ORCC Posts 31% Increase in Q3 Profit

Virginia-based Online Resources Corporation reported a 31% increase in net income to $2.4 million on third quarter revenues of $15.3 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $3.5 million, a 34 percent increase compared to $2.6 million in the prior year. EBITDA per share was $0.13, unchanged from the prior year. Online Resources powers Internet financial services for over 800 firms nationwide.

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Card Manufacturing Tops $8 Billion in 2004

For the seventh consecutive year, the North American Region leads the world in the total number of cards manufactured but Europe continues to be the most lucrative market as measured in dollars. The “Seventh Annual Card Manufacturing Global Market Survey” by the International Card Manufacturers Association found that globally there were approximately 13.2 billion cards manufactured last year, a 13% gain over 2003. The global card marketing measure in U.S. dollars increased 33.2% to $8.2 billion. Traditional cards represented 83% of the units and 18% of the dollars, while smart cards increased to 18% in units and 82% in dollars. Financial hologram cards (including those with chips) represented 11.9% of the global card unit market. Non-secure units were up 13% driven by the loyalty and gift card segment.

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Cards Capture 59% of Global Web Purchases

A large survey of 21,100 respondents in 38 markets worldwide has determined that more than 627 million people have shopped online, including over 325 million within the last month. The semi-annual global ACNielsen “Online Consumer Opinion Survey” also found that the world’s biggest online shoppers are in Germany and UK, averaging seven and six purchases respectively in the past month. For most of these online purchases, credit card (59%) or bank transfer (23%) was used to make the payment. In Europe, however, cash-on-delivery (COD) is the 2nd most used payment method following credit card, in markets like Portugal (35%), Greece (31%), Spain (29%) and Italy (28%), while almost half of online shoppers in UK used debit cards. Cash-on-delivery is also a popular payment method used in some Asia Pacific markets, ranking 2nd to credit card in India (29%) and Japan (25%). China is most unique with COD (34%) as the most used payment method, followed by Bank Transfer (31%). Credit card ranks only third (26%) in this market and is followed closely by Money Transfer (23%). Yet when asked about preferred methods, credit card (24%) actually comes second to COD (32%) in China.

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Caen Residents to Test Mobile NFC Payments

The city of Caen in Normandy, France is the setting for a test trial of
Royal Philips “Near Field Communication” technology. A group of 200
Caen residents will use “Samsung D500” mobile phones with an embedded
Philips NFC chip as a means of secure payment in selected retail stores,
parking facilities and famous tourist sites around town in a six-month
trial. Philips will work closely with France Telecom R&D, network
operator Orange, handset manufacturer Samsung and retailers
Groupe LaSer and Vinci Park during the trial. The Caen NFC trial is the
world’s first large scale trial of this emerging technology and will
enable direct feedback to be gathered from mobile operators, retailers
and consumers. NFC was jointly developed by Philips and Sony and is a
combination of contactless identification and interconnection
technologies that enables wireless short-range communication between
mobile devices, consumer electronics, PCs and smart objects. NFC is compatible with Sony’s “FeliCa” card and the broadly established
contactless smart card infrastructure based on “ISO 14443 A,” which is used in Philips’ “MIFARE” technology.

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UK’s OFT Says VISA Interchange is Unfair

The U.K.’s Office of Fair Trading has opined that VISA’s interchange system in the U.K. restricts competition and infringes on the “EC Treaty” and the “Competition Act.” The OFT says that, like the MasterCard domestic “Multilateral Interchange Fee” agreement, the VISA “MIF” agreement leads to an unduly high fee being paid to card issuing banks by merchant acquirers on every transaction. The OFT has dispatched notices to VISA and its U.K. members to solicit a response. Last month, the OFT notified MasterCard of its view on the “MIF” agreement. However, MasterCard took over from its UK members the responsibility for setting default interchange fees on November 18, 2004. The OFT has been deliberating on interchange fee agreements for nearly six years. (CF Library 9/6/05)

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PayPal’s Account Base Expands 53% in Q3

eBay reported that the number of PayPal accounts, excluding closed and locked accounts, rose 53% in the third quarter to a record 86.6 million. The dollar volume of payments initiated through the PayPal system, was a record $6.7 billion in the third quarter, a 44% year-on-year increase and a 3% sequential gain. The number of active accounts hit 24.5 million, its highest level to-date. During the third quarter, PayPal handled $6.67 billion of gross payment volume, compared to $6.47 billion in the prior quarter, and $4.63 billion for 3Q/04. PayPal produced $247.1 million in transaction fees for 3Q/05, a 44% jump over the year-ago quarter. At mid-year, PayPal had 78.9 million accounts, compared to 71.6 million in 1Q/05, and 56.7 million for 3Q/04. During the third quarter, PayPal handled 117.4 million payments, a 4% increase over the prior quarter, and up 41% from 2Q/04. PayPal captured 62% of eBay’s total $10.8 billion in total sales volume during the quarter. PayPal’s 3Q/05 transaction revenue rate was 3.60%, flat year-over-year. The processing expense rate for the third quarter was 1.11%, compared to 1.30% for 3Q/04. PayPal’s transaction loss rate came in at 24 basis points, up 2 basis points from one-year ago. For complete details on eBay/PayPal’s third quarter performance, visit CardData ([www.carddata.com][1]).

