Catuity CALS Lands its First Major Deployment

Dayton, OH-based CertifiChecks will be the first to deploy the new Catuity “Advanced Loyalty System” as a turnkey, hosted solution that will be sold to the merchants and chain stores who now use CertifiChecks’ paper-based solutions. The system is expected to be deployed in October and will be offered to CertifiChecks’ 70,000 merchants nationwide. The company also provides gift certificate programs to a top 10 grocery store chain, the U.S. military’s Defense Commissary Agency and Army and Air Force Exchange Service. The Catuity “CALS” is a modularized hosted system that enables unique customer profiles as well as the delivery of points-based, discount and frequency programs, plus offering a flexible gift card solution.

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Phantom Fiber Integrates with FirePay

Dublin-based FireOne Group and Canadian-based Phantom Fiber have partnered to integrate FireOne’s stored value wallet, “FirePay,” with Phantom Fiber’s wireless platform. The first phase of the agreement will allow customers to download the mobile wallet application to their cellular device and fund their “FirePay” account virtually anywhere, anytime and still enjoy their mobile gaming with applications powered by Phantom Fiber. The ability to access account balance information and historical transactions will also be included. The companies expect that
deployment will be completed within the next month.

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OTP Bank Expands its BASE24 License

OTP Bank has extended its “BASE24” software license to increase transaction capacity for payment processing. The new license, which includes “BASE24-atm” and “BASE24-pos” modules, includes a second-site license for DSK Bank in Bulgaria, a recent acquisition of the OTP Group. As part of the agreement, DSK Bank will also implement ACI “Card Management System” software for the issuing and acquiring of bank cards.
DSK Bank was recently named “Bank of the Year” for Bulgaria in 2004 by
Financial Times Group’s international banking magazine The Banker.
More than 500 customers in 78 countries use ACI supplied software. OTP Bank is Hungary’s largest bank.

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Cross Country Settles with West Virginia

One week before a West Virginia trial over its credit card and collection practices, Cross Country Bank and Applied Card Systems agreed to settle with the State’s Attorney General. The $1.5 million settlement will be used to fund consumer credit education and conflict resolution programs. While both firms did not acknowledge that any of the lawsuit’s claims were valid, the settlement prohibits Cross Country and Applied from debiting customers’ bank accounts without their authorization or to engage in aggressive collection tactics. The West Virginia lawsuit was filed in March 2004 and charged that Cross Country engaged in deceptive marketing of credit cards, offering low credit limits and charging exorbitant hidden fees to consumers who already had bad credit. The suit contends that Applied Card Systems used a wide range of abusive collection practices to coerce consumers into making payments if they contested the fees or defaulted on the account. The lawsuit alleged that Applied called consumers during the night, used obscene language and threatened cardholders with arrest to collect on a credit card account. Six other lawsuits are pending with the state Attorneys General of Pennsylvania, New York, Texas, Minnesota, Wisconsin and New Hampshire. (CF Library 6/4/04; 6/25/04)

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Quatro Card Purchases Another Spartanics M500

Quatro Card Technology has purchased a second Spartanics “M500”
decorated material card punching and die cutting system. The new machine
will enable Quatro to create irregularly shaped loyalty cards, gift
cards and similar products. The Spartanics “M500” is a complete turnkey
punching and die cutting system that uses electro-optical sensors to
scan and record registration marks at production rates up to 165 strokes
per minute with consistent precision registration accuracy in X, Y, an
Rotational axes within +/-0.1 mm or better. The “M500” is the world’s
only card punching and die cutting system that re-registers in all three
axes during every press stroke.

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PPI PayMover Supports CNP Transactions

Newark, California-based Payment Processing has unveiled its next generation payment processing gateway, “PPI PayMover,” which offers support for card present and card not present transactions as well as ACH transactions through a single clientless solution. In addition, application software developers will be given this technology, development level services and unlimited on-going support without charge. PPI is focused on integrated payment processing, supporting over 500 software developers and more than 10,000 merchants.

