Operating Expense Finally Heads South

Rising interest rates and narrowing margins are not the only issues facing credit card providers in 2006. Operating expense, driven by increased competition, is still running 100 basis points over year ago levels, but may finally be abating. After peaking at 6.04% in February, operating expenses have nudged down by two basis points in March. Operating expense is determined by dividing monthly gross operating expenses by the average managed card outstandings and then annualizing. Operating expense includes such items as credit processing, call center servicing, billing, collections, fraud management, and card issuance. According to CardData ([www.carddata.com][1]), operating expenses stood at 5.00% for March 2005 and settled at 6.02% for March 2006.

OPERATING EXPENSE
Mar 05: 5.00%
Apr 05: 4.97%
May 05: 5.03%
Jun 05: 5.09%
Jul 05: 5.15%
Aug 05: 5.17%
Sep 05: 5.24%
Oct 05: 5.64%
Nov 05: 5.89%
Dec 05: 5.99%
Jan 06: 6.00%
Feb 06: 6.04%
Mar 06: 6.02%
note: Excludes American Express and Discover
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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STAR Network Inks North Shore Bank

Wisconsin-based North Shore Bank has added “STAR Network” access at more than 40 locations throughout Wisconsin for its 50,000 ATM and debit cardholders. North Shore Bank has assets of $1.9 billion with 45 branches throughout Eastern Wisconsin and Northern Illinois. First Data is a provider of electronic commerce and payment solutions for businesses and consumers worldwide.

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Chase Launches the Borders 3-2-1 VISA

Borders and Chase have enhanced their VISA cobranded credit card program, now offering extra points and enabling “Borders Rewards” members to double-dip. The new “Borders 3-2-1 VISA” card awards cardholders three points for every dollar spent at Borders or Waldenbooks stores; two points for gas, dining and grocery card purchases; and one point for all other card purchases. Cardholders can now choose to redeem points for a check or gift card from a variety of other merchants, including airlines. Under the current program, cardholders receive a $25 Borders gift card for 2,500 points. Cardholders who are also members of the “Borders Rewards” program can now earn points on both their VISA card and earn 5% cash-back from the loyalty card program. Additionally, “Borders VISA” cardholders can have their “Borders Rewards” number embossed on their “3-2-1 VISA” to eliminate the need to carry both cards.

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iPayment Delists from NASDAQ

Nashville-based iPayment, a card processor with 140,000 small U.S. merchants, has completed a merger with its related entities and was delisted from NASDAQ yesterday. Each issued and outstanding share of iPayment’s common stock has been converted into the right to receive $43.50 in cash without interest iPayment, Inc. is a provider of credit and debit card-based payment processing services to approximately 140,000 small merchants across the United States.

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InComm & PRE Holdings Merger Closes

Atlanta-based InComm has closed on its deal to acquire prepaid specialist PRE Holdings and now has more than 145,000 distribution points across the Nation. The new InComm will offer a prepaid product range which includes its subscription activation products, full range of prepaid wireless programs, enhanced long-distance programs, music and game downloads, private label and third party gift cards and financial services products such as the Mio Money Prepaid MasterCard and Vanilla Visa Gift Card.

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Cash Systems’ Q1 Revenues Up 50%

Las Vegas-based Cash Systems reported that first quarter revenue was up 50% to $20.5 million. However, the Company posted a net loss of $1.2 million for the quarter, compared to net income of $238,000 in the first quarter of 2005. Cash Systems says costs related to Sarbanes-Oxley and stock options impacted the quarter. During the quarter, the Company signed a joint venture agreement with Bally Technologies and Scotch Twist to develop cashless gaming products. The firm also renewed Dover Downs Entertainment and Delaware Park as well as inking a new contract with Crystal Park Casino and Hotel. The Company is expecting 2006 revenue of $82 million and a return to profitability in the fourth quarter. For complete details on Cash Systems’ latest performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Serverside Offers Personalized PaymentCards

ANZ and The National Bank in New Zealand and Heritage Building Society in
Australia now allow customers to place their favourite
photos on the front of their credit and cash cards using online card
customization technology provided by UK-based Serverside Group. Cardholders design
their own cards online using simple editing tools to rotate
and resize the image within a branded section of the issuers’ existing
websites. Members can either upload a personal photo or choose from a
large selection of gallery images selected by the issuer. Serverside
Group provides digital card design.

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ART to Power Pret a Manger POS

Pret a Manger, with 160 locations worldwide, is integrating online credit card processing at its POS terminals across the U.S. with the assistance of CA-based Alpha Retail Technology, resultimg in the reduction costs by eliminating the expense of dial-up and multiple dedicated telephone lines. In addition, Pret increased efficiency with the direct integration of payment information into enterprise applications. Instead of reconciling transactions from the dial-up terminal with other software programs (e.g. accounting software), the transaction data is sent directly to these programs.Pret A Manger features handmade sandwiches, wraps, salads, sushi, and desserts, along with teas and coffees. Alpha Retail Technology Inc. is a leading integrated retail software and professional service solutions provider.

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