Rewards Network Growth Slows; Revises Forecast

Chicago-based Rewards Network reported sales for the second quarter of $90.6 million, a 3.3% increase year-on-year. Operating revenue climbed to $26.2 million, an increase of 8.7%. The Company closed the quarter with 3.5 million active members and approximately 21,160 total participating merchants. The Company noted that its restaurant merchant base is growing more slowly than originally projected. As a result, the Company lowered its full year target growth in total operating revenues to 8% to 12%, and growth in net income to 5% to 8%. Rewards Network provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform. The network has 10,499 restaurants and 10,577 hotels participating in its rewards programs. For complete details on Reward Network’s second quarter results visit CardData ([www.carddata.com][1])

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

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PCCharge 5.7″ Offers VISA’s CISP

GO Software has released “PCCharge 5.7” which provides enhanced security in conjunction with VISA’s “CISP.” The upgraded system provides enhanced security in conjunction with Visa’s Cardholder Information Security Program, support for Canadian Debit card transactions and overall improvements of previous capabilities. PCCharge 5.7 underwent an audit conducted by Ambiron, an enterprise security advisor firm, which tested the application using Visa’s CISP guidelines for merchants. GO Software, a subsidiary of Return On Investment Corporation is a leading provider of point-of-sale (POS) payment processing software.

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STV Card Partnership Takes Shape in California

Global Vision Holdings and FirstCard Resources has entered into an alliance to offer stored-value cards. Under an agreement, Global Vision is to perform major sales channel development for FCR and will earn a fee for cards sold as well as from residual revenue streams from fees generated through the use of these cards. GVHL is a financial services business and technology development company providing software, consulting and infrastructure for small to medium sized businesses and consumers on a global scale. FirstCard Resources, LLC is a leading customizing and turnkey provider of Prepaid (Stored-Value) Debit Cards issued in conjunction with banks, Visa and MasterCard.

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AKQA Hires Lot21 Founder

San Francisco-based AKQA, an interactive marketing firm, has hired Kate Everett-Thorp, former Chairman of Carat Interactive and founder of Lot21, as President/ Interactive Advertising. Ms. Everett-Thorp most recently served as Chairman and Chief Marketing Officer for Carat Interactive where she was charged with the integration of three companies, Carat Interactive, Vizium and Lot21, a company she founded in 1998. Prior to Carat Interactive, Everett-Thorp served as CEO of Lot21, which specialized in the creation of integrated marketing solutions. AKQA is the leading interactive marketing firm developing innovative strategy and technology solutions to help its clients achieve maximum results.

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Food Lion to Offer PRE Solutions Prepaid Cards

Atlanta-based PRE Solutions has inked a deal to distribute prepaid phone cards through Food Lion’s 1,200 locations throughout the Southeast and Mid-Atlantic states. The agreement with Food Lion, one of the largest supermarket chains in the United States, has enabled them to sell prepaid products from the leading prepaid wireless providers such as Cingular, T-Mobile, Verizon Wireless, Virgin Mobile, TracFone, AT&T Wireless and ALLTEL. PRE Solutions Inc. is a leading provider of prepaid transaction processing solutions designed to offer retailers powerful revenue opportunities in prepaid products and other services. Food Lion, LLC is a subsidiary of Delhaize America, the U.S. division of Brussels-based Delhaize Group.

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Moneris Solutions Signs Midwest B&T

Illinois-based Midwest Bank and Trust Company has elected to renew its credit card processing contract with Moneris Solutions. Midwest Bank has been a Moneris customer for eight years. Midwest says that not only has Moneris contributed to a 27% merchant portfolio growth in the last year, they have also partnered with to launch a joint sales and marketing campaign to communicate the benefits of merchant acquiring to its current and potential business customers. Moneris Solutions serves more than 350,000 North American merchant locations and has a staff of over 1,100 employees.

