VISA Annual Volume Nears $3 Trillion Milestone

VISA International yesterday reported that its global card sales volume approached $3 trillion last year, rising 10% over 2002. VISA’s nine commercial products posted volume of $177.5 billion in 2003, an increase of 19% over the year-ago period, and VISA’s 12 debit products generated $1.4 trillion in sales volume, a 16% gain over 2002. Gross dollar volume in Asia-Pacific hit $438 billion. Excluding South Korea, card sales volume in Asia-Pacific grew 12%. Volume in Central Europe, Middle East and Africa was $139 billion, a 34% increase. The European Union region achieved card sales volume of $943 billion, an 11% increase over 2002. Latin America and Caribbean produced card sales volume of $181 billion, a 16% increase over the prior year. Canadian card sales volume of $89 billion, represented a 9% increase over 2002. As previously reported VISA’s U.S. volume was up 12% to $1.1 trillion last year. Totally, VISA handled $2.9 trillion in global card sales volume.

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Metavante Processing for the Allpoint Network

Metavante has been certified by Allpoint and is now processing in the “Allpoint Surcharge-Free ATM Network”. The Metavante and Allpoint relationship provides current and future Metavante clients with quick and easy access to Allpoint’s 25,000 surcharge- free ATMs coast to coast. Metavante Corporation is a leading provider of electronic funds transfer (EFT) and card solutions including debit, prepaid debit, and credit card account processing, card personalization, ACH processing, ATM driving and monitoring, gateway transaction processing, merchant processing, transportation payment solutions, healthcare identification card fulfillment, and flexible spending account processing. Allpoint is America’s Largest Surcharge-Free ATM Network, with more than 25,000 ATMs in leading national and regional merchant locations across the country.

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Scorex PLUS Eliminates Existing Accounts Bias

Experian-Scorex has introduced “Scorex PLUS” which provides two models: one for new accounts, and one for existing accounts. Until now, lenders have only had two options for effective risk scoring: a traditional bureau risk model or a custom model. While custom models are more predictive than traditional bureau models, they also require a larger investment. Experian-Scorex provides solutions that enrich customer data and allow organizations around the world to proactively manage their relationships with their clients.

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Gift Card Fee Regulation Could Limit Growth

Gift card dollar volume was about $45 billion last year, a 50% gain over 2002, and is now projected to hit $90 billion by 2007. However, a new report says potential regulation of gift card fees is not appropriate for bank-issued gift cards and could dampen growth. TowerGroup says that considering bank-issued gift cards have global acceptance and carry all the rights and protection afforded to credit cards, issuers should be permitted to add fees as needed. TowerGroup says that without charging fees to help support card benefits, institutions simply could not afford to offer the product. The report says that bank-issued gift cards are poised for the greater percentage growth over the next five years compared to retailer-issued cards. Several states have already moved to regulate gift card fees.

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Fletcher Named to Orbitz Board

Denise Fletcher, former EVP/CFO of MasterCard has been named to the Orbitz board of directors. Fletcher has been on the board of Unisys Corp. since 2001 and is a member of its audit committee and nominating and corporate governance committee. From 2000 to 2003, Fletcher was executive vice president and chief financial officer of MasterCard, a global payment solutions company, where she was responsible for finance, planning, internal audit, new markets, investments and procurement. Orbitz is a leading online travel company that enables travelers to search for and purchase a broad array of travel products, including airline tickets, lodging, rental cars, cruises and vacation packages.

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KeyBank Renews STAR Contract

First Data’s new Star Systems unit has renewed its agreement with KeyBank. Under the terms of the long-term agreement, the “STAR” network will continue to provide PIN-secured debit access at retailers and ATMs, and ATM and signature debit card processing for KeyBank’s 2,200 ATMs and 4.6 million credit and debit cards. Last year, the “STAR” network served 1.26 million ATM and POS locations nationwide. It processed nearly 7 billion transactions in 2003 at 6,100 participating financial institutions.

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FDC Earnings Projection Revised Upward

First Data yesterday revised its 2004 EPS guidance upward by $0.17 due to the recent sale of GCA. The change is due to the gain that resulted from the March sale of the company’s 67 percent ownership interest in GCA. The impact of these events will be accounted for through First Data’s continuing operations, and will result in a new 2004 EPS range from continuing operations of $2.17 to $2.35. First Data Corp., with global headquarters in Denver, helps power the global economy.

