DEBIT CARDS

Caracas-based Groupo Ingedigit has signed a deal for Florida-based ServiTrust to sell and distribute both its MasterCard stored value and pin-driven debit cards. ServiTrust says it expects to be distributing a minimum of 10,000 cards per month within the next 4 to 6 months. ServiTrust also expects to establish a low-cost, fulfillment-servicing platform primarily located outside of the U.S. that will be staffed by a highly educated, but less compensated workforce.

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VISA International Ratings

Moody’s Investors Service today affirmed the ratings of Visa International Service Association (Senior at A1/CP at Prime-1). Moody’s said that since VISA International has no direct responsibility for the obligations of VISA USA, including any potential damage claims against VISA USA, the ratings remain stable. If VISA USA were to lose the lawsuits challenging its operating rules, the direct result would be to allow U.S. banks to also offer cards on other payments networks, and to potentially limit VISA’s ability to expand its brand into new products at attractive prices. Such an outcome would likely slow down VISA’s rate of growth in the US. But Moody’s does not believe that it would result in large-scale defections of Visa’s largest members. Moody’s believes that VISA International’s credit profile still benefits from the substantial implied support of its member banks. This support is the result of VISA’s strong brand, the near universal acceptance of its credit card payments network by consumers and merchants, and VISA’s resulting pricing power in the credit card payments arena.

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KBC SMART VISAS

Seoul-based KBC Corporation has received approval from VISA/Asia Pacific to personalize VISA smart cards using the MIST NBS Smart EMV Card Issuance Process with Conquest Card Issuance Software and NBS Horizon and Advantage series card issuance machines. KBC Corporation is both a card service bureau and the exclusive reseller of MIST NBS Card Technology equipment in Korea. VISA expects to have more than 11 million EMV smart cards issued in the Asia Pacific region by the end of this calendar year.

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Discover Extends NASCAR Deal

Discover Card has extended its primary sponsorship for the remainder of the 2002 NASCAR Winston Cup Series season in conjunction with HAAS CARTER Motorsports. Todd Bodine will continue as the primary driver of the No. 26 Ford. The Discover Card Racing program will not only hit the race track every week, but also starting July 14th, the credit card company joins NBC as the title sponsor of the network’s pre-race show. Plus, Discover Card race fans will enjoy riding with Todd Bodine courtesy of in-car cameras at all of the races.

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Account Aggregation

Interest in account aggregation is lacking primarily due to a concern over security says a new report. The study by Chicago-based Spectrem Group also reveals a lack of knowledge about aggregation may contribute to a low interest level. Spectrem says early estimates for account aggregation were high. Celent predicted 3.4 million users by 2001 and 9.52 million in 2002. Researcher Piper Jaffray’s predictions were even more optimistic with over 10 million users in 2002. Current estimates reveal the total number of users to be less than one million, with usage within the affluent market at only 5%.

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epicDirect

Hypercom introduced the payment industry’s first comprehensive suite of Internet hosted applications for POS terminals. Accessed from a PC and a standard browser, “epicDirect” gives processors, ISOs and VARs everything needed to manage a base of card payment terminals and merchants. Using the ASP business model, “epicDirect” gets customers to market immediately and replaces upfront development costs and ongoing support expenses with a low monthly service fee. Typically, fees range from $4 to $30 a month per terminal depending on the mix of services selected. Other epicDirect applications include “myICE;” financial reporting; electronic receipt capture; E-mail; “ICE-PAC,” and package tracking.

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OPC Signs Texas Towns

Official Payments Corporation has signed contracts with 14 Texas localities to offer e-payment options for taxes and fees. The agreements authorize Official Payments to provide services enabling citizens of these localities to make credit card payments for real estate and personal property taxes, utility bills, and various other taxes, fees and fines by visiting the OPC website or calling 1-800-2PAY-TAX. Visa, American Express, MasterCard and Discover are the cards accepted by the programs, which are expected to become available at the end of July.

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Business Zone

FleetBoston and Staples have teamed to pilot a program to offer small business banking services inside ten Staples stores in the Northeast. Fleet Small Business Zones, will feature two specially trained Fleet business sales representatives who will manage a freestanding, 150 square-foot sales center that will be open six or seven days each week, depending on locale. Each Fleet Small Business Zone will be available to open accounts and issue on-the-spot debit cards featuring 1% rebate on signature-based purchases. The Fleet Staples Small Business Package includes a checking account with no cash handling fees, free money market account, free online banking, and a free personal checking account. The monthly service fee for the Fleet Staples Small Business Package will also be waived for customers who maintain a $20,000 average daily balance or who conduct all transactions electronically.

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Ryder & Stratus Card

U.S. Bank and Skylight Financial have signed Ryder System for its “Stratus” ATM payroll card account program. As part of a comprehensive program being rolled out by Ryder, employees of Ryder can optionally have their payroll checks deposited into Skylight’s Stratus ATM Card Account. The pre-approved Stratus Account is an FDIC insured, checkless account, which provides an alternative to check cashing companies for employees who do not have a bank account. The Stratus Account is accessed via the Stratus Card, which is used to withdraw cash at more than 200,000 ATMs and over 800,000 POS locations.

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Upromise Signs Albertsons

Albertsons has joined the Upromise college savings program and is offering up to 5% back on purchases to its Preferred Savings Card customers in Idaho, Utah, Montana, North Dakota, Northern Nevada, Western Wyoming, and Eastern Oregon. Albertsons is one of the world’s largest food and drug retailers, with annual revenues of approximately $38 billion. Based in Boise, Idaho the company operates approximately 2,300 retail stores in 31 states across the US, under banners including Albertson’s, Jewel-Osco, Acme, Sav-on Drugs, Osco Drug, Max Foods, and Super Saver.

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FDC 2Q/02

First Data reported this morning that second quarter revenue increased 9% while earnings per share grew 21% on a recurring operations basis, or 11% on a pro forma basis. Thanks to strong growth from Western Union, revenue for the payment services segment increased by 17% to $780 million, and profits of $246 million increased by 21% over 2001 pro forma profits of $204 million. The card issuing services segment reported a 5% decrease in revenues to $462 million due to prior year de-conversions. However, card issuing services has more than 70 million retail, debit and bank card accounts in the pipeline for conversion, with approximately 13 million accounts scheduled for conversion during the second half of 2002. CIS operating profits of $91 million were up 1% from 2001 pro forma profits of $90 million. The merchant services segment showed a 15% increase in revenue to $647 million. Profits of $194 million rose 14% over 2001 pro forma profits of $170 million. Merchant processing transactions grew 14% for the second quarter to 2.5 billion. The emerging payments division, First Data’s eONE Global business, which accounts for 2% of total revenue, reported $41 million in revenue for the quarter, a growth rate of 98% due primarily to acquisitions. For complete details on First Data’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

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

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Vital Nabs Marshall

Vital Processing Services has hired former Hypercom executive John Marshall as EVP, with responsibility for Sales and Client Relations and for leadership of Vital’s affiliates, Vital Merchant Services and Golden Retriever Systems. Marshall has built a career in technology-related and transaction-intensive businesses in Canada, New Zealand, Australia and the US. In New Zealand, he served as a senior level sales executive for Eagle Technologies as well as Computer Resources. Subsequently, Marshall held a senior leadership role at Austnet, the first independent ATM-driving company in Australia. Later, he moved to US where most of his work was with Hypercom prior to joining Vital.

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