ACS Wins the $45MM OH EBT Food Stamp Contract

Dallas-based Affiliated Computer Services has won a $45 million eight-year contract to provide the Ohio Department of Job and Family Services EBT services for food stamp benefits as the state converts from an offline smart card program to a new online magnetic stripe program. ACS will convert all EBT clients by April 2006. The contract provides EBT transaction processing, project management, retailer management for merchants, a data center, a call center, as well as card reconciliation and settlement. ACS provides business process and information technology.

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Citigroup Reshuffles Some Card Executives

The new co-heads of Citigroup’s Global Consumer Group reshuffled some card executives yesterday. Vik Atal, formerly EVP, Expansion Markets for Citi Cards, will assume responsibility for Citi Cards. Peter Knitzer, formerly EVP, Travel and Business, Citi Cards, will be the Head of Customer Franchise Management for the North America business. Rich Garside, formerly EVP and Chief Operating Officer, Citi Cards, will head the North America O&T function. The Group’s International business structure will remain the same as it is today with Faith Massingale continuing to run International Cards. Joyce Phillips will continue as Head of Japan/Cards and Retail Banking, and Augusto Escalante Juanes will remain as Head of Mexico/Cards. In August, Citigroup’s CEO announced that Marjorie Magner, Chairman and CEO of the company’s Global Consumer Group, will be leaving the company by October 1st. Prince then named Steven Freiberg, Chairman and CEO of Citi Cards and Ajay Banga, President of Retail Banking North America, as co-heads of the Global Consumer Group. Freiberg will lead the North American business (U.S. and Canada) and Banga will lead the International operations. (CF Library 8/23/05)

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Relay Capital to Acquire First Cash Card

Arizona-based Relay Capital is acquiring Canada’s First Cash Card which offers”Maestro-Interac-Cirrus” debit/ATM card. FCC has 3 retail locations that issue and load cards, with an opportunity to expand upwards to 35 locations. The cards can be used at ATMs and point of sale terminals worldwide. Relay Capital Corporation is a developer and marketer of a wide range of prepaid financial services. First Cash Card provides debit cards to the unbanked and underbanked population.

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UK CC Says Store Cards are Not Competitive

The Competition Commission has concluded that no real competition exists in the U.K. store credit card market. As a result, the CC estimates that British consumers are being bilked between $146 million to $183 million per year in excess prices paid for credit and insurance. A provisional findings report was issued today by the CC after the matter was referred by the Office of Fair Trading in March 2004. The CC is required to issue its final report in March 2006. The CC says store card APRs are on average some 10% to 20% higher across the store card market as a whole than they would have been had they reflected providers’ costs, including the cost of capital. The CC concluded that there are features of the store card market that effectively insulate retailers and consumer credit providers from competitive pressures, notably from credit cards and store branded credit cards. There is therefore little competitive pressure either on APRs or insurance. Retailers’ primary concern is to avoid having an APR on their store card which is above those of other store cards. At the same time, consumers’ sensitivity to APR levels and other charges is low. Taken together, this results in store cardholders who take up credit and associated insurance paying more than they would in a fully competitive market. The CC says at the end of 2004, there were almost 14 million active store card accounts, with outstanding balances of about $4.6 billion. The CC found that some 57% of store cardholders who used their card in a particular month took on interest-bearing credit. To correct the competitive situation the CC is considering requiring store issuers to place full information on statements; insert an APR warning notice on store card statements; provide and prominently display facility to pay outstanding balances by direct debit; and separate offer of payment, purchase and price protection insurance.

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MetroPCS Launches a Prepaid VISA Card

Dallas-based wireless communications services provider MetroPCS, along with MetaBank and Galileo Processing, have launched the “MetroPCS Prepaid VISA”. The MetroPCS Visa card is a general purpose reloadable card that enables MetroPCS subscribers to make everyday purchases, pay bills, send and transfer money and receive direct deposits and ATM withdrawals. MetroPCS Communications, Inc. is a provider of wireless communications services. Meta Payment Systems, a division of MetaBank, offers card issuing and program support.

