Discover Card Bonds Feel the Bankruptcy Spike

Morgan Stanley says that based on currently available information, Discover expects that the pre-tax charges in the fourth quarter of fiscal 2005 resulting from additional bankruptcy notices will increase by $200 to $250 million over those experienced in the third quarter of fiscal 2005. This estimate includes a decrease in the value of the Company’s residual interest in credit card securitizations and additional loan loss provisions for owned credit card receivables. The Company believes that this range represents in large part an acceleration, triggered by the new bankruptcy legislation, of charge-offs that otherwise would have occurred in the ordinary course of business in fiscal 2006. While the Company expects a decline in excess spread in the near term, the Company does not expect that an early amortization event will occur with respect to any outstanding DCMT term asset-backed securities.

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Bankruptcy Filings Set a New Record in Sept

Personal bankruptcy petitions in September set an all-time high, topping 200,000. It is expected that filings for the first two weeks of October may also have exceeded 200,000. New bankruptcy reform laws took effect on October 17th. According to the National Bankruptcy Research Center (a/k/a/ Lindquist Consulting), bankruptcy filings industry-wide increased by approximately ten-fold in the week preceding the legislation’s effective date compared with typical levels. The September year-over-year increase was more than 70,000 filings. About 205,000 filings were made during September, compared to 155,836 for August and 127,664 one-year ago. In the first nine months of this year, there have been 1,324,385 personal bankruptcy filings.

Monthly Filings Historical
Sep 04: 127,664
Oct 04: 133,404
Nov 04: 116,952
Dec 04: 113,957
Jan 05: 99,705
Feb 05: 103,457
Mar 05: 165,459
Apr 05: 170,130
May 05: 142,915
Jun 05: 145,946
Jul 05: 136,074
Aug 05: 155,836
Sep 05: 204,863
Source: CardData (www.carddata.com)

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Voyager Names a New Natl Account Manager

U.S. Bank Voyager Fleet Systems has named Adam Bruttell, formerly with Citibank,as national account manager for Voyager. Bruttell will be responsible for building Voyager’s card acceptance network and managing the ongoing process flow with existing vendors that provide maintenance, service and repairs to Voyager’s fleet customers. Bruttell brings with him a wealth of experience managing processes and people in the oil and gas card industry. U.S. Bank Voyager Fleet Systems Inc. is a leading provider of the universal fleet fueling and maintenance card for over 1.5 million vehicles.

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The Giving Card to Go Public on the OTC

CorpHQ Inc. and The Giving Card, Inc. have signed a $1 million deal with SG Martin Securities to qualify The Giving Card for trading on the OTC-Pink Sheets market. TGC’s proprietary affinity credit card program platform is designed to help merchants attract and retain customers, to enable non-profit organizations to generate donations, and to allow shoppers to make charitable tax-deductible donations to the organization of their choice by using credit and debit cards. CorpHQ, Inc. provides money and management to high caliber early stage companies, fast-tracking their growth from startup to profitability.

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VISA Provides a Friendly Experience

“A Friend Indeed” was the winning slogan by Kwai Wai Peng that won her
the RM20,000 cash prize from Visa International at the “20th Matta
International Travel Fair.” Kwai participated in the “Describe
Your VISA Experience” contest after she bought a tour package to
Shanghai with her HSBC Visa card at the recent MITF. During the
fair, visitors who spent a minimum of RM500 on a single receipt with
their VISA cards were entitled to redeem instant gifts of a limited
edition VISA travel bag or a VISA golf umbrella. They were also eligible
to take part in the “Describe Your VISA Experience” contest to win the
RM20,000 cash prize. MITF 2005 attracted more than 80,000 visitors
during the three-day event.

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Coin to Card Adds Borders & Waldenbooks

Coinstar has added Borders Books & Music and Waldenbooks to its selection of gift cards in the “Coin to Card” program. The program allows consumers to convert loose change into gift cards from national retailers and pay no coin counting fee at thousands of Coinstar Centers across the United States. Users then choose their desired gift card or eCertificate and then deposit the loose, unsorted change or bills into the machine. Once the change is counted, Coinstar converts the full value of their deposit to a gift card or eCertificate. Approximately 2,000 Coinstar Centers will offer Borders and Waldenbooks gift cards by the end of 2005. Coinstar is a multi-national company for retailers consisting of self-service coin counting, electronic payment solutions and entertainment services.

