National Consumer Protection Week Launched This Week

Federal, state and local agencies, as well as national consumer organizations, have launched the sixth annual “National Consumer Protection Week” for February 1st to the 7th, with the theme: “Financial Literacy: Earning a Lifetime of Dividends.” During NCPW, representatives from federal, state and local agencies and national consumer organizations will help consumers of all ages understand how the decisions they make in the marketplace affect their overall fiscal fitness. The FDIC insures deposits at the nation’s 9,237 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.

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Wal-Mart to Accept Jeanie Cards Next Month

Wal-Mart Stores announced Friday that effective February 1st, “Jeanie” debit cardholders will be able to make PIN-based purchases at Wal-Mart and SAM’S CLUB stores. The “Jeanie” network was launched in 1977 by Fifth Third Bank, and today has nine million cardholders and 14,000 merchants in the USA. Fifth Third Bank Processing Solutions processes over nine billion ATM and POS transactions per year for more than 198,000 merchant locations and 1,500 financial institutions worldwide.

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ACS Nails $33 MM Contract for SF FasTrak Toll System

Dallas-based ACS has been awarded a $33 million, five-year contract by the Bay Area Toll Authority to fully integrate and operate the San Francisco Bay Area regional “FasTrak” electronic toll collection system. With this contract, ACS will consolidate all functions of the Bay Area’s FasTrak systems, including customer service and violations processing, under a single service provider. For the first phase of the project, ACS will operate the two existing service centers, one that serves the Golden Gate Bridge and the other that serves the region’s seven state-owned bridges. ACS is the nation’s leader in electronic toll collection, processing over $2.2 billion in toll revenue and supporting over 5.3 million motorists annually.

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Liquor Gift Cards Hot in New Hampshire

The New Hampshire State Liquor Commission reported that holiday gift card sales at 72 state-run liquor stores in New Hampshire made up 62% of total gift card sales last year. Gift card sales figures shot up in the seven days preceding Christmas, accounting for 61% of the cards sold during the month of December, and 40% of all cards sold in the last six months of 2003. The Commission is a merchant customer of Dallas-based payment processor Paymentech. The New Hampshire stores began selling Paymentech’s plastic gift cards, known as “FlexCache,” after transitioning from paper gift certificates last year. The switch from paper to plastic resulted in a four-fold increase in gift card sales volume from 2002 to 2003. The “FlexCache” program continues to gain popularity. From 2002 to 2003, Paymentech reported a 230% increase in FlexCache transactions.

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Paymentech Invades Europe with a Dublin Office

Texas-based Paymentech is opening its first European office in the Eastpoint Business Park in Dublin. Several of Paymentech’s major merchants, including America Online, Symantec, Lands End and Amazon.com, already conduct business in Europe. Paymentech says a number of new product and technology initiatives are already in progress that will benefit European merchants. John Shirey, Paymentech Managing Director, will head the company’s European office. Privately-held Paymentech and its Canadian affiliate, processed 4.2 billion transactions and $123 billion in bank card sales in 14 currencies during 2002.

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SchlumbergerSema Deploys CreditCall’s EmvX to Speed Compliance

CreditCall’s software is to be deployed in handheld and cashier ticketing terminals across the UK rail network through a major deal with SchlumbergerSema. The Company’s EMV software kernel will be deployed to make SchlumbergerSema’s 4,500 “Tribute” and “AVANTIX” mobile ticketing terminals, deployed in the UK rail network, EMV compliant. The terminals are expected to be “Chip and Pin” enabled by the end of this year. SchlumbergerSema has deployed CreditCall’s pre-built EMV Toolkit, which consists of two core products: “EmvX” and “EMV.LIB.” The product being used by SchlumbergerSema, “EmvX,” provides devices based on the Windows platform with a simple method of adding the EMV functionality. Since it uses an architecture that is native to the Windows platform it is faster and more reliable than solutions based on interpreted languages such as Java. “EMV.LIB” is a portable version of the EMV kernel designed for use in proprietary embedded systems where memory footprint and CPU usage are critical issues. CreditCall develops diverse applications including card-based telephony solutions, pay & display car parking, vending, ticketing and pay TV.

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Strong Bidding on the Egg Card Portfolio Pushes Price Above GBP1.6 Billion

There is speculation that more issuers are lined up to take a crack at bidding on Prudential’s 79% stake in the “Egg” credit card portfolio. The mad scramble reportedly includes MBNA, Royal Bank of Scotland, Capital One, GE Consumer Finance, Barclays, Citigroup, HSBC, BNP Paribas, and National Australia Bank. The strong interest in purchasing the three million account portfolio is pushing up its potential price to more than £1.6 billion. Prudential put its stake on the sale block three months ago after “Egg” lost nearly £70 million in the first three months of 2003 in regard to its business in France. Egg produced a profit in the U.K. of £56.7 million during the same period. The issuer ended up with an overall pre-tax loss of about £25 million through the third quarter. Egg launched the “la Carte Egg VISA” card in France during November 2002 after purchasing Zebank, a local Internet bank for £5 million. Since its launch in France it has signed up less than 60,000 cardholders. In the U.K. Egg has signed up 3.1 million cardholders since its launch in October 1998.

