eCHEX and Trimfast Merger is Terminated

CA-based eCHEX, a stored value card specialist, has terminated its plans to be acquired by NJ-based Trimfast Group. eCHEX will continue with its business plan including the initiative to bring the eCHEX Stored Value card to 17 national markets. The initial rollout will target grocery and supermarket store outlets, primarily in Hispanic markets, with approximately 160,000 card packages, or 320,000 cards to be printed as part of the initial rollout. eCHEX, Inc., established and headquartered in Redwood City, California, is a Sales and Marketing organization with financial services and retail distribution relationships.

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KeyBank Launches a National Prepaid MC

Cleveland-based KeyBank and TX-based Answers, etc. have launched a prepaid MasterCard via independent financial service centers, such as neighborhood banks, grocery, check-cashing and convenience stores nationwide. The new “Zoomcard” will use TSYS Prepaid’s platform integrated with Answers’ “PowerCheck32” POS software. Sales, inventory control, loading and reloading are all embedded and tracked from the point of sale to the general ledger. A stand-alone system will also be introduced for non-“PowerCheck” customers. The “Zoomcard” is only available to residents of the USA but may offer money transfer capabilities later. Answers, etc. has developed check cashing and pay-day advance software and has more than 4,000 teller stations currently in place across the USA and Canada. TSYS formed New York City-based TSYS Prepaid following the acquisition of Clarity Payment Solutions in August. (CF Library 8/4/04)

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Fred Meyer Rewards Card is Launched

Kroger’s Fred Meyer multi-department stores has launched a new “Fred Meyer Rewards Card”, offering cash rebates, in its 129 stores in four western states. As an incentive to sign up, new Rewards Customers will receive 20 points the first time they use their Rewards Card. Fred Meyer Stores is based in Portland, Oregon and features 129 large multi-department stores in four western states that offer one-stop shopping for a wide range of food, apparel, and general merchandise products.

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Consumers are Okay with ARC Checks

A new survey has found that consumers are aware and comfortable with the Accounts Receivable check conversion application. The research conducted for NACHA also found that there were no concerns over checks clearing more quickly using ARC. Additionally, the study found that 4% of check writers have called their financial institutions in the past six months in reference to a check conversion payment compared to 3.2% in a previous study for NACHA. There were an estimated 1.25 billion consumer checks converted into ARC payments during 2004. At the current growth rate it may reach 2 billion payments this year.

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ECHO ISO Awarded $650K+ via Arbitration

An arbitration panel has decided to award $501,000 plus attorney fees to an independent sales organization in dispute with Electronic Clearing House. The Company continues to invest in building its business, with over $300,000 being invested in a sales and marketing campaign in the San Diego area in the second quarter 2005 and over $1,500,000 in fiscal year 2005 is projected for R & D expenses and various technical initiatives that it believes will result in more efficient and robust operations. ECHO (www.echo-inc.com) provides a complete solution to the payment processing needs of merchants, banks and collection agencies.

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Top Ten Outstandings Grew 3.7% in 2004

Bank credit card outstandings, managed by the nation’s ten largest issuers, grew a modest 3.7% during 2004, ending the year at $581.1 billion. MBNA, the nation’s third largest issuer, posted a decline of nearly 5%, and Discover was flat year-over-year, while the other eight issuers posted gains ranging from 3% to 17%. The biggest gain was produced by Wells Fargo Card Services and Wells Fargo Financial Bank, which together held $8.8 billion in outstandings at the end of 2004 compared to $7.5 billion one-year ago. Chase, which merged with Bank One last year to become the #1 U.S. issuer, posted an above average gain of 5.3%, according to CardData ([www.carddata.com][1]). Bank of America, which merged with Fleet in 2004 to become the #4 U.S. issuer, turned out a 9.3% gain. Turnaround issuer, Providian, reported a 9.5% increase to $18.5 billion for 2004. Capital One, the former powerhouse of double-digit growth, reported a middling gain of 5% in the USA for 2004. However, Capital One edged by Discover to become the nation’s #5 ranked issuer based on outstandings.

