Fortis Selects Diebold to Modernize its ATM Network

Fortis has signed an agreement with Diebold to manage a deposit automation project in Belgium and The Netherlands using ATM bundled-cash deposit technology. Diebold’s system allows bulk-cash deposits to be credited in real-time. In The Netherlands, Diebold installed its new family of “Opteva” ATMs. The installation included more than 160 “Opteva” cash dispensers and advanced-function ATMs. Half of these systems include modules for deposit automation. In Belgium, Diebold’s solution involves a pilot installation of Diebold “Cumulus” units, a Diebold “Custom Built Solution.”

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OTI Completes Acquisition of ASEC

On Track Innovations completed its acquisition of ASEC. The acquisition was conditioned upon ASEC’s receiving an order to supply 1,000 units of contactless reader solutions for micropayments. The order, which has been received, is for a Polish mass transit system.
In this application, commuters will be able to load funds onto
their commuter cards using a contactless reader integrated into Verifone’s “Omni 3750” terminals located at one of the largest kiosk chains across Poland. With this new system, customers will be able to pay for their mass transit tickets and other small ticket-items. The value of this order exceeds $500,000. Poland, with a population of about 40 million, recently joined the European Union. There are about 80,000 POS terminals and 7,200 ATM machines located across the country.

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CTFS 3Q/04

Canadian Tire Financial Services reported that its net managed credit card receivables, for the third quarter, increased 25% year-over-year to $2.7 billion, driven by a 26% increase in “Options MasterCard” average balances to $1,483. Pre-tax earnings rose 38% to $36.7 million. However, the average number of accounts with a balance declined slightly during the quarter primarily due to the sale of the commercial and PartSource credit card portfolios, a short-fall in in-store applications and adjustments to account approval standards over the first six months of the year. During the quarter, Financial Services tested a new personal (term) loan product targeted to existing credit card customers which added approximately $70 million in receivables at the end of the quarter. In addition, in the third quarter CTFS partnered with BMO Bank of Montreal to launch the new “Canadian Tire Commercial Link MasterCard” to replace the existing commercial card. Active commercial accounts are held by more than 50,000 Canadian Tire business customers. For complete details on Canadian Tire Financial Services’ third quarter performance visit CardData (www.carddata.com).

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Top Ten Issuers Hold 85% of the U.S. Market

Bank credit card outstandings rose 1.7% sequentially during the third quarter to $688.3 billion. The Top 10 issuers now control slightly more than 85% of the total U.S. general purpose credit card market. The merger of Chase and Bank One has produced a market leader with more than 19% of the market. However, the partnership between American Express and MBNA translates into two issuers with a combined market share of more than 21% of the U.S. market. The top five issuers now represent 64.5% of the market. The top ten currently have a collective market share of 85.2%, based on outstandings. At the end of the third quarter, VISA had $289.6 billion in credit card outstandings while MasterCard had $287.7 billion. For complete details on the industry’s third quarter performance visit CardData ([www.carddata.com][1]).

TOP TEN U.S. BANK CREDIT CARD ISSUERS – 3Q/04
(VISA, MasterCard, Discover, American Express)
[$ billions]

Rank/Issuer Outstandings Market Share
1. JPM Chase $131.5 19.1%
2. Citigroup 112.0 16.3%
3. MBNA 81.5 11.8%
4. Amer. Exp.* 63.9 9.3%
5. Bank of Amer. 55.4 8.0%
6. Discover** 47.1 7.2%
7. Capital One 46.1 6.8%
8. HSBC 20.1 2.9%
9. Providian 17.9 2.6%
10.Wells Fargo 8.2 1.2%
TOTAL $583.7 85.2%

* includes $25.2 billion in non-revolving outstandings
** as of 8/31/04
Source: CardWeb.com(R) CardData(R)

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

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Cap One’s CEO Exercises Options; Sells Stock

Richard Fairbank, Chairman and CEO of Capital One Financial is exercising 3.6 million stock options, unloading 2.6 million shares from the options, leaving a balance of 9.4 million options. Mr. Fairbank has adopted the pre-arranged stock trading plan in order to exercise options to buy Capital One common stock and sell part of those shares to cover expenses associated with transactions as well as to diversify his financial assets. The plan indicates that the transactions will occur between February 1, 2005 and September 14, 2005. Capital One is a Fortune 500 company and one of the largest providers of MasterCard and Visa credit cards in the world.

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Transoft’s eATM Certified by 12 Networks

NC-based Transoft reports its “eATM” solution has been certified by Concord EFT/STAR, Fiserv EFT, CSI, Fifth Third Processing Solutions, Metavante, Jack Henry & Associates, Fiserv Bowling Green, Genpass, Intrieve, Shazam ITS, Elan and Intercept. The eATM provides an open, hardware independent platform that can provide increased functionality and flexibility, enabling banks to be independent of vendors when purchasing ATMs. Through browser-based technology, the eATM also provides a strong multi-media capability. Transoft International, Inc. is the world’s largest provider of currency supply chain management and cost optimization solutions designed for the banking industry. It is a privately held company that manages cash for roughly 100,000 ATMs and bank branches with customers on six continents.

