Tax Refund Checks

A new consumer survey has found that 19% of Americans would use any refund checks they receive from President Bush’s proposed income tax cuts to pay off credit card debt. These findings are the result of monthly nationwide telephone poll of 1000+ adults conducted by ICR/International Communications Research in the past week, sponsored by The Debt Relief Clearinghouse.


Sagem has selected Atmel’s “secureAVR AT90SC9608RC” as the silicon
platform for the development contract of the next generation for chip-based
French bank cards. Sagem was awarded the smart card contract by Groupement
des Cartes Bancaires. Currently there are in excess of 45 million “CB”
cards in circulation, which will be replaced by the new EMV cards starting
in 2004. The “AT90SC9608RC” is an 8-bit/16-bit RISC microcontroller, having
96K of ROM, 8K of EEPROM, 3K of RAM, with a 16-bit high performance RISC

Gov Card Projects

According to information obtained from GSA, OMB, and other federal agencies, as of November, 18 federal agencies were planning, testing, operating, or completing a total of 62 smart card projects. Thirteen projects were in the planning stage, and 7 were being piloted. An additional 17 projects were listed as operational, and 13 had been completed. The status of the remaining 12 initiatives is not clear. The major DOD “CAC” smart card project is to be used to authenticate the identity of nearly 4 million military and civilian personnel and to improve security over on-line systems and transactions. The cards are being deployed in tandem with the roll-out of a department wide PKI. As of November, DOD had issued approximately 1.4 million “CACs” to military and civilian personnel and had purchased card readers and middleware for about 1 million of its computers. The Department of Transportation is also developing two large smart card pilot projects, which will be focused on controlling access to and improving security at the nation’s many transportation hubs as well as at federal facilities controlled by the department. One pilot aims to distribute smart cards to approximately 10,000 FAA employees and contractor personnel for access to the department’s facilities. Subsequent phases will be implemented across the agency to approximately 100,000 employees. In the second pilot, transportation worker identification cards will be issued to about 15 million transportation workers across the USA and is intended to improve physical and logical access to public transportation.

Check Decline Impact

The Federal Reserve Banks announced last week it is reducing its check-processing costs by streamlining their check management structure, reducing staff, decreasing the number of check-processing locations, and increasing processing capacity in other locations. With the changes announced last week, FRB check processing will be performed at 32 sites, down from 45. Additionally, the Reserve Banks will streamline their check-adjustment functions, now being handled in 43 locations, to 12 of their current locations nationwide. Of the 13 offices that will no longer process checks, the five regional sites that only process checks will close. The volume from these 13 offices will be handled by nine offices. Check payments make up only 60% of all noncash retail payments today compared to 85% in 1979. Recent Federal Reserve studies suggest that roughly 40 billion checks were written in the USA in 2002, down from about 50 billion in 1995. The Reserve Banks handle about 17 billion of these checks annually, and this volume is expected to decline as well.

Hypercom 4Q/02

Hypercom reported Friday that net income for the fourth quarter, after losses from discontinued operations, was $1.2 million compared to $1.6 million for 2Q/01. Fourth quarter net revenues of $69.6 million, were up $1.5 million over the prior year. A $2.7 million increase in the Company’s core POS/Network Systems group revenues were offset in part by a $1.2 million decline in Golden Eagle Leasing revenues. The Company closed the quarter with a backlog (POS terminal and network systems equipment) of $77.4 million, a reduction from the $91.8 million level as of the end of the third quarter but in keeping with the seasonal nature of fourth quarter shipping/order generation. Excluding discontinued operations, Hypercom projects 2003 net revenue of $265.0 to $273.0 million and income of $19.7 to $24.0 million. For complete details on Hypercom’s 4Q/02 results visit CardData ([][1]).



Oberthur Card Systems has been selected by China Unicom to deliver
7.5 million 32k high-end SIM cards by mid-year. The cards will be
manufactured and personalized in Oberthur Card Systems’ ISO 9001 version
2000-certified Shenzhen plant. China Unicom, the second largest wireless
carrier in China, had a total of 64 million subscribers. China Unicom
operates both a GSM and a CDMA network.

DataWave Board

Vancouver-based DataWave, a prepaid card specialist, announced Friday that Bernard Pinsky has resigned from its Board of Directors after the firm changed its policies as to its lawyers serving as directors. Mr. Pinsky will remain the Company’s outside legal counsel and available to serve on committees as agreed.