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Top 5 Outstandings Grew Less Than 2% in Q3

Managed card loans among the top five U.S. issuers grew a measly 1.9% during the third quarter, compared to one-year ago. However, Bank of America and Chase continue to emerge as market leaders in organic growth. Bank of America posted a 7.8% year-on-year gain in managed outstandings to $59.7 billion. Meanwhile, Chase, the nation’s largest bank credit card issuer, posted a 4.6% annual gain in third quarter outstandings to $137.6 billion. Citi and MBNA both posted negative gains. Discover was flat according to CardData ([www.carddata.com][1])

TOP FIVE U.S. ISSUERS
3Q/05 Managed Outstandings
1. Chase $137.6 billion +4.6%
2. Citi $114.1 billion -1.0%
3. MBNA $ 78.5 billion -1.5%
4. BofA $ 59.7 billion +7.8%
5. Disc $ 47.1 billion NC
TOTAL: $437.0 billion +1.9%
Source: CardData (www.carddata.com)

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

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Sentias and Credit Card Transactions Team

Vancouver-based Sentias Software has teamed with Sherman Oaks, California Credit Card Transactions Inc. to cross sell their services and products. Sentias and CCT began cross selling their services and products on October 1st, 2005 and have already worked together on several customer relationships. CreditCard Transactions is a payment and transaction processor serving businesses nationwide. CCT currently handles the merchant accounts for over 15,000 merchant locations and processing in excess of 1.5 billion dollars annually. Sentias develops multi-lingual web-based business software including Content Management and E-commerce solutions.

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NeTeller Acquires Netinvest for GBP 12.36MM

NETELLER has completed the acquisition of Netinvest
Limited and its wholly owned subsidiary, Netbanx Limited,
an independent payment service provider for GBP 12.36 million. Netbanx
has relationships with all of the major UK acquiring banks, as well as
MasterCard, Visa, American Express, Diners Club, Pago and Euroconex and
currently processes approximately GBP 10 million of credit card payments
each month with over 1,500 merchants. Netbanx Limited reported revenues
for the 18 months ended 30 June 2005 of GBP 27,708,385.

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ViVOtech Lands a RBS WorldPay Executive

California-based ViVOtech has hired Christopher Ong, formerly with Royal Bank of Scotland’s WorldPay subsidiary, as senior director of sales for the Asia Pacific region. Ong brings to ViVOtech more than 11 years of sales management experience from the financial industry. He will be responsible for expanding the sales infrastructure for ViVOtech in the Asia Pacific region. ViVOtech provides an end-to-end transaction platform that allows consumers to make Contactless payments with radio frequency-enabled credit cards, debit cards, access cards, key fobs, and NFC enabled mobile devices.

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ICMA Elects New President and a VP

The International Card Manufacturers Association Board of Directors has elected Herbert Grun of Giesecke & Devrient as the association’s new president and Fernando Bautista of Thomas Greg & Sons has been elected to serve as VP of ICMA. A long-time Board member, Grun has chaired and presented several ICMA workshops, and continues to play an integral role in expanding the association’s membership on a global level. Bautista has been a principal member of ICMA since 1992 and has served on the ICMA Board of Directors, representing the Latin American region, for the past several years. ICMA is a non-profit association comprised of plastic card manufacturers, personalizers and related industry participants.

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VISA’s V Pay Spreads Across Europe

VISA Europe has completed a series of “V PAY” transactions across Germany, France, Greece, Turkey, Norway, Finland, Poland, Portugal, Hungary, Estonia and Lithuania, bringing the number to 21 of countries where “V PAY” has successfully been tested, with 31 acquirers across Europe. “V PAY” is an EMV chip and PIN only debit product and is designed to be in line with the “SEPA Cards Framework,” advocated by the European Central Bank and the European Payments Council with the option to carry the “PLUS” mark enabling global access to ATMs. “V PAY” is compatible with all EMV compliant terminals and has its own acceptance mark.

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