ATM Express Joins NYCE

MT-based ATM Express and its 5,024 ATMs have joined the NYCE Network.  ATM Express, which began deploying ATMs in 1999, added to the NYCE Network 5,024 ATMs that it operates throughout the United States. As with all independent deployers in the NYCE Network, ATM Express’ network participation is sponsored by a participating financial institution. ATM Express is also relying on NYCE’s EFT Processing Services division to drive its terminals.

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Disney VISA

Mickey Mouse, Disney’s Michael Eisner and Bank One’s Jamie Dimon this morning will ring the opening bell at The New York Stock Exchange to celebrate the launch of the new Disney co-branded credit card. The “Disney VISA Credit Card from Bank One” is the result of separate deals signed last June by VISA and Bank One with Disney which became effective in January of this year. The co-branded card’s key feature is its “Disney Dream Reward Dollars” program. Cardholders earn 1% of their purchase volume back in “Disney Dollars,” which can be redeemed with as little as 20 “Dollars.” Rewards can be redeemed toward merchandise, theme park tickets, hotel rooms at Disney facilities. The card carries no annual fee, and variable APRs, ranging from prime + 6.90% to prime +10.90%. Bank One says nearly 100,000 people have pre-registered for the card after Disney offered its most loyal customers the opportunity to be first-in-line for the new product last month. In addition to a significant direct mail campaign and retail banking center promotions, Bank One will launch a national multi-million-dollar television and print advertising campaign to promote the card. The television advertising campaign will begin airing the week of March 10. All applicants approved during the first year will be recognized with a “Charter Cardmember” distinction, which will be embossed on their card. Prior to the Bank One and VISA deals, Disney had a long term association with American Express. In 1997, Disney became a global partner in the American Express “Membership Rewards” program. (CF Library 6/5/02)

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Contactless Payments

A new study has determined that if the future of payments lies in cell phones, radio frequency keychain fobs, or chip-based smart cards then it will largely depend on how effectively these methods can provide clear value to the consumer. The TowerGroup study shows that electronic payments continue to gain share at the expense of cash and checks in the USA. In the USA, check-based payments have fallen from 86% to 55% of the total volume of retail noncash payments since 1979. In the next phase of this shift, TowerGroup expects convenient and cost-effective macropayments and high-value micropayments to expand further into new consumer arenas, like movie theaters and fast-food restaurants. TowerGroup says this move is already visible in the introduction of stored value cards by chains like Starbucks, and in the piloting of swipe and contactless cards at fast-food and convenience store chains.

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CIBC 4Q/02

Toronto-based CIBC reported that it maintained its market dominance during
the quarter ending January 31st with a market share of 32% in card purchase
volume and a 21.4% market share in card balances outstanding. For the
quarter, CIBC reported $313 million in card revenue, up slightly from $307
million in the year-ago quarter. Provision for credit losses for the
quarter was $339 million, down from $540 million in the first quarter of
2002 and up from $280 million in the prior quarter. The quarterly business
and government provision for credit losses was $204 million of which 52%
related to the telecommunications and cable, and utilities sectors. Credit
card losses represented 68% of the $135 million in the consumer provision
for credit losses for the quarter.

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Over-Limit Fees

Average over-limit fees have topped $28.00 for the first time, as average late payment fees have climbed above $30.00. Five top issuers now charge $35 over-limit fees. Last week, Discover said it is set to raise its over-limit fee to $35 for balances that exceed $1,000, effective April 1st. If the total Discover balance is less than $1,000, then the over-limit fee is $15. Household, Providian, Fleet, and Chase currently impose a $35 over-limit fee. Providian’s over-limit fee applies to accounts that are more than 2% over the credit limit. Fleet charges a $15 over-limit fee for balances under $500; $29 for balances between $500 and $1,000; and, $35 for balances over $1,000. Chase charges a $29 over-limit fee on all accounts except those subject to “non-preferred” pricing, which are assessed a $35 fee. Close behind is Bank of America, which now charges a $32 over-limit fee. As of the February, the average over-limit fee is $28.01, compared to $27.04 one year ago. The average late payment fee is now $30.07 compared to $28.79 one year ago, according to CardData ([www.carddata.com][1])

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

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IRIS

Paris-based Sagem, a fingerprint identification systems specialist, and
New Jersey-based Iridian Technologies, an iris recognition technology
specialist, have agreed to team. Under terms of the deal, Sagem will adapt
and integrate in its biometric identification systems the iris recognition
technology developed by Iridian. Sagen says that fingerprint recognition
technology is one of the most reliable and high performing solutions,
especially for the management of very large databases. The addition of the
iris recognition technology, renowned as one of the best biometrics, will
enable the development of multi-biometric solutions with unequalled
performance.

