MasterCard 3Q/03 Revenues Up 10%, Profits Down 4%

MasterCard reported third quarter net income of $74.4 million compared to $77.9 million one year ago. However, the network posted a year-to-date net loss of $319 million due to the $721 million charge taken in the first quarter for the settlement of the U.S. merchant lawsuit. Total revenues for the quarter were $594 million compared to $539 million for 3Q/02. Advertising and market development expenses rose 33% for the quarter to $183 million. During the quarter MasterCard filed a motion before a District Court judge seeking to enjoin VISA from enforcing a newly-enacted bylaw requiring VISA’s 100 largest issuers of debit cards in the USA to pay a fee if they reduce their debit volume by more than 10%. The motion is scheduled to be fully briefed by November 21st, and oral argument has been set for November 24th. Also during the quarter, the European Commission issued a “Statement of Objections” challenging MasterCard’s cross-border multilateral interchange fee. MasterCard’s response is due on December 25th. MasterCard’s application with the Federal Court of Australia seeking to overturn newly adopted RBA regulations was also rejected during the third quarter. MasterCard appealed the decision on the grounds that the Federal Court made a number of reversible errors. It expects to have a hearing on its appeal in February or March. MasterCard is also a defendant in a currency conversion lawsuit filed in California which has a trial date of October 10, 2005. For complete details on MasterCard’s third quarter results visit CardData ([www.carddata.com][1]).

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

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USTT’s Business Express Centers Link to Kinko’s

USA Technologies’ credit card-activated “Business Express” centers, installed within top hotels, will now be linked to Kinko’s locations nationwide through a new agreement. USA Technologies expects the agreement to generate additional revenue, strengthen the company’s leadership in unattended office centers, and substantially improve customer convenience and service levels. For Kinko’s, the agreement offers additional points of presence where customers may access the company’s network of locations and experienced staff. Kinko’s is the world’s leading provider of document solutions and business services. USA Technologies is a leader in the networking of distributed assets, wireless non-cash and m-commerce transactions, associated financial/network services and interactive media technology and energy management.

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Brits Expect to be Frugal During Holiday Season

Concerns over credit card interest rates may impact Christmas spending this year. Brits are planning to tighten their belts spending £16 less on gifts for the festive season, according to debit card “Switch.” However, overall, Brits are expected to spend £868 each on presents, cards, accessories – just £6 more than last year. UK retailers appear to be echoing this view with 38% saying that they expect consumers to spend around the same this year compared to last Christmas, and 36% saying consumers will spend slightly more. However, one in five retailers are expecting us to spend less this year.

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GPN Closes $190 MM DolEx Deal

Global Payments has closed its deal to acquire Latin America Money Services and DolEx Dollar Express for $190 million. DolEx Dollar Express is a leading provider of consumer-to-consumer electronic money transfer services to the large and rapidly growing Latino community living in the U.S. and their Latin American families abroad. Global Payments Inc. is a leading provider of electronic transaction processing services for consumers, merchants, Independent Sales Organizations, financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Latin America and Europe.

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Scotiabank & Paymentech Canada Pilot Chip & PIN in Barrie

Scotiabank has partnered with Paymentech Canada to launch the first VISA cards in Canada containing a chip that is protected by a PIN. Paymentech Canada will participate in the pilot by deploying special chip-enabled, point-of-sale terminals to Paymentech merchants in the Barrie area. When conducting credit transactions with their new chip card at participating merchants,
customers will be prompted to enter a PIN, instead of signing a transaction receipt, similar to the “Chip & PIN” project in the UK. Paymentech is a single-source provider of VISA, MasterCard and Interac Direct payment processing in Canada.

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Encore Capital Income Doubles in 3Q/03

Collections firm Encore Capital Group reported pretax income for the third quarter of $5.2 million, 96% increase over 3Q/02. Gross collections for the third quarter increased by 26.7% to $49.1 million. Gross collections were $49.1 million in third quarter of 2003, an increase of 26.7% or $10.4 million over $38.7 million in the same period of 2002. The Company says it is looking for more non-credit card paper in the near-term. The Company’s exclusive “Secured Financing Facility,” under which it purchases credit card receivables, expires at the end of 2004. For complete details on Encore’s 3Q/03 performance visit CardData (www.carddata.com).

