MasterCard Voted the Top Corporate Card

Global Finance magazine has named MasterCard the “Best Corporate Cards and Expense Services Provider” in 2007. The publication’s editors selected MasterCard based on input from industry analysts, corporate executives and technology experts. Factors considered in selecting the winners included profitability, market share and reach, customer service, competitive pricing, product innovation, and the extent to which treasury and financial institutions have successfully differentiated themselves from their competitors around core treasury and cash management service provision.

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Calif City Gets WiFi-based Parking Meters

Digital Payment Technologies has been selected by Redwood City, California to supply forty WiFi-based parking pay stations for the city’s downtown core. The “LUKE” pay station by Digital Payment was chosen in order to provide city parkers with a greater range of payment options and convenience. The pay stations will be connected to Digital Payment’s Enterprise Management Server (EMS) via a WiFi “MetroMesh Network” using equipment manufactured by CA-based Tropos Networks. The WiFi connectivity will enable the city to offer new capabilities such as real-time credit card authorization, pay-by-cell integration and the ability to add time at any pay station. Digital Payment provides the design, manufacture and distribution of revenue-management hardware, software and wireless solutions for the multi-billion-dollar parking industry. Tropos Networks provides metro-scale Wi-Fi mesh network systems.

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SunTrust Rolls-Out VISA Consumer Cards

Atlanta-based SunTrust Banks announced its new SunTrust-branded VISA consumer credit cards. The cards include the “SunTrust VISA Signature” with “SunTrust Rewards;” the “SunTrust Platinum VISA” with “SunTrust Rewards”; the “SunTrust Platinum VISA”; and the “SunTrust Preferred VISA.” Two of the cards feature SunTrust’s new rewards program providing cardholders the ability to earn “SunPoints” which can be redeemed for cash back to their account, travel, gift certificates and merchandise. At year-end SunTrust had total assets of $182.2 billion and total deposits of $124.0 billion.

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Fifth Third Renews 3 Processing Contracts

OH-based Fifth Third Processing Solutions has renewed contracts for credit and debit card processing services for department store chain Kohl’s with 817 stores in 45 states, credit card processing for Perfumania, the nation’s largest perfumery chain, with approximately 270 retail stores nationwide and credit, debit and gift card processing for footware retailer SKECHERS USA. Fifth Third Bank Processing Solutions processes over 21 billion ATM and POS transactions per year for more than 2,300 financial institutions and over 142,110 retail locations worldwide. Annually, Fifth Third processes $148.1 billion in credit card sales.

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VISA Adds New Web Features for Parents

VISA USA has introduced three new free web-based allowance calculators designed to help parents monitor their kids’ spending habits and providing a solid money management foundation. The calculators help parents set appropriate allowances for kids of all ages based on the following factors: what parents themselves received for an allowance as children, needs- based expenses versus discretionary spending, and saving for a goal. A recent VISA survey of credit and debit cardholders found that less than 50 percent of respondents learned how to manage money from their parents and 41 percent of those surveyed said they learned the hard way or were self-taught. Parents can access the allowance calculators in the “At Home” section of Practical Money Skills for Life at http://www.practicalmoneyskills.com/allowance.

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On Track Innovations Revenue Up 42%

Contactless specialist On Track Innovations posted revenues for the fourth quarter of $13.2 million, a 42% increase over the same period of last year. The Company says it expects to achieve long term growth of 20% to 25% for this year, driven by the petroleum, ID markets, and the payment markets. During the quarter, USA Technologies selected OTI to provide its next generation contactless reader solution to be integrated into its “Generation Six e-Port” cashless transaction solution and the Discover Network certified the OTI “Saturn 5000” contactless reader for use with Discover Network’s contactless payment application. Recently, OTI’s new “Saturn 6000” contactless reader was approved by MasterCard for the “EMV M/Chip v.1.3” and “Magnetic Stripe v3.2” contactless payment programs. OTI also completed its acquisition of most of SuperCom’s assets. For complete details on OTI’s fourth quarter performance, visit CardData (www.carddata.com). (CF Library 10/27/06; 11/29/06; CFI Library 2/21/07)

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SunTrust to Fully Issue VISA Contactless

SunTrust Banks will become the first issuer in the U.S. to incorporate “VISA Contactless” payment technology across its entire consumer credit card portfolio. The program is part of an exclusive five-year partnership agreement to issue VISA consumer credit cards, VISA check cards, small business and commercial products. SunTrust is the 40th largest U.S. issuer according to CardData (www.carddata.com). The issuer has 235,636 cardholders and about $340 million in credit card outstandings. More than 30,000 merchant locations in the U.S. accept contactless payments.

