Circuit City Unloads the Rest of its Card Portfolio

Circuit City Stores confirmed yesterday it will sell its $1.8 billion private-label credit card operation, including both its private-label Circuit City credit card accounts and its co-branded “Circuit City Plus VISA” credit card accounts, to Bank One. The deal completes Circuit City’s exit from the card issuing business following the sale in November of its $1.5 billion VISA and MasterCard credit card portfolio to FleetBoston for $1.3 billion. Bank One will pay par value of the receivables for the portfolio. The retailer expects to incur an after-tax loss of approximately $10 million on the deal. Circuit City will also become an agent of Bank One under a seven-year contract. Circuit City will be compensated for each new account opened and Bank One will provide special financing terms for Circuit City customers. Bank One will assume about 700 employees of Circuit City. First Annapolis Capital is acting as advisor to Circuit City.

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Gemplus Names New North American President

Gemplus International has named two new members to its Operations Committee, and announced the head the Financial Services Business Unit. Ernie Berger is joining Gemplus in the USA as the President of Gemplus North America and is based in the Philadelphia area. Remi Calvet is joining the Company VP/Corporate Communications. Justin D’Angelo has also been promoted and will head the Financial Services Business Unit as SVP. Berger has 15 years of experience in the financial services sector with American Express and First USA, where he held senior management positions. Calvet has worked for Unilever, DMC, and Philip Morris International. The former “Financial and Security Services Business Unit” has been divided into two distinct entities: the Financial Services Business Unit, comprising banking, retail, transport, and conventional cards; and the ID & Security Business Unit, comprising ID, security and smart card interface (hardware and readers). D’Angelo will head the Financial Services Business Unit and Jacques Seneca will head the ID & Security Business Unit.

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VISA to Assist a Global Philanthropic Exchange

VISA International has inked a deal to be the preferred payment brand and to provide expertise to GlobalGiving, a philanthropic exchange founded by former executives of the World Bank. Visa will become the preferred payment brand for GlobalGiving, provide resources and co-promotion of the partnership, help optimise the collection of donations and refine best practices for security and privacy of donor financial information. Over the coming year, the two organizations will also work to identify ways that payment technology can improve the efficiency of business operations and help GlobalGiving maximize the percentage of financing going to projects. GlobalGiving uses a market-based approach to enable individuals, businesses, and groups to find and support high quality, small-scale, social development projects on five continents.

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Optimal Robotics and Terra Payments to Merge

Montreal-based Optimal Robotics and Montreal-based Terra Payments announced they have agreed to merge. Under the agreement, Terra will become a wholly-owned subsidiary of Optimal and be renamed Optimal Payments. As well, Terra’s senior management team will remain in place. Mitch Garber, the President and CEO of Terra, will become President and CEO of Optimal Payments and will also be EVP of Optimal. Steve Shaper, the Chairman of Terra Payments and the former President and CEO of Telecheck, will become Chairman of Optimal Payments. Doug Lewin, the EVP of Terra Payments, will remain in that position at Optimal Payments and will become SVP of Optimal. The remaining senior management team of Terra Payments will continue to hold their respective titles in the renamed Optimal Payments. Optimal Robotics is a provider of self-checkout systems to retailers and, through Optimal Services Group, provides a broad scope of depot and field services to retail, financial services and other third-party accounts. Optimal has a strong IT infrastructure with over 800 software and hardware professionals. Terra Payments is a growing presence in the payment processing industry and provides technology and services that businesses require to accept credit card, electronic check and direct debit payments. Terra Payments processes credit card payments for non-face-to-face transactions, including mail-order/telephone-order, online gaming and other online merchants, as well as for retail point-of-sale merchants.

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MPS to Offer CommerSafe MPI to I-Merchants

Los Angeles-based Merchants Billing Services is now offering iBIZ Software’s payment authentication services based on “CommerSafe MPI” to its online merchants. iBIZ Software’s CommerSafe MPI (Merchant Plug-In) is compliant with the Verified by Visa and MasterCard SecureCode payer authentication programs of Visa and MasterCard. Like the 3-D Secure protocol, developed by Visa International and adopted by MasterCard International, CommerSafe MPI, was designed to protect Internet merchants and consumers from payment card fraud. iBIZ is a pioneer and a recognized leader in online payment card security and offers robust authentication solutions for the entire e-payments industry.

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UFJ + NIPPON SHINPAN

UFJ Bank Limited announced it will merge Nippon Shinpan with UFJ Card next year, after it purchases Nippon Shinpan and makes it a consolidated subsidiary of UFJ. The planned action will create the second largest Japanese issuer with 23 million cardholders, about three times UFJ Card’s current size. The merger is the first in the local card industry between a credit-related card company and a bank-related card company. UFJ also announced it will seek to enhance cost competitiveness through cooperation with JCB in the areas of administration and information systems. Nippon Shinpan also plans to issue credit cards under the JCB brand, in addition to VISA and MasterCard brands. JCB is the largest issuer in the country with 48 million cardholders. UFJ is in the process of buying Nippon Shinpan for Y200 billion.

