Some Issuers Tightened Underwriting in 4Q/03

The Federal Reserve’s “January 2004 Senior Loan Officer Opinion Survey on Bank Lending Practices” says it found that a moderate fraction of banks reported that they had decreased the extent to which credit card accounts are granted to customers who do not meet credit-scoring thresholds. Moderate net fractions of both domestic banks and U.S. branches and agencies of foreign banks indicated that they had eased lending standards and several lending terms on C&I loans over the past three months. Credit demand from households reportedly weakened over the past three months. On net, almost 40 percent of domestic banks indicated that the demand for residential mortgage loans to purchase homes had deteriorated, a significantly greater proportion than in the October survey. However, respondents may find it difficult to separate mortgage originations used to buy homes from those used to refinance existing mortgages, and the pace of refinancing has slowed considerably since the middle of last year.

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JCB Card Promotes Tourism via Sapporo Snow Festival

JCB is continuing to promote travel to Japan and increased inbound sales in conjunction with the “55th Sapporo Snow Festival.” The event runs from February 5th through February 11th in Sapporo City,
Hokkaido. Visitors bringing their JCB card receipts will get one chance in a lottery of assorted prizes for every 10,000 yen in card use through February 11th. The “Snow Festival” campaign follows the JCB Akihabara “10% Cash-Back” campaign. Other premiums include a free gourmet map of Sapporo in Chinese with information on the festival and JCB merchants offering special discounts, and a 5% discount on JCB card purchases at cooperating retailers such as Marui-Imai. All these special benefits are available to any JCB cardholder, from Japan or abroad. JCB has more than 49 million cardholders in 18 countries and territories around the world.

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Fair Isaac Beefs-Up its Recovery-Support Solution

Fair Isaac announced the release of “UniScore 3.0,” a new version of its recovery-support solution that delivers a predictive non-custom recovery score, value-added data and online collection strategy development tools to enhance collection efforts. The new version includes enhanced asset information, employment information, information about deceased accounts, and expanded bankruptcy details. The new version also delivers up to four phone numbers and three addresses, making it easier for collectors to locate debtors. The solution’s unique analytics rank order charged-off accounts based on the expected collection amount, or unit yield, not simply according to probability of payment.

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PinXpress and Kalignite Come Together to Offer Prepaid Services via ATMs

Scotland-based KAL and San Diego-based EWI Prepaid have signed a partnership deal to integrate EWI’s “PinXpress” technology platform with KAL’s “Kalignite” software platform to offer prepaid services via ATMs and kiosks. By integrating EWI’s PinXpress technology platform with KAL’s Kalignite Software Platform, any self-service device from the extensive range supported will be able to process banking transactions plus prepaid transactions including prepaid wireless, prepaid long distance, prepaid utilities, local phone service, prepaid Internet/Wi-Fi, movie tickets, and many more. EWI is a leading global provider of advanced payment processing technologies to the prepaid and cash payments sectors. KAL is the world-leading provider of open software for ATMs and self-service systems.

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Triton Passes 10-Year ATM Milestone

MS-based Triton this week announced it has shipped 100,000 ATMs since 1994. Triton’s first cash-dispensing ATM, the Model 9500, pioneered the use of dial-up transmission technology that ignited the explosive growth of ATMs in off-premise retail settings. Today, off-premise ATMs are found in shopping malls, convenience stores, casinos, and even national parks. Triton is the largest provider of off-premise ATMs and ATM management software in North America and has more than 100,000 installations in over 17 countries worldwide.

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Coinstar Takes FSV e-Payroll Services Nationwide

Coinstar announced plans Wednesday to expand access to FSV Payment Systems’ electronic payroll services from 1,000 “Coinstar Centers” in supermarkets to its 10,000 machine national network. By fall of 2004, FSV expects to have three hundred thousand employees enrolled in payroll debit card programs through their employers. Payroll Debit Cards are growing in popularity, especially among employers with large workforces that may be geographically diverse, have high turnover, or an employee base without access to bank accounts. Coinstar, Inc. owns and operates the only nationwide network of supermarket-based kiosks that offer coin counting and other electronic services. FSV Payment Systems offers a robust suite of unique, host-based stored-value and payroll debit card solutions direct to large employers and to financial institutions through an exclusive agreement with Fiserv, Inc..

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VISA and MasterCard Exclusionary Rules Stayed

VISA confirmed Wednesday that the Second U.S. Circuit of Appeals decided last week to continue the stay on the October 2001 ruling by a U.S. District Court which found the card association’s exclusionary rules to be in violation of the “Sherman Antitrust Act.” The decision was entered on Monday. On January 9th, all 12 members of the Second U.S. Circuit of Appeals rejected VISA’s and MasterCard’s request for a review of the October 2001 decision. VISA and MasterCard have since indicated they will take their request to the U.S. Supreme Court. U.S. District Court Judge Barbara S. Jones previously ruled that VISA’s bylaw “210(e)” and MasterCard’s “Competitive Programs Policy” weaken competition and harm consumers in a number of ways.

