Open Solutions’ Board Gets Lynched

Connecticut-based Open Solutions has landed Dennis Lynch, former CEO of NYCE, to its Board of Directors. During Lynch’s tenure, NYCE became one of the largest consumer payment entities in the U.S., serving over 2,100 financial institutions at more than one million ATM and retail locations. Lynch served on the executive committee and the board of the Electronic Funds Transfer Association (EFTA), and is a past chairman of the Network Executive Council. Open Solutions offers a fully-featured strategic product platform that integrates core data processing applications with Internet banking, cash management, CRM/business intelligence, financial accounting tools, electronic image/item processing, Check 21, interactive voice response, and loan and payment origination solutions.

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MobileCredit Completes VISA Certification

CreditPipe announced that its “MobileCredit” m-commerce service has become the first mobile transaction processing switch to complete VISA International certification in South Africa. The VISA International audit team was led by the association’s e-risk auditor, who traveled from London, and who was accompanied by a representative from Visa International South Africa. The division employs a dual audit process that has a minimum of two auditors reviewing each process simultaneously. The detailed audit ranged from physical security inspection to software security and transaction flow, and resulted in CreditPipe’s certification of “VISA Secure Electronic Commerce Requirements for Mobile Payment Hosts v1.0.” MobileCredit service utilizes “Wireless Internet Gateway” technology that resides on a GSM cellular phone’s SIM card.

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Target’s Q4 Credit Card Profits Rise 21%

Target reported that its pre-tax credit card profits for the quarter ending January 31st increased 21% over the year ago quarter and 12% sequentially. Excluding the disposition of its Mervyn’s and Marshall Field’s card portfolios, Target’s credit card receivables increased 9.7% compared to 4Q/03. Target’s fourth quarter credit card profits were $134 million, compared to $120 million in the prior quarter, and $111 million one-year ago. Target reported that its total credit card receivables, which include its VISA and “Guest” cards, were $5.46 billion as of January 31st, compared to $4.97 billion one-year ago. Delinquency (90 days+) for 4Q/04 was 3.5%, compared to 3.8% in the third quarter, and 4.2% one-year ago. Charge-offs were 7.6% for 4Q/04 compared to 9.55 one-year ago. Target’s credit card unit had revenues of $288 million in 4Q/04, a 9.1% increase over 4Q/03. Target also noted yesterday that it is switching to variable rate pricing from fixed rates for its VISA credit card program this year. For complete details on Target’s latest performance visit CardData ([www.carddata.com][1]).

TARGET AVERAGE CARD LOAN HISTORICAL
(Excludes Mervyn’s & Marshall Field’s)
4Q/03: $4.973 billion
1Q/04: $4.688 billion
2Q/04: $4.716 billion
3Q/04: $4.914 billion
4Q/04: $5.456 billion
Source: CardData (www.carddata.com)

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

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FreeStar Technology Revenues Up 18% in Q4

Helsinki-based FreeStar Technology reported that revenues for
the fourth quarter rose 18% to $424,772, compared to one-year ago.
The net loss increased by approximately 6% to $1,350,302 for 4Q/04.
During the quarter, Rahaxi processed 4,285,230 transactions, an increase of 1,127,946, or 33.58%, over the 3,358,284 transactions that were processed in the corresponding period in the prior year. Rahaxi Processing OY currently processes in excess of 1,000,000 card payments per month for an established client base that comprises companies such as Finnair, Ikea, and Stockman. For complete detail on Freestar’s fourth quarter performance visit CardData (www.carddata.com).

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Euronet Signs ATM Agreement with Centurion Bank

Centurion Bank has signed a multi-year ATM outsourcing and deployment agreement with Euronet Worldwide. Under the agreement, Centurion Bank will outsource its entire network of 152 ATMs to Euronet India. The company will take over the operation of the bank’s ATMs within the next sixty days and provide end-to-end ATM outsourcing services from its operations center in Mumbai. In addition to ATM outsourcing services, Euronet provides shared ATM networking services to Centurion Bank through its Cashnet network, the largest nationwide multilateral shared ATM network in India today comprising nine member banks with more than 3,500 ATMs across the country.

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Diebold Renames its Credit Division

Diebold Credit Corporation has officially been renamed Diebold Global Finance Corporation to reflect its international push. Diebold Global Finance has grown to become the only captive finance organization in the financial self-service, security, and card systems industries. Its attractive financing alternatives allow customers to cost- effectively acquire new Diebold technology solutions and obtain needed flexibility to better manage the cost of rapid change. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security and services.

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Banks Switch from NCR to Diebold for ATM Solutions

Four Icelandic banks have partnered with Diebold. ATMs manufactured by NCR are now powered by Diebold terminal software at
Iceland’s Landsbanki, Kauphthing Bank, Islandsbanki and the Savings Bank
Datacenter. Previously, Icelandic banks operated in an NCR hardware and software environment. The solution was developed using Diebold’s “Agilis Power” software toolkit. Hugur, the software house that develops all Icelandic ATM applications, used “Agilis Power” to develop a custom application that will run on approximately 250 NCR terminals throughout the country. The addition of Agilis also enabled the banks to make their ATMs compliant with EuropayMasterCardVisa.

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Monthly Payment Rate Remains High in Dec

The monthly payment rate among credit card-backed securities rose to an average of 17.44% in December. Charge-offs headed south by 4 bps to 6.07% during December. Delinquency, among credit card ABS, dropped from 4.50% in November to 4.31%. According to Moody’s Investors Service, the excess spread ratio declined to 6.64% in December from 6.75% one-year ago. It was the first decline in 12 consecutive months of increases.

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STM, Orange, and Trusted Logic Team

STMicroelectronics has demonstrated an Orange secure electronic
payment concept implementing “Operator Virtual Machine” technology on a
“Nomadik” processor. The solution will enable a user to enter a PIN code on a mobile phone; the PIN will be processed on the phone’s SIM card using additional specific software, and the payment information transferred securely to the vendor’s point of sale terminal to complete the purchase. The “OVM” matches the “GPD/STIP” specification for
mobile devices designed for secure transactions. The “OVM” is implemented on the “Security Module” middleware developed by Trusted Logic.

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Synthetic Identity Fraud Now on the Rise

A new study by San Diego-based ID Analytics has found that “synthetic identity fraud,” where the identity is fabricated, is becoming the new challenge for organizations exposed to fraud. Synthetic identities are more commonly used to commit identity fraud than true-name identities. Overall, synthetic identity fraud comprises 88.3 percent of all identity fraud events and 73.8 percent of the total dollars lost by U.S. businesses. Fraudsters using synthetic identities to further their crimes typically employ the systematic manipulation of real Social Security numbers and create multiple variations of similar names across the numerous identities. ID Analytics is the Identity Risk Management company providing advanced analytic solutions that prevent identity fraud and manage identity risk across the customer lifecycle.

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GE MONEY CARD

GE Money is set to launch a new MasterCard next month offering a six-month 0% interest rate on balance transfers. The new “GE Money Low Rate
MasterCard” will carry an interest rate of 10.99% on purchases and an
annual fee of $58. GE indicated it plans to spend between $3 million and
$5 million on the first leg of a television, radio, billboard and print
advertising campaign. GE also plans to drop 1 million direct mail pieces
for the card. The card will be launched on March 1st. GE Money is
currently the country’s 6th largest lender, after acquiring five
financial firms over the past nine years.

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