Asia Payment Systems & Cardtrend Merge

Hong Kong-based Asia Payment Systems has signed a binding agreement to merge with Cardtrend Systems. Owned 100% by Asia Payments, Cardtrend will become the flagship for Asia Payments’ Processing Business. Based in Kuala Lumpur, Cardtrend has been awarded “High Technology Company” status under the Malaysian Government’s program that promotes the growth of ICT industries through providing incentives such as tax-holidays and R&D grants. KK Low, Founder and Managing Director of Cardtrend has joined the Board of Directors of Asia Payments and has been appointed Chief Technology Officer. He will also become Head of Processing Business in the combined organization.

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Operating Expense Nudges Down to 6%

Rising interest rates and narrowing margins are not the only issues facing credit card providers in 2006. Operating expense, driven by increased competition, is still running 160 basis points over year ago levels, but may finally be abating. After peaking at 6.04% in February, operating expenses have nudged down by four basis points in September. Operating expense is determined by dividing monthly gross operating expenses by the average managed card outstandings and then annualizing. Operating expense includes such items as credit processing, call center servicing, billing, collections, fraud management, and card issuance. According to CardData ([www.carddata.com][1]), operating expenses stood at 5.24% for September 2005 and settled at 6.00% for September 2006.

OPERATING EXPENSE HISTORICAL
Jan 06: 6.00%
Feb 06: 6.04%
Mar 06: 6.02%
Apr 06: 5.99%
May 06: 5.90%
Jun 06: 5.90%
Jul 06: 5.76%
Aug 06: 5.87%
Sep 06: 6.00%
Source: CardData (www.carddata.com)

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

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RED BUYOUT

Retail Decisions has agreed to a $314 million cash offer from RD
Card, a private equity investment firm. ReD operates in Europe, the USA,
Australia and South Africa. The firm posted 54.7 million euros in
revenues for 2005 compared to 31.7 million euros for 2004. ReD’s fuel
card operation is the largest multi-branded card business in Australia
accepted at nearly all of the 6,500 fuel stations throughout the country
and at around 8,250 other outlets that provide services for business
drivers. In the UK and Europe, ReD’s fuel card business, known as “ReD
Fuel Cards,” is the UK’s second largest operator in the independent fuel
card market with over 65,000 cards in issue and around 6,300 live
customer accounts. In December, ReD acquired E Com, Australia’s largest
pre-paid card operator. For more details on ReD’s latest results, visit
CardData (www.carddata.com).

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KeyCorp Selects American Express eAccess

KeyCorp has selected American Express Bank’s “eAccess Multicurrency Cash Management” for its international cash management platform.. The platform has features that help simplify some of the complexities of international payments. KeyCorp is one of the nation’s largest bank-based financial services companies, with assets of approximately $95 billion. American Express Bank Ltd. provides services to financial institutions, high net worth individuals and affluent customers through more than 73 locations in 45 countries.

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ACCEL/Exchange Network Offers CardAlert

Fiserv’s “ACCEL/Exchange Network” will begin delivering Fair Isaac’s “CardAlert Fraud Manager Service” to Canadian financial institutions for cardholder transactions conducted in the USA through ACCEL/Exchange. CardAlert provides card issuers with an improved ability to minimize fraud losses through real-time detection of fraudulent card transactions. The service combines powerful predictive analytic software with investigative techniques to help organizations spot counterfeit cards and skimming fraud in the earliest stages. ACCEL/Exchange provides financial institutions with the infrastructure for cardholder access to their funds anytime, anywhere. Fiserv Inc. provides information management systems and services to the financial and health benefits industries.

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TSAI Closes Deal and Changes Name to ACI

Transaction Systems Architects has closed on its acquisition of P&H Solutions and closed a $150 million credit facility led by Wachovia Securities plus says it will re-brand the corporation fully under the “ACI Worldwide” name. The acquisition was funded by $75 million of available TSA cash and $75 million from the revolving credit facility. The Company is announcing today that it plans to rebrand the corporation fully under the ACI Worldwide name. ACI Worldwide is the primary operating company and brand used in the marketplace, and this name change is a key element of the Company’s strategic plan developed in 2005. Transaction Systems Architects facilitates electronic payments by providing consumers and companies access to their money.

