VeriFone’s Omni 3750 Continues to Lead the Market

The most successful product launch in VeriFone’s 22-year history just surpassed the 450,000 terminal milestone. The “Omni 3750” has been certified by all of the leading U.S. processors, supports solutions from over 30 value-added application providers, is shipping to merchants through existing acquirer and ISO channels, and has been installed in over 70 countries. The terminal offers swap-out capabilities of different communications modalities, including 14.4kbps dial-up, SSL-protected broadband DSL/cable, Wi-Fi, and Ethernet. It is also “EMV Level 1” and “Level 2” type approved, and has “Triple DES” and “PED” certification. VeriFone also recently announced the first Wi-Fi “Omni 3750” payment system at The Mall of San Marino in Ecuador and the first terminal deployment at US Ford Mercury dealers needing to migrate from dial to DSL.

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Providian’s Charge-Offs and Delinquency Rise

Providian reported Tuesday that charge-offs for its securitized card loans rose sharply during October to 17.19%, after a sharp one-month decline. Providian’s delinquency rate edged up to 12.38%, from 12.17% in September and 12.12% in August. Providian recently reported net income for the third quarter of $85.3 million, double its profits for the third quarter of last year. However, Providian’s managed loans declined to $16.95 billion following the sale of approximately $667 million in loans on August 1st. For complete details on Providian’s 3Q/03 performance visit CardData (www.carddata.com).

SECURITIZED PVN 2003
Month Charge-offs Delinquency
Jan 03 19.38% 13.26%
Feb 03 18.23% 12.89%
Mar 03 19.89% 12.46%
Apr 03 19.80% 12.27%
May 03 20.40% 11.92%
Jun 03 16.76% 11.98%
Jul 03 17.39% 11.96%
Aug 03 17.04% 12.12%
Sep 03 15.65% 12.17%
Oct 03 17.19% 12.38%
Source: CardData (www.carddata.com)

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Global Prepaid Market to Reach $500 Billion by 2007

A new research study shows that prepaid payment applications will account for over $240 billion in payments globally this year. TowerGroup says it expects that all prepaid applications will exceed $500 billion worldwide by 2007. The research firm believes the early success of prepaid applications in closed environments like telecom and retail gift cards will lead to a new variety of opportunities over the coming decade – particularly where enhanced user convenience and control are key, cash and checks can be displaced, or existing credit and debit card products are a poor fit. TowerGroup says prepaid offers a major opportunity to build upon the existing branding, acceptance, and infrastructure and offer the next generation of bankcard products. It will be the engine for both product innovation as well as a major driver to enter new markets and grow revenue. Prepaid products will reduce costs for funding by businesses and government agencies, while simultaneously offering greater utility and convenience for consumers.

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PayPass is Ready for Prime Time After Two Pilots

MasterCard yesterday declared its new contactless consumer payment system a success, following trials in Orlando and Dallas. The network says it will now expand its “MasterCard PayPass” program to additional locations. More than 16,000 cardholders and more than 60 retail locations participated in the nine month Orlando trial of “PayPass.” MasterCard says its biggest success was in the QSR environment where “PayPass” shaved between 12-18 seconds off the purchase time as compared to cash. Earlier this year, MasterCard began working with Nokia to incorporate “PayPass” into mobile phones for a trial in Dallas. MasterCard says the Dallas trial showed that the average “PayPass” payment made using a mobile phone was six seconds faster than using a card. MasterCard also released a survey yesterday that showed nearly 40% of U.S. adults carry less cash with them compared with 5 years ago. Findings also showed that 49% of consumers carry $20 or less in their wallet and 86% of consumers reported that they want to use cash less often than they currently do. MasterCard says the results are in line with 2002 studies which showed that 53% of consumers would use “PayPass” to replace cash payments if their banks offered it to them.

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AmEx Names New Treasurer and Corporate Governance Officer

American Express has named Paul Hough, a 19-year employee, as SVP/Corporate Treasurer, and has named Stephen Norman to the newly created position of Corporate Governance Officer. As treasurer, Mr. Hough succeeds Walter S. Berman, who now assumes the role of executive vice president, market risk, and remains chief financial officer of American Express Financial Advisors. American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.

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MasterCard Introduces STV Card Replenishment Tool

MasterCard has introduced a payment mechanism that provides cardholders with a new way to reload a prepaid or stored-value account using their MasterCard debit or credit card. The new “MasterCard rePower” is being deployed first in the USA by Chase to enable cardholders to purchase prepaid airtime for their Cingular phones. In South Africa, “MasterCard rePower” is enabling South African consumers and merchants to use their debit or credit to purchase prepaid airtime from the regions’ three major providers of cell phone service for a variety of uses, such as prepaid mobile phones and payphones. Under the program, cardholders provide their contact and payment information, their mobile phone number and then select a “rePower” code or password for future authentication. Once registered, a cardholder need not provide detailed payment information again to use the service. Payment details are stored in a secure, password-protected account for them to access whenever they’d like to replenish their prepaid accounts using their registered debit or credit card. In the future, MasterCard plans to expand “MasterCard rePower” to enable the replenishment of gift cards, prepaid MasterCard cards, and stored value accounts such as transit and tolls.

