Major Smart Card Conference Scheduled for January

The Royal Bank of Scotland Group reported that withdrawals from its
British ATMs hit record levels in December. RBS ATM volume rose from £947
million in December 2001 to £1,154 million for December 2002, a 20%
increase. For the year, ATM volume exceeded £11,799 million in more than
207 million transactions. The number of withdrawals during December has
also risen from 15.3 million to 18.1 million, and the average withdrawal
has risen from £61.89 to £63.75. The busiest single day was Friday, 20th
December – when £70.1 million was withdrawn.

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Debt and Diet Resolutions

MA-based Cambridge Credit Counseling has released a new survey which shows that 29% of Americans ranked getting out of debt as important as losing weight as top New Year’s Resolutions. These findings are the result of monthly nationwide telephone poll of 1000+ adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.

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ACE SSM

ACE Cash Express said it now has a $290 million cash inventory lined up for this year’s tax season. The funds will be used for self-service check-cashing machines to be placed in 248 H&R Block retail offices nationwide. With the company’s seasonal revolving credit facility available from its bank lenders of a maximum of $55 million, a total of cash inventory of $345 million will be available to cash tax refund and refund anticipation loan checks during the 2003 tax season. During fiscal 2002, ACE cashed over 575,000 tax refund checks with a face value of more than $649 million, resulting in fees totaling $21.3 million. ACE has more than doubled the number of SSMs in fiscal 2003 from the 100 machines deployed in fiscal 2002.

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AAA Loyalty

The AAA reported yesterday that its “Show Your Card & Save” discount purchasing program produced a $396 million savings to its 45 million members in the United States and Canada last year. AAA plans to expand its Search for Savings national partner database on aaa.com and to expand its network of international reciprocal partner clubs in Europe, Mexico and Asia. As North America’s largest motoring and leisure travel organization, AAA provides its 45 million members with travel, insurance, financial and automotive-related services.

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DataWave Systems Launches NextWave Cash Cards

Seoul-based CyberNet has unveiled its lost-cost smart card
terminal for VISA members as part of VISA’s new “Smart Breakthrough
Acceptance Device” program. The new “JADEBreakthrough” terminal will cost
slightly over $200. “JADEBreakthrough” is powered by a 32 bit processor,
the CyberSoft operating system, and supported by a JAVA development
toolkit. Globally provided with a thermal printer, for some Asian markets
“JADEBreakthrough” is offered with a multiple ply impact sprocket printer.
VISA initially announced the new low-cost terminals last month. CyberNet is
the dominant electronic payment solutions supplier in Korea. The company
dominates the smart card application market, representing “K-Cash,”
“A-Cash,” “Visa Cash,” “Mondex,” and other private payment & communications
card programs. CyberNet has also captured 60% of the EFT-POS terminal
market and 95% of all Internet payment solutions in Korea.

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Comdata FedEx Award

TN-based Comdata has received the FedEx “Global Strategic Supplier Symposium Excellence Award” for its fleet card program. Comdata became the exclusive fuel card supplier for FedEx Express in 2001, and has issued more than 50,000 Comdata MasterCard(R) Corporate Fleet Cards(R) to its driver workforce. The Comdata MasterCard Corporate Fleet Card, coupled with supply chain management services from TransMontaigne, streamlines terminal, network and commercial fuel purchases by consolidating all billing detail on a single invoice.

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Smithsonian Card

MBNA has snagged an affinity card deal with the Smithsonian Institution. In 1997, the Smithsonian first inked a deal with Dean Witter, Discover & Co’s NOVUS Services business unit to issue the “Smithsonian Card.” The NOVUS/Smithsonian card offered cardholders the opportunity to earn a $50 Savings Bonds for each $5,000 charged to the card. NOVUS Services also made a contribution to the Smithsonian for every card issued or renewed. The new MBNA version does not offer a cardholder rebate, but does offer a free “2003 Smithsonian Treasures Calendar” after the account is activated and the first transaction is made. MBNA will continue to deliver a percentage of each purchase to the Smithsonian, under the typical affinity card contract. MBNA is offering a 1.7% six-month intro rate on balance transfers and cash advance checks, followed by a fixed 12.99% APR, according to CardWatch ([www.cardwatch.com][1]). The Smithsonian has more than two million members and nearly 30 million annual visitors to its museum and research complex.

