Jet Opens West Coast Office and Hires McCune

IL-based plastic card manufacturer, Jet, has opened a California sales office and has hired Keith McCune VP/Sales. Operating since 1947, Jet’s over 100,000 square feet plant is ideally located in Downers Grove, Illinois, within close proximity to Chicago and O’Hare International airport. With over $30 million annually in sales and 200 employees, Jet is a nationally recognized graphic communications company. Jet is known for providing premium quality products and services to clientele from small design firms to Fortune 100 companies. Jet is a unique business providing customized print communication solutions across market segments. Keith’s recent experience as Director of Sales and his nearly thirty years in the industry make him a valuable resource for the marketplace.

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JCB Launches 3-D Secure Internet Authentication Program

As “Verified by VISA” and “MasterCard SecureCode” slowly gain acceptance by cardholders, JCB has launched its own Internet authentication program. JCB’s new ” J/Secure,” is compliant with the “3-D Secure” protocol and, like other authentication schemes, adds a password identification step to the traditional online shopping process. JCB says several vendors are already prepared to provide “J/Secure” software and many others are developing “J/Secure” solutions that willsubject to testing by JCB. Currently, JCB’s merchant network includes nearly 11 million merchants with cards issued in 18 countries. There are 48.4 million JCB cardholders worldwide.

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eFunds Extends American Airlines FCU ATM Contract

American Airlines Federal Credit Union has extended its contract with eFunds for risk management services and third-party electronic payment processing for AAFCU’s ATM locations, used by 200,000 members nationwide. AAFCU has branches located across the country, including concentrations in Dallas-Ft. Worth, Chicago, New York, Miami, Tulsa and Los Angeles. According to a 2002 Credit Union National Association (CUNA) study, credit union membership in the U.S has been on the rise since the credit union concept first took hold in the early 1940s. American Airlines Federal Credit Union, headquartered in Ft. Worth, Texas, serves the financial needs of American Airlines employees and their families. Headquartered in Scottsdale, Ariz., eFunds Corporation is an industry leader with nearly 30 years of experience and expertise in electronic payments.

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DIGIPASS & CAP

VASCO’s “Digipass 800” smart card terminals will be used for the first European chip authentication program for e-commerce. Barclaycard, in conjunction with MasterCard, will offer its customers a service to perform secure online e-commerce transactions, while using the same pin and the same card as they use for their online banking and ATM transactions. The “European CAP” system is expected to save costs for bankcard issuers by the reducing the number of PIN codes used by the end user, and possibly cut marketing and operational costs too. VASCO’s “Digipass 800” is used by over 2 million cardholders worldwide. The Company provides its services and products to approximately 250 banks with over 10 million end users. VASCO’s “Digipass 800” is an official partner product in MasterCard’s “EMV Program.”

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International Card Establishment Acquires Major CardService Agent

Los Angeles-based International Card Establishment is acquiring Worldwide Business Services, Inc., one of the largest ISO agencies within First Data’s CardService International unit. The terms of the Letter of Intent call for I.C.E. to issue up to 600,000 shares of its restricted common stock and assume approximately $230,000 in Worldwide Business Services debt. The acquisition is subject to due diligence. Since its founding less than two years ago, Worldwide Business Services has grown its revenues to $150,000 per month (unaudited) and its revenues are projected to reach approximately $3 Million in 2004. I.C.E. is a rapidly growing provider of diversified products and services to the electronic transaction processing industry.

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Most Asia-Pacific Merchants Understand Advantages of EMV Cards

A new study of merchants located in eight Asia-Pacific countries has shown that 6 out of 10 merchants believe that smart card technology will be beneficial to their organizations. The research, by MasterCard International, found that approximately half the merchants surveyed are aware of the salient attributes of smart card technology and have initiated activities in preparation for the EMV compliance deadline of January 2006. Of the merchants surveyed in Australia, Hong Kong, Japan, Korea, Malaysia, New Zealand, Singapore and Taiwan, 77% accept credit card payment, in addition to cash. Merchants singled out fraud reduction as the most important benefit of smart cards. Other salient benefits identified include more efficient transaction processes, wider range of functions and applications of smart cards, enhanced loyalty programs, cost savings, and decreasing the number of POS terminals.

