Asia Pay Launches APAYcard Platform

Asia Payment Systems has completed technical development of its “APAYcard” transaction processing platform for use in China. The IP-based “APAYcard” system facilitates credit and debit card
transaction processing from anywhere in China via Asia Pay’s new data center in Shanghai. Live testing is now underway. Asia Pay is
developing a credit card processing network that provides clearing
services to merchants, oil companies and financial institutions in China, Japan and in related markets elsewhere in Asia.

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Gemplus Wins a Casino Card Lawsuit on Appeal

Gemplus says it has landed a successful result on appeal in a lawsuit concerning an alleged breach of contract by Gemplus regarding the promotion of smart card solutions for casino slot machines. On May 26th, the Aix-en-Provence Court of Appeal rendered a decision
in favor of Gemplus, reversing the judgment of the Marseille
Commercial Court of March 18th, 2004 which had found that Gemplus had breached the contract and had ordered Gemplus to pay the plaintiffs EUR 22 million in damages. The Court of Appeals dismissed all the plaintiffs’ claims for damages and ordered the plaintiffs to pay court costs and expert’s fees.

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BOS JCB CARD

Bank of Shanghai is gearing up to launch its first JCB branded credit card next month. The new “Shanghai Shen JCB Card” will be denominated in both local Chinese currency and U.S. dollars and be issued in both “Standard” and “Gold.” The new card is targeted at Shanghai’s business travelers. Bank of Shanghai expects to issue 50,000 cards in the first year. JCB is currently working with other Japanese partners to develop new services for JCB cardholders in China such as discounted package prices for tours in Japan and special deals on
mobile phone rental in Japan. JCB has 12.2 million merchants in its network and 53.6 million cardholders worldwide.

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ABS Charge-Offs Head South in April

Charge-offs, among “sub-prime” card-backed securities, nose-dived in April by 163 basis points. Despite the steep rise in bankruptcy filings, charge-offs in the “prime” asset-backed credit card securities market also edged down by nine basis points. Additionally, delinquency (60+ days) fell across the board in April for ABS card portfolios. “Sub-prime” delinquency (60+ days) dropped for the sixth consecutive month, while “prime” delinquency hit its lowest level in nearly three years. “Prime” charge-offs declined to 5.88% in April, 89 basis points below April 2004. “Sub-prime” charge-offs collapsed to 13.43 in April, and are now 373 bps below one-year ago. According to the “Fitch Credit Card Index,” “prime” delinquency (60+ days) fell to 2.80% in April, 40 bps lower than April 2004. “Sub-prime” delinquency (60+days) for April declined to 7.00%, the lowest level since July 2001.

ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Apr 04: 6.77% 17.16%
Mar 05: 5.97% 15.06%
Apr 05: 5.88% 13.43%
Source: Fitch Ratings

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Student Loans Now Offer Air Miles

EduCap’s Loan to Learn is now awarding American Airlines “AAdvantage” miles or Delta “SkyMiles” to qualified student borrowers and their parents. Borrowers with loans of $25,000 or more will earn 15,000 AAdvantage miles or SkyMiles, while those whose loans are between $15,000 and $25,000 will receive 10,000 AAdvantage miles or SkyMiles. EduCap Inc is a Washington, D.C. non-profit organization, with a mission to promote an educated citizenry through its Loan to Learn and has disbursed billions of dollars in education loans.

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US Takes Leadership in Contactless

The NJ-based Smart Card Alliance says the recent expansion of contactless technology for payment cards in the USA is the start of a trend crossing over multiple businesses. Contactless smart chips are designed to work in many form factors – a plastic card, key fob, document cover or even a mobile phone cover. The SCA notes that contactless chip technology is not only growing for retail payments, but for transit payments as well. Sixteen major U.S. cities are in various stages of deployment of contactless technology for transit payments. While transaction speed is the driving force for contactless transit payments, security is the primary factor motivating financial institutions’ investment in the higher-priced contactless smart chip-based cards. The SCA predicts tens of millions of contactless payments cards will be issued within the next few years in the USA. This morning, the Alliance re-introduced its free white paper, “Contactless Payment and the Retail Point of Sale: Applications, Technologies and Transaction Models.”

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People’s Bank Resolves Card Issues

Connecticut-based People’s Bank has resolved contract issues for the servicing of its credit card portfolio, which was sold in March 2004, and expects to post additional pre-tax income of $9.7 million in the second quarter. People’s had previously established an accrued liability to account for contract termination and other exit costs relating to the sale of the business. People’s Bank has assets of $11 billion, more than 240 ATMs and 154 branches.

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VISA USA Ramps Up Olympic Support

VISA USA last week kicked off its “2006 Torino Olympic Winter Games” marketing campaign and announced a forthcoming cause-related initiative to raise a minimum of $1 million to help support America’s Olympic and Paralympic athletes. As an Olympic sponsor, Visa has contributed more than $9 million to America’s Olympic athletes. More than 463 million Visa-branded cards have been issued to cardholders in the United States. In over 150 countries, there are more than 1 billion Visa-branded cards, accounting for more than $3 trillion in annual transaction volume.

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Chex Services to Expand Overseas

Minnesota-based Chex Services has signed a marketing agreement with Basinco Holdings to offer Chex’s full line of cash access products and services in Europe, Asia and Africa. Chex Services, Inc is a wholly owned subsidiary of FastFunds Financial Corporation and specializes in full booth operations to Native American casinos and has developed a suite of cash access products for use in the traditional gaming and retail markets.

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Key Offers Agent Banks MoneyPass Access

Cleveland-based KeyCorp has inked a deal to offer its agent bank clients the option of including “MoneyPass” ATMs as part of their surcharge-free access. Key’s agent bank clients now have the option of providing their cardholders with access to an additional 12,000 ATMs through the “MoneyPass” network. The deal is non-reciprocal, which means Key’s current and future agent bank clients are not required to add their ATMs to the “MoneyPass” network and customers who bank with Key do not gain surcharge-free access to “MoneyPass” ATMs. Under Key’s current agent bank program, financial services companies provide their customers and members surcharge-free or surcharge-reduced access to Key’s 2,200 ATM network.

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Bankruptcy Filings Set Another Record

Americans filed a record 170,130 bankruptcy petitions in April as the clock began to tick on new laws to take effect on October 17th. In April 2004, a total of 145,543 were made. The 16.0% gain for April is the second 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. The steep rise in March and April is expected to continue through the fall of the year.

Monthly Filings Historical
Apr 04: 145,543
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
Source: CardData (www.carddata.com)

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