PULSE & TYME Merger

The merger of two of the electronic funds transfer industry’s most prominent networks has been completed, according to officials from the PULSE EFT Association and TYME Corporation. The merger was approved by an affirmative vote of more than 95% of TYME’s outstanding shares, and all TYME participants signed PULSE membership agreements. The combined system further solidifies PULSE’s status as one of the leading independent financial industry owned and controlled providers of automated teller machine and point-of-sale processing services.

“This merger is especially significant in light of industry developments that have removed a large portion of the nation’s EFT infrastructure from the stewardship of financial institutions,” said PULSE president and CEO Stan Paur. “The consolidation of the two networks is a natural in light of the mutual ownership structure and the similar operating philosophies.”

TYME president Jim Martin, who will remain head of PULSE’s Wisconsin operations, said the merger offers important strategic benefits to TYME members.

“We felt it was important to our members and to cardholders that TYME be aligned with an organization owned and controlled by the financial industry,” he said.

“Not only does PULSE embody that principle, but it also is widely recognized as an industry innovator and leader. We are very comfortable and confident in joining forces with PULSE for the future.”

Paur noted that PULSE patterned its business philosophy and infrastructure after TYME, which was organized in 1975 and was the first shared EFT network in the country. He said consumers will continue to see the familiar TYME logo on ATMs and at POS terminals, now appearing alongside the PULSE brand. TYME cardholders should notice no changes in the services they have come to count on and to respect but will gain the benefit of access to more ATMs and POS locations.

Following the merger, PULSE membership now includes 3,500 banks, credit unions and savings and loans throughout a 22-state primary service area stretching from the Canadian border to the Gulf of Mexico. PULSE links an estimated 70 million cardholders with more than 83,000 PULSE-branded ATMs and 350,000 POS merchant locations throughout the United States. The network expects to process more than one billion transactions in 2002. In recent years PULSE has become known as a valued resource for consumer research related to EFT services and an effective national voice on public policy issues relevant to the financial services industry.

Completion of the TYME merger represents the second expansion of the network over the past 12 months. PULSE acquired the Ohio-based Money Station network last January.

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Direct Merchants Lawsuits

Metris Companies/Direct Merchants Bank announced Friday an agreement to settle separate lawsuits filed in Minnesota, Arizona, and California over its credit card and enhancement services business practices. Under the terms of the settlement, Metris will pay approximately $5.5 million for plaintiff attorneys’ fees and agree that all payments received by 5 p.m. Eastern time will be credited to the cardholder’s account the same day. In addition, for two years, Metris will agree to give refunds to customers who wish to cancel purchases of Metris enhancement services, including credit protection, extended service plans and membership clubs. The agreement will also enable former cardholders who apply and qualify for a new credit card to pay no annual fee and receive a 9.9% APR for one year. Metris will also offer to make a charitable contribution of $8 in their name or give them a choice of a coupon book good for discounts on a variety of goods and services or enrollment in a card registration or travel protection service. The agreement will cover all current and former cardholders who were issued credit cards from January 1, 1995 through February 1, 2002. Metris said it expects the agreement will have no material adverse effect on its earnings. The lawsuits were filed in 2000 and 2001 and alleged that Direct Merchants Bank routinely assessed fees for the purchase of fee-based services which cardholders did not authorize and repeatedly charged late payment fees and interest for cardholder payments that were not in fact late or delayed. (CF Library 5/25/00)

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JCB China

JCB International Company announced last week plans to issue credit cards in China, according to [The RAM Report][1]. In cooperation with the People’s Bank of China, JCB plans to grant card-issuing licenses to Chinese commercial banks such as Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of Communications.

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

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Super Bowl Ads

VISA’s two television ads, which ran during last night’s ‘Super Bowl XXXVI’, ranked among the top third of all ads airing during the event. Budweiser landed four of the top five rankings according to the ’14th Annual USA Today Ad Meter’. VISA’s “Jason Sehorn, Michael Johnson race horse” ad ranked #13 among viewers, while the “Kevin Bacon encounters six degrees of separation” ad ranked as #17. Budweiser’s “Stain Sheets” commercial was the most liked Super Bowl ad among the total of 56 ads airing. Pepsi’s “Britney Spears old Pepsi ads” commercials ranked among the least popular. Pepsi spent nearly $6 million in production costs for the 90-second version. Reportedly 30-second ad placements for this year’s ‘Super Bowl XXXVI’ cost as much as $1.9 million each. An estimated 130 million viewers tuned into last night’s broadcast which turned into one of the most exciting match ups ever.

