Certegy Signs FL’s Largest Credit Union

Suncoast Schools FCU, the largest credit union in Florida, has selected Certegy Card Services to process its 100,000 VISA credit cards with $275 million in loans outstanding. Suncoast is the largest credit union in Flordia, and the eighth largest credit union in the nation with $4.3 billion in total assets and 350,000 members. Certegy will service Suncoast’s credit card portfolio, which contains a platform that provides card processing solutions. Certegy provides various services including credit and debit processing, check risk management, check cashing, merchant processing, and e-banking to almost 7,000 financial institutions, 117,000 retailers, and 100 million consumers around the world.

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USA Technologies’ Revenues Double

PA-based USA Technologies reported revenues for the year ending June 30th of $5.6 million, nearly double the year-ago level. The fiscal year produced a net loss of $21.4 million compared to a net loss of approximately $21.9 million for the prior fiscal year. The Company also reported it had shipped a record number of “e-Ports” in the last two quarters to 58 vending operators and bottlers, bringing the “e-Port” customer base to a total of 215 vending operators and bottlers in 41 states. Many of these customers own and operate in excess of 10,000 vending machines. The Company also entered into an agreement with Sony Electronics, who worked with USA Technologies to develop cashless transaction capabilities for its “PictureStation” photo-finishing systems, which are currently being launched nationwide. For complete details on USTT’s latest performance visit CardData (www.carddata.com).

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Care Concepts Forms Penthouse Media Group

After rescinding its deal to acquire Penthouse’s Media Billing Company last week, FL-based Care Concepts yesterday announced it has entered into an agreement with GMI Investment Partners and PET Capital Partners to purchase 48% of General Media. Upon its emergence from bankruptcy next month, General Media will be renamed Penthouse Media Group, Inc. Care Concepts owns Forster Sports, a producer of sports radio talk shows and iBidUSA.com. Penthouse International last month announced a deal to sell iBill less than six months after acquiring the business from Atlanta-based InterCept. Penthouse’s Media Billing subsidiary acquired iBill in March in a transaction valued at approximately $33 million. Penthouse sold iBill to FL-based Care Concepts for $55 million in stock. (CF Library 3/17/04; 3/23/04; 5/25/04; 8/2/04; 9/1/04; 9/28/04)

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Prime ABS Charge-Offs Hit a 4 Year Low

Credit card charge-offs, among “prime” asset-backed securities, dipped to their lowest level in nearly two years during August, as 60+ day delinquency hit a four-year low. The monthly payment rate also climbed to 17.33%, the highest ratio since April 2000. “Prime” charge-offs decreased to 6.01% in August, compared to 6.45% in July, and 6.78% one-year ago. The 60+ day delinquency index for “Prime” portfolios remained steady at 2.86%, its lowest point since August 2000. Fitch’s yield and payment rate indexes moved in opposite directions during August. Fitch’s yield index dropped 35 bps sequentially to 16.37%, 23 bps below the year-ago level. The monthly payment rate was up 5 bps above the prior month. According to Fitch’s latest issue of “Credit Card Movers & Shakers,” “sub-prime” charge-offs decreased to 15.58% during August, compared to 16.68% in the prior month, and 16.45% one-year ago. Late-stage delinquencies for “sub-prime” card bonds (60+days) rose for the first time since December to 8.66%.

ABS CHARGE-OFFS HISTORICAL
Prime Sub-Prime
Aug 04: 6.01% 15.58%
Jul 04: 6.45% 16.68%
Aug 03: 6.78% 16.45%
Source: FitchRatings

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Natl City Seeks VISA Gift Card Agents

National City has launched a program to offer agent banks instant-issue VISA gift cards, after scoring success with its in-house program. Offered in pre-denominated values ranging from $25-$200, branch representatives activate the card at the point of sale by calling a toll-free number; no new or dedicated equipment is required by the agent bank. The agent bank VISA gift card program enables banks to earn revenue on each card sold, and provides the flexibility for the agent bank to set the purchase price charged to customers. The agent bank VISA gift card program provides consumers complete access to customer service resources. Cardholders can obtain balance information anytime online or through the gift card’s toll-free support number. Pen Air FCU of Pensacola Florida, recently began participating in the agent bank program and is selling VISA gift cards to members at its 12 retail offices.

