Global Payments to Ring the NYSE Bell

Global Payments will ring the opening bell at the NYSE tomorrow morning to commemorate Global’s fifth anniversary. Chairman, President and CEO, Paul R. Garcia, will lead the ceremony along with a delegation of Global Payments’ employees, who were chosen by lottery to represent the company’s divisions and major locations. Global Payments is a provider of electronic transaction processing services.

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FASTLINE Network Hires a Natl Sales Mgr

The new Colorado-based FASTLANE payment network has hired Harry Clark, formerly with Certegy, Verifone, and Ingenico, as National Sales Manager. Clark brings over 20 years of respected, award winning, industry experience ranging from Network Operations to Sales Management and has also worked for some of the top companies in the industry from network service providers to terminal manufacturers including such industry leaders as Verifone, Ingenico and most recently Certegy. While at Certegy, Clark increased the number of direct resellers to include numerous high profile ISOs. Clark also managed ISO relationships to promote loyalty and business growth. The FASTLANE payment network utilizes a single swipe of customer’s drivers license and the consumer’s identity is verified and access is gained into FASTLANE’s Virtual Payment Network (VPN).

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HSBC Signs Storehouse Furniture Card Deal

HSBC-North America has signed a multi-year agreement to renew its retail credit program with Storehouse Furniture, which operates more than 60 stores located in upscale village centers throughout the Southeast, the Mid Atlantic and Texas areas. In addition to providing Storehouse customers with a more convenient way to pay for their furniture purchases, the Storehouse credit card offers cardholders additional buying power and customized financing options. Cardholders also receive advanced notice of sales and special in-store events.

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Discover Profits Up 35% as Metrics Improve

Morgan Stanley reported this morning that its Discover unit posted a record $479 million in pre-tax profits for the quarter ending February 28th, a 35% gain over the year-ago quarter. Gains on securitizations and lower loan loss provisions in the wake of the fall bankruptcy losses were key drivers for the quarter. Discover also posted record gross dollar volume of $26.8 billion, a 3% gain over the prior year quarter. Purchase dollar volume rose 8% over 1Q/05. Managed merchant, cardholder and other fees were $519 million for 1Q/06, up 8% from a year ago. Managed outstandings were flat to year-ago levels, however, U.S. managed outstandings declined from $45.1 billion one-year ago to $43.6 billion. During the quarter Discover purchased $1.4 billion in card outstandings from Goldfish in the U.K. The managed credit card net charge-off rate for the first quarter was 5.06%, 5 basis points lower than a year ago. The managed credit card over-30-day delinquency rate was 3.45%, a decrease of 79 basis points from the first quarter of 2005 and the managed credit card over-90-day delinquency rate was 1.61%, 44 basis points lower than a year ago. The account base increased during the first quarter by approximately 600,000 accounts from the fourth quarter but includes the addition of 1.1 million Goldfish accounts. Active accounts rose slightly from 1Q/05 to 19.6 million. For complete details on Discover’s first quarter performance, visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
1Q/05* 2Q/05* 3Q/05* 4Q/05 1Q/06 Y/Y CHNG
Outstandings: $47.8b $46.8b $47.1b $46.9b $47.8 NC
Volume: $25.9b $25.4b $26.7b $26.1b $26.8 +3%
Accounts: 46.0m 45.9m 45.6m 45.5m 46.1 NC
Actives: 19.5m 19.3m 19.2m 19.2m 19.6 +1%
Chargeoffs: 5.11% 4.94% 5.12% 5.76% 5.06 -5bps
Delinquency**: 4.24% 3.90% 3.91% 3.98% 3.45 -79bps
Yield: 11.23% 11.69% 12.04% 11.94% 12.13 +90bps
Notes: * 1Q/05 ended 2/28/05; 2Q/05 ended 5/31/05; 3Q/05 ended 8/31/05;
4Q/05 ended 11/30/05. 1Q/06 ended 2/28/06** delinquency is 30-90 days
and excludes 90+ days. Includes both domestic and international cards.
Source: CardData (www.carddata.com)

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

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BofA Customers Get Access to Chinese ATMs

As of April 1st, Bank of America customers traveling to China will have free access when using debit or ATM cards to withdraw cash from more than 11,000 foreign-enabled China Construction Bank ATMs. In return, CCB’s “Happy Investor” cardholders traveling to the U.S. will have access to 17,000 BofA ATMs. In June, BofA inked a deal to buy about 9% of the stock of CCB for $3 billion, with the option of increasing its stake in future years. At the same time, BofA began providing advice and assistance to CCB in such areas as governance, risk management, credit cards, consumer banking and treasury services designed to enhance the Chinese bank’s performance. CCB, the second largest commercial bank in China, has $472 billion in assets and 136 million active retail deposit account relationships. The bank is currently majority owned by China SAFE Investments Limited, an entity of the government of China. (CF Library 6/17/05)

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ATEbank Replaces EFT Platform with S1’s Postilion

ATEbank of Greece has signed an agreement to use the full S1 “Postilion” suite to replace the bank’s existing ATM-driving platform and enable it to expand its service offering. In the first phase of the project, “Postilion Realtime” will be used to drive the bank’s existing and new ATMs. ABG intends to migrate its current network of 600 ATMs and the 15 ATMs it drives on behalf of another Greek bank to “Postilion” in mid-2006. “Postilion Realtime” will enable the bank to fulfill
its EMV compliance commitments. “Postilion PostCard” will manage ABG’s
1 million debit cards. “Postilion Office” will allow the bank to perform
continuous back-office processing without impacting the online system.
S1 Corporation is a provider of customer interaction software solutions for financial and payment services.

