10/29/2003 • CardFlash® - Payment Card Industry News

StoreNext Israel Group Attracts New Investor

5, Country, ISRAEL, PriorityBy Robert McKinley 10/29/2003

IsraCard has signed an agreement to make an equity investment in the StoreNext Israel Group, which provides information and e-commerce services to the Israeli food retail industry.
According to the agreement, IsraCard will acquire 13% of Store-Alliance Ltd. (the StoreNext Israel Group) for an investment of $2.5 million, which reflects a $16.9 million valuation for StoreNext Israel Group. Other shareholders in StoreNext Israel Group are Retalix, Coca-Cola Israel, and Discount Investment Corporation. The StoreNext Israel Group includes four companies: StoreNext Ltd., which provides information and retail management services to independent retailers; Tradanet, which provides EDI messaging services to suppliers and retailers; IREX, which has set up a web-based retail exchange for suppliers and supermarket chains; and CellTime, which provides solutions for selling pre-paid cellular air time at retail points of sale. Approximately 500 grocery stores, independent supermarkets and small chains are connected to StoreNext and enjoy a variety of online information and management services, including accounting, loyalty club management, chain management, fast credit card and cheque validation etc.

Portfolio Recovery Associates 3Q Profits Up 7.6%

5, Country, Priority, UNITED STATESBy Robert McKinley 10/29/2003

VA-based Portfolio Recovery Associates reported net income of $5.5 million for the third quarter, a 7.6% gain over 3Q/02. Total revenue was up 46% in the third quarter to $22.2 million from $15.2 million in the year-ago period. Cash collections rose 46% to $30.2 million in the third quarter and “cash collections per hour paid” improved to $110.77 for the first nine months of 2003 from $96.37 for full-year 2002. The company purchased $323 million of face-value debt during the third quarter for $11.8 million, representing a blended purchase rate of 3.65%. This debt was purchased in 16 transactions from 8 different sellers. Buying in the third quarter focused more heavily on early recall debt than in the recent past, due to the quality of these accounts in the marketplace. Cumulatively, the company has purchased $1.85 billion of face-value debt at a blended rate of 2.72% in the first nine months of this year, compared with $930 million at a blended rate of 2.84% for the same period in 2002. For complete details on Portfolio Recovery Associates’ 3Q/03 results visit CardData (www.carddata.com).

GEMPLUS 3Q/03

5, Country, FRANCE, PriorityBy Robert McKinley 10/29/2003

Smart card manufacturer, Gemplus, reported that revenues for the third quarter were 10% above the prior quarter and that its losses have been cut by two-thirds since the third quarter of last year. The company’s Financial and Security Services segment posted revenues of 57.7 million euros, a 20% gain over the last quarter, as gross profits soared nearly 59% to 14.7 million euros during the same period. Overall revenues hit 190.0 million euros for the third quarter, compared to 172.4 million euros for the second quarter. However, compared to the third quarter of 2002, revenues are down 7.6%. The net loss for the third quarter of this year was 13.1 million euros, compared to 82.4 million euros in the previous quarter, and 38.6 million euros one-year ago. However, at the operating level Gemplus posted a tiny profit compared to a loss of 6.5 million euros for the third quarter of last year. Gemplus says that EMV shipments doubled sequentially for the second quarter in a row and nearly quadrupled compared with the same quarter a year ago. Sales were mainly driven by the UK market, but were also supported by South America, Turkey and Malaysia. Other payment smart cards increased 64% compared with the second quarter and 66% compared with the same quarter a year ago. Malaysia and France mainly drove sales.

Scheidt & Bachmann and OTI Win Houston Transit Card Contract

5, Country, GERMANY, PriorityBy Robert McKinley 10/29/2003

Monchengladbach-based Scheidt & Bachmann the Israeli firm On Track Innovations have signed a deal to provide the Metropolitan Transit Authority of Harris County (Houston), Texas with mass transit ticketing solutions. The project is scheduled to go online in 2004. Scheidt & Bachmann will act as the system integrator with OTI supplying the front-end solutions including readers and support software. Scheidt & Bachmann is a private German company that is one of the world’s leading providers of management systems for mass transit, car parking, petrol stations and railway
protection. OTI is a leader in contactless microprocessor-based smart card solutions.

Vancouver EasyPark gets Pay-Mint Wireless Parking Payment

5, CANADA, Country, PriorityBy Robert McKinley 10/29/2003

Mint Inc, a provider of wireless payment services, has signed a deal to provide “Pay-Mint” wireless parking payment options to all 30 EasyPark lots in downtown Vancouver. EasyPark has
been managing parking services in Vancouver for more than 50 years. It has more than 7,500 of the estimated 48,000 downtown off-street parking stalls, and has carparks located on more than 30 properties. With “Pay-Mint,” consumers are able to pay for parking using their mobile phone, or any wireless device. Once a car is parked on a lot that offers Mint wireless payment options,
consumers call the posted telephone number from their mobile phone to start their transaction. The call identifies the customer as a Mint subscriber. When customers leave their parking spot, they call the number again to end their parking session. The money to pay the operator comes from the account that the customer has registered – their credit card or their bank account. Mint Inc. was formed in Toronto in 2001 after the company purchased the license for the wireless technology from Mint AB, a Swedish mobile payments company founded in 1998.

