PMAA Renews Paymentech Contract

Paymentech announced this morning that the Petroleum Marketers Association of America has renewed its two-year contract that designates Paymentech as the organization’s preferred payment processor. Under terms of the agreement, PMAA members combine their collective transactions to gain higher overall volume and qualify for a lower rate. Paymentech says the PMAA program offers rates that reduce the marketers’ processing expense as much as 30% and possibly more in certain cases. Paymentech also provides credit card processing for PMAA’s “Spirit” brand locations. The PMAA is a federation of 44 state and regional trade associations representing approximately 8,000 independent petroleum marketers nationwide.

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COF 3Q/03

Capital One posted its third straight profitable quarter for its international credit card portfolio on September 30th. The issuer posted 3Q/03 net income of $21.5 million, compared to $13.6 million in the second quarter, and $18.1 million in the first quarter. One year ago Capital One lost $1.1 million on its international card activities. Since the third quarter of 2002, Capital One’s international portfolio outstandings have grown 25%, from $5.3 billion to $6.6 billion. Charge-offs for the third quarter of this year were 4.01%, compared to 4.48% in 2Q/03, 4.28% in the first quarter, and 3.61% one year ago. International delinquency for the third quarter of this year was 4.08%, compared to 3.92% in the second quarter, 4.22% in the first quarter, and 3.78% one year ago. Capital One previously reported that its UK operations became profitable for the first time in 2002. At the end of 2002, the U.K. Bank had 2.8 million accounts and $3.9 billion in credit card, revolving loan, and installment loan assets.The UK Bank has been operating independently in France since 2000. Besides the UK, the issuer also has operations and activities in Canada, South Africa and France. For the second quarter, Capital One said the increase in total International segment loans outstanding was principally the result of the application of IBS to originate loans in the United Kingdom and Canada.

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Fifth Third Bank Launches Agent Bank Credit Card Program

Cincinnati-based Fifth Third Bank announced this week it will begin to acquire and manage existing credit card portfolios under an agent bank credit card program. Fifth Third will begin to acquire and manage existing credit card portfolios from institutions that want to continue offering cards with their own brand. Fifth Third will also establish and manage de novo branded credit card programs for institutions that currently have no card program. Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The company has $89 billion in assets, 17 affiliates with 953 full-service Banking Centers, including 132 Bank Mart¨ locations open seven days a week inside select grocery stores and 1,889 Jeanie¨ ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee and West Virginia.

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OBERTHUR 3Q/03

Oberthur Card Systems reported it delivered a record 33 million microprocessor cards during the third quarter. For the payment smart card market, the Company delivered 13.4 million cards during the quarter, a 14.9% gain over the prior quarter. Smart payment card revenues for the third quarter were $26 million, a 6.6% gain over one year ago. The growth in payment cards was driven by EMV migration programs both in Benelux and the United Kingdom where Oberthur recently signed an exclusive three-year contract with the retailer Marks & Spencer for the supply of credit cards. Obethur says sales of banking magnetic stripe cards, loyalty cards, scratch cards and memory cards totalled $19 million, a decline of 6.2% over the second quarter. Magnetic stripe cards activity is globally stable (-1% versus the second quarter) with an increase in Europe and a decline in the US due to a low seasonality quarter. Oberthur says the overall decrease for this segment comes from the continued withdrawal from memory cards activity.

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Fingerhut Direct Beefs-Up Credit Processing for the Holidays

Fingerhut Direct has implemented GA-based CoreCard Software’s “CoreISSUE” credit management and transaction processing system providing 80 customized features, 11 custom interfaces to existing and external systems including those at Equifax and the conversion of existing accounts from Fingerhut’s incumbent processing system. It also included the delivery of an initial version of CoreCOLLECT, a workflow-driven credit recovery application that is utilized by Fingerhut’s in-house team as well as its outsourced collections service providers. Fingerhut Direct Marketing, Inc. is a direct to the consumer marketing company selling a broad selection of general merchandise. CoreCard provides real-time cardholder and merchant account management and transaction processing solutions for issuers and acquirers worldwide.

