MBNA 4Q/02

MBNA reported that fourth quarter profits rose 2.9% to $540.2 million, compared to $524.8 million one year ago. Gross dollar volume for 4Q/02 hit $43.9 billion, compared to $39.2 billion for the fourth quarter of 2001, a 12.0% gain. Managed outstandings for 4Q/02 were $107.3 billion, compared to $97.5 billion one year ago, a 10% increase. Charge-offs increased to 5.04% for 4Q/02, compared to 4.86% one year ago. Delinquency declined 21 basis points over the past twelve months from 5.09% to 4.88%. MBNA’s net interest margin also declined. For 4Q/02 MBNA’s NIM dropped to 8.47% from 9.00% one year ago. For the year, MBNA added 14.2 million new customers or 12.0 million new accounts. The company acquired 405 new endorsements from organizations and renewed more than 1,100 group contracts during the year. For complete details on MBNA’s latest performance visit CardData ([www.carddata.com][1]).

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

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ACE 4Q/02

ACE Cash Express reported fourth quarter net income of $2.4 million on revenues of $57.3 million. ACE Cash Express, Inc. is headquartered in Irving, Texas and is the largest owner, operator and franchiser of check-cashing stores in the United States. Founded in 1968, the Company has a total network of 1,170 stores, consisting of 977 company-owned stores and 193 franchised stores in 35 states and the District of Columbia.

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Advanta 4Q/02

Advanta reported that business credit card outstandings rose 27% in the fourth quarter to $2,594,230,000. Gross dollar volume increased 47.5%, from $1.16 billion for 4Q/01 to $1.71 billion for 4Q/02. Charge-offs dropped 78 basis points over the past twelve months, from 8.67% to 7.89%. Over 30 day delinquencies declined 51 basis points to 6.15%, and over 90 day delinquencies decreased 14 basis points to 3.13% as compared to year end 2001. The on-balance sheet loan loss reserve as a percent of owned receivables was 10% at year end, representing approximately 14 months of estimated losses based on fourth quarter net charge-offs. Advanta also posted a 16% decline in its net interest margin, from 16.57% for 4Q/01 to 13.88% for the fourth quarter of 2002. For complete details on Advanta’s latest performance visit CardData ([www.carddata.com][1]).

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

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Household & Menard

Household’s retail services business has signed an agreement to manage the private label credit card program for Menard, the third largest home improvement retailer in the USA with 170 stores in nine states. Menards, a privately held company based in Eau Claire, Wis., is the third- largest home improvement chain in the US. Menards has over 170 stores in Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North and South Dakota, and Wisconsin.

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$8.1 Billion in VISA Holiday Volume, an 8.4% Increase

One-quarter of Canadian adults surveyed made an Internet banking transaction last year, up from 19% in 2001. Meanwhile, phone-banking usage fell for the first time since tracking began in 1994, from 26% in 2001 to 22% last year, according to NFO CFgroup. When it comes to paying for purchases, debit cards continue to be popular. Although the proportion of Canadians who made at least one debit card payment per month is unchanged from a year ago from 76%, those who use debit cards are swiping them more often. The average number of Interac directpayments made by users in the month prior to the survey was 19.6 in 2002, up from 18.2 in 2001. As for other payment methods, little has changed in Canadians’ use of credit cards and cheques. Three-quarters of adults (74%) hold a credit card of some sort – from a financial institution, retailer or gas/oil company – and 56% usually use their card(s) at least once a month. Almost two-thirds wrote at least one cheque in the past month, up slightly from 62% in 2001, but the average number of cheques written per month per cheque writer continues a downward trend, dropping to 3.8 in 2002 from 4.1 in 2001.