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CHARGE-OFFS

Credit card losses for February increased more than 10% compared to one-year ago, as credit card balances grew nearly 19% during the same period. However, compared to five years ago, credit card losses have more than tripled, while card volume increased 36%, and card loans grew 74%. According to the Monetary Authority of Singapore, charge-offs for February came in at $16.1 million, compared to $14.6 million for February 2003, and $5.2 million for February 2000. Total card volume for February was $1024.1 million, compared to $861.2 million one-year ago, and $751.2 million five years ago. Total card loans for February were $2,517 million, compared to $2,479 million one-year ago, and $1,445 million five years ago. At the end of February there were 3,558,720 credit cardholders in the country including 2,564,364 main cardholders, according to the MAS.

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Lightbridge Completes Authorize.Net Acquisition

Lightbridge completed its acquisition of Authorize.Net Corporation last week for $82 million exclusive of transaction related costs. Authorize.Net provides payment solutions that enable online merchants to authorize settle and manage electronic transactions. Authorize.Net generated 2003 revenue of $27.8 million and segment income of $6.9 million as reported by InfoSpace, the seller of Authorize.Net. Lightbridge plans to retain the Authorize.Net management team and brand name as well as facilities in American Fork, Utah and Bellevue, Washington.

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RBC Tees Off with a Masters Champion Card

As Masters champion Mike Weir seeks to defend his title this week, Canada’s RBC Royal Bank has launched a credit card to honor the Canadian hero. The new “RBC Mike Weir VISA” card rewards cardholders with bonus points for every victory Weir earns on the PGA Tour. Cardholders receive 500 “RBC Rewards” points for a Mike Weir PGA tour win, and 1,500 points should he win either the “Bell Canadian Open” or one of the four “Majors.” Cardholders also earn one point for every dollar they charge to the card. Among the rewards offered to holders of the “RBC Mike Weir VISA” card are preferred offers to Taboo Resort, Golf and Conference Centre, Mr. Weir’s home course in Gravenhurst Ontario. TaylorMade, Weir Golf, and Bell Canada are also offering cardholders special benefits and privileges. The new card joins other new cards recently launched by RBC. Last week, RBC rolled out a no annual fee rewards card targeted at consumers with lower-to-moderate monthly spending. The new “RBC Rewards VISA Classic” awards one point for every two dollars spent, instead of the typical one-for-one rewards offered on RBC cards. The points carry a nominal value of one cent each. Reward redemptions start at 2,500 points and include travel and merchant gift certificates. The card carries an 18.5% interest rate. RBC Royal Bank also offers the “RBC VISA Classic II” for $35 annually, “RBC VISA Platinum Preferred” at $110 per year, and, the “RBC VISA Platinum Avion” for $120 a year. All three of these cards offers one point for each dollar charged. Additionally, the issuer offers a “RBC U.S. Dollar VISA Gold” card for those desiring to avoid fluctuations in the exchange rate. The “U.S. Dollar” card awards 1.5 points for each dollar charged and carries a USD$65 annual fee. The “RBC Rewards” program was launched in April 2003.

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FDC Processing Glitch Hits Wal-Mart Last Week

First Data has apologized to Wal-Mart for a processing error last week. On Thursday, April 1, First Data says it experienced a computer hardware problem that affected MasterCard and VISA transactions at Wal-Mart. In some cases, the problem resulted in triplicate postings to consumer debit and credit card accounts. FDC says it processed corrections to the affected accounts on Friday. FDC also opened a toll-free customer hotline to assist consumers.

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MBNA Complete Sky Financial Acquisition

Sky Financial Group has completed the sale of its dental financing affiliate, Sky Financial Solutions to MBNA. SKY markets financial products and services to dental professionals, including financing for practice acquisition, equipment financing, and working capital. Nearly three-quarters of all dentists in the USA carry an MBNA card. Sky is endorsed by 33 dental associations and MBNA’s credit card products are endorsed by 39 dental associations. MBNA says the financing of dental practices is a good strategic fit with its affinity marketing strategy. MBNA said it will retain Sky Financial Solutions’ management team and employees. Sky Financial Solutions has outstanding loans of nearly $800 million.

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