OBERTHUR 4Q/02

After a sluggish first half in 2002, Oberthur Card Systems reported that
revenues for the fourth quarter were up 15.5% over the third quarter, to
119.3 million euros. Smart banking card sales hit 11.0 million cards in the
fourth quarter, up 3.7% over the previous quarter, driven by migration
programs in the United Kingdom, France and Benelux. However, full year 2002
revenues declined by 9.1% to 440.1 million euros, due to a broad internal
reorganization. After posting a first half loss, Oberthur says that EBITDA
has more than tripled compared with the first half. Over the course of
2002, Oberthur was able to achieve lower purchasing prices of components,
reduce its staff more than 10%, and cut net debt from 142 million euros on
EOY 2001, to less than 90 million euros as of EOY 2002.

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Carte Blanche Bennies

Diners Club has lifted its annual limit on complimentary tickets on British Airways for “Carte Blanche” cardholders. Diners previously limited “Carte Blanche” cardholders to one complimentary ticket per year, according to CardTrak ([www.cardtrak.com][1]). Cardholders who purchase a full fare round-trip ticket in any of four classes of service on British Airways, can request a complimentary companion ticket. British Airways offers the Concorde, First Class, Business Class, or World Traveller Plus (premium economy) service. Round-trip air fare, per person, for the Concorde from New York’s JFK Airport to London’s Heathrow currently runs about $12,500. Diners also offers unlimited access to free companion tickets on Korean Air for “Carte Blanche” cardholders. Citigroup revived the “Diners Club Carte Blanche” card in December 2000. Other features of the card include access, for up to three guests, to many of the world’s finest private, semi-private and public golf courses. The card carries a $300 annual fee. (CardTrak New 12/15/00)

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

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Heartland PayDay VISA

NJ-based Heartland Payment Systems has launched the “PayDay VISA” card for its small- and mid-sized business clients. The new signature and PIN-based payroll cards are aimed at helping employers reduce costs associated with producing, handling and distributing traditional paychecks as well as the re-issuance of replacement checks in cases of loss or theft. Visa estimates the potential cost savings alone for replacing lost, stolen or damaged paychecks is approximately $50 million annually.

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GEMPLUS & SAGEM

Smart card specialist Gemplus, and biometrics specialist Sagem, have
teamed. The cooperation derives from a recent joint national identity
customer win in the Sultanate of Oman, where 1.5 million
biometrics-enabled smart cards are to be issued to the local population by
the end of 2003. Sagem provides advanced biometrics technology and system
integration technology and expertise, while Gemplus delivers smart card
technology, as well as the related software & services required for
identity programs.

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ViVOpay

Santa Clara, CA-based ViVOtech has launched a contactless payment terminal that enables merchants to upgrade their current magnetic-stripe POS to accept payment from contactless cards at a low cost. “ViVOpay” terminals are currently being piloted in Orlando as part of a trial for MasterCard “PayPass.” The Orlando pilot involves contactless payments for gas stations, convenience stores and fast food restaurants. “ViVOpay” is designed to accept RF payments, as well as infrared proximity payment technologies, using the same system. In addition to contactless cards, consumers will soon be able to make payment by pointing or clicking their cell phones or PDAs. ViVOtech has more than 10 patents pending on various enabling technologies. The company is privately held. The management and advisory board includes former executives from First Data, Citibank, Diebold, Intuit, McCaw Cellular, Mervyns, VeriFone and VISA. In December, MasterCard launched “PayPass.” Manufacturing companies supporting “PayPass” include Infineon/SC2, OTI/Samsung, Philips Semiconductor/Oberthur. Card manufacturing supporters include CPI Card Group and Oberthur USA. Card personalization providers include First Data and MBNA. POS providers include C-SAM, OTI, Panasonic, Stella, VeriFone, ViVOtech, and 3 Form Design. Testing and compliance supporters include Cadimes, Caradas, and Consult Hyperion. Merchant installations are by Edgar Dunn and OTI. (CF Library 12/12/02)

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OTI LISTING

Smart card contactless technology provider OTI announced that the Deutsche
Boerse AG approved the admission of the company to the “Prime Standard
Segment.” Trading of OTI Shares on the Neuer Markt segment has been
stopped. The company was listed on the Neuer Markt since Aug 31, 1999.
Deutsche Boerse AG has decided to close the segment at the end of 2003. OTI
was also recently listed on NASDAQ.

