STATE FARM CARD

The State Farm Bank VISA CheckCard has been launched as the insurance company makes its way into banking. Customers do not need to be a policyholder of State Farm Insurance to open a State Farm Bank account. Customers may apply by contacting a participating State Farm agent in any state except Massachusetts and Rhode Island. Customers may also establish an account online or by calling. The new VISA card offers access to five ATM networks with 200,000 locations across the USA. State Farm Bank was formally chartered by the Office of Thrift Supervision in November 1998 as State Farm Financial Services, F.S.B.. It opened in its pilot area of Central Illinois and St. Louis, Mo., in May 1999.

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SEARS 2Q/02

Sears, Roebuck and Co. reported that operating income for its credit and financial products increased 19.4% to $412 million as favorable funding costs and higher revenues offset higher provision and selling and administrative expenses. The company has currently issued more than 20 million Gold MasterCards as of June 30th and is gearing up to expand the acceptance of its private label card early next year. Sears Card outstandings at the end of the second quarter were $20.1 billion while Sears MasterCard receivables were $7.5 billion. Sears also reported Thursday that second quarter domestic credit and financial products revenues increased 3.5% from a year ago to $1.3 billion, due primarily to higher average receivable balances. Credit receivables at the end of the second quarter grew 8.8% over the prior year to $28.2 billion. The net charge-off rate for the quarter decreased to 5.32% from 5.42% last year primarily due to decreased customer bankruptcy filings. Year-over-year delinquencies decreased 39 bps from 7.26% to 6.87%. For complete details on Sears 2Q/02 results visit CardData ([www.carddata.com][1]).

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

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OPAY OK

Official Payments Corporation has signed Oklahoma County, Oklahoma to offer the company’s Internet tax payment option to citizens who owe personal property and real estate taxes. When the system becomes available in August, Oklahoma County residents will be able to pay these taxes with their Visa, American Express, MasterCard and Discover cards online. Oklahoma County collected more than $375 million in personal property and real estate taxes last year.

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ICBA MEXICO

The Independent Community Bankers of America and Travelex have signed a formal agreement to launch a new money transfer service that will enable ICBA’s member banks to provide money transfer and remittance services to their customers and community members through Travelex’s Worldwide Money division. Travelex’s internet-enabled money transfer service will provide customers with a lower-cost alternative to two of the largest players in the market: Western Union and Moneygram. The service will initially be geared to serving immigrants and workers from Mexico, Central and Latin America who send approximately $15 billion annually to family and friends in their home countries.

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DOUBLE MILES

United Airlines and Bank One announced yesterday they will reward Mileage Plus VISA cardholders with double miles for purchases through October 31. The United Mileage Plus Visa program continues to enhance benefits for cardmembers. The United Mileage Plus Visa card with Visa Signature benefits and the United Mileage Plus Platinum Business card were both recently introduced, offering exceptional value to consumers and small businesses.

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CHARGE-OFFS DOWN

Credit card charge-offs among credit card-backed securities decreased slightly by 20 bps in May to 7.1%. Delinquencies levels have also been trending downward since January according to Standard & Poor’s Credit Card Quality Indexes. In addition to delinquencies and charge-offs, the other performance trends were also positive in May. Payment rates increased by 90 bps, settling in at 16.5% for the month. Payment rates since 1998 have consistently topped 16.0%, and despite uncertain economic direction, obligors’ propensity and ability to pay their credit card bills seem undeterred, at least for now. In addition, yield numbers increased by a modest 20 bps in May to 18.6%. With news that the Federal Reserve may leave rates unchanged through the end of the year, yield numbers are likely to remain fairly inelastic in the near term. In May, yield numbers were also boosted and benefited from four Monday collection days. Excess spread continues to remain robust despite increased pressure on losses. Excess spread increased 40 bps to 7.0%. During the last six months, excess spread has averaged 7.2%.

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DATAKEY CARDS

Datakey announced it has delivered smart cards, readers and CIP client software to 16,000 users at three different Canadian government
agencies in the second quarter. The Canadian government has been a pioneer in the adoption of smart card technology. In particular, major programs such as the Department of Defense E-mail System II project demonstrate the progressive approach that Canada has taken in e-government initiatives.

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CAMPUS CARD

James Madison University and Case Western Reserve University have selected Student Advantage’s “SA Cash” program to launch an off-campus stored-value card program for more than 30,500 students, faculty, and staff at the two schools. Partner universities and Student Advantage share a percentage of each transaction. In addition, Student Advantage offers university card programs Web site maintenance and development services, and a communications plan that will inform students about the ID and its applications.

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EN-CONCERT SIGNIA

Ingenico says its eN-Concert Signia provides a secure and paperless solution to managing credit card receipts. Signia is a comprehensive signature and image document storage, retrieval and management system that solves the problem of storing and retrieving signatures and credit card receipts while reducing the opportunity for receipt mishandling. Through recently passed identity theft legislation in California, Georgia, Wisconsin and Oregon, injured consumers residing in those states can file lawsuits for civil damages against companies that fail to comply with the statute to destroy customer records by shredding them, erasing them or making them unreadable.

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NPC 2Q/02

National Processing reported net income for the second quarter was $12.2 million. Merchant Card Services transaction volume increased to record levels for the second quarter and year-to-date periods. Total merchant transactions processed were 955 million for the quarter and 1.8 billion year-to-date, representing respective increases of 14% and 16% over comparable 2001 volumes. Merchant Card Services dollar volume increased to record levels for the second quarter and year-to-date periods. Total dollar volume processed was $42.9 billion and $82.0 billion for the quarter and six months ended June 30, 2002, representing respective increases of 14% and 16% over comparable 2001 volumes. Revenue for Merchant Card Services increased to record levels for the second quarter and year-to-date periods. Merchant Card Services revenue was $107.6 million and $212.2 million for the quarter and six months ended June 30, 2002, representing respective increases of 13% and 17% over comparable 2001 amounts. For complete 2Q/02 details on National Processing visit CardData ([www.carddata.com][1]).

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

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