BabyMint Award

The Robinson College of Business at Georgia State University has selected BabyMint, a rebate credit card program for college savings, as a finalist for its “Marketing Awards for Excellence.” Finalists are chosen each year by members of the Georgia State University Marketing RoundTable from among dozens of new products introduced by Georgia-based companies. Criteria used to judge the nominees include: degree of marketplace innovation, technological innovation, market structure innovation, marketplace success, and societal impact.

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FSR Card

U.S. Bank and the State of Colorado declared their payment program, that enables the state to disperse child support payments on a VISA card, a success, and is now expanding the program statewide. The program began as a pilot in 2001, and is now used by more than 1,200 recipients in Colorado. It is unique in the USA. Under the “Family Support Registry VISA” debit card program, the state collects court ordered payments, as it has in the past, and electronically loads the payment on to the “FSR VISA.” The card is available to the recipient free of charge. However, there is a $1.50 fee for ATM cash withdrawals. U.S. Bank implemented a similar pilot in the State of Washington and is working with other government agencies to initiate stored value payment cards in more states and in various capacities. U.S. Bancorp has 4,604 ATMs.

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ACTIVCARD 4Q/02

Suresnes-based, ID card security specialist, ActivCard, reported that
fourth quarter revenues hit $12.1 million, a 79% jump over 4Q/01, and a
slight increase over the prior quarter. Net loss for fourth quarter was
$9.2 million, compared to a net loss of $9.8 million in the fourth quarter
of 2001. During the quarter, ActivCard expanded its existing business with
Inovant – VISA, who added AIMS to their current deployment of ActivCard IDM
solutions; expanded existing business with Hewlett-Packard, as the company
placed new orders for ActivCard “Corporate Access Card” products and
services. The company also said it won new business with three new U.S.
Department of Defense agencies for ActivCard Gold during 4Q/02, and also
won new business for its ActivCard “Identity Management System” with a U.S.
federal government civilian agency. ActivCard projects first quarter
revenues to range between $12.0 million and $12.5 million.

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VISA & Hilton

VISA U.S.A. and Hilton Hotels have signed a contract to provide enhanced folio data on all “VISA Corporate” and “VISA Purchasing” card payment transactions for corporate travelers. According to a Visa 2002 Procure to Pay Study conducted by Deloitte Consulting and Deloitte & Touche, 69 percent of survey respondents have implemented a T&E card program, reporting one of the greatest benefits aside from the improved data access to be traveler convenience. The study also found that 26 percent of the companies studied have already implemented an enterprise wide expense reporting solution, while 36 percent plan to implement one in the next two years.

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ALPHYRA SALE

Electronic transactions company, Alphyra Group, valued at 91m euros, is
still up for grabs, unless a management buyout is successful. The Sunday
Times reported the latest suitor is Euronet Worldwide, however, the company
says it is not in takeover discussions with Alphyra. Euronet says it did
have discussions with Alphyra in the summer of 2002 regarding a possible
business combination, but that these discussions had terminated months ago.
Last week, Rendina, an entity formed by management as a buyout vehicle for
Alphyra raised its offer to 2.70 euro per share, after originally offering
2.45 euro per share. First Data initially offered 2.80 euro per share, however the
offer was withdrawn shortly thereafter.

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HF Card Sale

Sioux Falls, SD-based HF Financial Corp., the parent company for Home Federal Bank, confirmed Monday the closing of the sale of its credit card loan portfolio. The principal balance of the remaining receivables at closing was $2.9 million and proceeds from the sale were $500,000. The Company’s subsidiary, HF Card Services, LLC will be winding down operations and dissolving during the first quarter. The Company initially recorded a fiscal 2002 loss from the write down of credit card receivables of $1.4 million, net of taxes. HF Financial also owns Mid America Capital Services, Hometown Insurors and HF Financial Group.

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OPENLIMIT ACQUISITION

OPENLiMiT, a developer of Internet enabled smart credit cards, has inked a
deal to be acquired by Canada’s Jure Holdings. The companies expect to sign
a definitive acquisition agreement before the end of February. Afterwards,
Jure intends to change its company name to OPENLiMiT, Inc. and will request
a new NASDAQ trading symbol. The OPENLiMiT product consists of an Internet
smart credit card that utilizes a digital signature, the OPENLiMiT card
reader, and the OPENLiMiT “Signcube” software. Each OPENLiMiT subscriber
receives an immediate credit line, starting at $200 up to $1,000 depending
on the credit evaluation of the individual. Once a credit limit has been
established, each subscriber is granted access to the OPENLiMiT “Tower,”
where customers can transact purchases on the Internet at preferred rates
with the security that comes from using digital signatures.

