BMO Corporate MasterCards Get ExpenseLink

Gelco Expense Management has inked a deal with BMO ePurchasing Solutions to integrate its “ExpenseLink” suite of services with BMO’s MasterCard corporate card program. By capturing essential expense data through BMO’s corporate card program and automatically merging it with Gelco’s ExpenseLink suite of services, clients will have total visibility and control of their company’s entire travel and entertainment spend. BMO ePurchasing Solutions (http://www.bmoeps.com) is a dedicated line of business within BMO Financial Group and is a leading North American MasterCard commercial card provider. Gelco Expense Management, a division of Gelco Information Network, is the largest and most experienced provider of expense management and reimbursement programs.

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Global Payments Profits Up 24%

Global Payments reported that revenues for the quarter ended November 30th were up 15% to $148.4 million and that net income grew 24% to $16.8 million for the quarter. GPN noted that $3.8 million in revenue was posted during the quarter from its DolEx money transfer acquisition that closed on November 12th. In August, GPN announced its purchase of TX-based Latin America Money Services and its operating subsidiary, DolEx Dollar Express. GPN paid $190 million, plus a potential earn-out of up to $10 million, for DolEx. Through a network of 550 retail branches in 15 states, DolEx serves predominately Latino customers who send money to beneficiaries primarily in Mexico, as well as other Latin American countries. Beneficiaries collect these funds in their local currency at approximately 8,500 bank, exchange house, and retail settlement locations in Latin America. Last year, DolEx processed 4.6 million electronic money transfer transactions, producing $69.9 million in revenue. GPN yesterday also reaffirmed its annual revenue guidance of $588 million to $608 million and diluted earnings per share guidance of $1.65 to $1.72 for fiscal 2004. The company says it continues to make progress consolidating certain locations to gain greater efficiencies and reduce costs. Including the restructuring charge related to this plan, GAAP net income for the quarter was $14.9 million, compared to $13.6 million in the prior year. The company has scheduled a conference call this morning to discuss the quarter’s results. For complete details on GPN’s latest performance visit CardData ([www.carddata.com][1]). (CF Library 8/12/03)

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

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Fairbank Gets 2004 Pay Package

Capital One’s CEO Richard Fairbank will receive more than 700,000 shares, with a current market value of $42 million, as part of his 2004 compensation package. The issuer’s “Compensation Committee” of its Board of Directors this week approved granting CEO Richard Fairbank 360,000 stock options and up to 355,410 performance-based shares of Capital One’s stock. Fairbank, along with former Capital One senior executive Nigel Morris, previously waived salary and benefits in exchange for stock options and stock performance bonuses. The COF Committee says the compensation program “reflects the issuer’s continued commitment to aligning the interests of its Chairman/CEO with those of its stockholders through a balanced compensation program designed to encourage management decisions that increase stockholder value over the long term.” The stock options granted Fairbank this week have an exercise price of $56.275, and will vest annually in three equal installments beginning on December 15, 2004 and will expire ten years from the date of grant. The actual number of performance-based shares to be issued will depend on Capital One’s fully diluted compound earnings per share growth rate compared with that of a peer group of 33 companies over the three-year period beginning January 1, 2004 and ending December 31, 2006. Nigel Morris is in the process of leaving Capital One by April. He is currently dumping up to 3 million shares of COF common stock within the next year. After completion of the stock sales, he will own approximately 3.3 million options to purchase shares of COF common stock. One year ago, Fairbank’s exercisable options declined in value from $262 million to $104 million. Morris’ options decreased in value from $150 million to $57 million. (CF Library 4/22/03; 8/7/03)

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Fair Isaac’s InterACT Set for April in Prague

Fair Isaac has set April 27-30 as the date for its “InterACT” conference in Prague, Czech Republic. The Prague InterACT conference will feature a content-rich agenda of presentations and discussions focused on the latest advances in analytics and decision technology, and fresh ideas on how they can be applied to improve business performance, build a more profitable customer base, fight fraud and achieve optimal regulatory compliance. InterACT is Fair Isaac’s annual educational forum that provides industry leaders with the latest ideas, insights and strategies for achieving smarter, more consistent and more profitable business decisions. Fair Isaac Corporation is the preeminent provider of creative analytics that unlock value for people, businesses and industries.

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Bank of Montreal Launches a Card with the Red Cross

BMO Bank of Montreal and the Canadian Red Cross introduced a new affinity credit card this week. The “Canadian Red Cross Mosaik MasterCard” directs a percentage of card purchases to the Canadian Red Cross while providing cardholders with a fully customized card program. Cardholders can customize their card at any time by choosing the reward program (AIR MILES or CashBack), interest rate plan and special features that best meet their needs. BMO Bank of Montreal launched the first “Mosaik MasterCard” in September 2002. The new card offered consumers 900 potential combinations of features and pricing. BMO Bank of Montreal is the largest MasterCard issuer in Canada.

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VISA and the China National Tourism Association Form an Alliance

The China National Tourism Association announced a five-year global alliance with VISA International. The alliance will showcase VISA’s Olympic sponsorship which runs through 2012, the “Beijing 2008 Olympic Games,” as well as jointly promote China tourism worldwide. The agreement also makes VISA the “Preferred Partner of the CNTA.” VISA says special advertising and marketing programs will be developed
jointly to stimulate both inbound and outbound travel and to promote China as a key travel destination. Additionally, VISA’s member and merchant Olympic marketing programs using advertising, direct mail, cardholder communications and Olympic promotions will promote China around the world. VISA will also make special China offers in its “The World’s Best Offers” to VISA’s “Signature” and “Infinite” card clients all over the world. VISA notes that China offers enormous potential for card usage by international travelers whose spending on international VISA cards grew some 145% in that market over the past year.

