LATINA ECONOMIES

A new research report found that Latin American nations located closest to the USA appear to have fared better economically than those furthest from the USA. Puerto Rico and Mexico have the highest levels of average buying power per household, among the 125 million Latin American households, the report from Strategy Research Corporation says 22% of Mexicans and 21% of Costa Ricans feel they are personally better off economically than in the previous year, while 64% of Latin Americans feel that their personal economic situations are worse than the year before. At the same time, 54% of Latin Americans consider that their countries’ economic situations will be the same or better next year, while 38% believe their country’s economic situations will be worse. It’s important to note that Argentina experienced a 62% decline in consumer buying power this year, while other countries, including Ecuador, experienced an 18% growth in buying power for the same period.

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U.S. Seniors

A new survey has found that more than 75% of American seniors have at least one credit card, with 23% holding two cards, and 20.7% who carry four or more credit cards. More than one third of seniors (aged 60+) say they do not know what identity theft is or where to find financial information online. According to a recent survey conducted for Capital One, “Boomers” (34.4%), and seniors (33.2%), both said they would turn to their credit card company for advice on using credit wisely. More than one-third of seniors do not know what identity theft is while most Boomers (81.7%) are aware of it. Cap One also found that one-quarter of all Boomers surveyed said they have four or more credit cards, 21% said they have no credit cards and 18.4% said they have one credit card. One-quarter of all women surveyed said they have four or more credit cards while most men (24.1%) said they only have two credit cards.

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3Q/02 DELINQUENCY

Canadian credit card delinquency has declined for the 11th consecutive quarter, even as credit card debt is up 6% in September, year over year to $32.6 billion. Moody’s Investors Service reports that the percent of Canadian credit card accounts that are 30 or more days past due fell by nearly 11% to 2.29% of accounts, compared to 2.57% for the same period in 2001, and marked the lowest quarterly rate dating back to the first quarter 1999. Canadian cardholders continued to expand the use of their credit cards as average outstanding balances grew 6.9% to approximately $32.6 billion dollars as of September 30th, compared to a year earlier. The gross yield on Canadian credit cards has fallen for the third consecutive quarter to 13.89% from 14.41% in the third quarter of 2001. Net yield (i.e. gross yield less net losses) followed suit in the third quarter, falling to 11.22% from 11.80% a year earlier.

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NOVA & Camden

ME-based Camden National Corporation announced the sale of the merchant credit card processing business of its subsidiary banks, Camden National Bank and UnitedKingfield Bank, to NOVA Information Systems for $1.25 million. As part of the transaction, the Company and its subsidiaries entered into a joint marketing and alliance agreement with NOVA, whereby it will cooperate with NOVA in providing merchant credit card services to customers and marketing to prospective merchants in return for specified royalty payments. During the seven-year term of this agreement, and any renewal or extension thereof, the Company will not compete with NOVA for merchant credit card processing business.

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Cards 3Q/02

While credit card and debit card volume has topped $1.4 trillion in the first three quarters of this year, and growing at annual rate of nearly 14%, the number of payments cards by the four leading U.S. networks is growing by an annual rate of about 8%. VISA’s overall U.S. cardbase is now growing 4.3% annually, driven primarily by its dominance in the debit card segment, where three out of four debit cards in the U.S. are VISA-branded. MasterCard is growing its credit and off-line debit U.S. cardbase by an annual rate 15%, driven by its momentum as the leader in credit cards. American Express and Discover have not realized any significant growth in their cardbases over the past year. For complete details on payment card brand statistics visit CardData ([www.carddata.com][1]).

