Personal Advantage Cash Card Launched

Los Angeles-based Direct Response Financial Services has launched its “Personal Advantage Cash Card” which offers card-to-card transfer, and cash or USPS money order loading at major banks. The stored value card can be used at all merchant locations accepting VISA or MasterCard and over 800,000 ATM locations worldwide. Personal Advantage Cash Cards can be used as stored value cards, gifts cards, transmitter cards (linking two cards together), payroll cards, and more. The Company plans to begin marketing of the Personal Advantage Cash Card through retail outlets and television and radio advertising to the under-banked and un-banked consumer market in Q3 of 2003.

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Central Bancard to Offer SPS Services

San Diego-based Secure Payment Systems has signed a marketing agreement with IL-based Central Bancard, a company founded by industry veterans Jerry Cain, Bill Brockaway, and Henry Harp. Secure Payment Systems is a leading check and gift card services processors, and the only U.S. company to provide a truly integrated check conversion and gift card program. Secure Payment Systems was founded in 1996 by Lin Fellerman, former 20 year employee and 10 year President of the Telecredit / Equifax Check Services subsidiaries. Central Bancard is a new merchant acquirer venture developed to provide superior payment processing services.

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MBNA Charge-Offs and Delinquency Decline in June

MBNA reported Tuesday that charge-offs and delinquency edged down slightly in June. Delinquency declined for the fifth consecutive month while charge-offs had a slight bump-up in May, but have otherwise been declining since the start of this year. The nation’s second largest bank credit card issuer reported that charge-offs dipped to 5.01% in June, compared to 5.04% for May. Delinquency declined to 4.34% in June, from 4.36% for May. MBNA also reported that managed credit card outstandings for the end of June were $96.4 billion, a 4.0% gain since the end of the first quarter. MBNA also holds more than $14 billion in other consumer loans. MBNA will release its second quarter earnings report on July 24th.

MBNA 2003
Month Outstandings Charge-offs Delinquency
Jan 03 NA 5.15% 4.85%
Feb 03 NA 5.10% 4.91%
Mar 03 $92.9 b 5.05% 4.62%
Apr 03 $93.9 b 5.02% 4.49%
May 03 $95.3 b 5.04% 4.36%
Jun 03 $96.4 b 5.01% 4.34%
Source: CardData (www.carddata.com)

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VISA Hires Chase’s Cramer

VISA USA has hired David Cramer, former SVP of Sales and Marketing at JPMorgan Chase, as SVP of sales and integrated solutions for its commercial business. He also served as VP of business development for GE Capital’s Corporate Expense Management Services, before joining JPMorgan Chase. Cramer also was VP of national accounts for Citicorp Diner’s Club at GE Capital. Mr. Cramer’s responsibilities at this newly created position with VISA include driving adoption of VISA’s commercial-payment solutions in both public and private sectors.

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TSAI Names New CFO

NE-based Transaction Systems Architects has named David Bankhead, former CFO of Hogan Systems, as SVP, CFO and Treasurer. Mr. Bankhead has over 30 years of financial experience, and has serviced as a public company CFO on four separate occasions. Dwight Hanson, the current CFO, will serve as Senior Vice President of Corporate Planning and Analysis. Transaction Systems Architects’ products are used to process transactions involving all types of payment cards, and are used on more than 1,640 systems in 71 countries.

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American Express Buys Rosenbluth International

American Express is acquiring Rosenbluth International in a deal that will bring AmEx’s global travel volume to more than $18.5 billion. Philadelphia-based Rosenbluth is one of the largest privately held companies in the world, with corporate travel operations in 15 countries and posted global business travel volume of over $3 billion last year. Last year, American Express booked global travel volume of $15.5 billion. Rosenbluth has been impacted by the changes in the travel agency business which has moved from an industry largely dependent on supplier commissions, to one in which clients pay directly for agency or travel management services. Further, in a tough economy, travel management services have been in great demand, as companies of all sizes have focused on reducing travel expenses by lowering both the cost of the travel process and the cost of travel itself. The Blackstone Group acted as exclusive financial advisor to Rosenbluth International in this transaction and Blank Rome served as their legal counsel.

