LG Card Rides Profit Train as Creditors Sell-Out

South Korea’s second largest credit card issuer has posted $1.14 billion in profit for 2005 after earning $352.2 million in the third quarter. However, controlling interest in LG Card is on the sale block as its creditors this week named JP Morgan Chase as the lead manager for the sale, according to today’s issue of CardFlash International. Korea Development Bank and other creditors are seeking to unload their combined 51% stake in LG Card by the end of this year. The expected sale price is expected to be in the $4.8 billion range. LG Card has posted four consecutive quarters of solid profitability. In the third quarter of 2004, the issuer reported a $45.4 million loss. Since then, LG Card has earned $1.42 billion. In the first quarter of this year, the issuer earned $465.0 million.

LG CARD NET INCOME
3Q/04: -$45.4 million
4Q/04: $315.7 million
1Q/05: $283.0 million
2Q/05: $465.0 million
3Q/05: $352.2 million
Source: CardData (www.carddata.com)

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eFunds to Drive 65,000 USPS POS Devices

eFunds has expanded its agreement with the United States Postal Service and will now drive transaction processing at more than 34,000 USPS locations and 65,000 POS devices nationwide plus 2,500 self-serve kiosks. Under the new agreements, USPS will have direct control over its back office operations and business functions, indirect control over its own payment switch through eFunds and a flexible platform designed to support new business initiatives. eFunds Corporation provides electronic payments and risk management.

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Anglia Society Selects the TNS Network

The Anglia Society has selected Transaction Network Services for an IP-based solution to reduce the time it takes to
authorize credit card transactions. The solution will provide Anglia
with the fastest way to securely authorize credit card transactions with
the acquiring banks. Payment data from the 400 till points across
Anglia’s 75 stores will be securely transported over TNS’ private
network, providing a high-speed digital connection for card
authorization. Anglia Society is the sixth largest co-operative society in the country. Transaction Network Services provides data communications services for transaction-oriented applications.

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FanBox and Transax Integrate Platforms

FanBox and Transax Technologies have announced the full integration of
“MS2”, FanBox’s technological platform. The “MS2” platform provides real
time transaction management and integrated marketing tools. In addition,
an electronic currency exchange solution is nested in the gift card
management portion, providing computer-assisted management in any retail
chain environment. The new “all-in-one” solution enables the merchant
to use a single banking terminal for credit cards, debit cards, loyalty
cards and gift cards. The new product is offered in real time through a
telephone or high-speed Internet connection. Integration directly into
cash register systems and ecommerce Web site is also available. FanBox
provides management of loyalty programs, gift cards and communities of
interest. Transax Technologies sells and services ATMs and POS terminals.

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Hypercom & Innova Card Team for Next Gen

Innova Card and Hypercom have partnered to develop new products integrating the “USIP Professional IC” or universal secure integrated platform. USIP Professional IC is an EMV and FINREAD compliant System on Chip (SoC) that integrates all the security and application management functionalities required to build new generations of trusted devices, providing a large set of patented security and cryptographic features that facilitate application development and enhance the global security level of point-of-sale/point-of- interaction products.

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Diebold Opteva ATM Integrates Biometric

Diebold has introduced biometric automated teller machines into South
America. The Opteva line of ATMs uses the company’s Agilis software and
Windows XP operating system to integrate biometrics, shifting the focus
of user recognition. The biometric technology, using the geometry of
the index finger, can be substituted for either the conventional
personal identification number or the magnetic stripe card. Diebold
created middleware that runs on its Agilis software platform and allows
customers to apply any biometric technology they choose to the ATM.
Customers are not obligated to use a particular biometric device from a
specific supplier. To access Diebold’s biometric ATMs, consumers
simply enroll with their financial institution, which collects personal
information that is paired with biometric data. The institution then
issues a PIN to be used in conjunction with the fingerprint scan when
conducting ATM transactions.

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Wright Express Renews EFS Fleet Card Deal

Enterprise Fleet Services has inked a three-year contract extension with Wright Express for a cobranded fleet card. Enterprise Fleet Services has 48 group offices throughout the country, specializing in fleets of 15-125 vehicles offering Fleet Management products and services, including the Wright Express card. Wright Express is a provider of payment processing and information management services for more than 298,000 commercial and government fleets containing more than 4.2 million vehicles.

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APACS Says Issuers have Improved Transparency

Payments association APACS has released a new report that outlines credit card industry initiatives which have been
implemented to improve transparency in the credit card industry. The “Responsible Lenders, Responsible Borrowers” report follows up an agenda established last year by the Treasury Select Committee. The report outlines how the industry has delivered on that agenda and is working to encourage responsible lending and borrowing decisions. For example, the extended use of the Summary Box and the launch of a Web site in July that offers consumers impartial advice on credit cards. Many of the changes and initiatives outlined in the report are part of the new
Banking Code, published in March this year.

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Capital One & Hibernia Merger Closes at $4.9B

Capital One Financial closed its acquisition of Hibernia for $4.9 billion, compared to the $5.3 billion deal originally signed in March. Hibernia, one of the largest banking companies headquartered in the Gulf South, provides a broad range of financial products and services. The transaction makes Capital One the nation’s ninth-largest consumer lender and one of the top 20 banks in terms of total deposits. Capital One and subsidiaries collectively had 49.2 million accounts and $84.8 billion in managed loans outstanding as of September 30, 2005.

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Online Bill Payments via Banks Up 24%

A new survey has found that 56% of the 72 million online households in the U.S. are paying at least one bill online, up from 52% in June 2004. Currently, 87% of users who pay their bills from a single consolidated website, such as a bank, where they receive the service for free. The semi-annual survey by CheckFree Analytic Research Services with The Marketing Workshop and Harris Interactive also found that for the first time, online banking and bill pay features surpassed the more traditional bank selection criteria of bank branch and ATM proximity to home. The availability of online banking and bill pay features ranked third among the top three factors in selecting a bank for personal accounts, following “availability of free checking” and “reasonable fees and service charges.” According to the survey, the volume of bill payments made at consolidated sites, primarily banks, increased 24% from June 2004 to March 2005.

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