Debit Card Fees

A new study shows that 26% of financial institutions impose a transaction fee on all or part of their debit cardholders. Roughly half of these institutions impose a transaction fee on all debit cardholders when they make an online, or PIN-based, purchase. Debit card transaction fees range from 25 cents to one dollar, with the average being 50 cents. The study by Boston-based Dove Consulting and commissioned by PULSE EFT Association, also found that the imposition of a debit card charge effectively reduces transaction activity by 40%. The survey, which involved a representative group of large banks, community banks and credit unions that combined have issued more than 80 million debit cards, did not find any card issuers which imposed fees for offline, or signature-based, debit purchases. Dove says its research found that, among all cardholders (active and inactive), consumers perform an average of 2.2 online and 3.6 offline debit transactions per month. Online debit transactions grew by 25% last year while offline debit transactions rose by 22%. Dove noted that several issuers have recently discontinued the practice of imposing fees on PIN-based debit card trabsactions.

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Cubic Moves

Cubic Corp, which recently relocated to new Orlando, FL quarters, has transferred Richard Koon, VP/GM of Cubic Worldwide Technical Services division, from its San Diego office to the new Orlando office. Cubic has provided its advanced laser-based combat training systems to the U.S. Army Simulation, Training & Instrumentation Command (STRICOM), and has several contracts with the Naval Air Warfare Center Training Systems Division (NAWCTSD) for instructional support, operation and maintenance of aviation, warship and submarine simulators.

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3Q/02 Outlook

The Federal Open Market Committee decided yesterday to keep its target for the federal funds rate unchanged at 1.75%. However the Committee recognized that current conditions may generate economic weakness, this leaving the door open for possible future rate cut. Meanwhile MA-based Global Insight/DRI-WEFA says its forecast for the third quarter predicts economic growth will rebound to 3.4% after a sluggish 1.1% reported in the second quarter. The research group says the rebound in the third quarter will be fueled by a 4% growth in consumer spending. Growth in the fourth quarter of this year and the first quarter of next year is predicted to remain in the 3.5% to 4% range as capital spending finally begins to recover.

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Deci$ionable Data

Dallas-based Paymentech has launched “Deci$ionable Data”, a Web-based reporting module, which enables merchants to monitor transaction qualification, chargebacks and retrievals and credits without offsetting debits. Deci$ionable Data can be accessed 24 hours a day and used in conjunction with Re$ource Online, Paymentech’s proprietary Web-based reconciliation reporting application, features simple navigation properties.

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PubliCARD 2Q/02

NY-based PubliCARD reported 2Q/02 revenues of $1.0 million, compared to $1.4 million a year ago. The 2001 figure includes $286,000 of revenues associated with the smart card reader and chip business, which the Company exited in July 2001. Sales related to smart card platform solutions for educational and corporate sites for the second quarter were comparable to the prior year period. The net loss from continuing operations for 2Q/02 was $1,083,000 compared with $9,510,000 one year ago. The results for 2001 reflect a repositioning charge of $6,085,000 principally reflecting the non-cash write-offs of goodwill, fixed assets and inventories relating to the July 2001 decision to exit the smart card reader and chip business. For complete details on PubliCard’s 2Q/02 performance visit CardData ([www.carddata.com][1]). (CF Library 6/27/02)

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

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CompuCredit 2Q/02

CompuCredit reported a second quarter net loss of $37.1 million due to proposed bank regulatory guidelines which change the carrying value of retained interests in securitized credit card receivables, and accrued interest and fees. The company says if it had not made the adjustments the second quarter loss would have been $8.6 million. CompuCredit’s 2Q/02 credit card loans were $2,260,442,000, a 35% increase over the second quarter of 2001. However, the 2Q/02 charge-off rate climbed to 15.0%, compared to 14.6% one year ago. The 60+ day managed delinquency rate was 9.0%, as compared to 10.6% for 2Q/01. The total number of accounts dropped slightly from 2,300,000 in 2Q/01 to 2,285,000 for the second quarter of this year. Last month, CompuCredit closed on the purchase of $1.2 billion in sub-prime Fingerhut credit card receivables from Federated Department Stores. CompuCredit also announced its board of directors has authorized a program for repurchases of up to 5 million shares of its common stock. For complete details on CompuCredit’s 2Q/02 performance visit CardData ([www.carddata.com][1]). (CF Library 6/27/02)

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

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VISA & LOGICA

London-based Logica has been confirmed as a partner of VISA in the recently launched “Chip Migration Partner Program” for Asia Pacific. Under the program, Logica will supply its “EMV ENABLER” solution and related professional services. “EMV ENABLER” is a complete solution is suited to merchants, acquiring and issuing banks, and shared payments switches who are migrating towards EMV compliance. Under the
VISA program, member banks have special access to a host of smart card services from 16 of the region’s leading chip vendor companies.

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SKANDIA DIGIPASS

Internetbank Skandia Bank Switzerland is now using VASCO’s “Digipass” to securely perform e-banking and phone banking transactions. A complementary phone banking application is available for customers choosing not to perform banking transactions via the Internet. The e-banking service went live on August 9th. Skandia Bank Switzerland is part of the Swedish Skandia Group. VASCO’s family of “Digipass” and “VACMAN” products offers end-to-end security through strong authentication, digital signature, network “Single Sign-On”, and Radius, LAN and Web security.

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AP PULSE

MasterCard’s “MasterIndex of Consumer Confidence” shows that nine markets within Asia/Pacific manifest positive sentiment for the next six months: Korea (76.5), New Zealand (75.2), Malaysia (74.0),
Thailand (73.9), China (73.6), Indonesia (67.7), Taiwan (58.9), Australia (58.6) and Singapore (56.1). A total of 5,406 consumers were surveyed in June for the latest “MasterIndex” report that tracks sentiment on five variables: employment, economy, regular income, stock market and quality of life. There is no doubt consumer confidence is back in Malaysia as the previous reading of 44.4 surged to an extremely strong score of 74.0. Particularly noteworthy are scores for employment, which shoots up from 33.4 to 69.9, as well as economy, which leaps from 42.9 to the current 77.4. China’s current index of 73.6 falls from its highest ever
score of 84.8 six months ago but consumer confidence in this market remains strong. The latest “MasterIndex” reveals lower scores for all five variables, compared to six months ago. Weaker consumer sentiment for employment (53.6) and the stock market (57.1) results in reducing the over all average. Consumers in Shanghai appear to be less upbeat about the future than their counterparts in Beijing and Guangzhou.

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