Barclays and Lloyds TSB May Follow RBS into the U.S. Credit Card Market

Less than one week after the Royal Bank of Scotland announced its planned acquisition of Connecticut-based People’s Bank credit card business, there is renewed speculation that Barclays and Lloyds TSB are making a run at San Francisco-based Providian’s credit card business. Interestingly, both U.S. banks were previously active in the U.K. credit card business. In April 2002, Barclaycard completed its acquisition of Providian Financial’s U.K. card business. The deal represented $543 million in receivables and approximately 500,000 accounts. Barclaycard took ownership of Providian facilities in London and in Crawley which employed 600 people. In April 2001 People’s Bank sold its U.K. credit card portfolio to Citigroup International PLC for approximately $526 million. Last week, the Royal Bank of Scotland confirmed plans to purchase People’s $2.3 billion credit card business for a 15.5% premium. RBS will maintain People’s credit card business employment base in Bridgeport. Providian currently has $16.9 billion in U.S. credit card outstandings and 10.5 million accounts.

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Taco Bueno Installs VeriFone IP Terminals

VeriFone reported last week that TX-based Taco Bueno has completed its installation of VeriFone “Omni 3750” IP-enabled terminals in its locations nationwide. SageNet, the Oklahoma-based network integrator, designed and installed the IP network over which the “Omni” terminals communicate to Paymentech, Taco Bueno’s credit card processing services bureau. The QSR chain says it upgraded due to its need for payment terminals to process transactions via IP rather than phone lines. Taco Bueno has 124 locations across Texas and Oklahoma.

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Consumers Loan Shop by FICO Score

Fair Isaac launched the first online service to help consumers instantly compare competing loan rates based on FICO credit scores. The “Loan Center” on Fair Isaac’s consumer Web site enables visitors to compare national and local lenders’ rates currently being offered to people in their area who have FICO credit scores similar to their own. If consumers like a particular lender’s posted rate, the site helps connect them with the lender for more information or to apply for the loan. The initial lineup of participants in the “Loan Center” include Countrywide Home Loans, E-LOAN, E-TRADE Mortgage, IndyMac Bank and Pricelinemortgage. Bankrate.com is also participating.

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ABN AMRO Designates Preferred Card

MasterCard and ABN AMRO Bank have signed a multi-year strategic alliance under which MasterCard will be the bank’s preferred payment card brand in more than 60 countries. Although ABN AMRO will continue its multi-brand strategy in selected markets, MasterCard will be ABN AMRO’s preferred business partner and preferred payment card brand world-wide. Netherlands-based ABN AMRO has more than 3,000 branches in more than 60 countries.

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Upgrade Looses UltraCard, Gains StorCard

Seattle-based Upgrade International confirmed Friday it has lost control of UltraCard, Inc. and has signed an agreement to acquire 30% of StorCard, Inc. Under the terms of the credit facility, the outstanding principal balance was convertible, at the option of the Lender, into shares of common equity of UltraCard representing a 51% ownership interest. The Lender converted its loan into UltraCard common stock and sold its position to Gold, Inc. of Metropolitan Dallas, Texas. StorCard Inc. is an innovative developer and provider of breakthrough products expanding the market applications in enterprise, consumer electronics, government, healthcare and financial services for intelligent, secure, and portable information. Upgrade International Corporation through its ownership interest in high capacity smartcard related organizations is engaged in the development and commercialization of high-capacity portable solutions for a broad range of existing and new markets.

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Consumer Credit Tops $2 Trillion, Up 4%

Americans added $30 billion in revolving credit during 2003, ending the year at $742.5 billion. For the first time, overall consumer credit topped $2 trillion. Bank credit card debt (excluding store and gas credit cards) at the end of the third quarter was $645.7 billion, or roughly 88% of total revolving credit. It is expected that card loans, at year-end 2003, will come in around $660 billion. During December, consumers added $1.6 billion in revolving credit according to figures released Friday by the Federal Reserve. Revised figures also show that the November and October figures were better than previously reported. November’s revised annual growth rate is +0.6% compared to -0.9% reported last month. October’s revised annual growth rate is 5.2% compared to 4.3% previously reported. At the end of December, Americans were $2001.7 billion in debt, excluding home mortgages.

