Euronet Q2 Rev Soars 52%; Trans Up 59%

KS-based electronic payments provider Euronet Worldwide posted revenues of $132.2 million for the second quarter, a 52% jump over 2Q/04. However, net income for 2Q/05 declined 11% year-over-year to $3.9 million, due to foreign exchange fluctuations. The EFT Processing Segment posted second quarter revenues of $26.0 million, compared to $18.0 million reported for the second quarter of last year. The EFT Processing Segment processed 86.3 million transactions in the second quarter compared to 54.1 million transactions for 2Q/04. The segment completed the quarter with 6,565 ATMs owned or operated, compared to 5,097 ATMs at the end of the second quarter 2004. The Prepaid Processing Segment reported 2Q/05 revenues of $102.5 million, a 56% increase over the year-ago quarter. Total transactions processed by the Prepaid Processing Segment in the second quarter were 86.2 million, compared to 54.6 million prepaid transactions processed in 2Q/04. The Prepaid Processing Segment processes electronic point-of-sale prepaid transactions at more than 208,000 point-of-sale terminals across more than 101,000 retailers in Europe, Asia Pacific and the USA. For complete details on Euronet’s second quarter performance, visit CardData ([www.carddata.com][1]).

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

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MPR Among Credit Card Bonds Returns to 18%+ Levels

After dipping in May, monthly payment rates on asset-backed credit card bonds returned to record high levels during June. Payment rates, the amount that cardholders pay toward outstandings each month, hit 18.29% for June, 111 basis points above May and 161 basis points above year-ago levels. According to FitchRatings, the monthly payment rate, among prime issuers was 17.18% in May and 16.68% one-year ago. Standard and Poor’s “Credit Card Quality Index,” also reported a spike in the payment rates during June of 18.9%. The highest among managed card portfolios was 18.48% in April. Since 2000, the lowest MPR average occurred in October 2001 when it dipped to 14.89%, according to CardData (www.carddata.com).

MONTHLY PAYMENT RATES
(Prime Credit Card-Backed ABS)
Apr 04: 17.31%
Nov 04: 16.67%
Dec 04: 17.09%
Jan 05: 17.70%
Feb 05: 17.64%
Mar 05: 16.32%
Apr 05: 18.52%
May 05: 17.18%
Jun 05: 18.29%
Source: FitchRatings

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LG Electronics and SBI Card Launch a Co-Branded VISA

LG Electronics and SBI Card have launched a co-branded credit
card, the first of its kind in the Indian consumer appliances industry.
The new “LG-SBI VISA” card features special offers for cardholders as
well as an annual fee waiver for consumers purchasing at least Rs2000 of
LG products. The card also offers an installment plan at 10% interest
rate and free balance transfers for 75 days. Other benefits include a
transaction fee waiver on IOC and IBP pumps for fuel purchases of more
than Rs 400. SBI Card is a joint venture of the State Bank of India and
GE Money. SBI Card currently has 1.6 million cardholders and offers a
wide range of card products.

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Wausau Names its Payment Solutions President

Wausau Financial Systems has hired Nancy Langer, formerly of Billeo and Carreker, as its President of Payment Solutions. Langer will lead the software and services for WFS’ market leading distributed capture solutions and payment processing and archive solutions. Additionally, Langer will identify and oversee customer-centric OEM and other strategic business opportunities. Prior to joining Billeo she ran her own consulting company, Langer & Company. WFS is the largest independent software and services provider for check image point of presentment across multiple capture points and is the largest remittance technology provider to the financial institution and corporate marketplaces.

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Consumer Group Exposes Universal Default Policies

San Francisco-based consumer group, Consumer Action, is releasing a report today showing that “universal default” policies are widespread. 45% of banks surveyed by CA said they have universal default policies – a slight increase from last year’s survey. CA found default rates as high as 35% (Merrick Bank). Runners-up for the highest default rates are Citibank, Bank of America and Providian at 29.99%. The lowest default rate is 12% (Arkansas National Bank). Eleven of the 21 banks with universal default policies are willing to reduce the higher rates if cardholders’ credit histories improve. Consumer Action, founded in 1971, is a non-profit education and advocacy organization based in San Francisco, CA, with offices in Washington, DC, and Los Angeles, CA.

