CARD SHARE

Credit card market share, based on gross dollar volume, has dropped 30 basis points over the past year from 83.3% to 83.0% as more merchants assess surcharges for credit card use. As a result, charge cards from American Express and Diners Club have gained ground despite more expensive merchant fees. According to the Reserve Bank of Australia, the market share of credit cards, based on gross dollar volume, has plummeted from a high of 86.3% in September 2003 to 82.8% in October 2004. Since then, the credit card share has bounced around 83%.
The RBA recently released data showing that the average merchant service fee charged by Bankcard, MasterCard and VISA in the second quarter was 92 basis points, down from 99 basis points a year ago, and from 140 basis points immediately prior to the interchange reforms. Since the reforms came into effect, the average merchant service fee charged by American Express has fallen by around 15 to 20 basis points to 2.36%, while the average fee charged by Diners Club has fallen by around five basis points to 2.31%.

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Wincor Introduces the BEETLE/iPRO POS System

Wincor Nixdorf announced the availability of the “BEETLE/iPRO”, a high-performance POS system featuring “Intel Pentium 4” and “Celeron” desktop processors. The BEETLE /iPRO supports open standards, allows flexible configurations, and delivers faster processing speeds, improving POS interactions. Wincor Nixdorf is a supplier of IT solutions to the retail and banking industries with net sales of EUR 1,576 million.

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CardWizard Systems Usage Expands in Arizona

Phoenix-based Desert Schools FCU has expanded the use of Dynamic Card Solutions’ instant issue “CardWizard” software across the state of Arizona with the opening of its 50th branch. With instant issue, DSFCU now delivers cards on the spot, eliminates the risk of card theft and delivers debit card education along with new cards, which increases card activation rates and member usage. Dynamic Card Solutions is a developer of instant issuance and PIN selection solutions for banks, credit unions and retailers and is an instant issuance provider for Visa and MasterCard debit cards in the US. Desert Schools is Arizona’s largest credit union with more than $2 billion in assets.

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Equifax Acquires a Marketing Solutions Company

Atlanta-based Equifax has acquired BeNow. The Company combines database management, analytics and support to better structure customer marketing campaigns to optimize relationships through vertical market expertise. BeNow will become part of Equifax Marketing Services. The company will maintain its presence in Wakefield, MA and its CEO Brad Neuenhaus will join Equifax as SVP. Terms of the acquisition were not disclosed.

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One Third Take Cash in Hibernia – Cap One Merger

About 33% of Hibernia shareholders have elected to receive cash while 54% elected to receive Capital One common stock in the pending acquisition of Hibernia by Capital One. The maximum amount of cash that will be paid in the merger is fixed at $2,382,141,311. Capital One and Hibernia expect to complete the merger on September 1, 2005. Capital One and its subsidiaries collectively had 48.9 million accounts and $83.0 billion in managed loans outstanding as of June 30, 2005. Hibernia has $22.1 billion in assets and 321 locations in 34 Louisiana parishes and 36 Texas counties.

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iLoop Mobile and MyMoneyPlus Team

San Jose-based iLoop Mobile is teaming with MyMoneyPlus, an ATM/Debit card technology company to provide prepaid content cards and credit card purchases for mobile content. iLoop Mobile is a mobile application service provider for interactive mobile phone services, marketing initiatives and content distribution. MyMoneyPlus Card Corporation has developed a suite of prepaid debit cards. MyMoneyPlus cards are FDIC insured when registered and function as normal ATM/Debit cards with the capability of withdrawing cash worldwide.

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Monthly Payment Rate Hovers at a Record Level

The amount Americans are paying each month on their credit card bills continues to hover at record levels. After dipping in May, the average is now about 18.5% of the outstanding balance. One-year ago the monthly payment rate was about 17.3%. Approximately 42% of consumers pay-off credit card balances in-full each month, while 33% pay more than the minimum, according to a recent American Bankers Association survey. As a result of the steep rise in payments, the bank credit card industry has experienced sluggish growth in card loans. Most large issuers are posting growth around 3% to 4% per year in total credit card balances. The increase in the monthly payment rate has largely been attributed to debt consolidation via home equity loans. However, a significant portion is driven by cardholder behavioral changes due to penalty interest rates, universal default policies and rising fees.

MONTHLY PAYMENT RATES
(Prime Credit Card-Backed Securities)
Jul 04: 17.28%
Jan 05: 17.70%
Feb 05: 17.64%
Mar 05: 16.32%
Apr 05: 18.52%
May 05: 17.18%
Jun 05: 18.29%
Jul 05: 18.47%
Source: FitchRatings

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Morgan Beaumont Hires Marketing Executive

Florida-based Morgan Beaumont has hired Clare Morgan, formerly with Touch-n-Buy and Blackstone Calling Card, as VP of Marketing. Morgan brings to Morgan Beaumont over 10 years of marketing and public relations experience in the prepaid telecommunications and electronic transaction industries and will assume responsibility for the company’s corporate marketing efforts; including plans to bring national brand exposure to Morgan Beaumont’s nationwide cash load platform, the SIRE Network, and the company’s numerous stored value card solutions. Morgan Beaumont, Inc. is a provider of stored value and debit card solutions.

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Florida AG Nails a Collections Firm

The Florida Attorney General last week filed suit against a Jacksonville-based collections agency for repeatedly threatening consumers. Ellis Crosby & Associates allegedly used aggressive and illegal tactics to collect on its accounts, including posing as law enforcement officers or attorneys, threatening arrest by military police, collecting illegal fees greater than the original amount owed, and representing themselves as lawyers with the Attorney General’s Office. In one case a woman was contacted by an employee of Ellis Crosby claiming to have a videotape of her husband cashing a bad check. The company told the woman that the police were on their way to her home to arrest her husband. Another person, who was eight months pregnant, was threatened with arrest if the payment was not received. A representative of the Company informed the person that she should know “they don’t give very good prenatal care in jail.”

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VISA’s Latin America PDV Up 38% in Q2

VISA credit and debit purchases for Latin America and the Caribbean increased 38% over the twelve-month period ending June 30th, accoding to last week’s issue of CardFlash International. VISA’s total sales volume, including purchases and cash advances, surpassed US$258 billion, a 29% gain over last year. The number of cards-in-force approached 194 million, a 23% increase over the second quarter of 2004. Over the same period, purchase volume with VISA debit cards registered a 48% record growth, surpassing the US$21 billion mark. The number of VISA and “Visa Electron” debit cards grew to 139 million, a 22% year-over-year increase for the same period ended June 2005.

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