BofA ATMs

Bank of America and Valero Energy Corporation announced Friday they have expanded their ATM contract. By the end of the first quarter, BofA will have installed its enhanced ATM software on more than 1,100 of Valero Energy-owned ATMs, which are located in the company’s retail stores. Valero’s retail brands include Diamond Shamrock Corner Stores, Stop N Go, Ultramar, Valero, Beacon and Total. This new agreement expands upon BofA’s previous contract with Valero for approximately 300 ATMs in Stop N Go convenience stores. The agreement increases the number of ATMs that Bank of America operates in Arizona, Arkansas, California, Colorado, Louisiana, New Mexico, Oklahoma and Texas. More than half of the ATMs will be located in Texas, expanding BofA’s current ATM network by more than 700 locations, giving it a total of 1,900 statewide. At the end of December, Bank of America had installed its software on approximately 900 ATMs in Valero’s network of 1,300 company-operated convenience stores. The deal between BofA and Valero has created the single largest ATM contracts in U.S. banking history.

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CARDS EUROPE

Banks, retailers, telcos will be assembling next week in London to discuss
smart moves with EMV, secure payments and commerce, point of sale, Europe’s
hot markets, mobile payments, and, loyalty and multi-application cards.
“Cards Europe” has signed the following major sponsors and exhibitors for
the event including MasterCard International, Thales e-Security, Thales
e-Transactions, Gemplus, Schlumberger SEMA, Pegasystems, ACI Worldwide, and
First Data Europe. The event is scheduled for February 3-5 at the Royal
Garden Hotel.

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Certegy 4Q/02

Certegy reported Friday net income of $29 million on revenues of $263 million for the fourth quarter. During the fourth quarter, domestic card issuing transaction volumes increased by 6.8%, driven primarily by growth in debit card transactions. Certegy added approximately 500,000 cards, increasing its international card base to 24.2 million and its global card base to 46.7 million. For the full year 2002, the number of cards processed globally increased by approximately 5.0 million, or 11.9% over 2001. Card Services produced revenue of $163.6 million in the fourth quarter, an increase of $1.0 million, or 0.6% over the prior-year quarter, driven by a 7.2% increase in North American card revenue and strong international card revenue growth outside of Latin America. However, merchant processing revenue declined by 4.7%, due to the previously announced deconversion of a large customer and the company’s focus on improving the overall quality and profitability of the portfolio. For complete details on Certegy’s 4Q/02 performance visit CardData ([www.carddata.com][1]).

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

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Canadian Debt

Household credit in Canada rose by 7.6% during the year ending October 2002, the fastest pace of growth in 11 years. Also, for the first time since mid-2001 consumer credit is rising faster than mortgage credit, according to CIBC’s latest “Household Credit Analysis.” Mortgage debt rose by 7.6% during the year ending October 2002, a significant acceleration from the 6% growth observed earlier in 2002. During the same period, consumer debt expanded by more than 8%. Growth in credit card debt is also rising by over 13% year over year. Even with the very strong growth in borrowing, personal bankruptcies are trending downward, falling by 1.5% in the first eleven months of 2002 compared to the same period last year. The main improvement is in Quebec, with Ontario still seeing rising bankruptcies – reflecting the sensitivity of the province to developments south of the border.

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EURONET CONTRACTS

Euronet has recently signed two significant ATM outsourcing agreements and
software agreements. The first outsourcing agreement is with a Western
European independent ATM deployer, which plans to start rolling out ATMs in
second quarter. The IAD plans to implement 1,700 ATMs by the end of 2006.
Traditional ATM transactions will be combined with value-added transactions
that allow consumers to purchase prepaid mobile air time and other items,
such as cinema tickets, directly from the ATM. The second agreement is with
a South African-based company that plans to build a shared network in
Uganda, offering ATM operating and card issuing services. Euronet will
provide processing services out of its Budapest center together with the
professional services for training and development, while the contracted
company will handle all local services. This project will also integrate
ATM processing services with the area’s mobile operators, making available
electronic payments for prepaid mobile air time.

