Merchant Link Names a New President

Maryland-based Merchant Link has hired Christopher Justice, formerly with First Data as SVP of Advanced Solutions and leader of the National Sales Team, as President. Merchant Link LLC is a network-based gateway company providing solutions to the integrated point-of-sale industry, including high-end technical support and data transport services. Merchant Link currently supports more than 25,000 hotels, restaurants, ballparks, and other venues, and maintains connectivity to the major US credit card processors.

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Charlotte Russe Licenses a Fraud System

Charlotte Russe Holding, which operates 408 retail stores, has inked a license for credit card fraud protection technology with Acacia Research The patented technology generally relates to a computerized system for protecting retailers and consumers engaged in credit card, check card, and debit transactions. The system includes an electronic card reader, and the generation and use of a transaction number, which specifically identifies each transaction processed within the system. As a result, the retailer does not necessarily have to print detailed information concerning the cardholder’s identity or account number on the customer’s receipt.

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Mashreqbank Launches Black Platinum Card

Mashreqbank, in partnership with MasterCard International and VISA
International has launched the UAE’s first “Black Platinum” card.
The new “Platinum Card” is fully chip-enabled and incorporates all the
features of premium credit cards plus numerous loyalty rewards for
shoppers. Cardholders will receive exclusive vouchers for
shopping and dining. Mashreqbank was the first bank to introduce credit
cards in the UAE and also is the only bank in the country offering the
benefits of fully enabled microchip card technology, which it introduced
to the market with the launch of “WOW! Credit Cards” in 2004.

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Quantum RewardsCard Breaks New Ground

NV-based Quantum Loyalty Systems has introduced a gift card that marketers can offer to reward their customers. The card is branded with either MasterCard, VISA or Quantum’s private network. The new “Quantum RewardsCard” offers company sponsors the advantage of paying for only the associated rewards when their customers activate the card. Rewards distributed and not activated incur no expense to the sponsor. Moreover, sponsoring companies need fund only the expected activation amount up-front, not the full perceived value of a specific program; have access to valuable consumer market information that is obtained when the card holder activates their card; have no monthly service fees or hidden charges; and the reward program can be delivered in product packaging, handed out, mailed, or made available to customers online. The card currently has patents pending.

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Dresser Wayne Intros Next Gen Dispensers

TX-based Dresser Wayne this week unveiled a new fuel dispenser that goes beyond payment card acceptance by enabling consumers to buy a cup of coffee, a lottery ticket, download an MP3, check traffic reports and run a diagnostics report on their car, all at the pump. The new “Ovation iX” dispenser is the only open architecture solution in the retail fuel dispensing industry and is a member of the “Microsoft Windows Embedded Partner Program.” “iX Media,” a standard offering in the “Ovation iX” dispenser, allows consumers to watch full-motion, site-specific video commercials on a dispenser-integrated 10.4-inch color display with built-in speaker. Fuel customers can print customized coupons at the dispenser for in-store specials and other retail promotions.

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INTERAC Direct Payment Sets a New Record

Canada’s INTERAC Direct Payment set a new record for transactions on December 23rd with 15.5 million transactions processed on a single day, an 18% increase over the previous record set in 2004. There are more than 35 million debit cards in circulation in Canada, accounting for more than four billion IDP transactions in 2005, according to this week’s issue of CardFlash International. Interac is a not-for-profit organization composed of 95 financial members.

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Etihad Airways Joins UATP Network

Etihad Airways has joined the UATP network as a new merchant airline.
Etihad now accepts all UATP corporate cards, issued by 14 airlines
worldwide and accepted as form of payment by travel agencies. Founded
in 2003 as the National Airline of the United Arab Emirates, Etihad
Airways flies to over 16 destinations across Europe, Asia and the Middle
East. UATP accounts are accepted as a form of payment for corporate
business travel by more than 200 airlines worldwide.

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Axalto Palmera Lands Chinese EMV Project

Axalto announced that its multi-application “Palmera” smart cards have 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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Washington Trust Names Two Card Execs

Rhode Island-based Washington Trust Company has promoted Stephen Bessette to oversee its merchant card services business and Michael Rauh to oversee online banking, ATMs and debit cards. Bessette joined Washington Trust in February 1997 and previously served as president of New England Pacific Mortgage Company. Rauh is also responsible for coordinating sales and business development activities for the Bank’s product and service lines, and the development and implementation of sales measurement and reporting systems. The Washington Trust Company offers a full range of financial services, including wealth management, through its offices located in Rhode Island, southeastern Connecticut and Massachusettes.

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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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