Community Banks Bash Large Mergers

The nation’s community banks warned yesterday that large bank mergers are challenging the ability of the regulatory system to effectively regulate banks. The ICBA also said these banks will be too big to fail and therefore will pose a systemic risk to the FDIC’s “Bank Insurance Fund.” The trade association said the largest banks will attempt to amend the “Riegle-Neal Interstate Banking and Branching Efficiency Act” which prohibits a bank merger if the resulting bank would control more than 10% of the deposits in the USA. The ICBA testified yesterday in regard to the BofA/Fleet merger before the Federal Reserve. The ICBA says the evidence shows that increased concentration in the banking industry has not benefited bank customers and has not had a positive effect on the convenience and needs of the communities served by the acquired banks.

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Paymentech STV Volume Up 230% in 2003

Dallas-based Paymentech this week reported that its “FlexCache” stored value card transactions rose 230% last year. Gift cards continue to be the gift of choice for many consumers, as more than half of all respondents to a consumer survey conducted by Paymentech in October 2003 said they planned to give at least one gift card during the 2003 holiday season. Paymentech marked an 80 percent increase in merchant locations that are using FlexCache between 2002 and 2003. Paymentech, L.P. processes more payment transactions than any other company in North America and more than half of all Internet transactions for retailers accepting U.S. and international payments via traditional point of sale, Internet, catalog and recurring payments.

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Mid-Size Portfolios Post Strong 4Q/03 Gains

Mid-sized credit card issuers produced above average performance in outstandings during the fourth quarter. Wells Fargo Financial and Associated Card Services led the increase with a 17% gain in receivables compared to one-year ago. Overall, the five issuers representing a sample of the middle market, produced an average gain of 12%, or about twice the industry average. The five issuers had aggregate outstandings of $3.3 billion, according to CardData (www.carddata.com).

4Q/03 PORTFOLIOS
ISSUER RECV Y/Y CHNG
Wells Fargo Financial* $1,342,149,879 +17.0%
Associated Card Srvcs 930,294,855 +16.6%
Compass Bank 481,185,823 + 4.5%
SouthTrust 349,375,639 NC
Columbus B&T 225,113,234 +4.3%
TOTAL: $3,328,119,430 +12.0%
* does not include Wells Fargo Card Services
Source: CardData (www.carddata.com)

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RCBC Adopts Verified by VISA for its Internet Remittance Service

Rizal Commercial Banking Corporation has launched the first Internet remittance service in the world to adopt VISA’s global Internet authentication service. “Telemoney Direct” is also the Philippines’ first “Verified by Visa”-enabled Web site. The service enables consumers to send funds via the Internet and to have the funds instantly credited to the beneficiary’s RCBC deposit account. RCBC says they are confident that “Telemoney Direct” will become the preeminent platform for delivering remittance services to the seven million Filipinos in over 100 countries today. In Asia Pacific, VISA has 198 million VISA-branded cards in the region. During the twelve months ended September 30th, US$428 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using VISA cards.

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FAPS Names New COO and CFO

Fort Worth, TX-based First American Payment Systems has promoted Debra Bradford to EVP/COO, and has hired James Walburg, formerly of NTS, as SVP/CFO. Ms. Bradford joined First American as Senior Vice President and CFO in 2001. Prior to joining the company, she was Senior Vice President and CFO of ACE Cash Express, Inc. The changes to senior management follow the company’s recent major acquisitions and accelerated organic growth. First American Payment Systems, L.P. provides full service credit card processing for merchants throughout the United States.

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International Card Establishment to Offer Card Services to Merchants

California-based International Card Establishment has entered into a marketing agreement with a Toronto-based company to provide credit card services to merchants throughout Canada. The Canadian company’s name is not being disclosed for competitive reasons. I.C.E. will use its internal sales force to conduct direct mail and telemarketing campaigns to small merchants throughout Canada, while its Canadian partner will concentrate on providing face-to-face and technical support services on the ground in Canada.

