Holiday Retail Sales on Cards to Hit $120B

Americans will likely use general purpose credit/debit cards and store credit cards to charge about $120 billion in retail sales this holiday season. The figure is about 5.4% above last year. Signature debit card use is expected to soar by nearly 17% while store credit cards will generate fewer sales this year, about 8% less. Consumers will likely rack up more than $77 billion in holiday sales on VISA, MasterCard, American Express and Discover credit cards. VISA reported that total spending by consumers and businesses on VISA-branded payment cards rose to approximately $23.3 billion last week, a 12% increase over the same period in 2004. VISA says the figures point to a moderate to strong holiday season.

Holiday Card Volume
(five weeks ending 12/25)
2004 2005 Gain
Credit: $73.6 billion $77.1 billion + 4.8%
Debit: $24.2 billion $28.2 billion +16.7%
Store: $16.0 billion $14.7 billion – 8.0%
TOTAL $113.8 billion $120.0 billion + 5.4%
Source: CardData (www.carddata.com)

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LG CARD 3Q/05

The country’s second largest credit card issuer has posted 1.18
trillion won in profit for 2005 after earning 363.4 billion won in the
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. 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 5 trillion won
range. LG Card has posted four consecutive quarters of solid
profitability. In the third quarter of 2004, the issuer reported a 46.8
billion won loss. Since then, LG Card has earned 1.47 trillion won. In
the first quarter of this year, the issuer earned 479.8 billion won. For
complete details on LG Card’s latest performance, visit CardData (www.carddata.com).

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Asia-Pacific Card Fraud May Top $1B by 2009

Total losses from credit card fraud will reach US$600 million in 2005
across the Asia Pacific region. However, the introduction of
standards such as EMV will slow the overall growth in fraud levels according to Frost & Sullivan’s “World Credit & Debit Fraud” report.
Along
with the rise in card use, levels of fraud also have gone up considerably.
Several countries such as Malaysia, Taiwan, and Thailand have taken up
national-level programs to move to chip-based payment cards. However, card
issuers and associations are finding it tough to build a convincing
business case for investment in anti-fraud technologies where fraud levels
are already low. The banks are prepared to accept a certain level of
fraud rather than investing in an entirely new chip card infrastructure
which would justify the amount of fraud prevented. Frost & Sullivan expects overall credit card fraud losses will exceed US$1.0 billion by 2009 in the Asia-Pacific region.

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NYC Renews its OPC Credit/Debit Card Contract

The City of New York Department of Finance has renewed its contract with Official Payments Corp. for credit and debit card payment processing of property tax payments through August 2007. The New York City Department of Finance collects almost $12 billion in property taxes annually, maintains records for more than one million properties, conducts thousands of tax audits and adjudicates more than 1.5 million parking tickets each year. Official Payments provides electronic payment services for the Internal Revenue Service, 26 states, the District of Columbia and 2,000 local government clients nationwide. Official Payments charges citizens a convenience fee for the service, however, payers using credit or debit cards with bonus rewards programs may, depending on their card’s program, earn reward points, airline frequent flyer miles or cash back for paying their taxes and fees.

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Zebra Intros a New Single-Side Card Printer

Zebra Technologies has unveiled its lowest priced color plastic printer, the “P110i,” that can personalize gift cards for multi-store retailers. Up to one hundred blank cards fit into the top-loading card input feeder (30 millimeter card thickness). The Zebra P110i allows for single sided printing in full color or monochrome. For dual-sided printing, the user can simply run the card through a second time. Zebra Card Printer Solutions is a division of Zebra Technologies Corporation, providing on-demand printing solutions to businesses and governments in 100 countries around the world.

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MBNA Card Loans Near Record; Charge-Offs Up

MBNA’s managed credit card charge-offs took a turn north in October as the effects of the recent bankruptcy surge plays out. However, the charge-off ratio was helped by higher outstandings, as MBNA posted its fifth consecutive month of growth. After dipping below 4.00% in September, charge-offs came in at 4.15% for October, but, remain below last year’s 4.36%. MBNA’s managed credit card outstandings increased by slightly less than $1 billion in October to $101.4 billion. MBNA recently reported that U.S. card loans grew from $75.0 billion in 2Q/05 to $78.5 billion in 3Q/05 but remain 1.5% lower than one-year ago. MBNA’s card loans peaked at $101.9 billion in December. The managed credit card delinquency ratio for October was 4.12%. MBNA’s managed delinquency ratio for September was 4.17%, and 4.18% for October 2004. For complete details on MBNA’s third quarter results and monthly metrics, visit CardData ([www.carddata.com][1]).

