IRN Offers Free Hypercom T7Plus Terminals

New York-based IRN Payment Systems has become the first organization to adopt a Hypercom product for a free terminal program and named Hypercom as its preferred terminal vendor. Hypercom’s T7Plus is a compact countertop POS terminal that accepts all magnetic stripe cards, authorizes online transactions and provides “One-Touch” shortcut keys. The T7Plus units will be configured to support credit, debit, EBT, gift card and loyalty card transactions as well as IRN’s proprietary Paid On Signing 9-second real-time check debit processing solution. IRN expects to purchase the terminals over the next 12 months for free placement in merchant locations by its ISO partners. IRN Payment Systems provides electronic payment processing solutions to businesses. Hypercom provides card payment terminals, network access devices, server and transaction networking solutions.

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Groupe Caisse d’Epargne to Offer GemLucence Cards

Gemplus International announced that it has delivered limited
edition “GemLucence” cards to the French bank Groupe Caisse d’Epargne.
The volume roll-out of the translucent payments cards, which began in
September, is a first for the French market as well as for Gemplus.
The “GemLucence” card has a mandarin tinted transparent card body and is
been specifically designed to appeal to the youth market. It has a
limited production of 100,000 units. Gemplus International is a
global provider to the smart card industry in both revenue and total
shipments, selling over 5 billion smart cards. Gemplus’ revenue in 2004
was 865 million Euros.

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EFMARK Launches ATM Image Guard Service

EFMARK Premium Armored has launched its “ATM Image Guard” service, which adds exterior maintenance and refurbishment to its ATM capabilities. EFMARK’s ATM Image Guard is made possible through a partnership with ATA Services of Salt Lake City,that specializes in the cleaning, branding and exterior upkeep of ATMs and their surrounding environments. The ATM Image Guard service helps financial institutions and other ATM owners maintain a clean, attractive and inviting setting for their customers to conduct ATM transactions. EFMARK Premium Armored is the nation’s largest “ATM only” service company.

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Most Consumers Carry 3+ Credit Cards

The total number of U.S. payment cards-in-force rose 9% at mid-year topping 926 million, setting the pace to pass the one billion milestone in mid 2006. A recently concluded CardWeb.com poll revealed that 52% of Americans carry three or more credit cards. As of June 30th, there were 682.2 million credit cards and 243.8 million off-line debit cards. Over the past five years, credit cards have grown 24% while signature debit cards have expanded by 63%, according to CardData ([www.carddata.com][1]). The recent CardWeb.com poll of 10,143 consumers showed 25% carry two credit cards, 20% carry three credit cards and and 13% carry four credit cards. Seven percent said they carry no credit cards while 3% said they had at least 11 credit cards in their wallet.

Q2 Payment Cards-in-Force
(VISA, MasterCard, Discover, American Express)
[millions]
Credit Debit Total
Q2/01 551.3 149.9 701.2
Q2/02 597.2 166.4 763.6
Q2/03 620.8 186.8 807.6
Q2/04 641.2 207.6 848.8
Q2/05 682.2 243.8 926.2
Source: CardData (www.carddata.com)

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

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AmEx Offers a Cash to Savings Acct Card

American Express has launched a new credit card that generates cash rewards automatically swept into a savings account. The new “American Express One” card also features “Interest Protection” wherein cardholders can separate purchases to pay off and those to pay over time. The card is linked to a high-yield savings account with American Express Bank, and currently pays 3.15% per annum. The “Savings Accelerator” feature also permits cardholders to contribute extra funds to their account. The annual fee for “One from American Express” is $35 which is waived for the first year. The APR is prime +5.99%. All new cardholders also receive a $25 bonus contribution to their savings account, upon first purchase. The new card is an expansion of AmEx’s success in credit card cash rewards. After receiving a strong response to its “Cash Rebate Card” in 2002, AmEx extended the program to “Blue” and its business cards in 2003. (CF Library 4/3/03; 5/4/05)