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UK OFT Requests Lower Late and Over-Limit Fees

The U.K. Office of Fair Trading has ruled that credit card late fees and over-limit fees far exceed the actual damage done to an issuer when a cardholder defaults. The OFT this week issued letters to eight major credit card companies notifying them that the fees are excessive and has given them three months to lower the fees or provide more information to justify the fees. Credit card late fees typically range from $35 to $45 according to this week’s issue of CardFlash International. Current British law restricts the damages that can be awarded to compensate for loss suffered as a result of a breach of contract. The breach must be an effective cause of the loss. The innocent party is entitled to be compensated for certain types of loss that were reasonably foreseeable at the time that the contract was made, but is not entitled to more. The OFT has powers to take enforcement action in the courts if necessary to protect consumers.

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Smart Card Revenues to Hit $4.B by 2010

A new report has found that although the growth in the smart card integrated circuit market was erratic over the last five years, it received a strong boost with the explosive, yet unexpected, growth in the SIM segment in 2003 and 2004. The uptake of EMV cards is increasing and this is significant enough to drive continued growth in the overall market. Frost & Sullivan says that revenues in this market totaled $2,098.9 million in 2004 and is projected to reach $4,188.1 million
in 2010. The F&S report also notes that the traditional horizontal value chain of semiconductor vendors to smart card manufacturers to card issuers is changing as some semiconductor manufacturers are directly approaching card issuers without the consent of their traditional customers, the smart card manufacturers, known as the big 4.

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Fiserv Buys BillMatrix for $350 Million

Fiserv signed a definitive agreement to acquire BillMatrix for about $350 million. Dallas-based BillMatrix is expected to generate revenue of approximately $90 million in 2006. BillMatrix, founded in 1994, provides 120 billers with an outsourced payment solution that allows their customers to get immediate credit for bills paid online or over the phone using electronic checks, debit cards or credit cards. BillMatrix’s employees and its president and CEO, Scott Walker, will join Fiserv after the acquisition is completed. The majority of the company’s stock is owned by Great Hill Partners and other outside investors, while the remainder is owned by management and employees. BillMatrix was advised on the transaction by the investment banking firm of Lane, Berry & Co.

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Citigroup Promotes Financial Literacy in Wash, DC

The Citigroup Financial Education Program and Operation HOPE teamed this week for an interactive “Banking on Our Future” seminar at Howard University in Washington, DC. Many university administrators believe that credit card debt leads to a higher drop out rate than academic failure. The Citigroup Financial Education Program is a global, company-wide effort to identify, support and implement initiatives that help give individuals, families and communities the tools needed to make sound financial decisions. Operation HOPE, Inc. is a nonprofit social investment bank and a national provider of financial literacy and economic empowerment programs.

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Et-china and Asia Payment Systems Team

Guangdong-based Et-china Limited has teamed with Asia Payment
Systems to cooperate and invest in an online system to process airline ticket sales from Et-china in Shenzhen. Et-china built and operates an online e-commerce system in Shenzhen for processing Chinese domestic debit card transactions. Et-china is the largest merchant in dollar value for e-commerce transactions in Guangdong Province due to the high volume of online transactions it processes for China Southern Airlines in ticket sales.

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GECF to Issue the Carvin Music Credit Card

The Retail Sales Finance unit of GE Consumer Finance announced it has signed a five-year agreement with Carvin Music to provide private label credit card services to its customers. Carvin Music is a manufacturer and retailer of custom guitars, amplifiers and professional audio equipment. GE Consumer Finance, a unit of General Electric Company, is a leading provider of credit services to consumers, retailers and auto dealers in 47 countries around the world with $150 billion in assets.

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