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FTC Settles Another Ditch the Pitch Complaint

The Federal Trade Commission said Wednesday it reached a settlement of a complaint against a San Diego-based company in regard to the marketing of credit card loss protection and other credit-related goods or services. The complaint against Membership Services, Inc. was filed as part of the FTC’s “Operation Ditch the Pitch.” In pitching advance-fee credit cards, the FTC says the defendants allegedly misled consumers by representing that by purchasing their service, they would receive a low-interest VISA or MasterCard credit card. They also allegedly represented to these consumers that they were affiliated with their credit card issuers when this was not the case. The complaint also charged the defendants with misrepresenting that consumers would be held fully liable for all unauthorized charges made to their credit card accounts if they did not buy the “protection” services offered. The individual defendant is to pay restitution in the amount of $30,000, and the corporate defendant is to pay approximately $50,000.

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Providian Deploys Genalytics Software to Target Offers

Providian has selected the Genalytics “Predictive Suite” for advanced marketing decision support and risk management software to improve the accuracy of promoting products, selecting prospects, and targeting offers. The Genalytics Predictive Suite helps firms like Providian build predictive models designed to improve the accuracy of promoting products, selecting prospects, and targeting offers. Genalytics is a supplier of predictive intelligence software that helps marketers and data analysts increase customer profitability and better manage risk. Providian Financial ([www.providian.com][1]) is a leading provider of credit cards to Middle American customers throughout the U.S. By combining experience, analysis, and technology, Providian seeks to build long-lasting relationships with its customers by providing products and services that meet their evolving financial needs.

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

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VISA GOLD PASSPORT

Laurentian Bank unveiled a new rewards program for its “VISA Gold” credit card offering customized and extraordinary experiences. The new “Passport” rewards program is subdivided into four main categories: “Travel Chic,” “Outdoor Passions,” “Techno Fun” and “A la carte.” Examples of rewards include an African safari, spa relaxation in the Alps, or a Lamborghini for a weekend. Offers are not limited to predetermined packages as any combination is possible. The customer may also combine points and money for rewards.

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Fiserv Credit Processing Gets MAINVIEW

Fiserv Credit Processing Services has selected BMC Software’s “MAINVIEW” systems management solutions to handle its nine million credit processing accounts and 80 million transactions per month. Fiserv Credit Processing Services’ goal of keeping its business-critical transactions available is directly in line with BMC Software’s strategic direction focused on Business Service Management (BSM). MAINVIEW has allowed Fiserv Credit Processing Services to be more proactive in solving its customer problems and allowed the organization to enhance its services. Fiserv is able to ensure the health of local as well as remote transaction servers by having MAINVIEW monitor and notify personnel in the command center of fluctuations in processing rates that fall outside the normal parameters. Fiserv, Inc. provides industry leading information management systems and services to the financial industry, including transaction processing, outsourcing, business process outsourcing and software and systems solutions. BMC Software, Inc. is a leading provider of enterprise management solutions that empower companies to manage IT from a business perspective.

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Discover Card Profits Off 31%; Portfolio Contracts

Morgan Stanley reported this morning that its Credit Services division, including the “Discover Card,” posted lower net income for the fourth quarter compared to 4Q/02. Net income of $131 million was off 31% compared to one-year ago and down 29% compared to third quarter 2003 profits of $185 million. The lower fourth quarter earnings reflect special charges of $35 million in pretax severance and facilities closing charges. Merchant and cardholder fees were $512 million, down 6% from last year’s fourth quarter. Discover says an increase in merchant discount revenue driven by higher sales activity was more than offset by a decline in cardholder late fees. Total transaction volume declined 9.1% to $23.0 billion, due to a lower level of balance transfers. Account growth was flat, but active accounts declined more than 8% from 4Q/02. The credit card net charge-off rate was 6.87%, 91 basis points higher than a year ago but 3 basis points lower than the third quarter. The over-30-day-delinquency rate declined 8 basis points from last quarter to 5.97%, and the over-90-day-delinquency rate declined 9 basis points over the same period to 2.82%. The decline in the over-30- day-delinquency rate was the third consecutive quarterly decrease. For complete details on Discover’s fourth quarter performance visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
4Q/02* 1Q/03* 2Q/03* 3Q/03* 4Q/03* Y/Y CHNG
Outstandings: $51.1b $51.8b $50.9b $50.0b $48.4b -5.3%
Volume: $25.3b $26.1b $24.0b $24.8b $23.0b -9.1%
Accounts: 46.5m 46.5m 46.4m 46.3m 46.1m -0.9%
Actives: 22.6m 22.3m 21.8m 21.3m 20.8m -8.0%
Chargeoffs: 5.96% 6.17% 6.50% 6.90% 6.87% +91bps
Delinquency: 5.96% 6.33% 6.21% 6.05% 5.97% + 1bps
Yield: 12.45% 11.78% 11.97% 11.94% 12.05% -40bps
4Q/02 ended 11/30/02; 1Q/03 ended 2/28/03; 2Q/03 ended 5/31/03; 3Q/03 ended 8/31/03; 4Q/03 ended 11/30/03.
Source Source: CardData (www.carddata.com)

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

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