TSYS Names a Product and Knowledge Executive

TSYS has promoted Kathy Wills to group executive of product and knowledge development, effective immediately. She oversees client education, documentation, team member education, client assessment and consulting, product development, and intranet portal development and administration. In 1981, Ms. Wills joined the division that would later be incorporated as TSYS, serving as the company’s liaison with the major payment associations. Since then, she has played key roles in critical stages of the company’s evolution. Wills was a member of the original TS2 development team, working closely with clients to collect and define the system’s requirements. Later, she developed and refined the processes that govern new client conversions to the processing platform, including supervision of client enhancements and testing. TSYS provides outsourced payment services.

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JCB SWEET CARD

JCB is expanding its women-oriented credit cards with the special launch of the “JCB LINDA Sweet” card. Only 20,000 of the aromatic cards will be issued with applications to be accepted on December 10th. More than 500,000 “JCB LINDA” women-oriented
cards have been issued since the card’s launch in 2002. The “LINDA” concept is backed by the LINDA League, an alliance of product
and service providers that supports women seeking a more beautiful
lifestyle. In addition to the scented “JCB LINDA Sweet Card,” three new card designs will be released next spring. The new designs are being selected by “JCB LINDA” cardholders and others who visit the LINDA web site or call an automated telephone system to vote for their three favorite designs from a field of nine. JCB has 55.14 million cardholders worldwide.

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Relay Capital to Issue Cards to House in a Box

House in a Box and Relay Capital have teamed to issue debit cards and stored value cards to HIB members. Starting January 2006, Relay Capital will begin distribution of the debit and stored value cards. HIB has already launched membership marketing of the Relay Capital program. Relay Capital Corporation develops and markets a wide range of financial services, including pre-paid stored value cards, reward cards, employee payroll cards, gift, retail and affinity group cards, travel cards and fund transfer cards.

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Americans Downshift on Xmas Credit Card Debt

Nearly one-third of Americans plan to use less credit card debt when buying gifts this holiday season, up from 28% who planned to use less debt in 2004. According to the “Cambridge Consumer Credit Index” another 32% do not plan to use credit cards at all this holiday season, down from 38% who swore off plastic last year. The “Index” also asked consumers who plan to use credit cards this holiday season whether they expect to pay off what they owe in full or if they expect to carry balances when the bills arrive in January. About 55% say they expect pay off their balances in full, down by 6 points from 2004. Approximately 41% say they will carry a balance on the credit cards for more than a month, up sharply from 33% year ago. Nearly 4% plan to pay off some credit cards and carry balances on others, down by two percentage points from 2004.

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Pay By Touch Buys Rival BioPay for $82MM

San Francisco-based Pay By Touch has inked a deal to acquire rival VA-based BioPay for $82 million in stock and cash. Pay By Touch has 55 of the top 100 retailers as customers with 7,000 retail stores under contract for biometric payments. BioPay has 1,600 retail implementations. BioPay also has two million enrolled consumers in 42 states and more than $7 billion in transactions processed. Under the terms of the agreement, Pay By Touch expects to acquire all assets of BioPay, including its patent portfolio. Pay By Touch expects to complete the acquisition within the next few weeks.

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Sub-Prime Cardholders May Impact Card ABS

Higher interest rates and an uncertain housing market will likely challenge the stability of the U.S. subprime consumer in 2006. Fitch Ratings says the coming problem could amplify losses. Fitch says mid/subprime borrowers may be forced to draw on previously unused revolving credit lines at a time when household leverage is near all time highs. In addition, these conditions may also serve to intensify competition among lenders. Fitch recently reported that “Sub-prime” charge-offs fell by 43 basis points to 10.73% in September. One-year ago, “sub-prime” charge-offs stood at 15.13%. “Sub-prime” delinquency (60+days) for September fell slightly to 6.53%, but continues to hover at the lowest level in four years. (CF Library 12/01/05)

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E*Trade Program Targets Airline Cardholders