REVOLVING CREDIT HISTORICAL ($billions)
Dec03 Nov03 Oct03 Sep03 Aug03 Jul03 Jun03
GRWTH: 2.6% 0.6 5.2 6.8 3.4 1.4 -2.4
$OWED: $742.5 740.9 740.5 737.3 729.1 726.8 725.9

May03 Apr03 Mar03 Feb03 Jan03 Dec02 Nov02
GRWTH: 7.7% 3.4 4.1 5.9 5.2 -6.7 -1.4
$OWED: $727.9 722.8 720.7 718.6 715.5 712.4 716.8

Source: Federal Reserve; revised figures as of 2/06/04;
For complete historical data visit CardData (www.carddata.com)

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Cash Technologies Stays on the AMEX

Los Angeles-based Cash Technologies will remain on the American Stock Exchange after submitting an acceptable plan to regain compliance. As reported in the Company’s SEC filings, it is not in compliance with AMEX listing standards, in particular Section 1003(a)(ii) of the AMEX Company Guide, for having shareholder’s equity of less than $4 million and net losses in three out of its four most recent fiscal years. Cash Technologies, Inc. develops and markets innovative data processing systems, including the BONUS and MFS financial services systems, EMMA transaction processing software and PrISM security system.

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iMergent Profits Double in the Fourth Quarter

UT-based iMergent, an e-commerce software provider, reported fourth quarter profits of $1.5 million on revenues of $19.8 million. The higher revenue was primarily due to an increase in the total number of workshops conducted, which included the initial stages of the expansion of international marketing efforts. Revenue for the six-months ended December 31, 2003 grew to $40.4 million versus $21.9 million for the comparable period in 2002, an increase of 85 percent. iMergent provides eCommerce solutions to entrepreneurs and small businesses enabling them to market and sell their business product or idea via the Internet.

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VISA GDV Increases 12%; Tops $1 Trillion

As expected, VISA topped $1 trillion in U.S. annual gross dollar volume last year. During the fourth quarter, the nation’s largest payment card network, processed $178 billion in credit card volume, and $124 billion in signature debit volume. For the year, VISA handled more than $1.1 trillion in gross dollar volume, an 11.6% increase over the previous year. Debit card volume for all of 2003 grew 19.5% while credit card volume increased by 6.6%. For 4Q/03, VISA USA’s debit card volume was up 21.4% to $124.1 billion, and credit card volume was up 9.5% to $178.3 billion. VISA also reported this morning that commercial card volume increased 20.4% last year, and that small business card volume was up 28.6% to $56.6 billion. VISA says that prepaid card sales and cash volumes grew last year by more than 240%, primarily due to “VISA Payroll” cards. Prepaid card volume exceeded $1 billion during 2003. VISA’s U.S. PIN-based point-of sale network, Interlink, produced $35.2 billion in volume, a 35% increase over 2002. VISA volume in the e-commerce category was up 53.2% to $60.4 billion.

VISA 2003 GROSS DOLLAR VOLUME
1Q/03 2Q/03 3Q/03 4Q/03
Credit Cards $145.2b $158.8b $167.7b $178.3b
Check Cards $100.2b $111.5b $118.2b $124.1b
TOTAL $245.4b $270.3b $285.9b $302.4b
Source: CardData (www.carddata.com)

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Checkpoint Systems Expands RFID at the POP

NJ-based Checkpoint Systems has made a minority investment in GOLIATH Solutions, a start-up developer of RFID based technology for point-of-purchase advertising. Annually, consumer packaged goods companies spend some $17 billion in trade development dollars to produce, distribute and monitor their promotional displays and signage to increase sales. However, about 50% of the time, their displays are not deployed in a timely and consistent manner. GOLIATH Solutions designs and delivers RFID solutions that track and report the presence/value of advertising and displays in retail stores. Checkpoint Systems, Inc. is a multinational manufacturer and leading provider of product identification and shrink management solutions for the consumer packaged goods and retail industries.

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U.K. Banks Eyeing U.S. Card Market

Less than one week after the Royal Bank of Scotland announced its planned acquisition of CT-based People’s Bank entire credit card business, there is renewed speculation that Barclays and Lloyds TSB are making a run at San Francisco-based Providian’s credit card business. Interestingly, both U.S. banks were previously active in the U.K. credit card business. In April 2002, Barclaycard completed its acquisition of Providian Financial’s U.K. card business. The deal represented $543 million in receivables and approximately 500,000 accounts. Barclaycard took ownership of Providian facilities in London and in Crawley which employed 600 people. In April 2001 People’s Bank sold its U.K. credit card portfolio to Citigroup International PLC for approximately $526 million. Last week, the Royal Bank of Scotland confirmed plans to purchase People’s $2.3 billion credit card business for a 15.5% premium. Providian currently has $16.9 billion in U.S. credit card outstandings and 10.5 million accounts.

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OPC Enters Franklin County, Ohio

Official Payments Corp. has signed a deal to enable property owners in Franklin County, OH to pay their real estate taxes via a credit card. Official Payments provides credit card payment services for the Internal Revenue Service, 22 states, the District of Columbia, and more than 1,400 local government clients nationwide. Official Payments’ principal business is collecting credit card payments on behalf of government entities. Tier is a provider of transaction and online payment processing and packaged software and systems implementation services primarily for federal, state and local government clients.

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