Card Volume Up Nearly 13% for Top Issuers

Gross dollar volume among the top five U.S. issuers grew a solid 12.7% during the third quarter, compared to one-year ago. However, Bank of America led the peer group with a whopping 43% increase in volume, compared to 3Q/04. MBNA and Citi, which both posted declines in year-over-year outstandings for the third quarter, reported double digit growth in Y/Y GDV. Chase, the nation’s largest payment card issuer, posted a 4.2% gain in gross dollar volume during the third quarter, according to CardData ([www.carddata.com][1]).

TOP FIVE U.S. ISSUERS
3Q/05 Gross Dollar Volume
1. Chase $ 76.4 billion + 4.2%
2. Citi $ 73.7 billion +10.5%
3. MBNA $ 61.3 billion +15.7%
4. BofA* $ 37.0 billion +42.9%
5. Disc $ 26.7 billion + 5.1%
TOTAL: $275.1 billion +12.7%
*BofA figure is modeled on prior quarterly data
Source: CardData (www.carddata.com)

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

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VeriSign Acquires Retail Solutions for $24MM

VeriSign has acquired Retail Solutions, a provider of operational POS data to the retail industry, for $24 million in cash. Operational POS data provides detailed information about the volume and value of product sales through retailers, and is increasingly being combined with other demand data and new technologies such as RFID to increase sales and reduce costs. In conjunction with the acquisition of RSI, VeriSign also announced an agreement with the World Wide Retail Exchange to deliver POS services through WWRE’s global platform, enhancing store-level visibility to thousands of retailers and suppliers worldwide. Last month, PayPal inked a deal to acquire VeriSign’s payment gateway business for $370 million in cash and/or eBay stock. eBay and VeriSign also signed a multi-year security technology agreement that calls for eBay to invest in the deployment of VeriSign technologies that enable and protect online transactions, including the purchase of up to one million two-factor authentication tokens. (CF Library 10/11/05)

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Paymentech Canada Introduces Express Aerial

Paymentech Canada has introduced the portable wireless “Express Aerial” terminal from American Express for restaurants, bars, patios and specialty retail environments. With no cords and a functional range of 30 meters inside and 100 meters outside, the terminal can be taken directly to the customer, making payment at the table quick and easy. The Express Aerial provides efficient and secure credit and debit card processing capability and offers customers peace of mind as they do not lose sight of their credit or debit card during the payment process. Paymentech is a payment processor. In 2004, the Paymentech companies processed 8.5 billion transactions and $200 billion bankcard volume in 14 currencies.

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Nationwide Airlines Now Accepts UATP Cards

South Africa’s Nationwide Airlines now accepts all UATP cards, issued by 15 airlines and accepted by more than 220 airlines worldwide. Nationwide Airlines offers a corporate travel program that includes preferential airfares,flexibility through no advance purchase, no penalties in changing flights and additional bag allowances. To qualify for this program, an individual or business must spend R50 000 or more on air travel each year.

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First American Payment Acquires Govolution

TX-based First American Payment Systems has acquired Arlington, VA-based Govolution, Inc. for an undisclosed amount. Govolution enables federal, state and local governments and their depository financial institutions to electronically process consumers’ credit, debit and ACH payments made through a variety of methods, including Internet, telephone or in person. Govolution provides not only an application to process electronic transactions but also to interface with the government’s own systems, enabling reporting and transactions through a consolidated environment. First American offers full service credit card processing for approximately 75,000 merchants nationwide.

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BECU Extends the CheckFree eBill Contract

CheckFree has inked a multi-year contract extension with BECU, the largest credit union in Washington and one of the top 10 financial cooperatives in the country, to provide electronic billing and payment services to BECU’s members. BECU members can receive e-Bills from a variety of national and regional companies. BECU has more than 415,000 members and more than $5.6 billion in assets. CheckFree Corporation provides financial electronic commerce services and products to organizations around the world.

