ONEX & AIR CANADA

Toronto-based Onex Corporation may run into some turbulence in its bid to
acquire a 35% equity interest in Air Canada’s “Aeroplan” loyalty program.
Ernst & Young, the court-appointed monitor for Air Canada, have asked for
an extension to the talks between Onex and Air Canada, and have indicated
it may recommend that Air Canada solicit for other bids. In late January,
Air Canada agreed to let Onex acquire a 35% equity interest in
its”Aeroplan” loyalty program for US$177 million. Ernst & Young says the
recent revisions to the “CIBC Aerogold VISA” deal, as well as the inclusion
of another credit card issuer in the program has affected the value of the
Onex-Aeroplan agreement. “Aeroplan,” launched in 1984, has more than six
million members. In January 2002, “Aeroplan” became a wholly-owned
subsidiary of Air Canada. Last year, “Aeroplan” generated cash revenue in
excess of $600 million, of which less than forty percent represented
billings to Air Canada. Approximately 1.4 million round-trips were redeemed
for travel on Air Canada and its worldwide “Star Alliance” partner airlines
in the past year. Aeroplan has more than 90 partnerships with airline,
hotel, car rental, financial, telecommunication, retail, services and
entertainment partners.

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Debit Upgrade

Toronto-based Triversity has come up with a solution that adds a debit card function to NCR POS systems without new hardware. The company recently implemented a “DOS Thin Client” version of its “Transactionware” POS software along with “Transnet,” Triversity’s file and message transfer solution for credit and debit transactions, for a Seattle-based drugstore chain. Bartell Drugs was willing to upgrade its existing DOS-based software to accommodate debit, but the company’s POS hardware could not handle the additional memory and storage requirements of a Windows-based solution. The family-owned drugstore chain wanted to preserve its hardware investment and migrate to Windows on its own timetable. As part of the upgrade, Bartell Drugs is replacing its previous dial-up connections with a frame relay network for faster debit and credit authorization.

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CONVERT-A-CHECK

Vancouver-based LML Payment Systems and its licensee Global eTelecom have been selected as the back end processor for Merchant Services Network’s Electronic “Convert-A-Check” program. The program enables merchants to accept and process paper checks electronically, similar to a credit card transaction. Global eTelecom’s check services are licensed under four U.S. Patents held by LML. Florida-based Merchant Services Network has been in the merchant bank card processing business for more than 10 years.

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GCA Clients

Global Cash Access has signed 16 gaming properties for its ATM cash access services to bring its total customer base to approximately 1,000 gaming properties. GCA offers an array of products and services, ranging from the latest ATM technology to guest development marketing services that help casinos better understand their customers and increase traffic to the gaming floor and special events.

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HumanaAccess Card

Humana, Evolution Benefits, and BANKFIRST have teamed to launch a prepaid MasterCard that provides access to “Flexible Spending Accounts” and/or “Health Reimbursement Arrangements.” The “HumanaAccess MasterCard” will initially be issued to Humana employees, however the firm intends to make the new card available to Humana commercial members with HRA-style plans in 2004. The card is powered by the Evolution Benefits’ “Benny Card” that enables users to access FSA/HRA funds they set aside by swiping their card at the provider’s office or pharmacy. KY-based Humana has approximately 6.6 million medical members located primarily in 18 states. On May 6th, the IRS issued its stored value card guidance in the form of Revenue Ruling 2003-43. The ruling addresses the use of stored value cards with FSA/HRA accounts. The Ruling upholds the existing IRS substantiation requirements that call for third-party receipts and adjudication of all claims.

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BestBank Indictments

The former CEO and founder of Colorado-based BestBank, a now defunct issuer of sub-prime credit cards, was arrested Friday afternoon as he was passing through customs in Los Angeles. Edward Mattar III, and four other executives, were indicted two weeks ago on 95 counts of fraud in connection with the 1998 failure of BestBank which cost depositors more than $200 million. The other four individuals indicted and arrested include: Thomas Alan Boyd, a former director and president at BestBank; Jack Grace Jr., former director and CFO of BestBank; and, Glenn Gallant and Douglas Baetz, principals of Florida-based Century Financial. The indictment alleges that Mattar, Boyd, Grace, and Gallant fraudulently took more than $5 million each. BestBank offered a sub-prime credit card that included a travel club membership. Under the “BestBank VISA” program consumers would received a $600 credit limit in exchange for a $498 club membership fee and a $45 annual card fee. The program signed up 500,000 cardholders in its two year run and produced $240 million in credit card outstandings. The bank was seized by authorities after BestBank’s bad debt topped $134 million. (CF Library 7/27/98; 8/27/98)

