MC SMART CARDS

MasterCard International reported that smart card issuance in the Asia/Pacific region doubled last year. At the end of 2002, there were more than 8.0 million smart cards in the region, compared to 3.8 million in 2001. Globally, more than 127 million MasterCard smart cards have been issued, a growth of 7% in year 2002, as compared to 2001. Therefore, Asia/Pacific’s share of the number of MasterCard smart cards worldwide grew from 3.3% to 6.3% in year 2002. MasterCard says that working with KeyCorp Limited, it has brought down the price of its 16K multi-application MULTOS card to US$1.99. The card contains the MasterCard “M/Chip” credit/debit application, “Mondex” e-cash, PKI file storage and PKI identification applications in the ROM portion of the chip. MC has slated 2006 as the year for which most cards in Asia/Pacific will be migrated to chip cards.

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T.G.I. Fridays & Fifth Third

Carlson Restaurants Worldwide/T.G.I. Fridays has selected Fifth Third Bank Processing Solutions as their endorsed credit card processor. Fifth Third Bank processes 8.2 billion ATM and POS transactions per year for more than 180,000 retail locations and financial institutions worldwide, including The Kroger Co., Abercrombie & Fitch, Nordstrom, Inc. and The Finish Line. Fifth Third processes $83 billion in credit card sales annually. Fifth Third Bank has recently moved from the eighth largest bank acquirer to the fifth largest bank acquirer according to The Nilson Report (February, 2002).

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HOME CAPITAL 4Q/02

Home Capital reported this week that its consumer lending unit had
22,265 VISA cardholder accounts with receivables of $16.2 million at EOY
2002. The gross credit card receivable balance is comprised of $10.0
million in accounts secured by cash deposits or mortgage collateral and
$6.6 million in
unsecured accounts. The total credit approved is comprised of $17.0 million
in secured and $9.5 million in unsecured credit lines. The recent
introduction of the secured “Equity Plus VISA” product has pulled in 208
accounts and receivables of $4.0 million at year-end. The Company’s
strategy of focusing on credit cards secured by cash deposits or home
equity is illustrated by the increase of secured loans to 60.2% of the
credit card receivables as compared to 28.4% at the end of 2001. In
November, Home Trust announced a further expansion of its partnership with
First Data through which Home Trust will offer VISA credit card acceptance
services to Canadian merchants beginning in the first quarter of this year.

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MC UK Fees

The UK Office of Fair Trading has notified MasterCard that its interchange fee is an “unjustifiably high fee” and an “infringement of the Competition Act” unless MasterCard can provide a cost-justification for the fee. The bold move mirrors the action recently taken in Australia, whereby the Reserve Bank of Australia is cutting credit card merchant fees by 40%. The OFT is unofficially looking for MasterCard to cut the interchange fee from 110 basis points to 70 basis points. VISA is not part of the current OFT investigation. However, VISA agreed with the European Commission last summer to reduce the rate of cross-border interchange by 27%, to 70 basis points, by 2007. Interchange fees in the UK produce about $1.3 billion in revenue according to the RAM Research Group. MasterCard has about a 32% share of the UK market. The British Retail Consortium, originally complained to the OFT about the fees in 2000 and reportedly welcomed the OFT ruling. MasterCard has eight weeks to respond to the OFT. In August, the Reserve Bank of Australia released its final reforms on credit card programs which included dropping average interchange fees by 40% and lifting the restriction imposed by credit card programs which prevent merchants from recovering from cardholders the costs of accepting credit cards. Under the new RBA rules, interchange fees will decrease from around 95 basis points to approximately 55-60 basis points by July 1st of this year. (CF Library 8/27/03; 1/14/03)

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TU FICO

Fair, Isaac has teamed with TransUnion to introduce the “FICO-Scored TransUnion Credit Profile.” Fair Isaac previously launched a similar service with Equifax. Via myFICO.com, the new “FICO-Scored TransUnion Credit Profile” provides customers with their personal “FICO” score and current TransUnion credit report on which their score was based. The online product includes a detailed explanation by Fair, Isaac of their FICO score, the positive and negative factors affecting their score, and personalized strategies for improving their score over time. The product also includes use of the “FICO Score Simulator,” an interactive tool that allows consumers to quickly see how financial actions they might take could impact their “FICO” score. The FICO-Scored TransUnion Credit Profile is priced at $12.95. Purchasers can view their information online for 30 days.

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Travelocity & MasterCard

Travelocity has renewed its alliance with MasterCard International. As part of the multi-year agreement, Travelocity and MasterCard have teamed up to create an expansive program to market destinations, airlines, hotels, cruise lines, vacation packages, car rental specials and more. The agreement has been broadened to include travelocity.ca, Travelocity’s Canadian Web site, and last-minute travel site, Site59. The expanded scope of the new agreement reflects the success of the relationship between the two companies since June 2000 jointly offering compelling and rewarding consumer travel options.

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PAYWARE ACQUIRER 5.0

Dublin-based Trintech Group has released “PayWare Acquirer 5.0.”
The new version enables any transaction processor to extend their payment
solutions by fully integrating payment processing and acquiring services
with a hosted merchant payment function for businesses that process online,
offline, virtual and physical transactions. “PayWare Acquirer” incorporates
the merchant payment processing function within the payment gateway
application to provide straight through transaction processing, providing
the essential technology infrastructure to take advantage of both B2C and
B2B opportunities in global and electronic commerce.

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HypeSafe Chip

Hypercom and First Data’s First aSuretee subsidiary have partnered to combine aSuretee technologies and Hypercom’s information and transaction terminal technology to securely authenticate individuals authorized to conduct transactions on Hypercom terminals. The solution will feature new biometric technology from Hypercom with aSuretee digital signature capabilities. The aSuretee chip authentication solution will now be offered as a standard feature that can be embedded in Hypercom’s “HyperSafe” “ICE” terminals. The chip is pre-configured with a public/private key pair that is secured by an authorized administrator of the terminal owner. Once the authorized administrator registers the terminal for transaction services, the aSuretee chip generates a unique digital “signature” for all transactions. This signature, which is transmitted from the terminal every time a transaction is initiated, guarantees that the transaction is secure and serves to authenticate the terminal itself. The new solution will feature Hypercom’s “BioPin” biometric which converts a fingerprint into an algorithmic reference.

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iDine 4Q/02

Miami-based dining rewards program provider, iDine Rewards Network, reported 4Q/02 operating revenue of $22.9 million, an increase of 66% over the same period one year ago. Gross dining sales in the fourth quarter amounted to a record $85.5 million, an increase of 69% over the corresponding prior year period. Profits for the fourth quarter were $4.7 million compared to $1.1 million for 4Q/01.The Company currently has 17.2 million credit cards registered through 12.7 million enrolled accounts. Dining incentives are offered through the Company’s dining programs, either branded under the name “iDine” or provided through co-branded and private label partnerships, such as airline frequent flyer programs, club memberships or other affinity organizations. iDine Reward Network currently has more than 9,700 restaurants in the USA participating. For complete details on iDine’s latest performance visit CardData ([www.carddata.com][1]).

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

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