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IBM Makes Predictive Analytics Available on Demand

IBM has inked a deal to become a global reseller of Fair Isaac’s core analytic capabilities for financial services providers. The relationship will focus on delivering the full range of Fair Isaac’s advanced analytic software and tools through IBM’s established technology infrastructure at the world’s top financial institutions. Fair Isaac and IBM plan to bring new solutions to market in the future that deliver breakthrough value to financial institutions through joint product development and integration efforts. IBM is the world’s largest information technology company and provider of IT services, as well as a preeminent technology partner to the world’s financial services industry. Fair Isaac Corporation is the preeminent provider of creative analytics that unlock value for people, businesses and industries.

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T-Systems Certifies Diebold PIN Pad for ZKA

T-Systems GEI GmbH has certified Diebold’s new “EPP4.0” encrypted PIN pad for ATMs as meeting ZKA specifications. Diebold is one of only a few manufacturers to have its product tested by the German testing organization. “EPP4.0s” are used on all of Diebold’s new “Opteva” family of ATMs, as well as its earlier “ix Series” machines and “9x” series machines. Encrypted PIN pads are secure devices that protect a consumer’s PIN once it is entered at an ATM. EPPs are not new but have received more attention recently due to increased consumer awareness of ATM security.

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HOLIDAY RETAIL

Despite predictions of retail sales growth in the range of 3% to 6%, Canadians racked up nearly 9% more in December retail sales compared to 2002. Based on more than 125 million debit and credit card
transactions from more than 110,000 retail merchant locations spanning 162 retail categories, consumers spent $2.19 billion more at retail locations in December 2003 than they did the previous December.
Card volume in discount stores rose 14% in December while department stores fell 8%. Pet stores posted the strongest year-over-year gain of 25%. Family clothing stores were up 9%, but children’s and infants’ clothing stores were down 6%. Performance in other categories showed: stationery stores up 13%; book stores up 12%; grocery stores up 12%; music stores up 7%; apparel (all apparel segments) up 4%; and, gift, card and novelty stores up 1%. The data were gathered by Moneris Solutions Corporation, the country’s largest processor of debit and credit card transactions.

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Wespac Implements Euronet Internet Banking in South Pacific

Westpac has introduced the Euronet “Internet Banking” system in three of its Pacific banking sites, including Fiji, Papua New Guinea and Vanuatu. Westpac Pacific Banking operates across eight Pacific locations and has implemented other self-service offerings from Euronet including ATM, debit card, POS, merchant, telephone banking and bill pay software solutions.The collaboration has been an extended joint project, which has resulted in the redevelopment of the Euronet “Internet Banking” system using the experience and knowledge of Westpac Banking Corporation and IBM Global Services. Westpac Pacific Banking plans to expand the Internet banking service to the Solomon Islands.

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PULSE Signature Debit Transactions Up 40% Last Year

PULSE EFT reported that total transaction volume in 2003 was up 26.5%. ATM transactions grew 17% over 2002. PIN debit transactions at the point of sale increased 26%. Signature debit transactions jumped nearly 40% last year. PULSE notes that it added 380 new members during the year in 41 different states, without benefit of merger or acquisition. PULSE currently serves more than 4,300 bank, credit union and savings institution members across the country. The network links an estimated 90 million cardholders with more than 200,000 ATMs and 3.2 million POS terminals at retail locations nationwide.

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Upromise Hotels/Rewards Network Program Launched

Upromise and Rewards Network (f/k/a iDine Rewards Network), have rolled-out the “Upromise Hotels by Rewards Network” program, offering credit card users between 3% and 8% off rooms at more than 6,900 participating hotel locations nationwide. Members must have at least one credit card registered with Upromise and search for a hotel room through Upromise.com. Upromise is a service that helps families save for college. Members can automatically earn money for college while making everyday purchases at more than 18,000 grocery and drug stores, 200 online shopping sites, and 9,000 restaurants nationwide, as well as tens of thousands of retail locations. Rewards Network headquartered in Chicago, Illinois, provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform.

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