VISA Asia Pacific To Provide Free Security Service

VISA Asia Pacific has taken another step in the fight against payment
system fraud by offering the world’s first free security assessment
service to help boost cardholder data security in the region. All
parties that handle VISA cardholder data, such as VISA’s member
financial institutions, internet payment service providers and
merchants are entitled to access a free self-assessment service and to
receive quarterly network vulnerability
scans to validate the security of their Internet-connected systems. The
service is part of VISA’s Asia Pacific’s Account Information Security
Program (AIS). VISA will partner with ScanAlert to provide the free
security assessment and validation service and will provide VISA’s member
financial institutions in the Asia Pacific with a comprehensive reporting
system to track the AIS validation status of their merchants and service
providers. VISA Asia Pacific captures 62 percent of all card purchases in
the region. ScanAlert is the world’s largest website security
certification company, protecting over 65,000 web sites worldwide through
the HACKER SAFE certification program.

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Nestle Cafe Launch a Gift Card Nationwide

The five-year-old Nestle Toll House Cafe by Chip franchise has inked a deal to launch a gift card. CO-based Mercury Payment Systems launched the card this week at a franchise conference. Mercury also teamed with CRS to enable a total credit and gift card processing solution throughout the entire franchise. Howell ECR Systems of Dallas, initiated the solution for Nestle. The Mercury platform is integrated to the Samsung “7000” registers in use at most franchise locations and is also configured to facilitate processing for those using Samsung “4000” registers with stand-alone terminals. The Nestle Toll House Cafe by Chip franchise currently has about 70 locations nationwide.

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JCCA Survey Tracks Smart Card Awareness

In late July, The Japan Credit Card Association (JCCA)
conducted an online survey of men and women in their 20s to 60s on their
awareness of smart credit cards embedded with a processor.
Of the 684 respondents, 54% were aware that credit card companies are
replacing their magnetic cards with smart cards. When asked about what
type of card they want to use, 93% of the respondents answered that they
prefer chip-embedded cards. Respondents indicated they want to use smart
cards in the future because there is “no worry about counterfeiting
(64%)”, followed by “no concern for forgery because pin numbers are needed
(50%)”, “cards are used in visible proximity (42%)”, and “ease-of-use
because all you need is your pin number, not signature
(36%)”.

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Rogers to Test Mint PayPass MasterCard

Rogers Communications has initiated a market trial of the “Mint PayPass
MasterCard” at its Toronto headquarters campus. Over the course of the
trial, employees at the Rogers Campus need only register for the Mint
MasterCard, which can be used for contactless payments at MasterCard
PayPass designated merchants at the Campus and traditional purchases
wherever MasterCard is accepted worldwide and access prepaid
functionality which allows cardholders to preload value on their card.
Peoples Trust of Vancouver is responsible for card issuance. Rogers
Communications is a diversified communications and media company engaged
in three primary lines of business: Rogers Wireless, Rogers Cable and
Rogers Media.

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AUG DEBT

Credit card borrowing continues to downshift, as Brits lopped-off GBP146
million during August, compared to adding GBP584 million in
August 2004. There was a stronger increase in overall consumer credit in
August as a result of higher demand for loans and overdrafts, but in
marked contrast, credit card lending fell for the second time this year.
This weakness on cards ties in with the very weak retail sales data and
reflects consumer caution in relation to their borrowing. The British
Bankers Association also says that total sterling lending to the UK
private sector showed a net underlying increase of GBP8.0 billion
(+0.7%) to GBP1,119 billion. This was down on the previous month’s rise
of GBP11.6 billion and the average of +GBP10.0 billion over the previous
six months. The BBA collects data from Abbey National, Alliance &
Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB,
Northern Rock and The Royal Bank of Scotland.

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Freeman to Chair the BAI Board of Directors

Douglas Freeman, chairman and CEO of NetBank, has been elected chairman of the BAI Board of Directors. Over his more than 30-year career in financial services, Freeman has held a number of executive positions, including President of the Consumer Finance Group at Bank of America; President of the Consumer Finance Division at NationsBank, N.A.; Chief Corporate Bank Executive and Chief Consumer Bank Executive at Barnett Bank; and Executive Vice President of Business Banking at Wells Fargo Bank. Freeman had served as Chief Executive Officer of Resource Bancshares Mortgage Group, Inc. for more than two years prior to NetBank’s acquisition of that company. BAI is the financial services industry’s professional organization focused on enhancing organizational and individual performance.

