CONSUMERS PIN READY

A new study has found that only 4% of U.K. consumers are not yet at ease with remembering and using a four digit PIN. The research, conducted for VISA by TNS, suggests that people in the U.K. will have no problem adopting new chip and PIN payment technology when it is rolled out nationally later this year. The introduction of chip and PIN is already underway in Northampton where 600 retailers are live with chip and PIN. More than 181,500 chip and PIN cards have been issued by participating banks. The research also found that 29% of U.K. consumers have no problem remembering a range of different four digit PINs for most purposes in everyday life. The study found that, on average, U.K. consumers have three personal identification numbers committed to memory for day to day use, such as withdrawing cash from ATMs, setting a burglar alarm or a security code on a mobile phone.

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Credit Card ABS Issuance Trust Updates Launched

Fitch Ratings has launched a new Web-based information product for credit card ABS investors called “The Credit Card ABS Issuance Trust Updates”. The Credit Card ABS Issuance Trust Updates,’ is a new web-based information product for credit card ABS investors. Fitch designed these comprehensive reports to provide investors with timely and innovative research on credit card issuance trusts updated monthly.

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724 SOLUTIONS 2Q/03

Toronto-based 724 Solutions reported second quarter revenue of $3.0 million, compared to $3.5 million in the previous quarter and $5.0 million for the same period last year. The net loss for the second quarter was $6.8 million, compared to $13.1 million in the second quarter
of 2002. In the second quarter, the company announced the launch of its “X-treme Mobile Data Applications,” initially centered on collections management, fraud protection, banking and credit card management. The Company says these actionable alerts-based applications will provide mobile network operators an immediate opportunity for revenue through the expansion of their relationship with their enterprise clients. 724 Solutions and our mobile operator partners were selected for several pilots of these applications, which are currently underway.

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Lloyds TSB Takes Over U.K.’s Goldfish Credit Card

The U.K.’s Lloyds TSB is buying the “Goldfish Credit Card,” personal loan business, and associated business assets of Goldfish Bank Ltd for a 14% premium or $126 million. Lloyds currently owns 70% of Goldfish Bank, while Centrica owns the rest. The “Goldfish Credit Card” was originally developed as a loyalty program for Centrica’s energy supply business. Goldfish cardholders will continue to be able to redeem their loyalty points against British Gas bills following the takeover by Lloyds. At the end of the second quarter, the Goldfish credit card portfolio had 1.18 million cardholders, and the bank had 11,000 personal loan accounts, plus 17,000 retail savings accounts. During the first six months of this year, Goldfish Bank had an operating loss of $33.5 million.

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CHARGE-OFFS SOAR

Bank credit card issuers in Singapore reported the highest monthly level of charge-offs in twelve years. During June card issuers lost $17.5 million, bringing total charge-offs for the first half of this year to $86.5 million. The rising losses were driven in the second quarter by the outbreak of SARS. The government recently reported that Singapore’s economy contracted by 11.8% in the second quarter, the worst-ever. According to the Monetary Authority of Singapore, bank credit card issuers lost $14.0 million in May, $15.6 million in April, $13.6 million in March, $13.7 million in February, and $12.1 million in January. Card volume for the first six months of this year has fluctuated between $2.4 billion and $2.5 billion. The total number of cards in the country at mid-year was 3.3 million, which included 2,295,027 primary cards and 992,555 supplementary cards.

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InteliData Technologies Nears Profitability

InteliData Technologies reported second quarter revenue of $6.0 million, a 9% increase as compared to the year-ago quarter. Gross profit for 2Q/03 totaled $4.0 million versus $3.4 million for the second quarter of 2002. Net loss for the 2Q/03 period was $11,000, compared to a net loss of $3.9 million, for the year-ago period. While InteliData’s card business has been adversely impacted by the economy, its EBPP business has remained very strong. The Company says that as banks and credit card issuers are confronting higher bankruptcy claims and weakening portfolios, their willingness to focus on procuring new, credit card related software is limited. Also, InteliData was recently notified of a re-organization of the e-Commerce group within Fidelity National Information Solutions. The Company is currently re-assessing several prospects that are being jointly managed between InteliData and FNIS. InteliData says it still expects to be net income profitable for the year. For complete details on InteliData’s 2Q/03 results visit CardData ([www.carddata.com][1]).