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

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Euronet Worldwide Names New Board Member

Terrapinn Ltd announced that MasterCard International has agreed to host
the “4th Annual Cards Middle East” conference and exhibition in Dubai. The
event is scheduled for May 19-21 at the Al Bustan Rotana Hotel. Other
sponsors and exhibitors at the exhibition include ACI Worldwide, Thales
e-Security, Card Tech Ltd, Intercard Wireless, Narboni, Verisoft, Samsung,
and First Data. Key speakers include Mohamed Belarj, General Manager MENA,
MasterCard International and Louis Scotto, General Manager, Retail Banking,
Emirates Bank Group.

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Infrared Standard

After a three year effort, a standard has been released for global, wireless, proximity payments. IrDA yesterday released the standard for infrared payments to be used by cell phones and PDA’s that beam transaction information between card readers, ATMs, kiosks, gas pumps, turnstiles and toll booths. The new “IrFM” specification utilizes existing financial services infrastructures to process wireless payment transactions (credit cards, debit and smart cards, checks and loyalty programs) at the POS. Harex InfoTech in South Korea tested the standard in 2002 for nine months. During the past 4 years an estimated 200+ million IrDA enabled cell phones and PDA’s have been shipped throughout the world.

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XTREME INTEGRATED

CIBC reported that it’s the annual cash payout to CIBC “Dividend
VISA” and “Dividend Platinum VISA” credit card customers exceeded $25
million. The rebates, based on 2002 cardholder purchase volume, were down
16% compared to 2001, presumably due to the softness in overall credit card
volume in Canada produced by the global weak economy. This year, CIBC says
active card users are now receiving annual cash rebates ranging from $50 to
$900. CIBC “Dividend VISA” and “Dividend Platinum VISA” cardholders earn
cash rebates of up to two per cent on every purchase. The rebate is
credited at the end of the
year. Since the inception of the cards in 1998, cardholders have earned
more than $100 million in cash rebates.

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FFIEC Guidelines

The Federal Financial Institutions Examination Council yesterday issued new guidance governing account management and loss allowance practices for credit card lending. The overhaul was largely driven by the collapse of sub-prime credit card market, however, the new standards will apply to all banks and thrifts regardless of portfolio quality. The new guidance says that institutions significantly increase credit exposure by offering customers additional cards, including store-specific private label cards and affinity relationship cards, without considering the entire relationship. In extreme cases, some institutions have granted additional cards to borrowers already experiencing payment problems on existing cards. It is expected that institutions offering multiple credit lines will have sufficient internal controls and management information systems to aggregate related exposures and analyze performance prior to offering additional credit lines. The new guidance also set new standards for minimum payment requirements. New formulas that have the effect of further delaying principal repayment are gaining popularity in the industry. These problems are exacerbated when minimum payments consistently fall short of covering all finance charges and fees assessed during the billing cycle, producing a negative amortization. In these cases, the lender is recording uncollected income by capitalizing the unpaid finance charges and fees into the account balance owed by the customer. The FFIEC says the pitfalls of negative amortization are magnified when sub-prime accounts are involved, and even more so when the condition is prolonged by programmatic, recurring over-limit fees and other charges that are primarily intended to increase recorded income for the lender rather than enhance the borrowers’ performance or their access to credit. For a complete list of the new FFIEC standards visit CardFlash Online ([www.cardflash.com][1]).

[1]: http://cardflash.com

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Cross-Border Fraud Site

The FTC yesterday opened a new Web site devoted to fighting cross-border fraud which includes advance-fee loan scams and unnecessary credit card loss protection offers. Consumers can download many valuable consumer education publications, including “Hang Up on Cross-Border Phone Fraud,” “Border-Line Scams are the Real Thing,” and “Straight Talk About Telemarketing.” The site also includes a full-color downloadable poster – “Foreign Lotteries: The Games You Can’t Win”- for legitimate lottery vendors to help customers avoid common, costly foreign lottery scams.

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