CIBC 1Q/03

CIBC said this week that the increased rewards costs and attrition within its “Aerogold VISA” program will force the issuer to introduce new products with broader loyalty programs. On May 14th, CIBC entered into a new contract with Air Canada’s “Aeroplan” whereby CIBC will pay an extra 24% for each “Aeroplan” mile purchased. CIBC noted this week that the “Aeroplan” contact will cost up to 10 cents per share per annum, which is 2-3% of expected earnings. CIBC also acknowledged it is losing cardholders in the wake of Air Canada’s financial woes. The issuer said it has added less than 5,000 new “Aerogold VISA” cardholders so far this year compared 8,000 in the same period last year. CIBC credit card outstandings have also decline from $9.9 billion for 1Q/02 to $9.5 billion for 1Q/03. Additionally, CIBC faces new competition with American Express in the awarding of “Aeroplan” miles. Last week, CIBC agreed to share “Aeroplan” miles with AmEx. (CF Library 5/15/03).

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DECU & AXIS

Delta Employees Credit Union has extended its contract with Digital Insight for the entire suite of “AXIS Lender Solutions.” The suite includes “AnyTimeLender,” “DeskTopLender,” “ContactCenterLender,” and “Branch Services.” DECU was an early adopter of online lending, initially using Digital Insight’s “ContactCenterLender” in 1997. DECU is the largest credit union in Georgia and the 18th largest in the country.

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Canadian Tire & Moneris

One of the Canada’s largest retailers has inked a seven-year agreement with Canada’s largest debit and credit card payment processor. Canadian Tire made a decision to consolidate all of its processing with one partner, and in so doing, selected Moneris Solutions. The agreement with Canadian Tire Financial Services includes 1,000 retail stores, gas bars and car washes, as well as Canadian Tire Direct online and catalogue ordering channels. Canadian Tire has $7.2-billion in annual retail sales. Moneris provides payment card acceptance and POS technology for more than 350,000 merchant locations across North America and processed approximately 1.7 billion card transactions last year.

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Ceridian Board

Minneapolis-based Ceridian Corporation has elected Alan White, Senior Associate Dean of the Sloan School of Management at the Massachusetts Institute of Technology to its Board. Mr. White began his career at MIT in 1973 and has had responsibility for MIT programs in Asia, Europe and Latin America. He is currently responsible for a major assignment in China where MIT is working with three universities to develop international MBA programs.T hrough its Comdata subsidiary, Ceridian is a major payment processor and issuer of credit cards, debit cards and stored value cards, primarily for the trucking and retail industries in the USA.

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PegaHEALTH Service Manager

MA-based Pegasystems has launched “PegaHEALTH Service Manager,” a new suite of solutions for healthcare payers that is being initially deployed by Blue Cross Blue Shield of Rhode Island. The suite consists of “PegaHEALTH Member Services” v3.2 and “PegaHEALTH Provider Services” v2.0. “PegaHEALTH Service Manager” provides the tools to create a universal service representative which helps to eliminate the need for separate, disparate contact centers and allows for phone line consolidation to help improve service delivery, create process-driven staffing models, and create cross-constituent interactions to improve consistency.

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Recurring Payments

VISA reported this week that its “automatic bill payments” or “recurring payments” card volume increased 26% last year to $39.9 billion, compared to $31.6 billion in 2001, and $25.1 billion in 2000. Automatic payments for phone services led the segment with $13.3 billion in annual volume in 2002, a 44% increase. Payments for PayTV service increased 50% last year to $3.8 billion. Recurring payments for insurance services was up 44%, to $5.7 billion. Research conducted by VISA in March revealed that the primary reasons consumers choose automatic bill payments are to save time, ensure on-time payment, and avoid the hassles associated with writing checks, buying stamps, and mailing. VISA says another factor in the growth of automatic bill payments with payment cards is the ever-increasing popularity of debit cards.

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Credit Card Analyzer

Microsoft announced this morning it is expanding its “CNBC on MSN Money” personal finance service on June 20th to include a “Credit Card Analyzer” feature. Microsoft also announced that CNBC on MSN Money attracted the largest audience among financial news and information Web sites in March and April, surpassing competitors such as Yahoo! Finance and AOL Personal Finance, according to Nielsen//NetRatings. Microsoft also announced other new tools to enable consumers to monitor investment and market changes. For example, “GainsKeeper” which helps investors optimize investment transactions, minimize tax implications and automatically generate a ready-to-file Schedule D. Additionally, there are new “Candlestick Charts” which show investors open/close/high/low prices for one or more stocks providing at-a-glance insights into the bullish or bearish trends underlying daily stock trading activity.

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SPS 2003

San Diego-based Secure Payment Systems has inked a deal with credit card processor US Merchant Services to offer SPS check guarantee services including the SPS “PayDay” 90-day “same-as-cash” loan program. SPS also reported this week a record 48% increase in volume for the first four months of this year as compared to the same period in 2002. SPS offers an integrated check conversion and gift card program and other check services. The company was founded in 1996 by Lin Fellerman, former 20 year employee and 10 year President of the Telecredit/Equifax Check Services subsidiaries.

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AmEx Defined Cards

American Express has launched a suite of “Defined Expense Cards” for larger corporate clients. The new cards can be set-up to expire after a company-determined period of two to 24 months, and carry a maximum spending limit, as well as monthly or per-transaction spending limits if necessary. An online administrative website enables the program manager to issue, monitor and adjust limits on cards in real time from a central point. AmEx said after a successful in-market pilot with more than a dozen companies, the new card has already been used for employee relocation, per-diem travel advances, virtual office needs, marketing project budgets, educational seminars, and temporary assignments. Unlike pre-paid cards, the “Corporate Defined Expense Program” is centrally billed on a monthly basis, after expenses are incurred, enabling companies to spread out payments over the life of a project.

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INSIDE KARTU-KONTAN

Aix-en-Provence-badsed INSIDE Contactless has been selected by Epecom Technology & Distribution to offer PT Adiwira Sembada a cashless payment solution for a parking pilot program in Jakarta,Indonesia. The “Kartu-Kontan” project will use INSIDE Contactless’ “PicoTag” chip and the “Hand’IT” contactless springboard modules for the hand held readers. Epecom will provide the full integration of the system.

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SLMsoft Update

Toronto-based SLMsoft has filed for protection under the “Companies’ Creditors Arrangement Act” after negotiations with Insight Venture Associates stalled. Insight has filed a petition for bankruptcy against SLM. However, SLM is commencing proceedings to seek a stay of this petition. SLMsoft Inc. provides real-time end-to-end e-banking solutions that include Internet banking, interactive voice recognition, debit and credit card issuing, automated teller machines and point-of-sale network management, retail branch management, and e-CRM enabling technology.

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