Citi Tweaks Fees, Rates, and Arbitration

Citibank has joined the list of top issuers currently making adjustments to cardholder agreements. During the March billing cycle, Citi raised its balance transfer fee cap, late fees, and cash advance interest rates. Also, Citi, like other major issuers, is raising its foreign currency transaction fee next month to 3% from 2% as VISA and MasterCard drop their 1% foreign currency conversion fee. Balance transfers will now cost 3% with a $5 minimum and $75 maximum, according to CardWatch ([www.cardwatch.com][1]). The late fee is now $15 for balances under $100, $29 for balances between $100 and $1000 and $39 for balances of $1,000 or more. The cash advance APR is now prime +14.99% with a 19.99% minimum. Citi also dropped JAMS as an arbitration option and modified its arbitration clause to read: “If any portion of the arbitration provision is deemed invalid or unenforceable, the entire arbitration process will not remain in force” (instead of “the remaining portions will remain in force”). Minimum payments will adjust to past due amount + over-limit amount + ($5, if the APR is over 19.99%) plus the greater of

1. the billed finance charges and any applicable late fee
2. the new balance if it is under $20
3. $20 of the balance is between $20 and $960
4. 2.08% of the balance is over $960. A $5 fee will be added if all of the APRs on the account are under 19.99% and if #1 is the largest.

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

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PETROLEUM ADVANTAGE

Small and mid-market petroleum and automotive retailers now have access to a payment card processing solution previously available only to national retailers. Global Payments has unveiled “Petroleum @dvantage Rigger Lite” that operates on the Keycorp “K26” terminal and offers a customized payment solution. The new solution feature a PIN Pad and all-in-one terminal/printer that enables merchants to accept all major payment card brands and a wide variety of fleet and commercial cards.
The product and the receipt can be customized to capture and communicate
business-specific information such as fuel type, product description,
associated tax information and price per liter.

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Vesdia Intros FundraiserRewards for Non-Profits

Vesdia Corporation has launched “FundraiserRewards, a non-profit fundraising program. Participants earn rebates at more than 500 top-name retailers which are automatically donated to a charity, church, school or other nonprofit organization of the cardholder’s choosing. The program offers the potential to capture more than $21.7 billion annually in eligible shopping transactions, representing an incremental $1.1 billion per year in aggregate rebates. Vesdia specializes in loyalty marketing technology.

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Euronet Buys Up 3 More Prepaid Concerns

Euronet Worldwide recently completed acquisitions of three new prepaid companies. The firm acquired 100% of the assets of Dynamic Telecom in the USA, all of the assets of Telerecarga in Spain and an additional 41% in UK-based ATX Software. Dynamic Telecom specializes in selling prepaid services, including wireless top-up, long distance calling cards and financial services products such as credit cards and stored-value cards via POS terminals in convenience store retail chains. Madrid-based Telerecarga specializes in the electronic distribution of prepaid wireless airtime and other prepaid products through approximately 10,000 POS terminals and over 14,000 other points of sale through electronic cash register integrations in Spain. ATX Software is a provider of electronic prepaid voucher solutions with customers in more than 25 countries. Euronet reported that its Prepaid Processing Segment had annual revenues for 2004 of $289.8 million, compared to $136.2 million reported for 2003.

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Asia Pay and Beijing Purple Stars Appraisal Team

Asia Payment Systems has signed an agreement with Beijing Purple Stars Appraisal Co. to establish an international standard credit bureau in Beijing. The BPS/Asia Payments Systems agreement provides for a working committee made up of representatives from both parties to coordinate the development of both a China Credit Bureau, as well as development related to further deploying Asia Pay’s China credit card processing systems. Beijing Purple Stars Appraisal Co., Ltd. is an official appraisal agent licensed by the Chinese government to provide appraisal services to the Beijing Municipal Government and to the public. In addition, BPS provides credit files and credit rating services to banks and financial institutions in Beijing. Asia Pay is developing a credit card processing network that provides clearing services to merchants, oil companies, and financial institutions in
China, Japan, and other markets of interest in Asia.

