SCOTIABANK 4Q/02

Scotiabank reported that debit card volumes were up 11% in the latest
quarter. Wireless banking was also up 28% from last quarter. The online
banking active customer base grew by 42% over last year, and transaction growth was even higher. Overall, Scotiabank
reported net income in the quarter ending January 31st of $595 million,
compared to net income of $592 million in the year ago quarter. Return on
equity for the quarter was 16.6%.

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FCNB Cards

Spiegel’s First Consumers National Bank is notifying cardholders that their VISA and MasterCards cannot be used for purchases after tomorrow. Closing down the open-to-buy on outstanding credit card accounts is part of the action take by the bank to liquidate its mostly sub-prime credit card portfolio. Under OCC-approved plans, FCNB must sell or liquidate its portfolio by April 30th. The bank has been trying to unload its portfolio after signing a consent order with the OCC in May 2002 to end the issuance of sub-prime credit cards. FCNB agreed at that time to stop issuing any new secured credit cards unless it is fully secured; increasing the credit line of any existing secured credit card; issuing any new unsecured or partially-secured credit cards to any existing customer with a FICO score below 680; and providing any new credit line increases on any bankcard to any customer having a FICO score less than 680. FCNB also agreed in May to close all accounts with a FICO score of less than 680 and all “Preferred” card accounts with a FICO score of less than 640 that have been inactive for a period of twelve months or more. First Consumers is the 28th largest bank credit card issuer in the USA, according to CardData ([www.carddata.com][1]), with 1,439,479 accounts and $1,059,783,754 in outstandings as of 12/31/02. (CF Library 2/22/02; 4/23/02; 8/23/02)

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

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MAESTRO 2002

MasterCard International’s PIN-based global debit brand, “Maestro,” is now
carried on 505.2 million cards worldwide, a 16.6% increase over year-end
2001. Europe is the largest cardholder base for “Maestro,” with 226.1
million cards, a 9.2% increase over the same period one year ago. There was
also a 25.3% increase in the number of merchant terminals accepting
“Maestro” in Europe during the fourth quarter. With over 188.5 million
cards, Asia/Pacific was the second largest “Maestro” region as of December
31st. The number of “Maestro” cards in the region rose 32.6% over year-end
2001. In Latin America there were 29.9 million “Maestro” cards in
circulation, a 12.6% gain over 2001. The number of “Maestro” merchant
terminals in the Latin America region increased over 25.2% during 2002. In
South Asia, Middle East/Africa, “Maestro” acceptance has been growing
significantly with an increase of 41.2% in merchant terminals as of
December 31, 2002, compared to the same period in 2001. As of the fourth
quarter, there were over 15.4 million Maestro cards in circulation in the
SMEA region. Overall, “Maestro” is accepted for purchases at more than 7.3
million merchant terminals in 93 countries and territories, and at 821,766
MasterCard/Maestro/Cirrus ATMs around the world.

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RECONNET 6.5

Dublin-based Trintech Group has released the latest version of its
industry-standard deposit verification and reconciliation solution. The
basic ACH features of “ReconNet 6.5” is to optimize and automate the
electronic sweep of available funds from various deposit accounts into
consolidated interest-
bearing accounts. The new Advanced ACH capabilities in “ReconNET 6.5” offer
increased automation and accuracy for anticipatory account sweeps that
minimize idle cash, based on weighted historical trends and customizable
account rules. “ReconNET’s” new web “Remote Researcher” streamlines
research tracking and communication across the organization through a
secure, browser-based interface. Research tasks can contain attachments,
like scanned checks or signatures from credit card receipts, and can
automatically escalate and send email alerts if not addressed within a
specified time. “ReconNET,” part of Trintech’s “PayWare” suite of products,
provides business-to-business enterprise reconciliation and treasury
solutions that streamline the management of cash deposits, credit card
payments and disbursements.

