PayPal to Become Yahoo!’s Online Wallet

Yahoo! has selected eBay’s PayPal to become the exclusive third-party provider of its online wallet. The eBay/Yahoo! multi-year U.S. deal consists of four major components in the areas of search and graphical advertising, online payments, a co-branded toolbar, and the opportunity to explore “click-to-call” functionality. The initiatives will include a testing phase that will take place over the next several months, with a plan to achieve full implementation in 2007. PayPal has 73 million accounts in the U.S.

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GPT Names a SVP/Engineering and Operations

New York-based Global Payment Technologies has hired Hal Charych, formerly with Symbol Technologies as SVP/Engineering and Operations. Charych spent almost fourteen years at Symbol Technologies where he was responsible for leading multi-functional teams of engineers in all phases of new product technology development of laser scanning, mobile computing and RFID products, from inception to production. He is a graduate of the University of Massachusetts with a Bachelor of Science Degree in Electrical and Computer Systems Engineering and has a Masters of Business Administration from Long Island University – C.W. Post.

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Pemco Technologies Inks Two Credit Unions

Seattle-based Pemco Technologies has signed MO-based United Credit Union for card processing and credit/debit awards programs and has signed Illinois Community Credit Union for VISA credit processing and an “Extra Awards” loyalty program. United Credit Union has assets of more than $87 million and 14,600 members. Illinois Community Credit Union holds assets of more than $43 million and 7,900 members.

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Word of Mouth Drives Biz Card Applications

A new study has concluded that when it comes to marketing business credit cards the card industry needs to be focused on generating positive word of mouth. Toronto-based The Warrillow & Co. research found that business owners prefer to rely on recommendations from fellow business owners before making any buying decision. Using methodology made famous by Bain consultant Frederick Reichheld, Warrillow calculated each company’s “Net Promoter Score”, which is the percentage of a company’s customers who would be very willing to recommend them subtracted by the percentage of the company’s customers who would be unlikely to recommend them. The second-highest-ranking category on the “Index” is the business credit card with an overall “Net Promoter Score” of 29%. Topping the list was shipping companies.

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First Data Healthcare to Use Edifecs

Washington-based Edifecs has entered into an agreement to license its “SpecBuilder,” “XEngine,” “Healthcare Transaction Repository” and “Transaction Manager” solutions to First Data Healthcare Services to enable real-time transaction processing for provider and payer customers. The Edifecs Healthcare Suite, which provides mission-critical solutions for reducing friction in the transaction lifecycle for healthcare and healthcare-affiliated organizations. Edifecs helps organizations achieve interoperability and return on investment by enabling, managing and deriving business value from standard electronic transactions within trading partner communities.

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Fifth Third Intros a Private Client Card

OH-based Fifth Third Bank has introduced the “Private Client Group World MasterCard” for its clients in Private Banking, Trust, Wealth Planning, Investment Services, High-Net-Worth Insurance and PCG Brokerage groups. As of March 31, 2006, the Investment Advisors division of Fifth Third Bank, which includes the Private Banking Group, had $33 billion in assets under management, $203 billion in assets under care and $12 billion in Fifth Third Fund Assets.

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Travelocity Offers MasterCard SecureCode

MasterCard reported that as of this month, there were more than 3,000 financial institutions enrolled in the MasterCard “SecureCode” program on a global basis. In addition, more than 77,000 merchants are now participating in the program. MasterCard also announced this morning that Travelocity has made “SecureCode” available on its consumer Web site. “SecureCode” requires cardholders to enter their personal code in a pop-up or inline window on their PC before their online payment can be completed.

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Credit Cards Capture a Chunk of Tuition

New York-based AllianceBernstein Investments has released a survey showing that 43% of respondents with college debt used a credit card to pay tuition and/or other college expenses and of those, 32% carried that debt for more than five years. Respondents still paying off education-related debt individually and/or for a spouse say their debt has required them to delay some key “rites of passage” into adulthood: 44% have delayed buying a house, 28% have delayed having children and 32% were forced to move back in with a parent or guardian or live at home longer than expected. 27% say their financial situation has caused them to delay getting a dental or medical procedure.

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Asia Payments Acquires InterPay International

Asia Payment Systems has acquired all of the shares of its strategic
partner, InterPay International Group Limited. The acquisition enables
Asia Payments to accelerate key business initiatives in
Asia as a whole and to better pursue its objectives in China’s rapidly
expanding financial payments market. InterPay will permit Asia Payments to
more aggressively develop payment services and card programs with its
strategic partner, Global Uplink in Guangzhou, China.

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Changing Marketplace Represents Challenges

Another report points to a slowdown in consumer lending as rising interest rates and declining real estate values bite. However, the report suggests that consumer lenders can gain a competitive edge by leveraging the best mix of business and technology remedies to drive loan volumes up, keep cost down, retain customers, and keep customers paying. The latest TowerGroup report divides the consumer credit life cycle into four stages: marketing/account sourcing, originations, servicing, and portfolio management. TowerGroup says each stage contains a number of decision points and opportunities for success. The research group notes that credit cards have by far the most numerous accounts in consumer lending but represent a common point of entry.

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MasterCard’s IPO Opens Below Expectations

A watershed event is unfolding this morning in the payment card industry as MasterCard, the world’s second largest payment card network, is going public. Last night, MasterCard announced that its IPO of 61.5 million shares of its “Class A” common stock has been priced at $39 per share. The pricing was below the anticipated range of $40 to $43 per share. The Company will open trading today on the New York Stock Exchange under the trading symbol “MA.” The IPO raised $2.4 billion, the largest since 2004, surpassing Google’s IPO of $1.7 billion. The IPO represents a 46% stake in the company. MasterCard will use most of the proceeds to redeem shares held by current shareholders, mostly bank/issuers. About $650 million will be retained for business and litigation purposes. Despite the lower start, Morningstar places MasterCard’s fair market value at $80 per share.

MASTERCARD HISTORICAL ($ millions)
1Q/05 2Q/05 3Q/05 4Q/05 1Q/06
G&A: $306.6 $319.2 $350.1 $376.1 $347.8
A&M: $171.7 $231.6 $219.2 $385.5 $182.7
Net Income: $ 93.3 $120.2 $106.1 ($ 53.0) $126.7
Note: G&A: General & Administrative Expenses; A&M:
Advertising & Market Development Expenses.
Source: CardData (www.carddata.com)

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Omaha Steaks to Distribute InComm Cards

Atlanta-based InComm has teamed with Omaha Steaks to distribute its gift cards. The Omaha Steaks gift cards will be available in $25 and $50 denominations. The gift cards can be redeemed in Omaha Steaks’ 75 retail locations nationwide or through its web site. InComm offers more than 46 different gift cards that include major retailers, casual and fine dining, entertainment, electronics, office supplies, sports and recreation.

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