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

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EXPANDING HORIZONS

MasterCard International’s “Expanding Horizons” program this year included 12 attendees from Brazil, Japan, Lebanon and Mexico. The program, now in its fourth year, is aimed at introducing the participants to global best practices in the payments industry and learning how to improve the profitability of their organizations’ payments programs. During the month-long training session, the participants learn about marketing, risk management, security and fraud control. They also learned best practices for portfolio management, and product development, and how to effectively communicate and work with business people in other countries, particularly the USA. Participants attend daily roundtable briefings and also visit MasterCard’s Global Technology and Operations center in St. Louis, MO for a three-day training session on Operations Support.

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ICBA Promotes McGuire

The ICBA has promoted Paul McGuire, who joined the group in 1997 and who formerly worked at the EFTA, as VP of State/Regional Operations & Membership Strategy. McGuire’s responsibilities include fostering stronger relations with ICBA’s state regional associations. McGuire received a bachelor’s of science degree in Political Science from Old Dominion University and has completed course work towards his Certified Association Executive program, as well as Sales Management training through the American Management Association.

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ACTIVCARD 2Q/03

ActivCard reported second quarter revenues of $9.5 million, compared to $9.6 million for the second quarter of 2002. Net loss for the second quarter was $10.2 million, compared to a net loss of $4.7 million for 2Q/02. The increase in the loss was due to the effects of
decisions made to terminate non-core business activities. The resultant charge is related to the Company’s decisions to discontinue its biometric hardware product lines by transitioning to third party reselling; to terminate the hosting of PKI certificate issuance; and to eliminate overlapping ActivCard solutions by converging products and replacing royalty bearing third party software code. During the second quarter, ActivCard reached a milestone of 6 million ActivCard digital identity software and device users worldwide; signed agreements in North America with 4 new VARs and 1 distributor; and, reached 2.2 million licenses of “ActivCard Gold” sold to date. In the third quarter, the Company expects revenues to range between $9.0 million and $10.5 million.

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Tier Technologies 2Q/03 Revenues Soar 73%

Tier Technologies reported Friday that 61% of its $45.5 million in second calendar quarter revenue was derived from transaction-based services. Revenues for the quarter ending June 30th were up 73% as compared with the same period a year ago and up 37% compared with the previous quarter. However, net GAAP income declined to $2.1 million compared with $2.4 million in the same period a year ago. Tier says the decline was due to unexpected, additional project costs and expenses on a large systems integration project and the start-up costs relating to the operations of the Illinois child support payment processing center. While the Company did not breakout segment P/L, the firm did note that Official Payment Corporation’s performance continues to exceed its expectations since the it was acquired. For complete details on Tier Technologies’ second quarter performance visit CardData ([www.carddata.com][1]).

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

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FCNB Ordered to Refund Annual Fees and Over-Limit Fees

OR-based First Consumers National Bank, part of The Spiegel Group, has been ordered by the OCC to refund $1.65 million in annual fees charged to VISA and MasterCard customers whose cards were about to be terminated under a recent portfolio liquidation. The OCC says that FCNB knew on December 28, 2002 that it would have to liquidate its credit card portfolio and it should have informed customers of that fact when they renewed or initiated their credit cards. The OCC says the Bank did not inform customers and continued to assess the annual fees even though the credit cards were about to be terminated. The formal agreement, announced Friday, also directs the Bank to refund over-limit fees charged to customers who exceeded their credit limit as a result of the annual fee charge. The amount of those refunds is approximately $255,685. Most of the customers were reimbursed by the Bank by June before the Bank transferred the servicing of its credit cards to First National Bank of Omaha. Friday’s agreement also requires the Bank to provide funds to First National Bank of Omaha to reimburse the customers who have not yet received refunds. (CF LIbrary 7/21/03)

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Cash Systems Wins Judgement for ATM Losses

MN-based Cash Systems, a casino cash access solutions provider, said Friday it has won a judgement against Dunbar Armored for losses discovered in 2001 in its ATM operations. Cash Systems also entered into an agreement with Chex Services, Inc. to provide credit card cash advance services at Cliff Castle Casino in Camp Verde, Arizona. Cash Systems also announced the completion of its Player Loyalty Station. This device is an interactive kiosk capable of operating several games that issue prizes to successful participants.

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