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Alpine Bank Opts for Saylent’s Y-Debit

CO-based Alpine Bank has acquired two of Saylent Technologies’ “Y-Debit” modules including “Card Management” and “Card Profitability” for their debit card program. Card Management will enable the bank to identify customer payment trends dynamically as well as track the effectiveness of marketing campaigns. Card Profitability was acquired to analyze the financial impact of its decisions and to automate the growing loyalty program calculations. This module will also allow the bank to allocate financials by branch, region and other custom groupings. Saylent Technologies, based in Medway, Massachusetts, is a leading provider of debit card management solutions for the banking, credit union and payment industries.

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ABS Charge-Offs Head North in August

Credit card charge-offs, among “prime” asset-backed securities, headed north in August, but, the 60+ day delinquency ratio remained stable. Nevertheless, total charge-offs will edge up by year-end despite the fact that bankruptcy filings are down more than 65% year over year. According to FitchRatings, “prime” charge-offs for August were 3.94%, 50 basis points higher than July and compared to 5.97% one-year ago. The “prime” 60-plus day delinquency index for August was 2.33%, compared to 2.36% in July. Fitch also reported that “sub-prime” 60+ day late payments increased five bps to 5.00%. “Sub-Prime” charge-offs jumped 105 bps to 9.45%. Charge-offs for the year have averaged 9.13%, a 419 basis points improvement from 13.32% for the same period the year before.

ABS PRIME CHARGE-OFFS HISTORICAL
Jan 06: 6.88%
Feb 06: 3.29%
Mar 06: 3.10%
Apr 06: 3.19%
May 06: 3.58%
Jun 06: 3.58%
Jul 06: 3.44%
Aug 06: 3.94%
Source: FitchRatings

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Card Activation Technologies Hires a COO

MedCom USA has named William Bednarski as COO of its new division Card Activation Technologies. Mr. Bednarski joins MedCom from Minrad International Inc., a medical device and acute care company, where he had originally been hired as the COO in February 2005 and was then promoted to President and CFO in January 2006. Mr. Bednarski graduated Cum Laude from Harvard University and has an MBA in Finance from the Wharton School of Business at the University of Pennsylvania. MedCom USA, Inc. (OTC Bulletin Board: EMED – News) provides innovative healthcare and financial transaction solutions for electronically processing HIPAA compliant transactions within the healthcare industry.

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Credit Manager’s Index Slips in September

The “Credit Manager’s Index” slipped in September from 57.3 to 57.1. Six of the 10 components for the combined sectors fell. The National Association of Credit Management says the figures show good momentum, but one which is slowly trending downward, probably due to the combination of a plummeting housing market and tightened monetary conditions. However, sales dropped sharply in both sectors: manufacturing sales fell 7.7% and service sector sales fell 4.8%. The NACM says this is a somewhat worrisome development as sales can lead other business conditions.

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Shell Extends Merchant Fee Reduction

Shell has again elected to extend the temporary reduction to merchant service transaction fees. The extended temporary reduction will remain in effect until October 31st. This temporary fee reduction will be extended on all electronic transactions for VISA, MasterCard, and AmEx credit card transactions. The Company previously announced permanent reduction in MasterCard fees from 2.10% +.10 to 2.00% + .10. In addition to the extended temporary reductions in transaction fees, Shell Wholesalers and Retailers receive no fees on Shell-branded consumer card transactions such as the “Shell Gasoline Card,” “Shell Gift Card,” “Shell Gold MasterCard” and “Shell Platinum MasterCard.” Last week, Shell and Citibank launched a promotion for new “Shell Platinum MasterCard” holders offering triple rebates on all Shell gasoline purchases; the first $100 of daily Jiffy Lube purchases; and, all other purchases. (CF Library 9/29/06)

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