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ASK BLUETOOTH READER

Sophia Antipolis-based ASK has introduced a new “Bluetooth” handheld contactless smart card reader designed for use in mass transit areas, such as public transport, amusement parks, government offices, etc. The new “HCR825” reader is “ISO14443” and “ISO7816” compliant enabling transport staff to make a sale, top-up a passenger’s card or issue a receipt. A group of inspectors can exchange data and alert messages, to blacklist users in a fraud situation. The “HCR” product family is designed to be a mobile extension of existing systems. ASK provides a kit to facilitate and enhance application software development. The “HCR825” is part of a range of “Bluetooth” peripherals specifically designed to meet mass transit company needs. ASK hassupplied over 20 million contactless cards and contactless paper tickets for use in more than 25 countries and in 70 towns and cities in Europe, Asia and the USA.

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Equitex’s Chex Services Sold for $63 MM

Las Vegas-based iGames Entertainment and PA-based Money Centers of America have inked a deal to acquire CO-based Equitex’s Chex Services subsidiary for $63 million. The sale of Chex Services was unanimously approved and ratified by the Equitex board of directors after Equitex’s independent advisor determined that amongst other factors, the iGames Entertainment and Money Centers of America, Inc. combination of seasoned management, superior financing, and proprietary products provided more value for the Equitex shareholders than the previously announced transaction between Equitex and Cash Systems, Inc. iGames Entertainment, Inc. develops, manufactures and markets technology- based products for the gaming industry.

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Hakrinbank Launches Internet Banking Solution with Euronet’s Help

Paramaribo-based Hakrinbank NV has inked a deal with Su-Euronet Worldwide to launch the first Internet banking solution in Suriname. Hakrinbank has 51,000 customers, including 17,000 cardholders. Euronet Internet Banking is a feature-rich, state-of-the-art browser-based product that enhances the customer experience, enabling customers to view account balances and
history, transfer funds and perform bill payment transactions. The solution also has four layers of security using secure socket layer and industry standard firewalls.

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Holiday Sales Up 5.2% This Year

The Ernst & Young Retail and Consumer Products Group yesterday projected that the 2003 retail holiday sales increase for November and December will be 5.2%, compared to a 3.4% increase for the same period last year. According to Jay McIntosh, Americas Director of the Retail and Consumer Products Group for Ernst & Young, “The economy has been bolstered by increases in disposable income and housing starts combined with federal income tax rate reductions and low prime interest rates. Jay McIntosh is the Americas Director of the Retail and Consumer Products Group for Ernst & Young. He is responsible for the group’s strategy, sales, marketing, and thought leadership efforts as well as developing and overseeing relationships with many of the largest and best-known retail and consumer product companies throughout the Americas.

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VISA Modifies Settlement Service Fee Policy

To appease the U.S. Department of Justice, VISA announced yesterday it will waive its newly adopted “Settlement Service Fee” bylaw for members switching to American Express or Discover. The new bylaw was adopted to discourage VISA members from switching their off-line debit card business to MasterCard, in order to escape the settlement payment in the Wal-Mart debt card lawsuit. In September, MasterCard decided to take VISA to federal court after VISA declined to act on its “cease and desist” letter. MasterCard asked VISA to rescind its new bylaw, which imposes huge fines on the top 100 VISA issuers if they switch to MasterCard and/or reduce their VISA debit volume. The “Settlement Service Fee” bylaw requires VISA top off-line debit card members, who switch to MasterCard’s off-line debit card, to pay a $20 million fine for each percentage point of lost VISA off-line debit volume. Following the recent settlement of the Wal-Mart litigation, VISA told its top 100 debit issuers that for the next 10 years, they would face significant fines, based on a share of VISA’s $2 billion settlement with the merchants, if they reduced their VISA debit volume from September 30, 2002 levels.

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U.S. Bank Deploys Cyota’s Secure Suite

U.S. Bank has added Cyota’s “SecureSuite” to boost enrollment to its “Internet Banking” service via “Verified by Visa.” The integration of the systems creates an extremely user-friendly experience, while not interrupting the cardholder’s shopping experience. Following an enrollment to Verified by Visa, U.S. Bank sends an email to each new Verified by Visa participant thanking them for joining the service and prompting them to click on a link and activate the Internet Banking service as well. U.S. Bancorp, with assets of $189 billion, is the 8th largest financial services holding company in the United States. Cyota is the leading payment security provider for financial institutions.

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