Corillian Names a New Chairman

Oregon-based Corillian has named Jay Whipple, a long-time director and formerly with CheckFree, as chairman of the board of directors. Whipple has served as a director of Corillian since November 1997. During that time, he has also served as chairman of Osprey Partners, LLP, a software services company, and president of J.N. Whipple, Inc., a money management firm. Corillian provides online banking, bill payment and fraud prevention applications to leading financial institutions.

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Arthur Blank RAC CARD Patent Dispute Settled

Arthur Blank and Barry Fiala Inc. have settled a dispute over a retail activation card patent held by each firm. The “RAC CARD” is a single piece product, punched to hang from a standard J-hook and scored to snap cleanly into a standard plastic card and a panel that can be used for a variety of functions. The product is geared toward prepaid cards. In the recent litigation settlement, Arthur Blank, in addition to other considerations, acknowledged that the Fiala patent is valid and enforceable and that it applies to its “RAC CARD.” Arthur Blank will now be a licensee of the Fiala patent and will manufacture and market its RAC CARD products under that license. Also, Fiala and its licensees will be able to manufacture and market products under the Arthur Blank and Co. “RAC CARD” patent.

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Manhattan Golf Promotes MC and Citi Cards

MasterCard and Citibank teamed up yesterday to hold a one-hole golf event with Tom Watson in downtown Manhattan to promote the “World MasterCard” and the “Citi PremierPass MasterCard”. Earlier this year, MasterCard launched its enhanced World MasterCard program to further establish its leading profile among affluent consumers in the United States. World MasterCard allows cardholders to choose from a wide selection of rewards based on their personal needs and interests from vacations to donations. Citi Cards, or Citi, is a member of the Citigroup. Citigroup, the preeminent global financial services company, has some 200 million customer accounts and does business in more than 100 countries.

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Morgan Stanley Nixes the Discover Spin-Off

Morgan Stanley’s Board has decided to retain Discover Financial Services and not spin it off. The Company says that Discover is a strong and attractive business that provides a consistent stream of stable, high-quality earnings and substantial cash flow, diversifies the Company’s earnings and broadens its scale and capital base. Among some of the items considered is the fact that Discover added more than one million merchant locations over the past year, has improved credit quality, launched new partnerships with GE Consumer Credit and China UnionPay and has acquired the PULSE debit network. MS also noted that Discover is poised for new growth due to a favorable 2004 court ruling that allows the network to partner with financial institutions in the U.S. for the first time. The Company reports Discover delivered record before-tax earnings of $1.27 billion in 2004, representing 19% of Morgan Stanley’s total before-tax earnings and in excess of 19% ROE. (CF 4/5/05)

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OfficeMax Promotes Gift Cards for Teachers

OfficeMax has launched a promotion with Aly & AJ to promote the purchasing gift cards by students for teachers. According to the National Education Association, the average teacher spends nearly $500 each year out of their own pocket to stock their classroom. The trend-setting teens are asking their fans to remember to pick up a back-to-school gift of school supplies or an office supply gift card for their teacher. OfficeMax Incorporated provides business-to-business office product solutions and retail office products.

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MAY DEBIT

Debit card EFT/POS volume grew 12.2% to A$6.6 billion in May.
Over the past five years debit card volume has grown 128%. During May,
Australians used debit cards for A$5.2 billion in purchases with 83.6
million transactions. Total EFT/POS transactions were 98.0 million for
May according to the Reserve Bank of Australia. Over the past twelve
months, Australians have used debit cards for A$60.8 billion in
purchases. There were 25.1 million debit card accounts in the country at
the end of May, compared to 24.7 million one-year ago.

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PayPilot RFID Offers ACH, Credit and Prepay

Seattle-based Accelitec has introduced a comprehensive suite of RFID-based payment solutions, including ACH, credit and prepay. The “PayPilot” system consists of three hardware components and supporting backend and transaction software. Consumers sign up at their merchant’s store for a key fob or card using a PayPilot “Automated Transponder Dispenser.” The RFID-enabled fob is presented at check-out to a “PayPilot POS” transponder. Authentication, security and consumer pre-set variables help provide spending controls. Backend transaction software allows merchants to control interchange fees by allowing consumers to use ACH for payments. The “PayPilot” network operates on a Microsoft.Net platform. POS terminals are available in the sub-$100 range.

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TransUnion Names a New CFO

TransUnion has hired Scott Schubert as its new CFO, replacing David Emery who became COO earlier this year. Schubert comes to TransUnion from NTL, Inc. where he was executive vice president and CFO. Prior to NTL, he was CFO for Williams Communications, vice president of global financial services for BP Amoco and vice president of worldwide financial services for the Amoco Corporation. Schubert holds a MBA from Purdue University. TransUnion offers a broad range of financial products and services that enable customers to manage risk and capitalize on market opportunities.

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Processors Develop Value Added Services

A new research report reveals that there is a growing demand for processor value added services due to the rapid consolidation of the card issuing and transaction processor segments. The study suggests that processors are in a position to use their scale and transactional expertise, as well as their key position in the card industry value chain, to assist issuers with profitability issues. The research, by Mercator Advisory Group, says processors have increased their efforts to provide a broad spectrum of new services, from pure cost reduction programs (like data warehousing and implementation of association compliance mandates) to complex data analytics services on top of the core processing activities (like risk prediction, fraud detection, loyalty and marketing programs). The report says issuers spent nearly $72 billion in expenses last year with charge-offs making up the lion’s share. Marketing and operating expenses were about $29 billion in 2004 with processing costs comprising the smallest expense.

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Banner Year for Debt Buyers/Collection Firms

A leading indicator of economic conditions affecting the accounts receivable management industry has reached an all-time high. The latest “Kaulkin Ginsberg Index” reached 1303.1, a 16.4% increase over the past year. Since its inception in January 2000, the Index has added more than 30% to its original value for the first time. Kaulkin Ginsberg says it has been at least five and a half years since overall economic conditions were more friendly to collection agencies, debt buyers and collections law firms.

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