Asia Pay Q1 Gross Profit Margin Up 68%

Asia Payment Systems reported that its first full fiscal quarter of operations showed a 68% gross profit margin. The Company says its credit bureau operations, which currently are in the pilot program stage, hold significant potential for increasing shareholder value in the future. Asia Pay’s mission is to be a national provider of world-class, third-party processing services in China to bankcard-accepting merchants, issuers of bank credit cards, issuers of petroleum station retail cards, and issuers of merchandise and other retail cards. Systems, hardware, and personnel are now in place as Asia Pay commences delivering service to clients.

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Another Pile-On Lawsuit Against MBNA

Seeger Weiss has filed a class action against MBNA for purchasers of MBNA stock between January 20th and April 21st. The complaint alleges that on January 21, 2005, the start of the class period, MBNA issued the first earnings forecast in the Company’s history, projecting an ongoing 12% earnings increase, with a 10% increase in 2005 earnings over 2004. According to the complaint, negative facts which were known by each of the defendants were concealed from the investing public during the class period. Following the company’s April 21, 2005 disclosures concerning its business operations, financial results and reduced 2005 earnings expectations, the Company’s stock price plummeted from its closing price of $23.11 on the close of April 20, 2005 to below $19 per share on trading volume of 51 million shares. MBNA is an international financial services company providing lending, deposit, and credit insurance products and services to its customers.

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Sparkasse Hannover to Deploy NCR Personas M ATMs

Sparkasse Hannover has selected NCR’s “Personas M Series” ATMs.
The bank will install 37 new “Personas M Series 76” ATMs in its branch lobbies as through-the-wall units. The units will be equipped with the new self-service units, which will be initially configured to recycle cash. Recycling solutions, popular in some European and Asian markets, require considerably less frequent refill of ATMs, thereby reducing the bank’s cash replenishment and management costs.

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Commercialbank Launches Free-For-Life WOW VISA

Commercialbank has launched a new VISA that carries no annual fee for life. The new “WOW VISA” is also offering a free Qatar
Airways economy class ticket for approved applicants. The free ticket is good for select destinations and requires the cardholder to pay pay the nominal processing fees and airport taxes. The card also offers up to 50% discounts at over 200 outlets in Qatar as “Wafapoints.” The “WOW VISA” requires a minimum annual income of QR1,500.

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Payment Systems Solutions Begins Operations

Industry veterans Harsh Arora, formerly with Household, GE and Discover Card, and Gary Barth, formerly with VISA International and Household, have formed Payment Systems Solutions, a consulting and outsourcing firm that provides card issuers with advanced analytical and decision-management expertise. Arora was most recently Managing Director and Chief Credit Officer of HSBC/Household International. Barth served as Vice President in the Global Product Platforms Group of Visa International and Vice President of Marketing and Business Development at Household Credit Services.

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MC’s Credit Wise Program Reaches 375K Students

MasterCard’s college campus peer-to-peer consumer credit education program reached more than 125,000 students last year. The “Are You Credit Wise?” program was launched six years ago and has reached more than 375,000 students at over 50 colleges and universities in the USA and Canada. During the 2005 academic year, 15 students from 15 different colleges participated in the “Are You Credit Wise?” program, bringing the total number of interns to date to 61 who have led peer-to-peer campaigns. The “Credit Wise” initiative trains student interns to lead campus-wide education campaigns focused on the fundamentals of good credit habits. Activities include: hosting school wide intern-led presentations on money management; organizing and officially designating a “Credit Wise” week during the semester; sponsoring smaller workshops in residence halls or as part of orientation programs; and providing consumer education materials to the student body.

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College Students Still Need Credit-ED

A new survey shows a significant disconnect between what students “THINK” they know about credit and what they actually know. According to the second annual survey by Citibank’s “Credit-ED” financial education program, 80% of students feel knowledgeable enough to manage their finances after graduation, yet almost half of those who feel knowledgeable still make significant credit mistakes. The survey also found that three out of five juniors and seniors today expect to have no credit card debt upon graduation or a year after graduation. The survey, conducted by Harris Interactive, reveals that 42% of today’s college upperclassmen expect to be financially secure within three years after graduation, compared to 35% a year ago.

