Citi to Rejigger its Global Consumer Group

Charles Prince, Citigroup’s CEO, yesterday 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. Prince said the new structure will enable the company to better focus on customer’s needs in an integrated fashion across all product lines and more effectively respond to the specific opportunities in markets at different stages in their development. Last month, Citigroup announced that its President, COO and Board member Robert Willumstad will be leaving next month after he was reportedly disappointed with not receiving the CEO position to succeed Sanford Weill. Citigroup recently reported that second quarter profits for its credit card business in North America inched up by a mere 1% to $861 million. Credit card outstandings for North America also grew a modest 1% over 2Q/04 to $139.8 billion. Citi’s account base at the end of the second quarter declined by 1.6 million accounts from the prior quarter and was down 2% from one-year ago. (CF Library 7/15/05; 7/18/05)

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Three Retailers License Card Fraud Patent

Coldwater Creek, The Dress Barn and Whitehall Jewellers have signed non-exclusive licenses with Acacia Research’s Financial Systems Innovation to cover a patent that applies to credit card fraud protection technology. The patented technology includes an electronic card reader, and the generation and use of a transaction number, which specifically identifies each transaction processed within the system. As a result, the retailer does not necessarily have to print detailed information concerning the cardholder’s identity or account number on the customer’s receipt. Acacia controls 31 patent portfolios, which include over 120 U.S. patents, and certain foreign counterparts, covering technologies used in a wide variety of industries.

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Paypro and Major Payment Systems Team

Fort Worth, TX-based Paypro and Dallas-based Major Payment Systems have partnered to develop and implement various programs including: payroll, money transfer and multi-wallet card products. Paypro’s stored value debit cards are sold under the brand names CHEXCARD and MYBANKCARD to businesses, governmental agencies and individuals. Major Payment Systems, LLC. is a privately held subsidiary of software engineering and communications firm Major Financial Services, Inc.

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Card Debt Sets New Record but Volume Slows

Credit card balances hit a record $A31.4 billion in June, a 13.4% gain
over year-ago levels. Gross dollar volume on credit cards was flat
sequentially and up 6.0% year-over-year. Credit card volume has been
largely sluggish over the past year, impacted by new rules that give
merchants the right to pass on their card fees directly to consumers. In
May, credit card volume was up 10.6%. Credit card balances at the end of
May were A$30.8 billion, compared to A$30.6 billion in April and A$27.7
billion for June 2004. Gross dollar volume on credit card and charge
cards in June was A$14.2 billion. Based on data from the Reserve Bank of
Australia, consumers charged A$13.2 billion in purchases on
credit/charge cards during June, compared to A$12.4 billion one-year
ago. Card credit limits reached A$86.4 billion at the end of June,
compared to A$76.6 billion for June 2004. There are currently 12.1
million credit card and charge card accounts in Australia, compared to
11.3 million one-year ago.

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Sears Settles a 2003 FCRA Lawsuit

Sears Holdings has agreed to settle a lawsuit for allegedly violating the “Fair Credit Reporting Act.” The settlement, made public last week via the U.S. District Court – Central District of California, could involve as much as $34.5 million. The class-action lawsuit, filed in 2003, charged that Sears illegally accessed the credit files of customers after their accounts were sold to collection agencies. The time period covered ran from October 2002 through May 2003. Reportedly, as many as 2.3 million customers may be entitled to discount coupons ranging from $10 to $15, under terms of the August 16th settlement. Sears did not admit any wrongdoing in the settlement.

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Micro Payments Conference is Scheduled

Massachusettes-based Peppercoin has scheduled its “Third Annual Micro and Small Payments Conference” in New York City on December 6th. This year’s conference theme is “Building the World of Small Payments” and will focus on the growing small payments and micropayments opportunities in the physical, digital and mobile marketplaces. Peppercoin’s small payment products help merchants, banks, and other payments companies build market adoption quickly.

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GECF Lands the QVC Card from HSBC

After losing its private label credit card contract with QVC to Household (now HSBC) five years ago, GE Consumer Finance announced they have signed a deal to issue the card again. The private label “QCard” will be offered to QVC customers in the U.S. QVC says it chose GECF because it offered better Web-based enhancements. QVC markets a wide variety of brand name products to approximately 87 million American homes.

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FAST in Talks to Acquire Car-Tel

Montreal-based Financial Access Solutions Technology, a specialist in POS, card products and transactional software solutions has entered discussions to acquire Car-Tel Distributions, a $30 million per year payment card distribution company. Financial Access Solutions Technology Inc. provides transactional software solutions, markets point-of-sale (POS) terminals, software and prepaid debit and credit cards.

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CO-OP Signs its First Montana Member

Montana’s Missoula FCU has signed an agreement to become the first CO-OP Network member credit union in the state, with CO-OP providing access to 20,000 surcharge-free ATMs nationwide and processing for all of the credit union’s EFT transactions. With an asset size of $212 million and more than four percent of the state’s population as members, MFCU is Montana’s second largest credit union. CO-OP Network is wholly-owned by its credit union shareholders with 1,836 credit union members, more than 20,000 surcharge-free ATMs, 92 million-plus monthly transactions and 23 million cardholders.

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Major Restaurant to Deploy JCB’s QUICPay

The Royal Group, a major restaurant chain in Japan, will be phasing in “QUICPay” acceptance during October. With all Royal Host and Sizzler restaurants nationwide included, 300 locations will be offering JCB’s contactless payment solution. “QUICPay,” a contactless payment solution, was launched by JCB in 2003. A part of the customer’s existing credit limit is assigned to a contactless IC chip, which may be embedded in a plastic card or in a mobile phone handset. “QUICPay” purchases are linked to the cardholder’s existing JCB credit card account.

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CyberSource Names Cruickshank to its Board

CyberSource has named Scott Cruickshank, formerly with Paymentech, First Data Merchant Services and MasterCard, to its board of directors. As Qsent president and chief operating officer, Cruickshank oversees sales, marketing, customer care and all operational functions of the company. Prior to Qsent, Mr. Cruickshank served as chief marketing officer at Paymentech where he led the company’s sales, customer care, marketing and service operations functions. CyberSource Corporation is a provider of electronic payment and risk management solutions.

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I.C.E Second Quarter Revenues Up 11%

International Card Establishment reported net revenue of $3.9 million, as compared to net revenues of $3.5 million for 2Q/04. For the quarter the company reported net losses of $145,101. I.C.E. became a full fledged processor in May. The Company is projecting $25 million in revenue for 2005 and reaching profitable operations by year end. I.C.E. also markets a proprietary “Smart Card”-based system through its wholly-owned Neos Merchant Solutions subsidiary that enables merchants to offer store-branded gift and loyalty cards. For complete details on I.C.E.’s latest results visit CardData (www.carddata.com)

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