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FleetBoston Portfolio Continues to Contract in Q2

FleetBoston reported yesterday that credit card outstandings dipped to $14.7 billion in the second quarter, a 2.0% decline over the first quarter of this year. Since the first of this year Fleet’s outstandings have declined due to portfolio sales, lower balance transfers, a decline in cash advances, and other normal seasonal factors. For the second quarter, the delinquency rate was 3.89%, compared to 3.74% one year ago. Delinquency at the end of the first quarter was 3.83%. Charge-offs for the second quarter hit 6.56% compared 5.81% one year ago. Charge-offs for the first quarter quarter were 5.16%. Fleet also reported that second quarter credit card revenues were flat at $155 million. For complete details on FleetBoston’s second quarter results visit CardData (www.carddata.com).

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Citigroup Snags Sears Credit for a 10% Premium

Sears, Roebuck and Co. announced Tuesday afternoon a definitive agreement to sell its domestic private-label and bank credit card portfolio to Citigroup for more than $3 billion, or approximately 10% over the total outstandings. The deal will add 27.2 million new “Gold MasterCard” accounts to Citibank’s current portfolio of 85.2 million bank credit card accounts in North America. The acquisition will solidify Citibank’s leadership in the U.S. market, after coming close to being unseated by MBNA. Citigroup will also pick up the nation’s largest private-label credit card portfolio of 31.8 million accounts. The premium, which is about half the going rate for bank credit card portfolios, is reflective of the current credit quality of the store card component, and the relatively unseasoned bank card segment. Sears launched its “Gold MasterCard” program in August of 2000. Citigroup said yesterday there is a 20% lap-over of Sears and Citigroup customers. Citibank also noted that 18% of Sears’ cardholders are Hispanics, a coveted market segment by some issuers. Other terms of the deal include payment for approximately $3 billion of Sears’ net invested capital, related to loan loss reserves. Sears also expects to receive approximately $200 million in annual performance payments from Citigroup based on items such as new account and credit sales generation activities. In addition, Sears expects to realize annual savings of more than $200 million as Citigroup will absorb costs associated with Sears’ zero percent financing program.

BANK CARD PORTFOLIO GLANCE
ISSUER RECV Q-VOL ACCTS
Citibank $113.3b $59.7b 85.2m
Sears National Bank $ 12.2b $ 3.8b 27.2m
TOTAL: $125.5b $63.5b 112.4m
note: Citibank data as of 6/30/03 and covers North American accounts;
Sears data as of 3/31/03 and includes MasterCard accounts only
Source: CardData (www.carddata.com)

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Fiserv Buys Chase Credit Research/Systems

Fiserv has acquired North Hollywood, CA-based Chase Credit Research and Chase Credit Systems, a pair of related companies that provide credit reporting services and systems. The transaction is expected to add $25 million in annual processing and services revenues. Chase Credit Research and Systems employs 115 people. Fiserv provides industry leading information management systems and services to the financial industry. WI based Fiserv reported $2.3 billion in processing and services revenues for 2002.

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USTT Acquires Bayview Technology Group

PA-based USA Technologies has acquired the assets of Denver-based Bayview Technology Group, a company that markets intelligent power control solutions for the vending, office equipment and other industries. Bayview has reported approximately $5.8 million in revenues and $500,000 net income for 2002. The purchase price was 20 million shares, and a cash payment of $631,000. USA Technologies will sell Bayview’s intelligent power control solutions as stand alone products, and also give customers the ability to customize or install a total solution.

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KeyCorp Signs Ohio ATM Agent Contracts

Cleveland-based KeyCorp has 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. Members of these institutions will be able to perform transactions using any of KeyCorp’s 528 ATMs with no additional fees. Keycorp also offers national and regional ATM access to banks, savings and loans, and credit unions, representing more than two million cardholders. KeyCorp is one of the largest bank-based financial services companies in the nation, with assets of $86 billion.

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Internet Retains Power for Credit Card Marketing

A new survey shows that nearly half the 78.1 million Americans who used the Internet to help manage their finances in the past twelve months applied for some kind of financial product either online or offline. The “2003 American Interactive Consumer Survey” conducted by Milwaukee-based The Dieringer Research Group, also found that nearly 40% of consumers who obtained information from a financial service provider’s Web site indicated that their opinion of financial service brands or products changed as a result of that information whether they later applied for a product online or offline. The study, based on 2,000 completed telephone interviews with U.S. consumers, covers multi-channel customer acquisition behaviors in banking, credit cards, lending, investing and insurance products.

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