Metavante Renews the TNS Communications Contract

Reston, VA-based Transaction Network Services announced that Metavante has renewed its contract to be the primary transaction network provider for the banking and payments technology solutions provider for dial ATM traffic and, to provide connectivity through TNS’ persistent-dial private network for telecommunications solutions. Transaction Network Services is one of the leading providers of business-critical, cost-effective data communications services for transaction-oriented applications. TNS provides rapid, reliable and secure transaction delivery platforms that enable transaction authorization and processing across several vertical markets and trading communities.

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Sears Enables Gift Card Face Personalization

Sears has added a personalization feature to its gift cards. The card now doubles as a picture frame, enabling consumers to customize the card by inserting a family portrait or a picture of the gift intended for the recipient. Sears gift cards can be purchased in increments of $5-$500 and carry no fees or expiration dates. VISA International recently teamed with Serverside Graphics to enable issuers to offer cardholders the option of using their own photographic images from family and pets to children or personal artwork – to design and create their own tailor-made VISA credit, debit, pre-paid or gift cards. Taishin Bank in Taiwan was the first VISA member financial institution in Asia Pacific to issue the cards through its “imake” program. First National Bank of Omaha also offers the “One of a Card VISA” which enables users to personalize the entire face of the card with just about any kind of a photo. Users can then shrink or enlarge the photo, and customize the card using fun tools like artistic borders, etc. Images can also be rotated or flipped using the online tools. FNBO permits cardholders to change the image on the card up to four times a year. (CardFlash International Library 11/10/04 and CardTrak Library 9/24/04)

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Paymentech to Offer PayPal Option in 05

Paymentech has inked a deal to offer PayPal next year to its merchant clients. The processor is the first merchant acquirer to resell and fully integrate PayPal’s online payment service onto its proprietary processing platform. Paymentech processes more than half of all Internet transactions. Paymentech now gives Internet merchants a full range of payment options, including popular forms of payments such as electronic checking and gift cards in addition to PayPal. During the third quarter, PayPal handled $4.64 billion of gross payment volume for eBay and had 56.7 million accounts. PayPal handled 83.4 million payments in 3Q/04. (CF Library 10/22/04)

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Sub-Prime Charge-Offs Dip Below 15% in Oct

Credit card charge-offs, among “prime” asset-backed securities, dropped 40 basis points, as the 60+ day delinquency ratio inched up 7 basis points during October. Meanwhile, “sub-prime” ABS metrics show a dramatic one-month fall in charge-offs of 154 bps to 14.70%, the lowest level since March 2002, and 210 bps below year-ago levels. Late stage delinquencies among “sub-prime” borrowers rose for the second consecutive month to 8.93%, the highest level since February 2004, though 108 bps below year-ago levels. Fitchratings also reports that the monthly payment rate slipped 34 bps to 17.22%, though 67 bps above year-ago levels. “Prime” charge-offs for October were 5.73%, compared to 6.13% in September, and 6.40% one-year ago. Fitch’s 60-plus day delinquency index for October was 2.93%, 54 bps below year-ago levels. Fitch’s yield index tumbled 111 bps to 16.39%, 29 bps below year-ago levels.

ABS CHARGE-OFFS HISTORICAL
Prime Sub-Prime
Oct 03: 6.40% 16.80%
Sep 04: 6.13% 16.24%
Oct 04: 5.73% 14.70%
Source: FitchRatings

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ADS Renews New York & Co Retail Credit Card

Alliance Data Systems announced the signing of a renewal agreement to provide private label credit card services for New York & Company, a specialty retailer of fashion-oriented, moderately priced women’s apparel with annual sales of nearly $1 billion, through 2012. Under terms of the agreement, Alliance Data will continue its relationship with New York and Company, providing the retailer with an integrated private label credit card program for its 486 nationwide retail locations, as well as its website (http://www.nyandcompany.com). Alliance Data Systems is a leading provider of transaction services, credit services and marketing services. New York & Company, Inc., founded in 1918, is a leading specialty retailer of fashion-oriented, moderately-priced women’s apparel.

