FLEXI-RATE VISA

Barclaycard this week launched a new credit card that charges a lower interest
rate to those customers who pay off a higher proportion of their balance each
month. With the new “Barclaycard Flexi-Rate VISA,” cardholders who clear more
than 10% of their balance will be charged an interest rate of 9.9%, those who
pay the minimum 2.5% are charged 16.9%. People who pay between 5.05% and 9.99%
of their monthly balance will be charged 12.9% interest. The new card was
tested as the “Repayment Rewards” card. Last March, Barclaycard began testing
another credit card to encourage responsible debt management. The “Combinations
VISA” comes with a separate line of credit with a lower interest rate and set
repayment terms. Barclaycard has 11.2 million cardholders in the UK. (CFI
Library 9/22/05)

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Card Scammers Settle FTC Charges

A group of U.S. and Canadian telemarketers who targeted consumers with poor credit, offering major credit cards with a $2,500 limit for an advance fee of $197 to $300 have agreed to settle with the FTC. The three Florida corporations and one Canadian corporation agreed to pay $415,000 to settle charges they were selling nonexistent credit cards to U.S. consumers. The firms operated under the names “Royal Credit Solutions,” “Imperial Consumer Services,” and “Beneficial Client Care.” The companies are also subject to a suspended judgment of just over $9 million, the total amount of consumer injury in this case.

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GreenZap Revenues Up 48% in Q4

San Diego-based GreenZap says fourth quarter revenue earnings are already showing a 48% increase over its third quarter driven by credit card processing, an enhanced rewards program and an online store. GreenZap Storez is a value-add for members and feature discounts from merchants like Office Depot, eToys and Enterprise Rent-A-Car. The company is working on phase two of the Storez where the company says preferred merchants will accept a portion of the sale price in WebCash, GreenZap’s rewards dollar, further increasing the savings to its members. As a means to drive membership, GreenZap rewards account holders with up to $50 in WebCash for opening an account.

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Hypercom Names a New CFO

Hypercom has hired Thomas Liguori, current CFO of Iomega Corporation, as SVP/CFO, effective November 14th, while interim CFO Grant Lyon will be departing. Liguori has more than 23 years of experience in corporate financial matters. Previously, Mr. Liguori was Chief Financial Officer of Channell Commercial Corporation, directing all aspects of corporate finance for the company’s operations in the United States, United Kingdom and Australia. He holds a Master’s degree, summa cum laude, in Business Administration with a concentration in Finance from Arizona State University.

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AmEx U.S Card Q3 Profits Rise 25% Y/Y

American Express reported that its U.S. Card Services division posted third quarter net income of $446 million, up 25% year-over-year, as revenues increased 14% to $3.0 billion, compared to 3Q/04. However, expenses for marketing, promotion, rewards and cardholder services rose 18%. Card volume in the U.S. increased 17.8% to $89.0 billion. The total number of domestic cards-in-force grew by 1.0 million from the prior quarter to 42 million cards. Worldwide total card loans grew by 11% to $50.6 billion, compared to 3Q/04. Global delinquency increased slightly to 2.4% compared to 2.3% in the second quarter. Net charge-offs, as a percentage of worldwide loans, declined to 4.0% from 4.1% in prior quarter and the year-ago quarter. AmEx noted that average cardholder spending rose 12% and total cards-in-force were up 9% in the quarter. Starting this quarter, AmEx reported results for U.S. Card Services, International Card & Global Commercial Services, Global Network & Merchant Services and Corporate & Other. For complete details on American Express’ third quarter results, visit CardData ([www.carddata.com][1]).

American Express U.S. Card Portfolio Snapshot
3Q/05 2Q/05 1Q/05 4Q/04 3Q/04 Ann Chng
Volume $89.0b 88.5 79.6 83.4 75.6 +17.8%
Cards 42.0m 41.0 40.3 39.9 38.0 +10.5%
Source: CardData (www.carddata.com)

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

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Certegy Card Services Revenue Up 11%

Certegy reported that third quarter revenue increased 7.7% to $282.8 million as operating income increased 12.1% to $50.0 million. Card Services generated revenue of $166.5 million for the quarter, an increase of 11.4% above the 2004 quarter. North American card transactions increased 5.2%, driven by 5.1% growth in number of cards processed. Internet banking subscribers increased 18.2% and electronic bill payment users increased 31.9%. Institution merchant processing volumes increased 20.8%, driven by 14.0% growth in transactions and higher average ticket. Check Services generated revenue of $116.2 million in the third quarter, an increase of 2.8% over 3Q/04. Certegy says it expects revenue growth in the fourth quarter of approximately 6% to 8%, driven by upper single-digit revenue growth in Card Services and low to mid single-digit growth in Check Services. For complete details on Certegy’s third quarter results, visit CardData ([www.carddata.com][1])