Click on the graphics below to view the entire commercial in REAL Player.[][1]VISA Race [][2]VISA Kevin Bacon[][3]PepsiBritney[][4]Anheuser-Busch Clydesdales[][5]Anheuser-Busch Card [][6]Anheuser-Busch Texan [][7]Anheuser-Busch Satin sheets[][8]Anheuser-Busch anniversary [][9]Anheuser-Busch Earnhardt Jr.

[1]: http://play.rbn.com/?url=usat/usat/g2demand/visa_race.rm&proto=rtsp
[2]: http://play.rbn.com/?url=usat/usat/g2demand/visa_bacon.rm&proto=rtsp
[3]: http://play.rbn.com/?url=usat/usat/g2demand/pepsi_britney.rm&proto=rtsp
[4]: http://play.rbn.com/?url=usat/usat/g2demand/bud_clydes.rm&proto=rtsp
[5]: http://play.rbn.com/?url=usat/usat/g2demand/bud_card.rm&proto=rtsp
[6]: http://play.rbn.com/?url=usat/usat/g2demand/bud_texan.rm&proto=rtsp
[7]: http://play.rbn.com/?url=usat/usat/g2demand/bud_satin.rm&proto=rtsp
[8]: http://play.rbn.com/?url=usat/usat/g2demand/bud_anniversary.rm&proto=rtsp
[9]: http://play.rbn.com/?url=usat/usat/g2demand/bud_dalejr.rm&proto=rtsp

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Self-Checkout

NCR is rolling out this week a new, enhanced, and modular self-checkout solution. ‘NCR FastLane’ offers a smaller footprint and can be easily upgraded to feature small- and large-order bagging areas and a new take-away conveyor belt without having to reinstall the core system. The new solution also incorporates other NCR technologies, including touchscreens and scanners, and can accept cash, check, credit, debit and coupons. It can also be programmed in multiple languages. Home Depot is piloting ‘NCR FastLane’ and BJ’s Wholesale Club has intentions to pilot ‘NCR FastLane’ in one of its stores in April. The Food Marketing Institute says nearly 20% of food retailers had self-checkout installed in 2001. Optimal Robotics is also launching its new line of smaller, more compact ‘U-Scan’ systems this week. (CF Library 2/1/02)

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Federated Falcon

Federated Department Stores announced this morning it is implementing HNC’s ‘Falcon Fraud Manager’ for its more than 1 million VISA cards. The cards are issued through FDS National Bank. ‘Falcon’ is a neural network-based predictive software system that examines transaction, cardholder and merchant data to detect a wide range of payment card fraud. It is currently in-force on more than 450 million payment card accounts worldwide. Last year, HNC released a specialized version of the ‘Falcon’ bank card fraud detection system developed specifically for international card issuers. ‘Falcon Quick Track’ offers fraud detection abilities to mid-sized European card issuers at a significantly reduced implementation time. (CF Library 4/12/01)

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Intelli-Check & Sensormatic

Intelli-Check, Inc., a developer of advanced document verification systems, announced that the non-exclusive OEM agreement with Sensormatic Electronics Corp., recently acquired by Tyco International Ltd., which expires on March 31, 2002, will by mutual agreement not be renewed.

Intelli-Check said that Sensormatic has agreed to pay an undisclosed sum of money and additionally return to Intelli-Check previously paid for and unsold CHECK-FIRST units in its inventory to meet its obligations under the agreement.

Intelli-Check will recognize the income in the first quarter of 2002. Intelli-Check, Inc. ([www.intellicheck.com][1]) is a developer and marketer of an advanced state-of-the art document verification system for authenticating the validity of driver licenses and ID cards used as proof of identity.

Intelli-Check’s multi-purpose ID-CHECK(R) units are fully capable of increasing security and as a tool that can be used to deter terrorism at military installations, high profile buildings, airports and other sites and are also an effective tool against “identity theft,” which often is supported by fake IDs and is the fastest growing crime in the U.S. ID-CHECK(R) units enable a user to prevent economic loss from check-cashing, credit card and various other frauds utilizing fake IDs and to determine whether purchasers of age-restricted products such as alcohol and tobacco meet minimum age requirements for their sale. ID-CHECK(R), with its patented technology, analyzes and displays information encoded in magnetic stripes and barcodes found on driver licenses, military identification and other forms of state and government-issued identification from more than 50 jurisdictions.

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

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AmEx/Delta SLC Double Miles

American Express announced that Delta SkyMiles Credit Cardmembers can earn double miles on all purchases made on their Card in Salt Lake City and throughout Utah during the month of February.

