AEON Credit Service Launches an ATM Network

The first non-financial institution, Aeon Credit Service, has
established an ATM network in Malaysia. The service will be available to
AEON “Express” and credit card members, collectively known as “AEON
Cash” customers. These customers will be able to withdraw cash upon
approval of their applications. This development is projected to
generate up to a 100% sales growth.

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Hong Leong Bank Aims To Expand Retail Banking

With the introduction of “Smartlink”, Hong Leong Bank’s all-in-one
account, the bank hopes its retail banking customer base will expand.
“Smartlink” was designed to link to programs and services within the
bank and offers attractive interest rates calculated daily and credited
quarterly. This additional convenience and increase in spending power is
what Hong Leong hopes will attract new customers. The bank has 186
branches nationwide and 1.6 million customers.

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BluePhoenix Solutions Lower Volvofinans Credit Card TCO

Volvofinans Group will use Bluephoenix to modernize its credit system.
This credit system is used by 70 dealers in Sweden and interfaces with
over 100 vendors. With this partnership, Volvofinans will be able to
deliver new applications for customers, respond to changing business
requirements and expects to lower the credit card system’s “Total Cost of Ownership” (TCO) by 40% annually. The Group has assets of more than $3.4
billion and chose the BluePhoenix Solutions tool because of its ability
to migrate IDMS/ADSO applications to a relative database environment
without compromise.

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MoneyPass ATM Network Expands in Minnesota

MN-based Snyders Drug Stores has selected the “MoneyPass ATM” network to provide surcharge free ATM access in its 50+ stores. MoneyPass, a national surcharge-free ATM network with nearly 10,000 ATMs, offers flexible and open participation to both ATM owners and ATM card issuers. Through a unique mix of financial institution and retail ATMs, MoneyPass provides convenient and accessible locations to eligible cardholders across the United States and is a network of Elan Financial Services, a provider of complete outsourced solutions with a focus on payments and ATM and debit card processing for financial institutions.

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Discover Profits Slip 22% in First Quarter

Morgan Stanley reported this morning that its Discover unit posted pre-tax profits of $372 million for 1Q/07, a 22% decline over the year ago quarter. However, sequentially, profits nearly doubled from $199 million. Discover also reported that net revenues dipped 6% from a year ago to $1025 million. Net sales volume rose to $30.3 billion, a 13% increase from 1Q/06. Managed credit card loans increased by $400 million from the prior quarter to $50.73 billion and up 6% from a year ago. Managed merchant, cardholder and other fees were $552 million for 1Q/07, up 6% from a year ago. The number of accounts continued to shrink from 46.1 million in 1Q/06 and 45.3 million in 4Q/06 to 44.9 million for the first quarter, a 3% year-on-year decline. The managed credit card net charge-off rate was 4.05%, 101 basis points lower than last year’s first quarter, and 10 basis points lower than the fourth quarter. The managed credit card over-30-day delinquency rate was 3.45%, unchanged from 1Q/06 and 6 basis points lower than the fourth quarter of 2006. The over-90-day delinquency rate increased 8 basis points over the same period to 1.69% and was four basis points higher than the prior quarter. For complete details on Discover’s first quarter performance, visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
($ billions; accounts/actives millions)
1Q/06* 2Q/06* 3Q/06* 4Q/06* 1Q/07* Y/Y CHNG
Outstandings: $47.8 $48.5 $49.6 $50.3 $50.7 +6%
Volume: $26.8 $28.5 $30.2 $29.1 $30.3 +13%
Accounts: 46.1 45.9 45.6 45.3 44.9 -3%
Actives: 19.6 19.6 19.6 19.8 19.7 +1%
Chargeoffs: 5.06% 3.30% 3.81% 4.15% 4.05% -111bps
Delinquency**: 3.45% 3.29% 3.41% 3.51% 3.45% NC
Yield: 12.13% 12.69% 12.38 12.23 12.27% +14bps
Notes: 1Q/06 ended 2/28/06; 2Q/06 ended 5/31/06; 3Q/06 ended 8/31/06;
4Q/06 ended 11/30/06; 1Q/07 ended 2/28/07. ** delinquency is 30-90 days
and excludes 90+ days. Includes both domestic and international cards.
Source: CardData (www.carddata.com)

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

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Credit Card 06 Ad Spending Falls $137MM

Advertising spending for credit card services fell $136.6 million or 6.9% last year. According to preliminary figures released by Nielsen Monitor-Plus, overall advertising last year increased 4.6%. No surprise that Internet advertising led the charge with a robust 35% gain while network radio and local newspapers declined. Spot TV in the Top 100 markets and Spanish language national TV were the leaders in traditional advertising, growing 9% and 8%, respectively. The top advertising product was pharmaceuticals rising $718.9 million or 14.9% last year.