E*Trade Financial has introduced a proprietary, automated credit card balance transfer system which enables customers who are loyal to their branded airline mileage rewards credit cards to enjoy mileage earning benefits without paying interest rates on the balances they carry. The new “E*TRADE Mileage Maximizer Account” program is linked to a competitively priced E*Trade credit account carrying a prime +1.9% APR. The online set-up process provides customers with the opportunity to set their payment preference — pay off the entire balance, a pre-set amount, or a percentage of the new statement balance. Once enrolled, E*Trade’s proprietary balance transfer system monitors the customer’s airline rewards card balance on a daily basis to determine the payment due date. When the system learns of a new payment due date, it schedules a transfer and sends the customer an electronic notification of the planned transfer. Customers may edit or cancel a particular transfer up until the date it is completed. Once the transfer is complete, the system sends the customer an electronic confirmation.

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MC and Peppercoin Gear Up for Micropayments

MasterCard and Peppercoin have signed a LOI to work towards an alliance to accelerate card usage for small payments at the physical point of sale and online. Peppercoin emables consumers to use their credit and debit cards for purchases, including those for $5 or less. MasterCard says consumers in the U.S. make more than 350 billion transactions of less than $5 each year, representing $1.32 trillion in total spending. As part of the deal, merchants who enroll in the Peppercoin micro and small payments program will receive a reduction in Peppercoin fees for their MasterCard transactions.

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Minimum Payment Consumers Double Since 04

About 68% of consumers say they are optimistic about their financial situation in the coming year, including 30% who are “very” optimistic. According to the latest “Experian-Gallup Personal Credit Index” survey, 38% of consumers anticipate paying off all their debt next year. The poll also found that 14% of consumers who have a credit card pay only the minimum amount, in effect using the card as a high-interest loan. In a similar Experian-Gallup poll last December, just 7% of consumers used their credit card that way. Additionally, 36% hope to earn a higher credit score, while just 2% think their score may decline in 2006.

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Gemplus and Axalto Merge to Form Gemalto

The boards of smart card specialists Axalto and Gemplus have unanimously approved a merger of equals to create Gemalto. The $1.1 billion transaction will create a company with annual revenues of $2.1 billion and 11,000 employees. Management of the companies expect to realize joint annualized net operational synergies of approximately $100 million by the third year after closing on a fully phased basis. Alex Mandl, the President & CEO of Gemplus, will assume the position of Executive Chairman and Olivier Piou, CEO of Axalto, will be the CEO of Gemalto. Mr. Mandl and Mr. Piou will jointly constitute the Office of Chairman. Frans Spaargaren will assume the position of Chief Administrative Officer with responsibility for integration, procurement, supply chain and IT and Charles Desmartis will be the CFO of Gemalto. The Board of Directors of the combined entity will be comprised of 11 members, 5 proposed from the current Axalto Board, 5 proposed from the current Board of Gemplus and 1 other independent member will be jointly nominated. Deutsche Bank acted as financial advisor to Axalto and Morgan Stanley as financial advisor to Gemplus.

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Citi and AA Offer Double Miles on AA Purchases

Citibank and American Airlines have launched a promotion to enable “AAdvantage” cardholders to earn double miles for every dollar spent on tickets, upgrades, vacation packages, and “Admirals Club” memberships purchased through American Airlines. AAdvantage program benefits for cardmembers include no blackout dates on AAdvantage award travel and miles that may never expire. In addition, cardmembers are eligible for Reduced Mileage awards, which allow members to redeem AAdvantage awards for fewer miles to select destinations and offers members Personal Business Assistant service, the ability to set spending limits on employee cards, Citi Identity Theft Solutions for small business and Fraud Early Warning.

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PRAA Lands a $75 Million Credit Line

Virginia-based Portfolio Recovery Associates has closed on a new $75 million bank credit line. Portfolio Recovery purchases and manages portfolios of defaulted consumer receivables and provides a broad range of accounts receivable management services. Terms of the new line, which is being led by Bank of America and Wachovia, are generally more advantageous to the Company than its prior line.

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