MBNA CONSUMER CREDIT CARD SNAPSHOT
Month Outstandings Charge-offs Delinquency
Oct 04 $ 98.5b 4.36% 4.18%
Nov 04 $ 99.9b 4.33% 4.21%
Dec 04 $101.9b 4.12% 4.20%
Jan 05 $ 98.6b 4.46% 4.34%
Feb 05 $ 96.9b 4.27% 4.50%
Mar 05 $ 96.1b 4.29% 4.35%
Apr 05 $ 95.9b 4.34% 4.16%
May 05 $ 95.0b 4.77% 4.16%
Jun 05 $ 96.1b 4.50% 4.16%
Jul 05 $ 96.7b 4.49% 4.15%
Aug 05 $ 98.5b 4.34% 4.08%
Sep 05 $100.5b 3.87% 4.17%
Oct 05: $101.4b 4.15% 4.12%
Source: CardData (www.carddata.com)

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

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Rabobank to Use VASCO’s Digipass 810

Rabobank will begin implementation of VASCO’s “Digipass 810” for retail
banking, corporate banking and e-commerce. Rabobank will be the first
bank worldwide to start a large scale roll-out of “EMV-CAP 2004” certified secure smart card reader. With “Digipass 810”, Rabobank allows its customers to do both secure e-banking and e-commerce. By using VASCO’s
Digipass secure smart card readers in conjunction with an EMV smart
card, end users can use the same EMV card and PIN at an ATM or to pay
for purchases in a shop and perform online transactions such as internet
shopping and internet banking. “Digipass 810” is the second product that
VASCO has developed with Rabobank. VASCO provides patented user
authentication products for the financial world, remote access,
e-business and e-commerce.

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Wincor Offers ATM Master Key & CRM Solutions

Wincor Nixdorf has released a new software solution that enables banks and independent ATM operators to securely manage and distribute terminal master keys electronically from a centralized, single location; and also announced its “ProClassic/ProSales” CRM software solution for ATMs. Master keys are required to ensure the protection of communications and authentication routines between ATMs and host/switch systems. Traditionally, master keys are made by key management systems and split into two halves, which are then entered into the ATM manually by two bank staff members. ProTect/Enterprise Security Server software with RKL allows banks to distribute master keys in a fast, cost-effective and secure manner.

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EFMARK Premium Armored Lands an ATM Veteran

Illinois-based EFMARK Premium Armored has hired Brian Stang, formerly with Dunbar Armored, as Northeast Division Manager. Stang has an extensive resume of success in ATM and armored services, having risen through various service and senior management positions with Loomis Fargo, including a temporary assignment leading cash services activities for the 1996 Olympic Games in Atlanta. Prior to joining EFMARK Premium Armored, Stang spent five years with Dunbar Armored, most recently serving as regional vice president of the company’s Southeastern division. EFMARK Premium Armored is the nation’s largest “ATM only” service company, servicing more than 50,000 ATMs in 42 states for more than 1,600 financial institutions.

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TRM’s Gross Sales Double Y/Y; But Down Q-Q

Portland, OR-based TRM reported that gross sales more than doubled again in the third quarter to $59 million, compared to $29 million one-year ago. ATM operating income increased 39% to $3.5 million during the quarter but was down significantly from the prior quarter’s $5.0 million. ATM operating reflects increasing economies of scale in the ATM business, but have been offset by eFunds transition costs and unusually high cash losses in the Company’s UK ATM operations as a result of a significant increase in ATM theft. TRM acquired eFunds ATM network last year, adding 15,700 ATMs to its network. During the third quarter, TRM agreed to purchase the U.K-based ATM business of Travelex UK for approximately $78 million. At the end of the quarter, TRM had 22,243 ATMs producing total withdrawals of 20.0 million during 3Q/05. For complete details on TRM’s third quarter performance, visit CardData ([www.carddata.com][1]).

TRM GROSS SALES
1Q/04: $25.9 million
2Q/04: $28.8 million
3Q/04: $29.0 million
4Q/04: $26.6 million
1Q/05: $58.8 million
2Q/05: $61.4 million
3Q/05: $59.2 million
Source: CardData (www.carddata.com)

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

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Lipman Dione Products Receive Security Certifications

Lipman Electronic Engineering has announced that its “Dione
Xplorer,” “Dione Secura” and “Dione Secura Integration Module” have received “Payment Card Industry PIN Entry Device” approval and
the Xplorer and Secura received certification (PCI PED) from the
Australian Payments Clearing Association (APCA). In addition, the
Xplorer terminal has received APACS Common Criteria certification from
the UK payments association. To receive these certifications, the
systems were tested at both the hardware and software levels by a
independent laboratories for fraud protection, including tamper
resistance and tamper responsiveness as well as other stringent
criteria, to ensure transaction security and protect customer PINs and
other sensitive data at the point of sale.

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Oberthur & M-Systems Team for Authentication

Oberthur Card Systems and M-Systems, a provider of flash-based data storage devices, have teamed to develop a new secure-storage token platform for strong, two-factor authentication in high-volume vertical markets. Network security is greatly enhanced by two-factor authentication, which combines something the user physically carries, such as a secure-storage token, and something the user knows, such as a personal password. This two factor authentication can also be combined in the future with biometry (fingerprint) for user identification. Oberthur Card Systems is is a provider of card-based solutions, software and applications.

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