February Rebound

Consumer revolving credit continued its rebound in February, growing at an annual rate of 9.0% compared to 2.2% one year ago. Americans added $5.4 billion to revolving credit in February, compared to $2.6 billion in February 2001. In January revolving credit increased at an annual rate of 5.5%, compared to 1.8% one year ago. The unusual surge in consumer revolving credit for the first two months of 2003 was preceded by a 1.4% drop in November and a 6.7% decline in December. Bank credit card debt at the end of the fourth quarter was $660.9 billion or roughly 93% of total revolving credit, according to CardData (www.carddata.com). According to the government figures released Monday, American consumers were $1.740 trillion in debt, exclusive of home mortgages during February. Overall, consumer credit increased 1.0% in February.

REVOLVING CREDIT HISTORICAL
($billions)
Feb 03 Jan 03 Dec 02 Nov 02 Oct 02 Sep 02 Aug 02
GRWTH: 9.0% 5.5 -6.7 -1.4% 1.6 3.0 6.2
$OWED: $721.1 715.7 712.4 716.8 717.9 721.3 719.5

Jul 02 Jun 02 May 02 Apr02 Mar 02 Feb 02 Jan 02
GRWTH: 8.9% 6.0 4.1 8.0 4.8 2.2 1.8
$OWED: $717.4 715.6 712.1 708.7 705.4 705.0 702.4

Source: Federal Reserve; revised figures as of 04/07/03;

For complete historical data visit CardData (www.carddata.com).

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MAGIC DEAL

Desjardins has inked a deal with Schlumberger Smart Cards and Terminals
for a multi-million dollar project for POS terminals incorporating the
“MagIC 9000” product family. The multi-application “MagIC 9000” terminal
can serve as a stand-alone payment terminal and be integrated with third
party software. It can also house gift certificate and loyalty applications
for the service provider. The common platform allows for portability of
applications throughout different products and services, and the wireless
application increases the speed of time to-market for the customers’
businesses. Desjardins will target the terminals at retail stores,
restaurants, theaters, gas stations and transit operators.

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Taking Stock

Alliance Data Systems and Limited Brands announced they intend to sell 2 million and 7 million shares, respectively, of Alliance Data stock. The net proceeds to Alliance Data plus other available funds will be used to repay $52 million of 10% subordinated notes to an affiliate of Welsh, Carson, Anderson & Stowe, Alliance Data’s largest stockholder.Alliance Data manages over 72 million consumer relationships. (CF Library 1/30/03)

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Alliance AuthExpress

Patrick Townsend & Associates has released Alliance AuthExpress, a new IBM AS/400 and iSeries application that provides an affordable, scalable, and manageable platform for the authorization of credit and debit cards, gift and stored value cards, and for the verification of checks. AuthExpress allows your organization to start out with a small volume of transactions and grow to a large volume without changing your authorization software.

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Infrared Pilot

A new pilot to test an infrared credit card payment service in Tokyo using DoCoMo mobile phones with IrDA ports is being launched in June. VISA International, Nippon Shinpan, OMC Card, AEON Credit, and, NTT DoCoMo have teamed for the project. In the first phase, Nippon Shinpan will select 3,000 VISA cardholders and provide infrared-payment terminals to about 500 merchants. In the second phase, which begins this autumn, OMC Card and AEON Credit Service will join the pilot program to recruit more users and expand the range of participating merchants, bringing the pilot program closer to full commercialization. The pilot leverages a DoCoMo i-áppli application for payments based on the VISA Proximity Payments Messaging Specification. Credit card data is downloaded and then stored in the DoCoMo “504i” and “504iS” mobile phones. There are about eight million owners of DoCoMo “504i” and “504iS” mobile phones which are standard-equipped with an IrDA port to exchange information with other IrDA-equipped devices via an infrared signal.

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GM 4-Play

The pioneer of co-branded rewards-based bank credit cards continues to deliver solid results more than 11 years after its launch. General Motors and Household Bank announced yesterday the “GM MasterCard” recently passed the 4 million mark in new GM vehicle redemptions. GM says the “GM MasterCard” is used in about 12% to 14% of GMs retail transactions, and that in 2002 card redemptions delivered the equivalent of more than 2.5 points of market share for the auto manufacturer. As of January 2003, there were 6.9 million GM cardholders. To celebrate the 4 million redemption mark, GM announced that it awarded $4,000 in bonus GM Card Earnings to four cardholders on April 4th. The “GM MasterCard” was launched in September 1992 and offers five percent earnings on every credit card purchase that can be used to purchase or lease new GM cars, trucks and SUVs. The card was the most successful credit card product launch ever, producing three million cardholders and $2 billion in balances in its first three months.

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Cyota & HBOS

HBOS Card Services has selected Cyota to provide “MasterCard SecureCode” and “Verified by Visa” security services to its five million cardholders. HBOS is the first issuer in the UK to announce a commercial service of this kind. HBOS Card Services will host its service at Cyota’s local facility in London. Currently six of the world’s top ten issuers are already initiating “3D Secure” programs, five of which have selected Cyota as their provider. Cyota services multiple clients in North America, Europe and Asia-Pacific with systems currently available to over 300 million cardholders.

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TERMINAL DEAL

Sydney-based Keycorp has secured an order for more than 1,000 “K26”
terminals and peripherals from Global Payments. Global Payments will offer
the “Retail @dvantage K26” and the “Travel and Entertainment @dvantage K26”
developed jointly by Keycorp and Global Payments for small and mid-sized
merchants in the general retail, travel and entertainment
industries. Global will be able to offer its clients express processing
ability by providing increased memory, client-specific logo and graphic
download ability, secure backlit PINpad, and a built-in high speed thermal
printer.

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