Financial Services Phishing Takes-Off in Dec

Phishing attacks on the financial services sector continued to rise in December, now making up 85% of all such attacks. The Anti-Phishing Working Group reported this week that the number of active phishing sites reported in December was 1707. The APWG report also suggests that the proliferation in the number of attack targets continues to rise, running from 44 in October, 51 in November to 55 in December. The APWG says it is interesting to note that the concentration on phishing attacks against financial institutions actually increased to a new high during a time when many were concerned that opportunistic phishers would spoof retail sites, using consumers urgency to keep their e-commerce accounts in order to complete their holiday shopping in time.

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PBS/FRONTLINE Documentary Re-Airs Next Week

PBS is re-airing its one-hour FRONTLINE documentary, the “Secret History of the Credit Card,” on Tuesday, February 1st. In “Secret History of the Credit Card,” FRONTLINE(R) and The New York Times join forces to investigate an industry few Americans fully understand. In this one-hour report, correspondent Lowell Bergman uncovers the techniques used by the industry to earn record profits and get consumers to take on more debt. Millions of American families use their personal, general-purpose credit cards such as Visa, Mastercard, American Express and Discover to make ends meet; credit cards have been a discreet lifeline for families in financial straits.

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Pay By Touch Acquires a Check Cashing Patent

San Francisco-based Pay By Touch has acquired a new patent portfolio for additional biometric payment solutions, including a U.S. issued patent for biometric authentication for check cashing. The newly acquired portfolio includes a U.S. issued patent for biometric authentication for check cashing and adds to Pay By Touch’s more than two dozen issued U.S. patents. Pay By Touch is a free consumer payment service that allows shoppers to pay for purchases and cash checks using a finger scan linked to their financial accounts and loyalty programs. With Pay By Touch, the checkout process is faster, more convenient, and more secure than other payment methods.

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Paymetric Moves and Picks Up More Funding

Commercial card specialist, Paymetric, has moved to new headquarters in Houston and picked up $7 million in new funding, led by Austin Ventures. Paymetric will use the funds to support continued product innovation, sales growth and market expansion. Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. Paymetric enables organizations to benefit from payment cards by integrating payment card buying and selling functions directly into the financial supply chain.

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FDC to Process the New Wal-Mart Discover Card

First Data confirmed yesterday it has signed a contract to process transactions for the new “Wal-Mart Discover” card. FDC becomes the first certified third-party credit card processor to process transactions utilizing the Discover network. FDC will provide authorization and settlement as well as producing and mailing cards and statements. Last week, Wal-Mart announced it has teamed with GE Consumer Finance and Discover Financial Services to launch a new credit card on the Discover Network. This is Discover’s first credit card issuing partnership outside its network. The new “Wal-Mart Discover” cards will be available by March. Under the program the card will carry no annual fee and offer up to 1% back from GE on all purchases. GECF says the deal will expand its Wal-Mart relationship, enabling it to offer both a Wal-Mart store card and a general purpose “Wal-Mart Discover” card. GECF’s current private label card contract runs through 2009.

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Fiserv Profits Rise 19% in the 4Q/04

WI-based Fiserv reported that processing and services revenues rose 20% in the fourth quarter to $866.1 million. Net income for the quarter rose 19% to $97.5 million. Revenues for financial institution outsourcing, systems and services hit $596.7 million in the fourth quarter compared to $566.1 million for 4Q/03. During the fourth quarter Countrywide Bank chose Fiserv CBS as its new core processing platform and WA-based Columbia Bank chose Fiserv for a technology package including the “PCS Vision” system from Information Technology and electronic funds transfer services from Fiserv EFT. Fiserv closed four acquisitions last year including CheckAGAIN. The Company is currently negotiating a 12-year contract with three Australian banks for electronic check settlement services. For complete details on Fiserv’s fourth quarter results visit CardData ([www.carddata.com][1]).