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BofA Buys 9% Stake in China Construction Bank

Bank of America has signed a definitive agreement to buy approximately 9% of the stock of China Construction Bank for $3 billion,
with the option of increasing its stake in future years. CCB, the second largest commercial bank in China, has $472 billion in assets and $422 billion in deposits. It has 136 million active retail deposit account relationships, a national network of 14,500 branches concentrated in the more economically developed areas and a relationship with 92 of the top 100 enterprises in China. It is China’s second largest mortgage lender and has leading positions in credit cards and infrastructure loans. The bank is currently majority owned by China SAFE Investments Limited, an entity of the government of China. Bank of America currently operates a bank in Hong Kong with 16 offices offering an array of consumer banking products. It also has corporate banking offices in Beijing, Shanghai and Guangzhou.

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Remote Deposits Introduced for SMBs

Zion’s Nevada State Bank has rolled-out a new service for small businesses to make deposits from remote locations. “Remote Deposits,” powered by software from Net Deposit, enables businesses to scan checks from their place of business and create an electronic image which is transmitted to a central processing center and converted into a substitute check. The substitute checks are then presented for payment at the appropriate paying institution. The new service is the result of “Check 21” which allows banks and other financial institutions to exchange digital images of original checks, known as substitute checks, instead of physically transporting the original checks to the paying entity.

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Discover Profits Fall 18.8% in 2Q/05

Morgan Stanley reported this morning that its Credit Services division, including the “Discover Card,” posted $242 million in pre-tax profits for the quarter ending May 31st, compared to $298 million for the year-ago quarter. Managed outstandings were essentially flat compared to year-ago levels, but transaction dollar volume increased more than 4% year-over-year, while delinquency and charge-offs continue to fall compared to prior quarters. Merchant and cardholder fees rose 4% to $486 million, due to higher merchant discount fees. Managed credit card loans of $46.8 billion at quarter-end declined by $925 million from the first quarter and nearly $500 million below one-year ago. International card loans were $2.5 billion for the second quarter. Total transaction volume increased to $25.4 billion, compared to $24.2 billion for 2Q/04. The account base declined during the second quarter by 100,000 accounts. International card accounts stayed at 1.4 million. Domestic active accounts declined 3% from 2Q/04 to 19.3 million. The credit card net charge-off rate was 4.94%, 154 basis points lower than a year ago and down 17 basis points from the prior quarter. The charge-off ratio was the lowest in three years. The over-30-day delinquency rate declined 98 basis points from 2Q/04 to 3.90% and the over-90-day-delinquency rate declined 103 basis points over the same period to 1.83%. For complete details on Discover’s second quarter performance, visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
2Q/04* 3Q/04* 4Q/04* 1Q/05* 2Q/05* Y/Y CHNG
Outstandings: $46.8b $47.1b $48.3b $47.8b $46.8b -0.1%
Volume: $24.4b $25.4b $25.7b $25.9b $25.4b +4.1%
Accounts: 46.0m 46.0m 46.2m 46.0m 45.9m -0.2%
Actives: 19.9m 19.6m 19.7m 19.5m 19.3m -3.0%
Chargeoffs: 6.48% 5.76% 5.45% 5.11% 4.94% -154bps
Delinquency**: 4.88% 4.81% 4.55% 4.24% 3.90% – 98bps
Yield: 11.88% 11.69% 11.59% 11.23% 11.69% – 19bps
Notes: * 2Q/04 ended 5/31/04; 3Q/04 ended 8/31/04; 4Q/04 ended 11/30/04;
1Q/05 ended 2/28/05; 2Q/05 ended 5/31/05. ** delinquency is 30-90 days
and excludes 90+ days. Source: CardData (www.carddata.com)

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

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Intersections Advances ID Fraud Detection

Virginia-based Intersections has teamed with Cyveillance to offer consumers a way to continuously monitor the Internet for stolen identity information that is being offered for sale or trade by criminals. The partnership also gives Intersections the exclusive right to offer Cyveillance’s services directly to consumers to help them detect and protect against identity theft. Intersections Inc. provides consumer credit management and identity theft prevention solutions to more than 3 million subscribers. Cyveillance provides online risk monitoring and management solutions to Global 2000 organizations.

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