Cardinal Offers a New Payment Option

CardinalCommerce is partnering with MODASolutions, a payment and order processing provider, to offer “SECURE-eBill,” a payment option that enables consumers to shop online and pay from their online banking account. When shoppers click on the SECURE-eBill option at checkout, an e-mail invoice (the e-Bill) is sent confirming their purchase. Consumers then pay the invoice using their secure online checking account, just as they would pay their utility bills. Unlike credit card and electronic check purchases, SECURE-eBill never requires the disclosure of consumer’s personal or financial information over the Internet. MODASolutions provides payment and order processing capabilities that link online banking with online shopping to reduce the risk of e-commerce transactions for consumers and merchants. CardinalCommerce Corporation is a leading provider of authentication services for banks, merchants, processors and financial service providers.

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January NACM Index Gives Mixed Signals

January’s “Credit Manager’s Index” of 53.7 shows the economy is reasonably strong but it also shows a worrisome downward trend as it is also down substantially from November’s 57.4 and three of the Index’s ten components are now below 50. The consumer has been the offsetting factor, which has kept the economy growing and the CMI above 50, but consumers could hit a rough patch if their two sources of funding dry up financing from home equity and credit cards, and incomes, which are falling below consumption. The overall picture suggests that business conditions could weaken in the spring, given the possibility of a consumer slowdown and the trends in the CMI. The CMI, a monthly survey of the business economy from the standpoint of commercial credit and collections rates favorable and unfavorable factors in the monthly business cycle.

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Credit Utilization Drops with Higher Scores

A new study reveals that consumers with scores less than 660 had a significantly higher incidence of late payments as well as higher debt usage than those consumers with scores of 720 or greater. While those consumers in the higher scoring group had higher debt balances, they generally utilized less of the credit available to them. The analysis by Experian Consumer Direct is based upon a nationwide sampling of three million consumer credit profiles.

Consumers Consumers
less than 660 720 or greater
Average monthly payment $291 $724
Average debt $6,661 $15,015
Average debt usage 27.7% 17.8%
Average number of late payments 2.32 0.0021
Average number of inquiries 3.07 1.44
Source: Experian Consumer Direct

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Egg’s CEO Gratton Moves On

Egg announced that Paul Gratton, its Chief Executive, will leave Egg
following
Egg’s delisting from the London Stock Exchange. Mark Nancarrow has been
appointed CEO and will assume executive responsibility effective
immediately. Kieran Coleman has been appointed Chief Financial Officer.
In December 2005, Prudential announced the terms of a recommended offer
for the whole of the issued and to be issued shares of Egg not already
owned by Prudential Group, representing approximately 21.7% of
the existing issued share capital of Egg. On January 23 2006, Prudential
announced that the Group’s share ownership of Egg had risen to 95.7% of
the entire issued ordinary share capital and that it had applied
to delist Egg on February 20th.

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NOVA Buys First Horizon Merchant Services

Atlanta-based NOVA Information Systems has agreed to acquire the merchant processing business of First Horizon Merchant Services for about $433 million. The credit and debit card processing volume from this agreement is expected to add approximately $25 billion annually to NOVA’s processing business. The deal involves approximately 53,000 merchant locations in the U.S., Canada and Puerto Rico, 400 employees, and FHMS systems, sales and operations centers based in Englewood, CO, and Orlando, FL. First Horizon has also entered into an agreement that will offer NOVA’s merchant processing services to First Horizon’s current and prospective customers. The deal is expected to close in the first quarter. NOVA is a wholly owned subsidiary of U.S. Bancorp. FHMS is a wholly owned subsidiary of First Tennessee Bank and a part of First Horizon National Corp.

