Retail Decisions and Mi-Pay Team for Top-Up

Retail Decisions has partnered with Mi-Pay to enable mobile phone
users to top-up directly through the handset. Retail Decisions
has also made a 20% equity investment in Mi-Pay. ReD is also partnering
with Mi-Pay by providing its payment gateway and card fraud prevention
services to Mi-Pay’s customers. ReD is already the largest processor of
pre-pay mobile transactions in the U.K. through card-not-present
channels. ReD’s mobile telecoms clients include: T-Mobile, Virgin Mobile
and O2 among others. Mi-Pay is led by Norman Frankel, who was formerly
the Mobile Commerce Director of LogicaCMG.

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Parking Machines Move to Chip and PIN

Any new installations of credit and debit card equipped
parking machines in the U.K. must now be able to process an EMV transaction. Following the introduction of the “Chip and PIN” standard in the UK, VISA declared that all new unattended terminals accepting VISA cards in Europe will be required to be capable of performing a
full EMV level 2 (“Chip and PIN”) transaction. Any new terminals which are not chip and PIN capable will not be accepted by VISA and operators
will be unable to obtain merchant facilities to process VISA-branded
cards. The directive does not prevent the acceptance of other branded cards such as MasterCard, American Express, Diners, JCB, etc.

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Global Cash Access Revenues Up 13%

Las Vegas-based Global Cash Access reported record first quarter revenues of $109.7 million, an increase of 12.6% from 1Q/04. Net income for the first quarter was $7.3 million as compared to $14.1 million in the comparable 2004 period. Cash advance revenues were up 12.5% to $56.8 million as the number of transactions increased 4.7% to 2.3 million. ATM revenues increased 14.2% to $43.8 million. The number of transactions increased 10.7% to 14.3 million. Cash disbursed was $2.35 billion compared to $2.02 billion, an increase of 16.6%. Average revenue per transaction increased 3.0% from $2.96 to $3.05. Check services revenues were $6.3 million, an increase of 8.1%. For complete details on GCA’s latest performance, visit CardData ([www.carddata.com][1]).

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

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Means Test Could Boost Profits by 3%

A new analysis has found that the U.S. bank credit card industry wrote off approximately $13 billion last year in credit card receivables, due to cardholders filing under Chapter 7 of the U.S. bankruptcy code. Under the new “means test” to take effect this fall, about $1.3 billion of the losses would have been subject to a repayment plan under Chapter 13. Moody’s Investors Service says the number could be even higher because those Chapter 7 filers who would have failed the “means test” would likely have had larger than average outstanding balances. Even though this is a large number, it equals only 3.4% of all credit card charge-offs, or 20 basis points of the 5.75% total net charge-off ratio in 2004. In addition, Moody’s expects that many of those consumers forced to file under Chapter 13 will still not have the ability to repay all of their credit card debt outstanding. Among those currently filing under Chapter 13, estimates are that only around one-third are able to complete their payment plans, and even those plans don’t usually contemplate a 100% repayment of unsecured debt. Assuming that consumers filing under Chapter 13 rather than Chapter 7 because of the means test are able to pay between a quarter and one half of what they owe, then industry-wide aggregate credit card net charge-offs might decline by $325 million to $650 million a year. This would translate into a 5 to 10 basis point decline in the net charge-off ratio. Moody’s estimates that this modest decline in net charge-offs, if it fell entirely to the bottom line, would increase the average pre-tax profitability for the bank credit card industry by only 1.5% to 3.0%.

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BADR Deploys ACI’s BASE24 Software

Banque de l’Agriculture et du Developpement Rural has deployed ACI’s “BASE24” software. “BASE24” will enhance BADR’s ATM and POS network transaction processing. ACI is helping the bank develop dedicated in-branch areas for customers to make transactions via ATMs.
BADR will also leverage “BASE24” to deploy new functionality including support for EMV and multi-currency capability, improving customer service and reducing the risks associated with credit and debit card fraud. The bank is running “BASE24” on a HP “NonStop” platform. BADR manages the country’s largest banking network with 290 agencies and 40 branches.

