VISA Launches its Third Consumer e-Commerce Initiative

VISA Canada announced the third pillar of its consumer e-commerce offering. The new “VISA E-Promise” provides cardholders with a new level of protection when they use their VISA card to shop online, by mail, or by phone. The initiative provides consumers with the ability to contact their credit card issuer directly to resolve disputes that they may have encountered after shopping online, by mail, or by phone. The “VISA E-Promise” builds on existing VISA initiatives such as “Verified by Visa” and “Zero Cardholder Liability.” Once contacted by the VISA cardholder, and provided that the cardholder has legitimate grounds for the request, the VISA issuer will act on the cardholder request, investigate the dispute and provide a refund to the cardholder if the cardholder’s claims are validated. In 2003, consumer online sales in Canada totaled more than $7.5 billion.

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Catuity Acquires Vitesse Assets and Execs

Detroit-based Catuity has acquired certain rights and assets, including partner company relationships, products and methodologies, from Denver-based Vitesse Worldwide. The Company also hired two Vitesse executives to drive the company’s strategy to offer additional IT services to retailers and their processing partners. The acquired Vitesse services include the “AutoConvert Merchant Program,” a conversion/de-conversion outsourcing custom application, and consulting expertise relating to credit/debit/merchant systems. Catuity named Scott Aicher, previously CEO of Vitesse, as VP of Catuity’s new IT Services Group, and Dion Gonzales, formerly the Chief Development Officer at Vitesse, as the head of sales for the new division. Catuity also announced it has retained payments and technology industry veteran Ron Elmore as a consultant, to organize and direct a restructuring of Catuity’s sales and marketing activities. Catuity’s loyalty software is currently used on nearly 40,000 points of sale throughout the U.S.

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FastBank Adds 122,000 Cards to the Network

Elan Financial Services this week reported that its “Fastbank” ATM network, launched late last year, has added 21 financial institutions, 168 ATMs, and more than 122,000 cards to the original network. “Fastbank” complements the existing ATM and debit processing programs with over 7,500 ATMs across 50 states. “Fastbank Free,” the surcharge free option of the “Fastbank” network provides access to more than 3,500 ATMs in 27 states, predominately concentrated in the Midwest and West. Elan, part of U.S. Bancorp, supports 15 million ATM/POS cards and 2 million credit cardholders.

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A TransOne Prepaid VISA is in the Works

Las Vegas-based TransOne is launching a VISA pre-paid debit card using the Symmetrex state-of-the-art processing platform, and an innovative Web-based funds transfer system. Through the sales and marketing organizations of TransOne, Inc., and leading debit card marketing companies, TransOne enables pre-paid stored value cards to be purchased, activated, loaded and used over merchant POS terminal networks, ATM’s and the internet world wide. TransOne coordinated a series of meetings in Sydney, Australia with a leading marketing company of financial solutions throughout the Asia-Pacific region.

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Rate Hike Primarily Affects Refinancing Activity

While it is very likely the Feds will raise rates by 50 basis points in the next two weeks, the impact will largely affect refinancing activity, home prices, and collateral performance in the mortgage sector. Credit card issuers, blessed with lower funding costs over the past three years, will largely have to absorb the first wave of increases, but will recoup the impact by passing the rate increases to consumers over the summer. Some issuers recently switched from fixed rates to variable rates in anticipation of the increases. Discover switched its standard purchase rate from a fixed 16.99% to prime +12.99%, effective April 1st. Effective June 1st, American Express changed its default interest rate from a fixed 23.99% to prime +21.99%. A handful of VISA and MasterCard issuers have rejiggered punitive interest rates from fixed to variable, and have adjusted the effective dates of the prime rate. MBNA recently noted in its SEC filings that a 100 basis point increase in interest rates could reduce net income by $67 million for the year. MBNA said it could offset its costs by raising interest rates for cardholders but the company noted there is a lag of about 45 days before rate hikes takes effect upon cardholders. Fitch said yesterday it remains cautious in its near-term outlook for subprime credit card ABS. Higher rates may put pressure on subprime borrowers to reload available credit lines undermining stable to improving collateral performance. Notwithstanding, Fitch believes excess spread levels in the credit card sector, can absorb higher rates, though a rate increase may cause some spread compression for some issuers in the subprime segment.