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First Data & BNL Launch a JV in Italy

Italy’s Banca Nazionale del Lavoro and First Data have set up a joint venture for merchant acquiring. BNL POSitivity will be headed by Walter Pinci, former VP and Head of Strategic Alliances in Europe for American Express. BNL transferred its merchant acquiring business portfolio to BNL POSitivity and then sold 49% of the share capital to First Data, generating a net capital gain for BNL of approximately $12.1 million. BNL Group is one of the largest Italian banking groups, ranking sixth in terms of total assets.

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Western Union Spin-Off Presents Challenges

First Data’s decision to spin-off Western Union coupled with clear declines in its card issuing business will present significant challenges to the Company. TowerGroup says this sudden spin-off will create a Cinderella story for Western Union, building incremental shareholder value while enabling new investment to recoup its leadership position in the face of widening competition. TowerGroup says FDC is narrowing its focus to core card issuing and acquiring businesses, with a major thrust in international markets. This significant strategic change of direction signals a realignment in the global payments business.

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Consumers Confused About Fee-Free ATM Access

A new survey by Which? reveals nearly 50% of bank customers are
confused about whether they can use the Big Four banks’ (Barclays, HSBC,
Lloyds TSB and NatWest) cashpoints for free. Consumers were surveyed
whether they’d be charged to use cashpoints
at each of 15 major banks (but not their own bank). For all but two –
Barclays and Lloyds TSB – at least half of the respondents didn’t
know whether or not they’d be charged to use these banks’ machines.
Currently, only two of the 15 banks charge. In both cases the fee is
payable only at some machines and only by other banks’ customers.
Ninety-five percent of the respondents felt that no bank or building
society should charge anyone to use its cashpoints. The same number
wanted all cash machines to make clear, before you put your card in,
whether there would be a charge.

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BNL & FDC

Banca Nazionale del Lavoro and First Data have set up a joint venture for merchant acquiring. BNL POSitivity will be headed by Walter Pinci, former VP and Head of Strategic Alliances in Europe for American Express. BNL transferred its merchant acquiring business portfolio to BNL POSitivity and then sold 49% of the share capital to First Data, generating a net capital gain for BNL of approximately EUR 10 million.
BNL Group is one of the largest Italian banking groups, ranking sixth in
terms of total assets.

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Boston Newspaper Errs; Distributes Card Info

The Boston Globe and Worcester Telegram & Gazette this morning confirmed that credit card numbers were inadvertently printed on the backs of routing slips attached to newspaper bundles that were sent to retailers and newspaper carriers in the Worcester area this past weekend. Information on up to 240,000 customers may have been distributed. The Telegram & Gazette is also notifying its subscribers that routing information for the personal checks of 1,100 subscribers may have been inadvertently released with some of the bundles. Payment information was mistakenly included on the reverse side of individual routing slips that were attached to up to 9,000 bundles of Sunday Telegram & Gazette newspapers. The incident took place when discarded internal reports were inadvertently recycled as the paper for printing the routing slips.

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Cardpoint Reports Q1 Results

Cardpoint has released trading results for the first quarter of its
financial year, having achieved annualised savings of GBP 2.4 million
through headcount reduction following the acquisition of Moneybox.
Conversion of the cash machines acquired from HBOS to the charging model
has now been successfully completed with the migration of almost
300 machines with progress being made on the integration of Moneybox. The company expect further growth in Germany and The Netherlands.

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FreeStar Secures $9.2MM in Financing

FreeStar Technology announced that it has signed private placement
agreements to secure $9.2 million in financing. The terms agreed to
provide for the purchase of 46 million newly issued
shares under Regulations S of restricted common stock at $0.20 per share
and two-year warrants to purchase 14 million shares at a strike price of
$1.50, as well as an additional 36 million warrants at a strike prices
ranging from $2.50 to $8.50. The investors have agreed to pay $4.6
million within seven days of the issuance of the restricted shares and
an additional $4.6 million four months later. The Margaux Group
assisted in arranging the financing transaction. Carl Hessel, chief
executive officer of the Margaux Group, is also a director of FreeStar
Technology.

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