Canadian Transactions

IPSPayment has begun to offer on-line payment and money transfer services to a total of more than 10 million banking customers from TD Canada Trust, Scotia Bank, Canadian Imperial Bank of Commerce, Royal Bank of Canada and several Canadian Trust companies through an established inter-bank settlement system. Each customer will be able to transfer funds using on-line banking services, ATMs, and telephone banking services, into an IPSPayment account from which the funds can be sent to anyone with an email address in Canada, the U.S. and the Caribbean.

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Bill Payments

San Francisco-based Financial DNA says the the bill payment industry will likely process over 700 million payment transactions during this year. In its latest report, the research firm says it estimates that bill payment processing revenues for the key participants, i.e. CheckFree, Metavante, Princeton eCom, and the ACH Direct Bill Payment Network, in 2002 will be $433 million. Financial DNA says without the presence of the low-cost alternative, the ACH network, consumers and consumer banks would pay nearly $1.00 per transaction at this early stage in the industry’s life. However, the ACH network has grown to represent almost 30% of total industry volume and charges $0.04 per transaction in contrast with the much higher cost alternatives.

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SAS Credit Scoring

U.S. Bancorp has signed a multi-year agreement with SAS to improve scoring of new credit applications and existing accounts. By bringing these credit services in-house with the SAS solution, U.S. Bancorp’s risk management group can understand the specific risk characteristics that lead to delinquency, default and, ultimately, bad debt. They can also leverage the SAS solution to both transform their various risk models into “points based” scorecards and to make appropriate approval criteria without relying on external scorecard development services.

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B2B Payments

The barriers to electronic payments across large, medium and small companies include the lack of information with payments and the perceived loss of check float, according to a new study. Currently, one seventh of all payments are accompanied by enough electronic remittance information for automated reconciliation. The survey, by The New York Clearing House, also found that across the revenue segments 65% of companies were “likely” to “certain” to adopt a service that integrated the remittance information with the payment. Results also show that while companies like using direct debits for collections, businesses do not like being debited by other companies as a form of payment. Instead, they prefer to control the timing and amount of payments. Many companies said they were reluctant to give out their account numbers, which is required to initiate electronic payments. The NYCH survey showed 38% of large revenue companies had experienced unauthorized debits to their accounts in the past six months.

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Target 2Q/02

Target Corporation reported a 73% increase in credit card receivables over the past twelve months, driven by its highly successful launch of a “smart VISA” card. Since the end of the previous quarter, Target has advanced from #23 to #18 among the nation’s top bank credit card issuers, and has retained its leadership role as the largest issuer of smart credit cards in the USA with seven million issued. Since August 4, 2001, Target’s private label credit card receivables have declined nearly 18% as the company migrates current “Guest Card” users to the “Target VISA” program. Target says it is gearing up to offer about one million “Guest Card” holders the opportunity to upgrade to the VISA program during the current quarter. Target has also begun the in-store deployment of smart card readers and is teaming with Proctor-Gamble, Unilever, Pepsi and others to deliver incentives via the VISA chip. Profits (pre-tax) for Target’s credit card business have grown from $103 million for 2Q/01 to $129 million for 2Q/02. At the end of the quarter ending Aug 3, 2002, Target had $2.53 billion in VISA receivables, $865 million in “Guest Card” receivables, $586 million in Mervyn’s card receivables, and $651 million in Marshall Field card receivables. Delinquencies (60+ days) were 5.6% for 2Q/02 compared to 6.8% one year ago. For complete details on Target’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

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

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LOGICA PICTURE-IQ

London-based Logica, a major supplies of mobile payments, and PictureIQ, have signed an agreement to enhance the real-time delivery of multimedia messages by ensuring interoperability between different mobile handsets or Internet-connected devices. Under the terms of the agreement, Logica will incorporate PictureIQ’s “TransForce MTS” into its own Picasso Multimedia Messaging Service Centre to deliver rich-media transcoding services that will facilitate the management of multimedia content including images, animation, video and audio messages. PictureIQ’s “TransForce MTS” solution is an enabling server software
platform capable of powering the real-time optimization and rendering of content and messaging services for varied aspects of Internet and mobile device delivery, including device displays, formats, screen resolutions, audio players and more.

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Equifax Buys Email Database

Equifax is getting into mass email. The firm yesterday announced the acquisition of Naviant, Inc. for $135 million. Naviant has an email database of more than 100 million unique permission-based addresses. The email lists include physical address, demographics and purchasing power on consumers who have given their consent to receive marketing information. Equifax says the deal will accelerate growth in Equifax’s marketing services business and enable it to reach into new industries and further penetrate Naviant’s 3,000 customers. The company also said the acquisition will provide a significant new distribution channel for Equifax’s rapidly growing direct-to-consumer business. Naviant’s full-year 2002 revenues are expected to be approximately $60 million.

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Sub-Prime Bankruptcy

The Credit Store Inc. announced that, in order to facilitate the completion of its restructuring initiatives, the Company filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. The Company is negotiating a sale of its assets and expects, subject to overbids in Bankruptcy Court, to conclude a sale, recapitalization, or merger in the next 30-45 days.

The Court has scheduled a hearing on the Company’s first day motions on Friday, August 16, 2002, before the Honorable Irvin N. Hoyt at the U. S. Bankruptcy Court in Pierre, SD.

The Company said its decision to seek judicial reorganization was based on a combination of factors, including a rapid decline in liquidity when it was unable to obtain additional financing and/or accommodations from its existing creditors and was unable to extend the maturity of its credit facility with Coast Business Credit.

The Company has retained J. Richard Budd, of Marotta Gund Budd & Dzera, Management, LLC, as Corporate Restructuring Officer to assist the Company in its reorganization, and the law firm of Neligan Stricklin, L.L.P. as special counsel, both subject to court approval.

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