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CMS Makes a Whopper of an Announcement

Burger King Corporation yesterday announced it will expand credit and debit card acceptance nationwide. The QSR chain selected Chase Merchant Services as the processor for the card acceptance program. Burger King operates more than 11,285 restaurants in all 50 states and in 58 countries. Currently, card payments are accepted in more than 2,100 Burger King restaurants nationwide. The fast food operator says it expects to increase that number considerably by providing the card program to its U.S franchisees. Ninety-one percent of its restaurants are owned and operated by independent franchisees, many of them family-owned operations. Chase Merchant Services is a joint venture between JPMorgan Chase Bank and First Data, processing 3.4 billion transactions annually with more than $226 billion in annual card sales volume. According to a FDC consumer survey, 63% of respondents said they would frequent a QSR that accepts credit/debit card payments more often than a traditional cash-only QSR, and 36% said they would spend more money if debit and/or credit card payment options were available.

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CyberSource Enters Online Traffic Ticket Payments

CyberSource has signed a deal to provide electronic payment solutions to TX-based Trafficpayment.com, an online payment service for universities, colleges, municipalities, airports, and other organizations that derive revenue from traffic and parking citations. People paying tickets no longer need to deal with checks, stamps, or waiting in line. They merely log on to Trafficpayment.com, enter specific information about their citation, and pay the fine with a credit card. CyberSource Corporation is a leading provider of electronic payment and risk management solutions. TrafficPayment.com specializes in accepting fast, secure, and reliable online payment of traffic and parking citations for any institution including universities, colleges, municipalities, and airports.

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AmEx Says US Partners May Produce Big Profits

American Express said this week that the earnings impact from opening its network to others and doing deals with VISA and MasterCard issuers in the USA could be substantial. AmEx says, for example, that an issuer moving $10 billion in accounts receivables to their network, could potentially add $35 to $40 billion in volume since the spend turnover from these customers is likely to be three or four times. The Company say that based on its experience outside the USA, a 10% increase in transaction volume generates only a 1.5% increase in network costs. It estimates that a similar 10% increase in transaction volume will add incremental network costs of only 1% in the USA. American Express says its Global Network Services has produced more than 350 different card products through independent operator, joint venture, and non-proprietary license agreements outside the USA. GNS partners have added 6.4 million cards to the American Express network, and more than 2.5 million new merchant establishments. AmEx says that since 1999, cards-in-force issued by GNS partners outside the USA, have grown at a CAGR of 24%. Card spending has grown at a compounded annual rate of 16% and totaled more than $12 billion in 2003. At the end of last year, one out of every five new AmEx-branded cards acquired worldwide was issued by a GNS partner, and outside of the USA, one out of every three new cards acquired was a GNS card. GNS partners were also responsible for nearly one out of every three new merchants acquired to the network worldwide. AmEx also noted yesterday that MBNA, like other partners, will not offer the “Membership Rewards” program on their AmEx cards. MBNA announced last week it intends to offer AmEx cards by year-end. (CF Library 1/29/04; 1/30/04)

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Citibank Enters the Upstart Credit Card Market in China

Shanghai Pudong Development Bank and Citibank yesterday, officially launched their first international credit card in China that can be settled both in renminbi and US dollars. The card will initially be available to residents of Shanghai, aged 21 and above, with an annual income of $6,000. SPDB says it will expand the issuance of the new card nationwide later this year. The new “SPDB VISA” is available in a “Classic” or “Gold” version. The “SPDB VISA Gold” includes the “Citibank World Privileges” program. Late last year, Citibank and HSBC were approved by banking regulators to issue local-currency denominated credit cards in China. HSBC launched a VISA card through Bank of Shanghai last month. The Chinese government also lifted the cap on foreign ownership of local banks from 15% to 20%. There are 614 million debit cards and 25 million credit cards in the country, according to this week’s issue of CardFlash International (www.cardflashinternational.com). VISA has 300,000 acceptance locations in China. SPDB has 290 branches across 30 cities.

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EWI and KAL Team to Offer Prepaid Services via ATMs

San Diego-based EWI Prepaid has signed a partnership deal with Scotland-based KAL to integrate EWI’s “PinXpress” technology platform with KAL’s “Kalignite” software platform to offer prepaid services via ATMs and kiosks. By integrating EWI’s PinXpress technology platform with KAL’s Kalignite Software Platform, any self-service device from the extensive range supported will be able to process banking transactions plus prepaid transactions including prepaid wireless, prepaid long distance, prepaid utilities, local phone service, prepaid Internet/Wi-Fi, movie tickets, and many more. EWI is a leading global provider of advanced payment processing technologies to the prepaid and cash payments sectors. KAL is the world-leading provider of open software for ATMs and self-service systems.

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