Payment Antenna

UK-based Optical Antenna Solutions has developed an optical device that can provide credit card-free ‘point and pay’ technology. The antenna, inserted in the mobile phone to read as part of the infrared port, will be pointed towards the payment register where a similar infrared port can be found. A personal security code is then entered into the phone on the nine digit key pad at which point the OAS antenna captures a light signal, which carries the data required to authorize the transaction and exchanges it with the register. The live trials of the antenna in a range of ‘point and pay’ applications are currently under way in Korea. Further trials are planned for Japan, the USA and Cambridge in the UK.

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CIBC E-BANKING

Canadian Imperial Bank of Commerce confirmed it is closing its U.S.
electronic banking operations, CIBC National Bank and Amicus FSB. CIBC has
been losing money in both operations. Customer deposits with a balance of
$1,000 or more on the date of closing will be transferred to E*TRADE Bank.
CIBC National Bank provides financial services under the “Marketplace Bank”
brand, and Amicus FSB provides financial services under the Safeway “SELECT
Bank” brand.

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CANADIAN TIRE 3Q/02

Canadian Tire Financial Services reported its third quarter accounts
receivable were up 40.0% to $1.69 billion, compared to $1.20 billion in
2001, driven by its strategy to convert retail credit accounts to the
“Options MasterCard.” Gross operating revenue in CTFS for the third quarter
was $98.9 million, a 10.5% improvement from $89.5 million in 2001. Earnings
before taxes were $25.7 million for the quarter, down 19.0% from the $31.7
million recorded in 2001 due primarily to timing impacts from CTFS’s
securitization program. Excluding the impact of the securitization program,
CTFS’s earnings before income taxes for the quarter were $26.8 million, a
61.3% increase compared to the same period last year due to receivables
growth and continued expense management. Canadian Tire also announced its
decision to apply to establish a bank for CTFS to ensure that CTFS’s card
operations operate under a common regulatory framework with other issuers
in the bank card market. Canadian Tire also noted that establishing a bank
will result in a significant reduction in the complexity and costs
associated with the multi-jurisdictional regulations that CTFS’s card
operations currently operate under.

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MC GLOBAL 3Q/02

MasterCard International reported that third quarter purchase and cash
transactions worldwide reached 3.50 billion, generating gross dollar volume
of $296 billion, a 16.5% gain over 3Q/01. There were double-digit gains in
the first nine months of 2002 in all of MasterCard’s regions: Europe rose
13.6%; Asia/Pacific, 12.7%; Latin America, 26.3%; South Asia, Middle
East/Africa, 23.1%; Canada, 19.8%; and, the U.S. rose 17.8%. At the end of
the third quarter, MasterCard’s 25,000 member financial institutions had
issued nearly 578.8 million MasterCard-branded cards, a 15.6 % increase
over 3Q/01.

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LML 3Q/02

Vancouver-based LML Payment Systems reported that EBITDA for the quarter
ending September 30th was a loss of approximately $162,000, compared to an
EBITDA loss of approximately $1.2 million for the same quarter one year
ago. Revenues for the quarter were approximately $2.0 million, compared to
approximately $2.3 million for the year ago quarter, a decrease of
approximately 13%. The decrease was a result of a reduction in overall
returned check volume processed which was partially attributable to one of
its largest customers, which moved its primary check collections in-house,
and partially a result of softer consumer spending trends resulting in
lower check volumes. LML also provides selective routing of debit, credit
and EBT transactions to third party processors and banks for authorization
and settlement.

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DRFS ISO

Los Angeles-based Direct Response Financial Services has reached a three year agreement for Hughes & Kaye Products and Services to serve as its ISO. Under the terms of the agreement Hughes & Kaye will act as an independent sales organization to Direct Card Services and plans to deliver merchant card processing of approximately $150M in its first year to Direct Card Services.

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Experian Traffic

Experian Consumer Direct said this week that its family of Web sites continues to be one of the top resources for consumer credit information. Experian also says it now has 1.2 million subscribers to its premier credit monitoring service. According to comScore Media Metrix tracking, Experian attracted more than 9.7 million unique visitors in September compared to 922,000 for Equifax and 523,000 for TransUnion. Experian Consumer Direct was created this year when Experian combined CreditExpert, its consumer credit management group, with ConsumerInfo.com, the largest provider of online credit reports and other credit-related information to consumers. Experian Consumer Direct’s Internet properties include ConsumerInfo.com, CreditMatters.com, FreeCreditReport.com, QSpace.com and CreditExpert.com.

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USWD 3Q/02

U.S. Wireless Data reported an 83% increase in third quarter service revenue, with an overall 8% total revenue rise, and a 45% reduction in operating expenses compared to the same quarter last year. Net cash used in operating activities declined by 73% and the net loss declined by 61% compared to the same quarter last year. Revenue for the three months ended September 30th was $783,000, as compared to $722,000 for the same period in the prior year. Service revenue was derived primarily from the growing base of active sites that use the company’s proprietary Synapse service to process transactions. Net loss for the quarter totaled $1.76 million, compared to a net loss of $4.56 million for the corresponding quarter of the prior fiscal year. Wireless transactions processed for the third quarter were approximately 1,741,000, an increase of over 746,000, or 75%, from last year’s quarter. For complete details on USWD’s third quarter performance visit CardData ([www.carddata.com][1]).

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

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V/MC Respond

VISA said Thursday that Wal-Mart and the retailers in the debit card lawsuit are using the enormously costly and time-consuming mechanism of class action litigation and antitrust to solve a problem that does not exist and to prevent consumers from choosing how to pay at the checkout counter. MasterCard added that the documents released by the Court this week reflect that MasterCard has been a steadfast supporter of PIN-debit for the last decade and thus has contributed to the enormous growth of both PIN-debit transaction volume and the PIN-debit networks that process these transactions. VISA noted that Wal-Mart’s own studies at Sam’s Club, studies released for the first time in this case, shows that VISA generated significantly more income than cost, substantially increased traffic to the stores, increased membership renewals, and resulted in a recommendation that VISA be accepted by all Sam’s Club stores. VISA says signature debit actually is less expensive to the merchant than many other well-known payment cards, such as American Express, and only 25% of U.S. merchants in the class action actually accept PIN-based debit. MasterCard says the plaintiffs claim that MasterCard and VISA tried to prevent merchants from distinguishing between credit cards and debit cards, and they have therefore been unable to prompt consumers to use their PIN when paying with a debit card. However MasterCard says during the same week that Wal-Mart authorized their counsel to file a complaint making that allegation, Wal-Mart was training its cashiers, instructing them via a video that they can readily distinguish credit from debit, and prompt for PIN. MasterCard added that continuing Wal-Mart’s well-known history of discovery abuses, Wal-Mart initially claimed to have ‘lost’ this video. MasterCard also noted that an internal Payless document confirms that debit cards and credit cards are easy for merchants to distinguish, and testimony of a Sears executive admits that these cards are readily distinguishable. Both VISA and MasterCard agree the debit card lawsuit is more about lawyer fees, than merchant fees.

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