[Click Here To View The Notice of Amendment to the Discover Cardmemeber Agreement In PDF Format][1]

[1]: http://www.cardweb.com/cardflash/2004/june/discover.pdf

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VISA Finds E-Payments Drive Canada’s Economic Growth

VISA Canada released a report this week that shows electronic payments contributed $C107 billion to the Canadian economy since 1983, accounting for nearly 25% of Canada’s cumulative economic growth. The study found a strong link between payment system efficiencies and economic growth. Merchants and financial institutions can process and settle transactions more efficiently, reliably, and securely in an electronic payment system, thanks to lower payment system and infrastructure costs and greater economies of scale. Visa is the leading payment brand in the world. Global Insight, Inc. provides the most comprehensive economic coverage of countries, regions and industries available.

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An Online Biometric Payment Portal Planned

Secured Digital Applications this week announced plans to conduct a field trial of an online biometric payment portal during the second half of 2004, with initial deployment of the portal in the Malaysian and Singapore markets. After successfully implementing the payment portal for the Asia-Pacific region, the Company intends to introduce a similar portal for the North American market. Secured Digital Applications, Inc. (formerly known as Digital Broadband Networks, Inc.) and its subsidiaries are involved in the development, integration and provision of secured shipping and supply chain management service, sale of biometrics security systems and the development of Web based interactive multimedia content.

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Direct Response Inks Another Hispanic Deal

Los Angeles-based Direct Response Financial Services has inked a deal with PromoConnect USA to sell stored value cards to the U.S. Hispanic population. PCUSA has an existing national sales force reaching into Hispanic communities throughout the United States. The PCUSA sales teams are specially trained in understanding and reaching the Hispanic market. PCUSA has recently been successful in offering stored value credit cards on behalf of one of the largest U.S. banks where PCUSA quadrupled the number of stored value card sales for their banking customer over the previous year. Direct Response Financial Services Inc. makes it easier, faster and more secure for people and businesses to buy goods and services, using virtually any form of payment: credit, debit, smart card, stored-value card, electronic check at the point-of-sale, or over the Internet. PromoConnect USA Inc. is a privately-held Nevada corporation with offices in California, Texas, Oklahoma, Arizona, Nevada, Illinois and New York.

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Fiserv’s PDQ has a PDQ Start

Fiserv reports that its out-of-the-box payroll solution, called “PDQ,” has signed 12 financial institutions, including Charter Bank in Bellevue, WA, and United Bank in El Paso, TX in the last 30 days. Fiserv began marketing PDQ via its account management and sales teams to financial institutions and payroll processors in late April and early May – in an effort to address the burgeoning payroll debit card market, according to Frank Smeal, President of the Fiserv division that handles bank outsourcing services. Fiserv, Inc. provides industry leading information management systems and services to the financial industry, including transaction processing, outsourcing, business process outsourcing and software and systems solutions.

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TRM Acquires Canada’s Mighty Cash ATM Network

Portland, OR-based TRM has acquired Canada’s Mighty Cash Financial ATM network, marking its entry into the Canadian ATM market. Through purchase of all outstanding shares of Mighty Cash, TRM’s Canadian network consists of 72 ATM locations comprised primarily of merchant-owned programs. TRM Corporation is a consumer services company that has provided convenience banking (ATM) and photocopying services for more than 20 years.

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Prepaid Tickets to Access Discover’s Network

Discover and Utix have partnered to enable consumers to redeem prepaid cards for rounds of golf, visits to day spas, or days at the slopes in the form of a prepaid gift ticket at thousands of venues across the country. The new suite of Utix prepaid products is one of the first designed under the exclusive partnership agreement between Discover and WildCard Systems, and are accepted throughout the Discover/NOVUS Network. The Discover/NOVUS acceptance mark will be present on the back of all “Universal Golf” and “Universal Spa” prepaid gift cards. In addition, a directory of participating venues will accompany each prepaid card. The first of the new prepaid “Universal Golf” and “Universal Spa” tickets will be available to the corporate premium industry this month. The retail product, “Giftix,” will be available to consumers at national retailers by the fall of this year.

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