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Consumers – Stable & Cautious with Credit

The latest “Experian-Gallup Personal Credit Index” shows that consumer feelings about credit are stabilizing as they take a wait and see outlook with regard to changes in the economy. Two months ago, the Personal Credit Index stood at 100, but it dropped sharply last month to 82 and has moved slightly upward this month to 86. The Experian-Gallup Personal Credit Index measures four key areas related to credit: level of debt, monthly payment burden, credit rating, and debt extension capability. The Gallup Organization has studied human nature and behavior for more than 70 years.

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Interchange Battle Enters Round One

The rhetoric heated up yesterday between merchants and the card networks over interchange in the wake of the “2005 Payments Conference” produced by the Federal Reserve Bank of Kansas City. MasterCard said the attacks on interchange by merchants are disingenuous and misguided considering that their own payment systems, as well as those offered by the three-party networks, are more expensive and inefficient. MasterCard says as a result, merchants are moving away from their own card systems and are offering co-branded general purpose cards. The National Retail Federation says credit and debit card interchange fees account for nearly $2 out of every $100 consumers spend. The NRF says card company rules force retailers to hide these fees in the price of merchandise and effectively prohibit merchants from giving a discount for cash or checks in all but a handful of situations. The NRF has labeled interchange as a “hidden tax.” MasterCard says the real “hidden tax” is the 2% of the nation’s GDP that goes to pay class action lawyers.

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Info Touch Signs Maverik Country Stores

Info Touch Technologies has signed Maverik Country Stores to deploy self-serve automated bill payment and financial services touch-screen terminals at 35 select convenience stores in Salt Lake City and Boise. The TIO Network provides patrons with secure and convenient access to financial services, geared towards the under-banked marketplace. Maverik Country Stores, Inc. operates about 170 convenience stores in seven western states and represents the area’s largest independent gasoline marketer. Info Touch Technologies is a strategic investment of Hewlett Packard and builder of the “TIO Network”, the largest national multi-retailer network of self-service financial service kiosks in North America.

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FalconOne Fights Fraud Across Data Silos

Fair Isaac has taken fraud management to a new level by offering a unified platform across multiple departments or “data silos” within banks. The new “FalconOne” software system will help financial institutions address every type of customer and account fraud within an organization through a configurable set of detection, case management and analytic capabilities. Within the “Falcon One” infrastructure, Fair Isaac is offering “Falcon Fraud Manager” for credit card and debit card transaction fraud and “Falcon ID” solution for identity fraud protection. Each “Falcon One” solution includes a detection component, which determines the likelihood that a particular activity is fraudulent and provides a fraud score and a case management component, which guides the analyst through a consistent review process to help resolve suspected fraud cases. The “Falcon One” infrastructure offers several additional services, including dynamic data optimization, real-time data sharing and continually updated profiling of customers, merchants and institutions.

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Cap One Decorates D.C. with Piggy Banks

Capital One is unveiling today 15 over-sized piggy banks to be placed around the nation’s capital to promote its “Stash Your Cash” financial education program with D.C. middle and junior high schools. The Stash Your Cash program introduces students to basic money management skills, with an emphasis on starting to save money at an early age. Capital One’s subsidiaries collectively had 49.1 million accounts and $81.6 billion in managed loans outstanding as of March 31, 2005.

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Chex Systems Buys Natl Check Protection

eFunds’ Chex Systems has inked a deal to acquire the assets of National Check Protection Services for a base purchase price of approximately $20 million. The acquisition will accelerate the delivery of new risk management services to the Northeast market and contribute enhanced bankruptcy and criminal data to DebitBureau. NCPS provides information services for new account verification, employment screening and due diligence investigations. eFunds Corporation offers electronic payments and risk management products and services.

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