CARD LIMITS

The Reserve Bank of India announced this week it is lifting its $10,000
annual limit on foreign credit card spending by consumers and its $25,000
for annual restriction on international business travel credit card
spending as mandated by the Foreign Exchange Management Act. The RBA says
credit card users will now be limited by their credit card credit lines and
will no longer need special permission to exceed the annual RBA limits.
Under the current RBA rules, the credit limit for a “Classic”/”Silver”
credit card is between Rs 15,000-Rs 50,000 (apprx. $300 and $1000); “Gold”
card credit limits are now between Rs 50,000-Rs 300,000 (apprx. $1000 and
$6000); and, “Platinum” card credit limits begin at Rs 500,000 (apprx.
$10,000). India has about six million credit cards and the average annual
credit card volume per card of about Rs 17,000 ($350). There are less than
10,000 “Platinum” credit cards in the country. The Reserve Bank of India
also noted that rules prohibiting purchases of lottery tickets, banned
magazines, sweepstakes, and payment for call-back services will continue in
force.

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Providian 4Q/02

Providian reported a $12.1 million fourth quarter profit compared to its huge loss of more than $481 million in 4Q/01. Even though the company sold off several segments of its portfolio last year, dumping 8.5 million accounts, the issuer originated more than two million new accounts during 2002, with 750,000 generated in the fourth quarter. During 4Q/02, Providian sold off its “First Select” card segment which included 600,000 accounts. The issuer ended the quarter with $19.6 billion in total managed credit card loans and 12.0 million accounts. The Company’s managed net credit loss rate was 17.34% for 4Q/02 compared to 16.71% in the previous quarter, and 12.70% one year ago. Providian noted that effective November 1, 2002 they began recognizing charge-offs for accounts of deceased customers within 60 days after verification of death. The transition to the new policy increased managed net credit losses in the fourth quarter of 2002 by approximately $16 million. The managed 30+ day delinquency rate at the end of the fourth quarter was 11.11%, compared to 11.23% at the end of the third quarter, and 8.81% one year ago. For 2003, the Company expects managed net credit losses of approximately $3.0 billion, with managed net credit losses of approximately $875 million in the first quarter of 2003. The December sale of the “First Select” accounts produced a pre-tax charge of approximately $42 million. Solicitation and advertising expense in the fourth quarter was $65.6 million compared to $126.4 million in the prior quarter. For complete details on Providian’s 4Q/02 results visit CardData ([www.carddata.com][1]).

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

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AmEx & TD Bank

As reported earlier this week in The RAM Report ([www.ramreport.com][1]), Amex Bank of Canada has signed an agreement to purchase the VISA accounts of approximately 300-500 TD Bank Financial Group’s corporate clients that have annual revenues of more than US$12.5 million. Under terms of the deal, which reportedly is worth in excess of US$120 million, TD will promote a broad range of American Express corporate products to its commercial clients while AmEx issues, manages and supports TD’s corporate card program for major clients. The migration from VISA commercial cards to AmEx cards will be completed by mid-summer. Two years ago TD Canada Trust sold its MasterCard portfolio to Citibank Canada. One year ago, AmEx inked a deal with CIBC to issue a suite of AmEx credit cards including a smart card. The CIBC/AmEx card products carry the name “entourage.” The three “entourage” credit cards include the “American Express Smart Card,” “Platinum American Express Card,” and the “Business American Express Card.” Under terms of the deal, CIBC will issue the cards, own the accounts and handle the customer service support for the AmEx cards, including authorizations, billing and credit management. (CF Library 1/10/02)

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

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LaundryCard

IL-based Card Concepts has integrated the highly-reliable MEI cash acceptor into its new “X-Changer LaundryCard” kiosks. With the kiosks, customers can use $1, $2, $5, $10, $20, $50 or $100 bills to purchase prepaid service cards that work like rechargeable debit cards. The system also enables laundromat owners to track customer behavior in order to build loyalty programs and launch marketing initiatives such as direct-mail marketing and cash-back programs. To date, Card Concepts has installed “X-Changer” kiosks in 26 locations throughout the USA.

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ADS 4Q/02

Dallas-based Alliance Data Systems reported that fourth quarter revenue increased 12% to $236.8 million and that net income increased to $10.6 million in 4Q/02. Transaction Services revenue increased 4% to $142.3 million. Credit Services revenue increased 24% in the fourth quarter to $98.0 million. Total private label credit sales increased 22%, driving fee income and portfolio growth. Marketing Services revenue increased 21% in 4Q/02 to $62.4 million. The “AIR MILES Reward Miles” issued, which is a predictor of future performance, registered the strongest quarterly growth of the year, increasing 15% in the fourth quarter. For the year 2003, ADS projects revenue of approximately $970 million compared to $872 million for 2002. For complete details on ADS 4Q/02 results visit CardData ([www.carddata.com][1]).

