First Annapolis Adds Two Partners

First Annapolis has promoted Bob Lime and Jim Leroux to partner. Bob Lime focuses on the firm’s Card Issuing practice with a particular emphasis on the Retailer Services sector where he advises retailers and third party providers of retail credit programs on a full range of customer financing and payment strategies, such as private label credit cards, co-branded credit cards, stored value gift cards, and loyalty programs. Jim Leroux works with First Annapolis clients on corporate strategy with a strong emphasis on mergers and acquisitions, strategic relationships, and outsourcing transactions. He works with clients across all of our practice areas and routinely helps clients develop and execute their corporate strategies, often through the identification and completion of strategic transactions. First Annapolis is a management consulting and M&A advisory firm with a focus on the consumer financial services and a specialty in payment-related products, services, and delivery.

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RBS Buys a Top Merchant Processor

Royal Bank of Scotland is buying privately-held, Atlanta-based Lynk Systems, through its US-based Citizens Financial Group, for $525 million in cash. Lynk, a top merchant processor and acquirer, handles $18 billion in charge volume and 400 million transactions annually. The Company services approximately 100,000 merchants. Lynk also provides processing services for 25,000 ATM’s located throughout the USA representing $6 billion dispensed and 120 million transactions annually. The Company was founded in 1991 and has more than 950 employees. Financial Technology Partners and FTP Securities exclusively represented Lynk Systems in the pending sale to RBS. Lynk was a customer of Citizens Financial. Atlanta-based Arnall Golden & Gregory served as Lynk’s legal advisor.

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Diners Club to Beef-Up Global Vision MIS

Diners Club yesterday announced it plans upgrade its “Global Vision” online MIS reporting tool for corporate card clients during the fourth quarter. Besides faster page load times, users will be able to run reports on specific days, and delinquency reports can run at the summary level. Changes have also been incorporated to allow users to create and name their own report folders as well. Additionally, the multi-language capabilities of “Global Vision” will expand to include Spanish and French by the end of the year. Diners Club “Global Vision,” launched in 1992, includes more than 40 standard reports and allows users to create custom reports with access to over 500 distinct data items.

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MEI Gears-Up for the New $50 Bill

MEI is now offering clients options to upgrade their bill acceptors in the field so that they will recognize and accept the new $50 bill when it comes out next month. Upgrade and pricing options differ according to the model bill acceptor, and customers will receive detailed upgrade ordering information from MEI via e-mail and service bulletins that will be issued to service centers, distributors, and customers. The new $50 bills will be safer, smarter and more secure. MEI payment systems are relied upon for more than1 billion transactions per week in 90 countries.

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Card Scams Victimized 10 Million Consumers

Nearly ten million Americans were victims of three types of credit card-related fraud last year. The FTC yesterday reported that advance-fee loan scams, mostly credit cards, claimed 4.55 million victims last year. Credit card insurance scams claimed 3.35 million victims, and credit repair scams suckered 2 million victims. The annual FTC survey found that American Indians and Alaska Natives, African Americans, and Hispanics were more likely to be victims of fraud than non-Hispanic whites. The FTC research reveals that 33% of fraud victims first learned about a fraudulent offer or product from print advertising in newspapers, magazines, direct mail, catalogs, or posters. Telemarketing was the first source of contact in 17% of the frauds. Only 14% of fraudulent offers were promoted using Internet and e-mail; television or radio advertising account for only 10.6% of fraudulent offers.

TOP TEN FRAUDS 2003
SCAM #VICTIMS
1. Advance-fee loan scams 4.55 million
2. Buyers clubs 4.05 million
3. Credit card insurance 3.35 million
4. Credit repair 2.00 million
5. Prize promotions 1.80 million
6. Internet services 1.75 million
7. Pyramid schemes 1.55 million
8. Information services 0.80 million
9. Government job offers 0.65 million
10. Business opportunities 0.45 million
Source: FTC

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Incurrent Releases InSite Collections

Incurrent is releasing “InSite Collections,” a fully-branded, online collections product. InSite Collections can integrate seamlessly with its powerful InSite product line or it can run as a stand-alone experience for delinquent cardholders. InSite Collections provides delinquent accounts a Web experience in which they can communicate with the card issuer about the details of their delinquency and become educated about the options available to them.

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Metris Companies Gets a New CFO Next Week

Metris Companies announced that CFO John Witham has resigned and that William Houlihan, currently with JPMorgan Chase, will become EVP/CFO on Monday. Houlihan has more than 27 years of diversified financial services and management experience. Before joining JPMorgan Chase in November 2003, he spent three years as Executive Vice President and CFO at Hudson United Bancorp in Mahwah, N.J., where he was responsible for all finance and treasury areas of the bank. Metris Companies Inc., based in Minnetonka, Minn., is one of the largest bankcard issuers in the United States.

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eFunds’ Net Income Soars 84% in Q2

AZ-based eFunds reports second quarter net income of $9.4 million, matching its first quarter results, but well above last year’s second quarter net income of $5.1 million. Second quarter net revenue increased 5.8% to $140.7 million, compared to the second quarter of 2003. Revenues for eFunds’ Electronic Payments segment increased 14% to $51.7 million, but net income declined 20% to $7.4 million. ATM Management revenues were down 5% to $34.6 million and net income declined 32% to $446,000 compared to a $657,000 one-year ago. The Risk Management unit produced revenues of $35.0 million, a 9% increase over 2Q/03, as net income for the segment grew 90% to $12.4 million. eFunds Global Outsourcing business posted second quarter revenues of $19.4 million, unchanged compared to 2Q/03, but the net loss widened slightly to $10.4 million for the quarter. The Company reconfirmed its previous outlook that net revenues for the full year 2004 will increase approximately 5% to 10% over the net revenues recorded in 2003 of $532.1 million. For complete details on eFunds’ second quarter performance visit CardData ([www.carddata.com][1]).

eFunds Revenues Historical
2Q/03: $133.0 million
3Q/03: $133.1 million
4Q/03: $135.4 million
1Q/04: $140.9 million
2Q/04: $140.7 million
Source: CardData (www.carddata.com)

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

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CARDS MAY 04

Consumer purchase volume on credit cards increased 12.6% during May, as balances grew 13.3%, and credit lines edged up 12.7% per annum. During May, Australians charged A$12.8 billion in purchases on credit cards compared to A$11.5 billion one-year ago. At the end of May, consumers owed A$27.2 billion on credit cards versus $24.0 billion for May 2003. The ratio of credit card balances to card credit limits remained flat during May compared to one-year ago, at 37.3%, according to data released by the Reserve Bank of Australia. One-year ago, consumers owed A$24.0 billion with total credit lines of A$64.4 billion. Card credit limits reached A$72.6 billion at the end of May.

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Bank One and Disney Launch an Auction

Bank One and Disney will launch an auction next month for “Disney VISA” cardholders offering more than 25 once-in-a-lifetime Disney items and experiences. The “Disney Dream Auction” will launch September 27th. Auction items include recording a song with a “Grammy Award”-winning Walt Disney Records producer, the last remaining pro-am spot in the PGA TOUR’s “FUNAI Classic”, and the “Royal Princess” treatment at Disney’s Grand Floridian. Cardholders must be registered to participate in the auction. The auction will benefit three charities: the Make-A-Wish Foundation, Broadway Cares/Equity Fights AIDS and Free Arts for Abused Children. Bank One and Disney launched their co-branded card in March 2003.

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