Oberthur Receives EAL+4 Certification

Oberthur has received EAL +4 certification on its “ID-One ePass”,
giving European Union members commercial source of electronic
passports. This also certifies that the solution meets Basic Access
Control requirements and “Active” security. This gives the group an
advantageous position in the ID market with a comprehensive edge
in the e-passport market. The company had sales of 524 million euros
in 2006 in card-based solutions, software and applications.

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BofA to Form a Chinese Card JV with CCB

China Construction Bank and Bank of America this week inked a deal to create a credit card joint venture in China. The roll-out would be implemented in two stages according to this week’s Cardflash International. In the first stage, CCB would create a stand-alone credit card unit, merging its current card operations into this new unit. CCB would also form an advisory committee to determine and develop the unit’s business structure. Bank of America would serve on this committee and provide advisory services on the unit’s development. The second stage would involve converting the credit card unit into a Chinese-foreign credit card joint venture registered in China. Bank of America would acquire 37% of the joint venture and would begin launching co-branded credit cards. At the time of the second stage, both companies would have board of director representation and be a part of the company’s senior management team. The second stage would occur after new joint venture regulations are enacted by the Chinese government and subsequent regulatory approvals are obtained. CCB says it expects the JV to break even within seven years. CCB currently has more than 6.3 million credit cards in force, making it the second largest issuer in the country with a market share of 20%. CCB reports that its cardholders charged about 40 billion yuan in 2006. BofA is a strategic investor in the bank with a 8.52% stake. CCB also reported a net profit of 46 billion yuan last year, compared to 47 billion yuan in 2005.

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ISLAMIC COVERED VISA

Dubai Bank has introduced a “Shari’a Compliant” card that includes a value packed and fully-loaded rewards program called
“Choice”. The new “Islamic Covered VISA” offers the convenience to make
purchases worldwide, with the flexibility to pay back the amount depending on percentage of their choice. The “Choice” program gives customers the option of three programs including: the “Accumulate & Redeem” program; the “Discount Program”; and the “Benefits Program.”
The “Accumulate & Redeem Program” offers “Choice” points for every dirham spent on the card. The “Discount Program” offers cardholders
exclusive membership to Dubai Bank’s Dining Club, Shopping Club, and
Health Care Club – where percentage discounts ranging from 10%-50% are
available. The “Benefits Program” offers customers various benefits such as free “Life and Travel Insurance,” “Purchase Protection” and “Travel Assistance.” Dubai Bank noted it is offering a 0% profit, 0% payment and free-for-life campaign for customers applying in the first three months.

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USAT Launches e-Port Connect

USA Technologies has launched “e-Port Connect” which wirelessly enables self service terminals to accept cashless payments, handles all elements of the transaction processing and allows customers to monitor and manage their terminals online. USA Technologies recently announced the nationwide deployment of 6000 devices with MasterCard, Cadbury Schweppes and several Coca-Cola bottlers connected to the e-Port Connect Service. A recent study revealed North American consumers spent more than $475 billion at self-checkout lanes, ticketing kiosks and other self-service POS locations in 2006. Expenditures at these types of self-service kiosks are expected to rise 33 percent in 2007. Additionally, The Ohio Turnpike Commission announced it was installing USA Technologies e-Port payment solution at highway exit tolls to accept MasterCard’s PayPass contactless payment system. The US Center for Business Planning estimates there are 3,500 tollbooths in the US conducting four billion transactions annually. USA Technologies is a leader in the networking of wireless non-cash transactions, associated financial/network services and energy management.

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Western Union Renews H-E-B Agency Deal

H-E-B has renewed its agreement to offer Western Union Money Transfer and Money Order services. This most recent agreement ensures that H-E-B customers will continue to have access to these value-added services at all 236 H-E-B Business Center locations. In addition, 262 H-E-B locations will offer Western Union Money Orders. Western Union and H-E-B have a long history of offering consumers quality financial services. H-E-B, which has more than 300 stores in Texas and Mexico, began offering Western Union services more than 25 years ago.

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AmEx U.S. 1Q/07 Card Profits Rise 22%

American Express reported that its U.S. Card Services division posted first quarter net income of $644 million, up 22% year-over-year. U.S. gross dollar volume rose 13% and the AmEx cardbase expanded 8% during the first quarter, compared to the year ago quarter. Total net revenues for the first quarter increased 16% to $3.4 billion. Total U.S. card loans rose 36% to $33.0 billion. Delinquency on card loans (30+ days) rose to 2.9% versus 2.7% in the prior quarter and 2.4% for 1Q/06. Charge-offs on total card loans increased to 3.7% compared to 3.5% for 4Q/06 and 2.6% one-year ago. Card volume in the U.S. hit $85.2 billion, up 13% from the year ago quarter. The total number of domestic cards-in-force grew to 41.5 million cards, compared to 38.3 million for 1Q/06. For complete details on American Express’ first quarter results, visit CardData ([www.carddata.com][1]).