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

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Moneris Solutions Reports it Processed a Record 8.5 Million Card Transactions on December 23rd

Amex Bank of Canada has signed an agreement to purchase the VISA
accounts of approximately 300 TD Bank Financial Group’s corporate clients
that have annual revenues of more than $20 million. Under terms of the
deal, which reportedly is worth in excess of $200 million, TD will promote
a broad range of American Express corporate products to its commercial
clients while AmEx issues, manages and supports TD’s corporate card program
for major clients. The migration from VISA commercial cards to AmEx cards
will be completed by mid-summer. Two years ago TD Canada Trust sold its
MasterCard portfolio to Citibank Canada.
One year ago, AmEx inked a deal with CIBC to issue a suite of AmEx credit
cards including a smart card. The CIBC/AmEx card products carry the name
“entourage.” The three “entourage” credit cards include the “American
Express Smart Card,” “Platinum American Express Card,” and the “Business
American Express Card.” Under terms of the deal, CIBC will issue the cards,
own the accounts and handle the customer service support for the AmEx
cards, including authorizations, billing and credit management.

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BabyMint Acquires NestEggz

Atlanta-based BabyMint has signed an agreement to acquire the assets and loyalty rewards program of the NestEggz division of Nuvisio for $4.5 million cash. The NestEggz loyalty rewards program enables consumer products companies (CPGs) to broadly distribute fraud-protected coupons online. Kellogg USA, Kimberly-Clark, Mott’s, Clairol, Fleischmann’s, Birds Eye, GlaxoSmithKline, Georgia-Pacific, and Borden Foods were among the first to promote their products online using NestEggz when it launched in April 2001.

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Diebold 4Q/02

Diebold yesterday reported fourth quarter profits of $21.9 million on revenues of $525.8 million. However, ATM-related revenues decreased 5.2% from $413.8 million for 4Q/01 to $392.5 million for 4Q/02. The results included a one-time charge for the cost of settling a tax dispute with the IRS. During the fourth quarter Diebold signed $12 million in ATM deals in the USA, $8 million from several financial institutions in India, more than $4 million from financial institutions in Brazil, $3.2 million from a financial institution in Indonesia, orders for more than $3.2 million from two financial institutions in China, and, more than $2 million from a large financial institution in Canada. Diebold expects first quarter revenues to increase in the mid-single digit range vs. prior year. For complete details on Diebold’s 4Q/02 results visit CardData ([www.carddata.com][1]).

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

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VISA’s Boxing Day Volume Approaches $300 Million

Intelli-Check and Bioscrypt have teamed to combine the enhanced
security provided by Bioscrypt’s fingerprint verification algorithm with
Intelli-Check’s “ID-CHECK” technology to prevent economic loss from
check-cashing, credit card and various other frauds utilizing fake
identification and to provide an enhanced security system for access
control at airports, seaports, bus and rail terminals and other high
profile infrastructure. The proposed combined solution will store the
fingerprint template in a 2D bar-code where it will be read by the
“ID-CHECK” technology to perform user authentication. The user
authentication is performed seamlessly and automatically in seconds using
Bioscrypt’s award winning fingerprint recognition algorithm. This provides
a secure link between the user and the document enhancing protection
against fraud and identity theft underlying economic loss and security
violations.

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Card Mail 4Q/02

Approximately 1.2 billion direct mail credit card offers were received by US households during 3Q/02, the same volume mailed in 3Q/01. Nearly eight out of ten solicitations received by American households during the third quarter were “Platinum” offers, compared to 68% of all offers received the same time the prior year. According “Mail Monitor,” the direct mail tracking service from Synovate (formerly BAIGlobal), consumer response rates remained at a low rate of 0.7%. More than one third of the 3Q offers promoted a 0% introductory rate for purchases, and 52% promoted a 0% introductory rate for balance transfers. About 7% of the offers promoted a 0% intro rate for cash advances. The average introductory period for purchases increased from seven months in the second quarter to eight months in the third quarter of 2002, and the average introductory period for balance transfers increased from seven months to nine months over the same period. Reward and/or cash rebate offers made up 27% of all credit card mailings during the third quarter compared to 20% in the third quarter of 2001. Synovate says just under half of all co-branded offers promoted some form of reward/rebate scheme during the third quarter, up from 31% during the same period the year before.

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PayMaxx Card

Payroll processor, PayMaxx, has teamed with Bank One to re-launch a VISA debit card in April. The “PayMaxx PayCard,” enables employers to directly deposit funds into the employee’s PayCard account each payday and is targeted at unbanked employees. PayMaxx previously offered a VISA debit card through BankTennessee in 2001. PayMaxx says its research shows that employees in high turnover industries often find obstacles to cashing their payroll checks and managing their funds. The payroll company says it will target hospitality, manufacturing, fast food, and trucking industries for the debit card product. VISA estimates that 12-15 million households, or 20% of the U.S. population, do not have a traditional banking relationship. (CF Library 5/2/01)

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