FSV Payment Systems and Meta Launch GiftIT

FSV Payment Systems and Meta Payment Systems have teamed to launch “GiftIT”, a turnkey gift card solution. The GiftIT program allows financial institutions to sell loadable Visa or MasterCard-branded debit cards to their customers for year-round gift-giving. FSV Payment Systems offers host-based FSA,gift, payroll card, and other MarketReady stored-value ePayments solutions as a strategic business partner of Fiserv, Inc. Meta Payment Systems, a division of MetaBank, offers card issuing and program support.

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Meijer Stores Accepts PayPass and Launches a MC

Meijer Stores is set to become the first super center chain in the U.S. to accept MasterCard “PayPass” as a contactless payment option at all of its 171 locations. Meijer also expects to have all of its gas pumps equipped for “PayPass” this fall. In conjunction with GE Consumer Finance, Meijer is planning to launch a PayPass-enabled “Meijer Platinum MasterCard” soon. Cardholders will accrue two points for each dollar spent in-store and one point for each dollar spent elsewhere. Cardholders can also earn additional points through special seasonal offers and fuel purchases. “PayPass” is currently accepted at participating McDonald’s, 7-Eleven stores, CVS, Ritz Camera Centers, Boater’s World Marine Centers, Sheetz and Regal Entertainment Group theatres. Meijer Stores are located in Illinois, Indiana, Kentucky, Michigan and Ohio.

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Intelius Expands “IDWatch” Monitoring

Washington-based Intelius has expanded its “IDWatch” service to monitor public forums, chat rooms, Web sites and other sources to detect the use, sale and trade of identity-related data. Intelius has already identified more than two million compromised credit and debit cards and is adding thousands of new cards to its database every day. Intelius provides instant, innovative and affordable research services and background information for personal safety.

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Variable Card Rates Jump Ahead of Fixed Rates

Less than twelve months ago variable interest rate credit cards were almost a full percentage point lower than their fixed rate counterparts. However, during the same period, the prime rate, which most variable rate credit cards are based on, has climbed from 4.50% to 6.50%. Today, variable rate cards carry an average go-to interest rate of 14.24% versus 13.76% for the average fixed rate cards. In August 2004, the average go-to variable interest rate was 11.89% versus 12.85% for fixed rate cards. (The averages do not include introductory or punitive interest rates.) Due to the rapid rise in the prime rate, many top issuers have abandoned their fixed rate offers, switching back to variable rates, according to CardTrak ([www.cardtrak.com][1]). In 2001, slightly more than half of all credit cards carried fixed interest rates. Today, nearly three-quarters carry variable interest rates.

CREDIT CARD INTEREST RATES
Month Prime Fixed Variable
Aug 04 4.50% 12.85% 11.89%
Sep 04 4.75% 12.88% 12.11%
Oct 04 4.75% 13.00% 12.19%
Nov 04 5.00% 13.04% 12.37%
Dec 04 5.25% 13.09% 12.49%
Jan 05 5.25% 13.22% 12.67%
Feb 05 5.50% 13.25% 12.84%
Mar 05 5.75% 13.32% 13.08%
Apr 05 5.75% 13.39% 13.17%
May 05 6.00% 13.48% 13.45%
Jun 05 6.00% 13.59% 13.61%
Jul 05 6.25% 13.64% 13.84%
Aug 05 6.50% 13.76% 14.24%
Source: CardData (www.carddata.com)

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

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A Spyware Keylogger Targets Online Banking

Florida-based Sunbelt Software has uncovered a spyware keylogger that secretly steals data from users’ Internet sessions, including logins and passwords from online banking sessions, eBay, PayPal and other programs that use html forms to collect personal information. It is a new variant of a family of existing trojans generally known as “Dumaru” or “Nibu.” The spyware keylogger has been named “Srv.SSA-KeyLogger.” The Company is offering a free detection and removal tool.

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Credit Card PDV Up 11% in Q2 to $285 Billion

Purchase dollar volume on VISA and MasterCard U.S. credit cards increased 11% in the second quarter, compared to one year ago. While significant, the pace is about half the annual growth rate of signature debit card PDV during 2Q/05. Among the two card associations, VISA credit card PDV is growing slightly faster. VISA posted $139.4 billion in consumer credit card PDV and $28.0 billion in business credit card PDV. One-year ago VISA reported $151.1 billion in credit card PDV. MasterCard had $117.6 billion in second quarter credit card PDV, compared to $106.7 billion for 2Q/04. Based on the current growth rate, credit card purchase volume for VISA and MasterCard should exceed $1160 billion for full-year 2005, according to CardData ([www.carddata.com][1]).