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Contactless May Drive Smart Card Acceptance

The failure of true smart cards in the USA to take hold, such as the “Target smart VISA” launched in 2001 and the five-year old American Express “Blue Card”, has given way to another approach, namely contactless payments. Yesterday’s announcement that Chase will issue RFID cards along with the recent 7-Eleven and McDonalds endorsement of contactless payments has produced a watershed event for the U.S. payment card industry. The notion that consumers can control the use of their card by contactless technology to prevent skimming or ID theft is perhaps the killer application that smart cards have been in search of. If the Chase push is successful, then the pressure will be on restaurants to provide payment at the table, other issuers to offer next generation cards and all merchants to make their payment terminals “smart.” Yesterday, Chase, the nation’s #1 credit card issuer, became the first issuer to make a national roll-out of contactless general purchase consumer payment cards with the new “blink” VISA and MasterCards. VISA’s contactless payment platform became operationally ready for the U.S. market in February. MasterCard launched its “PayPass” pilot in Orlando during January 2003. American Express first piloted its “ExpressPay” program in early 2003 in Phoenix.

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ADS Acquires a POS Technology Specialist

Dallas-based Alliance Data Systems has acquired Dallas-based Atrana Solutions. Atrana specializes in the design and development of comprehensive transaction-oriented technology solutions for retailers, financial processors, POS hardware manufacturers, telecommunications providers, and other transaction-based businesses. Atrana’s transaction services include support for prepaid wireless top-up, long distance cards, third party gift cards, and prepaid bankcard products. Atrana has 30 employees with all to be transferred to ADS.

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VISA and AmEx Both Gain Share in 1Q/05

VISA and American Express continued to gain market share in the first quarter with VISA picking up 30 basis points and American Express adding 20 basis points. Based on credit card and signature debit card gross dollar volume, American Express racked up a 13.6% year-over-year gain, while VISA grew 12.2% over the same period. As a group, the four U.S. networks handled $602.1 billion in first quarter gross dollar volume, an 11.5% increase over 1Q/04, according to CardData ([www.carddata.com][1]). The market share data excludes VISA’s “Interlink” and MasterCard’s “Maestro” online debit products.

NETWORK QUARTERLY SNAPSHOT
Network 1Q/05 GDV Y/Y CHNG SHARE
VISA $322.1 billion +12.2% 53.5%
MasterCard $174.5 billion +10.2% 29.0%
American Express $ 79.6 billion +13.6% 13.2%
Discover $ 25.9 billion + 7.0% 4.3%
TOTAL $602.1 billion +11.5% 100.0%
Note: excludes online debit products
Source: CardData (www.carddata.com)

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

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AirPlus Snags Two AmEx Executives for Sales

AirPlus International has hired Colleen Ecker and Aaron Kelling, both formerly with American Express, to lead its West coast sales activities and corporate sales in the North East region, respectively. Previously, Ecker led a team of 11 American Express sales people based throughout North America. She brings to AirPlus a well rounded knowledge of corporate payment systems. Kelling was both the Director of Business development and as top producing regional sales manager in corporate meeting solutions. AirPlus International is a global provider of business travel payment solutions.

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FDC Renews MidAmerica BankCard Association

First Data has signed a multi-year contract extension with MidAmerica BankCard Association, FDC’s first bankcard processing client, for credit card transaction processing and other card portfolio management services. MABA is a non-profit bankcard processing cooperative with 3.5 million accounts. Its members are 1st Financial Bank USA, Franklin Templeton Bank & Trust F.S.B., InfiCorp, INTRUST Bank and Zions Bancorporation. First Data Corp. provides electronic commerce and payment solutions for 4.1 million merchant locations, 1,400 card issuers and millions of consumers worldwide.

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