Asia Pay Japan Set to Launch

Asia Payment Systems is set to launch its Asia Pay Japan credit card processing network. The network is currently able to process all Japan domestic cards and International VISA, MasterCard, AMEX, JCB, and Diners Club card transactions. It is the first network to provide IP-based transaction processing for Japan credit card transactions. In addition to the Asia Pay Japan transactions, Asia Pay has also completed client integration (U.S. credit card transaction processing) for two Hong Kong-based clients, CTUSA and Telecom Innovation Limited. Asia Pay’s mission is to be a national provider of third-party credit card processing services in China.

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TODITO CARD

A prepaid dial-up ISP and long-distance phone card can now be used to purchase on-line versions of three newspapers. The “Todito Card,” which is offered at 30,000 points of sale in Mexico and the USA,
can now be used to access content produced by Grupo Reforma. Grupo Reforma previously accepted credit cards only. Todito.com, issuer of the card, is the second largest ISP in Mexico. “Todito Card” sales for 2Q04 grew 68%, reaching US$2 million versus US$1.2 million for 2Q/03. “Todito Card” active users grew 73% from 248,000 in the second quarter of 2003 to 430,000 during the second quarter of 2004. Todito.com is jointly owned by Universidad CNCI and TV Azteca.

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TSYS Signs a Mexican Deal with Spira

Spira de Mexico, S.A. de C.V. has signed a five-year processing agreement with TSYS. Spira de Mexico is a newly formed joint venture company of Grupo Financiero Uno and Invex Grupo Financiero. Spira will also utilize TSYS risk management, portfolio management, and reporting tools. Additionally, TSYS de Mexico will support Spira’s production, statement and card personalization needs out of its Toluca, Mexico facility.

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VISA to Capture 50% of Small Biz by 07

This week, VISA indicated it is reaching for a 50% share of small business volume by the end of 2006. VISA also predicted it will surpass American Express in early 2005, after the gap narrowed to 2 percentage points this year. The U.S. small business market will produce about $175 billion in volume this year. Seven years ago, American Express held a 70% share of the small business market. Its share has rapidly declined as VISA and MasterCard have deepened their penetration with incentives and new products. Last year, VISA’s small business card volume was up 28.6% to $56.6 billion, according to CardData ([www.carddata.com][1]).

SMALL BUSINESS CHARGE VOLUME
AmEx VISA MC
1997: 70% 15% 15%
1998: 68% 17% 15%
1999: 64% 20% 16%
2000: 60% 23% 17%
2001: 55% 27% 18%
2002: 51% 30% 19%
2003: 46% 34% 20%
2004: 41% 39% 20%
Source: CardData (www.carddata.com)

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

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TWS Systems Powers Nevada FCU’s ATMs

Nevada FCU has expanded its use of TWS Systems’ ATM management modules to process more than one million transactions per month for its 82,000 members. The credit union selected ALERTMANAGER BY TWS, a fraud prevention solution and OMEGA BY TWS, an ATM deposit management solution that automates the processing and management of an ATM deposit. Pete Jenkins, senior vice president of Administrative Services for Nevada Federal, says that TWS’ software enables them to process the one million plus monthly transactions quicker with more efficiency, helping the credit union serve their members better. The software also protects members from fraud, creating an additional sense of security. Nevada FCU is the largest credit union in Nevada and is one of the top credit unions in the nation. TWS is a leading company that manages ATM deposits and provides fraud prevention and transaction processing solutions for financial institutions.

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Competition Commission Expands Card Probe

The Competition Commission announced it is expanding its investigation of store credit cards to include other forms of consumer credit. The CC was asked last March by the Office of Fair Trading to look into competition issues within the store credit card market as it pertains to retailers and consumers. Since then the CC has written to over 350 parties and held more than 20 hearings. Store credit card issuers have lobbied the CC to expand its probe to examine other forms of consumer credit. The CC is considering whether the services provided by store card credit providers to retailers and consumers form part of a single economic market, or two or more such markets. Also, whether the economic market or markets consist of one or more kinds of store card, or include other products such as credit cards, loyalty cards or other
kinds of credit. The CC is considering whether there are any features that prevent, restrict or distort competition in the relevant market or markets. The CC is examining relationships, benefits, pricing, profitability, and competitive pressures within the relevant market.
The CC said there are approximately 17 million active store card accounts in the U.K. and that the value of store card transactions is around GBP 4.8 billion a year. The CC is required to publish its final report by March 17, 2006 but expects to report before that date.

