TSYS Powers New Post Office Credit Card

TSYS and Bank of Ireland have launched a new MasterCard credit card for the U.K. Post Office that allows customers to treat certain transactions as installment loans. With the “2-in-1” feature of the new post office credit cards, customers may designate up to two large-value transactions on the card as installment loans under separate terms, reducing the outstanding revolving balance and attracting a lower rate of interest. Cardholders can transfer large purchases between GBP 500 and GBP 2000 into the special line with an interest rate of 6.8%. (The credit card feature generally carries a 14.9% interest rate.) The purchases transferred to the special line can be repaid over a period of 12 months. Cardholders can use the facility for up to two purchases at any one time subject to an aggregate limit of GBP 2,000 and have one month to transfer the purchase to the loan-like facility of the card. The U.K. Post Office has 14,600 branches across the country. The new card products will complement the personal-loan and insurance
services offered through the Bank of Ireland and the U.K. Post Office
joint venture since 2004.

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Hypercom Restores Profitability in Q3

Phoenix-based Hypercom posted an 11% year-over-year gain and a 9% sequential increase in revenues to nearly $70 million. The payment terminal manufacturer says the revenue increase was primarily due to strong U.S. sales of its new “Optimum L4100” multi-lane terminal. Gross profit for the third quarter was $26.5 million, up 9% from one-year ago. Third quarter operating income increased by $20.5 million compared to the second quarter operating loss of $15.7 million that reflected some special reorganization charges. During the third quarter the Company cut 100 jobs, including 21 senior management positions. In October, Hypercom restructured its worldwide sales organization, dividing up the job among two executives. During the third quarter, Hypercom officially named William Keiper as CEO and President; hired Neil Hudd, formerly with Way Systems, NBS Transaction Systems and NCR, as SVP/Global Product Marketing; and landed Diane Handley as VP/Global Human Resources. The Company also began shipping the “P1300 PIN Pad,” the first handheld PIN entry device to meet the new PCI security standards. For complete details on Hypercom’s third quarter results, visit CardData ([www.carddata.com][1]). (CF Library 8/16/05; 8/31/05; 9/26/05; 9/28/05; 10/12/05)

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

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Men are More Debt Aware & Card Savvy

A September poll has found that 27% of Americans have used a credit card to track spending, with 31% of men and 24% of women using a credit card for that purpose. The MasterCard survey also found 22% of males say they precisely know their own debt situation to the penny, while 16% of females make that claim. Sixteen percent of Americans surveyed say they have sought professional advice at some point in their lives to pay off debt. In response to the findings, MasterCard launched a consumer education campaign how to manage personal debt. The “Debt Know How” program includes an interactive section on the MasterCard Web site and a curriculum as well as training sessions for educators and personal finance coaches.

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Smart Card Alliance Membership Up 45%

New Jersey-based Smart Card Alliance reports it has grown by over 45% in the last year, with 54 new organizations becoming members. Fast growing categories of new members include organizations involved in computer hardware and software, card technology, security products and services, healthcare, financial services and transportation. Organizations such as Viisage, LEGIC Identsystems, Digimarc Corporation, Identification Technology Partners, Inc., HIRSCH Electronics, Tyco Software House, GE Security, CoreStreet, and Lenel Systems have joined with other security market leaders to work together in SCA industry councils. The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

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Optimal Group Reports $11MM in 3Q Earnings

Optimal Group reported revenues for the third
quarter of $44.8 million compared to $28.3
million in the quarter ended September 30, 2004. Underlying earnings
from continuing operations before income taxes and non-controlling
interest were $10.77 million. Optimal’s
financial results for the third quarter period do not reflect any financial impact of the recently announced acquisition
of U.S. merchant processing contracts and associated sales channel
contracts from Moneris Solutions, Inc. Optimal also announced a stock buyback program which authorizes the company to purchase up
to 1,100,000 shares. Optimal has operations throughout North America, the United Kingdom and Ireland.

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Abanco Intl Lands Stone for Sales

Illinois-based Abanco International has hired Harvey Stone, formerly with Pay by Touch, CES, First Data, CPS and Concord, as VP/Sales. In this newly created position, Stone will be responsible for driving the company’s strategic sales direction, worldwide payment processing sales and independent sales organization (ISO) operations. Stone holds a B.S. from New York University. Abanco is a provider of payments and data-transaction technology.

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Lipman Gets $6MM Follow on Orders from India

Lipman Electronic Engineering has received follow on orders totaling
more than $6 million from two leading banks in the Indian market. These
orders for Lipman’s “NURIT 8320” landline POS terminals
are expected to be supplied during the fourth quarter. Lipman says that as the nation’s infrastructure continues to develop, a greater emphasis will be placed on card-based transactions, creating a significant growth opportunity for POS terminals in the market. Lipman is a provider of electronic payment systems.

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3Q Growth Comes at the Expense of Margin

Although down from a year ago, margins for credit card issuers rebounded in the third quarter from second quarter levels, reflecting slightly better pricing trends in certain segments. UBS Investment Research says that nonetheless, most issuers characterized the environment as highly competitive. With the exception of American Express, portfolio growth apparently came at the expense of margin. UBS also noted that operating expenses as a percentage of managed loans trended lower across the industry, largely as an offset to margins that remain under pressure. UBS expects this trend to continue as the recent consolidation in the industry should result in greater economies of scale and present an opportunity to reduce costs.

Net Interest Margins, by Company
3Q04 3Q05
American Express 8.60% 9.20%
JPM/Bank One 8.90% 8.55%
MBNA 7.82% 7.37%
Capital One 7.86% 7.99%
Citigroup 10.19% 10.15%
Discover 8.83% 7.95%
Providian 10.43% 10.10%
Median 8.95% 8.76%
Source: Company Reports & UBS

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Credit Card Penetration Reaches 79% of Adults

Canadian credit card ownership is widespread with 79% of adults owning a
card, according to research for MasterCard Canada. Sixty-two percent of
cardholders say they would feel constrained in their choices as a consumer
if they did not have access to their credit card and 72% consider it an
important financial tool. A significant minority (16%) have actually left
a merchant without making a purchase because the merchant did not accept
credit cards. Twenty-eight percent have tried to put as many of their
purchases as possible on their card in order to better track and manage
finances.

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HID Contactless ISO Certified Again

Irvine, CA-based HID has received “ISO9001:2000” certification for its contactless cards and readers. HID first received ISO9000 certification on June 1, 1999, ISO 9001:2000 certification on June 1, 2002 and has been continuously certified while they maintain focus on continuous process improvements for the company’s entire iCLASS 13.56 MHz, Prox 125 kHz, and Wiegand card and reader technology design, manufacture and distribution processes. HID is a global supplier of contactless access control cards and readers for the security industry.

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CEE CARDS

The number of payment cards in central and eastern Europe has tripled to 109 million over the last four years. While three
countries in the region now have more payment cards than adults, the
average across the region is just under half a card per adult. There are almost two payment cards per adult in Slovenia. The study by London-based Retail Banking Research also found there were a total of 450,000 terminals deployed in the CEE region last year. The debit card is by far the most widely held type of payment card in the CEE region, representing 88% of all cards in issue ⓠthis contrasts strongly with western Europe where the equivalent figure is only 51%. Credit cards with 8% and charge cards with 4% make up the remainder. RBR says Estonia leads the region in terms of EMV cards issued, with 35% of its
cards in compliance by the end of 2004.

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