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MC Triples Premium Cardholder Incentives

MasterCard has tripled the number of exclusive offers available to the 245 million cardholders of its “Global Premium Collection,” which includes “Gold,” “Platinum” and “World” cards. Affluent cardholders now have access to more than 75 high-value incentives including special new offers from Abercrombie & Kent, Tumi, Crystal Cruises, Harrods, and Le Meridien. MasterCard reports that the number of “Premium MasterCard” cardholders increased by 15 million last year, adding an additional $30 billion in spending volume. MasterCard has a consumer Web site dedicated to premium cardholder incentives. In addition to providing re-established travel offers, MasterCard also delivers a turnkey solution that enables customer financial institutions to access promotional materials. Participating customer financial institutions can view all information related to the MasterCard Global Premium Collection in real-time via MasterCard’s proprietary online “PiXi.”

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Cencosud Acquires Almacenes Paris 1.3MM Cardholders

Chile’s largest retailer and second largest supermarket operator has added 1.3 million credit cardholders to its portfolio. The expansion came as Cencosud acquired control of Almacenes Paris for about $834 million. Almacenes Paris’s credit card customers pay interest rates as high as 50% per annum. Almacenes Paris also has more than 30 times the number of active accounts of Cencosud. The combined companies had more than $3 billion in sales during 2004.

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Top 10 Average Balances Up 3.3% in 04

The average balance per active account among the top 10 issuers increased 3.3% last year to $2,356. Compared to five years ago, average balances are up about 4%, indicating that consumers are spreading their balances over multiple accounts. The nation’s top issuer, Chase, had a 1.3% decline in average balances last year. MBNA’s average balance also fell by nearly 3%, according to CardData ([www.carddata.com][1]). Citi, the nation’s #2 issuer, experienced a 6.7% increase in average balances during 2004. Other top gainers are HSBC +18%, Wells Fargo +12% and Providian +7%.

AVERAGE BALANCES AMONG TOP 10 ISSUERS
(per active account)
ISSUER 2004 2003 CHNG
1. Chase $3411 $3457 – 1.3%
2. Citi $1690 $1584 + 6.7%
3. MBNA $2475 $2548 – 2.9%
4. BofA $3118 $3057 + 2.0%
5. Cap One $1854 $1801 + 2.9%
6. Disc $2452 $2325 + 5.5%
7. AmEx $2240 $2362 – 5.2%
8. HSBC $1734 $1469 +18.0%
9. Prov $2439 $2288 + 6.6%
10. Wells $2146 $1923 +11.6%
AVG $2356 $2281 + 3.3%
SOURCE: CardData (www.carddata.com)

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

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HSBC Exec Named to MC International Board

The Global Board of Directors of MasterCard has elected Siddharth N. Mehta to become a director, representing the U.S. region. Mr. Mehta fills a vacancy since the resignation of another director in July 2004. Mr. Mehta is currently Vice Chairman of HSBC Finance Corporation and is expected to become Chief Executive Officer of HSBC North America Holdings Inc. in April 2005. Mr. Mehta has served on MasterCard’s U.S. region board since March 2000.

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Cubic Wins the PATCO Fare Payment Contract

Cubic Transportation Systems has been awarded an $11.3 million contract from Philadephia’s Port Authority Transit Corporation (PATCO) for the design and integration of a contactless smart card-based automated fare collection system to link rail and parking services. The automated customer service features will include credit-debit payment, internet-based ticketing and the ability to automatically load value onto the card. Cubic Transportation Systems, Inc. is the world’s leading full-service solution provider of automated fare collection systems for public transportation in 40 markets worldwide.

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UCE and Trycera Partner for a STV Card

Universal Cash Express has partnered with Trycera Financial for development and delivery of an Association-branded UCE stored value debit card program. Universal Cash Express is a division of Universal Express, Inc., specializing in logistics and transportation. Trycera Financial,Inc. offers customized and turnkey prepaid programs partnerships to self-banked consumers.

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