Dec Debt Decline

Consumer revolving debt data for November 2002 turned about to be an aberration after all, as revised data released Friday show that consumers added $1.7 billion to revolving credit rather than paying down $1.6 billion in November. However, in December, Americans paid down $8.4 billion in revolving credit, mostly credit card debt, according to new data provided by the Federal Reserve. In December 2001, Americans paid down $5.6 billion in revolving credit. The revised FRB data show that consumer revolving credit increased from $699.9 billion to $711.2 billion during 2002, the slowest rate of increase since the recession of 1990-1991. Bank credit card debt at the end of the third quarter was $632.7 billion or roughly 88% of total revolving credit, according to CardData ([][1]). CardData is set to release 4Q/02 data in mid-February. According to the government figures released Friday, American consumers were $1.722 trillion in debt, exclusive of home mortgages during December. Overall, consumer credit declined 2.8%, the second such decline in overall consumer credit in five years.

Dec 02 Nov 02 Oct 02 Sep 02 Aug 02 Jul 02 Jun 02
GRWTH: -14.0% 2.8 1.6 3.0 6.2 8.9 6.0
$OWED: $711.2 719.6 717.9 721.3 719.5 717.4 715.6

May 02 Apr02 Mar 02 Feb 02 Jan 02 Dec 01 Nov 01
GRWTH: 4.1% 8.0 4.8 2.2 1.8 -9.7 12.7
$OWED: $712.1 708.7 705.4 705.0 702.4 692.4 698.0

Source: Federal Reserve; revised figures as of 02/07/03; For complete
historical data visit CardData (



Vancouver-based DataWave reported net income of US$119,964 for the quarter
ended December 31st, compared to net income of US$22,667 for the same
period last year, an increase of 429%. Revenues increased 47% to
US$4,798,270 from US$3,273,335. DataWave’s Canadian operation generates all
its revenues from the sale of prepaid long distance and prepaid wireless
phone cards and PINs to retailers. DataWave announced in the prior quarter
its intention to become an intermediary between national Canadian prepaid
cellular providers and certain national convenience stores in order to
exploit its POSA technology. The Company has deployed 356 terminals
distributing prepaid cellular PINs in Canada as of the end of 2002. These
terminals dispensed PINs with a gross value of US$1.3 million in the
quarter ended December 31, 2002 and US$1.5 million since the program began.

ECHO 4Q/02

Electronic Clearing House reported revenue of $9.3 million for the quarter ending Dec. 31st, an increase of 17.4% compared to the prior year quarter. Operating income rose to $527,000, as compared to an operating loss of $76,000 one year ago. ECHO says the increase was mainly attributable to a decrease in legal and professional fees. Total processing and transaction revenue for the quarter increased 16.8%, from $7.8 million one year ago to $9.2 million for the current quarter. Bankcard processing and transaction revenue increased 14.0% to $7.5 million. Check-related revenues increased 34.4% to $1,782,000, from $1,326,000 for the three months ended December 31, 2001. For complete details on ECHO’s 4Q/02 results visit CardData ([][1]).



EDS has selected Pegasystems to provide call center software to support a
roll-out of electronic card-based accounts being launched through the UK
Post Office. EDS was awarded a contract by Post Office Ltd. in March 2002
to provide a full spectrum of business process outsourcing services to
support the payment of benefits directly into Post Office card accounts,
beginning in April of this year. The UK Government is changing the way
benefit payments are made effective April 1st. Benefit claimants will still
be able to collect their benefits in cash from Post Office branches from
April on by using their existing account if they bank with one of the Post
Office’s banking partners, through a basic bank account, or through a Post
Office card account. In July of last year, EDS selected Pegasystems’
software as one of the business process management platforms of choice for
use within the Inland Revenue in the UK.


America Online and the American Express “OPEN” small business network have signed a multi-year contract which makes the “OPEN Network” the exclusive small business card advertiser on AOL for small business. AOL will also integrate “OPEN Network” content and articles designed to assist small business owners in managing their companies. “OPEN Network” cardholders will also be eligible to receive special subscription offers for “AOL for Small Business” and benefits, such as a 50% discount on a six-month enhanced online Yellow Pages listing on AOL, MapQuest, Netscape, and CompuServe. AOL for Small Business was launched in November. AmEx launched the “OPEN: The Small Business Network” in January 2002. (CF Library 1/18/02)