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INDUSTRIAL CARD

Industrial Bank is issuing its first MasterCard dual-currency international credit card through China UnionPay. The new “Industrial
Card” provides real credit for Chinese consumers in that it does not require a deposit. The vast majority of credit cards issued in the country are secured credit cards. The new credit card also provides for an optional cardholder password, or PIN number, to enhance a cardholders’ security. The “Industrial Bank MasterCard” card is MasterCard’s second collaboration with China UnionPay to issue a credit card. In June, Ningbo Commercial Bank issued the first international dual-currency MasterCard credit card through China UnionPay – the “Huitong Card.” Other international MasterCard credit cards available in the Chinese market are primarily issued by large state-owned commercial banks or joint stock commercial banks.

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Axalto and Thales Power the First National Transport System

Thales has selected Axalto to provide the smart cards of its e-ticketing solution for the Dutch national transport project managed by Trans Link Systems. Conducted by Trans Link Systems and the East West consortium, the program is the first in the world to be implemented on a national scale and will offer integrated solution covering all means of public transport. The program involves 1.4 million contactless cards in its pilot phase, out of the total 12 million cards to be deployed by 2006. One single contactless card, “Axalto Easyflow,” will allow the
citizen to equally access ferries, buses, metros, trams or trains to
travel across the country. More than two million passengers per day are
expected to use the national transport once the project is fully
implemented.

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MBNA Delivers Another 20%+ Quarter

MBNA reported that net income for the second quarter rose 21% to $660.3 million driven by improving credit quality and growth in fee income. Managed loans for 2Q/04 were up 7%, and charge volume was up 15%. Total managed loans at the end of the second quarter were $118.2 billion, and charge volume was $52.0 billion, including $18.4 billion in cash advances. Managed charge-offs decreased slightly to 4.95% compared to 4.99% in the previous quarter, and 5.35% one year ago. Delinquency on managed loans dropped to 4.08%, compared to 4.27% in 1Q/04, and 4.46% in 2Q/03. During the quarter MBNA added 2.5 million new accounts. MBNA indicated future growth drivers will be its international card business, the launch of its American Express-branded credit card in the U.S., and its expansion into professional practice financing and insurance premium financing. For complete details on MBNA’s second quarter results visit CardData ([www.carddata.com][1]).

MBNA TRACK RECORD
Profits Loans
2Q/03: $543.3 MM $110.5 B
3Q/03: $658.8 MM $112.8 B
4Q/03: $703.5 MM $118.5 B
1Q/04: $519.7 MM $117.6 B
2Q/04: $660.3 MM $118.2 B
Source: CardData (www.carddata.com)

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

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CMB DEBIT CARDS

China Merchants Bank has teamed with MasterCard to launch two debit cards, one targeted at high-net worth customers with more than RMB500,000 on deposit. The new “Platinum Sunflower MasterCard” debit card offers VIP boarding at any airport in the world through “Priority Pass”, among other benefits. The “Gold Allionene MasterCard Debit Card” is for CMB customers with more than RMB50,000 on deposit. The “Gold” version allows various saving programs and multiple currency transactions. Both cards offer “Emergency Cash”, “Card
Canceling/Replacement,” “ATM Direction,” and “Medical Warranty.”
CMB has more than 30 branch offices across 31 mainland cities.

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ADS Profits Double as Revenues Climb 20%

Dallas-based Alliance Data Systems reported that its net income doubled as revenues climbed 20% during the second quarter, compared to one-year ago. Second quarter revenue rose to $300.5 million, compared to $251.0 million for 2Q/03. Net income for 2Q/04 was $28.0 million, compared to $14.1 million for the second quarter of 2003. Transaction Services revenue, mostly from private label and utility services businesses increased 13% to $170.6 million. Credit Services revenue increased 24% to $122.0 million driven by private label credit sales and portfolio growth that grew at a rate in the mid-to-high teens. Marketing Services revenue increased 19% to $84.2 million thanks to solid growth in the “AIR MILES” program. ADS says it expects to outperform its previous guidance for 2004. Specifically, the Company is increasing its 2004 full-year cash earnings per share estimate to $1.44 – $1.48. For complete details on Alliance Data Systems’ second quarter performance visit CardData ([www.carddata.com][1]).

ADS REVENUE SNAPSHOT
2Q/03: $251.0 million
3Q/03: $255.7 million
4Q/03: $298.3 million
1Q/04: $312.5 million
2Q/04: $300.5 million
Source: CardData (www.carddata.com)

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

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