InterCept Acquisition

Atlanta-based InterCept has signed an agreement to acquire item and remittance processing and statement rendering assets from Affiliated Computer Services for $7.5 million. This deal adds two additional item processing locations, bringing the Company’s nationwide total to 27 item processing centers. ACS is selling its Woodbury and Utica, New York, locations, which currently serve more than 120 customers in the northeast to InterCept. Intercept believes this transaction will contribute revenues of $6.0 million for the remainder of 2002 and $14.0 million in 2003. Last month, InterCept signed a definitive agreement to acquire DE-based Electronic Payment Exchange in a stock-for-stock deal. Earlier this year InterCept also agreed to purchase FL-based Internet Billing Company, Ltd. InterCept reported first quarter net revenues of $37.7 million, a 39.6% increase compared to the three months ended Mar 31, 2001. (CF Library 5/6/02; 5/24/02)

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ONLINE GAMBLING

Last week’s decision by Citibank to block online gambling transactions with its credit cards in the USA has been deemed “politically motivated” by the head of the largest online gambling firm. Sportingbet.com Plc’s CEO says Citibank’s decision is linked to New York’s plans to build a new gambling center closer to home. Last month, Sportingbet Plc launched a major campaign in the USA to promote government regulation of the online gambling industry. The firm has nearly 400,000 customers in the USA and estimates it could generate US$11 million per year in new tax revenue if online gaming was legalized. Sportingbet.com says 30% of its American customers use credit cards to place bets on its Web site. To further its plans in the USA, the firm has taken out full page advertisements in The Washington Post and The Washington Times, hired D.C. lobbyist Greenberg Traurig, and, has scheduled meetings with various Congressmen. Under the agreement reached last week with the New York Attorney General, Citibank says it will block transactions that are identified by transaction code as casinos and Web sites as online gambling. Bank of America, Fleet, Direct Merchants Bank, MBNA, and Chase Manhattan Bank have already begun blocking such transactions.

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ADS Signs Restoration Hardware

Alliance Data Systems has signed a six-year agreement with Restoration Hardware to provide turnkey private label credit card services for more than 100 Restoration Hardware stores nationwide, as well as for the retailer’s catalog and online store. The full-service private label credit card program that Alliance Data will provide includes account acquisition and activation; database marketing services; receivables funding; card authorization; private label credit card issuance; statement generation; remittance processing; and customer service functions.

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ALL ASIA PASS

MasterCard, Travelocity.ca, and Cathay Pacific have teamed to offer Canadian travellers a special discount on travel to Asia this summer. The All Asia Pass, which includes roundtrip Economy Class airfare between Toronto or Vancouver to Hong Kong and up to 21 consecutive days air travel to 16 Asian cities, is priced at CD$1,599 for Vancouver departures and CD$1,699 for Toronto departures. Travelocity.ca members using a MasterCard card to purchase The All Asia Pass will save an additional $200. The All Asia Pass is available for travel from July 22 to December 4.

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OPC Signs AZ County

Official Payments Corporation announced today that Maricopa County, Arizona plans to offer the company’s electronic payment options to citizens who owe property taxes. When the systems go live in August, Maricopa County residents will be able to pay these taxes with their Visa, American Express, MasterCard and Discover cards, via Internet or telephone. Maricopa County, which is the largest county in Arizona, collected over $2.5 billion in property taxes last year.

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Home Depot Heat

Home Depot’s confusing position over acceptance of business cards for government purchases has created negative publicity this week, leading the company to defend itself. The home improvement chain reportedly sent out a memo earlier this month advising store managers not to process purchases connected with the U.S. Government, including those made with GSA payment cards. The company indicated its decision is largely based on a concern that it could be responsible for compliance with federal law involving discrimination and affirmative action. Home Depot said yesterday the policy on not doing business with the Federal Government is a long-standing policy but could change. However, the firm emphasized it has a long record of “unwavering commitment to support its communities, federal and local government, and all disaster agencies in times of emergency and natural disasters through generous donations of supplies and materials.”

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GoPin Changes Name

MD-based GoPin Inc., creators of the Bill Me Later network, have changed their name to I4 Commerce Inc. effective immediately. With the introduction of Bill Me Later this year, the company has taken the opportunity to change the corporate name to reflect their merchant-centric mission. The company currently has strategic relationships with the industry’s largest payment processors, including Paymentech and First Data Corporation.

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Personalized Holograms

Israeli firm SafeCard ID system 7 is introducing new technology enabling the creation of personalized holograms for ID cards and possibly payment cards. The hologram may contain the card bearer’s photograph which is embedded in the card and cannot be altered. The special process makes the card bearer’s face appear as a shiny face integrated within other holographic elements. SafeCard’s patented system can also be used as a platform for printed biometric data. The system can also handle smart cards. SafeCard can selectively metallize the card in any size and shape and in several colors. The company is currently moving its headquarters to Norfolk, VA from Caesaria, Israel.

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Wider Margins

The gap between the cost of funds and interest revenues continues to widen for credit card issuers this year. Meanwhile, average credit card interest rates have edged upward by 20 bps since the start of this year. Yesterday, Discover reported that its interest rate spread widened 123 basis points for the second quarter compared to 2Q/01, driven by a decline in cost of funds. Other top issuers are expected to report similar gains when second quarter reports come out next month. The Feds have not adjusted rates since December.

INTEREST RATE YIELDS
Jan 01: 8.71% Jun 01: 9.35% Nov 01: 10.14% Apr 02: 10.45%
Feb 01: 8.79% Jul 01: 9.43% Dec 01: 10.26%
Mar 01: 9.04% Aug 01: 9.68% Jan 02: 10.40%
Apr 01: 9.12% Sep 01: 9.80% Feb 02: 10.39%
May 01: 9.28% Oct 01: 9.96% Mar 02: 10.39%
Source: CardData (www.carddata.com)

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