Q1 & US-OUTSOURCING

Vancouver-based QI Systems has signed a sales and marketing alliance with USOutsourcing of Dallas, Texas.
USOutsourcing will target, prospect, pre-qualify, process and close sales for QI Systems in the USA for the beverage and snack food vending business. QI’s “SmartVend” technology enables debit card purchases by consumers from a wide range of vending machines types. The “SmartVend” system is currently being used in conjunction with many card schemes, including VisaCash, Mondex (Multos), CANTV (Venezuelan phone card), Telus SmartONE card and others.

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Target Card Profits Hit $160MM

Target reported this morning that its credit card operations produced 20% of its total pre-tax profit of $793 million for the second quarter ending August 2nd. The retailer’s “smart VISA” portfolio posted 2Q/03 outstandings of $3.89 billion, a 3.7% increase over the first quarter, and a 54% increase over 2Q/02. Meanwhile, Target’s private label “Guest Card” credit card posted another drop as it migrates its best customers to the “smart VISA” program. At the end of the second quarter, Target’s private label outstandings were $733 million, compared to $734 million in the previous quarter, and $865 million one year ago. Target’s net charge-off rate for its VISA program was 9.3%, compared to 8.5% in 1Q/03, and, compared to 4.8% one year ago. Net write-offs for its store credit card program were 8.0%, compared to 8.2% in the prior quarter, and compared to 7.5% for 2Q/02. The 90-day+ delinquency rate for “smart VISA” was 3.5% compared to 3.3% for the first quarter, and, compared to 2.4% for 2Q/02. For its “Guest Card” program the figure edged up slightly to 5.2% from 5.1% in the prior quarter, but unchanged from one year ago. Target’s pre-tax profits from its credit card operations was $160 million compared to $151 million in 1Q/03, and well above the $129 million recorded one year ago. For complete details on Target’s 2Q/03 performance visit CardData ([www.carddata.com][1]).

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

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DEBRYSHIRE GOES OPTEVA

Derbyshire Building Society has signed a deal to deploy Diebold’s “Opteva 760” and “Opteva 520.” Derbyshire will install 24 advanced-function, through-the-wall “Opteva 760” units and an “Opteva 520” lobby machine by November. The units will operate on Diebold’s “Agilis” software platform, an open system that allows multiple vendors’ terminals and their respective technologies to co-exist.
The “Opteva” family includes a through-the-wall, walk-up ATM and a lobby ATM, both with advanced functionality, and a through-the-wall and lobby cash dispenser.

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MASTERCARD 2Q/03

MasterCard International reported that its second quarter net income dropped 11.2% even though 2Q/03 revenues climbed 23.7% to $556.9 million, compared to one year ago. The nation’ second largest card network said that $79 million of the $107 million increase in second revenues was due to its acquisition one year ago of MasterCard Europe. The decline in net income was impacted by a 29% rise in general and administrative expenses to $281.0 million, and a 22% increase in advertising and market development expenses to $195.4 million. MasterCard says the $63 million increase in general and administrative expenses was due primarily to its acquisition of MasterCard Europe ($39 million) and personnel expenses ($22 million). The network noted that the $35 million increase in advertising and market development expenses included $34 million for its MasterCard Europe acquisition.

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CompuCredit 2Q/03 Profits Top $20MM

Sub-prime specialist CompuCredit reported second quarter net income of $20.3 million, compared to net income of $33.2 million in the first quarter, and compared to a net loss in 2Q/02 of $37.1 million. Net charge-offs, as a percentage of average managed loans, hit 20.9% in the second quarter, compared to 20.3% in the previous quarter, and 15.0% one-year ago. Excluding receivables at or near charge-off at the time of purchase, the charge-off rate would have been 11.0% for 2Q/03 and 10.2% for 1Q/03. At the end of the second quarter, the 60-plus day delinquency rate was 10.5%, compared to 13.3% in 1Q/03 and 9.0% at June 30, 2002. CompuCredit’s second quarter managed loans were $2.2 billion, compared to $2.5 billion in the first quarter. On August 1st, the Company, in conjunction with Merrill Lynch, purchased approximately $824 million in credit card receivables from Providian, representing approximately 435,000 credit card accounts. One year ago, Providian dumped $2.6 billion in sub-prime card outstandings to two limited liability companies setup by Goldman Sachs, Salomon Smith Barney, CardWorks, and CompuCredit. For complete details on CompuCredit’s 2Q/03 performance visit CardData ([www.carddata.com][1]). (CF Library 4/16/02; 8/5/03)

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

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Southwest Expands Corporate Booking Tool

Southwest Airlines said this week that its corporate travel booking tool, “SWABIZ!,” will now support ghost cards, enabling travelers who book their own trips to select their form of payment from pre-entered company credit cards. Traveler accounts are created using individual Rapid Rewards frequent flyer program membership numbers. SWABIZ members can set up their personal information, credit card information, and travel preferences. Users can obtain the latest arrival and departure times on any particular flight either online or via text messaging. SWABIZ Customers also have the ability to modify their reservations and reapply ticketless funds online. SWABIZ has become a sleeper hit since launching in May 2000 because it couples the success and service of southwest.com with the added benefit of tracking and administrative tools for corporate travel managers who are responsible for the bottomline.

