Fast Cheap Cards

MN-based Datacard Group has taken high volume card issuance for the loyalty and phone card market to a new level this week. The company has unveiled two new systems that offer magnetic stripe encoding and inkjet printing of bar codes, logos and alphanumeric characters on preprinted loyalty or phone cards at speeds of 10,000 cards per hour. The E6200 Card Personalization System is designed for loyalty card production while the E8200 is designed for telephone scratch-off cards. One configuration prints alphanumeric characters lengthwise on a card, while the other prints data in multiple print fields in any location on a card. Datacard says the E6200 can produce cards at a cost as low as $0.0033 per card while the E8200 can produce cards at $0.006 per card.

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SONY WEB-CONNECT

Hoofddorp-based GlobalCollect has inked a contract with Sony Online Entertainment to expand the online payment options available to gamers. WebCollect is an end-to-end, real time processing system for international payments that enables companies to give their customers a flexible suite of payment methods, currencies and languages. Sony multiplayer online gaming business is using a subscription-based revenue model for its successful EverQuest series, which has more than 430,000 subscribers. While most of the online transactions in the U.S. market are done by credit card, the rest of the world prefers local payment alternatives such as bank debits, checks and wire transfers. WebCollect combines all these payment methods into one interface, thus simplifying the payment and collecting process.

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CashX Expansion

Phoenix-based CashX has introduced its CashX Prepaid VISA card in more than 200 stores in Southern New England. CashX can be purchased at retail locations in $20, $50 or $100 denominations, and can then be activated at CashX.com. Once activated, the consumer has a virtual Visa account that can be used to purchase anything wherever Visa is accepted online, over the phone or through mail order. CashX is available at 215 convenience stores in the Boston, Southern Massachusetts, and Providence, RI area including Tedeschi Food Shops, Lil’ Peach Convenience Stores, and Store 24.

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ATM CONTRACT

UniCredito Italiano has signed a US$6.5 million multi-year contract with NCR for hardware maintenance and support services to the bank’s dual-vendor ATM network. Under the terms of the contract, NCR will provide support for both NCR and Diebold ATMs. More than a half of UniCredito Italiano’s 3,338 ATMs are NCR machines. UniCredito Italiano is the largest banking group in Italy in terms of operating income and market capitalization. The bank is going through a period of reorganization, moving from a federal structure to an international multi-specialist business model. As a result, the bank has decided to reduce its number of vendors in the areas of self-service maintenance and software.

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KeyCorp CU ATM Deal

Great Lakes Credit Union of Toledo has signed an agreement with Cleveland-based KeyCorp for surcharge-free access to Key’s ATM network which includes more than 540 automated teller machines in Ohio, Indiana, and Michigan. GLCU serves the employees of more than 300 companies around the NW Ohio area bringing traditional banking services as a free employee benefit to the companies. KeyCorp delivers their products and services through KeyCenters and offices; a network of more than 2,300 ATMs; telephone banking centers; and a Website.

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ATMEL VAR

Bangalore-based California Card systems Pvt. Ltd. has signed a deal to handle Atmel’s smart card product line in India. Atmel is a supplier of smart card products such as memory, secure memory, CryptoMemory, secure microcontrollers and crypto-controllers. Atmel’s chips range from general-purpose nonvolatile memories and microcontrollers through programmable logic and application specific integrated circuits. California Card Systems was established in 1993 to provide turnkey solutions for the emerging smart card markets in the USA and India from its headquarters located in Palo Alto, California.

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Lerner Donation

MBNA Chairman Al Lerner has donated $100 million to the Cleveland Clinic Foundation, and Case Western Reserve University will re-name its new medical college the Cleveland Clinic Lerner College of Medicine of Case Western Reserve University. The Clinic will prepare physician-investigators and scientists dedicated to advancing biomedical research and practice and will admit an entering class of up to 40 students from a national and international pool of applicants.

