Metris Plans Another Debt Prepayment in July

Metris Companies Inc. announced it has notified the Trustee of its unsecured 10 1/8% senior notes, which are due July 2006, that Metris intends to make an optional principal prepayment of $30 million. The payment is expected to be made on Friday, July 15, 2005. The remaining principal outstanding on the original unsecured senior notes will be $49.1 million as a result of this prepayment.

Metris Companies Inc., based in Minnetonka, Minn., is one of the largest bankcard issuers in the United States. The company issues credit cards through Direct Merchants Credit Card Bank, N.A., a wholly owned subsidiary headquartered in Phoenix, Ariz. For more information, visit [www.metriscompanies.com][1] or [www.directmerchantsbank.com][2].

[1]: http://www.metriscompanies.com
[2]: http://www.directmerchantsbank.com

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Asia Payment YTD Volume Tops $35MM

Asia Payment Systems reported that the company’s card-processing
systems processed more than 150,000 transactions in its first six months
of operations. Gross dollar volume exceeded $35 million in the same
period. Asia Pay is developing a credit card processing network that
provides clearing services to merchants, oil companies, and financial
institutions in China, Japan, and in related markets elsewhere in Asia.
The Company has offices in: New York City; Seattle, Washington; Beijing
and Shenzhen in China and Hong Kong.

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Poder de Compra Partners with SiVault Systems

Mexico City-based Poder de Compra, S.A. de C.V. has partnered with
SiVault Systems to upgrade PDC’s banking platform. This platform utilizes
PDC’s U.S. debit cards and Mexican electronic cards using HSBC bank in
Mexico to enable people in the U.S. to easily, safely and inexpensively
transfer funds to relatives and friends living in Mexico. This initial
order was secured through the efforts of
Santiago de Leon. The agreement will result in an initial order for
100,000 cards that will be issued over the next four months primarily to
Hispanics who reside in Texas, Illinois and California. Through its
strategic partnership, SiVault also plans to deploy several thousand
terminals under the program with PDC.

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Yellowstone Park Gets Debit and Credit Cards

U.S. Bank is now issuing three affinity credit cards and one affinity debit card on behalf of the Yellowstone Park Foundation. The new Visa cards feature images of the natural beauty that encompasses Yellowstone and will give individuals who support the park additional opportunities to help preserve and protect it. Every new card activation and a share of every purchase made with the card will go to support the Yellowstone Park Foundation. The Yellowstone Park Foundation is a non-profit organization that funds projects and programs that protect the wonders and wildlife of Yellowstone National Park. U.S. Bank has $198 billion in assets.

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Mint Technology Launches the Prepaid Mint MasterCard

Toronto-based Mint and Affinity Merchant Solutions have signed a distribution agreement for the prepaid “Mint MasterCard.” AMS says it will initially distribute 100,000 of the cards. The affinity
rewards card will include a loyalty program featuring numerous
value-added services marketed through merchants. Horizon Plus Card Services, an affiliate of Peoples Trust, will be responsible for card issuance. Mint develops and markets new types of electronic payment applications in the financial payments sector. Through its payment platform Mint facilitates and issues prepaid MasterCard cards, municipal parking cards and new wireless payment alternatives such as: MasterCard cards with “PayPass” functionality and cellphone based parking.

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Ernex Enhances Points its Multiplier Program

Ernex has added enhancements to its “Points Multiplier” which gives merchants the ability to award multiple points to a loyalty program member in real-time based on conditions defined by the merchant. Other new features of “Points Multiplier” include the ability to establish minimum spending levels or a specified number of locations to be visited for customers to qualify. Merchants using the Ernex solution can also set the gross spending threshold to qualify and the number of maximum points a customer can earn during the promotion. Ernex is one of Canada’s top providers of real-time electronic loyalty and stored-value gift card programs, and is a wholly-owned division of Moneris Solutions Corporation.

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Bankruptcies Drive MBNA’s Charge-offs Higher

Citing an increase in U.S. bankruptcy filings during March, MBNA posted a sharp uptick in credit card charge-offs for May. However, delinquency remained unchanged from the prior month. MBNA’s managed credit card outstandings continued to contract, slipping to $95.0 billion compared to $95.9 billion in April. MBNA previously stated that higher than expected monthly payment rates were dampening its growth in outstandings. MBNA’s managed charge-off ratio for May was 4.77%, compared to 4.34% in April and 4.88% one-year ago. Delinquency for consumer credit cards remained at 4.16% for May from April. In May 2004, the delinquency ratio stood at 4.15%. The high last year was 4.49%. MBNA recently reported that domestic credit card loans declined 4.6% from one-year ago to $74.8 billion. For complete details on MBNA’s first quarter results and monthly metrics, visit CardData ([www.carddata.com][1]).