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Gift Cards Carry Significant Business Risks

A Los Angeles-based law firm is cautioning issuers in regard to prepaid gift cards. Pillsbury Winthrop says there are significant risks involved both for issuers and redeemers as states endeavor to regulate the fast growing industry. Many of the laws do not differentiate a gift card from other prepaid cards, and it is not clear whether the laws applicable to gift certificates apply to prepaid cards in general. Issuers of cards are also under the scrutiny of the federal government, which has a long roster of regulatory laws and regulations that potentially apply to prepaid cards. Some were implemented to oversee terrorism concerns of money laundering, while others deal with issues such as consumer privacy issues, licensing, and special reporting and booking requirements. Pillsbury Winthrop also notes that the issue of “escheat” obligations is also in question for issuers of prepaid cards. Most states require those businesses selling gift certificates escheat a remaining balance and give the money to the state as unclaimed property. Approximately 15 states don’t make a claim on abandoned card funds and the timing of escheat of those funds varies from state to state.

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Hypercom Offers Creditz Digital Loyalty Currency

Loyalty program specialist, CEO America, and Hypercom have teamed to provide card issuers and retailers with “Creditz” digital currency card transaction processing. Creditz is the first and only international sub micro-payment system that exchanges cash from consumer to merchant, merchant to consumer, manufacturer to consumer, and consumer to consumer in stores, online and through cell phones, including payments under one cent. Creditz’s Digital Currency Card converts loyalty points/miles and rebates into digital currency to purchase products. CEO America, Inc. is the exclusive master licensee for the United States of the Creditz System. Hypercom Corporation is a leading global provider of electronic payment solutions that add value at the point-of-transaction for consumers, merchants and acquirers, and yield increased profitability for its customers.

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Cash Systems Names a New CFO

MN-based Cash Systems has named David Clifford to EVP/CFO, effective January 1st, to replace Chris Larson who will become COO. Mr. Clifford has been providing strategic and financial consulting services to the Company for the last five months. Prior to Mr. Clifford’s consulting role at Cash Systems, he was the Executive Vice President and CFO of Crown Theatres LP, a division of Henry Crown and Company’s entertainment and leisure assets. Cash Systems, Inc., located in Minneapolis and Las Vegas, is a provider of cash access and related services to the retail and gaming industries.

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TSYS Names an Operational Quality Head

TSYS has hired Jeanne McDowell, formerly with GE Capital and First Data Resources, as group executive to lead its operational excellence initiatives. Her primary focus will be the continued deployment of the Six Sigma process improvement methodology across all TSYS business units. Prior to joining TSYS, Jeanne enjoyed an impressive career with Nextel Communications, GE Capital and First Data Resources. TSYS (NYSE: TSS) (www.tsys.com) 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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Maybank Selects Welcome’s XLS to Upgrade EMV cards

Malayan Bank Berhad has chosen Welcome’s “XLS” to boost their EMV payment cards with customer centric features. “XLS” will be the foundation on which Maybank’s cardholders are rewarded via multi-channels starting with the common EMV-enabled terminals. Welcome provides smart card software that enhances payment transactions with real-time point of sale features such as welcome gifts, surprise bonuses, personal reminders, targeted samples, loyalty points, coupons, punch cards, vouchers, tickets, cash back and more, all in a single convenient payment process. Maybank is the largest financial services group in Malaysia.

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Metavante Lands LA Metro Contract

The Los Angeles County Metropolitan Transportation Authority will add debit and credit card options to its fare system next year. Milwaukee-based Metavante has been chosen to provide Metro with debit and credit card transaction acquiring, processing and settlement for customers purchasing tickets through Metro point-of-sale devices, the Internet, and rail ticket vending machines. Metro is in the process of replacing all existing rail TVMs as a part of its Universal Fare System implementation. Additionally, with the new TVMs, customers will have the ability to purchase transit passes and to reload their “Transit Access Pass” stored value cards. In 2002, the Metro signed an agreement with Metavante to issue reduced fare passes, which includes a web-enabled database, cardbase management, data entry, card personalization and fulfillment services. These products support a reduced fare program focused on students, senior citizens and disabled persons.

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