ECHO Revises Diluted Earnings/Loss Per Share

Electronic Clearing House announced a recalculation of the diluted earnings/loss per share amounts previously reported. On December 16th, the Company announced that for the fiscal year ended September 30, 2003, it earned $0.23 per basic and diluted share on revenue of $40,636,000 before the cumulative effect of an accounting change to record the impairment of goodwill. This compared to a loss of $0.41 per share on revenue of $33,291,000 for the fiscal year ended September 30, 2002. The revisions show the Company earned $0.23 per basic share and $0.22 per diluted share for the fiscal year ended September 30, 2003, on revenue of $40,636,000 before the cumulative effect of an accounting change to record the impairment of goodwill.

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Card Use and ATM Visits May Decline in 2004

A new survey shows that eight out of ten consumers expect to have less debt next year. Of those surveyed, 72% plan to limit credit card usage while 40% expect to limit ATM visits during 2004. The survey, conducted by CoolSavings, also found that 57% expect to put more money away in savings in the new year. According to the survey, strategies for saving more are varied: consumers will track spending manually or with a computer program (44%), sign up for direct deposit to savings account (39%), contribute to tax free account through payroll deduction (37%) and still many will keep cash in a savings/checking account (36%). The survey was conducted between December 12th and 16th, and included 1,328 unique responders.

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MasterCard Launches a Chicago Promotion

MasterCard has teamed with the Greater North Michigan Avenue Association to launch a promotion to promote Chicago’s “Magnificent Mile.” Between January 3rd and February 29th, MasterCard carrying visitors to the strip will be able to take advantage of special discounts. The fourth annual “Light Nights on The Magnificent Mile” will feature special MasterCard discounts and incentives at more than 50 Michigan Avenue restaurants, shops and hotels.

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VISA’s Boxing Day Volume Approaches $300 Million

The day after Christmas or “Boxing Day” attracted 5.9 million Canadian shoppers this year. VISA says that 26% of Canadians planned to shop December 26th, representing a 3% increase over last year. The VISA study found that Canadians expect to spend an average of $293 on gifts for the 2003 holiday season on “Boxing Day.”
VISA says it expects to process more than 2.3 million credit card transactions totaling approximately $280 million in sales volume for December 26th. During the busiest hour, VISA will process more than 297 thousand transactions, valued at approximately $35 million. Earlier this month, VISA also revealed that 22.6 million Canadians expect to spend a total of $18.2 billion on holiday season gifts this year. Through December 21st, VISA processed 80 million credit card transactions, totaling $8.8 billion in sales volume, representing an increase of 7.7% over 2002.

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Starbucks Brews Up a Card Promotion

Starbucks has launched a major campaign to promote its new “Duetto VISA” and its hugely successful Starbucks Gift Card. Between now and February 17th, Starbucks card users making a purchase with either card will automatically be entered to win prizes in the “Meet Your Friends at Any Starbucks” sweepstakes. Weekly prizes of $10 card loads will be awarded. After the contest period, two grand-prize winners will receive first-class international travel for four to any city or country where a Starbucks is located. Winners will receive deluxe accommodations for six nights in the city of choice provided by Hyatt or Westin Hotels & Resorts. The winners will also receive a “Starbucks Card” that is automatically reloaded every month with $50 for two years.

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MasterCard Holiday Volume Up 6.5%

MasterCard reported that holiday spending on its cards in the USA increased 6.45% over last year. Consumer Electronics and Appliance Stores produced the biggest gain at 6.7%. MasterCard also found that California led the charge in card spending with an 11.7% increase. The weakest area of growth was the Southwest with a 2.7% gain. Internet and Catalog (non-store) card volume increase 6.5% while Toy Store card volume dropped 7.7%. Department stores were off 1.4% this year for MasterCard.