MBNA CONSUMER CREDIT CARD SNAPSHOT
Month Outstandings Charge-offs Delinquency
May 04 $ 98.5b 4.88% 4.15%
Jun 04 $ 99.4b 4.64% 4.10%
Jul 04 $ 99.5b 4.52% 4.00%
Aug 04 $ 99.7b 4.52% 4.01%
Sep 04 $ 98.8b 4.22% 4.15%
Oct 04 $ 98.5b 4.36% 4.18%
Nov 04 $ 99.9b 4.33% 4.21%
Dec 04 $101.9b 4.12% 4.20%
Jan 05 $ 98.6b 4.46% 4.34%
Feb 05 $ 96.9b 4.27% 4.50%
Mar 05 $ 96.1b 4.29% 4.35%
Apr 05 $ 95.9b 4.34% 4.16%
May 05 $ 95.0b 4.77% 4.16%
Source: CardData (www.carddata.com)

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

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CARD FRAUD

Payment card fraud committed abroad on UK cards fell to GBP92.5
million in 2004, a five-year low. Just under half of overseas card fraud
took place in three countries including the USA (18%), France (17%) and Spain (13%). APACS, the industry association representing plastic card
issuers in the UK, says the lower fraud figure is mainly attributable to
improved fraud detection systems that enable card companies to spot
unusual spending patterns most often associated with the fraudulent
use of cards. In addition, the Dedicated Cheque and Plastic Crime Unit,
a specialist police team sponsored by the banking industry has
successfully cracked several international card counterfeiting rings.
The figure of GBP92.5 million accounts for 18% of the total of UK card
fraud of almost GBP505 million in 2004. Foreign fraud peaked in 2001
when it hit GBP138.4 million.

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FastFunds to Acquire Control of Coast ATM

Minnesota-based FastFunds Financial has signed a LOI to acquire 51% of Coast ATM through a partnership to be formed. Coast specializes in ATM placements in retail markets and its principals have extensive experience in the gaming industry. The initial partnership will consist of 60 machines for which the total consideration is to include cash and FastFunds common stock. FastFunds operates through a wholly owned subsidiary Chex Services, Inc. Chex’s product lines include full financial service booth operations for casinos, ATMs and check processing services.

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Consumers’ Spare Cash Goes to Debt Repayment

A new survey has found that 28% of U.S. consumers say that once they have covered their essential living expenses they have no money left over. The ACNielsen survey found that U.S. figure to be higher than any other country. Of U.S. consumers who do have spare cash, 37% said their first priority for that money continues to be debt repayment. One-year ago the figure was 33%. ACNielsen also found that when it comes to spending the only area to increase was “Home improvements, decorating.” Areas such as entertainment, clothing and new technology declined. ACNielsen says Americans’ biggest concern over the next six months is the economy, far out-distancing concerns over terrorism or war.

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AmEx Launches a STV Card for Luxury Homebuyers

American Express is today launching a unique, upscale multi-brand stored-value card for the luxury home market. The new “Housewarming Card Platinum Edition” offers luxury homebuyers access to all of Williams-Sonoma’s stores and catalogs. The card is being offered to homebuilders, mortgage professionals and real estate agents to provide their clients with a high quality closing incentive. Buyers of the card must be able to document that they are involved in the luxury home market. The card can be loaded with values ranging from 250 to 2500 points or dollars. The card carries a $9.95 per card fee. The card is being distributed by CSMJ, an American Express Incentive Services Authorized Distributor. Williams-Sonoma’s brands that will accept the card include: Pottery Barn, Pottery Barn Bed & Bath, PBteen, Pottery Barn Kids, Williams-Sonoma, Williams-Sonoma Home, Hold Everything and West Elm. AmEx previously launched a “Classic” and “Gold” version of the “Housewarming Card.” The “Gold” edition was introduced in December and offers access to more than 180 select merchants. (CF 12/17/04)

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