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ACE Cash Express Renews Travelers Express Contract

Dallas-based ACE Cash Express has extended its money order agreement with Viad’s Travelers Express Company. Under the amendment, Travelers Express will pay ACE a total of $3.4 million in signing and annual bonuses. During fiscal 2003, ACE sold money orders with a face value of $1.6 billion. ACE is also an agent for MoneyGram money transfers. In fiscal 2003, ACE customers sent $400 million MoneyGram money transfers, under an existing agreement with MoneyGram Payment Systems, an affiliate of Travelers Express. ACE Cash Express has a total network of 1,174 stores, consisting of 968 company-owned stores and 206 franchised stores in 36 states and the District of Columbia.

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eBay and MBNA Take New Card North of the Border

eBay and MBNA have launched the “eBay Anything Points MasterCard” in Canada. For retail purchases charged on the eBay credit card, cardholders will earn a special eBay currency worth $.01 USD for each point, which can be spent on eBay sites. eBay “Anything Points” can also be used to pay eBay sellers in Canadian Dollars, U.S. Dollars, Pounds Sterling, or Euros. The new credit card is the latest expansion of the “eBay Anything Points” program, launched in May 2003. eBay launched a similar credit card in the U.S. in early October. Under the U.S. program, MBNA and Providian are both issuing the new co-branded “eBay MasterCard.” MBNA will issue the card to “super-prime” and “prime” credit, while Providian will issue the card to “prime” and “near-prime” credit. The new credit card is the latest expansion of the “eBay Anything Points” program, launched in May. In 2001, Providian launched the co-branded “PayPal VISA” card. PayPal was acquired by eBay. (CF Library 10/2/03)

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Coinstar Revenues Up 14% in Third Quarter

WA-based Coinstar reported revenues of $48.7 million and net income of $6.9 million for the third quarter, compared to third quarter 2002 revenues of $42.9 million and net income of $8.8 million. During the quarter, Coinstar expanded its prepaid wireless “TOP-UP” service and the “Truth prepaid MasterCard.” Retailer acceptance continues to be strong and the Company believes it is on target to sign up approximately 500 locations by year end. The company expects fourth quarter revenues to be between $43.0 and $44.5 million, and for 2004 revenues to be between $178 to $188 million. Coinstar owns and operates the only multi-national network of supermarket-based machines that offer self-service coin counting and other electronic services. The company has more than 10,000 machines in its network. For complete details on Coinstar’s third quarter performance visit CardData (www.carddata.com.)

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Alliance Data Systems Prices Secondary Stock Offering

Dallas-based Alliance Data Systems has priced its secondary public equity offering of 7.5 million shares at approximately $27 per share. In the event the underwriters exercise their over-allotment option, Welsh, Carson, Anderson & Stowe, Alliance’s largest stockholder, will sell up to an additional 1,130,006 shares at the offering price. Alliance will not receive any of the proceeds from the offering.

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Another Brokerage Card Hits the U.S. Market

Chicago-based full-service investment firm William Blair & Company has teamed with MBNA to launch a VISA program that deposits cardholder rebates into client designated securities account. The new “William Blair & Company Quantum VISA” is targeted at high-net-worth investors. MBNA’s “Quantum” product, launched in June 2000, offers credit card limits of up to $250,000 with the option of extending credit limits up to $1 million through related loans. Specific terms of the William Blair/MBNA program are not being disclosed. William Blair & Company has $22 billion is assets under management. Last month, online brokerage firm ShareBuilder Securities Corporation teamed with Bank One to launch the “ShareBuilder Platinum VISA.” Under the “Sharebuilder” program, cardholders earn one point for every dollar of credit card purchases. Once the cardholder earns 2,500 points, a $25 deposit is swept into a ShareBuilder brokerage account. Cardholders can earn a maximum of 60,000 points per year. (CF Library 6/6/00; 9/18/03)

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Corillian Gets New CFO Next Month

OR-based Corillian has hired Paul Wilde as CFO to replace Steve Sipowicz on November 14th. Wilde has more than 25 years of experience having served in various executive roles in finance, strategic planning and business operations. Wilde most recently served as CEO of Spear Technologies, an enterprise resource planning software company. Wilde has also held chief financial officer positions at Viasoft, Inc., Candle Corp. and Informatics General Corp. Corillian is a premier provider of enterprise software and services for the financial services industry. Empowered with Corillian solutions, some of the world’s most visionary financial institutions provide their customers with the tools to manage their finances more effectively.

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