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Be There Winner

Boston-based Sovereign Bank says one of its VISA cardholders has won the top prize in VISA’s “Be There” promotion, which ran last year between August and November. This was the first time ever that Visa featured its five world-class sponsorship properties in one compelling promotion. Visa cardholders of Sovereign Bank were given the opportunity to enter automatically for a chance to win a trip to attend all five of these premier events by using their Visa card for purchases last fall. Every single time cardholders used their Visa card for purchases between Aug. 1 and Oct. 31, 2002, they were automatically entered to win.

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CITIGROUP GLOBAL CARDS

Citigroup reported a 32% increase in international cards, reflecting
strong balance growth across all markets except Latin America, as well as
the adverse impact in the prior year of Argentina pesification. The
increase in the international cards provision for credit losses is
primarily due to higher credit costs in the Hong Kong and UK markets,
although credit losses have stabilized from the preceding quarter. At
year-end 2002, Citigroup had 13.5 million international cards, a 5% gain
over 4Q/01. Fourth quarter volume was up 10% to $9.1 billion. Average
managed loans for international cards was $11.3 billion.

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Experian Acquisition

Experian has acquired Credit Data Services of Springfield, Mass. which operates in the territories of western Massachusetts, Vermont and Connecticut. CDS will continue to serve current and prospective clients as a Sales Agent of Experian. This relationship will provide clients with a seamless interaction with Experian including access to additional products and services designed to optimize customer relationships.

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Chase Gas Card

Chase responded this morning to the new “Citibank Shell MasterCard” will the unveiling of the “Chase Freedom Card” that offers rebates on all gasoline purchases at any gas station, plus a smaller rebate on all other purchases. The new card, targeted at Chase’s current “Shell MasterCard” customers, will offer an automatic 3% rebate on all gasoline purchases, regardless of the brand, and a 1% rebate on all other purchases. For a 90-day introductory period, the new “Chase Freedom” card offers a 6% rebate on all gasoline purchases. There is no annual fee for the first year. The $19 annual fee is waived thereafter if the cardholder makes at least nine purchases in the prior year. The card will carry a prime +9.99% APR for most customers, but a prime +11.99% or prime +15.24% rate will be charged to higher risk consumers. The defensive move by Chase to introduce a replacement card for a co-branded card is reminiscent of Citibank’s 1997 decision to end its co-branded program with Ford Motor Company. Six months later, in early 1998, Citibank introduced the “Driver’s Edge VISA/MasterCard” that offered rebates toward the purchase or lease of any new vehicle, regardless of make or model. (CardTrak 6/30/97; 1/7/98)

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Lipman ISO Deal

Lipman has signed a deal to sell more than 6,000 POS terminals to Infinity Data Corporation. The contract is valued at $1.8 million. Under the terms of the agreement, Infinity will purchase and deploy “NURIT” POS terminals over the next 14 months. Infinity is an ISO providing “Class A” support for “NURIT” POS Solutions. Infinity’s primary focus is the “NURIT 2085” card payment terminal and the “NURIT 3000” series countertop payment solutions. Infinity will also sell and support “NURIT” wireless POS solutions.

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Discover Joins NACHA

Discover Bank of Delaware has joined NACHA, becoming the 15th financial institution member. NACHA now has 36 members consisting of 21 payments associations and 15 financial institutions. The other financial institution members of NACHA are American Express Centurion Bank, Bank of America, Bank One, BB&T Corporation, Capital One, Citibank, Commerce Bank of New Jersey, FleetBoston Financial, J.P. Morgan Chase, Mellon, National City, U.S. Bank, Wachovia, and Wells Fargo.

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Compete CEO

Boston-based Compete, a predictive analytics services firm, has named Donald McLagan, formerly CEO of NewsEdge Corp., as CEO. McLagan is an information industry entrepreneur who has been an innovator of business information services for more than 30 years. From 1988 to 2000, he was the founder, Chairman and CEO of NewsEdge Corporation, a public company subsequently acquired by Thomson Corporation. Previously, he was Vice President and General Manager of the Information Services Division of Lotus Development Corporation from 1985 to 1988, and a founding employee and Executive Vice President of Data Resources, Inc. from 1969 to 1984. In the late 1960s, he started the Advanced Computer Techniques Group within the Office of the Assistant Secretary of Defense, Comptroller.

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