Mobile Dibz

CO-based Dibz, Inc. has formed a new sales and marketing division to provide Internet-based mobile entertainment via the new Dibz prepaid card. CellDog will be coming online in conjunction with the late June 2002 launch of the Dibz powered card and the Vans Warped Tour. CellDog will provide such services as cell phone ring tones, group graphics (logos and other images that can be associated with certain groups of callers, for example, family), text message capability, and voicemail greetings.

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Equity Gold MasterCard

Cleveland-based Charter One Financial has introduced a new home equity MasterCard with a promotion offering a chance to win a Jaguar. The Equity Gold MasterCard offers customers a 2.99% APR introductory rate on home equity lines of credit for the first four months of the line. For the remaining life of the line, the interest rate will move to Prime minus a quarter point with a minimum draw or balance transfer of $10,000 at time of activation. The maximum APR is 16%. There is an annual fee of $100, however it is waived each year if the average outstanding balance on the credit line account is 20% or more of the line of credit. The card offers a credit line up to a 90% LTV. To promote the new home equity credit card, Charter One is offering new cardholders a chance to win a 24-month lease on a 2002 Jaguar X-J8. Customers need to access their Equity Gold MasterCard once between May 20 and August 31 for any type of purchase. Charter One Financial recently converted from a thrift to a national bank. The bank has 456 branch locations in Ohio, Michigan, New York, Illinois, Massachusetts, and Vermont. (CF Library 5/2/02)

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NPC Access

National Processing Company this week announced a major new release of its NPC Access platform which now enables users to easily isolate specific information they require to effectively manage their payment activity. Several of NPC’s national clients completed conversion to the new NPC Access platform in April and early May, with all national merchants scheduled for conversion in the months ahead. The product enables customers to quickly access various management reports for research, analysis, and internal reporting.

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EURONET RATED

Budapest-based Euronet Worldwide received a Positive Rating Outlook from Fitch Ratings. The firm was previously placed on Rating Watch Negative status since June 2000. Fitch says the change reflects the consistent improvement in Euronet’s operating performance over the past 18 months and, importantly, the strong liquidity the company now enjoys following a number of fund raising events in the first quarter of 2002. Euronet has demonstrated consistent improvement in revenue and margins in its core ATM processing business, with the company having posted four successive quarters of positive EBITDA and a second consecutive quarter of operating profit.

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Discover Hike

Discover is now notifying cardholders it will raise rates on existing purchase balances to 16.99% and to 22.99% for cash advance balances, effective June 15th. According to CardTrak ([www.cardtrak.com][1]), the rate hike does not apply to introductory or promotional rates until they expire. Current Discover cardholders pay interest rates ranging from 12.99% to 14.99% for purchases. Cardholders have until June 8th to reject the new rates. Beginning this month, Chase raised “preferred” credit card interest rates to prime +11.99% with a 19.99% minimum APR. Credit card “non-preferred” interest rates went to a fixed 22.99% interest rate. Providian has notified some of its sub-prime cardholders it was raising interest rates to 29.99% later this year.

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

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eMerchantWatch

First Data said this morning it is launching a proprietary security-testing program to validate that Internet merchants comply with new payment industry security requirements. eMerchantWatch unite security standards from different payment industry organizations into a single testing program. First Data has contracted with TrustWave Corporation, a high-tech security firm that arose from elements of the National Security Agency, to develop the technology and processes for remotely performing eMerchantWatch’s quarterly security testing. These tests will consist of two parts: an online security review and an electronic vulnerability scan. eMerchantWatch staff will work with Internet merchants to identify and resolve vulnerabilities, thereby mitigating the risk of fraudulent transactions and hacker intrusions. The program will be available this summer to acquirers and other payment industry organizations. First Data Merchant Services will initiate the roll out.

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InterCept & EPX

Atlanta-based InterCept has signed a definitive agreement to acquire DE-based Electronic Payment Exchange in a stock-for-stock deal. InterCept will issue 1,349,894 shares of its common stock to the EPX stockholders in exchange for the stock of EPX. A portion of those shares issued by InterCept will be held in escrow for a period of time after closing. InterCept had previously announced on March 19, 2002 a binding letter agreement to acquire EPX, an end-to-end provider of transaction processing services based in New Castle, Delaware.

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TSYS Integrity Award

TSYS was recently named the overall winner of Unitech Systems’ Excellence in Information Integrity Award. The company received the award for its commitment to the methods, processes, and procedures the company uses to protect its data integrity. TSYS joins an impressive group of previous Excellence in Information Integrity Award winners including Acxiom Corporation, American Express, PNC Bank, and Sprint.

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VISA Medical Accounts

San Ramon, CA-based KingThomason Credit Cards has signed a deal with IBM’s e-Business Services Division to provide support services for its new VISA medical accounts cards. In late 2001, KingThomason signed an exclusive marketing services contract with the Los Angeles Foundation for Medical Care. The contract calls for KingThomason Credit Cards, Inc. to provide the Foundation members’ patients with a bank specific, private label, Visa medical accounts receivable credit card designed to facilitate the recovery of approximately $1.4 billion in past due, non-insurance-covered accounts receivable. Then, in April of 2002, the Company reported signing a similar agreement with the 330,000-physician member Independent Physicians Association of America with association members in 39 states.