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Four More Merchants Accept VISA Contactless

Taco Bell, ShopRite, Braum’s Ice Cream and Dairy Stores and Clearview Cinemas have signed deals to accept “VISA Contactless” cards. “VISA Contactless” technology enables customers to make purchases by simply holding the cards near a secure reader at checkout instead of swiping them and eliminates the signature requirement for most payments under $25. Braum’s Ice Cream and Dairy Stores accepts Visa Contactless at its 276 stores in Arkansas, Kansas, Missouri, Oklahoma and Texas. Clearview Cinemas has installed VISA Contactless readers in all of its 52 theater locations in the New York metropolitan area. Grocery retailer ShopRite has started accepting VISA Contactless payments at more than 4,000 POS locations in the Northeast and the Taco Bell restaurant chain will test Visa Contactless cards initially at 100 restaurants in the fourth quarter of 2007.

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U.S. Commercial Spending to Rise 4% in 07

Overall commercial spending in the U.S. grew 6.7% last year and is expected to reach $17.95 trillion this year. Small business spending grew 4.3% in 2006 to $4.9 trillion and is expected to top $5 trillion this year, growing at the same pace as last year. According to VISA’s latest “Commercial Consumption Expenditure” Index, mid-sized company spending increased 8.0% to $3.5 trillion, large companies spent $7.6 trillion for 7.8% gain and government agency spending was up 5.9% to $1.3 trillion last year. VISA projects continued growth in business-to-business spending through 2010, when it is expected to eclipse $20 trillion, including $5.7 trillion in small business spending. VISA introduced the “CCE Index” in 2006.

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PAYjr Teen MasterCard Spreads into New Mexico

Dallas-based PAYjr has signed the Credit Union Association of New Mexico to offer co-branded prepaid debit cards for teens. Under the agreement, CUANM will offer a “PAYjr CU Succeed Prepaid Card” that provides teenagers flexibility and spending independence while also preventing overspending because it is a debit card rather than a credit card. Money is loaded electronically to the card through the completion of chores, recurring allowances set up by parents, one-time loads or by direct deposits from employers. Cardholders can track and manage their own expenses online, and the PAYjr system also provides SMS text messaging or email notifications to keep parents and teens aware of card activity, including balances and loads to the card. PAYjr provides easy-to-use online tools that help parents teach their children about money management and budgeting. The Credit Union Association of New Mexico is a not-for-profit trade organization that serves the needs of credit unions throughout the state.

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PayPass Cashless Vending Enters Oklahoma

OK-based Great Plains Coca-Cola Bottling Company has agreed to equip vending machines with USA Technologies’ “e-Port G6” cashless transaction solution to accept “MasterCard PayPass” contactless payments. The machines will be deployed first in Oklahoma City and Tulsa in multiple market environments, including colleges and universities, healthcare, hospitality, and businesses and industry workplaces. To make a cashless transaction at a PayPass-enabled vending machine, consumers need only tap their MasterCard PayPass-enabled credit card or device on the e-Port terminal. No signature is required. The machines will accept MasterCard PayPass contactless payment functionality as well as all major credit cards and cash. Great Plains Coca-Cola Bottling Company is one of the ten largest Coca-Cola operations in the United States. USA Technologies provides networking of wireless non-cash transactions, associated financial/network services and energy management.

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CHASE GOLD

Chase has launched its first proprietary credit card for Canadian consumers. The new “Chase Gold MasterCard” is the third card offering in Canada. Chase entered the Canadian market in 2005 with the acquisition of the Sears Canada credit card portfolio. Most recently, Chase introduced its new “Marriott Rewards Platinum VISA” in Canada. Chase also noted it plans to hire 100 Ottawa-area employees and will also expand jobs in Toronto to support its credit card business in Canada.

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