BofA Leads Top 5 Issuers in Organic Growth

Among the top five U.S. issuers, which represent more than $436 billion in credit card outstandings during the second quarter, Bank of America is the only issuer posting solid organic growth in both outstandings and volume. BofA reported a 2.4% sequential gain in outstandings and a 14.0% sequential increase in volume during 2Q/05. Chase posted a 3.2% gain in outstandings but volume growth, quarter-to-quarter, was a lackluster 7.5%. MBNA posted the largest gain in sequential volume growth of 15.6%, but, outstandings growth was less than 1%, according to CardData ([www.carddata.com][1]).

TOP FIVE OUTSTANDINGS/VOLUME
(Growth Over Prior Quarter)
Outstandings Volume
Chase: +3.2% +7.5%
Citi: -1.1% +13.0%
MBNA: +0.5% +15.6%
BofA: +2.4% +14.0%
Disc: NC + 4.1%
Source: CardData (www.carddata.com)

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

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Australia Wants to Benchmark Interchange

The Australian Payments System Board is proposing to establish and publish a common benchmark for interchange fees for the Bankcard, MasterCard and VISA credit card programs, according to last week’s issue of CardFlash International. The proposal replaces an earlier proposal to publish program-specific benchmarks. The standard proposes that the common benchmark be based on a weighted average of the eligible costs of issuers in the Bankcard, MasterCard and VISA programs. The new common benchmark would become effective on November 1, 2006. Meanwhile, BPAY has now agreed to publish its interchange fees and will be available on its Web site after September 1st. BPAY was unwilling to publish its fees after a request was made in June.

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Xtremo ATM Certified by RBS Lynk

NexTran Industries announced that its next-generation ATM, the “Xtremo,” has been certified RBS Lynk. The Xtremo features include a large eight-inch full color screen, can hold up to 2000 banknotes and is capable of performing such non-traditional transactions as cell-phone top-offs, sale of phone cards or postage or wiring money through Western Union. The NexTran Group LLC is a diversified portfolio of affiliate companies covering the financial services, security and Internet market segments.

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US Dataworks Tops 1B Clearingworks Transactions

Houston-based US Dataworks has exceeded the one billion transaction threshold using its “Clearingworks” payment platform. Clearingworks processes Accounts Receivable Conversion (ARC) transactions, image exchange/substitute checks (Check 21) transactions for credit card companies and financial institutions as well as the federal government. US Dataworks is a developer of payment processing solutions, focused on merchants, billers, Federal, State and local governments and the Financial Services market.

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BofA Launches the Make-A-Wish VISA

Bank of America and Make-A-Wish Foundation launched a VISA credit card this week that generates 65 basis points for each purchase and $2 for each account activation to the charity. The Make-A-Wish Visa card will give consumers a way to use their everyday spending to help the Foundation grant wishes to the thousands of children facing life-threatening medical conditions. There is no cap on the dollar amount that is donated to the Make-A-Wish Foundation. Bank of America is one of the world’s largest financial institutions, serving 33 million consumer relationships. The Make-A-Wish Foundation grants the wishes of children with life-threatening medical conditions with more than 11,700 wishes a year and 144,000 wishes granted worldwide since 1980.

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CHOOSINGANDUSING.COM

The UK payments association has launched a new Web site in an attempt
to offer impartial credit card advice directly to consumers. APACS says
the new online service is committed to providing a full breadth of
information on the nearly 1,500 credit card products currently available
in the UK. The site also provides advice on
managing money and reminds anyone who gets themselves into financial
difficulties, or struggling with repayments, that help and support is
available. As well as providing a one-stop site to answer basic questions
about credit cards, the site also includes more detailed information for
those wanting a greater understanding. The site is located at www.choosingandusing.com.