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Sears Q4 Profits Double Thanks to its Credit Card Sale

Following its exit from the credit card business in the fourth quarter, Sears, Roebuck and Co. reported yesterday that its net income more than doubled over the year- ago quarter to $2.7 billion. The profit surge was primarily due to a pretax gain of $4.1 billion on the sale of its Credit and Financial Products business to Citigroup. The purchase price of $31.8 billion, at the November 3rd closing, included a 10% premium on Sears private label and bankcard credit card receivables of $28.6 billion or $2.9 billion, and $300 million for other assets, business facilities and employees. Included in the purchase price was the assumption of $10.4 billion in securitized debt and other liabilities. For the fourth quarter, through November 2nd, Sears Credit and Financial Products unit reported an operating loss of $645 million, compared with operating income of $363 million for the prior quarter. The current year quarter operating loss includes a $791 million loss related to the early retirement of debt. Fourth quarter domestic Credit and Financial Products revenues were $526 million in the current year, compared with $1.4 billion in the prior year. For complete details on Sears’ fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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Travelers Express/MoneyGram Money Transfer Volume Up 31%

Phoenix-based Viad reported Thursday that Travelers Express/MoneyGram revenues for the fourth quarter were $205.2 million, up 4.1% compared to fourth quarter 2002. Payment Services’ operating income was up 12.1% to $34.8 million. In the fourth quarter, money transfer transaction volume grew 31%, and revenues grew 18.2% in comparison to the prior year fourth quarter. The worldwide agent base grew nearly 11% in comparison to the prior year quarter, and now stands at approximately 63,000. Viad expects Payment Services segment revenue to increase at a mid to high single-digit rate in comparison to first quarter 2003 revenue of $189.0 million. Operating income is expected to increase to between $28 million and $30 million in comparison to first quarter 2003 segment operating income of $20.1 million. Viad is in the process of spinning off Travelers Express and plans to operate the business under the MoneyGram International, Inc. corporate name. For complete details on Viad’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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RETAIL 1H/04

MasterCard’s “MasterIndex of Retail” for Asia/Pacific shows robust potential growth in retail sales during the first half of 2004. All 12 Asia/Pacific markets included in the forecast are predicted to see positive expansion, with China maintaining its lead with an anticipated 14.0% year-on-year growth. Thailand takes the number two spot in the retail sales growth predictions with 10.8% year-on-year growth, followed closely by two other South East Asian markets which also show impressive growth prospects: Malaysia (9.2%), Indonesia (8.0%). While not as bullish, the Philippines (5.6%) and Singapore (3.9%) are also indicating positive year-on-year growth prospects. Korea shows strong recovery, driven by particularly rapid expansion in exports. With domestic consumption starting to recover going into 2004, retail sales growth is predicted to hit 8.2% year-on-year, up from its 2003 year-on-year contraction of 0.7%. Hong Kong and Taiwan show post-SARS retail recovery forecasts at a healthy year-on-year growth of 6.8% and 5.5% respectively. Japanese consumers are also reasonably positive; retail sales are anticipated to grow by 4.5% over the previous year. The Australian and New Zealand retail sectors are both optimistic with anticipated 4.5% and 5.0% year-on-year growth respectively. The analytical foundation of the “MasterIndex of Retail” is based on the development of a set of techniques that have successfully linked MasterCard’s “MasterIndex of Consumer Confidence” with retail sales statistics. The survey findings of the “MasterIndex of Consumer Confidence” are used as a leading indicator of how consumers may act in terms of retail spending over the six-month period ahead. Thus, a link is made between consumer sentiment and actual consumer behavior.

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Linux Security Appliance Protects Windows-Based ATM Terminals

St. Louis-based JBM Electronics has introduced the Linux-based “Gateway 300” and “Gateway 400” security appliance to protect Windows-based ATM and POS terminals from hackers and viruses. The Linux based Gateway 300 or 400 can now offer IT managers a low cost solution for protecting their most important assets. The hardware based Gateway s provides Virtual Private Network (VPN), 3DES encryption, SSL, Transparent Bridging, In-line Intrusion Protection, Network address translation (NAT), Stateful inspection, and an extremely flexible firewall. JBM Electronics offers 28 years of experience and is the industry leader for ATM/POS connectivity and security solutions. Our flexible networking solutions for mission critical transaction data provides connectivity from any ATM/POS device to any Legacy or IP-based host or transaction switching system.

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