Economic Inflection Point Likely in 2006

A softening housing market and climbing mortgage rates could negatively affect consumer spending, particularly in durable goods and home furnishings. The latest Deloitte Research “Leading Index of Consumer Spending” forecasts a potential economic inflection point if employment trends continue. The labor market, with unemployment rates at lows not seen since the late 1990s, will lead to higher wages. Deloitte says the labor market is adding positively to the index, but not enough to offset deterioration in the other three components including tax burden, wages and real home prices.

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Fort Knox National Hires Hines as CEO

Fort Knox National Company has hired Jerry Hines, former EVP of Certegy and EVP/COO of AT&T Universal Card Services, as President and CEO Before joining Fort Knox, Hines most recently served as executive vice president of global development for Certegy, Inc. He was responsible for leading the company’s business development activities, including strategic alliances, mergers and acquisitions. Prior to this position, he served as group executive for Certegy’s global credit card processing units. These units process more than 43 million credit card, debit card, and private label cards for more than 6,000 clients around the world. Prior to joining Certegy in 1997, Hines was executive vice president and chief operating officer at AT&T Universal Card Services and chairman of AT&T Universal Services Corporation. Hines earned a bachelor’s degree in economics and a master’s degree in finance from St. Louis University. Fort Knox National Company is provider of electronic payment solutions.

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Lipman Receives $3.2MM Order for Secura PIN Pads

Lipman Electronic Engineering has received from one of Mexico’s largest banks a follow-on order for its “Dione Secura PIN Entry Device” valued at $3.2 million. This order follows this bank’s order of Secura units in the fourth quarter of 2005. The expanded deployment of these PIN entry units will allow the bank to continue driving the growth of card-based payments in the Mexican market. The bank is working with its customers in the multi-lane retail market to upgrade their payment systems for the acceptance of highly secure EMV smart cards.

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PayPal Tops 100MM Accounts This Month

PayPal reported it has crossed the 100 million account milestone this month. Last year, PayPal processed more than $27 billion in total payment volume and exceeded $1 billion in revenue. During 1999, its first year of operation, PayPal ended that year with 12,000 accounts and $235,000 in total payment volume. At the end of 2005 PayPal had 96.2 million total accounts, a 51% increase from one-year ago. Total payment volume for the fourth quarter rose 45% to a record $8.1 billion which includes payments initiated through the PayPal system but excludes its payment gateway business. The number of active accounts hit 28.1 million at year-end, its highest level to-date. During the fourth quarter, PayPal handled 139.7 million payments, a 19% increase over the prior quarter and up 40% from 4Q/04. For complete details on eBay/PayPal’s fourth quarter performance, visit CardData ([www.carddata.com][1]). (CF Library 1/18/06)

PAYPAL ACCOUNT HISTORICAL
Dec 04: 63.8 million
Mar 05: 71.6 million
Jun 05: 78.9 million
Sep 05: 86.6 million
Dec 05: 96.2 million
Feb 06: 100 million
Source: CardData (www.carddata.com)

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

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DenizBank Reduces Credit Card Application Turnaround

DenizBank is using Microsoft technology as the basis of its
entire IT infrastructure to achieve greater profitability, improve
productivity and comply with financial services industry regulations.
The bank has put into operation a solution for the processing
of credit card applications, based on Microsoft’s “BizTalk Server 2004”,
that has helped to produce a 94% cut in customer waiting time
for new credit cards. Following the installation of the new system,
application-to-delivery time has been reduced from 16 days to just one
and DenizBank has seen its number of cardholders increase by 39 per cent
in one year.

