Overall Banking Metrics Strong in Q4

A new report shows that large regional U.S. banks posted record earnings in the fourth quarter driven by strong loan growth and continuing excellent asset quality, listless noninterest revenues and good expense controls. The report from Standard & Poor’s Ratings Services says the net interest margin remained flat for the industry as a whole, with roughly half of the banks within this group reporting incremental improvement and the other half reporting continued pressure. However, S&P doesn’t anticipate any meaningful asset quality deterioration across the sector in the near term. S&P noted that nonperforming asset levels are the lowest they’ve been in years and net charge-off levels are about as good as they’re going to get.

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Waffle House Joins the P-Generation

The “Good Food Fast” restaurant that required cash has finally joined the plastic generation. GA-based Waffle House has been a cash-only business for 50 years but will begin accepting VISA and MasterCard next month. Credit cards will be accepted in the 713 company- owned restaurants in Alabama, Florida, Georgia, Mississippi, North Carolina, Oklahoma, South Carolina and Texas. Waffle House system operates more than 1,500 company and franchise restaurants in 25 states. Some franchise restaurants now accept credit cards or have ATMs in the restaurant. The Company expects most franchise owners will also offer the card option.

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Pay By Touch Hires an Online Entrepreneur

San Francisco-based Pay By Touch has hired Bill Townsend, formerly with Lycos, GeoCities, NewsAlert, as EVP, office of the CEO. Townsend’s 20 years of diverse business experience span education, media, and technology. Prior to joining Pay By Touch, Townsend was a partner and managing director of Interminds, LLC, a management-consulting firm that assists companies with strategic planning, troubleshooting, consumer adoption, incubation, and pre-IPO guidance. He also served as chief marketing officer of Cyber Operations, a technology research and development firm conducting military and government initiatives, and vice president and director of marketing for Ketchum, a global Top 20 advertising agency, where he ran global new business. Pay By Touch is the global leader of biometric authentication, personalized rewards, and payment solutions.

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Cybertrust Becomes a VISA Qualified QDSC

Virginia-based Cybertrust has been recognized by VISA USA as a PCI “Qualified Data Security Company”. Cybertrust is authorized to provide Payment Card Industry (PCI) on-site security audits, ensuring merchants and service providers who store, process or transmit payment card data consistently apply PCI measures and controls to defend against data exposure and compromise. As a QDSC, Cybertrust has met stringent requirements of financial stability, technical capability and industry experience, resulting in the qualification of Quality Data Security Professionals (QDSPs) authorized to perform PCI Data Security Assessments. Cybertrust is the global information security specialist.

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Railway Rewards Card Launched in India

India’s SBI Card has formed an alliance with the Indian Railway Catering and Tourism Corporation to launch a co-branded VISA card. Passengers will be able to use the “SBI Railway Card” to book tickets online and accumulate points under the new frequent travel program. The new card also features a specially-commissioned exclusive sketch by renowned Indian cartoonist, Shri R K Laxman. SBI Card is a joint venture between GE Money and the State Bank of India. SBI Cards has more than 2.3 million cards-in-force and is India’s largest VISA card issuer. IRCTC is the world’s second-largest railway and the world’s largest employer with 1.54 million employees. Indian Railways carries over 14 million passengers daily.

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MobileLime Upgrades its NFC Payment Platform

Boston-based MobileLime has introduced a next generation platform for its “Near Field Communication” solution that enables consumers to get rewards and pay for purchases by waving their cell phone over a contactless reader. Users with an NFC compatible phone will just click the lime from the menu screen, choose the credit card they want to use and wave their phone over the contactless reader that’s integrated with the point of sale system at checkout. For added security, the user can configure a PIN required to complete each transaction. With the simple shop ‘n go technology, consumers can automatically redeem Clip ‘n Go mobile coupons, get rewards and pay for purchases at their favorite merchants. MobileLime is the first U.S.-based company to turn the mobile phone into a marketing, loyalty and payment device.

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AmEx Leads in 2005 Volume & Growth

The top three volume leaders collectively topped $900 billion in gross dollar volume last year. American Express ranked as #1 posting during 2005 with more than $350 billion in GDV, a nearly 15% increase over 2004. Volume for Chase gained more than 6% while Citibank posted about an 8% gain.

TOP THREE VOLUME LEADERS
2005 GDV ($ billions)
2005 2004 CHNG
American Express $350.1 $304.8 +14.9%
JPM Chase $301.9 $283.7 + 6.4%
Citigroup $285.6 $264.6 + 7.9%
Source: CardData (www.carddata.com)

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TI Gets PayPass Certification for its Card Inlay

Dallas-based Texas Instruments has been certified for all three components of “MasterCard PayPass” conformity requirements for its solution that incorporates a secure, low-power microprocessor with an embedded “PayPass” application and a small-size radio frequency antenna, into a thin, PVC pre-laminate sheet that can be easily integrated into standard card manufacturing production processes.

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HSBC USA Profits Down 22% in 2005

HSBC USA reported net income of $976 million for 2005 compared to $1,258 million for 2004. The reduction in pre-tax income includes two meaningful inter-HSBC accounting events, both of which are eliminated upon consolidation. About $451 million of pre-tax premium amortization costs were recorded in 2005 on the private label credit card portfolio purchased from HSBC Finance Corporation at year-end 2004. Also, 2004 results included gains from the sale of credit card relationships to HSBC Finance Corporation of approximately $99 million. These transactions comprise the most significant factors in the year-to-year reduction in pre-tax income. The addition of the private label credit card portfolio significantly increased year-over-year revenues, provisions for credit losses and operating expenses. For complete details on HSBC’s latest performance, visit CardData ([www.carddata.com][1]).

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

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USA Technologies Now Trades as USAT

Pennsylvania-based USA Technologies is now trading under the ticker symbol “USAT” on the “Nasdaq Over-The-Counter Bulletin Board,” as a result of the recent reverse stock split. As a result of the reverse stock split, the Company now has approximately 5 million shares of common stock outstanding, and is trading at approximately $11.00 per share. USA Technologies is a leader in the networking of wireless non-cash transactions, associated financial/network services and energy management.

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BofA Hires a Head of Payments and Receipts

Bank of America has hired Len Heckwolf, formerly with JPMorgan Chase, as head of its new Payments and Receipts Product Management Group within the Global Treasury Services division. While at JPMorgan Chase (JPMC), Heckwolf led Consumer Payments Solutions, a business unit within JPMC’s treasury services unit that delivered ACH, national retail lockbox and consumer payments across the JPMC franchise. He also built a product organization focused on the middle market and commercial bank segments. In his 23-year career with JPMC, Heckwolf managed numerous product and operations businesses, including controlled disbursement, funds transfer, ACH, online bill payment, distributed capture, Electronic Data Interchange (EDI) and retail lockbox.

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