Prepaid Cards Lack Accurate Definitions

Lumping retailer-issued gift cards with bank-issued prepaid cards will likely have negative consequences for consumers and businesses. TowerGroup has released new research that suggests the one-size-fits-all approach to prepaid regulation could stifle the growth of certain payment products, particularly bank-issued prepaid cards that include gift cards, payroll cards, and prepaid cards linked to healthcare flexible spending accounts. TowerGroup says regulators and legislators lack accurate definitions and have failed to develop a harmonious regulatory framework around the valid consumer benefits of such products. TowerGroup notes that more than 100 stored value bills were introduced at the U.S. state level in the first half of 2004.

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VASCO and DataDesign Team for E-Banking

VASCO Data Security International e-banking solution provider DataDesign have teamed to offer secure e-banking to the German market.
Under the terms of the agreement, VASCO’s “Digipass” and “VACMAN
Controller” products have been integrated into DataDesign’s e-banking platform. The combination of DataDesign’s profound knowledge of the German market and VASCO’s worldwide experience will result in a state-of-art e-banking solution.

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TSYS Seals the BofA Deal through 2014

TSYS has extended its current agreement with Bank of America, which includes all consumer- and commercial-credit VISA and MasterCard accounts issued by Bank of America, as well as the recently acquired portfolio of FleetBoston, through 2014. TSYS also processes Bank of America’s merchant accounts through Vital Processing Services, a joint venture with Visa U.S.A. TSYS recently announced an agreement with Visa to acquire its 50-percent equity stake in Vital Processing. The acquisition is expected to close in the first quarter. Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses, and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. TSYS (NYSE: TSS) brings integrity and innovation to the world of electronic payment services as the integral link between buyers and sellers in this rapidly evolving universe.

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Universal Express to Offer Cardtronics ATMs

NY-based Universal Express has inked a deal to offer Cardtronics ATMs via a strategic alliance with Express ATM Northeast. Express ATM Northeast is the leading ATM distributor for Cardtronics of Houston, Texas. Jack Pacheco, President of Express ATM has been in the ATM business since 1998 and has negotiated several major ATM programs, most notably Irving Oil Company and Tedeschi Stores, a convenience store chain with over 200 locations in New England. Cardtronics is the nation’s largest independent owner/operator of ATMs with a network of over 25,000 locations operating in every major U.S. market and in all 50 states.

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CUs Score in a Balance Transfer Promo

A three-month special balance transfer promotion has paid off for 34 credit unions, resulting in above average transfers. Dallas-based TNB Card Services says the fall promotion, which ran from September through November, produced $4.917 million in balances from 1,600 cardholders, for its CU clients. The average transfer was $3,069 compared to an industry average of about $2,500. Dallas-based Credit Union of Texas, boasted the highest average transfer, at $3,757. The overall response rate to the offer was 2.25%. Dallas-based Neighborhood Credit Union had the highest response rate, at 3.38%. Depending on the rate each credit union selected, transfers were offered at anywhere from 0% to 7.9% APR, an offer good through February 2005. The offer was mailed in August. TNB Card Services serves more than 400 credit unions.

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Coast Capital Savings Offers a Free Debit Account

British Columbia-based Coast Capital Savings Credit Union has
introduced a truly free checking account from a full-service financial
institution in Canada. Features of the new account include free
unlimited debit card transactions and free free unlimited Coast Capital
Savings ATM transactions. The account also requires no monthly fee or
minimum balance and includes teller service across its branch network.
Prior to the launch of “The Free Chequing, Free Debit and More”
account, no full-service bank or credit union in Canada offered
unlimited no-fee checking to all customers.

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ORCC’s PIN-Less Debit Lands a Partner

NH-based The De Palma Group has signed an agreement with Online Resources to become a market partner for ORCC’s “CertnFundsT” PINless debit product line. PINless debit, an emerging payment method offered through the STAR, NYCE and Pulse debit networks, is reserved for billers in highly regulated industries, including insurance, financial services, utilities, government, telecommunications and cable/satellite services. The De Palma Group, (www.depalma-group.net), headquartered in southern New Hampshire, is a treasury management and payments processing consultancy specializing in emerging payment products. Online Resources powers Internet financial services for 700 firms nationwide.

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Certegy Card Services Revenues Up 13%

FL-based Certegy reported that its Card Services revenue increased nearly 13% in the fourth quarter, and that Check Services revenue rose 14% year-on-year. Card Services revenues were $157.3 million in the fourth quarter an increase of 12.7% above the 2003 quarter. Merchant processing revenue increased 12.2% over 4Q/03. Check Services generated revenue of $124.6 million in the fourth quarter, an increase of 14.1% over the year ago quarter. Check Services’ margin increased by 350 basis points to 19.7%, representing the highest quarterly margin in the past decade for the Company. Certegy is in the process of disposing of its merchant acquiring business. For the first quarter, the Company expects to achieve revenue growth of approximately 10%. For complete details on Certegy’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

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

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MS MasterCard Outstandings Rise 16% in Q4

Morgan Stanley reported that credit card outstandings for its British MasterCards approached a record $2.6 billion at the end of the fourth quarter, a 16% increase over the year ago quarter. The number of accounts for its “Classic,” “Gold,” “Platinum,” and “buy & fly!” cards rose 18% to 1.3 million, compared to one-year ago. At the end of the quarter, Morgan Stanley, which issues the Discover card in the USA, posted $2.571 billion in managed card loans, compared to $2.216 billion for the fourth quarter of 2003. Compared to the prior quarter, card loans jumped 10%. During the second half of 2004, Morgan Stanley added the “buy and fly! MasterCard” which earns one point for every GBP10 of purchases with bonus points earned for purchases made at participating U.K. retail merchant partners. Points can be redeemed for travel on 17 airlines. MS introduced its first credit card in the U.K. in 1999. For complete details on Morgan Stanley’s latest performance visit CardData (www.carddata.com).

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Metris to Make Another Debt Repayment

Metris plans to make its third prepayment of corporate debt of the past three months, paying $50 million on senior notes on February 24th. This is the third prepayment of corporate debt Metris has announced in the past three months. The Company made a $50 million prepayment on November 23, 2004, and a $25 million prepayment on December 22, 2004 of its senior secured credit agreement maturing in 2007. Metris Companies Inc., based in Minnetonka, Minn., is one of the largest bankcard issuers in the United States. The company issues credit cards through Direct Merchants Credit Card Bank, N.A., a wholly owned subsidiary headquartered in Phoenix, Ariz.

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