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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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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