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SPRON Ekort Card Goes OneSMART MasterCard Retail

MasterCard is expecting its first roll-out of the new “OneSMART MasterCard Retail package, using Welcome Real-time’s “XLS” software on a “MULTOS” chip platform. The roll-out by Reykjavik Saving Bank (SPRON) will be based on their successful multi co-brand program called “Ekort.” Launched in February, with nearly 200 retailers, SPRON and its partners are looking to leverage their EMV investment. For the launch, SPRON will be working with leading retailer Hager, with 58 stores across the country. “OneSMART MasterCard Retail” is a powerful chip package that
combines payment, loyalty, and cardholder preferences management in a single point of sale transaction using MODS (MasterCard Open Data Storage(TM)) features. This single system application allows cardholders to receive on-the-spot loyalty bonuses and customized offers from participating retailers, based on preferences the consumer opts in to, which are stored on his or her payment card.

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AmEx Sues Top Issuers; Excludes MBNA & Citi

American Express provided more details on its lawsuit against VISA and MasterCard after the release of yesterday’s CardFlash. Included in the lawsuit are eight major banks who were board members of VISA and/or MasterCard during the time that VISA’s “By-law 210(e)” and MasterCard’s “Competitive Programs Policy” were in place. MBNA, which recently began issuing AmEx cards, was not named as a defendant. AmEx says it will not seek damages from MBNA and will reimburse its new partner for certain costs which may be imposed by MasterCard or VISA as a result of this lawsuit. AmEx also did not name Citigroup as a defendant, and when asked in a news conference about the exclusion of Citi, the lead attorney responded vaguely. The banks sued include J.P. Morgan Chase, Bank of America, Capital One, U.S. Bancorp, Household Bank, Wells Fargo, Providian National Bank and USAA Federal Savings Bank. In 1996, MasterCard’s “CPP” was enacted. VISA enacted “By-law 210(e)” in 1991. (CF Library 10/5/04; 11/15/04)

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Providian’s Charge-Offs Down 525 bps in 04

Losses for Providian’s credit card ABS dropped 34 basis points in October, however, delinquency edged up 18 basis points. Since the start of this year, delinquency has collapsed by 300 basis points, and charge-offs have declined 525 basis points for the sub-prime specialist. Charge-offs dropped to 12.11% in October, compared to 12.45% during September. One-year ago, Providian’s securitized charge-off ratio stood at 17.19%. Delinquency ticked up to 8.48% during October compared to 8.30% during September. One-year ago, Providian’s securitized delinquency ratio stood at 12.38%. Providian’s managed charge-offs for October was 9.95%, and delinquency stood at 6.41%. For complete details on Providian’s latest performance, visit CardData ([www.carddata.com][1]).

PROVIDIAN MONTHLY ABS METRICS
Month Charge-Offs Delinquency
Jan 04 17.36% 11.48%
Feb 04 16.08% 11.07%
Mar 04 17.17% 9.56%
Apr 04 15.84% 9.09%
May 04 14.82% 8.68%
Jun 04 14.44% 8.40%
Jul 04 13.17% 8.42%
Aug 04 12.39% 8.37%
Sep 04 12.45% 8.30%
Oct 04 12.11% 8.48%
Source: CardData(R) (www.carddata.com)

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

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VISA & MC Say AmEx has an Uphill Battle

MasterCard says it will be an uphill battle for American Express to prevail in a private lawsuit. MasterCard says to prove that it was injured and suffered damages as a result of MasterCard’s policy will be a difficult hurdle considering the success of AmEx in the U.S. during the 1990s. Furthermore, MasterCard says the real world evidence of the failed AmEx partnerships with banks in foreign markets, along with the competing interests American Express will face between its proprietary business and its network business, will undermine any attempt by American Express to establish that it was damaged by MasterCard’s policy. Meanwhile, VISA says AmEx chose to walk away from working with banks in the 1980s, and instead only competed against them. VISA says AmEx is now suing the very same banks with whom it claims it wants to partner. VISA also noted that AmEx blew its 18-year head start on VISA by ignoring mainstream consumers and wrongly choosing to focus only on the wealthy, and now has a serious product problem.

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eFunds Offers ATM Remote Graphics Distribution

eFunds has introduced a remote graphics distribution solution for Diebold TCP/IP-based ATM machines running “Windows” and “OS/2”. The remote graphics distribution will enable EFT customers to control and self-author ATM content and advertising for their complete ATM portfolio from a Web browser. Customers can have complete control over the messages appearing to their customers and costs associated with on-site graphics loading are reduced. TEKchand’s ATMRewards™ technology is utilized to distribute graphics to ATMs. TEKchand LLC, based in Chicago, is a provider of ATM software and solutions. eFunds Corporation is an industry leader in electronic payments and risk management.

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Secret History of the Credit Card to Air

PBS’ “FRONTLINE” program and The New York Times have produced a 60-minute documentary entitled the “Secret History of the Credit Card,” that is set to air next week. The investigative report was conducted over a six-month time frame. The production suggests that the profitability of credit cards began twenty-five years ago, when the banking industry successfully eliminated the limit on the interest rate a lender can charge a borrower. Deregulation, coupled with a revolution in technology that enables the almost real-time tracking of personal financial information and the emergence of nationwide banking, has facilitated the widening availability of credit cards across the economic spectrum. But, for some, FRONTLINE found that the cost of credit is often far greater than it appears. The thoroughly researched documentary interviewed many top experts and is hosted by Lowell Bergman. The show airs nationally at 9 P.M. on November 23rd.

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