eFunds Names Richard Almeida to the Board

AZ-based eFunds has named Richard Almeida, retired chairman and CEO of Heller Financial, to its board of directors. Almeida has 35 years in the financial services sector, and will be an instrumental participant in formulating and overseeing strategies for creating profitable growth within each of the markets eFunds serves. Prior to his 14 year tenure at Heller Financial, Almeida held a variety of management and banking positions with Citicorp and with Citibank, both subsidiaries of the Citigroup, a global financial services company with some 200 million customer accounts in more than 100 countries. eFunds Corporation is an industry leader with nearly 30 years of experience and expertise in electronic payments. eFunds provides electronic funds transfer processing and software, ATM solutions, risk management, and global outsourcing services to financial institutions, electronic funds transfer networks, government agencies and retailers around the world.

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Consumer Confidence in On-Line Card Security Declines

A new survey of one million American consumers, has found that consumer confidence in on-line credit card security and technology optimism has declined over the past five years. This, despite the fact that 42 million more households are on-line today, than in 1998. “The Changing Consumer” research series by Forrester Research, also found that today’s consumers spend less time on-line than they did in the late 1990s. Forrester says close to one-third of on-line shoppers are technology pessimists, compared with 16% in 1998. As on-line retail security issues emerge, this larger group of eCommerce pessimists is becoming less trusting with credit card transactions.

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StereoVision Entertainment Selects Smart Chip Technologies

CA-based Smart Chip Technologies has signed StereoVision Entertainment for transaction clearing services and its “LoyaltyCentral” program. Smart Chip Technologies will receive 3% of the gross sales proceeds for performing transaction clearing services utilizing its settlement and clearing operations co-developed by IBM. StereoVision will deliver to Smart Chip Technologies, in the digitized format, all entertainment content produced, acquired, and/or licensed by StereoVision for electronic sales. In conjunction with the transaction clearing services, StereoVision will also be participating in Smart Chip Technologies’s LoyaltyCentral(TM) program.

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Citibank Launches CuidaTuCredito.com

Citibank has launched Hablando de Credito (“Let’s Talk About Credit”) on its Spanish-language Web site for Hispanic Americans. Hablando de Credito dispels common “credit myths” and empowers adult Hispanics with all the essential resources and straightforward information necessary to take control of their finances and credit. The cornerstone of this credit education effort is a free, easy-to-use Spanish-language website, http://www.CuidaTuCredito.com.

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Israel’s OTI Posts Higher Profits, Lower Losses in 2Q/03

The Israeli firm On Track Innovations reported that revenues for the second quarter were $5.0 million, compared to $4.7 million for the prior quarter, and $5.5 million for the second quarter of 2002. Gross profit for the second quarter was $2.9 million up from $2.4 million in the prior quarter and $2.3 million in the second quarter last year. However, for first half of 2003 gross profit was up 24% to $5.3 million, and operating losses declined 46% to $1.1 million. OTI says that during the first half of 2003, OTI made strong progress in petroleum payment management, mass transit, ID security/access control, and micro-payments. During the second quarter, the Company announced that ABSA, the largest commercial bank in South Africa, with the largest fuel card customer base in the country, has joined OTI’s “FuelMaster Express” program that is geared towards private motorists. OTI is also providing integrated point-of-sale solutions to Loews Cineplex as part of MasterCard’s “PayPass” trial in Orlando, Florida. For complete details on OTI’s second quarter performance visit CardData ([www.carddata.com][1]).

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

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BLACKOUT VOLUME

The August 15th blackout in Canada deeply impacted credit card activity across Ontario. Province-wide, total dollar volumes were down 29% on Friday, August 15 compared to the previous Friday. Most of the sectors that make up the retail category experienced an average 40% decline in dollar volume. However, within the retail category, gas stations and convenience stores increased 30%. Moneris Solutions Corporation also found that the services sector, which includes the health, financial, insurance and utilities industries experienced a 41% decline in total dollar volumes processed. Moneris estimates that spending across Ontario on Friday, August 15 was down $100.4 million compared to the
Friday previous.

