BART Finally Decides to Join the TransLink Smart Card System

San Francisco’s BART has finally decided to go forward with joining the “TransLink” smart card program. The decision follows an agreement reached last week with the Metropolitan Transportation Commission. The MTC agreed to fund some of cost of upgrading the BART ticket system. Under terms of the agreement, BART will be able to continue to offer the 6.25% discount currently available to its high value ticket customers with the regional smart card. The deal will also enable BART customers to add value into the “TransLink” cards in BART stations from the ticket vending machines. The “TransLink” system will be the largest regional smart card based transit fare collection system in the USA. It will provide a single payment system encompassing all major transit systems operating in the Bay Area, including buses, ferries, and light, medium and heavy rail systems. When fully operational, “TransLink” is expected to handle more than 25 million smart card transactions every month. The program has been in a pilot since January 2002. (CF Library 8/28/03)

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SAFE-SEND EXPANDS

Santander Serfin and Bank of America have added the “VISA Electron” symbol to their “SafeSend” ATM transfer card. The upgrade will enable cardholders to now use “SafeSend” cards in more than 120,000 stores in Mexico. The two banks also announced that customers in the U.S will now be able to view the exact amount of money available in pesos at the time funds are added to the card, since the exchange rate is applied when funds are loaded to the card. Bank of America introduced the “SafeSend” product in April 2002 to enable Hispanic U.S. customers to make money available to friends and family in Mexico through ATMs. Fees for ATM transactions are waived when customers use any of Santander Serfin’s 1,800 ATMs within Mexico. Bank of America Corporation acquired 24.9% of Grupo Financiero Santander Serfin in March.

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Metris Unloads $550 MM in CDs to Conform with OCC Request

In a move to further satisfy regulators, Metris Companies announced Friday the sale of $550 million in federally insured deposits at Direct Merchants Credit Card Bank. The OCC requested the bank to sell its brokered and retail jumbo certificates of deposit by September 30th to eliminate the risk to the FDIC. The OCC extended the deadline to October 10th. Metris will take a third-quarter 2003 pre-tax charge of approximately $30 million due to the sale. On Thursday of last week, Metris announced it will cut 25% of its senior management team. (CF Library 9/26/03)

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Bank One Has Teamed With the New Jersey Devils to Promote Cards

Bank One has developed a new way to promote its card products through a National Hockey League team. The New Jersey Devils will print an ad for a Bank One credit card on its season tickets for the 2003-04 season. The promotion marks the first time a professional sports team has published a Bank One ad on its tickets. Bank One says many businesses purchase season tickets and give away single-game tickets to various clients throughout the season. Therefore one stack of tickets for one seat could produce ads to 41 different people. Bank One also offers its card through on-site marketing at every Devils home game. The Devils, the NHL’s defending “Stanley Cup” champions, have been a Bank One partner since 1995.

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Offshore Outsourcing to Grow Significantly in the Fourth Quarter

Outsourcing activity among US financial services companies to offshore areas, such as India, will grow by as much as 20% in the 4th quarter according to a new survey. ICICI OneSource and A.T. Kearney estimated that US banks, brokerage firms, insurance companies, mutual funds and other financial services firms will relocate eight percent of their workforce offshore, representing more than 500,000 jobs, over the next five years. These relocations are expected to reduce annual operating costs by more than $30 billion. ICICI OneSource is one of the largest third-party BPO services companies in India, with offshore facilities in Mumbai and Bangalore and international business development offices in New York and London.

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First Data & Concord Merger Produces Speculation & Concerns

The merger between First Data and Concord EFS continues to generate speculation that regulators will require some changes in the deal. Last week, rumors surfaced that First Data will unload its majority ownership in the NYCE network to appease government regulators. FDC will not confirm or deny the rumors, but insists that it does not believe any changes in the business of either First Data or Concord in connection with the merger are necessary or appropriate. Meanwhile, a coalition of leading Hispanic organizations has informed the U.S. Department of Justice of its concerns over the FDC-Concord merger. The group made up of the Hispanic Alliance for Progress, the Mexican American Grocers Association, the Latino Coalition and the Association for the Advancement of Mexican Americans, says it believes the merger will adversely affect competition and result in higher prices and fewer services in numerous payment systems markets. They say the merger will be particularly harmful to the millions of Latinos in the USA without traditional banking relationships. They say unbanked consumers pay supra-competitive prices for money transfers because First Data/Western Union dominates the remittance market. First Data has over 80% of the market in many segments and they say it has been able to increase prices without restraint in the remittance market. The group also believes the First Data-Concord merger threatens innovation in the remittance market. For the past two years, Concord’s STAR has been developing an ATM- to-ATM based remittance product which offers significantly lower prices for wiring money.

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MINI VISA

United Overseas Bank Ltd. has launched a “VISA Mini” credit card and a “VISA Infinite” credit card. Applicants for the miniature VISA card are entered into a contest to win a “MINI” automobile. Applicants receive 10 chances to win when they apply, and one extra chance with each $50 outstanding on the statement. UOB is giving away a “MINI One” or “MINI Cooper S.” The bank is also offering various electronic gadgets for referrals. UOB says it expects to issue 100,000 “VISA Mini” cards by next September. Meanwhile, UOB has launched its exclusive “VISA Infinite” credit card. Reportedly, UOB is targeting 4,000 of Singapore’s affluent for the card. UOB also indicated it will roll-out “VISA Infinite” cards in Hong Kong, Malaysia, and Thailand over the next two quarters.

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New Coles Myer’s Source MasterCard Sparks Lawsuit

The Commonwealth Bank of Australia has filed a breach of contract lawsuit against MasterCard over the new “Coles Myer’s Source MasterCard” to be launched in October. CBA insists that exclusivity clauses in its contract with MasterCard prohibit the network from working with another retailer in a co-branding relationship. CBA currently issues a Woolworths MasterCard. GE Capital will issue the new “Coles Myer’s Source MasterCard.” CBA filed the action in NSW Supreme Court. GE Consumer Finance recently applied for a specialist banking license in Australia and is set to launch private label cards with Harvey Norman, Clive Peters, and Freedom very soon.

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Smart Debit Card for Water Access Launched

Cebu, an island in the middle group of the Philippine archipelago, has launched the first solar powered, prepaid municipal water distribution system that utilizes a smart card. The “AquaCard” and “AquaMeter” system by WorldWater Corp enables the community to offer clean, reliable drinking water to residents, who pay for water via a debit card similar to a prepaid phone card. The “AquaCard” is inserted into the “AquaMeter” solar pumping station and the requested number of liters of water is dispensed and the card is debited. A microchip on the card reads when it needs to be recharged by the customer at the community bank. The deal between the municipality and WorldWater runs for 10 years.

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