Bankruptcy Filings Slow After April Peak

Personal bankruptcy petitions in May rose nearly 5% over year ago levels but fell sharply from the surge experienced in April when filings soared nearly 17% year-over-year. It is expected that bankruptcy filings will run higher as the clock continues to tick towards the October 17th effective date of new laws. Nearly 143,000 filings were made during May, compared to 136,509 for May 2004. This is the third month in a row that filings have moved up sharply after a steady two-year decline. Bankruptcy filings declined about 4% for the full-year of 2004. In January, filings dropped 13% and during February filings dived by 17% year-over-year.

Monthly Filings Historical
May 04: 136,509
Jun 04: 127,742
Jul 04: 133,390
Aug 04: 125,783
Sep 04: 127,664
Oct 04: 133,404
Nov 04: 116,952
Dec 04: 113,957
Jan 05: 99,705
Feb 05: 103,457
Mar 05: 165,459
Apr 05: 170,130
May 05: 142,915
Source: CardData (www.carddata.com)

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EMV Can Add More Value to Banks and Merchants

MasterCard Europe says banks are now looking to vendors and MasterCard to help them turn a cost savings measure into a new revenue source. As such, EMV presents a huge new opportunity for the payments industry. MasterCard recently held its “Global Vendor Information Forum” to bring together members of the global “MasterCard Vendor Program,” to enhance the business relationship between MasterCard and vendors who are supplying solutions to its member financial institutions throughout the world. Globally, there are now over 132 million MasterCard
branded cards that are EMV compliant, representing a 169% increase since
the beginning of 2004. There are 2.4 million EMV point-of-sale terminals which accept MasterCard branded chip cards, a 205% growth since the beginning of last year.

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Certegy Names a New SVP HR Chief

Certegy has landed Sherri Nadeau, formerly with Equant, as SVP and Chief Human Resources officer. Nadeau brings over 20 years of experience in human resource management and tax expertise to Certegy. She previously held senior human resource positions at Equant, Inc. (formerly Global One), Universal Studios and Holiday Inn Worldwide and served as senior tax manager for KPMG Peat Marwick. Certegy provides credit and debit processing, check risk management and cash access services, merchant processing and e-banking services to over 6,500 financial institutions, 100,000 retailers and 100 million consumers worldwide.

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LifeLock Supported by Industry Veterans

Scottsdale, AZ-based LifeLock got a big shot in the arm as two top industry guns join its executive and advisory boards. The Company, which provides preventative identity theft protection services, announced that Luke Helms, former vice chairman of Bank of America and Inder Singh, former EVP and chief global technology officer for VISA International, have become senior advisors to the LifeLock management team. Helms will serve as Chairman of the Board. Singh will serve as an advisory board member. LifeLock places alerts on credit bureaus, stops pre-approved credit card applications and monitors credit files for consumers. (CF Library 6/17/05)

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U.S. Security Breach Hits A/P

As many as 500,000 credit card accounts in the Asia-Pacific region may have been exposed to potential fraud as a result of the security gap at CardSystems Solutions that took place between November 2004 and May 2005. Published reports claim 67,000 Japanese accounts and 50,000 Australian accounts were compromised. The U.S. breach reportedly took place following the installation of new data mining software which enabled a rogue computer program to extract files.

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NBS Certifies Systech’s IPG/7000 Converter

Minnesota-based National Bankcard Services has certified Systech’s “IPG/7000” dial-to-IP converters for retail petroleum POS applications. The solution gives merchants the flexibility to convert to broadband IP without new expenditures for POS hardware or software and in-store payment devices such as POS controllers, ATMs, POS terminals, and check readers can be connected to the Systech solution. National Bankcard Services is a leading provider of electronic payment and loyalty services. Systech Corporation designs and manufactures Internet Payment Gateways for electronic transaction markets.

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Cardinal Teams with Cart32 and Scan Alert

CardinalCommerce has partnered with Cart32 and Scan Alert to actively fight e-commerce fraud and chargebacks. CardinalCommerce’s authentication platform is now integrated into Cart32 Version 6.0, a shopping cart system for Windows, allowing merchants the ability to participate in the 3-D Secure authentication initiatives. Cardinal Commerce’s proprietary technology provides the ability to conduct fully authenticated Internet-based e-commerce. ScanAlert is a web site security certification company, protecting over 65,000 web sites in 30 countries through the HACKER SAFE certification program.

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Hypercom Cuts 100 Jobs Including Officers

Hypercom said yesterday it has completed its overhaul of the company and will cut 100 jobs today including 21 senior management positions. The plan also calls for the elimination of more than 25 employee annual pay packages in excess of $100,000 each. Top jobs included EVP, SVP, VP and Regional President positions. The move is expected to create annualized savings in excess of $15 million. However, the changes will result in one-time employee termination costs estimated at $1.6 million. Hypercom says more cost reduction action will be taken in the third quarter. The Company previously reported a 10% increase in net revenue for the first quarter, however, Q1 gross profit declined more than 9% due to $3.7 million in special charges. First quarter revenue was $54.5 million, compared to $49.6 million for 1Q/04. Gross profit declined from $20.5 million for 1Q/04 to $18.6 million. For complete details on Hypercom’s latest performance, visit CardData ([www.carddata.com][1]).

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

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TSAI to Acquire S2 Systems for $35MM

Transaction Systems Architects has signed a definitive agreement to acquire substantially all of the assets of Dallas-based S2 Systems for $35 million. S2 is a global provider of electronic payments and network connectivity software. The firm has more than 120 active customers and generates nearly half of its revenue from international markets. Lynn Holland, S2 System’s CTO, is expected to serve as VP with ACI Worldwide. S2 facilities in England and Australia will be integrated into ACI Worldwide offices, while other acquired locations will increase the Company’s presence in the Middle East and U.S. The transaction is expected to close by the end of July.

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BofA to Acquire MBNA for $35 Billion

Bank of America, the second largest U.S. bank, has inked a deal to acquire MBNA for $35 billion, in a deal that creates the nation’s largest bank credit card issuer with nearly $135 billion in U.S. outstandings. The merger, expected to close in the fourth quarter, will further consolidate the market power of the top ten issuers producing a market share of about 87%. About 6,000 jobs will be cut as a result of the combination producing an estimated $850 million in cost reductions. Bruce Hammonds, CEO and president of MBNA, will become CEO and president of BofA Card Services and report to Liam McGee, president, BofA’s Global Consumer and Small Business Banking unit. Hammonds will also be part of BofA’s Risk & Capital Committee. Frank Bramble, vice chairman of MBNA, will be appointed to the BofA Board of Directors. MBNA posted net income of $514.1 million in 1Q/05, excluding charges for staff reductions, facilities closings, and contract terminations. The issuer has been struggling with declining credit card balances and a weak diversification effort in the USA.

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