“The Delta SkyMiles Credit Card flies past the other airline reward cards when it comes to offering value and benefits to our customers — especially with great bonus mile opportunities,” said Richard Quigley, vice president, cobrand marketing at American Express. “Giving double miles on all purchases made by Cardmembers in Salt Lake City and throughout Utah this February is another way we can reward our customers, support travel and showcase the value of the Card.”

According to information gathered from the Utah Travel Council, it is estimated that during February 2002, Salt Lake City alone will have 70,000 visitors or more per day. Delta SkyMiles Credit Cardmembers placing their hotel, rental car, restaurant and day-to-day purchases on the Card can earn double SkyMiles, which can be redeemed for a wide variety of Award Travel options including upgrades and Crown Room Club memberships.

“With double miles opportunities throughout Utah, we are able to truly showcase the convenience of using the Delta SkyMiles Credit Card for daily purchases and emphasize the rewarding features of the Card,” added Quigley. Year round, Delta SkyMiles Credit Cardmembers earn two SkyMiles for every eligible dollar charged to the Card for purchases at supermarkets, gas stations, drugstores, home improvement stores, the U.S. Postal Service, wireless phone bills and Delta Air Lines through the Card’s unique Always Double Miles feature(1). Cardmembers continue to earn one SkyMile for every eligible dollar charged for other purchases. Delta SkyMiles Credit Cardmembers also receive American Express(R) Card features, including 24-hour customer service, Global Assist(R) Hotline, Purchase Protection Plan, Buyers Assurance Plan(2) and more. The Delta SkyMiles Card can be used everywhere American Express Cards are welcomed. For more information about the Delta SkyMiles Credit Card, visit: [www.americanexpress.com/delta][1] or call 1-800-SKYMILES.

American Express is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking. Delta SkyMiles members earn mileage by flying Delta, the Delta Connection carriers, Delta Express, Delta Shuttle and Delta’s airline partners, including Delta’s SkyTeam partners. The Delta SkyMiles program offers many other mileage-building opportunities, including the Delta SkyMiles Credit Card from American Express, MCI, Nextel, EarthLink, participating hotels, car rental companies, cruise line, restaurants, flower purchases, home buying and selling.

1 Always Double Miles(SM) offer applies at qualifying stand-alone supermarkets, drugstores, gas stations, home improvement and hardware stores, the U.S. Postal Service, on wireless phone bill payments and Delta Air Lines purchases. Not valid in the departments of superstores or warehouse clubs. All standard Delta SkyMiles program rules and conditions apply. (c)2002 American Express. 2 Underwritten by AMEX Assurance Company, Administrative Office, Greenbay, WI. Coverage is subject to the terms, conditions and exclusions of Policy AX0951 / AX0953.

[1]: http://www.americanexpress.com/delta

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Checkout Smart Rewards

Catalina Marketing Corporation introduced Checkout Smart Rewards, a new method for supermarket retailers to offer their customers savings through individualized shopping lists. With enhanced graphics and a new Checkout Coupon format, retailers can combat channel erosion by delivering targeted stealth savings to shoppers based on previous shopping behavior.

“This exciting new application provides supermarket retailers with the opportunity to leverage a targeted shopping list application with traditional weekly specials,” said Cynthia McCloud, Senior Vice President of Retail for Catalina Marketing. “Catalina Marketing is excited about Checkout Smart Rewards and the opportunity to augment frequent shopper programs and loyalty applications, without advertising in traditional media that can be seen by the competition.”

Checkout Smart Rewards provides the retailer with the ability to personalize coupon offers or item discounts that will be available on the customer’s next shopping trip. This program gives the customer a virtual shopping list supported by in-store specials and reduced price items. Checkout Smart Rewards helps promote cross shopping, category growth and pantry loading programs associated with retailer loyalty programs. In addition, targeted national manufacturer offers can be combined with local retailer offers to develop exciting new equity building programs.

“This new application, combined with Catalina Marketing’s current in-store targeted programs, enhances customer relationships with personalized marketing programs,” said Sue Klug, President of Catalina Marketing Services — Retail and Direct Mail. “Through Checkout Smart

Rewards, Catalina Marketing will once again provide new methods of communication between retailers, manufacturers and consumers.”

Based in St. Petersburg, Fla., Catalina Marketing Corporation ([http://www.catalinamarketing.com][1]) provides a wide range of strategic targeted marketing solutions for consumer goods companies and retailers. The targeted marketing services of the company are provided by interrelated operating groups that strive to influence purchase behavior of consumers wherever and whenever they make purchase decisions. Through these operating groups, Catalina Marketing Corporation is able to reach consumers internationally and domestically — in-store, using incentives, loyalty programs, sampling and advertising messages; at-home, through direct mailings; and online. Personally identifiable data that may be collected from the company’s targeted marketing programs, as well as its research programs, will not be sold or given to any outside party without the express permission of the consumer.