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Citibank & China UnionPay Establish Reciprocity

Citibank yesterday formally inked a deal with China UnionPay, becoming the first global alliance between China’s national bankcard association and an international bank. The alliance will expand the ATM acceptance for cardholders of China UnionPay and Citibank. Chinese holders of CUP cards will now have the convenience of being able to withdraw foreign currency from Citibank ATMs located in more than 50 countries, without needing a dual currency card. Citibank’s international cardholders will in turn have the convenience of access to approximately 8,000 foreign-enabled CUP ATMs when traveling in China. Citibank was the first bank to deploy foreign-card enabled ATMs in China, which it has been doing for more than a decade. Citibank was also the first foreign bank to enter the retail banking business in China in the post-WTO era. In May, China UnionPay sealed a deal with Discover Financial Services to facilitate acceptance of CUP cards in the USA via its “PULSE” network. In return, Discover cards will be accepted in China. There are more than 800 million CUP cards issued in China. (CF Library 5/26/05)

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Second Wave of Bankruptcies Hits the Market

After a one-month decline in personal bankruptcy filings during July, momentum is building again ahead of the October 17th full implementation of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” Fitch Ratings says it sees a second wave of increased personal bankruptcy filings. The Katrina disaster may contribute to the surge. Some lawmakers are seeking a postponement of the new bankruptcy laws. Nevertheless, Fitch now expects full year filings to outpace 2004 totals by more than 6% and for credit card charge-offs to increase measurably in the coming months and into 2006. Through February, personal bankruptcy filings were running 9.6% below 2004’s pace. Since that time, filings increased 12% year-over-year and are now 7% ahead of 2004’s year-to-date pace through the first week in September.

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Peppercoin Powers Rowe’s Digital Jukeboxes

Rowe International is adding credit card acceptance to its digital jukeboxes. The low ticket, pay-per-use transactions will be handled by Peppercoin’s “Small Transaction Suite.” Each Rowe jukebox offers more than 200,000 songs from major music labels. Currently, Rowe’s 230,000 jukeboxes represent 65% of U.S. jukebox market share, and accept in aggregate payments for more than $1 billion annually. Peppercoin says consumers make more than 354 billion cash transactions of less than $5, representing $1.32 trillion in aggregate revenue. Last year, credit and debit transactions under $5 totaled $13.5 billion.

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STANDARD CHARTERED VISA

Standard Chartered announced the launch of “Standard Chartered VISA Credit Card” in the Sultanate of Oman. Initially, the residents of Ruwi & Muscat will be able to apply for the Card, the minimum income required to apply for the card is RO 300 per month. The applicant is not required to hold an account with Standard Chartered Bank in Oman and no salary transfer is required to qualify for the card. Some of the
notable benefits include “Purchase Protection,” “Loss Card Cover,” “Travel Accident Insurance,” “Travel Inconvenience Benefits” and “Photosign” Card. The card also offers special discounts and privileges at selected shopping and dining outlets in Oman. Standard Chartered has 950 locations in more than 50 countries.

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Cap One’s Delinquency Up; Charge-Offs Down

Capital One’s managed delinquency ratio increased for the fourth consecutive month while charge-offs retreated last month. For August, Cap One reported that managed charge-offs dipped by 25 basis points, while delinquency edged upward by 3 basis points. Delinquency increased to 3.69% in August, compared to 3.66% for July, 3.49% for June, 3.43% for May and 3.84% in January. Delinquency one-year ago stood at 3.80%. Charge-offs came in at 3.77% for August, compared to 4.02% in July, 3.96% in June and 3.87% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. At the end of June, Capital One had $83.0 billion in global outstandings. U.S. card outstandings of $46.4 billion were up 2.7%, compared to one-year ago. For complete details on Capital One’s monthly metrics and 2Q/05 performance, visit CardData ([www.carddata.com][1]).

Month Charge-offs Delinquency
Aug 04 3.87% 3.80%
Sep 04 4.18% 3.90%
Oct 04 4.10% 3.94%
Nov 04 4.35% 3.87%
Dec 04 4.63% 3.92%
Jan 05 4.19% 3.84%
Feb 05 3.96% 3.65%
Mar 05 4.35% 3.45%
Apr 05 4.22% 3.37%
May 05 4.10% 3.43%
Jun 05 3.96% 3.49%
Jul 05 4.02% 3.66%
Aug 05 3.77% 3.69%
Source: CardData (www.carddata.com)

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

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HID Rolls Out iClass R90 Reader

HID has introduced the “iCLASS R90 Long Range Reader”. An “iCLASS” card
provides parking lot and building access, as well as vending, POS,
records and logical access. The “R90” features read range distances up to
18 inches with auto- tuning enabling more consistent read ranges and a
“Parking Hold” function that allows connection to a loop detector to
ensure accurate detection of vehicles in parking lanes. The “R90” reads
HID “iCLASS” 13.56 MHz contactless smart cards, any ISO 15693 card serial number (CSN) and is compatible with industry standard Wiegand protocol access control panels. HID manufactures contactless access control cards
and readers for the security industry and pioneered the development of
radio frequency identification technology for physical access
control.

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