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Debit POS vs ATM

U.S. consumers are using their ATM/debit cards at POS terminals more than twice as often as they withdraw cash at ATMs. A survey conducted by Analytica during November and December for the PULSE EFT Association, shows that during a three-week period, ATM and debit card users relied on their cards an average of 10.92 times. Of those total transactions, 7.81 times were to make a purchase at a retail location, compared to 3.11 times to withdraw cash at an ATM. In a significant secondary finding, the study showed that the behavior of 61% of ATM and debit card users who have utilized their cards to make a purchase was not affected by signage on display. More than half said that if a merchant accepts ATM or debit cards, they assume their own card will work so they do not pay attention to any signs or symbols. An additional 10% indicated they would try to use their card even if there was signage at the POS terminal but none of the symbols matched those on their card. ATM and debit card users surveyed utilized their cards an average of nearly four times a week. The average 7.81 POS transactions recorded in a three-week period were closely divided, with 4.06 PIN-based, and 3.75 signature-based transactions conducted.

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CyberSource 4Q/02

CyberSource reported revenues for the fourth quarter of $7.4 million and gross profit of $4.6 million. CyberSource Corporation is a leading provider of electronic payment and risk management solutions for enterprise businesses selling via multiple sales channels. CyberSource solutions manage transaction risk and enable electronic payment processing for Web, call center/IVR, and POS environments.

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Fair, Isaac & Acxiom

Fair, Isaac and Acxiom have inked a multi-year partnership whereby Fair, Isaac will use Acxiom’s data to fuel its “Strategy Machine” solutions. Acxiom will leverage Fair, Isaac’s world-class decisioning capabilities to develop and deploy more potent marketing solutions on behalf of its clients. Acxiom expects the use of Fair, Isaac analytics and decision technology will facilitate faster, more cost-efficient marketing decisions for financial services clients looking to improve the effectiveness of their customer acquisition and account management solutions.

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M-SYSTEMS SUPER-MAP

Kfar Saba-based M-Systems has signed a deal with Connecticut-based
Emosyn to have its “SuperMAP” cryptographic co-processors optimized for use
within Emosyn’s products. The first Emosyn product family to integrate
“SuperMAP” technology will be the “Theseus Platinum” family of secure
microprocessors. “Theseus Platinum” products enable secure transactions for
mobile phone, banking, identification, and public transportation card
markets. “SuperMAP” cryptographic coprocessors are a comprehensive family
of hardware macrocells developed by M-Systems for accelerating
cryptographic functions. These patented devices implement sophisticated PKI
in both conventional RSA and Elliptic Curve.

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ID Fraud

The FTC released its annual top 10 consumer complaint report Wednesday which showed identity theft as the #1 complaint. As in 2000 and 2001, identity theft topped the list, accounting for 43% of the complaints lodged in the FTC’s “Consumer Sentinel” database. The number of fraud complaints jumped from 220,000 in 2001 to 380,000 in 2002, and the dollar loss consumers attributed to the fraud they reported grew from $160 million in 2001 to $343 million in 2002. “Sentinel” currently provides about 630 law enforcement agencies in the U.S., Canada and Australia with access to one million complaints.

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Cashcard Australia is being Purchased by First Data Corporation

ERG Transit Systems and Northrop Grumman Information Technology has been
selected by the Washington, D.C. Metropolitan Area Transit Authority to
install and operate a new customer service center for the “SmarTrip” smart
card-based fare collection system. The project also involves card
management and the clearing/settling of smart card transactions across 17
transit agencies in Northern Virginia, Maryland and the Washington DC area.
The new ERG system will interface with existing installed hardware such as
gates and readers. The project calls for ERG to operate the system for a
period of five years, with two subsequent one-year options. The initial 5
year contract is worth approximately $20 million comprising the supply,
installation and operation of the system. Northrop Grumman IT will be
responsible for the distribution of smart cards and operation of the
customer service center in the Washington DC area as a subcontractor and
partner to ERG. Work is expected to begin within several weeks.

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2003 Growth

A blue ribbon panel of banking economists predicted yesterday that national economic growth will pick up from the less than one percent annual rate last quarter to 3.5% in the second half of the year. The American Bankers Association Economic Advisory Committee also projected that inflation will remain tame at under 2.5% this year. The economists predicted that mortgage rates will rise to 6.75% by year end, partly in response to the Fed’s less accommodative policy. As a result, the EAC sees mortgage refinancing ebbing from its record pace. Although credit quality has deteriorated over the past year, the EAC expects an improvement in business credit quality in 2003.

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