Grace Periods

Grace periods have declined more than 28% over the past twelve years. According to CardData ([www.carddata.com][1]), grace periods on bank credit cards have dropped from 29.7 days in 1990 to 21.2 days as of April 2002. During the 1980s, grace periods averaged 30 days as interest rates averaged 19%. As annual fees began to disappear and interest rates began to decline in the early 1990s, the shortening of the grace period was not far behind. The launch of the AT&T Universal Card in 1990 and the growing success of the Discover Card, launched in 1986, were contributing factors to the disappearance of annual fees. Major card issuers shifted to variable interest rates in 1992 following the introduction of the General Motors MasterCard and as the prime rate dropped to 6.0%.

BANK CREDIT CARD GRACE PERIODS
(VISA, MasterCard, Discover, American Express)
1990: 29.7 days 1997: 24.3 days
1991: 29.4 days 1998: 23.9 days
1992: 28.6 days 1999: 23.5 days
1993: 27.8 days 2000: 21.8 days
1994: 26.8 days 2001: 21.5 days
1995: 25.3 days 2002: 21.2 days
1996: 24.7 days
Source: CardData (www.carddata.com)

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

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Concord Expansion

Concord EFS announced Monday it has completed the acquisition of TX-based Core Data Resources and has entered into a strategic agreement to resell the CyberSource Small Business solution to its small and medium-sized clients and prospects. Core Data’s 35,000 ATMs doubles the number of off-premise ATMs processed by Concord. Concord currently drives more than 56,000 ATMs, about half of which are installed by retail ATM deployers. The combination of CyberSource and Concord offerings gives small and medium businesses needing to sell online the ability to securely and cost-effectively accept credit cards on their web sites using the same highly secure, reliable and scalable infrastructures employed by many top national retailers and businesses to accept electronic payments. The CyberSource solution handles authorizations, settlements, and credits and can be pre-integrated with many popular Internet storefront programs; or, easily integrated with other business applications, including most shopping cart software.

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AIR Assets

The OCC, the Board of Governors of the Federal Reserve System, the FDIC, and the OTS collectively issued an advisory yesterday to clarify the appropriate risk-based capital treatment for institutions that securitize credit card receivables and record an on-balance sheet asset commonly referred to as an Accrued Interest Receivable. The agencies have found that many institutions continue to accrue fee and finance charge income on the investors’ portion of the transferred credit card receivables even though the right to receive this income, if and when collected, has been transferred to the trust. These institutions report the rights to these accrued fees and finance charges as an asset commonly referred to as an Accrued Interest Receivable. However, the AIR is subject to higher capital requirements under the agencies’ capital standards than many institutions are currently applying to this asset. Thus, the agencies expect institutions to hold risk-based capital in an amount consistent with the subordinated nature of the AIR asset and to reflect this treatment in their regulatory reports by no later than December 31, 2002.

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NCR TEC-BAN DEAL

NCR Corporation announced a multimillion-dollar software and services deal with Brazil-based Tecnologia Bancaria S.A. (TecBan). NCR’s APTRA open-architecture software for the automated teller machine channel will be used to transition TecBan’s ATM network to the Microsoft Windows NT operating system and drive additional revenue through enhanced customer transactions. The three-year agreement includes software licensing, professional services, and software maintenance. Andrew Orent, vice president of global sales and services for NCR’s Financial Solutions division, said, “TecBan is one of the world’s most sophisticated ATM networks and its selection of NCR APTRA to run on its diverse fleet of ATMs validates NCR as the best-of-breed player in multivendor ATM application software. ATM deployers worldwide are adding new transactions of value to provide better service to, and generate more revenue from their customers. To support these new transactions and meet speed-to-market requirements, new ATM software applications are increasingly being developed on the hardware-independent Windows platform. NCR has invested heavily in our APTRA software suite to serve this growing market.”

Ranato Mascaretti, TecBan general manager, said, “As we have been NCR customers for quite some time, we rely on their capacity to support us in the long term, and through APTRA EDGE, NCR can provide a reliable and fast evolution to the Windows NT platform.”

About TecBan

Tecnologia Bancaria S.A. (TecBan) was founded in 1982 by Brazilian banks, with the objective to develop and consolidate the automatic teller machine net for Banco24Horas. Throughout these years, TecBan has been placing products in the national market related to Electronic Funds Transfer, aiming to supply the specific needs of commercial banking automation of financial institutions and clients. In 1982, the company launched the Servicos de Cartoes; in 1991, the Cheque Eletronico; in 1992, Creditos Diversos; in 1993, the Pagamento Eletronico; and in 2000, Cheque Eletronico.com. Today, TecBan serves 61 financial institutions — among banks and credit card companies — reaching a volume of approximately 65 million active magnetic cards, thus operating in more than 160 Brazilian cities. In 2000, the company had income of almost R$160 million (Brazilian currency), with a growth rate of 35% if compared to the previous period. For more information, visit www.techban.com.br.

