CHIP & PIN RESPONSE

Northampton, where the largest “chip and PIN” trial was launched in the summer of 2003, has shown overwhelmingly positive support for the program. The national “chip and PIN” migration, which began October 2003, is fast approaching its target of 42 million cardholders, with 25.4 million cardholders upgraded to-date. Nearly 90% of “chip and PIN” cardholders in Northampton have used the new cards to pay for goods and services in the town; nearly three-quarters already use “chip and PIN” for at least half their purchases; and half use “chip and PIN” for most of their purchases. Two-thirds of Northampton’s “chip and PIN” cardholders feel the cards are safer and protect them from fraud and 84% think it would be much easier to forge a signature than guess a PIN.

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Americans Card $150 Billion in Bills & Fast Food

For the first time, Americans have paid more than $100 billion annually in household bills, including insurance, rent, cable TV, home phone, and mobile phone bills with debit and credit cards. Also, fast food sales on credit and debit cards should top $25 billion this year. The figure for household bills is expected to hit nearly $125 billion this year, up 27% from 2003. At mid-year, household bills on payment cards hit $110 billion, according to CardData ([www.carddata.com][1]). The growth in QSR sales is about double the 2003 level. The major card networks have been incenting consumers to card everyday expenses, in some instances awarding double points or special discounts. Tax payments via credit cards has also been an area of hot promotion this year. Bank One and American Express launched double miles promotions in the spring. (CF Library 2/23/04)

Consumer Bills on Cards
2000: $49.6 billion
2001: $60.4 billion
2002: $79.6 billion
2003: $98.4 billion
2004: $124.9 billion
SOURCE: CardData (www.carddata.com)

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

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Fargo Adds Two More DTC Card Printers

MN-based Fargo Electronics has introduced the “DTC300” and “DTC400” card printer/encoders utilizing Fargo’s “Direct-to-Card” technology. The DTC300 and DTC400 feature user conveniences such as pre-loaded ribbon cartridges and Fargo’s patent-pending SmartClean™ roller, designed to keep cards clean. Another convenience is Fargo’s SmartScreen™ LCD Control Panel, which provides prompts and commands giving users an updated status of print jobs. The DTC300 is intended for small corporations and has a suggested retail price of $2295. The DTC400 is intended for small to medium corporations and has a suggested retail price of $2895. Fargo is a world leader in secure technologies for card identity systems with over 80,000 systems in 80 different countries as well as the U.S.

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OTI Buys Polish Firm and Sells German Firm

Poland-based Nextel Spolka Akcyjna has agreed to sell its ASEC Spolka Akcyjna business to On Track Innovations. ASEC is a software company that provides complimentary solutions to OTI in the form of software and back office systems for mass transit ticketing and Payment solutions. The acquisition of ASEC will enable OTI to provide the required local support service for programs in the emerging European markets and will better position OTI to also provide complete solutions in these markets for its petroleum and smart ID solutions. ASEC has been working with OTI on various programs in Poland. In exchange for all of the outstanding shares of the capital stock of ASEC, OTI will issue to Nextel S.A. OTI ordinary shares having an aggregate market value of between $1.6 million and $1.95 million. OTI also announced it has decided to sell its wholly-owned German subsidiary, InterCard Kartensysteme GmbH for US$2.5 million, according to this week’s issue of CardFlash International. The subsidiary is engaged in the sale and support of closed campus systems. OTI says it is considered to be a highly competitive market with relatively low margins and high operating expenses. However, OTI will retain its profitable InterCard Systemelectronic GmbH subsidiary, which provides OEM and electronics manufacturing services. OTI designs, develops and markets secure contactless microprocessor-based smart card technology to address the needs of a wide variety of markets.

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Moneris Offers Peppercoin Micropayment Service

Moneris Solutions has formed an alliance with Peppercoin to meet the small payments processing needs of merchants. Peppercoin, a micropayments company, recently introduced the “Peppercoin 2.0” system to reduce transaction processing and customer service costs while driving increased small payments traffic over the payments network. Peppercoin’s small payments suite complements Moneris’ portfolio of solutions that enable merchants to accept credit and debit cards, paper and electronic checks, and gift and loyalty cards. Moneris Solutions will make “Peppercoin 2.0” available to its existing merchants and Peppercoin merchants by the end of the year.

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Societe Generale Expands Corp MasterCards

The top issuer of commercial cards in France, Societe Generale, is introducing “MasterCard Corporate” cards to service large and multinational corporations. The issuer will also launch an “Executive” version of the corporate card for senior managers and executives within its corporate customer organizations, according to this week’s issue of CardFlash International. The new cards available to major corporations will feature “MasterCard Smart Data onLine” which provides comprehensive MIS reporting. The new “Societe Generale MasterCard Corporate Card” can debit either corporate or individual accounts, benefits from a wide range of insurance and assistance services, and offers the choice of PIN code, a unique feature of Societe Generale card products. The “MasterCard Corporate Executive Card” has all the features of the standard “Corporate” card, but also includes a range of additional features, for example higher spending limits and additional privileges and VIP services, appropriate for senior or executive employees. Societe Generale serves more than 15 million retail customers worldwide.

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The Hartford Offers FSA Card Access

The Hartford Financial Services Group and Medical Group Insurance Services have teamed up to offer debit card access to the “Flex Convenience” flexible spending account. This service features debit card technology that helps employees manage the high costs of medical and dependent day care. Funds deposited into a flexible spending account can be used to pay for qualified medical and dependent care expenses and are not subject to federal income tax. Qualified expenses include co-payments, orthodontia, eyeglasses, and over-the-counter medicines. The percentage of employers offering FSA’s is predicted to increase 37% by 2010. With 2003 revenues of $18.7 billion, The Hartford is one of the nation’s largest financial services and insurance companies.

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MSC Wins the AIR and SEA Card Contract

The U.S. Defense Energy Support Center has awarded Multi Service Corp the “Aviation Into-Plane Reimbursement” and “Ships’ bunkers’ Easy Acquisition Card” programs contract. The AIR and SEA Card Programs provide Department of Defense and federal civilian agencies with a way to obtain fuel and similar services at commercial airports and seaports worldwide. Multi Service Corp will partner with BP Group to fulfill its contract. It will be responsible for developing software, implementing a transaction authorization and settlement system, and reporting specialized data. Mulit Service is now managing two proprietary card programs along with more than a dozen bankcard processing and private label charge card programs.

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NBS Acquires a French Smart Card Firm

Toronto-based NBS Technologies has agreed to purchase the assets and assume certain liabilities of Cybernetix Microelectronique for $9.4 million in cash, according to this week’s issue of CardFlash International. Marseille, France-based Microelectronique, a subsidiary of Cybernetix, designs and manufactures automated equipment systems for the production, testing, and personalization of, smart cards (contact, contactless and dual interface), smart objects, electronic labels and micromodules, as well as RFID products for applications in telecommunications, ID, security, banking, and transportation. In addition, Microelectronique designs and manufacturers equipment for handling, sorting, packing, unpacking, inspection, wet processing, personalization, and testing of semiconductor wafers.

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preCharge Launches an ID Protection Package

NY-based preCharge Risk Management Solutions has introduced an identity protection program offering up to $2,500 in coverage and protecting up to 10 debit or credit cards for $4.95 per month. The preCharge solution offers an early warning system to consumers if their credit or debit card number, name, or other personal information is used with the preCharge network of merchants. The service is free, so no consumer should be without preCharge. preCharge Risk Management Solutions provides an online scoring system meeting the needs of all businesses from small Internet startups to advanced e-commerce sites.

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