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AmEx/JetBlue Card Rolls Down the Runway

American Express and JetBlue Airways rolled-out their new cobranded credit card this week, previously announced in June, which awards points that are automatically transferred to the cardholder’s “TrueBlue” frequent flier account. Cardmembers earn award dollars on virtually every dollar they spend on the card and double award dollars on JetBlue flight purchases and other select categories, including restaurants, sporting events and movie theater purchases. JetBlue currently operates 316 flights a day and serves 32 destinations in 13 states, Puerto Rico, the Dominican Republic and The Bahamas.

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InfiCorp Buys CU Cards via AssetExchange

Oregon-based AssetExchange has assisted two credit unions with the sales of their credit card portfolios to InfiCorp including First Financial CU of Albuquerque and Helena Community CU of Montana. AssetExchange is a leading credit card advisory and brokerage firm for financial institutions. Services include credit card portfolio brokerage, performance assessments, and market valuations.

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MetaBank to Issue Travelex Prepaid Cards

South Dakota-based MetaBank has inked a deal to be the issuing bank for select Travelex prepaid card programs that will be offered through Travelex’s 20,000 banks and credit unions clients. Meta Payment Systems, a division of MetaBank, offers card issuing and program support to banks, processors, and third-party distributors seeking to develop, market and manage stored-value cards. Travelex is the world’s largest foreign exchange specialist, with offices in 35 countries, nearly 700 retail branches and 16,000 commercial customers.

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Bank Renaissance Capital Deploys Capstone

Bank Renaissance Capital is now using Fair Isaac’s “Capstone Decision Manager” to automate credit risk decisions for its consumer loan portfolio. This marks the first implementation of Fair Isaac’s high-performance platform for new account decisions and processing in Russia. Renaissance Capital currently offers its financial solution in more than 27 cities across Russia focusing on marketing, risk and service delivery. The bank chose “Capstone” to support its new consumer finance initiatives, including the processing of remote applications for installment credit on unsecured merchandise, such as electronics products, credit cards, auto loans and general purpose loans.

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PayPal Volume Soars 49%; Nears 80MM Accts

eBay reported that gross payment volume for its PayPal business increased 49% year-on-year during the second quarter and 4% sequentially. The payment service also signed up 7.3 million net new accounts and the number of active accounts hit 22.9 million, its highest level to-date. During the second quarter, PayPal handled $6.47 billion of gross payment volume, compared to $6.23 billion in the prior quarter, and $4.35 billion for 2Q/04. PayPal produced $243.9 million in transaction fees for 2Q/05, a 51% jump over the year-ago quarter. At the end of the second quarter, PayPal had 78.9 million accounts, compared to 71.6 million in 1Q/05, and compared to 50.4 million one-year ago. During the second quarter, PayPal handled 113.2 million payments, a 3% increase over the prior quarter, and up 46% from 2Q/04. PayPal captured 60% of eBay’s total $10.9 billion in total sales volume during the quarter. PayPal’s 2Q/05 transaction revenue rate was 3.67%, compared to 3.64% one-year ago. The processing expense rate for the second quarter was 1.08%, compared to 1.34% for 2Q/04. PayPal’s transaction loss rate came in at 19 basis points, down 6 basis points from one-year ago. For complete details on eBay/PayPal’s second quarter performance, visit CardData ([www.carddata.com][1]).

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
2Q/04 $4.3 billion 50.4 million
3Q/04 $4.6 billion 56.7 million
4Q/04 $5.6 billion 63.8 million
1Q/05 $6.2 billion 71.6 million
2Q/05 $6.5 billion 78.9 million
SOURCE: CardData (www.carddata.com)

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

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McDonalds Confirms the Cashless Ticket Lift

McDonald’s confirmed this week on its analyst call that payment card options have been a driving force behind increased revenue, higher than average ticket-lift and faster service at the checkout. The fast-food leader has increased payment credit acceptance from 3,000 location last year to 13,000 this year. According to VISA USA, spending on VISA-branded cards at fast food restaurants during the month of June soared to $1.5 billion with consumers spending an average of $11.18 per transaction. CardData projects that QSR payment card volume will top $30 billion this year. The QSR market is estimated to produce $140 billion in annual sales.

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