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The Moscow Social VISA Card Nears 1 Million Users

VISA International reported last week it has issued more than one million smart cards since July 2002 as part of the “Moscow Social Card” program. The card provides Moscow residents who receive social benefits, students, pensioners, members of the armed forces, public employees and others with a smart card carrying personal identity and benefits details, along with a VISA payment application. The multi-application card currently includes metro ticketing, health and medical insurance details, as well as access to government subsidies and discounts in specified retail stores. The “Social VISA” can be used at 45,800 “VISA Electron” acceptance locations across Russia as well as at more than 12 million merchant locations with electronic point-of-sale devices worldwide. This is the first use of a dual interface card in Russia and the first implementation within VISA’s CEMEA region. VISA has 6.1 million cards in-force in the country, producing more than $9.6 billion in annual sales volume.

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Gemplus Lands Major Smart Card Deal in Brazil

Sao Paulo Transporte has selected Gemplus’ “GemEasy8000” cards for the city’s new contactless ticketing system. Gemplus BankNote will initially deploy 2.5 million such cards in Sao Paulo, Brazil to students, pensioners and employees that receive corporate-sponsored travel passes. Students and pensioners currently travel free under government regulations, and Brazilian companies are also legally obliged to subsidize 100% of employees’ public transport costs. Approximately 16,000 vehicles in Sao Paulo are being equipped with smart card readers that will enable faster and more efficient fare checking. The public bus transportation system in Sao Paulo is one of the world’s busiest networks, serving over five million commuters every day. The system will go live in 2004.

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PayPal and eBay Get Hit with Another Process Lawsuit

AT&T has filed a patent infringement suit against PayPal and eBay. AT&T says that the PayPal/eBay online payment systems, violate an AT&T U.S. patent that covers transactions in which a trusted intermediary securely processes payments over a communications system such as the Internet. AT&T’s patent was originally filed with the USPTO in 1991. In July of 1994, the USPTO granted AT&T a patent for its invention. AT&T said it notified both PayPal and eBay in 2002 that they were using technology covered by AT&T’s patent in the PayPal and BillPoint payment systems. AT&T offered to license the patented technology to each of the companies, but were never able to reach an amicable agreement. Last month, PayPal and Bank One reached a settlement agreement to dismiss two lawsuits failed against each other. On September 6, 2002, Bank One filed suit against PayPal in the U.S. District Court alleging patent infringement on a patent that covers a cardless Internet payment system for its customers. On September 29, 2003, PayPal filed suit against Bank One in U.S. District Court alleging patent infringement on its Internet payments processing patent issued in 1998. (CF Library 10/20/03)

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South Korean Issuers Not Benefiting from Recovery

Liquidity problems among South Korea’s credit card issuers have not improved as the overall economy picks up. CardFlash International reported last week that LG Card is looking for $850 million by the first half of 2004. Woori Bank and Kookmin Bank agreed to pump $1.7 billion of fresh loans and roll over maturing debt into LG Card. LG Card posted $850 million in losses through the third quarter. Korea Exchange Bank says it is seeking to merge with KEB Credit Service to resolve liquidity problems with the credit card unit. KEB has lost $700 million so far this year. Other credit card issuers have posted significant losses as consumer credit defaults soar. Through the third quarter, Samsung Card has lost nearly $900 million; Woori Card $650 million; Hyundai $500 million, Shinhan $85 million; and Lotte cards $65 million. Fitch Ratings warned that the ailing credit card sector could damage the ratings of South Korean banks and corporations, even though 3.9 trillion won has been pumped into the credit card industry this year.

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KeyCorp Expands SFA ATMs in Colorado

Denver-based Native American Bank of Denver has joined Cleveland-based KeyCorp’s surcharge-free ATM network. The agreement provides Native American Bank customers with surcharge-free access to Key’s network of more than 1,347 automated teller machines in Alaska, Colorado, Idaho, Indiana, Michigan, New York, Ohio, Oregon, Utah, and Washington as well as 716 ATMs in ARCO am/pm retail locations in Arizona, California, Nevada, Oregon and Washington. Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $84 billion. Key companies provide investment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally.

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