JCB Smart Card Launches in Korea

South Korea’s Chohung Bank has introduced the “Chohung 365 BC JCB Card” EMV card. This is the first full-scale launch of a JCB smart card in Korea, according to this week’s CardFlash International. The new card offers “BC” miles redeemable for tickets on all airlines in Korea, the “Korea Train eXpress” mileage program and the “OK cashback” program, which is a major loyalty program affiliated with many national chain stores. A significant advantage is that “Chohung 365 BC JCB” cardholders can choose to have the “T-money” function incorporated into the IC chip, which enables them to use a postpaid “T-money” service on subways and buses in Seoul and other local districts. “T-money” function can also be used to pay admission at amusement parks and other spectator facilities, as well as parking fees. Other benefits include discounts offered at nationwide SK gas stations, major cinemas, hotel discounts of 20 to 50% off, and airline discounts from 5 to 7% off, while purchases of foreign currency receive a 30% discount on the exchange commission at Chohung Bank.

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Citi’s Willumstad Joins the AIG Board

Robert Willumstad, the recently retired President and COO of Citigroup, has joined the Board of Directors of AIG. Willumstad, 60, was a member of the Citigroup Management and Business Heads Committee and of the Citigroup Board of Directors. Previously, Willumstad served as Chairman and Chief Executive Officer of the Global Consumer Group at Citigroup, with responsibility for all of Citigroup’s global consumer businesses, including credit cards, consumer finance and retail banking. Willumstad previously was Vice Chairman of the Global Consumer Group and led Citigroup’s Global Consumer Lending shortly after the merger of Citicorp and Travelers Group in 1998. He is a member of the Board of Directors of Mastercard International. American International Group, Inc. (AIG) is a provider of insurance and financial services.

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Ingenico and TPI Software Partner

Ingenico has partnered with TPI Software to address the payment acceptance needs of mid-sized and smaller retailers that need a low cost PC payment processing software solution. SmartPayments can be used as a non-integrated stand beside solution or integrated with most POS systems, including Microsoft’s new RMS POS software to provide a complete payment and inventory management software. TPI also supports credit card electronic signature capture retrieval with the Ingenico eN-Touch 1000, i6550 and i6770 payment terminals. TPI Software is a provider of payment technologies.

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GECF Profits Rise 21% in 4Q/05

GE reported that profit for its Consumer Finance unit climbed 21% in
the fourth quarter to $770 million as GECF produced revenues of $4.9
billion, a 13.5% increase over 4Q/04. During the quarter, GECF acquired
a majority interest in Keppel Bank, the oldest savings bank in the
Philippines; made a strategic investment in Shenzhen Development Bank,
China’s first publicly traded bank; reached an agreement to acquire Pacific
Retail Finance, a $350 million consumer finance company in New Zealand,
and one of the country’s largest direct to consumer finance operations;
agreed to purchase the credit card assets of Belk, Inc., the United
States’ largest privately owned department store company; and closed the
acquisition of a stake in Garanti bank. For complete details on GE’s
fourth quarter performance, visit CardData (www.carddata.com).

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Late Fees Rise 6% in 2005

Late fees on credit cards increased nearly 6% during 2005 to more than $34 with $39 emerging as the most common fee. Over the past five years late payment fees have jumped by more than 27%, according to CardTrak (www.cardtrak.com). In 1995, the average fee was $13.24 compared to $34.42 today. Most top issuers now charge punitive interest rates around 30%. Citibank’s interest rate charged to delinquent and risky cardholders is now at 31.24%.

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Oyster Signs-Up 100,000 Cardholders in 06

More than 100,000 people have switched to Oyster since the New Year to
take advantage of cheaper or frozen fares. The 2006 Transport for
London fares package encourages people to use an Oyster smartcard rather
than cash as it speeds up the bus network, reduces queues and saves
passengers money on day and single fares. Customers can get/top up
Oyster at more than 2,300 local newsagents; at all Tube station ticket
offices; at the Oyster online shop; over the phone; at all London Travel
Information Centres and at some National Rail ticket offices.

