Average Credit Card Transactions Up 2.5%

While the average purchase transaction with a signature debit card continues to hover at $39-$40, the average purchase transaction with a VISA/MasterCard credit card has increased more than 2.5% this year. As of June 30th, average purchase transactions on credit cards, for the first six months of 2004, hit an all-time high of $84.95 compared to $82.86 one-year ago. The increase has been driven by a recovering economy, business card purchases, and deeper penetration into big-ticket transactions. Over the past five years, the first six months of 2002 posted the most significant decline with average credit card purchases slipping below $82 and debit card purchases dropping under the $39 level. During the first half of 2004, VISA and MasterCard reported $495.1 billion in credit card purchase volume and 5.8 billion purchase transactions. VISA and MasterCard posted 5.5 billion signature debit card purchase transactions producing $217.9 billion in purchase volume.

Average Purchase Transactions
(First Six Months of Each Year)
YEAR CREDIT DEBIT
2000: $82.84 $39.48
2001: $82.12 $39.40
2002: $81.78 $38.88
2003: $82.86 $39.29
2004: $84.95 $39.62
Source: CardData (www.carddata.com)

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Metavante Renews the ACI BASE24 Agreement

Metavante Corporation has renewed its commitment to ACI’s “BASE24” transaction processing software. The company will continue to use ACI’s flagship payments software and enjoy reduced transaction costs as well as scalability to meet more transaction volumes. ACI’s BASE24 software delivers a routing, switching, and authorization solution for transaction processing conducted online. Metavante Corporation delivers banking and payment technologies to financial services firms and businesses all over the world. ACI software is used over 40 billion times a year to process transactions that take place every second of every day. Over 500 customers in 75 countries are using ACI software.

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HP Lands a $55MM 7-Eleven RIS Contract

7-Eleven is deploying HP technology in 5,300 U.S. locations under a five-year, $55 million contract. Each 7-Eleven store in the U.S. will have a dual-processor HP “ProLiant ML330” server running Microsoft “Windows Advanced Server 2003.” The new technology supports 7-Eleven’s “Retail Information System,” streamlining its product traffic management process and allowing store operators to use in-store computers to re-order best-selling inventory and remove slow-moving items from store shelves. A typical 7-Eleven store carries about 2,500 different items. 7-Eleven handles about six million customers per day.

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VeriFone Unveils Two Low-End Terminals

VeriFone unveiled two, new, low-cost payment terminals that extend the “Omni 3700” family to the ISO community. The new “Omni 3730” and “Omni 3730LE” terminals are dial-up terminals that offer fewer applications than other “3700” models. Both terminals feature the handover style of the “Omni 3750.” The “Omni 3730” will also support a value-added application such as gift card, loyalty, check conversion or pre-paid phone activation. Both models have a backlit display, integrated thermal printer, and clam shell design for drop-in paper loading. VeriFone says the new terminals will directly compete with low-end terminals offered by Hypercom and Lipman, and the refurbished market of older VeriFone terminals.

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QuikTrip Stops Gas Thefts with a New Card

Faced with $3 million in drive-off gasoline thefts last year in Kansas City, QuikTrip is rolling out a new prepaid card that requires cash customers to pay in advance for their fuel purchases. The new “PumpStart Card” program is being introduced in 16 stores in the Kansas City metropolitan area this week. Under the program, the store employee enters the customer’s driver’s license, and then issues the customer the prepaid card. QuikTrip Corporation is a privately-owned gasoline/convenience store retailer with 435 stores in nine states.

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Troy B&T Leads Peer Group Performance

AL-based Troy Bank and Trust posted a 17% increase in outstandings for the second quarter and nearly a 25% gain in volume. Among issuers with card loans between $1 million and $10 million, Troy B&T posted the best second quarter performance, according to CardData ([www.carddata.com][1]). The issuer has $1.6 million in credit card outstandings and about 2,000 active accounts. Other issuers in the peer group posted modest gains. For example, TX-based Citizens National with $1.8 million in outstandings, reported a 3.6% gain in 2Q/04 card loans, and IL-based West Suburban Bank, with $9.1 million in card loans, posted a 0.9% increase in outstandings. WA-based Cowlitz Bank, with $1.1 million in card loans, had a 15% decline in both outstandings and active accounts.