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PayPal Processor

As reported in last week’s CardFlash, PayPal is switching from InterCept to Wells Fargo for its U.S. credit card processing following a May 1st agreement between Wells and PayPal. Yesterday it became official, as Wells confirmed it has become the payment provider to PayPal. PayPal’s business consists primarily of transactions between businesses and consumers via online shopping (e-commerce sites) and online auction sites. Using e-mail, senders simply notify recipients of a payment via e-mail. PayPal estimates that its total payment volume for the three months ending June 30, 2002 could range from $1.61 billion to $1.63 billion. Wells Fargo processes nearly $4 billion in credit card sales annually for 20,000 online merchants. (CF Library 6/13/02)

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Card Stocks Sink

Like the rest of the stock market, the stocks of credit card specialists have been getting hammered this week as more companies point to lower profits and a much slower economic recovery. Metris and Providian were especially hard hit yesterday, losing more than 17%, as Metris closed at a new low of $7.40 per share and Providian closed at $5.43 per share. Metris says it is unaware of any reason specific for the price movement, but it was downgraded by one analyst yesterday. U.S. Bancorp Piper Jaffray said Thursday that current credit trends for Metris remain challenging with no evidence of improvement at this point. Piper Jaffray said that given the uncertainty of Providian’s new strategy to move into the highly competitive prime credit segment,and continued overall credit weakness, it believes it will be difficult for Providian’s stock to outperform the market this year. Among other losers in Thursday’s trading: MBNA and Capital One down 2.8%; CompuCredit down 2.6%; American Express down 1.5%; Household down 3.4% and Citigroup down 3.7%. Since the first of this year, the CardWeb.com 100 Index has fallen 15.6% from 1713.15 to 1482.21. The CardWeb.com 100 stock index, launched January 1st, tracks the stocks of 100 highly focused credit card companies, card processors, card manufacturers, and other card-related businesses. The index is available through the CardData financial surveillance service. (CF Library 2/6/02)

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Certegy Card Consulting

Certegy has formed an alliance with JLS Associates, a management consulting firm, which specializes in the payment card industry, to provide a range of consulting services to Certegy clients including profitability and operational reviews. The profitability review will focus on a client’s products, pricing, and disclosures to ensure the client is positioned to compete with other local and national issuers.The operational review focuses on the client’s utilization of the Certegy processing system to ensure the client is making full use of the features and functionality inherent in the system.

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Card Marketing

While current go-to interest rates on credit card direct mail solicitations predominately fall between 10.00% to 13.99%, there has been an increase in offers in the 8.00% to 9.99% range and a slight increase in offers between 5.00% and 7.99%. Chicago-based Mintel Comperemedia says that in January 2001, the average interest rate was 15.87%, compared to an average of 12.46% in January 2002. The market tracking service says the overall average has remained high due to the number of sub-prime offers being sent out by the large mailers and the offers for co-branded cards, such as the airline partner cards, which also tend to have higher interest rates. The number of offers with an introductory rate declined in the first quarter of 2002, compared to the fourth quarter of 2001. In October, November, and December of 2001, almost 80% of all offers had an introductory rate included. By March 2002, less than 60% of the offers included an introductory rate. If an introductory rate is offered, however, it is most likely to be 0%. Comperemedia estimates that 965 million credit card acquisition pieces were mailed in the USA for credit card offers during the first quarter, compared to 883 million sent in the first quarter of 2001.

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EUROPAY MERGER

MasterCard International’s principal members have approved the conversion to a private share corporation in connection with MasterCard’s upcoming merger with Europay International. Upon completion of the transaction, MasterCard’s principal members and Europay shareholders will receive shares in MasterCard Incorporated, the new holding company, and a membership interest in MasterCard International, which will continue as MasterCard Incorporated’s principal operating subsidiary. MasterCard International has had a long-standing alliance with Europay, and currently owns a 12.25% share of Europay, and a 15% interest in EPSS, Europay’s processing subsidiary. In addition, MasterCard and Europay each own 50% of Maestro, the world’s leading global online debit program. Following completion, Europay will become the European region of MasterCard, and will continue to be based in Waterloo, Belgium. Peter Hoch, currently CEO of Europay, will retain his leadership role for the region and will report to Mr. Selander.

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