3C and Allied to Offer MoneyGram Services

MoneyGram has reached an agreement with Currency
Connections Corporation (3C) to provide MoneyGram’s international money
transfer services through 3C’s subagent, Allied Banking
Corporation. The service began December 19th. Allied Banking Corporation with its subsidiary, Allied Savings Bank, is among the largest banking groups in the country. MoneyGram has 84,000 money transfer agent locations worldwide in approximately 170 countries.

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Parking Payment System to Snag Non-Payers

A Canadian firm is launching a trial of a self-enforcing parking meter that provides cash and card payment options. Vancouver-based Photo Violation Technologies will pilot its patented “PhotoViolationMeter” next month. The system uses a combination of sensors, photography and wireless technology to detect non-payers. The system also offers a “No-Fine” option, “Grace Periods” and “Instant Notifications.” Access to all functionalities will be available via the Internet.

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Mercantile Renews the Metavante Contract

Baltimore-based Mercantile Bankshares has renewed its merchant processing contract with Metavante. Metavante will continue to provide Mercantile merchant processing services, including transactional approval and authorization, settlement and accounting solutions and fraud detection. Metavante Payment Solutions delivers electronic money movement through an integrated payments network, including an ATM/PIN-debit network in NYCE, online bill pay, a complete suite of payment cards and automated clearing house (ACH) processing. Mercantile Bankshares Corporation has assets exceeding $16 billion.

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MasterCard Sponsors a Free Snack on American

MasterCard has teamed with American Airlines to give away a “snack and a movie” to all Economy Class passengers this week on nearly 600 transcontinental flights. The “movie and snack” sponsorship is supported by a brochure that will be distributed to all First, Business and Economy Class passengers. The handout includes activities, games and puzzles. The promotion expects to reach more than 85,000 Economy Class travelers.

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MPS Adds CVV to its Gift Card Program

Durango, CO-based Mercury Payment Systems has added a card-validation code to its gift cards with the first deployment of cards for Edible Arrangements, a franchise with an online store and nearly 300 locations nationwide. A card-validation code is known as the Card Validation Value (CVV), which apears on credit cards to raise the level of fraud protection. The CVV code helps protect the merchant from fraud, particularly on “card not present” transactions for online store purchases. Mercury Payment Systems is an integrated transaction processing company created to enhance point-of-sale systems by offering credit, debit, check, gift card and loyalty processing.

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GreenZap Picks Up 250,000 Accounts

San Diego-based GreenZap has acquired 250,000 account holders previously serviced by Mazumah, an online transaction competitor bringing its total customer base to 650,000. On average, GreenZap receives more than 800 new account sign-ups each day and has been averaging monthly revenue of just over 25 cents per member. GreenZap enables any business or individual with an email address to send and receive money securely and cost-effectively online.

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Morgan Stanley Acquires the UK’s Goldfish

Morgan Stanley has agreed to purchase Lloyds TSB “Goldfish” credit card program for $1.76 billion which includes a 22% premium. The deal adds 800,000 credit card accounts to the MS card portfolio which currently has 1.5 million accounts in the UK, according to today’s CardFlash International. Lloyds TSB fully acquired the “Goldfish” business in August 2003 in a $198 million deal with energy supplier Centrica (f/k/a British Gas). At the time Centrica held a 70% stake in Goldfish Bank Ltd. At the time of the 2003 deal, the “Goldfish” credit card portfolio had 1.18 million cardholders, 11,000 personal loan accounts and 17,000 retail savings accounts. However, Goldfish Bank had an operating loss of $52 million in the first half of 2003. Centrica began the “Goldfish” credit card program in 1996 in a partnership with Household International. In September 2001 Centrica purchased HFC Bank’s entire rights and interests in the “Goldfish” credit card for $150 million. (CF International Library 8/7/01; 8/1/03)

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Bankruptcy Spike Drives Discover Profits Down