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

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New Merchant Fees Draws Investigation in Korea

South Korea’s Fair Trade Commission has launched an investigation into merchant fee pricing after allegations surfaced last week that credit card companies colluded to raise fees. The FTC dispatched investigators to BC Card, LG Card, KB Card, and the Credit Finance Association, according to CardFlash International. The FTC is also investigating the Korea Franchise Business Association to determine if its members committed illegal collective activities while protesting against the recent fee hikes. The country’s largest discount retailer, E-Mart, recently filed a lawsuit against KB Card, BC Card, and LG Card over new transaction fees, and has stopped taking cards in some of its stores. KB Card and LG Card are raising E-Mart’s rate from 1.5% to 2.2%, while BC Card is increasing its fee for E-Mart from 2.0% to 2.35%.

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Paymetric Board Adds Former Top Bank One Exec

Houston-based Paymetric has named Tyree Miller, former president and CEO of Bank One’s Global Treasury Services business unit, to the company’s board of directors. Mr. Miller has 28 years of financial services experience. His responsibilities at Bank One included president & CEO of Bank One Dallas, managing director of Commercial Banking and head of all Commercial Banking products and staff functions, and chairman & CEO of Bank One, Texas NA. Miller also worked as a director of Anexsys LLC, PaymenTech LLC, and Visa USA. He was an alternate director on the executive committee of The New York Clearing House and presently serves on the board of The Cox School of Business at SMU. Paymetric is a market leader in regard to enterprise payment solutions with a focus on SAP payment processing.

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NCR Gets a New CFO from Within

NCR Corporation has promoted Pete Bocian to SVP/CFO of the company. Mr. Bocian has worked for NCR for 21 years, serving as vice president of finance and interim chief financial officer. He was also chief financial officer of the Retail and Financial Group where he was responsible for financial and administrative functions for the four business units that make up the group. NCR Corporation is a global technology company that helps businesses create strong relationships with their customers through its ATMs, retail systems, Teradata® data warehouses and IT services.

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Circuit City Reports Card Agent Revenues

VA-based Circuit City reported second quarter credit revenues of $6.6 million from its agent relationship with Chase for private-label and co-branded credit cards. Before the most recent second quarter, private-label and co-branded credit cards were available through First North American National Bank, Circuit City’s wholly owned subsidiary. Private-label and co-branded finance income was not included in the total sales. It was reported as finance income on the consolidated statements of operations in all prior periods. Circuit City Stores, Inc. is a retailer of consumer electronics.

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Western Union Opens its 200,000th Global Agent

Western Union Financial Services and Orlandi Valuta opened its 200,000th global agent location with a ceremony in Athens. Two Olympic medal winning Greek athletes, Hrysopiyi Devetzi and Ilias Iliadis were part of the ceremony. Devetzi and Iliadis joined Western Union President Christina Gold at the new Agent location on Omonia Square. This location is one of seven opened simultaneously in Athens by Christopher C. Varvias & Associates S.A., which operates a network of nearly 600 Western Union Agent locations throughout Greece.

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ASIA/PACIFIC OPTIMISM

MasterCard released an optimistic retail sales forecast for the second half of this year for Asia/Pacific. During the first six months of 2004, MasterCard purchase volume in the region was up 13.1%, rising 15.5% in the second quarter. According to the latest “MasterIndex of Retail,” year-on-year retail sales volumes are anticipated to grow for all 12 Asia/Pacific markets covered under the forecast. Prospects for Singapore are the brightest with a forecasted year-on-year growth of 19.0% for the second half of the year. Double digit growth is also expected from China (12.0%) and Taiwan (10.5%), followed closely by Thailand (9.8%), Hong Kong (9.5%) and Malaysia (8.5%). Other Asia/Pacific markets, while less bullish, yet indicating positive year-on-year growth include; Indonesia (4.3%), Japan (3.9%) and
Australia (2.8%).

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