New Revenue Stream Offered to ISOs

Redding, California, MyBackgroundCheck.com is targeting ISOs to offer its applicant-paid pre-employment screening service. Under the MBC Agent Program, ISO operators provide their clients with applications and/or directions to a Web site offering a discounted rate for background screening. Business owners are then provided an access code that allows them to view the results over the Internet, offering a cost-free option that helps to protect businesses from the potentially devastating effects of a poor hiring decision. MyBackgroundCheck.com and its sister company, Pre-employ.com, are Web-based investigation companies that conduct 6,000 to 8,000 background checks a day.

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Pointsec Joins Smart Card Alliance

Pointsec Mobile Technologies has joined the Smart Card Alliance as
a general member. Pointsec will participate in Alliance education
programs and conferences, industry councils and market research and
joins more than 140 others members representing leading companies in the
financial services, computer, telecommunications, healthcare, and retail
industries, as well as federal government agencies. The organizations
work in an open forum to address the opportunities and challenges that
face the smart card industry. Pointsec provides mobile device
security through automatic data encryption.

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First Data Considers Card Issuing Exit

First Data is now considering the jettison of its U.S. credit card issuing business as the unit has dampened the growth rates of the entire company. FDC has engaged Morgan Stanley to help explore options. During the third quarter, Card Issuing Services reported revenue of $594 million and operating profit of $116 million, down 4% and 25% respectively. The processor says Card Issuing Services may drag on the consolidated growth rate through the middle of next year. First Data also updated its projection for the fourth quarter and now anticipates earnings per share to be in the range of $2.14 to $2.16. The final quarter of 2005 will be affected by delays in closing previously announced acquisitions and by consumer spending during the holiday season. For the third quarter, First Data reported that net income dropped by 8% even though total revenues increased 6% to nearly $2.7 billion, compared to one-year ago. (CF Library 10/14/05)

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Diebold Opens Global Service Center

Diebold this week opened its Global Service Logistics Center in Green, Ohio, less than 10 miles from its world headquarters. The brand-new, state-of-the-art facility is a two-story, 165,000- square-foot center dedicated to parts warehousing and fulfillment. The new hub of Diebold’s service operation supports hundreds of products, including those in Diebold’s security and self-service lines, and is home to more than 38,000 unique parts. The new facility also houses staging for Diebold’s automated teller machines (ATMs) and a media center, materials planning, product refurbishment and repair.

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Fiserv Names CEO Leslie Muma’s Replacement

Fiserv has hired Jeffery Yabuki, formerly with H&R Block and American Express, as president, CEO and board member, to succeed Leslie Muma who is retiring. Yabuki spent six years at H&R Block and served as executive vice president and chief operating officer since 2002. In that role, Yabuki had oversight for the domestic and international tax businesses, e-commerce activities and the financial services business units operating under the H&R Block brand, as well as marketing, information technology, compliance and corporate development. He also served on H&R Block’s Planning & Policy Committee. Prior to joining H&R Block, Yabuki spent 12 years with American Express and was most recently president and chief executive officer of American Express Tax and Business Services.

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FRAUD WATCH

While payment card fraud due to counterfeit, lost/stolen, mail
non-receipt and ID theft has plummeted since the migration to “Chip &
PIN,” fraud due to Internet, phone and mail order transactions
has risen sharply. “Card-Not-Present” fraud jumped 29% in the first six
months of this year to GBP 90.6 million, compared to the same period
one-year ago. As a result, APACS has introduced a new fraud awareness
campaign using its “Card Watch”* and “Bank Safe Online” brands to make
consumers aware of the simple steps they can take to protect their cards
and online bank accounts. APACS says British consumers need
to use such tools as “Verified by Visa” and “MasterCard SecureCode” to
fight CNP fraud. Furthermore, new research commissioned by APACS shows
that one in eight online shoppers have failed to log out when shopping
online, leaving their financial details available to others; 25% of
online shoppers do not check whether a Web site is safe and secure; and
almost half of women and half of 16-24 year olds in the UK do not know
what phishing is. APACS is the UK payments association.

*Editor’s Note – APACS’ “Card Watch” brand is not related to CardWeb.com’s marketing surveillance service and U.S. registered trademark of “CardWatch.”

