VISA’s HoloMag Decision Hurts ABNH

NJ-based American Bank Note Holographics reported that sales in the fourth quarter nearly doubled to $10.1 million, compared with one-year ago. However, the Company posted a net loss of $2.8 million in the fourth quarter as compared to net income of $0.5 million in the fourth quarter of 2004. The loss was due to a $5 million fourth quarter charge taken following VISA International’s decision to discontinue the use of the current version of the Company’s “HoloMag” product. On March 14th, VISA informed ABNH it was discontinuing the use of “HoloMag” due to an infrequently occurring technical problem at the point of sale that results from a combination of factors including low humidity environments at the point of sale, point of sale equipment with a relatively low tolerance to electrostatic discharge and higher electrostatic conductivity of cards with “HoloMag” compared to conventional magnetic stripes. ABNH says it is developing a second generation “HoloMag” product that addresses the ESD issue and remains committed to supporting the needs of the payment card industry. For complete details on American Bank Note Holographics latest performance, visit CardData ([www.carddata.com][1]).

ABNH NET INCOME HISTORICAL
4Q/04: $0.5 million
1Q/05: $0.6 million
2Q/05: $0.5 million
3Q/05: $1.1 million
4Q/05: -$2.8 million
Source: CardData (www.carddata.com)

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

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Q Comm Cleans Up its Terminal Base

UT-based Q Comm International reported that revenue for the fourth quarter increased 89% to $11.8 million, compared to $6.2 million in the fourth quarter of the prior year. Net loss for the quarter was $2.6 million, an improvement from a net loss of $3.4 million in 4Q/04. During the fourth quarter Q Comm cleaned up its terminal base deactivating about 740 terminals due to unfavorable credit risks and unproductive transaction levels, as well as two broker deactivations. At the end of the year Q Comm had 3,800 terminals. The Company noted that it has activated at least 1,000 net new units during the first quarter of this year. For the first quarter, Q Comm expects revenue of approximately $13.0 to $14.0 million. For complete details on Q Comm’s latest performance, visit CardData ([www.carddata.com][1]).

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

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Regulators Release a Privacy Notice Report

Federal regulators have released “Evolution of a Prototype Financial Privacy Notice,” a report by Kleimann Communication Group summarizing consumer research commissioned by the regulators as part of their ongoing efforts to develop improved financial privacy notices. The report’s release concludes the first phase of an interagency project by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission to explore alternatives for financial privacy notices that would be easier for consumers to read, understand, and use than many of the notices consumers currently receive from financial institutions.

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Top Issuers Take Q4 Charge-Off Spike

Average charge-offs among the top ten U.S. issuers rose sharply in the fourth quarter to 6.55% driven by more than 600,000 bankruptcy filings in early October. Bank of America’s charge-offs soared to 9.49% compared to 5.74% in the third quarter. Chase, the nation’s largest issuer last year, also experienced a spike, rising from 4.70% in 3Q/05 to 6.39% in the final quarter of 2005. Citibank, the second largest issuer, watched charge-offs rise from 5.57% to 6.61% in 4Q/05. Capital One also experienced a sharp rise from 4.69% in 3Q/05 to 5.70% in 4Q/05, according to CardData ([www.carddata.com][1]).

4Q/05 CHARGE-OFFS
1. Chase: 6.39%
2. Citigroup: 6.61%
3. MBNA: NR
4. BofA: 9.49%
5. Discover: 5.76%
6. Cap One: 5.70%
7. AmEx*: 4.60%
8. HSBC: NR
9. Providian: 7.28%
10. Wells Fargo: NR
AVERAGE: 6.55%
* American Express is for worldwide lending
note: quarterly charge-off rates shown are net of recoveries
Source: CardData (www.carddata.com)

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

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Goody’s Renews & Expands ADS Card Deal

Dallas-based Alliance Data Systems has signed a 10-year contract renewal and expanded agreement for private label credit cards with Goody’s. Under terms of the agreement, Alliance Data will continue to provide private label credit card services, and through the expanded agreement, will now provide an integrated co-brand credit card program and corresponding program servicing. Goody’s operates more than 380 retail locations nationwide with online and in-store revenue of more than $1.2 billion in 2005. Alliance Data is a leading provider of transaction services, credit services and marketing services.