CARD LEADER SCOREBOARD
(EOP Managed Outstandings)
ISSUER EOY-03 EOY-04 CHNG
1. Chase $128.6 $135.4 + 5.3%
2. Citi* $117.7 $121.7 + 3.4%
3. MBNA $ 84.1 $ 80.2 – 4.6%
4. BofA $ 53.6 $ 58.6 + 9.3%
5. Cap One $ 46.3 $ 48.6 + 5.0%
6. Disc** $ 48.4 $ 48.3 – 0.2%
7. AmEx $ 38.5 $ 40.1 + 4.1%
8. HSBC*** $ 18.8 $ 20.9 +11.1%
9. Prov $ 16.9 $ 18.5 + 9.5%
10.Wells $ 7.5 $ 8.8 +17.3%
TOTAL $560.4 $581.1 + 3.7%
* Citi includes approx. $2 billion in non-U.S. card loans.
** Discover’s fourth quarter ended 11/30/04.
** HSBC (f/k/a Household) is estimated; no Q4 report issued to-date.
Source: CardData (www.carddata.com)

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

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iMergent Net Income Doubles in Q4

UT-based iMergent, a purveyor of proprietary online store software, reported that total revenue for the quarter ending December 31st rose 78% to $31.4 million from the same quarter in 2003. During the fourth calendar quarter, the company hosted 177 workshops, of which 51 were international, compared to 116 workshops, 13 of which were international, in the year ago quarter. iMergent typically reaches its target audience through a concentrated direct marketing effort to fill preview sessions, followed by workshop conferences. Net income for the quarter was $3.1 million, compared to net income of $1.5 million for the comparable quarter of the prior year. During the quarter, the Company introduced “The Power of eBay” workshops and began offering a “Links4Trade” partnership option. For complete details on iMergent’s latest results visit CardData ([www.carddata.com][1]).

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

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OBERTHUR 4Q/04

Oberthur Card Systems reported that fourth quarter revenues hit a
record high of e132.1 million, driven by an all-time record shipment of
44 million smart cards. Sales of payment smart cards were e29.6 million
in 4Q/04, a nearly 20% increase over the year ago quarter. For the full
year, payment smart card sales topped e117.1 million, a 35% increase
over 2003. Meanwhile, sales of “Other Cards,” including magnetic stripe
cards, loyalty cards, scratch cards and memory cards, declined 12%, from
e19.3 million for 4Q/03 to e17.0 million. The expected decrease is
directly linked to the U.K. migration from magnetic stripe cards to
smart cards. Microprocessor cards account for nearly two thirds of
Oberthur’s total revenues. In 2004, the Americas region contributed 22%
of the card manufacturer’s total sales. For complete details on
Oberthur’s fourth quarter performance visit CardData (www.carddata.com).

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Financial Services Phishing Takes-Off in Dec

Phishing attacks on the financial services sector continued to rise in December, now making up 85% of all such attacks. The Anti-Phishing Working Group reported this week that the number of active phishing sites reported in December was 1707. The APWG report also suggests that the proliferation in the number of attack targets continues to rise, running from 44 in October, 51 in November to 55 in December. The APWG says it is interesting to note that the concentration on phishing attacks against financial institutions actually increased to a new high during a time when many were concerned that opportunistic phishers would spoof retail sites, using consumers urgency to keep their e-commerce accounts in order to complete their holiday shopping in time.

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PBS/FRONTLINE Documentary Re-Airs Next Week

PBS is re-airing its one-hour FRONTLINE documentary, the “Secret History of the Credit Card,” on Tuesday, February 1st. In “Secret History of the Credit Card,” FRONTLINE(R) and The New York Times join forces to investigate an industry few Americans fully understand. In this one-hour report, correspondent Lowell Bergman uncovers the techniques used by the industry to earn record profits and get consumers to take on more debt. Millions of American families use their personal, general-purpose credit cards such as Visa, Mastercard, American Express and Discover to make ends meet; credit cards have been a discreet lifeline for families in financial straits.

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