Payment Rates Edge Down for the 3rd Month

While payment rates remain historically high there is a downward trend over the past three months. Among credit card-backed securities, November represented the 10th month over the past year in which the payment rate exceeded 18%. The payment rate has averaged 18.6% during the current 12-month period. According to Standard & Poor’s Ratings Services’ “Bank Card Credit Card Quality Index,” the payment rate declined 20 bps to 18.8% in November, compared to 19.0% in October and 19.2% in September. S&P noted that more than three-fourths of the trusts experienced lower payment rates during November. The November payment rate of 18.8% is 140 bps higher than it was during the comparable period in 2004, 140 bps higher than the 2004 average of 17.4% and 240 bps higher than the 2003 average of 16.4%. Additionally, the payment rate averaged 18.7% during the first 11 months of 2005.

November Monthly Payment Rate
2001: 15.4%
2002: 14.7%
2003: 15.6%
2004: 17.4%
2005: 18.8%
Source: Source: Standard & Poor’s Ratings Service

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NCR Wraps Up Tidel ATM Asset Purchase

NCR has completed its acquisition of Tidel’s ATM assets and Mike Hudson, previously EVP and COO of Tidel Engineering, will lead the new NCR “EasyPoint ATM” team that includes Tidel’s ATM business employees. The acquisition will allow for the integration of NCR’s existing EasyPoint ATMs with Tidel’s 3000 Series product line to deliver the most effective self-service technology for retail ATM deployment. In the United States, NCR will sell Tidel ATM products using a separate sales organization, capitalizing on Tidel’s established distribution and product strength in the convenience and retail ATM market segments. Tidel Technologies is a manufacturer of cash security equipment designed for specialty retail marketers.

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ABS Charge-Offs Remain Artificially High

Performance among $388 billion in credit card asset-backed securities for November showed another spike in charge-offs but a sharp decline in delinquency. Yield, which consists primarily of cardholder finance charges, decreased to 18% in November but is 40 bps lower than the 2005 average yield of 18.4% and 40 bps higher than the 2004 average of 17.6%. According to Standard & Poor’s Ratings Services’ “Bank Card Credit Card Quality Index,” charge-offs remained at 7.1% for the second consecutive month, artificially high given bankruptcy filings. However, delinquencies improved from October, dropping to 3.7%, compared to 4.0% in October and 4.5% one-year ago. The November charge-off rate was 80 bps higher than the 2005 average of 6.3% and remains 50 bps higher than the 2004 average of 6.6% and only 10 bps lower than the 2003 average of 7.2%. Consumer bankruptcy filings, which stood at approximately 2 million through November, have decreased substantially since the October 17th effective date.

ABS MONTHLY METRICS
Charge-Offs Delinquency
Sept 5.7% 4.0%
Oct 7.1% 4.0%
Nov 7.1% 3.7%
Source: Standard & Poor’s Ratings Service

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VeriFone’s Vx Solutions Achieves ep2 Certification

VeriFone announced that it has received “ep2” certification for
two members of its “Vx Solutions” family, the “Vx 510” and “Vx 610”
wireless terminals. CCV-jeronimo SA, VeriFone’s international partner
in Switzerland, began installing the countertop and wireless systems at
major retail outlets nationwide in October. The development of the ep2
specification, in order to implement chip-based EMV payment standards
Swiss-wide, is a joint project including Aduno SA, Credit Suisse, Swiss
Post, Telekurs Multipay AG, Telekurs Card Solutions AG, JCB
International Co Ltd, and Verband Elektronischer Zahlungsverkehr VEZ –
CCV – jeronimo (Switzerland) SA provides terminals for debit and credit
cards.

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ICBC Selects Axalto for EMV Card Issuance Project

Axalto announced that its multi-application smart cards “Palmera” has been
selected by ICBC Industrial and Commercial Bank of China for the
world’s first Chinese EMV card issuance project. The Axalto “Palmera” card
supports both Visa and Chinese EMV requirements on a single card and
achieved the first EMV certification issued in China based on the
Chinese EMV debit/ credit specification by People’s Bank of China
in August 2005.

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ExaDigm Launches a New Mate Plus POS Terminal

California-based ExaDigm has launched the “XD2000” terminal, the next generation of its “Mate Plus” POS terminal. The Mate Plus point-of-sale terminal format and interchangeable modems supports IP (Ethernet), WiFi, Cellular and Dial-Up connections and features a fully modular design and PC-based Linux operating system. ExaDigm provides wireless, wired and modular point-of-sale (POS) terminal solutions.

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GE Money SBI VISA Tops 2MM Cards In India

The State Bank of India and GE Money credit card joint venture has topped the two million card customer milestone. The “SBI VISA” program includes the “LG Card,” “Hero Honda Card” and the “Lifestyle Card” according to this week’s issue of CardFlash International. SBI Card also offers a co-branded VISA with four NGOs including the National Association of the Blind, SOS Villages of India, World Wildlife Federation, and Cancer Patients Aid Association. SBI, India’s largest and most trusted bank, has over 14,000 branches nationwide and 6,000 ATMs – the largest ATM network of any bank in Asia outside Japan. The size of the Indian credit cards market is estimated to be about $4 billion and is growing at 35% per year.

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New Report Focuses on Card Growth in Asia

A new report titled “i-modes and Octopi:
Will Asia Reshape the World’s Payment Industry?” indicates the
expansion of payment cards will be concentrated in Japan and China.
A single technology, the “Felica” chip, has given birth to four payment
platforms that both cooperate and compete. They allow consumers to
transact using mobile phones, stored value cards, smart cards and credit
cards. The paper chronicles a “chicken and egg” problem in Asian
markets–where payments systems are beginning to emerge–and provides
insight into the decisions made by members of the Japanese payments
ecosystem, in particular, the decisions that drive both consumer and
merchant acceptance.

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SBI VISA

The State Bank of India and GE Money credit card joint venture has topped the two million card customer milestone. The “SBI VISA” program includes the “LG Card,” “Hero Honda Card” and the “Lifestyle Card.” SBI Card also offers a co-branded VISA with four NGOs including the National Association of the Blind, SOS Villages of India, World Wildlife Federation, and Cancer Patients Aid Association. SBI, India’s largest and most trusted bank, has over 14,000 branches nationwide and 6,000 ATMs – the largest ATM network of any bank in Asia outside Japan.
The size of the Indian credit cards market is estimated to be about $4
billion and is growing at 35% per year.

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EMC Acquires Acxiom’s Information Grid Software

Massachusetts-based EMC Corporation has acquired AR-based Acxiom’s information grid software for an aggregate $30 million and has signed a technology and distribution partnership deal. Under the terms of the agreement, EMC and Acxiom will jointly develop and market an information grid solution to customers as a hosted offering from Acxiom. Additionally, EMC has purchased information grid software from Acxiom, and over time, EMC and Acxiom plan to integrate relevant systems, software, services and data from both companies into a complete product-based information grid solution for customers to deploy within their own enterprise. Acxiom integrates data, services and technology to provide customer and information management solutions.

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EFMARK Premium Armored & Bantek West Merge

EFMARK Premium Armored is merging with Bantek West to create the nation’s largest provider of ATM services for financial institutions. Chicago-based The Edgewater Funds, a minority shareholder in Bantek, will help fund the merger and will become a minority shareholder in the combined company. The companies will operate as wholly owned subsidiaries of a newly formed holding company that will continue to be owned by current shareholders of the companies. The merged companies enhances EFMARK’s “Managed ATM Services” package by consolidating all services under a single provider.

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