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

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LIQUIDCREDIT

Fair, Isaac and Company, Incorporated, the leading global provider of decision technology, today announced a new Web-based credit scoring service for Japanese small business credit grantors, developed in collaboration with The Japan Research Institute, Limited. The service, powered by Fair, Isaac’s LiquidCredit decision engine, and delivered in ASP mode, will help Japanese lenders streamline their application processing systems and make more consistent, real-time credit decisions based on a small business’ risk profile.

The new service is the result of a banking consortium which Fair, Isaac and JRI had formed in November 2000 to develop the first broad-based small business risk models for Japanese credit grantors. Using loan performance data contributed by approximately 15 regional member banks, Fair, Isaac developed two small business risk models, one for small corporations with annual revenue of less than 500 million yen, and another for sole proprietors. Fair, Isaac will continuously analyze the loan data provided by the consortium members for potential improvements to the models and regularly validate and update the models for maximum scoring efficiency.

One of the most important components of the new scoring service is Fair, Isaac’s LiquidCredit, which provides a Web-based decision engine as well as the ability for lenders to design their own decision criteria and strategies. Japanese credit grantors can access the service — and Fair, Isaac’s decision technology — via the Internet to gain instant support in making credit decisions on small business loan applications.

“We are very excited to leverage our analytic expertise and decision technology in collaboration with JRI to bring small business lending in Japan to a new level,” said Tom Grudnowski, Fair, Isaac’s CEO. “The early adopters of this service will see a significant competitive advantage that will be reflected immediately on their portfolio profitability.”

“We are pleased to partner with Fair, Isaac in offering this important service to Japanese small business credit grantors, who have not, until now, had access to a Web-delivered credit decisioning solution. By increasing the lenders’ portfolio management efficiency, we expect this service to provide significant value to our clients as well as small businesses seeking funding,” added Toshio Mouri, JRI Counselor.

As part of the service, Fair, Isaac and JRI will also offer regular seminars to provide clients with updates on the latest decision technologies and information on how to best utilize the models for more profitable decisions in their origination and underwriting operations.

The launch of the Web-enabled small business scoring service for Japanese credit grantors follows last year’s launch of the first Web-based credit decisioning service for Japan’s 800+ consumer lending organizations in collaboration with Fujitsu FIP Corporation.

About Fair, Isaac

Fair, Isaac is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company’s predictive modeling, decision analysis, intelligence management and decision engine systems power more than 14 billion decisions a year. Founded in 1956, Fair, Isaac helps thousands of companies in over 60 countries acquire customers more efficiently, increase customer value, reduce risk and credit losses, lower operating expenses and enter new markets more profitably. Most leading banks and credit card issuers rely on Fair, Isaac’s analytic solutions, as do insurers, retailers, telecommunications providers and other customer-oriented companies. Through the www.myfico.com Web site, consumers use the company’s FICO(R) scores, the standard measure of credit risk, to manage their financial health. For more information, visit www.fairisaac.com.

About The Japan Research Institute, Limited

The Japan Research Institute, Limited, is a Tokyo-based leading management consulting organization and systems integrator. Originally established as a systems integrator for the banking industry, the company now also offers management consulting and policy research. JRI has about 2,400 employees.

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Providian 4Q/01

Providian Financial announced Thursday it is rescheduling its fourth quarter and full year 2001 earnings results from today to February 7th. However the sub-prime credit card specialist released its credit card portfolio report which shows a 23% jump in U.S. receivables over the past 12 months, and a 4.4% increase over the third quarter. Providian’s 4Q/01 receivables were $32,851,000,000 according to CardData. The issuer also reported 19,052,000 active accounts for the final quarter of 2001. The top ten issuer says it is finalizing key components of its new capital plan with regulators and thus the reason for the delay. Providian’s stock was the worst performer in the ‘S&P’s 500’ index last year, falling more than 90%. For complete details on Providian’s current and past performance visit CardData (www.carddata.com).

PROVIDIAN 5-YEAR HISTORICAL
4Q/01 4Q/00 4Q/99 4Q/98 4Q/97
RECV: $32.9b $26.7b $18.7b $11.6b $7.8b
Q VOL: $ 7.8b $ 7.6b $ 6.2b $ 3.7b $ 2.6b
ACCTS: 19.1m 16.3m 12.4m 7.6m 6.2m
Source: CardData (www.carddata.com)

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