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EFT Integration Signs 11 Processing Clients in July

FL-based Global Axcess reported its EFT Integration subsidiary signed 11 new processing customers in the month of July, mostly independent ATM owners/operators. This new group of customers is comprised primarily of independent ATM owners/operators who have begun to transfer their existing or new ATM terminal networks to EFTI. EFTI processes or provides certified gateway services for transactions initiated by ATM, debit, credit and electronic benefits transfer cards. These new contracts are expected to drive the total number of ATM transactions processed by EFTI up by more than 50% over a 12- month period. Global Axcess Corp. was founded in 2001 with a mission to emerge as a leader in the Automated Teller Machine industry.

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AmEx Unloads 1700 ATMs to Cardtronics

American Express has unloaded about a fourth of its ATMs, as it eliminates unprofitable and undesirable placements. Yesterday, Houston-based Cardtronics confirmed it acquired 1,704 ATMs from AmEx to bring the number of ATM machines it owns and/or manages to more than 12,500, the largest off-premise owned ATM network. Cardtronics says the transaction adds relationships with 22 new corporate retail organizations and 40 independent merchants to the company’s portfolio. During the past year, the company has acquired more than 5,000 ATMs and related contracts in the past year. Major retail and petroleum customers include Amerada Hess, Barnes & Noble College Bookstores, ConocoPhillips, ExxonMobil, Rite Aid, SSP/Circle K, Sunoco and Winn-Dixie Stores.

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Key’s SFA ATM Network Hits 3,000 ATMs

AL-based SouthTrust Corporation has become part of Key’s ATM network for agent banks. Before the SouthTrust agreement, Key agent bank clients, including banks, savings and loans and credit unions, had fee-free or fee-reduced access to Key’s network of over 2,200 ATMs in 15 states, including Key-branded ATMs in ARCO am/pm retail locations in the Western USA. The addition of SouthTrust adds 876 ATMs and 9 states including Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia to the network. Last month, KeyCorp signed agent contracts with nine additional financial institutions in the state of Ohio to provide surcharge-free or surcharge-reduced access to Key’s ATM network. In June, Young Americans Bank of Denver signed an agreement with KeyCorp to provide its customers with surcharge-free access to Key’s network of more than 81 ATMs in Colorado. In May, OR-based Pinnacle Bank signed an agreement with KeyCorp to provide its customers with surcharge-free access to Key’s network of more than 112 ATMs in the state. (CF Library 5/30/03; 6/12/03; 7/16/03)

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ACE Cash Express Hires SVP/General Counsel

ACE Cash Express has hired Walter Evans, formerly of Hollywood Casino Corporation, as SVP/General Counsel. Evans was previously executive vice president and general counsel for Hollywood Casino Corporation. Prior to his eight-year tenure with Hollywood Casino Corporation, Evans held associate positions with Hughes & Luce, L.L.P. and Akin, Gump, Strauss, Hauer & Feld, L.L.P. Evans’ experience includes all facets of corporate law and he has successfully negotiated joint venture agreements, public debenture offerings, and multi-million dollar mergers.

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MBNA Cardholder Fees Up 23% in 2Q/03

MBNA reported yesterday that its second quarter cardholder fee income increased 23.1% to $121.1 million and that its advertising expense for 2Q/03 increased 24.3% to $103.6 million. The issuer says the increase in credit card fees, which does not include securitized loans, was primarily the result of the growth in the portfolio, and an increase in the average fees assessed related to the implementation of a modified fee structure in the first quarter of 2002, which included higher late and over-limit fees. Credit card fees include annual, late, over-limit, returned check, cash advance, express payment, and other miscellaneous fees on credit card loans. MBNA also says the increases in advertising for the second quarter is the result of its efforts to increase the activity on newly established accounts. MBNA also reported that interchange income, excluding securitized loans, increased 15.3% to $101.0 million for the second quarter. For complete details on MBNA’s 2Q/03 performance visit CardData (www.carddata.com).

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