Two-Card Money Transfer Program Launched

Ft. Lauderdale-based Access Card Systems has launched “ACCESS MoneyNow,” a two-card money transfer program using an ACS-branded ATM Card and a branded “Gold Debit MasterCard,” enabling consumers to load cash onto one card and transfer money worldwide to another person holding the second card. Consumers purchasing the two-card program receive an ACS branded ATM Card and a branded Gold Debit MasterCard. Both cards can be used to purchase goods and services and withdraw cash at any ATM worldwide that displays the MasterCard, Plus, Star and NYCE logos. ACS specializes in branded Stored-Value card products including ATM, Debit and Payroll cards. ACS is a registered MasterCard Membership Service Provider (MSP) and develops partnerships with leading MasterCard Issuing Bank Members.

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Off-Line Debit Grows 16% During 2003

Growth in off-line debit card volume continued to downshift slightly last year as Americans used VISA- and MasterCard-branded debit cards for more than $576 billion in purchases and cash advances, a 16% increase over the previous year. Since 1998, consumers have racked up more than $2 trillion in signature debit card transactions. However, the signature debit card market is growing less than half the annual rate of the 1999 to 2001 period, when gross dollar volume increased 37% or more. VISA continues to dominate the off-line debit market with its “Check Card.” VISA’s signature debit card volume last year of $454 billion, represented nearly 79% of the market.

In 2003, debit represented 41% of VISA volume, and 59% of total VISA transactions

OFF-LINE DEBIT HISTORY
GDV CNHG
1999: $218.8 billion +37.0%
2000: $301.8 billion +37.9%
2001: $420.7 billion +39.4%
2002: $496.4 billion +18.0%
2003: $576.3 billion +16.1%
Source: CardData (www.carddata.com)

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Canada Gets Private Merchant Processing IP Network

Moneris Solutions has launched Canada’s first private merchant processing IP network, and a portfolio of IP solutions for debit and credit card payment processing. The Company says merchants have been dependent on legacy data and voice networks to handle card payment processing, but that has changed as these systems are outdated and costly. According to CardFlash International (www.cardflashinternational.com), Moneris’ private IP network offers an added layer of segregation of traffic dedicated to POS transactions that ride over a partitioned, protected IP connection that is monitored 24 hours per day. Moneris says IP networks deliver transaction times equal to, or faster than, the best networks in the market today.

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Cap One’s January Metrics Continued to Improve

Capital One reported that its delinquency rate for January hit the lowest level in at least four years and that charge-offs dipped to their lowest level in more than a year. With $71.1 billion in managed loans, and approximately $46 billion in U.S. credit card loans, the issuer reported that charge-offs dropped to 5.00% for January, compared to 5.10% in December, 5.57% in November, and 5.30% in October. Delinquency dropped to 4.39% for January, after leveling off in December at 4.46%. At the end of fourth quarter, Cap One had 46.7 million accounts, including domestic and international credit cards and auto loans. For complete details on Capital One’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

Capital One 2003
Month Charge-offs Delinquency
Apr 03 6.36% 4.86%
May 03 6.40% 4.82%
Jun 03 6.20% 4.95%
Jul 03 5.75% 4.92%
Aug 03 5.34% 4.74%
Sep 03 5.24% 4.65%
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Source: CardData (www.carddata.com)

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

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Hypercom Profits Rise 600%+ in the Fourth Quarter

Hypercom reported net income of $8.7 million in the fourth quarter, a six-fold increase over the year ago quarter, driven by its focus on gross margin and operating expense. Revenues for the final quarter were $63.4 million, a 2.4% gain over 4Q/02. Hypercom’s gross margin improved from 35.1% one-year ago to 42.4% for 4Q/03. The Company says it improved its manufacturing, labor and overhead efficiencies, re-engineered its product designs, and renegotiated component costs during 2003. During the quarter Hypercom launched “Optimum”, a portfolio of 32-bit, high security, multi- application POS products including the “T2100” PIN-entry hand-over version and the “M2100” wireless mobile version. The firm also released the “S9”, a high security payment device that reads both smart and magnetic stripe cards and can be used as a hand-over or countertop PIN-entry device to enable merchants to take advantage of increased PIN-based card transactions. Additionally, Hypercom formed a strategic partnership with Diebold to distribute its outdoor payment technology to drive-up pharmacies in the U.S. and Canada. The Company projects 2004 revenue between $254.0 and $266.0 million and income from continuing operations of $21.0 to $25.5 million. For complete details on Hypercom’s latest performance visit CardData (www.carddata.com).

HYC TRACK RECORD
Revenues Profits
4Q/02: $61.9 million $1.2 million
1Q/03: $55.7 million ($1.1 million)
2Q/03: $64.4 million $4.8 million
3Q/03: $60.2 million $4.2 million
4Q/03: $63.4 million $8.7 million
Source: CardData (www.carddata.com)

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LEGIC Identsystems and Nedap Partner

LEGIC Identsystems has named Nedap N.V. its latest license partner. LEGIC provides secure platforms for contactless smart card technology. Nedap is one of the Netherlands leading specialists in access control, time and attendance and parking systems applications involving the use of the latest contactless smart card technologies. LEGIC currently works with over 140 external co-operation partners world-wide who offer compatible LEGIC based applications including access
control, cashless payment, parking, e-ticketing and other multiplication’s in both workplace and leisure applications.

