JCB USA SMART CARDS

Following JCB’s successful rollout of “J/Smart EMV” cards in
Japan, Taiwan and the UK, the company announced plans to broaden smart
credit card acceptance in the USA. To spearhead this initiative, JCB USA
has hired Julie Krueger, former executive director of the Smart Card
Alliance, as vice president of smart cards. JCB recently announced JCB
certification of Hypercom’s EMV kernel for “ICE” card payment terminals for
use worldwide with JCB’s “J/Smart” credit cards. In addition JCB announced
a joint marketing arrangement with Hypercom to promote the acceptance of
“J/Smart” cards and the sale of “J/Smart”-enabled payment terminals
worldwide. The two companies will be targeting customers in Brazil, Costa
Rica and the United States. JCB has already issued more than three million
smart cards.

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Smart Cards 2003

A new study projects that more than 21 million smart payment cards will be in circulation by the first quarter of 2003 in the USA. More than one third of the cards will be issued by Target. Other smart issuers include American Express, Citibank, Providian, Bank One, and FleetBoston. The Smart Card Alliance says its “Smart Cards and the Retail Payments Infrastructure: Status, Drivers, and Directions” study shows that 300,000 smart card-ready payment terminals were shipped last year. The Alliance also released a case study entitled “Ohio EBT Smart Card Program.” It discusses the implementation and results of the statewide, offline EBT smart card program in Ohio in which over 375,000 smart cards are active, and more than 10,000 terminals are in use at over 5,000 retail locations.

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CARD MANUFACTURING STATS

A new survey shows that in 2001, approximately 9.7 billion cards were
manufactured, a nine percent growth rate over 2000 when 8.8 billion cards
were manufactured. The global card market measured in U.S. dollars
increased from $4.3 billion in 2000 to $4.7 billion in 2001, resulting from
the impact of severe price pressures. Traditional cards represent 82% (7.95
billion) of the units and 24.5% ($1.15 billion) of the dollars while chip
cards represent 18% (1.75 billion) of the units and 75.5% ($3.55 billion)
of the dollars on a global basis. Non-secure cards represent 40% of the
global card unit market and experienced the largest growth with 11.3% on
units and 8.5% on dollars. Financial hologram cards represent 10.8% of the
global card unit market and increased 2% in units and decreased 2.2% in
dollars, which is impacted by severe price pressures. The survey was
conducted by The International Card Manufacturers Association and released
at the Annual Card Manufacturing EXPO in Vancouver.

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ADS Signs Gordmans

Alliance Data Systems has signed a seven-year agreement with specialty clothing retailer Gordmans to provide a full-service private label credit card program for its locations located throughout the Midwest. Alliance Data will provide include account acquisition and activation; receivables funding; card authorization; private label credit card issuance; statement generation; remittance processing; and customer service functions.

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JCB USA

With three million smart cards issued in Japan since December, JCB is setting its sites on the US market. To-date JCB has successfully launched its “J/Smart EMV” cards in Japan, Taiwan and the UK. By the end of March 2003, JCB expects to have issued more than 10 million smart cards, making up 20% of its cardbase. To lead its US initiative, JCB USA has hired Julie Krueger, former executive director of the Smart Card Alliance, as vice president of smart cards. JCB recently announced JCB certification of Hypercom’s EMV kernel for “ICE” card payment terminals for use worldwide with JCB’s “J/Smart” credit cards. In addition JCB announced a joint marketing arrangement with Hypercom to promote the acceptance of “J/Smart” cards and the sale of “J/Smart”-enabled payment terminals worldwide. The two companies will be targeting customers in Brazil, Costa Rica and the United States. JCB’s merchant network includes 9.78 million merchants and spans 189 countries and territories, and serves 42 million cardholders worldwide.

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eFunds Delays Report

eFunds said Friday it will delay the release of its earnings for the third quarter while the Company completes a review of the accounting treatment given to various transactions that occurred in 2000 and 2001 and certain tax matters related to the Company’s India based operations. The Company previously announced that the Securities and Exchange Commission is conducting an inquiry involving the Company’s restatement of certain 2001 results.

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Aggregation ROI

A new study shows account aggregation can increase per customer profitability by $148 for retail banks and $178 for brokerages. The study by Oliver, Wyman & Company, also showed that on average, financial institutions have experienced retention rates six percentage points higher for aggregation customers versus non-aggregation online customers. The study found that aggregation can increase retention to 94%, compared to an average retention rate of 88% for all other online customers including those who pay bills online and 80% to 85% for traditional customers who do not use the Internet channel. About 57% of aggregation users have an annual household income greater than $75,000 while 33% of online banking households have an annual income greater than $75,000.

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USTT’s 17th Patent

USA Technologies has been granted notice of allowance for a patent covering the system for providing remote audit, cashless payment, and interactive transaction capabilities in a vending machine. USA Technologies now has 17 patents approved and more than 40 patents pending, all related to wireless payment processing, cashless microtransactions, remote auditing, and interactive e-commerce and e-business applications.

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I4 Signs Major Merchant

Buy.com has become the first major merchant to adopt I4 Commerce’s “Bill Me Later” payment option. After choosing Bill Me Later at checkout and agreeing to the terms, qualified buyers are instantly authorized for the amount of their purchase. I4 Commerce then sends the customer a bill that can be paid in full at no extra charge, or financed over time by making minimum monthly payments.

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Fleet 3Q/02

FleetBoston’s third quarter outstandings are up 7% over last year, while volume grew 24.8%. However charge-offs declined from 5.81% for 2Q/02 to 5.25% for the third quarter. Meanwhile the delinquency ratio edged up from 3.74% to 3.83%. For complete details on FleetBoston’s 3Q/02 performance visit CardData ([www.carddata.com][1]).

FLEET SNAPSHOT
3Q/01 2Q/02 3Q/02
Outstandings: $14,600,000,000 $14,679,000,000 $15,625,000,000
Q Volume: $ 5,776,000,000 $ 5,560,000,000 $ 7,209,000,000
Accounts: 7,200,000 7,265,000 7,960,000
Actives: 5,240,000 5,300,000 5,529,000
Cards: 10,404,000 11,503,000 11,925,000
Source: CardData (www.carddata.com)

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

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Card Manufacturing Stats

A survey, released earlier this month, shows approximately 9.7 billion cards were manufactured last year, a nine percent growth rate over 2000, when 8.8 billion cards were manufactured. The global card market measured in U.S. dollars increased from $4.3 billion in 2000 to $4.7 billion in 2001, resulting from the impact of severe price pressures. Traditional cards represent 82% (7.95 billion) of the units and 24.5% ($1.15 billion) of the dollars while chip cards represent 18% (1.75 billion) of the units and 75.5% ($3.55 billion) of the dollars on a global basis. Non-secure cards represent 40% of the global card unit market and experienced the largest growth with 11.3% on units and 8.5% on dollars. Financial hologram cards represent 10.8% of the global card unit market and increased 2% in units and decreased 2.2% in dollars, which is impacted by severe price pressures. The survey was conducted by The International Card Manufacturers Association and released at the Annual Card Manufacturing EXPO in Vancouver.

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