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ADS Closes the Blair Portfolio Acquisition

Dallas-based Alliance Data Systems has closed its deal to buy Pennsylvania-based Blair Corporation’s credit portfolio for $166 million. Blair will use $143 million to repay debt primarily incurred in association with its August 2005 tender offer of 4.4 million shares. Under the terms of a 10-year program agreement, Alliance Data will provide a fully-integrated private label credit program for Blair’s catalog and Web brands, including Blair and Irvine Park. Alliance Data will provide account acquisition and activation, receivables funding, account authorization, statement generation, marketing services, remittance processing and customer service functions. Blair Corporation’s annual sales are approximately $500 million. Alliance Data provides transaction services, credit services and marketing services, managing over 105 million consumer relationships.

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USA Technologies Reaches Inflection Point

PA-based USA Technologies reported third calendar quarter revenue of $1.4 million, an increase of 32% over the year-ago period. The growth was driven by its increased equipment sales across its “e-Port,” “VendingMiser” and “e-Suds” product lines. The company says it has finally reached an inflection point. During the quarter, USTT signed an agreement with PepsiCo and entered into a one-year agreement with MasterCard. Following successful trials conducted at MasterCard’s corporate facilities, more than 500 vending machines throughout New York City and Atlanta will now be equipped to accept “MasterCard PayPass.” The Company also established a customer relationship with ARAMARK. USTT also received approximately $3 million of new capital to fund operations. For complete details on USA Technologies’ latest results, visit CardData ([www.carddata.com][1]). (CF Library 10/27/05)

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

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Versatile Card Hires a New Sales Executive

Plastic card manufacturer Versatile Card Technology has hired William Mulligan, Jr., formerly with Plastag, as VP/Sales & Marketing. He began his career at DocuSystems, Inc., a division of Rand McNally in 1993, and was Midwest regional sales manager of CPI in Littleton, Colo., in 2000. Mulligan was recently accepted by Kellogg’s Executive Master’s in Business Administration program at Northwestern University in Evanston, Illinois. VCT is a certified manufacturer of Visa and MasterCards and produces a wide variety of products including, loyalty, membership, gift cards, smart cards, access control and contactless cards.

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Sub-Prime Charge-Offs Hit a Four Year Low

Chargeoffs among sub-prime credit card-backed securities have plummeted to the lowest level in more than four years. However, the delinquency rate has been rising for two months after nine consecutive monthly declines and the full impact of the recent bankruptcy surge has yet to hit. For the August collection period, Fitch’s 60 days or more delinquency index for sub-prime issuers registered an increase of 16 bps to 6.58%. Charge-offs fell to 11.16% compared to 14.70% one-year ago and 16.80% in September 2003. Metris recently reported that its managed 60-day delinquency rate for the third quarter was 8.0%, compared to 9.7% for the year-ago quarter. The Metris managed net charge-off rate was 12.0% for the third quarter, compared to 14.6% for the third quarter of 2004. Providian reported that its securitized charge-off ratio for August was down about 400 basis points compared to one-year ago. On a managed basis, charge-offs dropped to 7.10%, compared to 7.42% in July and 10.09% one-year ago. (CF Library 9/15/05; 10/25/05)

SUB-PRIME ABS CHARGE-OFFS
Sep 01: 12.57%
Sep 02: 15.22%
Sep 03: 16.80%
Sep 04: 14.70%
Sep 05: 11.16%
Source: FitchRatings

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CNP Card Fraud Rises 29% in the U.K. in 05

While payment card fraud due to counterfeit, lost/stolen, mail non- receipt and ID theft has plummeted in the U.K. since the migration this year to “Chip & PIN,” fraud due to Internet, phone and mail order transactions has risen sharply. “Card-Not-Present” fraud jumped 29% in the first six months of this year to $158 million, compared to the same period one-year ago. As a result, APACS has introduced a new fraud awareness campaign and is encouraging British consumers to use “Verified by Visa” and “MasterCard SecureCode.” APACS is the UK payments association.

CARD FRAUD MID-YEAR 2005
Card-Not-Present 41%
Counterfeit 21%
Lost/Stolen 20%
Non-Receipt 10%
ID Theft 8%
Source: APACS

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