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NextCard Card Bonds

NextCard credit card-backed securities have been downgraded again as payment rates declined to 4.8%, while delinquency and gross charge-off rates have increased to 18.80% and 28.10% during December. Trust yield, which historically averaged approximately 19.15%, prior to June 2002, has fluctuated dramatically during the past seven months, ranging between 8.96% and 20.35%. Therefore, Standard & Poor’s Ratings Services yesterday lowered its ratings on all classes of NextCard Credit Card Master Note Trust’s asset-backed notes series. Class A notes have be moved to “BBB+” and Class D notes have been moved to “CCC.” Unable to find a buyer for NextCard’s portfolio, the FDIC, in July, closed the underlying credit card accounts open-to-buy. On Aug. 1st, First National Bank of Omaha was appointed the successor servicer for NextCard for a 2% per annum servicing fee. The conversion process between NextCard and FNBO was completed by the end of September, at which time the FDIC terminated all of its responsibilities as subservicer. The OCC closed NextBank on Feb. 7th, 2002 and the FDIC was appointed the receiver. (CF Library 2/8/02; 2/11/02; 3/14/02; 6/10/02; 7/3/02; 7/11/02; 11/18/02)

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Bibit & Sodexho

San Jose-based Bibit Global Payment Services has teamed with MD-based Sodexho School Services to enable the use of debit and credit cards for K-12 school meals. Pilot programs in place at Sodexho K-12 public school foodservice accounts across the United States allow on-line payments, using debit and credit cards, for school meals. Eventually, this system will be available at more than 3,000 schools across the nation and can be expanded to provide transaction services for fees, uniforms and other education expenses.

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Blue Music

American Express and VH1 have jointly launched “Blue For Save The Music,” a new program to restore music education programs in America’s public schools. AmEx, which has pledged $1 million to the program, will launch the yearlong effort in conjunction with this year’s GRAMMY Awards taking place on February 23rd. AmEx will sponsor a star-studded “GRAMMY Viewing Benefit Event” at The Theater in Madison Square Garden on GRAMMY night. Tickets for the benefit will be available first to “Blue” customers beginning mid February, with proceeds donated to “Blue For Save the Music.” Following the GRAMMY Awards ceremony, musical instruments and memorabilia used by awards show performers will be for sale via an Internet auction. Proceeds from the auction will be donated to music education programs through “Blue For Save The Music” and the “GRAMMY Foundation.”

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Cardtronics CEO

Houston-based Cardtronics has hired Jack Antonini, formerly EVP of First Union and CFO at First USA, as president and CEO. Antonini brings more than 29 years of banking and financial services experience to Cardtronics. Most recently, he served as chairman/president and CEO of Austin-based Globeset, Inc., a supplier of secure ePayment infrastructure services and products, with customers such as Verizon Wireless and Southwestern Bell.

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CashWorks Funding

Dallas-based CashWorks, a provider of the “PayPort” technology solution for the non-bank financial services industry, has completed its “B” round of funding, raising over $5 million, with Capital Southwest as the lead investor. CashWorks’ patent-pending technology leverages the ATMs already installed in retailers to provide low-cost check cashing and other services. The company currently has deployed its patent-pending PayPort technology in nearly 300 retail locations across 13 states and is projected to have over a thousand locations by year-end.

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Gottschalks Card

Gottschalks, the western regional department store chain, announced Monday it has completed the sale of its private label credit card operations to Household’s retail services business. The sale agreement includes the servicing of the Company’s more than one million credit card accounts that generate annual credit card sales of more than $300 million. Gottschalks currently operates 69 department stores and thirteen specialty apparel stores in California, Washington, Alaska, Oregon, Nevada, and Idaho. At the end of 2002, Household has $14,916,700,000 in private label credit card outstandings. Household’s private label credit card portfolio has grown 8% over the past twelve months.

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