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PayPad EFT Link Solution is Introduced

3PEA International has announced the availability of its Windows-based “PayPad EFT Link Solution”, designed to enable customers to process “PayPad” transactions through their own payment processing connections. Using its “PayPad” payment terminals and IP payment gateway solutions, 3PEA can quickly and cost effectively help customers in various markets to payment-enable their applications. 3PEA works closely with its customers providing qualified payment expertise to produce a payment processing solution that best suits their needs. 3PEA International designs and develops payment solutions including proprietary payment terminals, secure key loading systems, prepaid card systems, and various payment services.

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Ruby Tuesday Upgrades its POS Security

Restaurant chain Ruby Tuesday is among the first to deploy ultra-secure point-of-sale equipment and software to safeguard the credit card information of its guests and protect against identity theft at more than 900 Ruby Tuesday restaurants in the U.S. The software, developed in conjunction with MICROS Systems, has multiple layers of AES-level encryption. VISA International has acknowledged that the POS system will be fully compliant with the stringent new data security standards set by the Payment Card Industry.

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Green Dot Network Tops 100 Card Programs

Los Angeles-based Green Dot Network has reached a new high of 109 prepaid card programs reloading on its network as of January 31. The Network enables consumers to reload prepaid cards issued by VISA, MasterCard and Discover, as well as eligible ATM and private-label cards. The Green Dot “MoneyPak” is a consumer to business “C2B” cash processing gateway that provides a convenient and efficient way for consumers to load cash to prepaid cards, use cash to pay bills, and add cash to a variety of accounts. Green Dot is a provider of retail-based financial services for America’s underserved community

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Metris Drives HSBC U.S. Card Profits

HSBC Finance reported that year-end U.S. bank credit outstandings rose 8.5% to more than $28 billion. U.S. credit card net income for 2006 rose 70% to $1.39 billion. HSBC says the increase was driven by strong organic growth in its “Union Privilege” card as well as other non-prime portfolios including Metris cards. The acquisition of Metris, which was completed in December 2005, contributed $147 million of net income during 2006 as compared to $4 million in 2005. The Metris portfolio produced higher late fees, higher interchange revenue and higher enhancement services revenue from products such as “Account Secure Plus” (debt waiver) and “Identity Protection Plan.” This increase in fee income was partially offset by adverse impacts of limiting certain fee billings on non-prime credit card accounts. For complete details on HSBC’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

HSBC U.S. CARD OUTSTANDINGS
4Q/04: $22.2 billion
1Q/05: $21.7 billion
2Q/05: $22.2 billion
3Q/05: $22.6 billion
4Q/05: $26.0 billion
1Q/06: $25.0 billion
2Q/06: $25.7 billion
3Q/06: $26.4 billion
4Q/06: $28.2 billion
Source: CardData (www.carddata.com)

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

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U.K. Credit Card Charge-Offs Hit a New Peak

Charge-offs for credit card-backed bonds in the U.K. hit a new peak during the fourth quarter to 7.2%, compared to 5.80% one-year ago and 6.9% for the prior quarter. Delinquencies were fairly stable and even fell slightly from 3.7% at the end of September to 3.6% at year-end. According to FitchRatings, the driving factor behind the quarterly improvement in delinquency was a fall in the delinquencies in the Pillar and Arran trusts, and to a much lesser extent, improvements from the Gracechurch, CARDS I and Sherwood trusts. While delinquencies showed some positive signs, falling back slightly over the quarter, “Individual Voluntary Arrangements” and bankruptcy cases continue to increase. It is possible that the high number of personal insolvencies is continuing to have a significant impact on charge off numbers as these are quickly reflected as losses. The monthly payment rate fell from 16.4% at the end of 3Q/06, to 16.2% by year-end. The yield also fell from 18.9% at the end of September to 18.4% in December.

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