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LML ECC Patent Litigation Settled

LML Patent Corp., First Data , ECHO and Nova have settled litigation over LML’s three electronic check conversion patents. All three companies have agreed to license LML’s patents for electronic check conversion in the “Direct Consumer Field” (NACHA standard entry class code “POP”). LML also entered into a cross-patent license agreement with First Data involving two FDC patents. The license negotiations were handled by Russell Levine and Jamie McDole of the Chicago office of the law firm Kirkland & Ellis. Terms of the settlements and license agreements remain confidential.

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Discover Bank Names a New President

Discover Financial Services has hired Christina Favilla, formerly First Vice President, Banking and Cash Management, Product Development at T.D. Waterhouse, as President of Discover Bank. Favilla also served as the Vice President, Business Analyst for Retail Banking and as the Vice President, New Business Development Manager of Home Equity Services for Chase Manhattan Bank. Favilla holds a Masters of Business Administration in Information Systems from Fordham University and a B.A. in International Studies from Marymount College.

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Paymetric Introduces XiBuy 2.0

Paymetric has introduced a new version of its “XiBuy” solution. “XiBuy 2.0” integrates purchasing cards with SAP at the onset of the order creation, subjecting purchasing card transactions to the same requisition-to-order process as traditional orders in SAP. Transactions initiated in SAP with “XiBuy” can be reconciled automatically or manually with their purchase orders, while transactions initiated outside of SAP can be reallocated, approved and posted. “XiBuy” uses the resulting card transaction to create an invoice receipt, thus completing the three-way match between the purchase order, the goods receipt, and the invoice. “XiBuy 2.0” also supports multiple card programs.

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Consumer Spending Looks Strong in Q1

The U.S. Commerce Department reports that personal spending rose 10 basis points in February from the prior month. The Commerce Department also reported that personal income rose 30 basis points in February. The data suggest that consumer spending will grow at a 5% annual rate in the first quarter. Last year consumer spending was largely driven by consumers tapping home equity.

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Aviation Card Adds a New Regional Manager

U.S. Bank’s Multi Service Aviation, which issues the “Multi Service Aviation Card” has named Renee Owen to its team of regional managers. Owen comes to Multi Service Aviation with over a decade of experience in the aviation industry. During her career in the industry, Owen held positions in both the commercial and general aviation arenas, including working with the Race Team Aviators Association (RTAA) and NASCAR(R). Before joining the aviation industry, she studied at Appalachian State University. The Multi Service Aviation Card is accepted worldwide by more than 7,000 aviation service providers in over 190 countries and has been voted the Best Fuel Card by Professional Pilot magazine’s PRASE Survey every year since the survey began in 1992.

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TRM’s ATM Sales Increase 46% in 4Q/05

Portland, OR-based TRM reported that gross sales rose 29% in the fourth quarter to $54.5 million. ATM sales for the quarter rose 46% year-on-year to $44.5 million. However, ATM operating income decreased due to higher vault cash costs, increased amortization/depreciation versus the prior year and increased SG&A costs such as labor, as well as unusual items. The Company also notes that cash losses in the ATM business improved significantly from the third quarter due to aggressive security measures designed to reduce theft. At the end of the quarter, TRM had 19,262 ATMs producing total withdrawals of 18.3 million during 4Q/05. For complete details on TRM’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

TRM GROSS SALES
4Q/04: $42.3 million
1Q/05: $58.8 million
2Q/05: $61.4 million
3Q/05: $59.2 million
4Q/05: $54.5 million
Source: CardData (www.carddata.com)

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

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ViVOtech to Give Away NFC-Payment Phones

Next week ViVOtech will be giving away NFC-enabled “Nokia 3220” mobile phones to select attendees at the “CTIA Wireless 2006” conference. Each phone, pre-loaded with a $25.00 “MasterCard Prepaid” account, can be used at a variety of contactless-enabled retail stores in Las Vegas. Each phone is enabled with the “ViVOwallet 2.0” payment and “Service Discovery” application software, which is part of the “ViVOnfc Software Suite” announced in September. The “ViVOnfc” software suite also includes “ViVOplatform,” which enables issuers and retailers to send cards over-the-air, as well as other real time services like e-coupons, tickets, loyalty programs and prepaid and gift card products.

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