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Diebold Unveils Drive-Up Opteva ATM

Diebold unveiled a drive-up version of its “Opteva” ATMs. The new “Opteva 750” island unit can easily be configured or upgraded with full deposit automation functions. Diebold says consumers will notice the increased lighting on the front of the ATM, together with LED task lighting to guide them through a transaction. The company says the “Opteva 750” enables a smooth, clear transaction flow, allowing more efficient and shorter transactions to reduce transaction error rates. The “Opteva 750” employs USB 2.0 architecture — a feature exclusive to its “Opteva” family. Diebold’s “Depository Module” accepts a check deposit without the use of an envelope. The bulk note acceptor can accept a stack of 100 notes offering immediate authentication and, depending on the policies of the financial institution, credits consumer accounts.

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Postilion Realtime 5.0 Goes Linux Next Year

FL-based Mosaic Software says its forthcoming release of “Postilion Realtime 5.0” in the second quarter of next year, will be available on Linux in addition to Windows and will also support both SQL Server and Oracle. Mosaic Software is a global EFT software company with offices in the United States, the United Kingdom, South Africa, and Australia. The company has over 500 installations in more than 30 countries, providing leading-edge software solutions to financial institutions, retailers, network processors, mobile operators, and portals. Mosaic Software’s product, Postilion, is at the forefront of next- generation payment processing software.

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Americans Want a Bank that Anticipates Their Needs

A new survey conducted for NCR by Harris Interactive has found that 43% of the survey respondents agree that their bank anticipates their needs for financial services and products, but when asked what elements of customer service are most important, 68% noted that it’s extremely or very important that their bank demonstrate the ability to understand their needs. Survey respondents were asked to compare the importance of several elements of customer service in conjunction with how they feel about the personal relationship they currently have with their financial institution. Harris Interactive fielded the survey from November 5-7, 2003, via its QuickQuery online omnibus, interviewing a nationwide sample of 2,281 U.S. adults ages 18 and over. NCR Corporation is a leading global technology company helping businesses build stronger relationships with their customers.

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MULTOS Consortium Announces New Open Platform for EMV Smart Cards

The MULTOS Consortium this week will be announcing a new, entry-level, open smart card operating system specification to support the transition of financial organizations to
their first EMV card issuance. The new specification exploits much of the security, flexibility and software interoperability of the original MULTOS platform but gives issuers better
choice and control by allowing them to individually manage vendors across the supply chain. The new platform’s certificate formats, and its card enablement and application load and delete processes are consistent with MULTOS. A number of innovations are introduced which make possible multi-application cards with as little as 4K of EEPROM memory. A new FREEZE command allows the card issuer to preserve the state of the card and prevent any further loading or deleting of applications. This command can be issued at any time during the card lifecycle and has no effect on changes to applications data. First silicon is expected in the first half of 2004.

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Two Major Conferences Scheduled for This Week

This is the week for two of the biggest and most important industry events of the year. BAI’s Retail Delivery Conference is set for New Orleans, while the Cartes 2003 event will be held as usual, in Paris. The BAI event is celebrating its 25th anniversary this year. The annual conference draws upwards of 5,000+ attendees and 300+ exhibitors. This year BAI snagged Richard Branson, Chairman of Virgin Group, as a keynote speaker. Other top speakers include Jamie Dimon, Chairman and Chief Executive Officer of Bank One; Lawrence Bossidy, retired Chairman and Chief Executive Officer of Allied Signal and Honeywell; and Louis Gerstner, retired Chairman and Chief Executive Officer of IBM. BAI’s Retail Delivery Conference & Expo 2003 will be held November 18th to 20th at the Ernest N. Morial Convention Center in New Orleans, Louisiana. The Cartes 2003 event in Paris will include 15 conferences over 3 days, plus a program for IT Security. The Cartes event will open with a Card Summit conference on November 18th from 9am to 5pm. The Cartes 2003 show has designated Brazil as the spotlight country this year. More than 400 exhibitors, 14,000 visitors, and 1,500 participants coming from 120 countries will meet for three days for Cartes & IT Security 2003. The event is scheduled to run through November 20th, at the Paris-Nord Villepinte Exhibition Centre – Halls 3 and 4. CardWeb.com will have representatives on hand for both events.

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Canadian Tire Financial Services Options MasterCard Up 28% in the Third Quarter

Canadian Tire Financial Services reported a significant expansion of its “Options MasterCard” portfolio during the third quarter. Card receivables were up 27.5% to $2.15 billion. During the quarter, Canadian Tire Bank converted 247,000 retail card accounts to “Options MasterCard” accounts, bringing the year-to-date total of conversions to more than 293,000. An additional 151,000 new accounts were secured and Financial Services now has more than 3.1 million “Options MasterCard” accounts, an increase of 49% year-over-year. Earnings before income taxes for the third quarter were up 3.8% to $26.6 million compared to last year.

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