No Borders Signs an EmpaSys Agreement

California-based No Borders has signed a deal to utilize and resell Security Bank’s “EmpaSys” services, including prepaid debit card loading and electronic bill payment. No Borders provides a debit and stored value card platform offered to residents of developing countries and to recent immigrants. Transaction Management is an electronic payment services company providing electronic transaction services and walk-in bill payment services to a nationwide market.

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Prepaid & STV Cards to Hit $257B by 2009

A new report projects that prepaid debit and stored value card transactions will grow to $257 billion by 2009, up from $63 billion in 2004 in the USA. Boston-based Aite Group says that by 2009, prepaid processors will generate $1.8 billion in revenues, up from nearly $500 million in 2005. By 2009, prepaid processing will be as large an industry as the debit card and ATM processing industry was in 2004. Aite says prepaid debit card (or open loop prepaid card) transactions will amount to about $150 billion transactions by 2009, up from $12.8 billion in 2004. The Aite report reviews the market opportunity offered by prepaid cards, the regulatory framework, the competitive landscape of processors and non-bank marketers and profiles 15 competitors.

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ADS Signs Carter Lumber to a Card Deal

Alliance Data Systems has signed five-year agreements with Carter Lumber and its 240 stores in 10 states to provide integrated commercial credit card and consumer private label credit card programs, as well as payment processing services. Alliance Data Systems is a leading provider of transaction services, credit services and marketing services, managing over 105 million consumer relationships. Carter Lumber operates 240 stores in 10 states and has annual sales of $675 million.

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First Data Names a New CTO

First Data has hired David Dibble, formerly the managing director in the JPMorgan Chase technology organization, as CTO. As CTO, Dibble will be responsible for all IT development activities and his team will focus on identifying, creating and implementing technologies that drive customer solutions. At JPMorgan Chase, he was responsible for defining and implementing a global data center strategy as well as critical system integration projects associated with major acquisitions. First Data Corp. is a provider of electronic commerce and payment solutions for businesses and consumers worldwide, serving 4.1 million merchant locations, 1,400 card issuers and millions of consumers.

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MS-based Triton Resumes Operations

After a two-week shut-down due to Hurricane Katrina, MS-based Triton began its first full day of business this week. The ATM manufacturer says 80% of its employee base reported for work on Monday. Production lines were up and running and shipped 25 units by the end of the day. Triton facilities in Long Beach received minor structural damage. Despite the two week interruption, Triton will unveil its newest banking ATM model at a trade show in Beijing as scheduled next week. Triton is the largest provider of off-premise ATMs and ATM management software in North America and has more than 133,000 installations in over 23 countries worldwide.

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CC & STORE CARDS

The Competition Commission has concluded that no real competition exists in the store credit card market. As a result, the CC estimates that British consumers are being bilked between GBP 80 million to GBP 100 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 GBP 2.5 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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Another 1MM PayPass Debit Cards in the Works

MasterCard’s “PayPass” program picked up a major supporter yesterday as HSBC Bank USA announced it will add the contactless payment option to its debit cards. The bank will be the first bank to completely reissue its debit cards to include “PayPass.” HSBC says it expects to upgrade about one million cards by year’s end. Last month, Cleveland-based KeyBank became the first bank in the USA to launch “MasterCard PayPass” debit cards. KeyBank’s consumer and small business debit MasterCard cards as well as its “KeyMiles” reward debit MasterCard cards are now being equipped with “PayPass.” Also during August, Citibank introduced a “MasterCard PayPass” key chain fob for its debit card customers. Citi plans to issue about 2.5 million “PayPass” debit devices. Citi is also planning to test “PayPass” for its credit card customers. (CF Library 8/4/05; 8/25/05)

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US Bank Introduces 3 Lacrosse Affinity Cards

U.S. Bank has introduced three affinity VISA cards for US Lacrosse including a cash back and a reward points card. The card generates revenue to US Lacrosse each time a new card is activated and repeatedly thereafter each time the card is used for everyday purchases. U.S. Bancorp has $204 billion in assets and is the 6th largest financial holding company in the United States.

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Loose Change Card Program Adds Amazon.com

Washington-based Coinstar is expanding its “Coin to Card” program to include Amazon.com gift certificates. The Coin to Card program allows the average American to take the approximately $99 in loose change that is sitting in their house and turn it into clothing, music, books, movies and more from Amazon.com, including many items offered on the site by third party sellers. Coinstar estimates that approximately $10.5 billion in spare change is sitting unused in American households. Coinstar, Inc. is a multi-national company offering self-service coin counting, electronic payment solutions, and entertainment services located at more than 44,000 retail locations. Amazon.com, Inc. offers customers a source to find and discover anything they might want to buy online at the lowest possible prices.

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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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