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Elan Offers a Turnkey ATM Solution

Elan Financial Services has introduced two ATM options: a turnkey outsourcing plan in which Elan owns and maintains the ATM, or a modified outsourcing plan in which the financial institution owns the ATM and contracts with Elan for certain services. The outsourcing program helps to reduce the burden of replacing or upgrading ATMs to comply with certain mandates. Elan will provide transaction processing services, maintenance, ATM monitoring, and cash and deposit management as well as replace and upgrade ATMs. The outsourcing program was the result of surveys indicating that many financial institutions prefer to outsource their ATM program. Elan Financial Services supports over 7,800 ATMs, 15 million ATM/POS cards, and 2 million credit cardholders.

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Low APR Most Valuable Perceived Feature

Even though reward programs are heavily promoted by credit card issuers, consumers prefer a low interest rate or no annual fee most of all. Nearly half of Americans (47%) say a low interest rate is the most valuable credit card feature, while one-fourth say no annual fee is the best feature. According to a CardWeb.com homepage poll conducted between September 7th and 28th, only 21% of the 1,302 participants designated rewards for purchases as the most valuable credit card feature. Slightly more than 3% say a high credit limit is the biggest attraction while about 2% say online account access is the most valuable. Less than 2% says automatic discounts are the key feature they look for in a credit card offer. The CardWeb.com survey has a margin of error of plus or minus approximately 4.0 percentage points.

HOMEPAGE POLL 9-7 to 9-28
Question: Which of the following is the most
valuable credit card feature?
Low Interest Rate 47%
No Annual Fee 25%
Rewards for Purchases 21%
High Credit Limit 3%
Online Account Access 2%
Automatic Discounts 2%
Source: CardWeb.com, Inc. (R)

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TSAI to Lose its Current CEO in Mid-2006

Omaha-based Transaction Systems Architects announced that Gregory Derkacht, president and CEO, will retire no later than June 30th, 2006. The company also announced a revised employment agreement with Mr. Derkacht that would provide his continued service until his successor is found. The Board of Directors is looking for an experienced leader who could take over for Mr. Derkacht. Transaction Systems Architects, Inc. has software that facilitates electronic payments by providing consumers and companies access to their money. The company’s solutions are used on over 1,700 product systems in 76 countries.

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Paymentech Hooks Pro Golf International

Dallas-based Paymentech has inked a payment processing deal with Pro Golf International for its 120 golf clothing and equipment franchise stores, producing more than $100 million annually in card volume. Pro Golf International signed with Paymentech because of its quality of technology and level of customer service. The deal calls for Paymentech to provide advanced online reporting tools and consolidated financial data for payment and gift card sales. Pro Golf International is based in Farmington Hills, Michigan and is currently the most rapidly growing golf retail franchise operation in the world. Paymentech, L.P. processes the most payment transactions in North America.

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VISA and the CBC Release White Paper

VISA International and the Commonwealth Business Council have released a white paper which supports the notion that efficient
and effective payment systems are vital for economic modernization.
According to the paper, the electronic payments revolution that transformed consumer spending in many countries and boosted the global economy can be expanded to provide significant benefits in developed and developing countries around the world and draw two billion unbanked citizens into mainstream financial services. The paper advances
an essential argument in the debate about driving economic modernization
and bridging digital divide issues: governments can deploy tailored
electronic payment initiatives for specific stakeholders or geographies,
allowing infrastructure, education and adoption issues to be resolved in
targeted and cost-effective ways, with maximum return. To make this case, the paper clarifies the components of electronic payment systems from the point of view of international payment networks.

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Fair Isaac Launches a Global FICO Score

Fair Isaac has launched the “Global FICO” score for businesses operating outside the U.S., Canada, U.K. and South Africa. The “Global FICO” score is already being implemented by lenders in Poland, Sweden and Mexico. Lenders in countries where “FICO” scores are not yet available can use the “Global FICO” score to leverage available bureau data in automated, accurate credit decisions. Multinational companies can use “Global FICO” score as a common risk measure across diverse markets, without regard for the credit bureau or country where the scores are calculated. Fair Isaac has built its “Global FICO” scoring formula with a flexible but comprehensive library of variables to extract predictive value from the widest range of available credit data. The company has also developed and validated preconfigured software that intelligently interprets available credit data for consistent assessment of risk. Use of preconfigured software additionally helps clients implement the scoring solution quickly.

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