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FTC Sues a Debt Elimination Program

The FTC is seeking to shut down a debt elimination program operated from Washington State. The FTC alleges Debt Solutions made false promises of substantially reduced interest rates and thousands of dollars in savings for consumers in financial hot water. The firm allegedly charged $399 to $629 to get interest rates lowered for consumers and promised a full refund if the consumer does not save at least $2,500. According to the FTC complaint, consumers who purchase the program typically do not have their interest rates lowered at all and if they do the reductions are rarely more than one percentage point. The FTC also says the defendants claimed the program was endorsed by the Financial Standards Council in Canada and the Registered Financial Planners Institute of North America and that both claims were apparently false.

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Covestic Becomes a VISA QDSC Provider

Washington-based Covestic has been named as a VISA “Qualified Data Security Company” VISA USA instituted the Cardholder Information Security Program (CISP) that endorses the PCI data security standard to protect Visa USA cardholder data, wherever it resides, and ensures that members, merchants and service providers handling that data maintain the highest information security standard. Other payment card brands have endorsed the PCI data security standard under their own cardholder security programs.

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TransFirst Inks the City of Coronado

The City of Coronado, California has awarded the sole contract for payment processing services to Dallas-based TransFirst. TransFirst will help the city improve overall customer service for residents and visitors and create significant efficiencies, allowing Coronado the opportunity to reallocate existing municipal resources to other priorities. Through this contract, TransFirst will provide Coronado with TransAction Central that instantly networks all devices, including POS, e-commerce, software and wireless. Transactions of all types, including e-check, ACH and recurring payments, can be entered over the counter, over the phone or over the Internet with this single, integrated system and can be accessed in real-time, 24 hours a day, seven days a week via the Internet.

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Restaurant Gift Cards Grow in Popularity

A recent survey found that 35% of consumers reported giving restaurant gift cards over the past holiday season and about 43% received them. Technomic also found that nearly 70% of gift-card givers say they were a better choice than regular gifts; among restaurant gift-card recipients, 97% hope to receive them again. Of those that gave restaurant gift cards, nearly 40% plan to purchase even more of them during the next holiday season. Technomic produces the “American Express Market Brief” which tracks chain restaurant trends.

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Sig Debit Continues to Gain Momentum in 05

Growth in off-line debit card volume in the U.S. continued to rebound in 2005, increasing 20% to $823.5 billion. Over the past five years, signature debit volume has enjoyed a CAGR of about 27%, compared to a CAGR of approximately 8.5% for VISA and MasterCard credit cards. Growth in the number of cards-in-force also picked up last year, growing about 16% to 265.4 million cards. This is the highest rate of growth since 2001. Compared to 2000, signature debit card volume has nearly tripled as the number of cards-in-force has nearly doubled, according to CardData ([www.carddata.com][1]).

VISA & MASTERCARD SIG DEBIT HISTORICAL
Year Volume Y/Y Cards Y/Y
2000: $301.8b +37.9% 135.9mm +18.2%
2001: $420.7b +39.4% 157.9mm +16.2%
2002: $496.4b +18.0% 174.9mm +10.8%
2003: $576.6b +16.2% 199.0mm +13.8%
2004: $686.0b +19.0% 228.7mm +14.9%
2005: $823.5b +20.0% 265.4mm +16.0%
Source: CardData (www.carddata.com)

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

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Business Card Use Expands 10% in 05

A new survey of small business principals has found that the use of business credit cards increased by nearly 10% to 65% during 2005. Also, overall satisfaction with business credit cards as a form of payment reached 64% last year. The new VISA USA survey revealed that within the next 12 to 18 months, 30% of small business owners said they plan to increase their reliance on business payment cards. For those respondents who already have business credit or debit accounts, 45% noted that if they could they would make all of their purchases using some type of business payment card. Nearly 27% said that they see card-based payments further providing greater efficiency in receiving and collecting payments. The survey was conducted in January and involved the responses of 468 small business owners or individuals with financial authority within a small business.

VISA USA COMMERCIAL VOLUME
Gross Dollar Volume
4Q/03: $27 billion
1Q/04: $25 billion
2Q/04: $30 billion
3Q/04: $32 billion
4Q/04: $33 billion
1Q/05: $32 billion
2Q/05: $38 billion
3Q/05: $41 billion
4Q/05: $42 billion
Source: CardData (www.carddata.com)

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