Signature Debit Cards Pass 200MM Milestone

While account/card growth in off-line or signature debit card volume has leveled-off at the 11%-12% level, card activity has been running at nearly twice the pace, between 19% and 22%. Furthermore, the number of VISA and MasterCard signature debit cards surpassed the 200 million mark during the first quarter. During the first three months of this year, VISA and MasterCard processed $104.6 billion in purchase volume, compared to $85.4 billion one-year ago. Gross transactions for the first quarter increased 19% to 3.2 billion. Overall, gross dollar volume increased 19% to $154.2 billion. At the end of the first quarter, there were 203.1 million VISA- and MasterCard- branded signature debit cards in circulation in the USA, linked to 161.5 million accounts, according to CardData (www.carddata.com). Based on gross dollar volume, VISA’s share of the off-line debit card market is a solid 80%. For complete current and historical statistics on the U.S. debit card market visit CardData ([www.carddata.com][1]).

U.S. SIGNATURE DEBIT SNAPSHOT
1Q/03 1Q/04 Y/Y CHANGE
Gross Volume $129.6b $154.2b +19%
Purchase Volume $ 85.4b $104.6b +22%
Gross Transactions 2.7b 3.2b +19%
Total Accounts 144.6mm 161.5mm +11%
Total Cards 183.1mm 203.1mm +12%
Source: CardData (www.carddata.com)

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

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Research and Markets Predicts Global ATMs to Reach 1.54 Million by 2007

Dublin-based Research and Markets predicts the total global estate of ATMs will reach 1.54 million by 2007. Total ATMs reached 1.142 million by the end of 2001. Of these, 345,000 were located in the USA, a number that exceeded the machine populations of every other region. For example, outside Japan, the populous and economically dynamic Asia-Pacific region still had fewer than 200,000 machines in operation.
The latest Research and Markets report on “Self-Service Banking and ATMs in the 21st Century” looks at the development of the industry and gives you a complete guide to the worldwide market and pays particular attention to developments in the USA, Asia-Pacific, Western and Eastern Europe and Africa. There are also chapters on the kiosk and ATM marketing that are heavily orientated towards the role that this self-service equipment. Case studies include: Arab National Bank; AutoBank E, South Africa; Barclays Group; DBS Banking Group, Singapore; Euronet Worldwide; HBOS; IBM UK; LINK Interchange Network; Moneybox, UK;
Nationwide Building Society; Piraeus Bank Group, Greece; and, Travelex Group.

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AmEx – Best Company for Women of Color

For the second consecutive year Working Mother magazine has named American Express to its short list of “Best Companies for Women of Color.” American Express’ diversity efforts are led by the company-wide Diversity Council, which is made up of global senior leaders who set overall diversity vision and policy and manage best practices. American Express Company () is a diversified worldwide travel, financial and network services company founded in 1850. Working Mother is the latest publication to acknowledge the company’s efforts to value diversity and provide a quality and supportive work environment.

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Fifth Third Nails the CVS Processing Contract

Fifth Third Bank Processing Solutions has inked a credit card/debit card/EBT processing contract with CVS/pharmacy for its 4,100 stores. Credit card transactions converted in April and debit card and electronic benefits transfer processing services are planned for conversion before yearend. In addition, the company will take advantage of Fifth Third’s Internet-based back-office management system, Fifth Third Direct. Fifth Third Bank Processing Solutions processes over nine billion ATM and POS transactions per year for more than 200,000 retail locations and 1,550 financial institutions worldwide, including The Kroger Co., AutoZone, Abercrombie & Fitch, Nordstrom, Inc. and The Finish Line.

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Lucier’s Star Rises at Xign Corporation

Xign Corporation has promoted Jim Lucier as VP/Corporate Alliances, overseeing all aspects of partnership activities including sales channel development, co-marketing relationships and product management, including the “Xign Payment Services Network”. Lucier brings to Xign more than ten years of operating experience in alliances, project management, sales and business development. Prior to joining Xign, he was senior vice president and general manager for west coast operations at Etensity, a leading e-business professional services firm. Xign Corporation is the leading provider of Enterprise Order to Pay software and services used for B2B commerce.

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CTFS Options MasterCard First Quarter Earnings Up 23%

Since surpassing the C$2.0 billion in credit card outstandings milestone in the second quarter of last year, Canadian Tire Financial Services reported that card loans were up 26% year-on-year to C$2.4 billion for the first quarter of this year, and up 64% since the first quarter of 2002. More than 95% of CTFS’ card portfolio is now comprised of “Options MasterCard” accounts. Financial Services’ goal for 2004 is to achieve gross ending credit charge receivables of C$2.8 billion. CTFS reports it had C$27 million in adjusted earnings before income taxes for the first quarter, a 22.6% increase over 1Q/03. CTFS says that increasing average balances represents the most significant opportunity to improve Financial Services’ earnings this year. The industry average balance at the end of 2003 for standard bank credit cards was C$1,875. The average CTFS balance is running at C$1,350 for the first quarter of 2004, compared with C$1,098 for the first quarter of 2003, and C$832 for the first quarter of 2002. In the first quarter of 2004, the average number of credit card accounts with a balance increased by 2.4% and average balances per account were 23% higher compared with the same period of 2003.