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Diebold and Hypercom Target Drive-Up Pharmacies

Diebold and Hypercom have teamed to provide card payment technology to drive-up pharmacies in the US and Canada. Diebold will distribute a system that includes Hypercom’s “HFT 505” outdoor card payment terminal which conveniently mounts near the retail transaction drawer, or the pneumatic prescription delivery terminal at pharmacy drive-up locations. Last year, Delphi Display Systems, a manufacturer and designer of outdoor digital video display systems for the QSR industry, integrated Hypercom’s “HFT500” transaction technology into its “Order Confirmation System”. Delphi introduced a visual order confirmation interface complete with an easy-to-read LCD panel, an integrated PIN pad, and debit or credit card accessibility located at the order-point in the drive-thru. (CF Library 1/28/03)

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GEMPLUS HIRES

Gemplus International has named two new members to its Operations Committee, and announced the head the Financial Services Business Unit. Ernie Berger is joining Gemplus in the USA as the President of
Gemplus North America and is based in the Philadelphia area. Remi Calvet is joining the Company VP/Corporate Communications. Justin D’Angelo has also been promoted and will head the Financial Services Business Unit as SVP. Berger has 15 years of experience in the financial services sector with American Express and First USA, where he held senior management positions. Calvet has worked for Unilever, DMC, and Philip Morris International. The former “Financial and Security Services Business Unit” has been divided into two distinct entities: the Financial Services Business Unit, comprising banking, retail, transport, and conventional cards; and the ID & Security Business Unit, comprising ID, security and smart card interface (hardware and readers). D’Angelo will head the Financial Services Business Unit and Jacques Seneca
will head the ID & Security Business Unit.

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OTI Reports 75% Increase in FuelMaster Volume

On Track Innovations reported that “FuelMaster by BP” sales increased from 26 million gallons in 2002 to approximately 46 million gallons last year in South Africa. The “FuelMaster Express” program, which is aimed at private motorists, uses an OTI contactless smart key fob to carry a driver’s payment information. The key fob is presented to the reader located on the pump and can be used at the convenience store for purchasing and gaining loyalty points. In 2003 ABSA, the largest retail bank in South Africa joined the program. the “EasyFuel” wireless solution represents the next generation of OTI’s
gasoline management system, a totally wireless solution for gas stations. OTI recently announced the introduction of “EasyFuel” to Spain and Mexico.

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EGG BIDDING

Speculation is rampant that Royal Bank of Scotland is in final discussions to purchase Prudential’s Internet bank, Egg, for £1.5 billion to £1.6 billion. Earlier rumors suggested that US-based MBNA and Capital One were in talks to purchase Egg with its two million credit card customers. Last week, Prudential confirmed it is was in discussions to unload its 79% stake in the Internet bank after it started to shop for potential buyers in October. Reportedly, Egg hit tough times after purchasing an Internet bank in France in 2002. Through the third quarter, Egg lost £70 million. Egg launched the “la Carte Egg VISA” card in France during November 2002. The card has since failed to meet projections. Prudential launched Egg in October 1998.

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VeriFone Snags Edwards from Hypercom

VeriFone has hired Doug Edwards, former SVP/National Sales Manager for Hypercom, for its North America sales team. Prior to joining VeriFone, Edwards was at Hypercom for seven years, primarily responsible for the managing the sales team servicing major financial accounts throughout the United States and Canada. VeriFone, Inc. recognized worldwide as the trusted leader in secure electronic payment technologies, provides expertise, solutions and services for today with a smart migration strategy for tomorrow.

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Hansabank will use Thales e-Security’s P3 for EMV Smart Cards

TietoEnator, a leading IT services provider in the Nordic countries, has chosen Thales e-Security’s “P3” smart card personalisation and preparation process for Estonia based Hansabank. EMV migration in the Baltics is moving fast with the first EMV smart cards issued in December 2002. To-date Baltic banks have issued more than 200,000 smart cards. Hansabank issued its first VISA smart cards in August. The “P3” system is designed to provide card issuers with a ready-made way of migrating from magnetic stripe cards to smart cards. Aimed primarily at the payments card industry, it offers the ability to generate data for credit/debit and electronic purse payment cards. Using P3 reduces or eliminates the need to make changes to the issuer’s host system thereby reducing implementation costs and timescales. Thales’ “P3” sits at the core of TietoEnator’s EMV solution and helps simplify the smart card migration process by providing all the cryptographic data required. The key benefits of Thales’ “P3” are a secure data preparation process, 100% in-house control over cryptographic keys and limited impact on the banks’ host systems. P3 is developed in conjunction with MasterCard and Visa and has been sold to smart card issuers in more than 30 countries around the world.

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