HSBC Acquires Marks & Spencer Money

HSBC has acquired Marks & Spencer Retail Financial Services Holdings Ltd for GBP762 million. This represents a premium of GBP224
million over net asset value. Under the terms of the sale, Marks & Spencer will receive fees equating to 50% of the profits of M&S Money.
As a result of this transaction, Laurel Powers-Freeling, Chief
Executive, M&S Money, will be stepping down from the Group Board immediately.

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Diners Club Signs Independence Air

Fast-rising Dulles airport based Independence Air has expanded its card acceptance to Diners Club, the world’s first charge card and first corporate card system. Visa, MasterCard, and American Express were always accepted by Independence Air as forms of payment for all flights since its inception last summer. In terms of total departures, the Independence Air hub at Washington Dulles is the largest low-fare hub in America.

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LML Payment Systems Mostly Recovers from a Setback

Despite the loss of one of its largest customers, responsible for approximately 24.5% of its total revenue, LML Payment Systems was able to replace some of this lost revenue from increases in revenue from the secondary check collection business. LML Payment reported third calendar quarter revenues of approximately $1.6 million, compared to approximately $1.8 million for the year ago quarter. There was a net loss from continuing operations of approximately $863,000 for the quarter, compared to a net loss of approximately $1.1 million for same period one-year ago. For complete details on LML’s third quarter performance visit CardData (www.carddata.com).

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Piggy-Back Antitrust Lawsuits are Dismissed

A total of nine consumer class action lawsuits brought against MasterCard in regard to alleged antitrust law violations have been dismissed. The courts found that the plaintiffs did not have a legally recognizable claim, lacked standing, and that the damages sought were abstract and speculative. To date, courts have dismissed class action lawsuits in New York, North Carolina, Michigan, Minnesota, Maine, North Dakota, South Dakota, Nebraska and Kansas. One judge noted that in the case of the settled merchant lawsuit, the merchants, not individual customers who brought this case, were the “consumers” of MasterCard’s debit card services.

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Cap One Outsources 750 Jobs to First Data

As it continues to cut costs, Capital One confirmed plans to transition the majority of its production services operations work to First Data. Approximately 750 positions at sites in Federal Way, Washington and Richmond, Virginia will be eliminated, as a result. The Washington state facility will be closed by early March, eliminating 260 positions. The Richmond facility will drop from 720 positions to 230 jobs. First Data will extend employment offers to certain employees. Under terms of the contract, First Data will provide statement services, plastics personalization and remittance processing services to Capital One, supported by FDC’s Card Issuing Services and REMITCO business units.

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ECHO Lands a New Chief Information Officer

Electronic Clearing House has hired Steven Smith, formerly with Digital Insight, as its new CIO. Mr. Smith has over 22 years of IT and Business Transformation experience. He formerly served as VP of Engineering for Digital Insight and has 11 years of product development experience with financial, supply chain, and telecom systems. Smith also has 11 years of global experience with Ernst & Young / CAP Gemini. He obtained a B.A. degree in Computer Science from the University of Texas in Austin. Electronic Clearing House (ECHO) solves the payment processing needs of merchants, banks, and collection agencies. Debit and credit card processing, check guarantee, check verification, check conversion, check re-presentment, and check collection are among the services provided by ECHO.

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Card Underwriting Standards Remain Unchanged

The OCC reported that its “10th Annual Survey of Credit Underwriting” practices found that 75% of the responding banks did not change credit card underwriting standards in 2004 while 12% tightened standards and 13% eased them. In contrast, more banks tightened standards than eased them in 2003. Underwriting standards for retail credit products showed more easing and less tightening. However, the change from other years was not as pronounced. The majority of the easing of retail standards was focused on credit cards and home equity products.

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San Fran’s BART Expands the Cubic Contract

San Diego-based Cubic Transportation Systems has landed an additional $3.4 million contract from San Francisco’s BART to expand the scope of its work on the “TransLink” fare collection equipment. TransLink will permit riders to use a single smart card to pay for fares in order to travel across all public transit systems throughout the Bay Area. Cubic will be allowed to integrate its smart card technology into BART’s ticket vending machines. This will enable customers to load fare value onto an “e-purse” on their TransLink cards. The e-purse stores cash value on the smart card chip and serves as an electronic wallet. Each year, Cubic fare collections systems are used for customers to take nearly 10 billion rides around the world.

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Cap One Delinquency Heads North for the 6X

After a one-month uptick, Capital One’s charge-offs headed south, falling 8 basis points in October. However, delinquency continued to edge upward for the sixth consecutive month, rising 4 basis points during October. During October, the issuer added $455 million in managed outstandings. Cap One reported that managed charge-offs decreased to 4.10% for October, compared to 4.18% in September, and 5.30% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency increased to 3.94% for October, compared to 3.90% for September, 3.90% in August, 3.77% in July, 3.76% in June, 3.73% in May, and 3.69% in April. Delinquency one-year ago stood at 4.52%. At the end of October, Capital One had $75.9 billion in global oustandings. At the end of the third quarter, Cap One had $46.1 billion in U.S. card loans, compared to $45.2 billion in the second quarter. For complete details on Capital One’s monthly metrics and 3Q/04 performance, visit CardData ([www.carddata.com][1]).

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Capital One 2003-2004
Month Charge-offs Delinquency
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Feb 04 4.75% 4.14%
Mar 04 4.74% 3.80%
Apr 04 4.70% 3.69%
May 04 4.40% 3.73%
Jun 04 4.17% 3.76%
Jul 04 4.10% 3.77%
Aug 04 3.87% 3.80%
Sep 04 4.18% 3.90%
Oct 04 4.10% 3.94%
Source: CardData (www.carddata.com).

[1]: http://www.carddata.com
[2]: /images/g/graphs/cofperformance_oct04.jpg

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Transoft Introduces OptiCa$h/Direct for ATMs

Transoft International has introduced “OptiCa$h/Direct” which connects XFS-based ATMs to Transoft’s “OptiCa$h Currency Management” application allowing for highly automated balancing, automatic balance updating, and on-board ATM cash monitoring. Transoft International, Inc. is the world’s largest provider of currency supply chain management and cost optimization solutions designed for the banking industry. It is a privately held company that manages cash for roughly 100,000 ATMs and bank branches with customers on six continents.

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VISA Lowers its Interchange for Utilities

VISA USA is targeting the $177 billion residential utilities market with a new campaign. Effective April 2nd, VISA is instituting, a new, lower interchange reimbursement fee program for consumer card transactions for the acquirers of utility merchants that do not charge convenience fees to consumers paying bills with VISA payment cards. Since many utilities are regulated, convenience fees have created a barrier to expanded acceptance. VISA says it currently processes approximately 2% of all utility bill payments, and that its volume in the utilities segment increased 42% during the year ending September 30th. Under the new campaign, VISA will provide utility firms a return on investment estimator, technology assistance, and marketing materials and programs, among other support items.

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AmEx and MSN Offer Free Music Downloads

American Express and MSN have teamed to offer free music downloads to AmEx consumer cardholders residing in the USA. The service is available via the “MSN Music Service” under two promotions. For every 10 songs purchased with the “Blue” or “Delta SkyMiles” credit card, or the AmEx “Charge Card,” consumer cardholders will automatically receive a free song credit to their MSN Music account. Also, consumers who apply for “Blue” or “Blue Cash” through a link on the MSN site will be eligible to receive a minimum of 10 free “MSN Music” downloads. MSN and AmEx are also launching “In the Mix on MSN Music,” a dynamic music hub where consumers can explore and discover music.

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