Morgan Stanley reported this morning that its Discover unit posted $65 million in pre-tax profits for the quarter ending November 30th, compared to $271 million for the year-ago quarter. The recent spike in bankruptcies reduced pre-tax income by about $180 million. Discover also noted that the higher cost of funds reduced net interest income during the quarter. Managed outstandings were down 3% to year-ago levels, but transaction dollar volume increased 2% year-over-year while overall credit quality continued to improve. Managed merchant, cardholder and other fees were $520 million, up 7% from last year. However, managed net interest income fell $92 million from a year ago, reflecting a tighter interest rate spread. At quarter end, managed credit card loans were $46.9 billion. The managed credit card net charge-off rate for the fourth quarter was 5.76%, 31 basis points higher than a year ago. The managed credit card over-30-day delinquency rate was 3.98%, a decrease of 57 basis points from the fourth quarter of 2004 and the managed credit card over-90-day delinquency rate was 1.75%, 43 basis points lower than a year ago. Total transaction volume increased to $26.1 billion, compared to $25.7 billion for 4Q/04. The account base declined during the fourth quarter by approximately 100,000 accounts from the third quarter. Domestic active accounts declined 3% from 4Q/04 to 19.2 million, the same as the prior quarter. For complete details on Discover’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
4Q/04* 1Q/05* 2Q/05* 3Q/05* 4Q/05 Y/Y CHNG
Outstandings: $48.3b $47.8b $46.8b $47.1b $46.9b -3%
Volume: $25.7b $25.9b $25.4b $26.7b $26.1b +2%
Accounts: 46.2m 46.0m 45.9m 45.6m 45.5m -2%
Actives: 19.7m 19.5m 19.3m 19.2m 19.2m -3%
Chargeoffs: 5.45% 5.11% 4.94% 5.12% 5.76% +31bps
Delinquency**: 4.55% 4.24% 3.90% 3.91% 3.98% -57bps
Yield: 11.59% 11.23% 11.69% 12.04% 11.94% +35bps
Notes: * 4Q/04 ended 11/30/04; 1Q/05 ended 2/28/05; 2Q/05 ended 5/31/05;
3Q/05 ended 8/31/05; 4Q/05 ended 11/30/05. ** delinquency is 30-90 days
and excludes 90+ days. Source: CardData (www.carddata.com)

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

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Internet and Telephone Payments Gain Speed

APACS says it has completed the first phase of its project to deliver a faster payments system for UK Internet and telephone banking payments in 2007. Currently payments by the phone or Internet take three business days. Under the new system the money will be transferred within hours. The UK banking industry also confirmed that LINK and Voca are the suppliers who will jointly develop and provide the new payment system so that banks are able to offer this service to customers before the end of 2007. LINK is the UK’s cash machine network provider and Voca currently provides the infrastructure for the 5 billion automated debits and credits generated each year. Currently Internet, phone and standing order payments account for just 7% of automated payment volumes, but these are growing rapidly as customers increasingly turn to them instead of more traditional payment methods such as checks. APACS is a banking trade association.

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ClickPay Solutions Names a New CEO

California-based check-casher ClickPay Solutions has named A.J. McCann, formerly with HiMC, EDS and Wells Fargo, as its new CEO. McCann is a published strategist in the emerging payment industry with more than 10-years of proven expertise in financial strategy mapping, financial analysis, corporate planning, joint ventures and strategic partnerships. Previously, McCann was an emerging payments expert at Wells Fargo Bank.In this capacity, he was instrumental in the bank’s large channel and strategic payment service sales/strategies and coordinated strategic planning processes for emerging payment services. ClickPay Solutions is a sales and marketing organization that provides ‘Cashless-Check-Cashing’ services to retail locations nationwide.

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JCB Completes ATM Gateway Agreement with CUP

JCB International has signed an ATM gateway agreement with China UnionPay. This will enable CUP cardholders to have access to ATM networks in Japan through a gateway platform provided by JCBI. The acceptance will begin March 2006 with the UFJ Bank ATM network of more than 6,000 ATMs, marking the first time that CUP’s 800 million members will be able to use an ATM network in Japan. The acceptance will be expanded to Japan Post which will open its network of 26,000 ATMs to CUP cards starting in May 2006. China UnionPay is China’s only national payment network and is the only bankcard association. JCB is an international credit card brand and the largest card issuer and acquirer in Japan.

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Consumers Say They’re Tight Wads This Year

Boston-based Compete reports that 41% of consumers surveyed say they plan to spend less on holiday gifts than last year and 42% plan to spend the same. In its latest “Spark!” report, Compete found that one out of every two consumers surveyed reported they plan to do 50% or more of their holiday shopping in a discount store up from the 30% they estimated they did in a discount store last year. Nearly 50% of consumers responded that the price of gasoline and the price they expect to pay to heat their homes this winter will have a strong or very strong impact on their holiday spending. Only current job situations ranked higher in terms of influence. Interestingly, Compete found that 60% of Republicans say they will spend about the same or more this holiday season.

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