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Pegasystems UK Deal

EDS has selected MA-based Pegasystems to provide call center software to support a roll-out of electronic card-based accounts being launched through the UK Post Office. EDS was awarded a contract by Post Office Ltd. in March 2002 to provide a full spectrum of business process outsourcing services to support the payment of benefits directly into Post Office card accounts, beginning in April of this year. The UK Government is changing the way benefit payments are made effective April 1st. Benefit claimants will still be able to collect their benefits in cash from Post Office branches from April on by using their existing account if they bank with one of the Post Office’s banking partners, through a basic bank account, or through a Post Office card account. In July of last year, EDS selected Pegasystems’ software as one of the business process management platforms of choice for use within the Inland Revenue in the UK.

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Top 10 Delinquency

Delinquency rates among the top U.S. issuers edged up again during the fourth quarter, thanks entirely to sub-prime portfolios. Discounting the delinquency rates of Capital One, Providian, Household, and Metris, the average delinquency rate among the nation’s top issuers would have declined 20 basis points over the past twelve months, from 5.23% to 5.03%. On average, the top 10 issuer delinquency rate for 4Q/02 is 6.62%, compared to 6.44% in the prior quarter, and 6.17% one year ago. The only non-sub-prime issuer to report an up-tick in delinquency compared to 4Q/01 is Fleet, which edged up by 7 basis points, according to CardData (www.carddata.com). Bank One reported the sharpest decline in delinquency, from 6.39% to 5.82%. Providian’s delinquency rate grew by 230 basis points. For more historical information on delinquency rates visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 4Q/02 3Q/02 2Q/02 1Q/02 4Q/01 Y/Y CHG
1. Citigroup: 90+ 1.86% 1.88% 1.84% 2.13% 1.98% -12 bps
2. MBNA: 30+ 4.88% 4.79% 4.80% 4.97% 5.09% -21 bps
3. Bank One: 30+ 5.82% 5.73% 5.55% 6.23% 6.39% -57 bps
4. Chase: 30+ 4.67% 4.47% 4.17% 4.58% 4.77% -10 bps
5. Cap One: 30+ 5.60% 5.36% 4.54% 4.80% 4.95% +65 bps
6. Providian: 30+ 11.11% 11.23% 10.16% 10.22% 8.81% +230 bps
7. BofA: 30+ 5.65% 5.29% 5.54% 6.11% 5.87% -22 bps
8. Household: 60+ 4.12% 4.14% 3.90% 4.39% 4.10% + 2 bps
9. Fleet: 30+ 4.12% 3.83% 3.74% 3.97% 4.05% + 7 bps
10. Dir Merch: 30+ 11.10% 10.80% 10.20% 9.80% 9.40% +170 bps
30+ DAY AVG*: 6.62% 6.44% 6.09% 6.34% 6.17% +45 bps
NR- not reported * 60+ day and 90+ day are not meaningful
SOURCE: CardData (www.carddata.com)

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

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Alphyra Sale

Irish electronic transactions company, Alphyra Group, which is valued at $97 million, is in play, unless a management buyout is successful. The London Sunday Times reported that Euronet Worldwide is now looking at a possible deal. However, the company says it is not in takeover discussions with Alphyra. Euronet says it did have discussions with Alphyra in the summer of 2002 regarding a possible business combination, but that these discussions had terminated months ago. Last week, Rendina, an entity formed by management as a buyout vehicle for Alphyra raised its offer to $2.88 per share, after originally offering $2.62 per share. First Data initially offered $3.00 per share, however the offer was withdrawn shortly thereafter, according to The RAM Report. Alphyra has 80,000 merchants in its network spanning ten European countries.

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CheckPoint

MA-based International Wireless has introduced its “MobileVision” suite of wireless productivity and mobile commerce software which includes “CheckPoint” that allows a mobile merchant to scan the MICR number on the bottom of a check to verify the funds using a camera enabled mobile device such as a cell phone or PDA. These applications together with the Company’s “CodePoint” software are expected to make the new generation of digital camera-enabled cell phones and hand held computers (PDA’s) more effective personal productivity and m-commerce tools for the average users. These enhanced devices are expected to also drive increased cell phone usage and improve revenues for wireless carriers (ARPU).

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CO-OP Offers Debit Fraud Tool

CO-OP Network has introduced Fair, Isaac’s “Falcon Fraud Manager” system to member credit unions to fight debit card fraud. Falcon Fraud Manager prevents losses by calculating and assigning scores to incoming transactions using both data-modeling and member profile histories. The result of the system is a neural network that quickly identifies potentially fraudulent activity while generating fewer false positives on cardholder transactions.

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