American Express U.S. Card Portfolio Snapshot
1Q/07 4Q/06 3Q/06 2Q/06 1Q/06 Ann Chng
Volume $105.4 109.7 101.7 102.5 92.9 +13.5%
Cards 49.3mm 48.1 46.8 45.4 44.0 +12.0%
Source: CardData (www.carddata.com)

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

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TSYS Signs mPay Gateway

TSYS Acquiring Solutions has signed a merchant-processing service agreement with MN-based mPay Gateway. This software enables providers to secure payment from patients at the point of service who have deductibles under Consumer Driven Health Care (CDHC) plans. mPay Gateway provides web-based management software to health care providers and is a PCI-certified issuing card processor delivering multi-purse bankcard solutions and web-based tool sets to banks and health plans/TPAs. TSYS Acquiring Solutions is a supplier of acquiring solutions, related systems and integrated support services to the acquiring industry and its customers.

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Cap One Card Profits Soar 47% Sequentially

Capital One’s first quarter U.S. credit card profits declined by 18% year-over-year but soared 47% sequentially. Purchase volume in the U.S. was up 7% while U.S. managed card outstandings increased 5.5% from the year-ago quarter. The number of U.S. card accounts rose by about 128,000 during the quarter, but remained down from the year-on-year figure of 37.2 million accounts. U.S. card net income was $495.3 million, compared to $337.2 million in the prior quarter and $602.8 million for 1Q/06. U.S. managed card outstandings were $49.7 billion for 1Q/07 compared to $47.1 billion one-year ago and $53.6 billion in the previous quarter. Purchase volume hit $19.3 billion for 1Q/07, compared to $22.8 billion for 4Q/06 and $18.0 billion for 1Q/06. The managed delinquency rate (30+ days) for U.S. credit cards was 3.48% for the first quarter, compared to 3.74% for 4Q/06 and 3.31% for the first quarter of 2006. The net charge-off rate for U.S. credit cards was 3.99% for the first quarter, compared to 3.82% for the fourth quarter and 2.93% one-year ago. For complete details on Capital One’s first quarter performance, visit CardData ([www.carddata.com][1]).

COF U.S. CARD NET INCOME
1Q/06: $602.8 million
2Q/06: $421.8 million
3Q/06: $461.6 million
4Q/06: $337.2 million
1Q/07: $495.3 million
Source: CardData (www.carddata.com)

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

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Discover ZIP to Enter the Contactless Arena

Discover Network is planning to roll-out its contactless payment solution this month. “Discover ZIP” will join “MasterCard PayPass,” “Visa Contactless” and American Express “ExpressPay” in the contactless segment. Last year Discover certified the “Saturn 5000” contactless reader, developed by On Track Innovations, for use with Discover Network’s contactless payment application. ViVOtech’s “ViVOpay 4000” and “ViVOpay 3000” were also certified for use with Discover’s contactless payment application. Discover has been testing “ZIP” for the past two months with employees. (CF Library 8/3/06; 11/29/06)

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TX AG Takes on CVS for ID Theft Issues

The Texas Attorney General has charged CVS with violating the “2005 Identity Theft Enforcement and Protection Act,” and with violating “Chapter 35” of the “Business and Commerce Code,” which requires businesses to develop retention and disposal procedures for their clients’ personal information. Investigators with the Office of the Attorney General (OAG) discovered that a CVS store near Houston exposed hundreds of its customers to identity theft by failing to properly dispose of records that contained sensitive information. The investigation was launched after reports indicated that bulk customer records were tossed in a dumpster behind the store. The documents obtained by OAG investigators also contained hundreds of active debit and credit card numbers, complete with expiration dates. Under the law, the OAG has the authority to seek penalties of up to $50,000 per violation. AG investigators are also working to determine if any exposed data has been used illegally.

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GE Money Inks a Major Canadian Accord

Canada’s Desjardins Group this week announced an agreement with GE Money to serve merchants with integrated VISA and MasterCard solutions. The service includes same-day deposits, single account statements, debit card and POS terminal transactions, faster processing of merchant enrollment applications and one-stop customer service. Desjardins is a payment solutions provider with assets of more than $135 billion. More than 55,000 merchants throughout Canada, including more than 5,000 offering “Accord D Desjardins” financing, have chosen Desjardins Card Services as their provider of POS transaction management solutions.

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Givex Becomes PCI DSS Complaint

Prepaid card specialist Givex has completed verification in the AmbironTrustWave “Trusted Commerce” program. Completion of the program signifies Givex’s commitment to the security of client data and compliance with the Payment Card Industry Data Security Standard (PCI DSS), the framework for both the prevention and detection of security breaches. Givex provides closed loop card processing in North America and Europe. AmbironTrustWave is a provider of information security and compliance management solutions to Fortune 2000 businesses and the public sector.

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