About NCR Corporation

NCR Corporation (NYSE:NCR) is a leader in providing Relationship Technology(TM) solutions to customers worldwide in the retail, financial, communications, manufacturing, travel and transportation, and insurance markets. NCR’s Relationship Technology solutions include privacy-enabled Teradata(R) warehouses and customer relationship management (CRM) applications, store automation and automated teller machines (ATMs). The company’s business solutions are built on the foundation of its long-established industry knowledge and consulting expertise, value-adding software, global customer support services, a complete line of consumable and media products, and leading edge hardware technology. NCR employs 30,300 in more than 100 countries, and is a component stock of the Standard & Poor’s 500 Index. More information about NCR and its solutions may be found at www.ncr.com.

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BEETLEVIEW

Wincor Nixdorf announced the release of BEETLEVIEW, a Web-based desktop management system that enables remote administration of POS systems. Because BEETLEVIEW is Web-based, users can log on from any workstation via a Web browser to obtain detailed information about their BEETLE POS system. BEETLEVIEW includes the following functions: Inventory management; Proactive fault management; Remote tools; and Integration with enterprise management solutions.

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PrePaidServer

Datacap Systems announced PrePaidServer, a prepaid account authorization and management system which is easily installed on a headquarters PC to handle charge requests, as well as account or card issue and add-value requests from direct-connected registers or registers in remote store locations. Retailers, schools, hospitals, country clubs, and other businesses can quickly implement their own prepaid account or gift card program, speeding up payment verification, eliminating third party service charges, and improving customer service. Datacap payment solutions automatically handle all payment types, sending bank credit/debit cards and check requests to traditional payment authorization services, while identifying prepaid account numbers and forwarding those authorization requests to PrePaidServer. A complete reporting package, including customer statements and balance reports, ensures control and accountability with or without integration to other accounting systems.

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USTT Closes Stitch

USA Technologies Inc. announced the closing of its acquisition of Stitch Networks, a major competitor in the cashless and wireless vending market. Together, USA Technologies and Stitch now have a total of nearly 1,000 customers worldwide, operating at more than 3,000 different locations and growing. The combined companies operate one of the largest networks of unattended, credit card activated vending, laundry and business services in the US. Among the combined company’s new customers and or prospects are seven of the biggest brands on the Fortune 500 list of companies.

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Canadian Market

VISA and MasterCard credit card volume in Canada grew 6.3% while the number of cards-in-force grew 12.3% last year. Gross dollar volume hit US$93.4 billion and the number of cards-in-force at year-end 2001 was 45.4 million, according to The RAM Report ([www.ramreport.com][1]). VISA now holds a 70% share of the Canadian market, down from 72% in 2000, as MasterCard expands. MasterCard’s volume grew 10.8% last year to US$27.7 billion. VISA’s 2001 gross volume was $65.7 billion. MasterCard’s cards-in-force grew 22.5%, from 16.9 million in 2000 to 20.7 million at year-end 2001. VISA added 1.3 million cards last year to grow 5.6%, from 23.4 million to 24.7 million. Total transactions for both VISA and MasterCard combined was 1.4 billion.

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

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Score Simulator

Equifax and Fair, Isaac announced the addition of an interactive service to Score Power that enables consumers to simulate their personal FICO score. Using the FICO Score Simulator, consumers can quickly understand how specific financial actions might impact their FICO score over time if other factors stay the same. In addition, the score analysis report includes multiple click-through links to the consumer’s Equifax Credit Profile, enabling each consumer to view directly the underlying detail in his or her credit report. Since March 2001, the Score Power report has provided more than one million consumers with their FICO score. Other new services to be added later this year include a monitoring service that will alert consumers to changes in their score and credit report; and a three-bureau credit report will be added that will provide a one-stop source for all of a consumer’s credit file information. (CF Library 3/19/01; 4/15/02)

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VbV Deployment

VISA U.S.A. announced yesterday that, to-date, more than 40 leading e-commerce merchants have made VISA’s online protection service, Verified by VISA, available to online customers. Verified by Visa is a simple and convenient tool that provides greater protection to Visa cardholders and reduces the risk of fraud online. This service is an additional layer of protection that complements Visa’s longstanding Zero Liability policy, which protects cardholders from responsibility for unauthorized use of their Visa cards online or in the physical world.

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BofA & PGA

Bank of America, Colonial Country Club, and The PGA TOUR announced a four-year title sponsorship agreement beginning in 2003, replacing MasterCard as the title sponsor since 1996. The 2003 Bank of America Colonial will have a $5 million purse and will be played May 19-25, with the winner receiving $900,000. The purse will increase every year over the term of the agreement, remaining one of the top five purse levels among the TOUR’s co-sponsored events. In addition, CBS Sports will continue to provide weekend coverage with USA Network providing early-round coverage.

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TRANSIT CARD FIGHT

Cubic Transportation has gone to the Supreme Court with concerns over the bidding process for a smart card-based mass transportation system. In August, ERG Ltd was awarded the $A100 million contract to build a smart card ticketing system for public transport in Sydney. The Government granted preferred tenderer status to ERG. The ERG contactless smart card is expected to be available in mid-2003 with full deployment scheduled for 2005. Under the program, the card will be used for all forms of transportation. Motorola and ERG will lead the consortium for the mass smart card system contracted by the NSW government. The government targeted 2002 for the release of the new smart card system but the process was bogged down over the bidding process. The Sydney Morning Herald quoted the Transport Minister, Carl Scully, as saying, “We’ve had an exhaustive… process which has sought to get the right value for money and we’ve sought to do it right. We’ve been very careful and cautious in delivering the product.”

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