SUREFIRE ISO

Montreal-based SureFire Commerce Inc. announced that its U.S. subsidiary has been formally certified and registered as an Independent Sales Organization by VISA and MasterCard. Boston and Houston-based SureFire Commerce Corp. will immediately offer VISA and MasterCard merchant accounts to mainstream POS and e-commerce/card-not-present customers throughout the USA. SFCC will for the first time in the SureFire group’s history be able to acquire transactions for retail point-of-sale merchants. The company expects first year USA revenues to exceed C$10 million. SureFire recently merged with ebs Electronic Billing Systems AG.

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Hero Honda Motor Card

New Delhi-based Hero Honda Motor Ltd., GE Capital India, and the State Bank of India have teamed to launch a co-branded credit card. The new “Hero Honda SBI VISA Card” will initially be marketed to Hero Honda’s seven million customers. Hero Honda is India’s largest two-wheeler maker with annual sales of 1.7 million units. SBI Cards is a joint venture between SBI and GE Capital. SBI Cards currently has 300,000 classic VISA credit cards issued across 25 cities in India. The card will feature no annual fee for the first year, no transaction fees at IOC and IBP petrol pumps on fuel purchases of over Rs 250, and a one-year road accident insurance of Rs 100,000.

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ADVANTEX & UAL DEAL

Toronto-based Advantex Marketing has signed an agreement with UAL Loyalty Services to develop a shopping program for “United Mileage Plus” members offering mileage awards on purchases at local, regional and national retailers in multiple categories. he benefit will also be available for “Mileage Plus VISA” cardholders. They will automatically earn additional miles on their card purchases when shopping and using their “Mileage Plus VISA” card at participating merchants. United Mileage Plus members who do not carry a “Mileage Plus VISA” card can earn miles by pre-registering any credit card of their choice with Advantex. Advantex’s streamlined award processing system eliminates the requirement for members to carry or present a secondary card to earn miles on their purchases. The program is scheduled to commence in the Fall of 2003.

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GLOBAL E-TELECOM & DESTINBANK

LML Payment Systems’s Global eTelecom subsidiary has entered into a long term technology service agreement with Florida-based DestinBank. DestinBank will provide Electronic Check Conversion to its customers and a network of banks nationwide by licensing in-house Global eTelecom’s proprietary Electronic Check Conversion Technology. LML Payment Systems is a financial payment processor providing check processing solutions including electronic check authorization, electronic check conversion and primary and secondary check collection including electronic check re-presentment to national, regional and local retailers.

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Other Reaction

The National Taxpayers Union says the settlements between Wal-Mart and MasterCard and Wal-Mart and VISA appear to preserve important elements of the U.S. payment system and avoid a long, drawn out and expensive legal battle for which consumers and taxpayers ultimately would have footed the bill. However, the NTU says it continues to be alarmed with the prospect of corporations turning to the courts to resolve their business disputes. Meanwhile, the Small Business Survival Committee says the debit card settlements maintains the ability of smaller merchants to continue to accept VISA and MasterCard payment products. However, the SBCC says its biggest concern from the beginning of the Wal-Mart case has been that larger merchants were attempting to destroy a payment system that leveled the playing field between small and large merchants.

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Retailer Reaction

The National Retail Federation gloated over this week’s settlements reached with VISA and MasterCard. The NRF says it’s a victory for both retailers and consumers because high fees have driven up the price of every product sold. The trade association says that VISA and MasterCard have charged merchants more than $1 extra on every $100 spent whenever a debit card user signs for a purchase. The NRF says the settlement will eliminate that extra charge and save American consumers billions of dollars. Under settlements reached with the card associations this week, the fees for signature transactions will be substantially reduced between now and January 1, 2004. In addition, merchants will no longer be required to accept VISA or MasterCard debit cards unless they choose to do so, although most are expected to continue to accept the cards at competitive prices negotiated between the two card companies and the retailers. The MasterCard settlement includes damages of approximately $1 billion while the VISA settlement includes damages of approximately $2 billion. The damages will be divided among the retailers represented in the suit, based on a percentage of the debit card transactions they have conducted.

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Oberthur 1Q/03

Oberthur Card Systems reported that sales for the first quarter, a traditionally weak quarter, reached 103.8 million Euros, a slight increase over 1Q/02. Nearly 29 million smart cards were shipped during the quarter, a 39% gain over the year-ago quarter. Compared to 1Q/02, smart card sales increased by 10.8% as a result of both a volume increase, and a 20.5% average selling price decline. Banking smart cards shipments have increased by 26.9% on a year-on-year basis, totaling 11 million cards delivered. Oberthur says growth in this segment came essentially from the UKIS migration program currently taking place in the United Kingdom. Sales of SIM cards hit 13.4 million cards for the first quarter, a 28.5% gain on a year-on-year basis. For complete details on Oberthur’s first quarter results visit CardData ([www.carddata.com][1]).

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

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Bank Reaction

The Independent Community Bankers of America said Thursday that the VISA and MasterCard debit card settlements, after millions of dollars of legal fees, will only serve to devalue and potentially “Balkanize” the United States’ efficient payment processing systems. The ICBA says that Wal-Mart’s ceaseless expansionist appetite goes far beyond just card litigation, as the retail behemoth continues to try to acquire its own banking charter. Its current focus is the industrial loan company and Wal-Mart supports national legislative efforts underway to expand this charter and accord it full interstate branching powers. The ICBA says the unfortunate court-engineered decision supporting Wal-Mart’s efforts to tear down the payments system that has built consumer credit in America should sound an alarm.

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