Third Quarter 2002
U.S. Quarterly Cards-in-Force by Brand

TOTAL CARDS
(credit + off-line debit)
3Q/02
VISA 385.0m (+4.3%)
MasterCard 308.9m (+15.0%)
American Express 34.8m (+0.3%)
Discover 50.0m (NC)
TOTAL: 778.7m (+7.8%)

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

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School Rewards VISA

Providian has launched a VISA card that enables cardholders to make automatic donations to the school of their choice. The new “Providian School Rewards VISA Platinum” card offers a 1% cash reward to schools (K-12) based on charge volume. Providian is offering a 0% APR on purchases, through January 2004, for the new card according to CardWatch ([www.cardwatch.com][1]). The no annual fee card will carry a go-to variable interest rate of 11.99% on purchases and balance transfers, as well as a 19.99% cash APR, and a 28.99% punitive interest rate. Applicants can check Providian’s Web site to review a list of schools eligible for the cash reward. Providian began testing three new rewards cards in August. Providian’s new suite of cards includes “Providian Airpoints,” “Providian Smart Rewards,” and “Providian Real Cash Rewards.” (CF Library 11/1/02)

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

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MasterCard NHL

MasterCard International has renewed its National Hockey League and the National Hockey League Players’ Association alliance through the 2006-07 season. In addition, MasterCard continues as a sponsor of the NHL All-Star Weekend, which includes the NHL “Block Party” and the NHL’s “Cup Crazy” promotion during the Stanley Cup Finals in June. The agreement provides MasterCard with the rights to leverage the sponsorship in the USA and Canada, which will be done this season via MasterCard’s new hockey-themed “Priceless” television executions in Canada, as well as through advertising commitments on ABC, ESPN, CBC, TSN and RDS (Canada), USA Today and NHL.com. In addition, NHL-themed cardholder promotions will be implemented throughout North America, and official NHL affinity cards will continue to be issued by MasterCard and MBNA. MasterCard has been an Official NHL Marketing Partner since 1995.

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2Checkout LiveProcessor

2Checkout.com has selected Retail Decisions’ “LiveProcessor” CNP electronic payment software solution for its 400,000 visitors per month. Retail Decisions’ LiveProcessor combines online, call center, retail and IVR transactions into a single system and integrates real-time authorization, batch processing and settlement functionality with existing order processing, subscription and electronic commerce systems.

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Metris Junk

Standard & Poor’s yesterday cut the ratings on some of Metris/Direct Merchants Bank credit card-backed bonds to junk status. Metris stock is now hovering at $3.75 per share, down nearly 87% from its 52-week high. Metris, a sub-prime credit card specialist, reported a charge-off rate of 16.56% and a delinquency rate of 11.63% for the latest performance cycle. The increased charge-off rate has negatively affected excess spread rates, causing excess spread levels to fall from their two-year average of 7.18% to a current three-month average of 5.93%. S&P says the performance trends have deteriorated during the past two years with more pronounced deterioration during the past six months, as the Metris Trust has reported increased delinquency and charge-off rates. While the Metris Master Trust-related transactions continue to benefit from a lower interest rate environment, the lower base rate costs have not wholly offset the trust’s increased charge-off rates. As a result, despite having a lower cost of funds, the excess spread levels for the trust continue to drop.

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US Airways VISA Promotion

VISA announced a special promotion with US Airways offering special fares to over 30 warm weather destinations in the Caribbean, Florida, Arizona and Southern California. nder this sale, tickets must be purchased roundtrip at least three days before departure for Caribbean travel, and for U.S. destinations at least seven days before departure. The last travel date is Feb. 28, 2003, for all markets except to and from Florida, for which the last travel date is Feb. 11, 2003.

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Tractor Supply Card

TN-based Tractor Supply Company has launched a gift card in more than 400 stores in 30 states. The new gift cards resemble credit cards and are similar to those offered by other large retailers. Four pre-denominated cards ($10, $25, $50 and $100), and two non-denominated (any amount $5-$5,000) gift cards are available for purchase. Merchandise return / exchange cards are also available to expedite the refund process for customers without receipts.

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Gemplus & SAGEM

The French firm Groupe SAGEM confirmed this morning it has acquired a stake in Gemplus. The ownership was effected through the buying of shares of Gemplus owned by Marc Lassus, a Gemplus founder and one of the company’s largest shareholders. Lassus agreed in December 2001 to cease his office as chairman of Gemplus. SAGEM is a specialist in fingerprint identification technologies. The firm is also the second largest French company in the field of telecommunications and the third European Company in electronics for defense and security. Gemplus stock is trading on Nasdaq around $2.75 per share.

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