Providian Rebound

Providian reported Tuesday that its charge-off rate has declined for the past three months and that its delinquency rate declined during February. The issuer’s managed charge-off rate declined to 17.00%, compared to 18.00% in January, and 18.79% in December. The managed delinquency (30+ days) rate was 10.77% for February, down from January’s 11.25% rate. The Company’s managed net credit loss rate was 17.34% for 4Q/02, compared to 16.71% in the previous quarter, and 12.70% one year ago. The average charge-off rate among the nation’s top ten issuers for the fourth quarter was 8.07%, according to CardData. The managed 30+ day delinquency rate for Providian at the end of the fourth quarter was 11.11%, compared to 11.23% at the end of the third quarter, and 8.81% one year ago. The average delinquency (30+ days) rate among the nation’s top ten issuers for the fourth quarter was 6.62%, according to CardData. Providian ended the 2002 with $20.0 billion in total managed credit card loans and 12.0 million accounts, according to updated information furnished to CardData ([www.carddata.com][1]).

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

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Triton ATMs

Triton unveiled two new ATMs based on the “Windows Intel X Scale PC Platform.” The “RL5000 Series” and “FT5000 Series” will be available in July. The operating system supports Windows file formats for adding custom logos and advertisements. In addition, both ATMs feature Triton’s completely custom designed motherboard. The “RL5000 Lobby Series” features a large color LCD screen. The “FT5000 Series” is Triton’s first “Through the Wall ATM.” Triton also announced this morning it will provide its customers with a “Triple DES” upgrade path for all of its 83,000 existing ATMs. For Triton’s first ATM, the 9500, Triton will offer a new retrofit kit which will be available by fall 2003. The “Triple DES” upgrade kit for the “Mako” and “9600 Series” is already available.

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HyperSafe Deal

NJ-based PayRight Merchant Services has inked a deal for 10,000 payment card terminals from Hypercom. Under the one-year, multi-million dollar contract, PayRight will begin to immediately roll out terminals using the “HyperSafe” operating system security.PayRight Merchant Services, LLC, based in Haledon, NJ, is a registered ISO/MSP of JP Morgan Chase. In February, Hannaford Bros, a major Northeast supermarket retailer, agreed to deploy 2,000 “ICE 5500M” terminals with the “HyperSafe” operating system in more than 100 of its multi-lane stores. In January, Hypercom announced that footwear specialist Genesco is rolling out Hypercom’s “ICE” card payment technology and terminals to its more than 975 U.S. retail locations by mid-year. And, earlier this month, Bridgeview Payment Solutions, which provides services for more than 27,000 merchants nationwide, signed a contract with Hypercom’s Golden Eagle Leasing unit to offer payment terminal leases. Hypercom maintains an installed base of more than five million terminals in over 100 countries. (CF Library 1/14/03; 2/24/03; 3/5/03)

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Self-Service Set-Up

VeriSign, the leading provider of digital trust services, and Telespree Communications, the leading developer of intelligent acquisition and activation solutions for wireless networks, have teamed up to create a new wireless self-service acquisition system. Self-Service Set-Up enables wireless carriers to revolutionize the wireless acquisition process by automating account, device and plan set-up using only the newly purchased device.

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CO-OP Triple DES

To address MasterCard’s security mandate that all ATMs use updated encryption systems for sending transaction information, CO-OP Network and eFunds have worked with Pi Systems to develop a hardware replacement that meets the new fraud protection standard. The Triple Data Encryption Standard technology will replace the Single DES system currently used by ATMs to protect user PIN numbers from fraudulent activity.

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US Airways Processor

The U.S. Bankruptcy Court of the Eastern District of Virginia for Alexandria has given US Airways 45 days to finalize an agreement with a new credit card processor. The bankrupt airline says it has several banks interested in taking over the processing of its credit card transactions. The airline’s current processor, National Processing, has given it a March 31st deadline to emerge from reorganization or face termination. In May 2002, National Processing announced its decision to discontinue processing debit and credit card transactions for all its airline clients. The Company will honor its existing contractual obligations to the airlines it currently serves but does not intend to renew such contracts when their current terms expire. The contracts currently in effect have various expiration dates extending through November 2005. (CF Library 5/30/02; 2/27/03)

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PCMCIA READER CERTIFIED

EMVCo has awarded its first level one certification for a PCMCIA reader. Ismaning-based SCM Microsystems has successfully passed all EMVCo level one tests for its “SCR241” smart card reader. SCM also participates in the “smart VISA Ready” program. The “SCR241” PCMCIA reader is one of several SCM readers certified as “smart VISA Ready.” Other certified products are the “SCR331” USB reader, the “SCR131” serial reader, and the “SCR531” USB and serial reader. SCM is also an active participant in the “MasterCard Vendor Program.” EMVCo, LLC, was formed in February 1999 by Europay International, MasterCard International and VISA International to manage, maintain and enhance the EMV smart card specifications for payment systems.

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Spiegel Bankruptcy

Six days after notifying the trustees for all six of its credit card-backed securitizations that an early amortization event had occurred, The Spiegel Group announced yesterday it has filed for a “Chapter 11 Reorganization.” Spiegel also confirmed it has secured a $400 million senior secured DIP financing facility from Bank of America, Fleet Retail Finance, and The CIT Group/Business Credit. In its filing documents, Spiegel listed total assets with a book value of $1.737 billion and total liabilities of $1.706 billion as of February 22nd. Spiegel’s First Consumers National Bank is not part of the filing. The bank is being liquidated under the terms of a preexisting consent order entered into with the OCC last year. Last week Spiegel announced it is no longer honoring the private-label credit cards issued by FCNB to customers of Spiegel’s merchant companies, which include Eddie Bauer, Newport News and Spiegel Catalog. Two weeks ago, FCNB discontinued charging privileges on all MasterCard and VISA bank cards issued by FCNB to its customers. On March 7th Spiegel was sued by the SEC for allegedly violating securities laws by withholding material information from the public. FCNB is the 28th largest bank credit card issuer in the USA, according to CardData ([www.carddata.com][1]), with 1,439,479 accounts; 812,843 active accounts; and, $1,059,783,754 in outstandings, as of 12/31/02. (CF Library 2/22/02; 4/23/02; 8/23/02; 2/25/03; 3/5/03; 3/7/03; 3/11/03; 3/12/03)

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

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53 Rewards

Fifth Third Bank announced Monday that all existing and new debit cardholders are now eligible to join the Fifth Third debit MasterCard card rewards program. In addition, the bank is launching the new “Fifth Third Cash Rewards MasterCard” credit card. Last year, Fifth Third launched a loyalty programs to reward both credit card and debit card use. Under the rewards program, debit cardholders earn one point for every $2 in purchases. Under the new credit card program cardholders earn one percent cash back for each $1 in purchases made, with a “Cash Rewards” check issued for every $5,000 in purchases made, up to $50,000 in purchases annually. Cardholders using their traditional Fifth Third select, gold or platinum credit MasterCard cards earn one point for each $1 in purchases. Using their traditional Fifth Third credit MasterCard card, and/or debit MasterCard card, participating cardholders can earn up to 60,000 points annually, with graduated redemption opportunities starting at 3,500 points.

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