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Alliance One Launches an ATM Promotion

Columbus, OH-based Alliance One, a selective-surcharge ATM group, has launched a program to reimburse the referring credit union’s $250 annual fee for sending new financial institution members its way. If a credit union refers three or more financial institutions that become participants during that same time period, Alliance One will not only reimburse the referring credit union’s fee for 2006, they’ll waive the $250 annual fee through 2010. Any credit union can join Alliance One, regardless of which ATM networks it uses or whether or not it owns machines. Participation costs only $250 a year, with a one-time startup fee. Alliance One is one of the largest non-network-specific ATM alliances in America.

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Citi’s Q4 U.S. Card Profits Drop 60%

Citigroup reported that 4Q/05 profits for its U.S. Cards unit plummeted 60% year-on-year to $444 million due to a $600 million (pre-tax) net credit loss related to the new bankruptcy legislation. U.S. Cards fourth quarter revenue also declined 22% to $2.7 billion due to a customer rewards accounting change and the surge in personal bankruptcies. Q4 credit card outstandings for the U.S. were down 2% to $141.6 billion compared to one-year ago. The figure includes $27.9 billion in private label card outstandings. Purchase and cash advance volume increased 9% year-on-year to $75.8 billion. Citi’s account base at the end of the fourth quarter rose 5% from 4Q/04. At the end of 2005, Citi had 131.2 million accounts in the U.S., Canada and Puerto Rico. Citi’s charge-offs increased from 5.66% in the third quarter to 6.68% for 4Q/05. Charge-offs for bank credit cards rose to 6.61% compared to 5.57% in the third quarter and 5.32% one-year ago. Charge-offs for private label credit cards rose from 6.04% in the third quarter to 6.93% for 4Q/05. Delinquency (90+ days) increased slightly from 1.60% for 3Q/05 to 1.75% for the fourth quarter 2005. Delinquency for bank credit cards edged down by 8 basis points from the year-ago level. For complete details on Citigroup’s 4Q/05 performance, visit CardData ([www.carddata.com][1]).

CITIGROUP
North American Credit Card Net Revenues
4Q/04: $1101 million
1Q/05: $ 778 million
2Q/05: $ 735 million
3Q/05: $ 797 million
4Q/05: $ 444 million
Source: CardData (www.carddata.com

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

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GEMPLUS 4Q/05

Smart card specialist Gemplus International says it now expects
fourth quarter revenues to be about 262 million euros (US$316.2
million). The revised figure is attributed to a quality issue with a
specific chip and overall pricing pressure. It is the second revision in
six weeks as the Company seeks to merge with Axalto. Operating margin
for the fiscal year 2005 is now expected to be around 7% versus 3% in
2004. This compares with the guidance previously provided of
approximately 8%. Gemplus plans to announce its fourth quarter and
fiscal year 2005 results on February 9th before the markets open.

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MasterIndex Shows Strong Consumer Optimism in A/P

MasterCard’S latest “MasterIndex of Consumer Confidence” shows a strong sense of consumer optimism in key Asia/Pacific markets, despite the many existing and emerging economic challenges. Highlights of the latest “MasterIndex” survey include: Vietnam tops the list of markets with a score of 93.1. Consumers in Vietnam continue to remain very highly optimistic, with its current “MasterIndex” at an all-time high due largely to the increasing awareness and knowledge of the “Stock Market”. China (82.3) continues to be highly optimistic, with sentiments on “Quality of Life”, the “Economy” and “Regular Income” remaining at about record high for the market. Singapore (74.8) posts significant gains in consumer confidence compared to six months ago. Singapore consumers are now much more optimistic on factors such as “Employment”, the “Stock Market” and the “Economy”. Japan (63.0) is showing a strong improvement in its overall consumer confidence score. For the first time since the inception of the survey 13 years ago, consumers are optimistic on all five factors and Malaysia’s consumer confidence (68.7) further improves over six months ago, with consumers optimistic about the “Economy” and “Regular Income”.

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