U.S. V/MC CREDIT CARD HISTORICAL
(Purchase Volume Only)
2Q/03: $231.5 billion
3Q/03: $243.5 billion
4Q/03: $259.6 billion
1Q/04: $237.3 billion
2Q/04: $257.8 billion
3Q/04: $266.3 billion
4Q/04: $283.8 billion
1Q/05: $254.3 billion
2Q/05: $285.0 billion
Source: CardData (www.carddata.com)

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

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KDB Indicates LG Card May Be Sold Very Soon

Korea Development Bank says LG Card creditors are planning to sell LG Card starting in September instead of December. LG Card has about 9.5 million cardholders and produced nearly $500 million in net income for the second quarter. Reportedly, Hana Bank, Woori Financial Group, and Shinhan Financial Group are interested in acquiring LG Card.
LG Card has a current market value of 3.9 trillion won (US$3.6 billion). LG lost about 81.6 billion won (US$81 million) last year, compared to the 2003 loss of 5.59 trillion won (US$5.6 billion).

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HSBC Modifies its Polaris StarCard Contract

Polaris Industries has signed a new private label credit card contract for its “Polaris StarCard” with HSBC Bank Nevada that removes all credit and funding risk to Polaris and eliminates the need for Polaris to maintain a retail credit cash deposit with HSBC. The new agreement provides for income to be paid to Polaris based on a percentage of the volume of retail credit business generated. Polaris designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs),Victory motorcycles and the Polaris RANGER for recreational and utility use, with reported 2004 annual sales of $1.8 billion. HSBC Retail Services is an issuer of private label, merchant branded, credit cards in the United States.

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AmEx Leads in Volume Dollars and Growth in Q2

Among the top players in the U.S. payment card market, American Express led the second quarter period with a 17% year-on-year increase, nearly twice the volume growth of Citibank and about triple JPM Chase’s growth. With $88.5 billion in second quarter U.S. GDV, American Express also ranked #1 in actual dollars, followed by Chase and Citi. Furthermore, AmEx bested the second quarter growth rates of VISA and MasterCard. VISA’s Q2 GDV for all U.S. products was up 15.6%, while MasterCard was up 11.1% in U.S. GDV for all products. The top three VISA and MasterCard issuers accounted for about 59% of V/MC’s total credit card dollar 2Q/05 volume in the U.S, according to CardData ([www.carddata.com][1]).

TOP ISSUER U.S. GROSS DOLLAR VOLUME
($ billions)
Issuer 2Q/04 2Q/05
American Express $75.7 $88.5
JPM Chase $71.2 $75.6
Citibank $66.1 $72.2
MBNA $52.0 $57.0
Discover $24.4 $25.4
Source: CardData (www.carddata.com)

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

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TRM Revenues Double in Q2 Driven by New ATMs

Portland, OR-based TRM reported that gross sales more than doubled to $61.4 million during the second quarter, compared to 2Q/04. ATM operating income quadrupled to $5.0 million during the quarter. TRM says the increase in sales reflects the addition of approximately 15,700 ATM’s resulting from the acquisition of the eFunds Corporation ATM network and by the ATM revenue mix which shifted from primarily full placement to predominately merchant owned ATMs due to the acquisition of the eFunds ATM portfolio. At the end of the quarter, TRM had 21,937 ATMs producing total withdrawals of 20.2 million during 2Q/05. The average monthly withdrawals per unit was down 18% to 333. The average sales per withdrawal was also down 18% to $2.31. Therefore, the average monthly sales per unit declined about 32% to $771. For complete details on TRM’s second quarter performance, visit CardData ([www.carddata.com][1]).

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

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ICICI CARDS

ICICI Bank has decided to waive all annual fees on its credit cards for life. Only co-branded cards with Deccan Air and Kingfisher Airlines will continue to carry such fees. ICICI in a total card base of nearly 14 million. The bank also has a 25% share of the total credit card market. ICICI Bank is India’s second-largest bank with total assets of about Rs.1,67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005 crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI Bank has a network of about 560 branches and extension counters and over 1,900 ATMs.

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