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Canadian Consumers Pay Steeply for Debit Transactions

A new study suggests that Americans saved more than $4.3 billion in debit fees last year when compared to the system utilized in Canada. The research by Dove Consulting for PULSE found that every major bank in Canada charges its customers a per-transaction fee every time they use their debit card. Canadian consumers pay a fee of C$0.50 to $0.60 for each electronic payment transaction, whether making a purchase or getting cash from an ATM. Canada has only eight major national banks, which control 93% of banking assets. By contrast, the U.S. has more than 17,000 banks and credit unions, and the eight largest banks control only 41% of banking assets. Canada has only one electronic payments system and consumers have access to only PIN-based debit. Furthermore, Canadian merchants pay no interchange fees for a debit transaction, whereas U.S. financial institutions receive revenue for use of their databases and for guaranteeing payment for every transaction. The study concludes the Canadian model is unlikely to be embraced in this country anytime soon.

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Payment Cards in Europe 2004 is Released

Retail Banking Research has released its latest edition of a study on payment cards in Europe. The report covers the structure and nature of the card market in 17 countries with detail to the level of the individual card scheme. Statistical data include card numbers, transaction volumes and values by type of card and issuer, merchant outlets and numbers of point of sale terminals. Time series data illustrate the path and rate of evolution. Commentaries enable the reader to understand the dynamics of each national market and the key domestic issues. “Payment Cards in Europe 2004” comprises 700 pages and over 500 tables and charts and is available for US$ 8,700 or in a single country reports at US$1,275.

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Excel Innovations Sues PayByTouch for Patent Violations

San Jose-based Excel Innovations has filed a lawsuit against San Francisco-based PayByTouch for alleged infringement on 18 of its U.S. patents, and seeks damages in excess of $20 million. The lawsuit is being closely watched by the financial and retail industries, as consumers have shown growing interest in the “tokenless biometric payment system” at issue in the case. Tokenless biometric payments have gained appeal with national retailers and the financial industry, benefiting from diminished smart card usage, increased adoption of biometrics, and the retail industry’s search for new ways to migrate consumers from cash and checks to lower-cost, more secure electronic payment methods.

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VISA QSR Volume Doubles Last Year to $6.5 Billion

VISA USA reported yesterday that consumers made $6.5 billion in VISA card purchases at fast food establishments last year, a 105% increase over the previous year. More than two-thirds of that spending was attributed to “VISA Check” cards. Wendy’s currently has about 70% of its domestic restaurants accepting payment cards. However, less than 10% of all QSRs in the U.S. accept card payments. VISA estimates total QSR volume to be $138 billion annually. According to VISA’s research, 64% of VISA check cardholders who have used their cards at QSRs said they did so for the convenience, with half specifically citing speed and time savings as the primary benefits. Based on previous VISA studies the average payment card purchase runs about 30% higher than cash purchases in quick service restaurants.

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TNS & Systech Simplify IP Processing Migration

Transaction Network Services and Systech have launched a joint solution to simplify the transition from legacy processing protocols to an IP infrastructure by combining Systech’s “Internet Payment Gateways” and TNS’ “TransXpress” secure Internet gateway solution. The two companies are bringing the speed and reliability of IP-based technologies to the point of sale (POS) with a joint solution consisting of Systech’s Internet Payment Gateways and TNS’ TransXpress® Secure Internet gateway solution. Systech Corporation is an industry leader in the design and manufacture of Internet Payment Gateways for electronic transaction markets. Transaction Network Services is one of the leading providers of business-critical, cost-effective data communications services for transaction-oriented applications.

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Moneris Solutions Launches the First Private Merchant Processing IP Network

Moneris Solutions has launched the country’s first private merchant processing IP network, and a portfolio of IP solutions for debit and credit card payment processing. The Company says merchants have been dependent on legacy data and voice networks to handle card payment processing, but that has changed as these systems are outdated and costly. Moneris’ private IP network offers an added layer of segregation of traffic dedicated to POS transactions that ride over a partitioned, protected IP connection that is monitored 24 hours per day. Moneris says IP networks deliver transaction times equal to, or faster than, the best networks in the market today. Moneris’ “Multi Protocol Label Switching” network is the architectural foundation for all of Moneris’ current and future IP network options, including: “IP 3201” – an IP-based replacement for the x.25-based data communications format gradually being retired by telecommunications companies; “IP Corporate WAN” – allows integrated POS solutions or stand-alone terminals to connect from a store location to a central head office and then to Moneris’ transaction processing system using Moneris’ private IP network; and, “IP 3000” – designed for merchants who have, or would like to set up a host-to-host link with Moneris using a dedicated circuit provisioned into Moneris’ private IP network.

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