United VISA Introduces a New Currency

United Airlines and Chase have changed the “Mileage Plus VISA” program by switching from awarding miles for card usage to earning a new form of currency called “Choices.” Under the new program cardholders have five new awards, including: flights booked on united.com with no capacity restrictions or blackout dates; hotel stays booked on united.com; car rentals booked on united.com; an annual subscription for access to United’s “Economy Plus” seating; and credit towards Elite status. When purchasing free air tickets the amount of “Choices” needed is based on the price of the ticket rather than the traditional set redemption amounts. Cardholders purchase their air tickets, hotel stay or card rentals and then receive a statement credit using “Choices.” In addition to “Choices,” cardholders can now use redeemable miles to receive a credit for their “Mileage Plus VISA” annual fee or redeem for products from the “Mileage Plus” online rewards catalog. The United “Mileage Plus” program was launched 25 years ago and has nearly 48 million enrolled members.

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VISA Members Approve Governance Changes

VISA USA’s board of directors added its first four independent members on Friday. The new directors are part of the corporate governance changes that VISA members overwhelmingly approved last week. Among other changes is the addition of a board seat to represent financial institutions with less than $1 billion in annual VISA volume. VISA will also add four more independent members to reach a board majority of independent directors. The independent directors will also be members of a new “Independent Directors Committee” to oversee management’s recommendations on interchange reimbursement fees, member transaction processing and service fees as well as other core economic matters. The new directors are Philip DeFeo, Linda Baker Keene, Jon Madonna and John Swainson.

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ACE Cash Express Profits Flat

Dallas-based ACE Cash Express reports that net income for the first months of 2006 was flat at $9.9 million. The current quarter includes the previously disclosed $0.04 after-tax charge related to the termination of the Company’s relationship with H&R Block. During the fiscal third quarter of 2006, ACE’s total revenue increased 16 percent to $91.2 million from $78.5 million in the prior year period, due primarily to a 19 percent increase in check cashing fees, an 18 percent increase in loan fees and interest, and a 33 percent increase in bill payment services. ACE Cash Express is a retailer of financial services, including check cashing, short-term consumer loans, bill payment and prepaid debit card services, and the largest owner, operator and franchisor of check cashing stores in the United States.

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DEBIT REFORMS

Bank regulators are continuing their efforts to drastically slash interchange rates on debit cards. The Payments System Board wants to push interchange fees in the EFTPOS system from 20 cents to 4.5 cents per transaction and cut the interchange fee in the “VISA Debit” system from 40 cents to 15 cents. The Board also wants the VISA system to remove the restrictions on merchants that require them to accept “VISA Debit” cards if they accept “VISA Credit” cards, and that prohibit merchants from imposing a surcharge on “VISA Debit” transactions.
However, the Board did note that earlier proposals that EFTPOS cash transactions by merchants to cardholders will not be subject to the
benchmark cap set out in the new “EFTPOS Standard” on interchange fees.
The new EFTPOS interchange “Standard” will become effective on November 1st. The Reserve Bank has given VISA and MasterCard until July 1st to show they will voluntarily comply with the new “EFTPOS Standard.”

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Benchmark to Resell Wincor ATMs

Benchmark Technology Group has agreed to market and resell Wincor Nixdorf’s line of cash systems including ATMs in the USA. Benchmark will market and resell Wincor Nixdorf’s line of cash systems including full function automated teller machines, cash dispensers, cash recycling systems, intelligent deposit systems and automated teller safes in the U.S. market. Benchmark Technology Group is a provider of end-to-end branch technology solutions for financial services institutions.

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NCR’s ATM Revenues Drop 5% in Q1

NCR reported that first quarter revenue of $259 million for its ATM business was down 5% year-on-year and down nearly $200 million from the prior quarter. Price erosion and lower volume drove operating income down to $13 million compared to $25 million in 1Q/05. In the Retail Store Automation unit revenue declined 2% to $172 million compared to one-year ago. The unit also posted an operating loss of $7 million due to lower profit in Japan and foreign currency fluctuations. During the quarter, Brown Shoe Company (Famous Footwear and Naturalizer Stores) has signed an order to equip all of its 1,300 stores with NCR POS systems running on “Windows Embedded for Point of Service” software platform. The Company also completed its acquisition of Tidel’s ATM assets. NCR says it expects lower profit during the second quarter in its ATM business due to the lingering impact of price erosion as well as manufacturing and supply-chain transition costs. For complete details on NCR’s current and past performance, visit CardData ([www.carddata.com][1]) (CF Library 1/6/06; 1/13/06)

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

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MC Names a New Americas President

MasterCard has named a new president for its Americas region which includes the U.S., Canada, Latin America and the Caribbean. Walter Macnee, who served as president of MasterCard Canada between 2001 to 2004, will take over the reins from Ruth Ann Marshall on May 15th. Marshall, who joined MasterCard in 1999, is taking early retirement but has agreed to stay through June to help with the transition. MasterCard is currently in the process of launching an IPO. Before returning to MasterCard, Macnee was EVP of CIBC in charge of its bank’s credit card business and national collections. He also served as Chairman of VISA Canada and Director of VISA International. The Americas region generates more than half of the MasterCard’s worldwide volume.

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