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Hacker Update

Omaha-based Data Processors International, a/k/a DPI Merchant Services, confirmed this morning that the total number of credit card accounts impacted from a recent break-in to its database has risen to 10.2 million. However, DPI says the increase from 8 million to 10 million is not related to any new unauthorized intrusions into its payment processing system. On February 3rd, DPI discovered a hack attack on its database, which involved 3.4 million VISA cards, 2.2 million MasterCards, and undetermined number of American Express and Discover cards. VISA says it has levied substantial fines in the matter. VISA also noted that there has been no fraudulent activity to-date. The other card networks also indicate there is no evidence of widespread fraud. So far, Pittsburgh-based PNC Bank, RI-based Citizens Financial Group, and First National Bank on South Africa announced they have de-activated and re-issued affected cards. DPI Merchant Services was acquired by TransFirst in March 2002. DPI reported $850 million in processing volume in 2001. (CF Library 3/15/02; 2/19/03; 2/25/03)

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POLCARD ACQUISITION

Warsaw-based Innova Capital Sp. z o.o. and Rhode Island-based GTECH
Holdings Corporation have teamed to acquire PolCard S.A., debit/credit card
merchant transaction acquirer and processor for approximately $60 million,
and the assumption of $2 million in debt. Following the closing, GTECH will
hold a 62.8% equity stake in PolCard, 36.9% will be held by Innova, and the
remaining 0.3% will be retained by one of the current owners, the Polish
Bank Association. The PolCard business is being acquired from a group of
Polish banks and a travel services company, ORBIS S.A. PolCard has a
nationwide retail network of 34,000 POS terminals and established
relationships with many of the country’s leading card-issuing banks.
PolCard’s most recent annual revenues were $60 million. GTECH has been
operating in Poland since 1991, providing products and services to
Totalizator Sportowy, the National Lottery, including 6,500 POS terminals
and the largest wireless POS network in Central Europe. Currently, less
than 17% of bank-card transactions in Poland are cashless transactions
originating at the POS as compared to 40% for its Western European neighbors.

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Bank One Goes In-House

Bank One announced this morning it is moving its credit card processing back in-house in 2006 with the help of TSYS. In an unusual arrangement, Bank One plans to move to the “TS2” technology platform when its contract with First Data ends in June, 2004. Under terms of the deal, TSYS would maintain all card processing functions, such as account transaction information, for two years. In 2006, Bank One would transfer the processing services in-house under a license of the “TS2” software. Bank One said its decision to handle credit card processing in-house will produce the most cost-effective infrastructure in the marketplace, allowing the bank to introduce innovations faster and deliver individualization. Bank One, the nation’s third largest bank credit card issuer, has 50.3 million cardholders and $74 billion in credit card outstandings at EOY 2002, according to CardData ([www.carddata.com][1]). Last year, Bank One decided to dump the “First USA” name on its credit card products.

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

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LG CARD & MICROSTRATEGY

LG Card has deployed the “MicroStrategy Business Intelligence Platform” to
leverage qualified customer data from its 18.6 million credit card
customers. LG says the new software enables end users to analyze credit
risk for delinquent customers, track credit card usage to up-sell to
existing customers, and analyze significant amounts of customer-interaction
information. LG Card is also enhancing operational efficiency by letting
end users create and run reports they need without IT involvement. LG Card
was formed in 1988 and has a 40% market share of the Korea credit card
market. The firm has 2,750 associated stores, 50 branches nationwide and
6.5 trillion won in revenue.

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Freddie Mac Corporate Card

U.S. Bank Corporate Payment Systems, the largest issuer of VISA-branded commercial card programs, has signed Freddie Mac to a “VISA Corporate Card” program. U.S. Bank Corporate Payment Systems offers clients a full suite of solutions for commercial, fleet and B2B payment needs. U.S. Bank was the first to offer corporate bankcard, purchasing and relocation card programs, the first to offer a private-label fleet card and is one of the largest merchant acquirers in the world.

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Midwest Miles

Midwest Airlines, which has a co-branded program with Juniper Bank, has re-launched its frequent flyer program under the name “Midwest Miles,” and is unloading partnerships with Northwest Airlines and Virgin Atlantic, and adding new partnerships with American Airlines and Air Jamaica.  The program relaunch coincides with the February 28 delivery of the first of 25 new Boeing 717 aircraft, featuring a quieter cabin and newly designed Recaro seats with headrests and footrests for additional comfort.

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