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First Premier Nears 3MM Active Accounts

Sioux Falls, SD-based First Premier Bank continues to plug along in the sub-prime market after peaking in 2002. At the end of 2005, the issuer topped 3.6 million accounts and had a record 2.9 million active accounts during the fourth quarter. The issuer offers fee heavy cards that carry low credit lines. The average balance per active account is $255 and the average annual volume per active account now stands at $410. At the end of 2005, First Premier posted $742 million in outstandings, a 4% increase over the prior year. The portfolio peaked in 2002 when the issuer reported $763 million in outstandings. Since 1999, the portfolio has more than tripled. For complete details on First Premier’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

FIRST PREMIER CARD LOANS
1999: $173.9 million
2000: $380.1 million
2001: $571.9 million
2002: $763.2 million
2003: $708.6 million
2004: $710.8 million
2005: $742.0 million
Source: CardData (www.carddata.com)

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

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BSI2000 Awarded Bank Card Patent

Colorado-based BSI2000 has been informed by the South
African Companies and Intellectual Property Registration Office that its
complete specification for its patent application titled “Optical Bank
Card” has been accepted. The patent covers methods and processes for
executing and tracking financial transactions and covers security issues
regarding biometric authentication of customers, crypto protection of
financial information residing on optical cards, and on-card transaction
audit trails. The patent covers and protects the “MICROBANKER2000” system that we have developed and continue to develop initially for the markets in South Africa. BSI2000 provides high-end security-related products for the homeland defense, entry/exit access control, and identification and transaction markets.

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Discover Drops its No Surcharge Rule

Discover Financial Services has agreed to rescind its “No Surcharge Rule,” opening the way for merchants to request a fee from consumers for using a “Discover Card.” As a result of Discover’s decision, a group of merchants seeking antitrust violations against the major card networks and issuers have agreed to drop Discover from the lawsuit. Lead attorneys, Friedman & Shube of New York City and Reinhardt Wendorf and Blanchfield of St. Paul, requested the release of Discover on February 10th in a letter sent to U.S. District Judge John Gleeson. In their court filings, the merchants have complained that they are forced to pass along high processing fees to consumers via price increases. Attorneys for the merchant say that VISA, AmEx and MasterCard are “scared to compete on merchant fees.”

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Macalla Software Enables Mpay Payment Services

Ireland-based Macalla Software is supplying its “Mobile Top-Up” software and related services to enable mobile phone re-charge and payment services in the Middle East. Branded “Mpay,” the initial service allows prepaid subscribers on the MTC Kuwait network to directly re-charge their mobile phones without having to travel to a retail outlet or hand over cash and to pay for these top-up transactions via their nominated bank facility. Top-up call credit is applied automatically within seconds. The service leverages commercial agreements between Al Bahar United, MTC, Axalto and the shared electronic banking services company (Knet) through which all Kuwaiti banks participate. Supported channels are SMS, JavaCard and web with services available in Arabic and English. Mpay is a subsidiary of Al Bahar Telecom, a leading telecommunication company that is a significant stakeholder in IT and Telecommunications products and services companies in Kuwait and Middle East.

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Elan Signs Harborstone Credit Union

Washington-based Harborstone Credit Union, with 17,200 accounts and $24 million in outstandings, has chosen Elan to be its credit card partner. Harborstone Credit Union has total assets over $600 million and membership near 50,000. Elan offers a full range of ATM services to financial institutions and independent sales organizations including authorization processing, terminal driving and switching services.

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Everest Software and PPI Team for SMBs

Virginia-based Everest Software has teamed with Payment Processing to offer a fully integrated payment processing solution to small and medium-sized businesses. Under the terms of the agreement, Everest will leverage PPI’s payment processing services with its new PayBridge product, a fast, efficient, and affordable integrated payment processing solution, specifically built for SMBs. PayBridge will allow Everest customers to implement integrated and secure credit card processing systems into their existing operations. For the first time, SMBs can now leverage a single resource to significantly simplify the process and reduce the costs associated with accepting credit card payments.

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ECHO’s 4Q/05 Revenues Grow 33%

Camarillo, CA-based card processor Electronic Clearing House posted fourth quarter of $16.9 million, a 33% increase over the prior year. Bankcard and transaction processing revenue grew 37% to $12.6 million and bankcard processing volume increased 48% to $388 million during 4Q/05. ECHO also reports that ACH transactions processed in Q4 increased 11.3% to 9.8 million transactions. For 2006, the Company is targeting total revenue growth in the 17% to 24% range, driven by 18% to 25% growth in its bankcard business and 15% to 22% growth in its check processing business. Net income for 2006 is expected to range from $1.5 million to $2.5 million. For complete details on ECHO’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

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

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