CIBC Cards Loans Up 6%, Revenues Climb 12%

CIBC reported that its credit card loans grew 6% in the quarter ending July 31st to C$9.878 billion. The nation’s largest bank credit card issuer posted a nearly 12% increase in card revenues for the quarter to C$347 million, tying the record set in the final quarter of last year. During the quarter, CIBC sold approximately 2.3 million shares of Global Payments resulting in an after-tax gain of C$74 million. CIBC expects to unload the remaining 6 million shares held, which have collars, for an after-tax gain of at least C$182 million. This month, CIBC announced the sale of Juniper Financial to Barclays Bank for C$383 million. Upon closing the deal by year end, CIBC expects to recognize an after-tax gain of approximately C$46 million. On October 1st, CIBC intends to end its “Entourage” co-branded venture with American Express which launched in January 2002. For complete details on CIBC’s latest results visit CardData (www.carddata.com).

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Grupo Financiero Uno Implements Falcon

Transaction processor Grupo Financiero Uno will offer advanced fraud detection capabilities to its clients through a recent implementation of Fair Isaac’s “Falcon Fraud Manager.” As part of a five-year agreement, Grupo Financiero Uno has integrated
Fair Isaac’s market-leading payment card fraud detection system with its
processing platform, providing credit card issuers in Guatemala, El
Salvador, Honduras, Nicaragua, Costa Rica and Panama with an improved
ability to minimize fraud losses through real-time detection of
fraudulent card transactions.

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Rahaxi Processing to Distribute Hypercom ICE

Rahaxi Processing OY, a subsidiary of FreeStar
Technology, has signed a licensing and distribution agreement
with Hypercom to deploy the “ICE” family of terminals. Rahaxi provides a variety of credit card processing and merchant services ranging from merchant accounts to Internet-based credit card processing. FreeStar currently processes approximately 1,000,000 card payments per month for an established client base that comprises companies such as Finnair, Ikea and Stockman.

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Chip and PIN Migration Passes the Mid-Mark

The “Chip and PIN” roll-out in the U.K. has topped 50 million cards. Well over half of the U.K.’s 42 million cardholders now have the cards. Almost half of all retailer terminals in the U.K. have installed “Chip and PIN” with 396,000 terminals at shops, restaurants, and bars switched over. “Chip and PIN” launched the second phase of its advertising campaign last week with TV, radio and press advertisements. The campaign, which runs for 13 weeks, aims to ensure cardholders are ready to use their PIN, with specific messages about how to unlock their PIN, remind them they can change their PIN to something they can remember easily, and to encourage them to keep their PIN a secret. The roll-out of chip and PIN began in October 2003 and is backed by the U.K.’s banking and retail industries.

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Intell-A-Check Becomes ClearTran, Inc.; Relocates

NJ-based Intell-A-Check has changed its corporate name to ClearTran and will relocate to Parsippany, NJ next month. Over the past 11 years, the company has expanded dramatically and has outgrown both their old name and offices. The new office location will not only provide additional space, it will also allow greater access to some of the country’s best telecommunications and power infrastructure.

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AsiaPay Adopts J/Secure for 300 Clients

AsiaPay Limited is adopting “J/Secure,” JCB’s payer authentication program. Twenty major AsiaPay client merchants
including Sinomedia Holdings and U Domain Web Hosting Co have
started using the “J/Secure” program for online shopping. An additional 300 AsiaPay e-commerce client merchants are expected to follow immediately. AsiaPay’s merchant server is equipped with merchant server
plug-in software compliant with “J/Secure” technology, performing the
authentication checking for the payment service provider’s client
merchants.

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Fortis Belgium to Offer Axalto Luxea Cards

Axalto has been selected by Fortis Belgium to provide
attractive transparent microprocessor cards for its new program
dedicated to young customers. The program, launched in April this year,
aims at reinforcing young customer loyalty with differentiated products.
Axalto is the sole supplier of the 300,000 “Luxea” smart cards to be
distributed by Fortis throughout Belgium. The transparent cards feature
debit and e-purse application.

