Premiums Rising

Card issuers are paying $152 per account this year compared to $116 per account last year, a 30%+ rise, according to 1999 data released this morning by Robert K. Hammer Investment Bankers. Hammer says in the first six months of this year issuers are paying an average premium of 16.38% compared to 13.10% last year and that two out of three recent deals include an agent bank component. The data are based on twelve 1999 portfolio transactions representing $6.4 billion in receivables. The portfolio transaction sample excludes year-to-date deals involving: 24 portfolios valued under $15 million; 45 mergers of equals or whole bank purchases; four private label portfolio sales; and four sub-prime portfolio deals. Hammer further notes that the average pre-tax earnings multiple this year is 5.2x compared to 5.1x last year and that the average card portfolio earnings this year is 3.15% compared to 2.5% last year. There are several deals in the pipeline, as of June 30, representing 15 million accounts and $6 billion in receivables.

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New ICMA Members

The International Card Manufacturers Association announced the addition of five new members for the second quarter of 1999. The new principal members are Korea Telcom Card of Seoul, Korea and Microelectronica Espanola of Madrid, Spain. The new associate members are Adriaplast S.p.A, of Monfalcone, Italy and Zebra Technologies/Eltron of Camarillo, California. The branch associate member is Akzo Nobel Inks Sweden located in Trelleborg, Sweden.

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FundsXpress

FundsXpress has joined forces with Credit Union National Association of Madison, Wisconsin, to form an Internet banking service.FundsXpress’ Financial Network expects to bring benefits to CUNA & Affiliates and its nearly 10,000 member credit unions. In addition to easy, 24-hour access to accounts, the technology enables the transfer of funds between accounts and online bill payment. Online verification of members’ identities, elimination of outside interference, encrypted transactions, a receipt of each transaction, and a confirmation number for each transaction are among the features of FundsXpress.

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Audio ATM

The Association of Access Engineering Specialists has announced that the NCR ‘Audio ATM’ has won a 1999 Excellence in Access Partnership Award. The ‘Audio ATM’ has the potential to allow more than 50 million people around the world who are visually impaired, as well as 1.4 billion people who can neither read nor write, to have easy and comfortable access to self-services. Using an assistive device called a private audio leadthrough, and a personal headphone-style jack, consumers are guided through their banking activities via the ‘Audio ATM’s’ interactive voice.

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VISA Award

VISA International’s multilingual, 3,800-page Web site was recently given an award for delivering business value and meeting business objectives. CIO magazine named VISA’s Website: a ‘1999 CIO Web Business 50/50’ winner for its online business excellence. The site is available in seven languages and noted for its ease of navigation. VISA’s ATM locator was recently named by Yahoo! as one of the 25 most ‘Incredibly Useful Sites on the Web’.

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GlobeID

GlobeID has performed the world’s first secure Internet purchases using the ‘ECML’ standard. The transaction took place last week at GlobeID’s Paris office. GlobeID has become the first to conduct a real-time transaction application. ‘ECML’, the new proposed standard, is a set of ‘Extensible Markup Language’ tags that merchants will be asked to use on their merchant servers to make form completion easier.

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Gambling Rules

In the wake of a California consumer lawsuit filed against credit firms over Internet gambling involving credit cards, MasterCard announced Friday it will adopt a series of rules for MasterCard card transactions involving Internet casino merchants. MasterCard says it will institute a new rule requiring that Internet casino merchants post a notice on their Websites stating that Internet gambling may not be lawful in some jurisdictions, including California. MasterCard will also require Internet casino merchants to ask prospective gamblers to identify the state or foreign country where they are located, and maintain a record of such responses. MasterCard said Friday it will also make a provision for card issuers to receive notice of Internet gambling transactions via a new operational rule requiring such transactions to be coded to indicate the nature of the transaction. The California lawsuit filed on behalf of Cynthia Haines and general consumers of California has been dropped after an out-of-court settlement was reached.

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Early Renewal

ICBA Bancard, Inc. decided Thursday to extend its electronic banking program agreement with Fiserv EFT a year early. ICBA Bancard signed a five-year agreement with Fiserv EFT in the summer of 1995. With the contract renewal, the agreement now runs through 2005. ICBA Bancard is a wholly owned subsidiary of the Independent Community Bankers of America. Since 1985, ICBA Bancard has provided more than 2,000 community banks with access to payment system products and services.

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May Blossoms

The summer may be hot, but credit card debt is even hotter. American consumers piled on $2.1 billion in revolving debt during May, compared to paying-down of $600 million last May. Revolving credit grew at an annual rate of 4.4% during May compared to -1.4% last May, according to preliminary figures released Thursday afternoon by the Federal Reserve. Overall consumer credit is growing sharply, at an annual rate of 10.4%. Since last May, American consumers have added more than $30 billion to revolving debt, according to the FRB. Revolving credit is mostly credit card debt. At the end of May, American consumers were $1.344 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
May99 Apr99 Mar99 Feb99 Jan99 Dec98 Nov98 Oct98 Sep98 Aug98
%GRWTH: 4.4% 5.9 -0.9 3.4 11.6 8.6 -2.4 13.0 7.5 10.7
$OWED: $572.2 570.1 567.3 567.5 565.9 560.5 556.5 557.6 551.7 548.3

Source: Federal Reserve; revised figures as of 07/08/99; For complete
historical data visit http://www.carddata.com/.

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Tidel’s Record Pace

TX-based Tidel Technologies reported yesterday that is sold 1,939 new ATMs during the second quarter, a 41% increase from the 1,379 units shipped in the same quarter of 1998. The unit sales reflect the best quarter ever surpassing by 28% the previous shipment record set in March 1999 of 1,511 ATMs. For the first-half of calendar 1999, the company shipped a record 3,450 ATMs, an increase of 38% from the 2,510 units shipped in the first-half of calendar 1998. In comparison, Tidel shipped 4,324 ATMs for all of calendar 1998.

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