Gen Y

On average, 52% students pay for things they buy at a college store with a credit or debit card. Cash is still king and is used most frequently by 40% of students. Those who use credit cards primarily use VISA (42%) and MasterCard (23%). The study by the NACS Foundation, the research and education arm of the National Association of College Stores, also found that the number of student buyers online has now risen to 72% and the vast majority of students (83.5%) claim to be either “extremely happy” or “somewhat satisfied” with their last online purchase, although the percentage has dropped since 2000 when 90% of students reported satisfactory experiences online. Students that have not yet embraced online shopping expressed a lack of need or desire (40%), security concerns (35%), or lack of a credit card needed to make a purchase (23%) as the primary obstacles to online purchases.

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Spiegel Suit

After shutting down credit lines on its bank credit card portfolio last week, Spiegel, the parent of First Consumers National Bank, was hit with a lawsuit from the Securities and Exchange Commission. The SEC alleges Speigel violated securities laws by withholding material information from the public. The complaint alleges that Spiegel withheld the fact that in or about the beginning of 2002, its independent auditor had notified Spiegel that it may not be able to continue as a “going concern.” The SEC says Spiegel’s independent auditor later provided a proposed auditor report in or about January or February 2002 which stated that the audit firm had “substantial doubts” about Spiegel’s ability to continue as a going concern absent the company addressing certain financial issues. The complaint alleges that Spiegel decided not to make its required 10-K and 10-Q filings to conceal the “going concern” issue from the public. Instead, the company filed a series of Forms NT (notices of late filing) indicating that Spiegel was not in a position to file because various lending agreements were not in place. According to the complaint, statements made by Spiegel executives confirm that Spiegel chose not to make its required filings to avoid disclosing the “going concern” notice and to avoid the negative “disruptions” that the disclosure of this information would cause.

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MOBILE BANXAFE

Banksys, Mobistar, and Gemplus have launched the first national mobile payment application in Belgium. When using the new “mobile banxafe,” the customer will receive a description of the transaction, displayed directly on his/her mobile phone screen. To authorize this, the customer will enter his “mobile banxafe” PIN code, or digital signature, which is then verified by the applet. If the PIN is correct, the signature is sent to the authentication server via the SMS channel, which authorizes the transaction to be processed. Payment commissions are fixed and shared in collaboration with the banking sector, which is responsible for the authorization, risk management, clearing and settlement. Mobistar had a total of 2,305,390 active customers at year-end 2002.

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NB AZ & eFunds

National Bank of Arizona has teamed with eFunds to launch its new core ACH processing system. The immediate benefits of the new system, according to Jorgenson, include automatic re-presentment of NSF returns and an ACH transaction warehousing feature that will allow corporate clients to schedule their file transmissions weeks in advance of settlement dates.  Other benefits include the automation of the bank’s ACH file distribution through multiple windows to the Federal Reserve Bank and the integration of the bank’s ACH Support and Cash Management operations to allow for instant online access to customers’ file information.

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DATAWAVE EXECS

Vancouver-based DataWave Systems says its CFO/Director Marc Belsky has
resigned. John Gunn, General Manager, North American Operations, has been
appointed CFO to replace Belsky. The Company also announced the appointment
of Syd Franchuk as Director of DataWave Systems. Franchuk is President of
National Money Mart Co., based in Victoria, British Columbia, the largest
provider of convenience-based retail financial services in Canada. DataWave
is a developer of prepaid and stored-value programs.

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Top 10 Market Share

Based on year-end credit card outstandings, Citibank, Chase, Capital One, and Fleet made gains in market share last year. The top ten U.S. issuers of VISA and MasterCard, now hold 70.7% market share of outstandings. American Express and Discover, which both lost market share last year, have a market share of 5.2% and 7.7%, respectively. AmEx had a market share, based on outstandings of 8.1% in 2001, while Discover held a 5.3% share. Among the top U.S. VISA and MasterCard issuers, Sears National Bank made the largest percentage move, from 0.8% to 1.9%.

TOP TEN U.S. VISA/MASTERCARD ISSUERS MARKETSHARE
(based on outstandings)
EOY 2002 EOY 2001
1. Citibank 17.6% 16.4%
2. MBNA America 12.0% 12.3%
3. Bank One 11.2% 11.2%
4. JP Morgan Chase 7.7% 6.7%
5. Capital One 7.7% 6.3%
6. Bank of America 4.5% 4.5%
7. Providian 3.0% 5.4%
8. Household Bank 2.6% 2.7%
9. Fleet 2.5% 2.6%
10. Sears National 1.9% 0.8%

Source: CardData ([www.carddata.com][1])

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

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RENMINBI CREDIT CARD

Shanghai Pudong Development Bank and First Sino Bank are teaming to issue the first renminbi-denominated credit card in mainland China. However, the new card is primarily targeted at Taiwan business people in the China. First Sino Bank, an affiliate of Taiwan’s Bank SinoPac, is also owned by Hong Kong-based Lotus Worldwide and Shanghai Pudong Development Bank. Earlier this year, Citigroup acquired a 5% interest in Shanghai Pudong Development Bank in an effort to enter the Chinese credit card market, with plans to issue a co-branded local currency card later this year. In March, Citigroup received permission to carry out foreign currency transactions, enabling it to expand its consumer operations. Citigroup first launched consumer banking operations in China in 2001. Only 20 million consumers carry credit cards in China.

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