U.S. Card Volume Up 15% in Q3 Led by VISA

Americans are on track to charge more than $2.3 trillion on credit, debit, and business cards this year. During the third quarter, a record $620 billion was charged on general purpose payment cards in the USA, compared to $541 billion one-year ago, a 15% gain. VISA captured more than 55% of the U.S. market with $342.7 billion in gross dollar volume. MasterCard’s U.S. GDV grew nearly 8% in the third quarter to $176 billion, representing a 28% share. American Express posted $75.6 billion in third quarter volume for a 12% share. Discover’s $25.4 billion in volume for the quarter ending August 31st, was $25.4 billion, or about 4% of total 3Q/04 volume. For complete details on network third quarter results visit CardData ([www.carddata.com][1]).

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

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“CHIP & PIN”

The “Chip and PIN” roll-out in the U.K. has topped 65.5 million cards. At the end of October, 30.8 million cardholders had at least one new “Chip and PIN” debit or credit card in their wallets. The figure represents about 75% if the total cardholders in the country. Furthermore, more than 520,000 tills in the U.K. have switched over to “Chip and PIN.” The latest major firms to roll out “Chip and PIN” include HMV, Selfridges, Shell and Debenhams. “Chip and PIN” recently launched the second phase of its advertising campaign with TV, radio and press advertisements. The campaign, which runs for 13 weeks, aims to ensure cardholders are ready to use their PIN, with specific messages about how to unlock their PIN, remind them they can change their PIN to something they can remember easily, and to encourage them to keep their PIN a secret. The roll-out of “Chip and PIN” began in October 2003 and is backed by the U.K.’s banking and retail industries. The “Chip and PIN” goal is to migrate 42 million cardholders to the new platform by year’s end.

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VISA LIGHT

DBS Bank of Singapore has become the first to launch the new “VISA Light” card which incorporates a mini-flashlight. The new card is part of a broader VISA initiative utilizing technologies from U.S.-based Innovative Card Technologies (InCard) and U.K.-based Serverside Graphics. Other cards include the “VISA Sound” card and “VISA Display” card. When prompted by a button, the “Sound” card plays a 10-second pre-recorded song, branded jingle, personalized message or virtually any other sound desired by an issuer or cardholder. Designed to enhance single or multi-application smart card functionality, The “Display” card screen can be programmed to show and store a wide variety of information, such as transaction details, card balances (on pre-paid payment products), currency conversions, loyalty points, special messages and a range of other non-financial data. Additionally, using Serverside Graphics’ on-line technology, VISA cardholders can use 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 is the first VISA member financial institution in Asia Pacific to offer customized graphics.

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MR Access Merges with Indala

Cardiff-based MR Access has become Indala Limited. The company was formerly the U.K. distributor for San Jose-based Indala Corporation and will now serve as Indala’s EMEA headquarters. MR Access provides contactless 13.56 MHz smartcard and reader solutions and is a major manufacturer of premium-quality magnetic stripe card readers. Indala Corporation is a security technology company that develops and manufactures 125 kHz proximity; 13.56 MHz contactless and contact smart
cards; and associated readers for physical and network access-control
applications.

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Bantek West and The Wilson Group Merge

Denver-based Bantek West has merged with MI-based The Wilson Group to strengthen and expand its ATM nationwide second-line maintenance and client/server service solutions. The Wilson Group will operate as a separate wholly-owned subsidiary of Bantek. Wilson specializes in ATM installation, de-installation, and software and hardware upgrades. Wilson and Bantek have capabilities in the Microsoft Windows(TM) and LAN/WAN market, separating them from other ATM service providers. Bantek services more than 15,000 ATMs across the nation as a result of the merger with Wilson. Bantek is a provider of cash-management and maintenance services for ATMs and bank-system desktop computers.

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HSBC Acquires Marks & Spencer Money

HSBC has acquired Marks & Spencer Retail Financial Services Holdings Ltd for GBP762 million. This represents a premium of GBP224
million over net asset value. Under the terms of the sale, Marks & Spencer will receive fees equating to 50% of the profits of M&S Money.
As a result of this transaction, Laurel Powers-Freeling, Chief
Executive, M&S Money, will be stepping down from the Group Board immediately.

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Diners Club Signs Independence Air

Fast-rising Dulles airport based Independence Air has expanded its card acceptance to Diners Club, the world’s first charge card and first corporate card system. Visa, MasterCard, and American Express were always accepted by Independence Air as forms of payment for all flights since its inception last summer. In terms of total departures, the Independence Air hub at Washington Dulles is the largest low-fare hub in America.

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LML Payment Systems Mostly Recovers from a Setback

Despite the loss of one of its largest customers, responsible for approximately 24.5% of its total revenue, LML Payment Systems was able to replace some of this lost revenue from increases in revenue from the secondary check collection business. LML Payment reported third calendar quarter revenues of approximately $1.6 million, compared to approximately $1.8 million for the year ago quarter. There was a net loss from continuing operations of approximately $863,000 for the quarter, compared to a net loss of approximately $1.1 million for same period one-year ago. For complete details on LML’s third quarter performance visit CardData (www.carddata.com).

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Piggy-Back Antitrust Lawsuits are Dismissed

A total of nine consumer class action lawsuits brought against MasterCard in regard to alleged antitrust law violations have been dismissed. The courts found that the plaintiffs did not have a legally recognizable claim, lacked standing, and that the damages sought were abstract and speculative. To date, courts have dismissed class action lawsuits in New York, North Carolina, Michigan, Minnesota, Maine, North Dakota, South Dakota, Nebraska and Kansas. One judge noted that in the case of the settled merchant lawsuit, the merchants, not individual customers who brought this case, were the “consumers” of MasterCard’s debit card services.

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Cap One Outsources 750 Jobs to First Data

As it continues to cut costs, Capital One confirmed plans to transition the majority of its production services operations work to First Data. Approximately 750 positions at sites in Federal Way, Washington and Richmond, Virginia will be eliminated, as a result. The Washington state facility will be closed by early March, eliminating 260 positions. The Richmond facility will drop from 720 positions to 230 jobs. First Data will extend employment offers to certain employees. Under terms of the contract, First Data will provide statement services, plastics personalization and remittance processing services to Capital One, supported by FDC’s Card Issuing Services and REMITCO business units.

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ECHO Lands a New Chief Information Officer

Electronic Clearing House has hired Steven Smith, formerly with Digital Insight, as its new CIO. Mr. Smith has over 22 years of IT and Business Transformation experience. He formerly served as VP of Engineering for Digital Insight and has 11 years of product development experience with financial, supply chain, and telecom systems. Smith also has 11 years of global experience with Ernst & Young / CAP Gemini. He obtained a B.A. degree in Computer Science from the University of Texas in Austin. Electronic Clearing House (ECHO) solves the payment processing needs of merchants, banks, and collection agencies. Debit and credit card processing, check guarantee, check verification, check conversion, check re-presentment, and check collection are among the services provided by ECHO.

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