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Chimera Technology and e-Network Partner

Chimera Technology announced that e-Network (Europe) Limited, operating the URL www.eNetworkBank.com, has been selected to execute the e-commerce transactions for all Chimera licensees. The payment gateway is the backbone of any successful online gaming portal and it must have the ability to reliably execute e-commerce transactions so that patrons may deposit and withdraw funds from their accounts with complete confidence. e-Network deals with all major e-commerce institutions and has the ability to execute transactions using all major credit cards including VISA, MasterCard and Diner’s Club. In addition, they also offer alternative methods of deposit including, VISA Electron, Direct Bank Wire, Neteller, Pre-Pay ATM and Book to Book transfer.

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Bankruptcy Boom Likely if IRS Revokes CCAs Status

A national consumer advocacy group warns there could be an explosion in the numbers of bankruptcies filed in the near future unless most states or Congress act soon to change the laws regulating the credit counseling industry. Currently, a majority of states have laws that either outright ban individuals or taxpaying businesses from providing credit counseling services, or otherwise in practice restrict credit counseling services exclusively to tax-exempt organizations. A recently released IRS memo indicates the IRS is preparing a case for revoking the tax-exempt status of large numbers of credit counseling agencies. Consumers for Responsible Credit Solutions says such entities would likely shut-down, leaving hundreds of thousands of consumers with little choice but to declare bankruptcy.

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Kerry to Take on Abusive Credit Card Practices

Senator John Kerry will take on the credit card industry today accusing banks of abusive practices in regard to penalty interest rates, universal default clauses, overlimit, and late payment policies. Adding fuel to the debate is that pre-tax credit card profits have doubled during the Bush administration, at a time when funding costs plunged to record lows. In a speech to be given today, Kerry will say he will ask Congress to legislate standards and to direct the Federal Trade Commission and bank regulators to impose regulations to require issuers to disclose the cost of making minimum payments. Kerry also wants to limit the increase in penalty interest rates to a few percentage points. Additionally, he wants to forbid credit card issuers from raising interest rates for customers with perfect payment records who have missed a payment on some other company’s bill. Kerry will also attack predatory lending practices associated with mortgages today. In the four year period between 1996 and 1999, credit card profits were $51.7 billion compared to $102.4 billion in the last four years.

PRE-TAX CARD PROFITS
1990: $ 6.4 billion
1991: $ 6.4 billion
1992: $ 6.3 billion
1993: $ 7.1 billion
1994: $11.1 billion
1995: $12.9 billion
1996: $13.6 billion
1997: $11.5 billion
1998: $11.4 billion
1999: $15.2 billion
2000: $20.5 billion
2001: $24.3 billion
2002: $27.8 billion
2003: $29.8 billion
SOURCE: CardData (www.carddata.com)

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Hibernia Offers Biz Credit and Debit Card Rewards

New Orleans-based Hibernia National Bank has launched a rewards program enabling small-business owners to earn points on credit card and debit card activity. The “Hibernia MasterCard BusinessCard” also allows them to earn rewards from multiple cards with no annual cap. The program allows the use of two enrolled cards per membership, one credit and one debit. Under the rewards program, one point is awarded for each dollar spent. Businesses can enroll an unlimited number of employees in the rewards program for $50 each. A bonus of 1,000 points are awarded for the first qualifying purchase on each enrolled card. Points can be redeemed for a wide range of merchandise, gift certificates and travel.

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On Track Innovations Hits Breakeven Point

Israel-based On Track Innovations reported that its operating cash flow reached the breakeven point for the first half of this year as revenues neared $10 million. The specialist in contactless, microprocessor-based smart card solutions, is also prepared for a sharp rise in orders for its card readers used in conjunction with the “MasterCard PayPass” card, currently in a national roll-out. OTI recently received its first commercial order to support “PayPass” from an undisclosed issuer. For complete details on OTI’s latest performance visit CardData (www.carddata.com).

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