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Cruise Platinum VISA

MBNA has added another cruise line to its long list of co-branded cards. Royal Caribbean International yesterday announced it is launching a platinum VISA card with MBNA that offers cardholders one point for every dollar charged and double points for booking a Royal Caribbean cruise, or making purchases onboard any Royal Caribbean ship. The “Royal Caribbean Platinum Plus VISA” is also offering a 2,500 point bonus after the first qualifying transaction. Cardholders may redeem points for upgrades, discounts, special amenities, or free rooms. Upgrades from an inside to an outside stateroom start at 5,000 points, while a free cruise for two starts at 50,000 points. MBNA also issues the “Norwegian Cruise Line MasterCard” and “Orient Lines MasterCard” which offers travel agents a $25 commission for every credit card application they generate that is approved and activated. Meanwhile, Carnival Cruise Lines and Capital One offer a cobranded MasterCard that includes an installment plan option. Last year, MBNA acquired 405 new affinity/co-branded programs and renewed more than 1,100 group contracts, according to CardData ([www.carddata.com][1].) (CF Library 4/12/01; 8/23/02)

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

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VOLUME SLOWS

Credit card volume in January for the UK was pounds 8.2 billion,an
8.0% increase over January, 2002. According to data released by the
London-based Credit Card Research Group, credit card spending has more than
tripled since 1993, reaching pounds 101.8 billion last year, but has slowed
in the past two years. Meanwhile, debit card spending growth has slowed
from its peak in the mid-1990s, with pounds 8.7 billion expenditure in
January, representing a 14.3% increase over January 2002. Combined plastic
spending in January of pounds 16.9 billion was 11.2% up on January 2002
but, not surprisingly, 14.1% down on December. The CCRG also noted that
spending on credit and debit cards in the UK is equivalent to 20.3% of GDP,
compared with an EU average of 9.6%.

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Card Transponders

TI-RFid’s new “Multi-Function Reader Module”, based on the “ISO 14443 B” technology platform, will enable payment terminal manufacturers to support more than one transponder solution for contactless payment applications. The “Multi-Function Reader Module” accepts “ISO/IEC 14443” and “ISO/IEC 15693” standards-compliant radio frequency transponders. Texas Instruments’ new reader module supports “Speedpass” low frequency technology, used by more than six million MobilExxon consumers in North America, as well as TI’s 13.56 MHz ISO 15693 transponder family and new transponders built on TI’s recently announced ISO 14443 Type B platform. Texas Instruments is sampling the “Multi-Function Reader Module” with core customers and will be in full production this quarter. (CF Library 2/26/03)

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Equitex Payroll VISA

CO-based Equitex, the parent firm of Nova Financial Systems, Key Financial Systems, Chex Services, and Denaris Corporation, said this morning it has been approved by VISA to market a prepaid payroll card through West Suburban Bank. Nova and Key service credit card products. Chex Services provides comprehensive cash access services to casinos and other gaming facilities. Denaris was formed to provide stored value card services.

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VSDC & FeliCa

Sony, Infineon, and VISA International have teamed for the joint development of a single-chip “GlobalPlatform” multi-application chip product that supports both “VISA Smart Debit/Credit” payment and “FeliCa” contactless applications. According to tomorrow’s edition of The RAM Report ([www.ramreport.com][1]), more than 60 million VISA smart cards based on EMV contact payment technology have been issued worldwide (9 million in Asia-Pacific) and over 35 million contactless cards employing Sony’s “FeliCa” operating system have been issued, mostly in Hong Kong, Singapore, and Japan. VISA plans to work with Sony and Infineon to jointly develop a single-chip “GlobalPlatform” product that supports all industry standard contact and contactless interfaces. VISA’s ultimate goal is the achievement of cross-platform interoperability across the “GlobalPlatform” and “FeliCa” operating environments, which would allow cardholders to use “FeliCa-based” applications to take advantage of special discounts or accumulate loyalty points when making purchases on their VISA cards and enable service providers to offer cardholders the convenience of using “VSDC” payment functionality to top-up the value on prepaid transit or e-purse applications in one simple transaction.

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

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UK Volume Slows

Credit card volume in January for the UK was pounds 8.2 billion, an 8.0% increase over January, 2002. According to data released by the London-based Credit Card Research Group, credit card spending has more than tripled since 1993, reaching pounds 101.8 billion last year, but has slowed over the past two years. Meanwhile, debit card spending growth has slowed from its peak in the mid-1990s, with pounds 8.7 billion expenditure in January, representing a 14.3% increase over January 2002. Combined plastic spending in January of pounds 16.9 billion was 11.2% up on January 2002 but, not surprisingly, 14.1% down on December. The CCRG also noted that spending on credit and debit cards in the UK is equivalent to 20.3% of GDP, compared with an EU average of 9.6%.

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