Serverside Enhances its Personalization Program

Serverside Group has launched a new product suite to help issuers
maximize the marketing and commercial opportunities of its “AllAboutMe”
card design application. “AllAboutMe” is a Web-based application that
allows cardholders to design their unique
payment card online. The six new products include: TalkAboutMe;
Competition API; Campaign Monitor; Image Management; Viral Marketing
Tools; and ShareMyDesign. Other enhancements include Image Checking. The
Company has also launched new program and partnership opportunities.
Serverside has strategic alliances with VISA, Datacard and Getty Images.

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Independent Bankers Bank Switches to NOVA

U.S. Bank’s NOVA Information Systems has signed an alliance marketing agreement, worth $600 million annually, with Independent Bankers Bank to provide processing services, customer service and support operations to more than 5,800 merchants of IBB’s member bank network. Merchant services will be marketed through 162 referral and correspondent banks throughout Florida, Georgia and Alabama. The conversion of existing merchants is expected to be completed by June 1, 2007.

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MCAP & MBNA Launch a MasterCard with WorldPoints

MCAP and MBNA Canada Bank have teamed to offer a new loyalty credit
card program. The new “MCAP MasterCard with WorldPoints” enables
cardholders to redeem points to reduce their mortgage. MCAP is Canada’s
largest independent mortgage and equipment finance company. The new card
offers one point for each dollar in retail purchases, plus 1,000 bonus
points with the first retail purchase and an additional 1,000 points on
every anniversary. MBNA Canada Bank is the second largest MasterCard
issuer in the country. The Bank has more than 500 co-branded and
affinity credit card programs in Canada.

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Cardholders Prefer Security Over Rewards

Nearly one-third of respondents in a recent survey who think that PIN-approved debit transactions are more or equally secure as signature-approved ones say that increased security is more valuable than earning rewards. Furthermore, half of consumers say that inputting their debit card PIN at the point of sale constitutes a more secure transaction than one in which they sign a receipt. The research by Auriemma Consulting Group also found that 20% of respondents say they have a debit card rewards program, up 40% from 12% of respondents who had debit rewards. ACG notes that PIN-authorized debit transactions have nearly doubled in market share over the past half-decade.

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GlobalSTORE v3.1.1 Validated for VISA PABP

Fujitsu Transaction Solutions’ “GlobalSTORE version 3.1.1” POS software was validated by a security assessor to meet the VISA U.S.A. “Payment Application Best Practices.” VISA’s set of best practices includes principles that protect stored data; suggest the development of secure password features; and elimination of full magnetic stripe or CVV2 data retention.

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60% Favor Biometrics for Bank-Issued Cards

A new study has found that 64% of Americans support adding biometric data to credit cards while 62% support it for debit cards. However, only 27% want that information on a retail store loyalty card. TRUSTe says this correlates with other findings in the survey which showed 76% of respondents trusted banks and financial institutions “always” or “most of the time” as compared to 41% of respondents trusting retail stores “always” or “most of the time.” The survey also revealed that consumers don’t trust systems that use biometric identification as a payment method. Less than two percent of respondents have used a fingerprint payment system and 32% say that they “do not trust retail stores with this information.” Only 23% of respondents expressed a desire to use this kind of payment system. TRUSTe says 73% of Americans support the addition of biometric information to driver’s licenses and nearly as many support adding it to Social Security cards.

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Fee Income Plateaus After 10 Up Years

Growth in issuer revenues derived from cardholder fees and interchange fees have finally plateaued after a decade. Excluding fees from securitizations, card fees for the past two years comprise 38% of the total revenue stream. Ten years ago, fee income represented 16.1% of total revenue, during a period when annual fees were fairly common. The significant rise in late payment fees, over-limit fees, and cash advance fees, coupled with new fees such as balance transfer fees, foreign currency exchange surcharges, and expedited payment fees have driven the overall increase. Since 1994, average late payment fees increased from $12.52 to $35.05. Average over-limit fees increased from $12.74 to $34.55 between 1994 and 2006. Total industry revenues last year topped $145 billion with more than $55 billion flowing from cardholder and merchant fees.

FEE INCOME AS A PERCENTAGE OF TOTAL REVENUE
1994: 17.3%
1995: 16.4%
1996: 16.1%
1997: 21.8%
1998: 24.5%
1999: 26.2%
2000: 27.9%
2001: 29.3%
2002: 32.8%
2003: 33.4%
2004: 37.3%
2005: 38.0%
2006: 38.0%

Note: Fee income includes merchant and cardholders fees but does not include fees from securitization. Ratio is calculated by dividing credit card fee income for the industry by the sum of the credit card interest income for the industry and the total credit card fee income. Source: CardData ([www.carddata.com][1])

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

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ARM M&A Deal Value Hits Another Record

Merger and acquisition activity in the Accounts Receivable Management industry set a new deal value record for the third consecutive year in 2006. Kaulkin Ginsberg says deal value was $3.1 billion last year. The record was mostly driven by two major transactions in the fourth quarter. Key private equity transactions included the management-led buyout of NCO Group for $1.26 billion; and the recapitalization of West Corporation $4.1 billion. Kaulkin Ginsberg estimates the ARM-related deal value of these two transactions amounted to $1.625 billion. Kaulkin Ginsberg expects activity to remain high in 2007, but the key drivers of activity will shift from platform investments to strategic acquisitions. There are apparently several large deals pending that may close this quarter.

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VISA MOBILE

VISA has launched a broad initiative to bring mobile payments to consumers worldwide. The new platform includes technology tools, applications, security standards, and business models to bring together
VISA issuers and mobile operators for market trials to drive
product development and commercialization of mobile payment services.
The initial version of the platform offers solutions for contactless mobile payment, OTA personalization, coupons and direct marketing.
Recent VISA-led market activities leveraging NFC technology include the industry’s first large-scale mobile payment trial at Philips Arena in Atlanta last year. Partners included Atlanta Spirit, Chase, Cingular, Nokia, NXP Semiconductors, and ViVOtech. In Malaysia VISA partnered with Maybank, Maxis Communications, Nokia and ViVOtech to pilot a mobile payment program. Other partners VISA has worked with for the new mobile platform include: CASSIS International, Ecrio, Giesecke & Devrient, Venyon, IBM, VeriSign, INSIDE Contactless, and mFormation Technologies.

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