Metavante Seeks Approval to Purchase Response Data Corp

Milwaukee-based Metavante is looking to purchase NJ-based Response Data Corporation for $34 million in cash. According to filings with regulators the acquisition would provide Metavante with a new line of credit card payment technology. RDC’s largest clients are Chase and BofA. The deal is the fourth acquisition by Metavante this year. In July, the firm purchased NYCE from First Data for $610 million in cash. In June, Metavante completed its acquisition of The Kirchman Corporation, a provider of automation software and compliance services to the banking industry. In May, Metavante signed a definitive agreement to acquire Advanced Financial Solutions of Oklahoma City, which provides check-imaging technology for over 7,000 financial institutions in the USA and 25 other countries. (CF Library 5/7/04; 6/1/04; 6/14/04).

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AmEx to Expand Prepaid Cards in School Fundraising

American Express Incentive Services has made an equity investment into Atlanta-based LoyaltyPoint and signed a five-year exclusive strategic marketing partnership with its Schoolpop subsidiary. Under the agreement, the two companies will launch exclusive new prepaid card products that offer access to national retailers. The cards will be themed to represent consumers’ typical spending categories such as clothing, home furnishings, electronics and groceries. The companies are also teaming up to create a unique series of new scrip cards that will be usable at multiple establishments and that will be introduced into the school and nonprofit markets under Schoolpop’s “Scrip & Earn” product line. Schools and nonprofit organizations purchase “Scrip & Earn” prepaid cards from Schoolpop and then resell the prepaid cards to their supporters for fundraising. LoyaltyPoint says current exclusive AEIS products have driven significant revenue for the company, comprising 73% of total company sales and 76% of prepaid stored-value card sales for the first half of this year.

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ActivCard Names Two New Board Members

ActivCard has named John Gordon and Richard Kashnow to its Board of Directors. Gordon brings extensive experiences in the security arena and Kashnow is a 33-year veteran of large and small business. Both men will bring the experience and expertise necessary to develop strategies for both government and enterprise markets and strengthen ActivCard’s dedication to the highest standards of corporate governance.

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Top Ten Delinquency Drops 111 BPS Year-Over-Year

With the exception of Household International, all top ten bank credit card issuers posted year-over-year declines in delinquency ratios at mid-year. As a group, the average rate for 30+day delinquency plunged from 6.14% in 2Q/03 to 5.03% for the just ended quarter. As expected, issuers with significant exposure in the sub-prime segment reported the largest improvements. Providian’s delinquency declined 328 basis points, as Metris dropped 170 basis points, and Capital One decreased 147 basis points. Household, which only reports 60+ day delinquency, reported a mere 2 basis points increase over one-year ago levels. Compared to the first quarter, average 30+ day delinquency dropped 44 basis points for 2Q/04. For the fourth quarter of 2003, the average rate was 5.97%, compared to 6.07% in 3Q/03. For complete detail on delinquency for U.S. issuers please visit CardData ([www.cardddata.com][1]).

TOP TEN ISSUERS DELINQUENCY (managed basis)
DAYS 2Q/04 1Q/04 2Q/03 Y/Y CHNG
1. Citigroup: 90 1.61% 1.83% 1.79% -18 bps
2. MBNA: 30 4.10% 4.27% 4.36% -26 bps
3. Bank One: 30 3.37% 3.75% 3.95% -58 bps
4. BofA: 30 3.86% 3.75% 3.99% -13 bps
5. Chase: 30 4.27% 4.43% 4.40% -13 bps
6. Discover: 30 4.88% 5.80% 6.21% -133 bps
7. Cap One: 30 3.95% 3.99% 5.42% -147 bps
8. Household: 60 4.21% 4.35% 4.19% + 2 bps
9. Providian: 30 6.44% 7.36% 9.72% -328 bps
10. Metris/DM: 30 9.40% 10.40% 11.10% -170 bps
AVERAGE (30day): 5.03% 5.47% 6.14% -111 bps
Note: excludes American Express
Source: CardData ( www.cardddata.com).

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

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N.E.W. Attracts a Major Investment

TH Lee Putnam Ventures, Freeman Spogli, along with company management, have taken a major equity interest into VA-based N.E.W. Customer Service Companies, provider of VISA USA’s credit card enhancement programs. NEW creates and administers warranty and extended service programs that retailers can offer to consumers. This acquisition will mean an enterprise value of approximately $370 Million.

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The Detroit Lions Opt for PowerPay in Ford Field

NYC-based Smart System Technologies has signed a deal with the Detroit Lions to deploy its “PowerPay” payment and reward system at Ford Field. Lions fans will benefit from the wireless, cashless payment system at permanent as well as portable concession and merchandise stands. PowerPay will decrease the time to conduct transactions, allowing fans to spend less time away from the action of the game.

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TSYS Lands the FleetBoston Credit Card Portfolio

Bank of America yesterday confirmed it has selected TSYS to provide credit card processing for its recently acquired FleetBoston card portfolio. BofA is a long-term client of TSYS. TSYS processes BofA’s consumer, commercial and government services accounts on TS2. TSYS also processes BofA’s merchant accounts through Vital Processing Services, its joint venture company with VISA. Discussions for a definitive agreement is underway. Last month J.P. Morgan Chase delivered official notification to TSYS to continue providing processing for the combined Chase and Bank One card portfolio. (CF Library 7/8/04)

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McDonald’s to Pilot MasterCard’s PayPass in NY & TX

After experimenting with ExxonMobil’s “SpeedPass,” the nation’s largest fast food outlet, has opted to roll-out MasterCard’s contactless RFID payment system. McDonald’s announced this morning it has inked a deal to accept MasterCard “PayPass.” The fast food chain will have Verifone “Omni 7000” card-readers installed to accept the new MasterCard “PayPass” card. Participating McDonald’s restaurants in Dallas and the New York metropolitan area will implement “PayPass” later this year, with additional locations to be added in 2005. McDonald’s currently accepts cashless payment options at more than 4,500 restaurants in the USA and expects to hit 8,000 by the end of this year. McDonald’s has more than 13,500 restaurants in the USA. McDonald’s piloted the ExxonMobil “SpeedPass” system in the Chicago area last year. (CF Library 3/11/04).

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PayPal Opens its Sixth International Market

PayPal headed into France with a fully localized Web site. The launch of PayPal France follows the recent introduction of the
service on eBay sites in Austria, Belgium, Germany, the Netherlands and Switzerland. The migration now enables payments in five currencies: the U.S. dollar, the Canadian dollar, the yen, the euro and the British pound. PayPal France is provided by PayPal (Europe) Limited, a UK regulated entity authorized by the Financial Services Authority as an electronic money institution. During the second quarter of this year, PayPal handled $4.35 billion of gross payment volume, a 53% increase over 2Q/03. PayPal produced $161.5 million in transaction fees for 2Q/04, a 59% jump over the year-ago quarter, but only a 0.2% increase over the first quarter of 2004. At the end of the second quarter, PayPal had 50.4 million accounts, compared to 31.1 million one year ago. During the second quarter, PayPal handled 77.2 million payments, a 2% decline over the prior quarter, but up 45% from 2Q/03. For complete details on eBay/PayPal’s Second quarter performance visit CardData (www.carddata.com)

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