Discover Launches Holiday Sweepstakes Nov 1st

5, Country, Priority, UNITED STATESBy Robert McKinley 10/29/2003

Discover is launching a new sweepstakes this weekend, “Fasttrack to Cashback,” offering cardholders a chance to win one of 54,000 prizes, ranging from $5 to $1,000. Winners of $25 or more will be notified by phone. The remainder will receive an announcement via direct mail. Discover Card will support the sweepstakes with national television spots, as well as print advertisements in publications such as US Weekly, Entertainment Weekly and People. Discover Financial Services, a business unit of Morgan Stanley, operates the Discover Card brands and the Discover Novus Network for more than 50 million Cardmembers.

TRANS-LINK CONTRACT

5, Country, NETHERLANDS, PriorityBy Robert McKinley 10/29/2003

Trans Link Systems has chosen The East-West Consortium to design, develop and implement a unified electronic ticketing and payment system for public transit. The new system, which will cover train, metro, bus, ferry and tram journeys, will be the first e-ticketing and payment system in the world to be implemented on a national scale. When the system is fully operational, it will accommodate more than 2 million passengers per day. The Consortium is led by Thales, Accenture and Vialis and the five-year contract is valued at 120 million euros. Additionally, as subcontractors to Thales, Hong Kong’s MTRC Corporation & Octopus Cards Limited will provide the central back office as well as expertise in operations. Trans Link Systems is an initiative of five major public transport companies in the Netherlands: Nederlandse Spoorwegen, Connexxion, GVB (Amsterdam), RET (Rotterdam) en HTM (The Hague). This alliance serves more than 80% of the public transport market.

First Data and Concord Shareholders Approve Merger

5, Country, Priority, UNITED STATESBy Robert McKinley 10/29/2003

Even though the DOJ has filed a lawsuit to block the merger of First Data and Concord EFS, both companies held special shareholder meetings Tuesday, wherein the majority of shareholders approved of the merger agreement. Approximately 63.3% of the total outstanding shares, or approximately 98.5% of the votes cast at the special meeting, were cast in favor of the proposal. Concord EFS, Inc., a vertically integrated electronic transaction processor, provides the technology and network systems that make payments and other financial transactions faster, more efficient, and more secure than paper-based alternatives. First Data Corp., with global headquarters in Denver, helps powers the global economy. As the a leader in electronic commerce and payment services, First Data serves approximately 3 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of payment.

Moneris Solutions Enters Gift Card Market with Ernex Acquisition

5, CANADA, Country, PriorityBy Robert McKinley 10/29/2003

The largest processor of debit and credit card payments in Canada is acquiring an industry leader in privately branded loyalty programs, stored-value gift cards and real-time electronic marketing solutions for merchants. Moneris Solutions Corporation said yesterday it is acquiring Ernex Marketing Technologies from RBC Financial Group for an undisclosed amount. RBC says it will continue using Ernex for its “Avion” and “RBC Reward” programs. Moneris provides a one-stop processing solution for payment card acceptance (credit, debit and loyalty cards) and point-of-sale technology.
This year Moneris expects to process approximately 1.8 billion card transactions. Ernex delivers real-time electronic marketing solutions to a variety of industries, including loyalty database hosting solutions, coalition marketing capabilities, real-time points/loyalty programs, “Swipe ‘N Win” sweepstakes programs, custom coupons/messaging capabilities and stored-value gift card programs.

FTC Nails Montreal Marketer of Nonexistent Cards

5, Country, Priority, UNITED STATESBy Robert McKinley 10/29/2003

The FTC yesterday filed charges in federal court against Montreal-based 9094-5114 Quebec, Inc. d/b/a Kinito, for promoting advance-fee, nonexistent credit cards to U.S. consumers. The FTC’s complaint alleges that the defendants typically target American consumers with offers of a MasterCard credit card with a $5,000 credit limit in exchange for a one-time advance fee, which the defendants automatically debit from the consumers’ bank accounts. The FTC has worked closely with the Canadian Competition Bureau and the United States Postal Inspection Service on this case and expresses its gratitude for the fine cooperation it has received from these consumer protection officials.

NCR Receives ATM Security Best Practice Award

5, Country, Priority, UNITED KINGDOMBy Robert McKinley 10/29/2003

NCR Corporation has received the ATM Industry Association’s “ATM Security Best Practice Award” at the association’s annual security awards presentation held in London. The award recognized NCR’s holistic approach to security, whereby the aim is to protect the integrity of the ATM channel at all potential points of compromise. The NCR security offer is unique, covering physical security offerings from its wholly owned subsidiary, Fluiditi, data and smart-card solutions that are standards compliant, features and procedures to combat fraudulent activity at the ATM and fraud detection through network management from NCR’s subsidiary, Gasper.

On Q Group to Distribute Magic Money Stored Value Cards

5, AUSTRALIA, Country, PriorityBy Robert McKinley 10/29/2003

Melbourne-based On Q Group has inked a deal to distribute GlobeTel Communications’ “Magic Money Stored Value Card.” GlobeTel says the program has been successfully rolled out in the US, South America and Europe. Over 100,000 cards have already been issued to-date. On Q Business Systems provides business software systems, integration, installation and support services to the Australian petroleum industry. The On Q Group of companies specializes in e-Commerce and business solutions through products that provide clients with a “one stop” shop for multiple solutions, or specific solutions, for specific needs. The On Q Group’s overall strategy is to focus on the development of Internet based and electronic commerce solutions for the point of sale interfaces between business and consumers.

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