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Delinquency Declines for Nine of the Top Ten Issuers

In a sign that credit quality is slowly improving in the card industry, delinquency for the second quarter, among the top VISA and MasterCard issuers, declined 26 basis points over the first quarter to 6.18%. However, compared to one-year ago, delinquency rates (30+ days) have climbed 32 bps, from 5.86%. All but one top issuer reported a decline in delinquency rates during the second quarter. FleetBoston reported that its delinquency rate edged up by 6 bps to 3.89%, compared to the first quarter. The largest declines were experienced by Providian and Sears National Bank. Meanwhile, American Express reported that its 2Q/03 delinquency rate fell to 2.7% from 3.1% in the first quarter, and 3.1% in 2Q/02. Discover reported its over-30-day delinquency rate increased 58 basis points to 6.21%, and the over-90-day delinquency rate increased 36 basis points to 3.01%, compared to the second quarter of 2002. For more historical information on delinquency rates visit CardData (www.carddata.com).

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 2Q/03 1Q/03 CHNG
1. Citigroup: 90+ 1.86% 1.91% – 5 bps
2. MBNA: 30+ 4.46% 4.74% -28 bps
3. Bank One: 30+ 3.95% 4.08% -13 bps
4. Chase: 30+ 4.40% 4.59% -19 bps
5. Cap One: 30+ 4.83% 4.97% -14 bps
6. Providian: 30+ 9.72% 10.31% -59 bps
7. BofA: 30+ 5.79% 6.09% -30 bps
8. Fleet: 30+ 3.89% 3.83% + 6 bps
9. Sears Natl 30+ 7.41% 7.87% -46 bps
10. Dir Merch: 30+ 11.20% 11.50% -30 bps
30+ DAY AVG*: 6.18% 6.44% -26 bps
NR- not reported * 90+ day is not meaningful
* does not include Household which is now part of HSBC
SOURCE: CardData (www.carddata.com)

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CIBC 2Q/03

CIBC reports that its card revenues dropped slightly from C$324 million in the first quarter to C$311 million. However, year-over-year, CIBC’s card revenues increased slightly from C$308 million. Canada’s #1 credit card issuer says that while volume dipped, card balances were up. CIBC also reported that its provision for credit losses for the quarter was $425 million, up from $248 million in the prior quarter. Credit card losses represented 69% of the $126 million in the consumer provision for credit losses for the quarter and 68% of the year-to-date consumer provision for credit losses of $396 million.

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NCR Gets Gulf Coast Distribution Deal

Houston-based Texas P.O.S. has inked a deal, through ScanSource, to resell NCR “RealPOS” workstations and peripherals to the restaurant market. Texas P.O.S. has been providing point-of-sale solutions for ten years throughout the Gulf Coast area and in other parts of the United States. The company delivers a turnkey installation that includes software integration, wiring, programming, training, equipment installation and live standby coverage.

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QANTAS AMEX CARD

Qantas Airways has teamed with American Express to launch the first corporate card offering cash rebates on air travel charges. Under the new Qantas/AmEx corporate card program, companies receive an annual cash payment of between 2% and 5% of qualifying air spend on Qantas domestic tickets charged to the card, provided the company spends more than AUD$20,000 annually with Qantas. The new “AmEx Qantas Corporate Card” is targeted at Australian-based small and mid-sized companies with 25 to 1000 employees that spend a minimum of AUD$50,000 on annual travel, entertainment and business-related expenses. Qantas has also introduced a new “Qantas Club Business” membership rate. When four or more employees become members, they will receive substantial discounts on annual fees. Annual fees are based on a sliding scale.

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VISA Launches Ad Campaign for Small Businesses

VISA is launching a TV and print ad campaign this morning to show VISA’s commitment to supporting small-businesses. The new ads features the two owners of C&C California Clothing, Claire and Cheyann. The ad will show how “VISA Business” provides cash flow management and expense tracking to small businesses. The TV ad was created by BBDO West in San Francisco. The TV ad will break on ABC, CBS, CNN and FOX today. The campaign also includes three print ads that display VISA small business resources.

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MENATAP VBV

St. Petersburg-based Bank Menatep is planning to offer the “Verified by
Visa” payment authentication service to its online merchants.
The Menatap “VbV” program is the result of a deal between the bank and
Belgium-based OpenWay Group and Texas-based iBIZ Software.
OpenWay and iBIZ have jointly developed the “Way4CommerSafe” payment
authentication service for both issuers and acquirers. Menatap is their
first customer. “Way4CommerSafe MPI” is an integrated product suite for
Internet payment acquirers. “Way4CommerSafe ACS” is an integrated product
suite that allows issuing banks and processors offer secure, real-time
authentication of cardholder transactions while they are online with
Internet merchants. Bank Menatap is one of the 20 largest banks in Russia
and is a “Principal Member” of VISA & MasterCard.

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