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MINT CARDS

Royal Bank of Scotland is in the process of replacing the Advanta name on its credit cards with a new brand name. The change-over to the “MINT” name came after the RBS Advanta relationship expired. RBS currently offers four credit cards under the Advanta brand. The RBS Advanta portfolio includes the “RBS Advanta VISA Classic,” “RBS Advanta VISA Gold,” “RBS Advanta Platinum MasterCard” and “RBS Advanta mc2 MasterCard.” The cards currently offer a 0% intro rate on purchases and balance transfers through October 1, 2004. The go-to interest rates are currently 12.9% for all four card products. The RBS Advanta cards were first issued in 1996.

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Moneris Solutions Reports it Processed a Record 8.5 Million Card Transactions on December 23rd

December 23rd was once again the single busiest shopping day across Canada. The country’s largest processor of debit and credit card transactions reported that it handled a record 8.490 million transactions on December 23rd, compared to 8.375 million on the same day last year. Moneris Solutions says its processing system handled 607 transactions per second during December 23rd’s peak time period of 3:00 pm EST. This represented a 10% increase from 2002’s peak of 550 transactions per second. Moneris processes credit and/or debit card payments for more than 350,000 merchant locations.

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$8.1 Billion in VISA Holiday Volume, an 8.4% Increase

VISA expects Canadians to spend $1.7 billion in retail stores on December 23rd. Data collected by VISA since 1997 shows that, typically, the busiest
shopping day of the year falls two business days before December 25th. Interestingly, during this six-year time period, the busiest shopping day has
never been on the Saturday or Sunday immediately before Christmas. The data also shows that this will be the fifth year since 1997 that the busiest
shopping day falls on December 23rd. To date this holiday shopping season (November 28 – December 18), Canadians have already spent an estimated $8.1 billion on their VISA cards,representing an 8.4% increase over last year.

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Terra Payments Secures a $10 Million Private Placement

Montreal-based Terra Payments has signed an agency agreement for a $10 million private placement. The Company intends to utilize the net proceeds to accelerate the Corporation’s growth and diversification in international markets for its proprietary credit card and electronic cheque processing services. Growth will be generated through expansion of the Corporation’s sales effort, securing additional processing suppliers, as well as potentially through the acquisition of merchant processing portfolios.

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VISA Debit Share Rises & AmEx Credit Share Rises

While VISA USA has given up a sliver of market share on the credit card side over the past twelve months, it has picked up 30 basis points in the signature debit card market. Based on final third quarter figures from the four major U.S. card networks, American Express has emerged as the fastest growing credit card provider. American Express credit card volume is growing nearly 14% annually, and has added 11 basis points in share. VISA’s market share in the U.S. credit card market is 42.8%, compared to 42.9% one-year ago. MasterCard’s credit card share has declined from 34.5% to 34.0% and Discover’s credit card share also declined, from 6.7% to 6.3%. American Express has moved from a 15.9% share for 3Q/02 to 17.0% for 3Q/03. On the signature debit card side, VISA’s share has grown from 76.4% one-year ago to 79.4% this year.

According to CardData ([www.carddata.com][1]), overall third quarter credit card volume is up 7.3% from 3Q/02 while overall signature debit card volume is up 18.0%, compared to last year.

U.S. CREDIT CARD MARKET SHARE
(based on 3Q/03 gross dollar volume data)

NETWORK Q VOL ANN CHNG SHARE
VISA $167.7 + 6.9% 42.8%
MasterCard $133.1 + 5.6% 34.0%
AmEx $ 66.3 +13.9% 17.0%
Discover $ 24.8 + 2.1% 6.3%
*all $ figures in billions; annual change is 3Q/03 versus 3Q/02;
share figures may not total to 100% due to rounding
SOURCE: CardData (www.carddata.com)

U.S. DEBIT CARD MARKET SHARE
(based on 3Q/03 gross dollar volume data)

NETWORK Q VOL ANN CHNG SHARE
VISA $118.2 +22.6% 79.4%
MasterCard $ 30.4 + 2.4% 20.5%
*all $ figures in billions; annual change is 3Q/03 versus 3Q/02;
share figures may not total to 100% due to rounding
SOURCE: CardData (www.carddata.com)

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

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