TowerGroup Hires a Global Sales Executive

TowerGroup has hired Clay Cocalis, formerly with Factiva, as VP of global sales and field marketing. Cocalis will bring a 20-year record of strong leadership and success in driving global information services industry sales. In his new position at TowerGroup, Cocalis will oversee a growing team of domestic and international sales personnel and will work across both advisory research and consulting.

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PowerPay to use OTI’s Saturn 5000 Readers

On Track Innovations has signed a VAR agreement with Smart System Technologies to deploy OTI’s “Saturn 5000” readers at sports venues and retailers in the USA as part of SST’s “PowerPay” solution. SST has targeted the “PowerPay” solution to merchants and sports teams. Consumers will enjoy a short, three second transaction that is easy, secure, cashless and contactless and can link PowerPay free-of-charge to any of their existing credit cards or checking accounts.

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Wells Fargo Q2 Outstandings Up 12%; Volume Up 16%

Wells Fargo Card Services and Wells Fargo Financial Bank reported second quarter outstandings of $7,810,690,817, an 11.6% increase over the same period one-year ago. Second quarter card volume rose 57% for Wells Fargo Financial Bank, and about 13% for Wells Fargo Card Services. Combined, Wells Fargo Card Services and Wells Fargo Financial Bank reported 2Q/04 volume of $4,517,907,863 according to CardData ([www.carddata.com][1]). At the end of the second quarter, Wells Fargo Financial Bank had 500,931 active accounts, a 10.8% increase over the prior year. Wells Fargo Card Services had 3,390,848 active accounts, a 6.0% increase over the prior year. In its earnings reports, Wells noted it now has 680,000 business debit card outstanding, an increase of 34% over 2Q/03. For complete details on Wells Fargo Card Services and Wells Fargo Financial Bank second quarter results visit CardData ([www.carddata.com][2]).

Issuer 2Q/04 2Q/03 CHANGE
WF Card Services (IA) $6.253b $5.783b +8.1%
WF Financial Bank (SD) $1.558b $1.215b +28.2%
Total $7.811b $6.998b +11.6%
Source: CardData (www.carddata.com)

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

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Card Fraud Squad Saves U.K. Issuers $118 Million

The U.K.’s card fraud-busting police squad has received GBP 3 million in new funding to continue its operations. Over the past two years, the “Dedicated Cheque and Plastic Crime Unit” has made 171 arrests and recovered more than 36,000 stolen cards in Britain. The work of the DCPCU has resulted in 52 convictions to-date. The Association for Payment Clearing Services says the fraud fighters have produced estimated fraud savings of GBP 65 million from stolen cards and card details. The unit was set up two years ago to target the organized gangs who are responsible for the lion’s share of the UK’s card fraud losses, amounting to GBP 402 million in 2003. The unit comprises officers seconded from the City of London and Metropolitan Police forces, supplemented by banking intelligence and administrative support supplied by the banking industry.

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More British Players Eye U.S. Credit Card Market

More British players are eyeing the U.S. bank credit card market looking to ramp up competition in a very mature and saturated business. This week, Virgin Money, which markets co-branded MasterCards in the U.K. and Australia, is exploring a possible entry into the U.S. market. Also this week, Barclays announced the acquisition of Delaware-based Juniper Financial and its 700,000 account, $1.4 billion credit card portfolio from Canada’s CIBC. In February, Britain’s second-largest bank, The Royal Bank of Scotland Group, expanded its presence in the USA with the purchase of the entire credit card business of CT-based People’s Bank, consisting of 1.1 million accounts and $2.3 billion in outstandings. RBS also owns RI-based Citizens Bank, which has about 800,000 debit cards, a small business card portfolio, and 1,700 ATMs. RBS also announced this month it is buying Atlanta-based merchant processor and acquirer, Lynk Systems, which handles $18 billion in charge volume and 400 million transactions annually. In February of this year, Barclays and Lloyds TSB were rumored to be making a run at Providian’s credit card business. Virgin Money Group launched its first co-branded MasterCard with MBNA Europe in January 2002. In May 2003, Virgin Money teamed with Wespac Banking to launch a co-branded MasterCard in Australia. Both launches were made with great fanfare. Last year Virgin predicted its card “will lead to a major ‘shape up’ of the Australian market.” Indeed Virgin attracted more than 50,000 applications in its first week in Australia. In the UK, Virgin signed up about 300,000 cardholders in its first year. (CFI Library 5/14/03; 5/21/03; 2/3/04; 2/9/04; 8/9/04 and CF Library 8/19/04)

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GTEL and GI Team to Create a Miami Switch

Miami-based GlobeTel Communications and Grupo Ingedigit have teamed to create a Miami switch for transaction processing services. GTEL will expand its capabilities to profit from the electronic processing of financial transactions with this venture. When completed, the Miami switch is expected to be certified to process MasterCard, Visa, Cirrus and other independent ATM transaction networks.

