ARGUS DEAL

Abacus Financial Management Systems Limited has placed its first significant purchase order for 320 “Argus” bill validators to be installed as part of the Abacus cash management system in a major U.K. retailer.
AFM Systems Limited is a UK-based manufacturer and product development company, providing a range of cash and coin management systems for the retail market. The company is a partnership between James Redding and US-based Global Payment Technologies. The unidentified U.K. retailer will deploy the Abacus systems in 57 of its locations. The installation is expected to be completed by December.

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CELLBUCKS EXPANDS

Ontario-based CellBucks has teamed with Ovations Food Services to offer its micropayment system to baseball fans attending the Joseph P. Riley Stadium in Charleston, South Carolina. The new program enables Charleston Riverdogs fans to order and pay for food and beverages from their cell phones and have it all delivered right to their seats. The CellBucks payment system is compatible with any type of cell phone on any cellular service provider’s network. Users can registerfor the service by going online to the CellBucks Web site or by phone call. CellBucks will accept VISA, MasterCard, Discover and American Express. Members will instantly be given a personal pass code for immediate use of the CellBucks service. Last week, CellBucks and Ovations Food Services sealed their first deal with the Bowie Baysox at Prince George’s Stadium in Maryland.

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B-CARD

Grupo Financiero Banamex is projecting it will issuer more than 200,000 smart cards by the end of 2002. El Economista says the new “B-Card” will be issued to customers with a minimum income of 5,000 pesos. Grupo Financiero Banamex says it is the first Mexican bank to begin the migration from magnetic stripe cards to smart cards.

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TSAI Re-Audit

Omaha-based Transaction Systems Architects said yesterday it will conduct a re-audit of fiscal years 1999, 2000 and 2001 following concerns over several transactions involving one of the Company’s customers that may not have been accounted for appropriately. The transactions with the customer primarily involved two software license agreements, a distribution agreement and investment in the customer’s common stock and warrants. The transactions that occurred in the second quarter of fiscal 1999 resulted in revenues of approximately $4.4 and the transaction that occurred during the second quarter of fiscal 2000 resulted in revenues of approximately $4.3 million. TSAI says revenue from this customer is not expected to be material to the Company’s future operations. The Company also made investments in the aggregate amount of $11.7 million in the publicly traded common stock of the customer during fiscal 1999 and 2000. The Company sold approximately $2.8 million of this common stock during fiscal 2000 that resulted in a profit of approximately $1.2 million. The price of the customer’s common stock declined significantly during late 2000 and declined further in 2001, and the Company recorded a non-cash charge to earnings of approximately $8.1 million and $900,000 in the fiscal quarters ended December 31, 2000 and September 30, 2001. For complete details on TSAI’s latest performance visit CardData ([www.carddata.com][1]).

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

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Multi-Merchant Loyalty Program

CO-based Smart Transaction Systems has introduced a multi-merchant program that tracks the cardholder’s point balance at each of the participating merchants and produces real-time reward messages printed from the POS terminal that change as the cardholder’s point balance changes. Additional enhancements include an option that allow merchants to process customer loyalty transactions using the customer’s phone number if the customer does not have his/her card or key tag handy.

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Cap One Adjustments

In conjunction with certifying its SEC filings, Capital One restated its stock option-adjusted net income lower for the past two years due to a computational error. As a result, the card issuer adjusted its 2001 net income from $597 million to $545 million, a 9% decline. Cap One also restated its 2000 stock option-adjusted net income as $401 million instead of $413 million, a 3% decrease. Cap One amended its Annual Reports on Form 10-K to correct the pro forma net income and earnings per share previously disclosed. The card issuers says the amendment does not affect the Company’s historical results of operations, financial conditions or cash flows for any period presented. Cap One says that other than this change, there is no change to the consolidated financial statements, the notes to the consolidated financial statements, the report of the independent auditors or the report of management. In pre-market trading this morning Cap One’s stock was down slightly from $31.05 to $31.00. Yesterday, the firm’s stock briefly dipped to $26.30. For complete details on Capital One’s latest performance visit CardData ([www.carddata.com][1]).

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

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College Debt

FL-based Consolidated Credit Counseling Services said this morning that 35 out of the nation’s top 50 credit cards issuers now compete in the college market. The firm also says an estimated 80% of the nation’s colleges and universities permit some form of on-campus solicitation. Four out of ten graduating seniors have credit card debt, with an average balance just over $3,000. The number rises to 48% when the students also have loans. The debt management firm also noted that a survey from VISA found 8.7% of bankruptcies are from people under 25 years old.

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MBNA Adjustments

MBNA warned yesterday, after certifying its SEC filings, that it may take a $200-$300 million charge due to proposed FFIEC regulations. MBNA said the proposed new regulatory rules might require it to create a reserve to cover uncollectible accrued interest and fees on managed loans, on non-accrual status. Currently, in accordance with generally accepted accounting principles and generally accepted industry practice, MBNA accrues interest and fees on loans until the loan is paid or charged off, at which time MBNA reverses the accrued interest and fees and, if the loan is charged off, charges them against current income. The bank credit card issuer has followed this practice and has disclosed it in its annual reports since it was established in 1991. MBNA says it does not believe an increase or decrease in the reserve for accrued interest and fees would significantly affect earnings in subsequent periods. MBNA’s stock gained more than 5% yesterday, closing at $19.60, after opening at $17.95 per share. For complete details on MBNA’s latest results visit CardData ([www.carddata.com][1]).

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

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Bankruptcy Record

Bankruptcy filings for the twelve months ending June 30th hit an all-time record of 1.5 million. One year ago, annual filings totaled 1,386,606. Bankruptcy filings first broke one million during the 12-month period ending June 30, 1996. According to Administrative Office of the U.S. Courts there were 1,466,105 personal bankruptcy filings over the past twelve months, an 8.5% increase over the previous year. There were 1,053,320 Chapter 7 filings during the past year. On a quarterly basis, total bankruptcy filings were only up slightly, from 400,394 for 2Q/01 to 400,686 for the second quarter of 2002. Most credit card issuers are preparing for a spike in personal bankruptcy filings if the bankruptcy reform legislation is passed by Congress. For complete details on the 2Q/02 bankruptcy data visit CardData ([www.carddata.com][1]).

BANKRUPTCY FILINGS TRACK RECORD
(For Second Calendar Quarter of Each Year)
1991: 246,496 1996: 297,162 2001: 400,394
1992: 250,622 1997: 367,168 2002: 400,686
1993: 229,406 1998: 373,460
1994: 216,213 1999: 345,956
1995: 235,302 2000: 321,729
Source: Administrative Office of the U.S. Courts

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

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@pos & Symbol

@pos.com yesterday signed a merger plan with Symbol Technologies and terminated its asset purchase agreement with Hand Held Products. Symbol Technologies will acquire all of @pos.com outstanding common stock for $.46 per share. The transaction will be effected pursuant to a negotiated merger agreement, whereby Symbol Technologies will make a tender offer for all of @pos.com outstanding common stock.

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