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
3Q/04 $4.6 billion 56.7 million
4Q/04 $5.6 billion 63.8 million
1Q/05 $6.2 billion 71.6 million
2Q/05 $6.5 billion 78.9 million
3Q/05 $6.7 billion 86.6 million
SOURCE: CardData (www.carddata.com)

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

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Paymetric Makes Technology Fast 500

Houston-based Paymetric has been ranked #124 on Deloitte & Touche’s “Technology Fast 500 List. Deloitte, one of the nation’s leading professional services organizations, bases its annual ranking on the percentage revenue growth that technology companies achieved over five years from 2000 to 2004. Paymetric assists organizations to leverage payment cards more effectively by integrating buying and selling functions directly into their ERP-enabled business operations.

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GZS Exceeds Earning Goals in 2005

Gesellschaft fur Zahlungssysteme posted $4.1 million in pre-tax
profits for January to September period. This was up sharply from the $2
million in the same period a year earlier. The result was generated on
sales of $85.3 million and total costs of $81.2 million ($93 million).
Group
consolidated results at the end of Q3 – which also include the results
of the individual operating companies easycash GmbH and IRS GmbH – came
in at $7.5 million (- $1.7 million) on sales of $129.5 million and total
costs of $122 million ($147.74 million). Additionally, GZS reduced its
workforce to around 760 staff and continued to cut its cost of materials
sharply. The GZS Group is the leading professional service provider of
cashless and card-based payment systems. The Company offers innovative
solutions in the area of intelligent transaction processing. In 2004,
the GZS processed around one billion transactions, with a card turnover
of some EUR 75.8 billion.

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OFT Says VISA MIF Agreements are Unfair

The U.K.’s Office of Fair Trading has opined that VISA’s interchange
system in the U.K. restricts competition and infringes on the “EC
Treaty” and the “Competition Act.” The OFT says that, like the
MasterCard domestic “Multilateral Interchange Fee” agreement, the VISA
“MIF” agreement leads to an unduly high fee being paid to card issuing
banks by merchant acquirers on every transaction. The OFT has dispatched
notices to VISA and its U.K. members to solicit a response. Last month,
the OFT notified MasterCard of its view on the “MIF” agreement. However,
MasterCard took over from its UK members the responsibility for setting
default interchange fees on November 18, 2004. The OFT has been
deliberating on interchange fee agreements for nearly six years.

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627 Million Shoppers are Online Worldwide

According to a recent AC Nielsen survey, more than 627 million people
have shopped online. Over 135 million consumers
have purchased DVDs, with another nearly 135 million making plane
reservations via the Internet. Europe and North America have the
highest incidence of online shoppers, with Germany, Austria and the UK
topping the list, with at least 95% of Internet users having
purchased online. Germany and UK averaged seven and six purchases
respectively in the past month. In Asia Pacific, South Korea and
Taiwan rank highest, with at least 90% of respondents claiming to
have ever made a purchase online. Latin America registers the lowest
past month purchase, with an average of only three purchases. ACNielsen
is a marketing information provider, offering services in more than 100
markets.

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Hypercom Optimum M2100 Now Available

Hypercom announced that the “Optimum M2100” card payment terminal for merchants and service providers in Europe, the Middle East and Africa is now available. The “M2100” is an always-on, battery-operated,
easy-to-carry terminal that accepts both magnetic stripe and smart
cards. It offers a full range of wireless connectivity options, EMV and
Visa PED security certifications, long battery life, and the ability to
withstand outdoor as well as indoor use. The compact handheld wireless
high-speed device offers fast, secure, mobile point-of-sale transaction
functionality for restaurants, delivery services, car rental companies,
sports stadiums, medical facilities, kiosks and other businesses that
require non-stationary payment systems.

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Chase Card Profits Up 29% Despite Losse

J.P. Morgan Chase reported this morning that credit card profits for the third quarter rose 29% to $541 million while revenues increased 6% to $4.0 billion, compared to one-year ago. However, operating earnings were impacted by a $100 million special provision for Hurricane Katrina credit losses and an additional $100 million provision for credit losses related to increased bankruptcies. Managed card loans of $137.6 billion were up 5% year-on-year, but flat sequentially. Pre-tax income to average managed loans (ROO) was 2.48% for 3Q/05, compared to 2.56% in 2Q/05 and 2.05% for 3Q/04. Excluding the special charge related to Hurricane Katrina, the ROO would have been 2.77%. During the third quarter, Chase opened about three million net new credit card accounts, ending the quarter with 98.2 million cards in-force. Charge volume for 3Q/05 was $76.4 billion, compared to $73.3 billion one-year ago. The managed net charge-off rate for the quarter declined to 4.70%, down from 4.88% in the prior year and 4.87% in the prior quarter. The 30-day managed delinquency rate was 3.39%, down from 3.81% in the prior year but up seasonally from 3.34% in the prior quarter. The 90-day managed delinquency ratio was 1.55%, up slightly from 1.54% in the second quarter. Bank card volume for Chase’s merchant acquiring business was $143.4 billion with 4.9 billion transactions. Chase also reported that it ended the third quarter with 9.1 million debit cards. For complete details on Chase’s third quarter performance, visit CardData ([www.carddata.com][1]).

JPM CHASE HISTORICAL ($billions)
3Q/04 4Q/04 1Q/05 2Q/05 3Q/05
EOP Outstandings: $131.5 135.4 133.4 137.3 137.6
Charge Volume: $ 73.3 75.3 70.3 75.6 76.4
Source: CardData (www.carddata.com)

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

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