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

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Q4 Bankruptcy Filings Drop More than 7% Y/Y

Consumer bankruptcy filings during December were flat compared to one-year ago following a sharp decline in the prior month. However, for the fourth quarter, filings were down 7.4%, and for the full year, filings declined nearly 4%. During December, 113,957 consumer Chapter 7 and 11 filings were made, compared to 113,383 for December 2003. During the fourth quarter, there were 364,313 consumer bankruptcy filings, compared to 393,348 for 4Q/03. In the third quarter there were 366,837 consumer bankruptcy filings. Year-to-date bankruptcy filings were 1,552,967. The decline for 2004 is the first drop in consumer bankruptcy filings since 2000.

Monthly Filings Historical
Dec 03: 113,383
Jan 04: 114,737
Feb 04: 124,719
Mar 04: 152,567
Apr 04: 145,543
May 04: 136,509
Jun 04: 127,742
Jul 04: 133,390
Aug 04: 125,783
Sep 04: 127,664
Oct 04: 133,404
Nov 04: 116,952
Dec 04: 113,957
Source: CardData (www.carddata.com)

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Premiums for

Premiums paid for credit card portfolios with less than $5 million in assets rose slightly last year while deals in the $10 million to $20 million bandwidth now command premiums as high as 27%. Smaller portfolios tend to be high quality, home grown, and stable with charge-offs under 2% and with more than four years of seasoning. According to R.K. Hammer Investment Bankers, “micro” portfolios with less than $1 million in assets produced premiums between 5% and 10%. “Mini” portfolios in the $1 million to $5 million range draw a 6% to 16% premium, while “small” portfolios in the $5 million to $10 million bandwidth command premiums ranging from 7% to 17%. “Midi” portfolios in the $15 million to $20 million range pull a 10% to 27% premium. Hammer says that some premiums paid are misleading since many smaller portfolio deals include an earnings-sharing provision based on future activity, which dilutes the effective premium figure at time of sale. Overall, of the 200+ portfolios changing hands last year, premiums ranged from 5% to 41%. The industry average premium for 2004 was 18.75% above book value.

PREMIUM RANGE
SIZE 2003 2004
Micro (<$1MM) 4-9% 5-10% Mini ($1-5MM) 5-15% 6-16% Small ($5-10MM) 8-16% 7-17% Midi ($10-20MM) 11-26% 10-27% Source: R.K. Hammer Investment Bankers

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EasyGreen Cash Card is Launched

FL-based Global Axcess Corp has launched the “EasyGreen Cash Card,” a payroll stored value/prepaid card. Global Axcess’ stored value/prepaid card platform provides a feature-rich, reliable, scalable, and secure solution for small, mid-sized, and large companies. Customers have on-line, real-time access to instantly issue payroll cards, load value, view balance information, transaction history, and manage employee “virtual accounts.” Global Axcess Corp was founded in 2001 with a mission to emerge as one of the nation’s leading network-based electronic commerce and transaction processing companies.

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AmEx and Priceline Launch a Cruise Promotion

American Express and Priceline.com have launched the “Cruise Bonus Days” promotion through February 21st, offering an “American Express Gift Card” worth up to $300 and double “Membership Rewards”. To make a 2005 cruise even more irresistible, major cruise lines are tossing in their own bonuses, which range from shipboard credits to free airfare, upgrades, complimentary wine and additional savings. Customers are not required to book an oceanview stateroom in order to qualify for cruise line-specific bonuses. Priceline.com is a travel service that offers leisure airline tickets, hotel rooms, rental cars, vacation packages and cruises. American Express Company is a diversified worldwide travel, network, and financial services provider founded in 1850.

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SMART System Technologies Names a COO & CTO

NY-based SMART System Technologies has named Michael Richardson as President/COO and Raymond Garcia as CTO. As President and COO, Michael Richardson will be primarily responsible for overseeing the day-to-day operations of the company. Formerly the Chief Technology Officer, Richardson brings over 25 years of experience in a variety of senior management and entrepreneurial positions with leading-edge technology companies to his new role. Richardson is also a former Vice President of Enterprise Technology for InterWorld Corp, which he helped guide from the launch of the company through a successful initial public offering (IPO) in 1999. SMART System Technologies, Inc. (SST) is a leading provider of contactless payment and loyalty solutions.

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