SMART CARD CARS

A proposal by Britain’s new transport secretary to install smart cards into all of the nation’s 24 million registered motor vehicles has touched a raw nerve with civil liberties group. Under the proposal, the smart cards, tracked by satellite, would be used to charge motorists fees based on the routes and the time of day they drive. The transport secretary says the plan would ease congestion, especially during peak periods, and would motivate more Brits to use public transportation, according to The Sunday Times. However civil liberties groups say the plan smacks of big brother and essentially creates a spy in every car. Britain currently has a plan to monitor 450,000 foreign lorries beginning in 2006, according to The RAM Report ([www.ramreport.com][1]).

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

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JAPAN NET

Japan’s UC Card Co, Credit Saison, Orient Corp, and Aeon Credit Service announced this week they will merge their merchant settlement systems. According to the Nihon Keizai Shimbun, the four credit firms will reduce operating costs through the consolidation. The combined network, which will involve more than two million merchants, is projected to be running by 2004. The four credit companies also noted they intend to use the combined platform to develop and migrate to multi-application smart cards by 2005, according to The RAM Report ([www.ramreport.com][1])

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

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PATHMARK DEAL

Pathmark Stores has signed a deal to install 2,150 PSC “Magellan 8500” smart scanners at the POS in all of its 144 stores by November. The Magellan 8500 is the highest performing fixed point-of-sale scanner in the world and also has the most aggressive scan pattern in the industry. It quickly reads bar codes on all six sides of an item using PSC patented SurroundScan 3D Scanning technology.

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SMART CARD CARS

A proposal by Britain’s new transport secretary to install smart cards into all of the nation’s 24 million registered motor vehicles has touched a raw nerve with civil liberties group. Under the proposal, the smart cards, tracked by satellite, would be used to charge motorists fees based on the routes and the time of day they drive. The transport secretary says the plan would ease congestion, especially during peak periods, and would motivate more Brits to use public transportation, according to The Sunday Times. However civil liberties groups say the plan smacks of big brother and essentially creates a spy in every car. Britain currently has a plan to monitor 450,000 foreign lorries beginning in 2006.

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E-CONNECT VISA

Bank eConnect has signed with AAA America Direct Inc. to market the Bank eConnect guaranteed issued VISA card to the sub-prime marketplace. Through its network of over 1,500 telesales companies, AAA America Direct has access to over 75,000 individual telesales representatives. Bank eConnect is held by eConnect Financial, a division of eConnect that is the distributor of the eCashPad and the Bank Eyes Only service.

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INFINEON 2Q/02

Munich-based Infineon Technologies reported revenues of Euro 1.4 billion for the quarter ending June 30, an increase of 1% from the previous quarter, and 10% from the same quarter last year. Net loss for the quarter amounted to Euro 76 million, a sequential improvement from a loss of Euro 108 million in the previous quarter and from a loss of Euro 371 million year-on-year. During the quarter, Infineon expanded its smart card market share from 34% to 38%. In addition to plain chips, Infineon has produced more than 2 billion chip card modules to-date and signed a second calendar quarter agreement to supply smart card chips to MasterCard Financial Institutions.

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FDC & PAY-POINT

First Data announced Friday an agreement to acquire PayPoint Electronic Payment Systems from BP p.l.c. Created in 1984 to help ARCO launch PIN-based card payments at the gasoline island, PayPoint added non-petroleum clients in the 1990s while continuing to process payments for parent ARCO, which BP acquired in 2000. Earlier this year, BP agreed to switch its debit and credit processing transactions to PayPoint for its various retail sites throughout the U.S. That switch is expected to take place in early 2003. PayPoint’s existing contracts include Albertson’s, Costco, Trader Joe’s and McDonald’s. With the addition of PayPoint’s EBT acquiring capabilities, First Data says it will be able to offer direct EBT connections to any merchants anywhere nationwide.

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TVG & COMCARD

Rehovot-based smart card developer T.V.G. Technologies announced an agreement with Germany’s Comcard GmbH to manufacturer smart card based identification cards and read/write systems for IBM Israel Ltd. in the event that IBM is successful in its bid for a contract to supply the new ID cards to the Government of Israel. The winning bidder in the Israeli Government tender, which calls for production of 5 million smart card based ID cards over the next five years, will be announced in November. If IBM’s bid is successful, TVG and Comcard plan to establish a new production facility in Israel, for this and other projects, mainly for the Israeli Government and possibly including driver licenses.

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CHASE 2Q/02

J.P. Morgan Chase reported that second quarter credit card outstandings approached $50 billion while charge-offs remain high due to its recent Providian acquisition. During 2Q/02, Chase’s managed credit card outstandings increased 29% from one year ago to $49.5 billion due to the Providian acquisition in the first quarter of 2002 and organic growth. Managed credit costs of $736 million were 1% higher than the first quarter and were 17% higher than the second quarter of 2001, primarily due to increased charge-offs related to the full quarter impact of the Providian credit card portfolio. On a managed basis, the credit card net charge-off ratio was 6.42%, compared to 5.87% for the first quarter and 5.54% for the second quarter of last year. Chase says consumer credit trends continued to improve with positive trends in 30-, 60- and 90-day delinquencies in credit cards. For complete details on Chase’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

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

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CAP ONE FALLOUT

Following the disclosure last week that Capital One has entered into an informal MOU with bank regulators addressing certain regulatory matters, and the subsequent collapse of the card issuer’s stock price, Cap One’s CEO announced Friday the purchase of $5 million in COF shares in an effort to bolster investor confidence. Meanwhile a number of shareholder lawsuits began to surface this weekend. Cap One’s stock closed Friday at $35.21, after hitting $33.15 during the day. In after hours trading the stock was slightly higher at $35.50. Los Angeles-based Glancy & Binkow filed a class action lawsuit alleging that Cap One failed to disclose its large percentage of sub-prime customers and failed to maintain adequate loan loss reserves, thereby artificially inflating the Company’s earnings and stock price. New York-based Milberg Weiss Bershad Hynes & Lerach charged that Cap One failed to disclose it was in violation of federal guidelines regarding adequate levels of capitalization and loan loss reserves and that it was not effectively managing its rapid growth. The law firm also alleged that Cap One insiders sold more than $8.2 million in Cap One common stock at artificially inflated prices. Finally, Washington, DC-based Cohen, Milstein, Hausfeld & Toll said Cap One failed to disclose that it did not maintain adequate loan loss reserves and failed to disclose the full scope and nature of its sub-prime lending and its inadequate internal controls. Cap One acknowledged last week that nearly 40% of its business is in the sub-prime segment. For complete details on Cap One’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

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

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