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ACEC Wants Merchant Card Abuses Stopped

VISA-funded Americans for Consumer Education and Competition has asked the payment card industry to stop merchants from requiring a minimum purchase in order to use a debit or credit card and to prohibit a check out fee for consumers who pay with plastic. Surcharging is a method practiced by some merchants to recoup fees they pay for in order to offer credit and debit options to their customers and consumers often wait in long lines only to find when they reach the register that there purchase does not meet the minimum purchase requirement. Americans for Consumer Education & Competition advocates for financial literacy and consumer rights initiatives and enjoys the financial support of VISA USA.

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Lorain & Huntington Expand Free ATM Access

Ohio-based Lorain National Bank has signed an agreement with Huntington National Bank that will enable LNB customers to have additional, surcharge-free access to 800 ATMs operated by Huntington throughout the Ohio, Indiana, Michigan, Kentucky and West Virginia region. Lorain National Bank operates its own ATM network at 24 locations in Lorain, Erie and Cuyahoga counties. Lorain National Bank is a wholly-owned subsidiary of LNB Bancorp, an $812.4 million financial holding company.

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Provident Bank Renews STAR Network Contract

Maryland-based Provident Bank, with 265,000 debit cards and 180 ATMs, has renewed its relationship with First Data’s “STAR Network” for PIN-secured debit services. Provident Bank has been a member of the STAR Network since 1984 and also works with First Data Merchant Services for its merchant processing portfolio. First Data’s STAR Network offers PIN-secured debit acceptance at 1.7 million ATM and retail locations. Provident serves individuals and businesses in the Mid Atlantic area through a network of 149 offices with $6.6 billion in assets.

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Discover Card Bonds Feel the Bankruptcy Spike

Morgan Stanley says that based on currently available information, Discover expects that the pre-tax charges in the fourth quarter of fiscal 2005 resulting from additional bankruptcy notices will increase by $200 to $250 million over those experienced in the third quarter of fiscal 2005. This estimate includes a decrease in the value of the Company’s residual interest in credit card securitizations and additional loan loss provisions for owned credit card receivables. The Company believes that this range represents in large part an acceleration, triggered by the new bankruptcy legislation, of charge-offs that otherwise would have occurred in the ordinary course of business in fiscal 2006. While the Company expects a decline in excess spread in the near term, the Company does not expect that an early amortization event will occur with respect to any outstanding DCMT term asset-backed securities.

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Bankruptcy Filings Set a New Record in Sept

Personal bankruptcy petitions in September set an all-time high, topping 200,000. It is expected that filings for the first two weeks of October may also have exceeded 200,000. New bankruptcy reform laws took effect on October 17th. According to the National Bankruptcy Research Center (a/k/a/ Lindquist Consulting), bankruptcy filings industry-wide increased by approximately ten-fold in the week preceding the legislation’s effective date compared with typical levels. The September year-over-year increase was more than 70,000 filings. About 205,000 filings were made during September, compared to 155,836 for August and 127,664 one-year ago. In the first nine months of this year, there have been 1,324,385 personal bankruptcy filings.

Monthly Filings Historical
Sep 04: 127,664
Oct 04: 133,404
Nov 04: 116,952
Dec 04: 113,957
Jan 05: 99,705
Feb 05: 103,457
Mar 05: 165,459
Apr 05: 170,130
May 05: 142,915
Jun 05: 145,946
Jul 05: 136,074
Aug 05: 155,836
Sep 05: 204,863
Source: CardData (www.carddata.com)

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Voyager Names a New Natl Account Manager

U.S. Bank Voyager Fleet Systems has named Adam Bruttell, formerly with Citibank,as national account manager for Voyager. Bruttell will be responsible for building Voyager’s card acceptance network and managing the ongoing process flow with existing vendors that provide maintenance, service and repairs to Voyager’s fleet customers. Bruttell brings with him a wealth of experience managing processes and people in the oil and gas card industry. U.S. Bank Voyager Fleet Systems Inc. is a leading provider of the universal fleet fueling and maintenance card for over 1.5 million vehicles.

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