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Diebold COO

Diebold announced it has begun the search for a COO following the sudden, recent death of Wes Vance. Vance, who served as the company’s COO since October 2001, died on April 26 when the private plane he was piloting crashed southeast of Columbus, Ohio, in Jackson County. The search will focus on identifying a candidate with a very strong background in global operations. The company is interviewing both internal and external candidates. The Lenkaitis Group is coordinating the external search process for Diebold.

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Chordiant & DWL

CA-based Chordiant Software and Atlanta-based DWL have teamed to integrate their products to enable retail banks and card issuers to improve customer service and employee productivity by creating a unified single view of the customer across the enterprise. Chordiant and DWL believe that an effective customer-focused sales and service strategy depends upon a single operational view of the customer that is accurate, complete and current. DWL and Chordiant are able to offer the industry’s most robust enterprise business process system and enterprise customer hub for unified customer knowledge and end-to-end business process to all channels, whether assisted or through self-service.

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Onex & Air Canada

Toronto-based Onex Corporation may run into some turbulence in its bid to acquire a 35% equity interest in Air Canada’s “Aeroplan” loyalty program. Ernst & Young, the court-appointed monitor for Air Canada, have asked for an extension to the talks between Onex and Air Canada, and have indicated it may recommend that Air Canada solicit for other bids. In late January, Air Canada agreed to let Onex acquire a 35% equity interest in its”Aeroplan” loyalty program for US$177 million. Ernst & Young says the recent revisions to the “CIBC Aerogold VISA” deal, as well as the inclusion of another credit card issuer in the program has affected the value of the Onex-Aeroplan agreement. “Aeroplan,” launched in 1984, has more than six million members. In January 2002, “Aeroplan” became a wholly-owned subsidiary of Air Canada. Last year, “Aeroplan” generated cash revenue in excess of $600 million, of which less than forty percent represented billings to Air Canada. Approximately 1.4 million round-trips were redeemed for travel on Air Canada and its worldwide “Star Alliance” partner airlines in the past year. Aeroplan has more than 90 partnerships with airline, hotel, car rental, financial, telecommunication, retail, services and entertainment partners.

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Advantex 1Q/03

Toronto-based Advantex Marketing International reported an 11% increase in revenues to $21.5 million, and a net loss of $825,000 for the first three months of this year. Last month, Advantex launched its expansion of the “CIBC Aerogold ADVANTEX Benefit” program to include retailers, and, this month, will introduce an embedded “Advantex Benefit” into several selected premium CIBC VISA credit cards, providing bonus rewards specific to the loyalty currencies offered on each of these cards. Next month, Advantex will begin earning income from its new “US Airways Dividend Miles Rewards” program. The Company signed multi-year agreements with US Airways and Bank of America to replicate the “Advantex Benefit” business model in the USA. Advantex recently signed an agreement with UAL Loyalty Services for a “United Mileage Plus Shopping” program for more than 40 million “Mileage Plus” members. The combined credit cardholder base of these two U.S. airline frequent flyer programs more than triples the Company’s current credit cardholder customer base. For complete details on Advantex’s first quarter results visit CardData ([www.carddata.com][1]).

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

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FNBO & Katz

Ronald A. Katz Technology has signed First National Bank of Omaha to a patent license for its automated customer service systems. The license to First National Bank of Omaha covers services in the “Financial Services Call Processing” and “Automated Securities Transactions” Fields-Of-Use. These services, including customer service provided to consumer and business accounts, are delivered through automated systems as well as the combination of automated systems and live agents.

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First Hawaiian Cardinal Centinel

BancWest’s First Hawaiian Bank has signed a deal to offer CardinalCommerce’s “Cardinal Centinel” payment authentication software. sudden, recent death of Wes Vance. First Hawaiian Bank is a principal subsidiary of BancWest Corporation, the largest Hawaii-based company, with total assets of $34.9 billion. BancWest is a wholly owned subsidiary of BNP Paribas. CardinalCommerce is the leading provider of online merchant payment authentication for securing online transactions.

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