KDB Indicates LG Card May Be Sold Very Soon

Korea Development Bank says LG Card creditors are planning to sell LG Card starting in September instead of December. LG Card has about 9.5 million cardholders and produced nearly $500 million in net income for the second quarter. Reportedly, Hana Bank, Woori Financial Group, and Shinhan Financial Group are interested in acquiring LG Card.
LG Card has a current market value of 3.9 trillion won (US$3.6 billion). LG lost about 81.6 billion won (US$81 million) last year, compared to the 2003 loss of 5.59 trillion won (US$5.6 billion).

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HSBC Modifies its Polaris StarCard Contract

Polaris Industries has signed a new private label credit card contract for its “Polaris StarCard” with HSBC Bank Nevada that removes all credit and funding risk to Polaris and eliminates the need for Polaris to maintain a retail credit cash deposit with HSBC. The new agreement provides for income to be paid to Polaris based on a percentage of the volume of retail credit business generated. Polaris designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs),Victory motorcycles and the Polaris RANGER for recreational and utility use, with reported 2004 annual sales of $1.8 billion. HSBC Retail Services is an issuer of private label, merchant branded, credit cards in the United States.

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AmEx Leads in Volume Dollars and Growth in Q2

Among the top players in the U.S. payment card market, American Express led the second quarter period with a 17% year-on-year increase, nearly twice the volume growth of Citibank and about triple JPM Chase’s growth. With $88.5 billion in second quarter U.S. GDV, American Express also ranked #1 in actual dollars, followed by Chase and Citi. Furthermore, AmEx bested the second quarter growth rates of VISA and MasterCard. VISA’s Q2 GDV for all U.S. products was up 15.6%, while MasterCard was up 11.1% in U.S. GDV for all products. The top three VISA and MasterCard issuers accounted for about 59% of V/MC’s total credit card dollar 2Q/05 volume in the U.S, according to CardData ([www.carddata.com][1]).

TOP ISSUER U.S. GROSS DOLLAR VOLUME
($ billions)
Issuer 2Q/04 2Q/05
American Express $75.7 $88.5
JPM Chase $71.2 $75.6
Citibank $66.1 $72.2
MBNA $52.0 $57.0
Discover $24.4 $25.4
Source: CardData (www.carddata.com)

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

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TRM Revenues Double in Q2 Driven by New ATMs

Portland, OR-based TRM reported that gross sales more than doubled to $61.4 million during the second quarter, compared to 2Q/04. ATM operating income quadrupled to $5.0 million during the quarter. TRM says the increase in sales reflects the addition of approximately 15,700 ATM’s resulting from the acquisition of the eFunds Corporation ATM network and by the ATM revenue mix which shifted from primarily full placement to predominately merchant owned ATMs due to the acquisition of the eFunds ATM portfolio. At the end of the quarter, TRM had 21,937 ATMs producing total withdrawals of 20.2 million during 2Q/05. The average monthly withdrawals per unit was down 18% to 333. The average sales per withdrawal was also down 18% to $2.31. Therefore, the average monthly sales per unit declined about 32% to $771. For complete details on TRM’s second quarter performance, visit CardData ([www.carddata.com][1]).

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

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ICICI CARDS

ICICI Bank has decided to waive all annual fees on its credit cards for life. Only co-branded cards with Deccan Air and Kingfisher Airlines will continue to carry such fees. ICICI in a total card base of nearly 14 million. The bank also has a 25% share of the total credit card market. ICICI Bank is India’s second-largest bank with total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs.

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Cardtronics Does Acquisition & Branding Deals

Houston-based Cardtronics has acquired the ATM business of Chicago-based ISO NEO Concepts. The portfolio includes over 360 ATMs located primarily in high traffic BP Amoco stores and an additional 50 ATMs in various independent merchant locations. Cardtronics also announced that Chase will brand 246 Cardtronics ATMs in Duane Reade stores in New York City, Long Island, Westchester and New Jersey. This is the second major branding agreement that Chase has completed with Cardtronics; the first included ATMs in 215 Exxon Mobil stores in Texas. Cardtronics is the largest owner/operator of ATMs with a nationwide U.S. network of more than 25,000 locations operating in every major market and in all 50 states as well as in 1000 locations throughout Great Britain.

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Open Solutions Gateway Targets Canadian QSR

Connecticut-based Open Solutions has launched a POS IP gateway to deliver credit and debit transaction processing in quick service and multi-lane environments in the Canadian marketplace. The IP Gateway provides the instant transaction response time that is essential in Quick Service Restaurants (QSRs) and multi-lane environments, leveraging off high bandwidth DSL or cable connections. Open Solutions Inc. provides a strategic product platform that integrates core data processing applications.

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Ernex Launches a New EFT Feature

Ernex has launched a new EFT feature designed to eliminate the manual reconciliation process for merchant gift card programs. With the new feature, merchants operating a gift card program can transfer funds into or out of a shared bank account managed by a corporate head office or collective of merchants. The head office can also easily debit or credit merchant accounts, in essence paying the locations for the value of gift cards redeemed at that location. Ernex provides real-time marketing solutions including privately branded and multi-merchant loyalty programs, stored-value gift cards, reward fulfillment
services and loyalty database hosting services. The Company is a division of Moneris Solutions Corporation.

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Global Axcess/NMS Revenues Up 74% in 2Q/05

Florida-based Global Axcess posted a 74% increase in second quarter revenues to $5.4 million. Net income for the second quarter was down 19% to $295,911. Net income one year ago was higher due to a one-time settlement gain of $304,000 but cash flow from operating activities tripled during the quarter. Global Axcess, through its wholly owned subsidiary, Nationwide Money Services, provides turnkey ATM management solutions. NMS currently owns and operates over 3,500 ATMs in its national network spanning 42 states and provides proprietary ATM branding and processing for over 70 financial institutions with approximately 650 branded sites nationwide. For complete details on Global Axcess’s second quarter results, visit CardData ([www.carddata.com][1]).

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

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Q Comm Restates Q1 and 04; 2Q/05 Delayed

Utah-based Q Comm International has restated its first quarter and 2004 results and expects to release its second quarter report on August 22nd. Q Comm has changed its revenue recognition policy on sales of consigned PINs based on a previously announced comment letter from the Securities and Exchange Commission (SEC) stating the revenue from sales of consigned PIN inventory should be recorded on a net basis rather than a gross basis. Based on this change, revenue for 2004 increased $9.9 million to $16.6 million from $6.7 million in 2003. In the first quarter of 2005, revenue increased $5.8 million to $8.5 million from $2.7 million in the first quarter of 2004. Due to the corresponding reduction in operating expenses for each of these periods, the adjustment in revenue recognition policy did not impact the Company’s assets, liabilities or equity. Q Comm International is a prepaid transaction processor that electronically distributes prepaid products from service providers to the point of sale.

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Mint Technology Signs Card Deal with Plastic Now

Mint Technology and People’s Trust have inked a distribution agreement with Plastic Now to create promotional prepaid MasterCard cards using Canadian household brand names. Plastic Now will initially purchase and distribute a minimum of 15,000 Plastic Now branded prepaid
MasterCard cards. Mint will provide Plastic Now with a turnkey prepaid
program with complete services, features and capabilities. Peoples Trust
of Vancouver will be responsible for card issuance under its agency
agreement with Horizon Plus Card Services Limited Partnership.

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