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Providian Ratings

Fitch Ratings lowered Providian yesterday, but Providian says the Fitch action has no bearing on its card-backed securities. Fitch said it is concerned about excess spread levels in the Providian Gateway Master Trust, and believes it could trigger an early amortization. Fitch says the decline in excess spread has been driven by a sharp rise in net chargeoffs of the PGMT assets. The increase in loss rates reflects weakness in the economy that began in 2001, limitations in growth, but Fitch notes it is also indicative of the high-risk nature of Providian’s customer base, a high percentage of which would be considered subprime under bank regulatory definitions. Providian responded Thursday by saying it expects that excess spread in its Gateway Master Trust will not fall to a level that would trigger early amortization of the outstanding securitizations of the trust. The Company also said that the Fitch downgrade does not result in an early amortization event in any existing securitization. Providian says early amortization for two specific series of its PGMT will occur if there is a downgrade of Providian National Bank’s credit ratings below BB-/Ba3, respectively, unless Providian National Bank has entered into a back-up servicing agreement with a back-up servicer satisfactory to the investors within 60 days of the downgrade. Providian noted that this ratings trigger is not tied to ratings by Fitch, but is based only on the ratings provided by Moody’s Investor Service and Standard & Poor’s. In pre-marketing trading this morning Providian’s stock was down about 6%.

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Smart Card White Paper

The Smart Card Alliance released a white paper yesterday which outlines how smart cards and biometrics enhance security, privacy, performance and return on investment in secure ID systems. A new national focus on domestic security has heightened interest in technologies that improve confidence in verifying the identity of individuals. Earlier this month, legislation was introduced in the U.S. House of Representatives that would include a biometric feature on an encrypted smart chip embedded in driver’s licenses. Federal, state and local officials have proposed other initiatives such as requiring biometrics in immigration documents and issuing secure smart card credentials to transportation workers.

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INFRARED SMART CARDS

Visa International and SK Telecom have signed an agreement to implement mobile payments/wireless payments that incorporate smart cards and infrared technology, in a move to provide consumers with greater convenience to conduct transactions anytime, anywhere using Visa debit or credit payments over mobile phones.

Both companies will collaborate to implement an innovative payment solution that integrates two major global specifications from the payments and wireless industries: the EMV (Europay-MasterCard-Visa) global smart card standard and IrFM (Infrared Financial Messaging), the global interoperable standard for infrared transmission. The solution allows Visa cardholders and SKT subscribers to pay for goods and services by beaming an infrared signal securely from the mobile phone to a small infrared receiver located at retail point-of-sale terminals, vending machines, subway stalls, tollgates, buses and other payment locations. The cardholder’s payment details are stored securely on an EMV chip within the handset.

This partnership between the two market leaders was signed on Monday at a signing ceremony held at SKT’s headquarters in Korea.

Speaking at the ceremony, Mark Burbidge, Senior Vice President and General Manager, e-Visa Asia Pacific, said, “Our partnership with SKT combines the strengths of the payments and mobile worlds with the convenience of mobile phones with the wide acceptance of Visa cards. The payment industry is undergoing a major transition from the use of magnetic stripe cards to EMV smart cards. These provide greater security and give customers a wide range of new payment functions.flexibility. Visa and SKT are using the extra capabilities of smart cards to enable Visa cardholders to make payments with their mobile devices easily and securely.”

SKT is the first company in the world to implement EMV-based infrared technology for wireless mobile payments. Since 8 April 2002, SKT has been piloting a chip-based payment service using an infrared-enabled mobile phone. The pilot program is being held at SKT’s headquarters and by 20 merchants at the Seoul Finance Center. Later this year the program will be rolled out to more than 30,000 300,000 merchants in Korea. Two million infrared-port enabled handsets will also be distributed by end of this year.

Mobile and online shopping in Asia Pacific has grown rapidly during the past few years. The International Data Corporation (IDC) predicts the market for mobile commerce in Asia Pacific will reach US$36 billion by 2004. The Visa and SKT initiative directly caters for this burgeoning market and is just part of Visa’s efforts to offer greater flexibility and convenience to its cardholders.

Visa International

Visa is the world’s leading payment brand. Visa-branded cards generate more than US$2 trillion in annual volume and are accepted at more than 24 million physical locations around the world, including more than 750,000 ATMs. The Visa organization plays a pivotal role in developing innovative payment products and technologies to benefit its 21,000 member financial institutions and their cardholders. Visa is a leader in Internet based payments and is pioneering the creation of u-commerce, or universal commercethe ability to conduct commerce anywhere, anytime, and any way. For more information, visit www.corporate.visa.com.

Visa Asia Pacific

In Asia Pacific, Visa has a greater market share than all other brands combined with more than 56 percent of retail sales volume. During 2001, a total of US$480 billion was spent in Asia Pacific using Visa cards, a growth of 70 percent over the previous year. Visa Asia Pacific’s Internet address is www.visa-asia.com.

About EMV

EMV stands for Europay-MasterCard-Visa, a joint industry working group created to facilitate the introduction of chip technology into the international payment systems environment by developing joint specifications for Integrated Circuit Cards (ICC) and terminals for Payment Systems. EMV serves as the global framework for chip card and terminal manufacturers worldwide.

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