MC EUROPE 1Q/03

MasterCard’s gross dollar volume for Europe increased more than 10% during the first quarter to $66.0 billion, a pace significantly slower than 4Q’s 16% annual growth rate. For 1Q/03, MasterCard processed 793 million purchase transactions and 157 million cash advance transactions, up 15% and 2% over 1Q/02, respectively. At the end of the first quarter, MasterCard had 78.5 million accounts representing 88.2 million cardholders. Europe continues to be the largest cardholder base for “Maestro,” with 226.4 million “Maestro” cards, an almost 7% increase over the same period in 2002. There was also a 41.7% increase in the number of merchant terminals accepting “Maestro” in the first quarter of 2003.

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I-Gambling Ban

The House of Representatives this week passed the “Internet Gambling Funding Prohibition Act” which bans the use of credit cards and wire transfers for use on Web gaming sites. However, the bill exempts horse racing and other state-approved gambling activities. Most Internet gambling operations are offshore. The GAO estimates there are between 1,600 and 1,800 such sites producing about $4 billion in annual revenue. VISA and MasterCard have rules to enable member banks to prevent the use of their cards in connection with Internet gambling transactions. The rules require that, in order for a merchant to seek payment authorization in connection with an Internet gambling transaction, the merchant must code the authorization request to indicate that the transaction is an Internet gambling transaction. Merchants who will not abide by these rules are not permitted to accept cards. As a result, the GAO says some Internet casino operators now estimate that four out of every five requests for credit card payments are denied. Also, the New York Attorney General announced earlier this year agreements with several individual card issuers to block cardholders from using their credit cards for transactions identified as online gambling. (CF Library 2/13/03; 3/18/03)

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Lipman POS E-Checks

Lipman USA has certified its terminals for check debit processing through Payment Option Solutions. This certification enables retailers to utilize most MICR check readers on NURIT terminals to take advantage of POS’ unique Check Debit Processing opportunity. With the Paid On Signing product from POS, merchants simply pass the check through the reader and key in certain consumer information. Within nine seconds, the consumer’s personal bank account is accessed, the availability of funds is verified, and the account is debited similar to the way it would be in a traditional ATM/Debit transaction.

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Young Americans & KeyCorp

Denver-based Young Americans Bank has signed an agreement with Cleveland-based KeyCorp to provide its under-21 customers with surcharge-free access to Key’s network of 81 ATMs in Colorado. Young Americans Bank is the first financial institution in Colorado to partner with Key for ATM access. Key also provides national and regional ATM access to banks, savings and loans and credit unions in Ohio, Idaho, Indiana, Maine, New York, Oregon, Pennsylvania and Texas. Agent Bank services also are available in Alaska, Arizona, California, Michigan, Nevada, Utah and Vermont.

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Box Tops VISA

General Mills reported yesterday that its “Box Tops for Education” program produced $23 million this school year for the 77,000 schools enrolled in the program. Besides the “Box Tops” coupons which appear on over 800 brands of grocery items, General Mills and Bank One also offer the”Box Tops VISA” which delivers a full 1% of every purchase to a designated “Box Tops” school, up to a maximum of $20,000 per school annually. Bank One and General Mills launched the card in November 2001. General Mills launched the “Box Tops for Education” program in 1996, and has raised more than $90 million for America’s schools. More than half of American homes with children participate in the original “Box Tops for Education” clipping program.

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Evo VISA

WI-based Universal Savings Bank this week officially launched its new VISA credit card that offers a free HP “Evo” laptop computer for making a minimum $5,000 balance transfer. However, cardholders who receive the free laptop must maintain a balance of at least $3,000 for the first 12 months, or a $500 penalty fee is charged to the account. The new “Universal Savings Bank Platinum VISA” offers a 10.99% variable interest rate on purchases as well as cash advances, and carries no annual fee. As part of the new offer, USB is waiving cash advance fees and is extending the purchase APR of 10.99% to cash balances. Cardholders who do not have $5,000 worth of balances to transfer, may take the difference as a cash advance up to $2,000 to qualify for the free laptop. The “Compaq Evo N1015v” notebook PC being offered with the new VISA card retails for $999 and has a street price around $800. (CF Library 5/20/03)

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Trilegiant Loyalty Patent

VA-based Trilegiant Loyalty Solutions yesterday received a new patent for a fully integrated, on-line interactive frequency and award redemption program. The new patent supplements patents relating to the online delivery of incentive and loyalty programs that were originally issued to Netcentives. Trilegiant purchased these patents at auction in December 2001 and they have been widely licensed to entities providing online incentive or loyalty services. Trilegiant Loyalty Solutions helps organizations motivate, reward and retain their most valued customers, employees and partners primarily through the administration of points-based loyalty solutions.

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FICO X3

Fair Isaac yesterday announced a new service to offer consumers all three of their “FICO” credit risk scores. The Experian-based “FICO” score joins “FICO” scores from Equifax and TransUnion in the first complete view for consumers. Fair Isaac is charging consumers $12.95 for each FICO-scored profile or $38.85 for all three. Fair Isaac says that through its myFICO Web site and associate Web sites, more than two and a half million FICO score-based information products have been sold to date.

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Balance Transfers APRs

More card issuers are extending their promotional balance transfer interest rates to the life of the balance. Mintel’s Comperemedia says the number of such offers has increased from 7% to 10% between January and March. American Express solicitations for their “Blue” and “Delta SkyMiles” constitute the majority of the offers for a rate good on balance transfers for the life of the balance. However, Bank of America, Chase, and Bank One also have such offers in the pipeline. Discover is offering a 0% for life on transferred balances if the customer makes two purchases or cash advances during each billing period. If the customer fails to make the required transaction, the interest rate increases to the purchase rate. Mintel also noted that in January, 92% of the offers with a promotional balance transfer rate offered it for 6 months or more. In March, this decreased to 86% of the offers.

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SMART TOURISM CARDS

Jerusalem-based -T.V.G. Technologies Ltd. is supplying tens of thousands of smart-cards for a project to encourage tourism in Jerusalem. The smart-cards will be programmed to provide discounts to tourists at hotels and other tourist attractions, as part of a multi-million dollar subsidies program for the tourism industry in Jerusalem. TVG will supply smart-card read/write systems and programming services in addition to the smart-cards, generating revenues of several hundred thousand dollars over a period of 3-5 years.

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Staples & Hypercom

Staples has inked a multi-million dollar deal to deploy 6,500 Hypercom card payment terminals, including the new EMV-type approved “ICE 6000Plus” with “HyperSafe” operating system security, in its US stores. Worldwide, businesses recognize Hypercom as the world’s premier provider of fast, high performance card payment and transaction networking technology and products. The Internet enabled ICE devices are high performance, touch screen-based card payment terminals that incorporate physical security features and Hypercom’s HyperSafe operating system.

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