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

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FSV Lands the Former Vital CEO

FSV Payment Systems has hired Jonathan Palmer, former CEO of Vital Processing Services, as president and CEO and has hired Ronald Hynes, formerly of JPMorgan Chase, as EVP of Sales, Marketing and Strategic Development. Palmer currently serves as Chairman and CEO of Lucid Security Corporation, a privately held computer network security company located in suburban Philadelphia. He will continue to serve as Chairman of Lucid. Hynes comes to FSV with more than 15 years of business development and marketing experience, having spent the last six years in the financial services industry. At JPMorgan Chase, he led business development teams within the credit card services group and most recently, for the past two and a half years, has overseen sales, marketing and strategy for Prepaid Solutions.FSV Payment Systems provides prepaid and automated epayments solutions direct to businesses and large employers and to financial institutions as a strategic business partner of Fiserv, Inc.

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American Airlines Gift Card Coming

American Airlines is introducing the “American Airlines Gift Card,” in $50 and $100 denominations, on November 1st. The cards will be available at thousands of participating grocery stores, including Tom Thumb, Randalls, Vons, Pavilions, Carrs, Safeway, Genuardi’s and Dominick’s. Up to eight gift cards may be applied to the purchase of a single ticket. The gift cards do not expire and have no fees to keep the card active.

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Metris Profits Jump 65% from Prior Q

Metris Companies/Direct Merchants Credit Card Bank reported net income of $53.7 million for the third quarter, down 13% from the year ago quarter, but up 65% sequentially. The sub-prime specialist says the results were driven by improved asset quality and cash flows, which enabled the Company to eliminate all of its corporate debt and invest more heavily in new marketing programs. New account originations for the quarter were 249,000 compared to 165,000 in the second quarter. Gross active accounts remained steady at 2.2 million. Managed credit card loans were $5.8 billion, compared to $6.8 billion for 3Q/04. The managed 60-day delinquency rate was 8.0%, compared to 9.7% for the year ago quarter. The managed net charge-off rate was 12.0% for the third quarter, compared to 14.6% for the third quarter of 2004. Metris and HSBC are currently in the process of merging and expect to complete the deal in the fourth quarter. For complete details on Metris’ third quarter results, visit CardData ([www.carddata.com][1])

METRIS NET INCOME
3Q/04: $61.8 million
4Q/04: $ 0.7 million
1Q/05: $27.6 million
2Q/05: $32.5 million
3Q/05: $53.7 million
Source: CardData (www.carddata.com)

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

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Rewards Network Q3 Revenues Fall 19%

Chicago-based Rewards Network reported third quarter sales of $70.3 million, a 19% decrease from 3Q/04. The Company says the decline was caused primarily by a lower restaurant merchant count and declines in the sales yield, the number of transactions and the average dining transaction amount. Operating revenues declined about 15% to $18.4 million. At the end of the third quarter, Rewards Network had 3.5 million active member accounts and 10,259 restaurants in its programs. The Company offers loyalty and rewards programs via credit cards to the restaurant industry. For complete details on Rewards Network’s third quarter results, visit CardData ([www.carddata.com][1])

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

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OPC Receives Louisiana Contract

The Louisiana Department of Revenue has awarded a contract to Official Payments for electronic tax payment processing services via payment cards. Taxpayers will be able to make secure electronic payments for their individual income taxes and certain business taxes using an American Express, Discover, MasterCard or VISA debit or credit card via the Web or by phone. Louisiana, the 22nd largest state in terms of population, collected approximately $2.2 billion in individual income taxes, and approximately $2.6 billion in sales, corporation income and franchise business taxes, in its last fiscal year. Official Payments provides electronic payment services for the IRS, 26 states, the District of Columbia and 2,000 local government clients nationwide.

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UBC Ranks #19 on the Inc. 500

New Jersey-based United Bank Card ranked 19th on the latest “Inc Magazine 500 Fastest-Growing Private Companies.” This accomplishment is the result of achieving revenue growth of 2,319% from 2001 to 2004. United Bank Card, Inc. is a payment and transaction processor serving businesses nationwide, handling the merchant accounts for over 40,000 locations and processes in excess of 3 billion dollars annually.

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