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HBC CARD SALE

Toronto-based Hudson’s Bay Company has decided to unload its C$1.25 billion credit card business to cash-in on the current high portfolio valuations. After peaking in 2003, HBC’s credit card outstandings have been steadily declining due to lower store sales and higher customer payments. The portfolio produced an operating profit of C$162 million last year. Hbc expect its portfolio to be worth between C$500 million and C$600 million. In August, J.P. Morgan Chase inked an agreement to acquire Sears Canada’s C$2.5 billion credit card portfolio for $2.2 billion in cash. Sears anticipates an after-tax gain of approximately C$650 million. The deal included both its private-label Sears credit card accounts (C$2.3 billion) and its co-branded “Sears MasterCard” (C$200 million). Totally, the Sears Canada portfolio has about 10 million gross accounts and four million active accounts. At July 31, 2005, there were 3.2 million gross accounts and 2.9 million active Hbc customer accounts (1.6 million Bay cardholders and 1.3 million Zellers cardholders). Hbc has retained Goldman Sachs and BMO Nesbitt Burns as financial advisors for the sale. (CFI Library 9/1/05; 9/16/05)

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Private Label Issuers’ Share to Hit 92%

A new report says there has been a dramatic shift in the ownership of U.S. store credit card receivables as the share of private label credit card issuers has grown from 45% in 1999 to 85% last year. Based on portfolio transactions this year, private label credit card issuers will increase their market share to more than 92% by the end of 2006. The research by Mercator Advisory Group calculated that GECF’s share was 31% at the end of last year while Citi Commerce Solutions had a 31% share. HSBC Retail Services had an 18% share as Alliance Data Systems held a 4% share at year-end 2004. The Group says private label credit issuers are still hungry for more acquisitions but will soon face the organic growth challenge. Mercator says co-branding, such as the “Starbucks Duetto Card” or the “Wal-Mart Discover,” could be the answer.

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Pipeline Data Raises Cash for Acquisitions

Massachusetts-based Pipeline Data has entered into a $2 million financing arrangement with Centrecourt Asset Management to fund new merchant portfolio acquisitions. Under the arrangement, Pipeline will issue up to $2 million of its convertible term notes at a conversion price of $1.10 to Centrecourt and Centrecourt will also be issued five-year warrants to purchase up to 700,000 shares of Pipeline’s common stock. Pipeline Data provides integrated transaction processing services for all major credit cards and serves over 15,000 accounts.

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Nordstrom Intros Debit Card w/Rewards

Seattle-based Nordstrom has introduced a VISA debit card that offers rewards. The “Nordstrom MOD VISA” is issued through Nordstrom fsb. Cardholders earn two points for every net dollar spent at Nordstrom. Once a customer reaches 2,000 points they automatically receive a $20 “Nordstrom Notes” certificate in the mail redeemable toward any Nordstrom product or service. Rewards points can be earned whether a customer uses a Nordstrom retail card, “Nordstrom VISA” card or a “Nordstrom MOD” card. Nordstrom has 154 US stores in 27 states. The Nordstrom VISA credit card portfolio currently has about $700 million in outstandings and one million cardholders, according to CardData ([www.carddata.com][1]).

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

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Pay By Touch Lands $130MM in Financing

San Francisco-based Pay By Touch Solutions has raised $130 million in new financing from two major hedge funds. $75 million was raised in senior secured notes with major investments from New York based hedge fund Och-Ziff Capital Management, Farallon Capital Management and Plainfield Asset Management. The additional $55 million was raised in a convertible promissory notes from three of the Getty Trusts, Ron Burkle, the founder and managing partner of The Yucaipa Companies and Rembrandt Ventures. Pay By Touch Solutions recently completed the largest chain-wide biometric payments rollout. Pay By Touch Solutions’ patented biometric payment products enable shoppers to quickly and securely pay for purchases or cash checks using a finger scan

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U.S. Bank Rolls-Out an Israel-Related VISA

U.S. Bank and Heritage Affinity Services have made a soft launch of their new affinity card that supports Israel-related charities. The new “HAS Advantage Platinum VISA” will roll-out nationally in November and target Jewish households. The card also rewards cardholders with one point for every dollar you spend. Additionally, new cardholders receive 1,000 bonus points with their first purchase. Points can be redeemed, after November 20th, for miles on EL AL Airlines, domestic and International travel rewards, brand-name merchandise, gift certificates and Judaica. Heritage Affinity Services has alliances with EL AL Airlines, Dan Hotels Israel, Sheraton Hotels Israel, Avis Israel and Budget Israel. The no-fee card carries an interest rate between prime +5.99% and prime +14.99%.

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Vital and BA Merchant Services Renew

Vital Processing Services has renewed its merchant processing service agreement with Bank of America merchant services, the second largest U.S. bankcard merchant acquirer. The agreement continues the longterm relationship between the two companies, with Vital providing full service transaction processing and related support services. Terms of the agreement were not disclosed. Vital provides end-to-end payment solutions to acquirers and their merchants.

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