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BofA’s SafeSend Grows Fifteen Fold this Year

Bank of America posted 1500% growth during the first half of this year for its “SafeSend” remittance service which enables customers to send money to Mexico. Currently, BofA maintains relationships with 57% of the Hispanic households in their territory, which accounts for more than $15 million in deposits with BofA. BofA will further address Hispanic customer demand by increasing mass marketing, launching and entry-level account called Nuevo Futuro, maintaining a Spanish-language Web site, and hiring more Spanish-speaking associates.

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CARDS JUN04

Consumer purchase volume on credit cards increased 16% during June, as balances grew 14%, and credit lines edged up 13% per annum. During June, Australians charged A$12.4 billion in purchases on credit cards compared to A$10.7 billion one-year ago. At the end of June, consumers owed A$27.7 billion on credit cards versus $24.3 billion for June 2003. The ratio of credit card balances to card credit limits edged up a bit during June compared to one-year ago, at 37.7%, according to data released by the Reserve Bank of Australia. One-year ago, consumers owed A$24.3 billion with total credit lines of A$65.0 billion. Card credit limits reached A$73.5 billion at the end of June.

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MBNA INTL 2Q/04

MBNA’s international credit card portfolio has grown approximately 17% over the past twelve months to $15.9 billion, slowing down as the U.S. dollar strengthens and the Canadian market weakens. Account acquisition also slowed, as MBNA added 550,000 new international accounts during the second quarter, compared with 720,000 new accounts for same period one-year ago. MBNA’s total managed foreign loans were $22.0 billion for 2Q/04, the same as the prior quarter but up 24% compared to 2Q/03’s $17.7 billion. Currency fluctuations decreased second quarter foreign loans by $350 million while first quarter foreign loans were boosted by $380 million. In Europe, total managed loans grew 28% year-on-year reaching $18.6 billion. Approximately 420,000 new accounts were added during the second quarter in Europe. In Canada, total managed loans grew 6% to reach $3.4 billion. Approximately 140,000 new accounts were added during the second quarter in Canada. MBNA signed several new foreign affinity agreements during the second quarter including Arsenal Football Club, (U. K.), Reader?s Digest Canada, and Halfords (U. K.). Among foreign affinity agreements renewing during 2Q/04 were PGA (U. K.), Bradford & Bingley (U. K.), and, Golf Digest (Canada). Globally, MBNA signed more than 50 new affinity agreements and renewed more than 350 during the second quarter. For complete details on MBNA’s international growth visit CardData (www.carddata.com).

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BARCLAYCARD USA

Barclays has inked an agreement to acquire Delaware-based Juniper Financial and its US$1.4 billion credit card portfolio from Canada’s CIBC for US$293 million in cash.
The deal represents a premium of 15.2%. The news marks the entrance of
Barclaycard into the U.S. credit card market. Since its inception in
2000 by former First USA executives, Juniper has grown from US$160 million in credit card receivables for EOY2000 to US$1.3 billion EOY2003. Between 2001 and 2002 the issuer doubled its size, becoming the fastest growing issuer during the period. Juniper, with 700,000 accounts, also has co-branded relationships with AirTran Airways, Best Western, Caesars Entertainment, Frontier Airlines, Gulf Petroleum, Midwest Airlines and Sinclair Oil. Barclaycard Chief Executive, Gary Hoffman, will become Chairman of Juniper, and Juniper will become part of the Barclaycard International business. CIBC acquired a 51% interest in Juniper Financial in 2001 and subsequently increased its ownership to 98%. The remaining 2% is owned by Juniper senior management. Barclays is
purchasing 100% of Juniper Financial. For details on Juniper’s past
performance visit CardData (www.carddata.com).

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Barclaycard Enters US Card Market via Juniper Acquisition

Barclays has inked an agreement to acquire Juniper Financial and its $1.4 billion credit card portfolio from CIBC for $293 million in cash. The deal represents a premium of 15.2%. The news marks the entrance of Barclaycard into the U.S. credit card market. Since its inception in 2000 by former First USA executives, Juniper has grown from $160 million in credit card receivables for EOY2000 to $1.3 billion EOY2003. Between 2001 and 2002 the issuer doubled its size, becoming the fastest growing issuer during the period. Juniper, with 700,000 accounts, also has co-branded relationships with AirTran Airways, Best Western, Caesars Entertainment, Frontier Airlines, Gulf Petroleum, Midwest Airlines and Sinclair Oil. Barclaycard Chief Executive, Gary Hoffman, will become Chairman of Juniper, and Juniper will become part of the Barclaycard International business. CIBC acquired a 51% interest in Juniper Financial in 2001 and subsequently increased its ownership to 98%. The remaining 2% is owned by Juniper senior management. Barclays is purchasing 100% of Juniper Financial. For details on Juniper’s past performance visit CardData ([www.carddata.com][1]).

JUNIPER HISTORICAL OUTSTANDINGS
2000: $160 million
2001: $425 million
2002: $950 million
2003: $1.3 billion
2004: $1.4 billion
Source: CardData (www.carddata.com).

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

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