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ASAP Funding Targets Credit Card Merchants

Global Debit Cash Card and its ASAP Funding subsidiary have launched a test of a new “AdvanceFundsPlus” product, which provides working capital to merchants by the purchase of a portion of their expected future sales at a discount and then collects a percentage of the merchant’s daily credit card sales for repayment. AdvanceFundsPlus provides working capital to businesses that accept credit cards. ASAP Funding’s target clients are small and mid-size businesses that need working capital, but cannot meet the requirements to qualify for bank financing. The United States has about 6,000,000 million businesses that are classified as small or mid-sized which comprise the target market ASAP Funding is seeking to serve.

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Discover Q3 Profits Slip 28%; Card Loans Flat

Morgan Stanley reported this morning that its Credit Services division, including the “Discover Card,” posted $239 million in pre-tax profits for the quarter ending August 31st, compared to $330 million for the year-ago quarter. Managed outstandings were essentially flat compared to year-ago levels, but transaction dollar volume increased more than 5% year-over-year, while delinquency and charge-offs continue to fall compared to prior quarters. Managed merchant, cardholder and other fees were $532 million, up 7% from last year. At quarter end, managed credit card loans were $47.1 billion. However, the managed net interest income fell $87 million from a year ago, reflecting a tighter interest rate spread. The managed credit card net charge-off rate for the third quarter was 5.12%, 64 basis points below a year ago. The managed credit card over-30-day delinquency rate was 3.91%, a decrease of 90 basis points from the third quarter of 2004, and the managed credit card over-90-day delinquency rate was 1.80%, 42 basis points lower than a year ago. Total transaction volume increased to $26.7 billion, compared to $25.4 billion for 3Q/04. The account base declined during the third quarter by 300,000 accounts from the second quarter. Domestic active accounts declined 2% from 3Q/04 to 19.2 million. For complete details on Discover’s third quarter performance, visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
3Q/04* 4Q/04* 1Q/05* 2Q/05* 3Q/05* Y/Y CHNG
Outstandings: $47.1b $48.3b $47.8b $46.8b $47.1b NC
Volume: $25.4b $25.7b $25.9b $25.4b $26.7b +5.1%
Accounts: 46.0m 46.2m 46.0m 45.9m 45.6m -0.9%
Actives: 19.6m 19.7m 19.5m 19.3m 19.2m -2.0%
Chargeoffs: 5.76% 5.45% 5.11% 4.94% 5.12% -64bps
Delinquency**: 4.81% 4.55% 4.24% 3.90% 3.91% -90bps
Yield: 11.69% 11.59% 11.23% 11.69% 12.04% +35bps
Notes: * 3Q/04 ended 8/31/04; 4Q/04 ended 11/30/04;
1Q/05 ended 2/28/05; 2Q/05 ended 5/31/05; 3Q/05 ended 8/31/05.
** delinquency is 30-90 days and excludes 90+ days.
Source: CardData (www.carddata.com)

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

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EFMARK Acquires an Interest in Solvport

EFMARK Premium Armored has acquired a significant interest in OR-based Solvport, a provider of technical services and support for ATM and kiosk owners and operators. Solvport currently provides service to more than 40,000 ATMs, offering telephone support nationwide and on-site repair in 93 metropolitan areas. Solvport also enables EFMARK to strengthen its service directly to financial institutions through its “Tech-Connect” offering, allowing banks and credit union customers to perform their own first line maintenance. EFMARK is the nation’s largest “ATM only” service company. Solvport provides technical service.

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Diebold Lowers Expectations; Pres/COO Out

Leading ATM manufacturer Diebold announced this morning that its President/COO is leaving and that its ATM related revenue for the third quarter may be more than $50 million lower than the previous 7%-9% increase expected. The Company says the lower profit expectations are due to weak overall North America financial self-service revenue, impacted by the effect of Hurricane Katrina, operational inefficiencies, rising fuel costs and pricing pressures. Diebold Chairman/CEO, Walden O’Dell, is immediately taking over the President/COO position from the departing Eric Evans. O’Dell also announced that a new financial self-service business unit combining product and software development, manufacturing, procurement and marketing will be formed into a single global organization. The new business unit will be headed by Thomas Swidarski, who assumes the title of SVP/Financial Self-Service Group. Sales and service operations for both financial self-service and security will remain unchanged and continue to be structured in two organizations focused on North America and International markets. Diebold share price was down as much as 16% this morning.

TOTAL FINANCIAL SELF SERVICE REVENUE
3Q/04: $418.4 million
4Q/04: $528.8 million
1Q/05: $388.5 million
2Q/05: $433.7 million
3Q/05: $397.0 million (projected)
Source: CardData (www.carddata.com)

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