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VISA/MC to Publish European Multilateral Interchange Fees

The European Commission this week announced that VISA International and MasterCard International have agreed to publish multilateral interchange fees paid transactions in Europe. The EU says the move is intended to enhance retailers’ ability to negotiate the fees with the banks that are part of the VISA and MasterCard card systems, according to this week’s issue of CardFlash International (www.cardflashinternational.com.) In accordance with the Commission’s decision of July 24th 2002, VISA had already allowed its member banks to reveal information about the “MIF” levels for consumer cards and the relative percentage of the cost categories composing the benchmark, at which the “MIF” has to be capped. However, merchants have repeatedly complained to the Commission that their banks are reluctant to give full information on the “MIF,” although VISA allowed them to do so. VISA has now published the “MIF” for consumer cards and the weight of the relevant costs components on its website. MasterCard Europe offered to publish on its website some of its “MIFs” and, for some cards, the relative weight of the cost elements composing these fees, and recently confirmed to the Commission its intention to do so. The EC says it will continue to monitor how VISA complies with its commitments under the exemption decision. The Commission is also investigating MasterCard’s rules and agreements, in particular those on the “MIF.”

VISA EU Intra-regional Interchange Reimbursement Fees
(Effective 4 April 2004)

Interchange fees Credit & deferred debit Immediate Debit
Electronic Authorisation Rate (EA)* 0.75% EUR 0.27
Secure Electronic Commerce Fee
(Fully Authenticated) 0.75% EUR 0.27
Secure Electronic Commerce Fee
(Non-Authenticated Security transaction) 0.75% EUR 0.27
Electronic Data Capture Rate (EDC)* 0.90% EUR 0.27
Card Not Present Rate (?CNP?) 0.90% EUR 0.29
Card Not Present (CVV2) 0.80% EUR 0.29
Airline Reimbursement Fee* 1.00% n/a
Non-Electronic 1.20% EUR 0.30

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Wal-Mart Low Balls Check Cashing Fees

Wal-Mart this week announced it is now offering a cut-rate check cashing service in 44 states, with licensing pending in the states of Connecticut, Massachusetts, New Jersey, Nevada, New York and Rhode Island. The retailer is charging a flat $3.00 fee to cash pre-printed payroll or government-issued checks up to $1,000. In states where the law requires a percentage based fee, then the maximum fee is $3.00. Wal-Mart’s currently offers its more than one million associates free cashing of their Wal-Mart paychecks. The retailer says its research shows check cashing outlets charge between $5.00 and $15.00 to cash a typical $500 check. Last week, Wal-Mart announced it will charge a flat fee of $9.46 for all amounts up to $500 with a competitive exchange rate for money transfers to Mexico. The retailer says their fee represents a 40%+ savings over competitors. Wal-Mart also announced that family members who pick up their money at Wal-Mart, Bodega Aurrera, Superama and Suburbia locations in Mexico from now through June 3 will also receive a 40-peso in-store certificate. Additionally, senders will receive a complimentary three-minute phone call to notify family members that the money is on the way. Wal-Mart uses Viad’s “MoneyGram” service for the money transfer service.

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Intersections Subscription Revenue Climbs 27%

VA-based Intersections Inc., a major third-party provider of identity theft protection and credit management services to credit card issuers, reported first quarter revenues of $38.2 million, an 8.3% increase over the year-ago period. Subscription revenue increased 27% to $37.3 million for the quarter and the total number of subscribers increased to more than 2.4 million compared to 1.8 million at the end of 1Q/03. Revenue generated from indirect marketing arrangements represented 37.5% of total subscription revenue compared to 24% for the comparable period of 2003. Subscribers from indirect marketing arrangements represented 55% of total subscribers, compared to 43% of total subscribers one-year ago. The Company reported that it signed up about 600,000 new subscribers during the first quarter and lost 438,000 subscribers. About 150,000 cancelled within the first 90 days of their subscription and 288,000 cancelled after the first 90 days of their subscription. For complete details on Intersections’ first quarter results visit CardData ([www.carddata.com][1]).

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

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MBF & HYPERCOM

MBF Cards, the largest MasterCard merchant acquirer in Malaysia, has agreed to purchase 10,000 smart card payment terminals from Hypercom. The purchase from Hypercom’s distributor represents the largest single order ever of Hypercom technology in Malaysia. The “T7Plus” terminals will be rolled out to retail outlets during the next 12 months. Malaysia’s central bank has required that at least 85% of the region’s financial institutions have EMV-certified terminals in place by year end 2004. MBF Cards has more than 330,000 cards in circulation and has the most number of merchant’s outlets of more than 12,000. MBF Cards is also the first monoline and non-bank to be awarded with a VISA license in Malaysia and the Asean region.

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AmEx Rewards Ronald McDonald House through June

American Express is making a $0.01 donation per card transaction at participating merchants to the Ronald McDonald House Charities’ “Make Room to Heal” program through June 30th, up to a maximum of $600,000. RMHC will use the funds to build or purchase new Ronald McDonald Houses or expand existing Houses in local communities. Donations are not tax deductible for Cardmembers and will be based on a $0.01 donation per American Express transaction at participating merchants. Ronald McDonald House Charities, a non-profit, 501(c)(3), creates, finds and supports programs that directly improve the health and well being of children. American Express Company is a diversified worldwide travel and financial services company founded in 1850.

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RCBC Capital Rescinds Purchase of Equitable PCI Bank’s Credit Card Portfolio

RCBC Capital Corp. has notified Equitable PCI Bank it wants to rescind its purchase of a PCI’s credit card business. RCBC wants to nullify its share purchase agreement covering the acquisition of 67% of Bankard Inc. from Equitable PCI. The deal in June 2000 involved nearly US$90 million. RCBS is seeking $45 million in damages in a petition filed before the International Chamber of Commerce. RCBC has become the sixth largest “private” local universal bank in terms of total assets in the Philippines.

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