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Prepaid Phone Cards to be Used for Purchases

Ft. Lauderdale-based DuoCash has inked a marketing agreement with Internet Billing Company to enable iBill online merchants to accept prepaid phone cards for purchases instead of credit cards. DuoCash owns and operates a patented payment network that allows consumers to use the stored dollar value on their prepaid long distance telephone cards to make purchases on the Internet. The agreement provides iBill exclusive use of the DuoCash network to the online entertainment market, and “Master Merchant” status in all markets. Both companies expect DuoCash to be available through iBill within the next 60 days.

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KeyCorp Lands its First Michigan ATM deal

Cleveland-based KeyCorp has signed a deal with the University Bank of Ann Arbor to provide surcharge-free access to Key’s network of more than 549 ATMs in Michigan, Indiana, and Ohio. University Bank can enhance its customer service capabilities by providing customers easy access to their accounts through its partnership with Key. Institutions can access Key’s network of almost 2,200 ATMs. University Bank is a state-chartered community bank with assets totally approximately $50,000,000. It specializes in mortgage subservicing through its subsidiary, Midwest Loan Services, which subservices over $2.2 billion in mortgages. KeyCorp has assets totaling approximately $86 billion and is one of the nation’s largest bank-based financial services companies.

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Cash Store Card Issuer Ranked in the Hot 50

Edmonton-based Rentcash, issuer of the “Cash Store Cash Card,” has been named as the 28th emerging growth company in the fifth
annual “PROFIT Hot 50” ranking of emerging Canadian growth companies.
Rentcash operates 169 stores in nine provinces under The Cash Store and Insta-rent banners. The Cash Store acts as broker to facilitate payday cash advance services to income earning consumers and provides a private label debit card, the “Cash Store Cash Card” for high risk borrowers.
Insta-rent rents brand name furniture, appliances, electronics and
computers, with or without an option to purchase. Rentcash reported that for the year ended June 30th, revenue climbed 116% to $22.3 million.

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Penalty Rates Rise 52 bps Since June

Punitive interest rates, among the top ten issuers, will range from 24.65% to 30.74% beginning October 1st. Across the entire U.S. credit card market, penalty interest rates will range from none to 41.00%, according to CardTrak(R). Providian, the 10th largest U.S. issuer, levies the greater of prime +25.99%, or 29.99% on cardholders who miss payments or default in some way. CompuCredit, an Atlanta-based issuer of “Aspire VISA” card, charges an interest rate of prime +36.25% with a 41.00% minimum, to its most risky cardholders who become delinquent.

CREDIT CARD PENALTY INTEREST RATES
(effective 10-1-04)
June Oct
1. Citibank 27.99% 28.74%
2. MBNA 24.99% 24.99%
3. Bank One 27.74% 28.49%
4. Chase 25.99% 26.74%
5. Discover 24.99% 24.99%
6. Capital One 25.90% 25.90%
7. Am Express 25.99% 26.74%
8. Bnk of Amer 25.99% 26.74%
9. HSBC/HH 23.90% 24.65%
10. Providian 29.99% 30.74%
AVG 26.35% 26.87%
Source: CardWeb.com’s CardWatch(R)

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Cell Charge Offers Terminal Free Processing

Westlake Village, CA-based Cell Charge, an ISO/MSP of Harris Trust and Savings Bank, has launched a terminal-less credit card and check guarantee processing service. Cell Charge’s service has brought the average regular monthly fees for electronic transactions down from $100 to $10 by enabling transactions to be processed over the telephone. Small businesses can now process transactions for a much lower cost. To use the service, all merchants have to do is dial a toll-free number from any phone and enter a pin along with the customer’s credit card or check information. After it is approved, the transaction is electronically deposited into the merchant’s checking account within 1-2 days.

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