GEMPLUS 2Q/04

Global smart card specialist, Gemplus, reported that payment
microprocessor card revenue for 2Q/04 rose 37% year-on-year, and 15%
quarter-on-quarter. Gross profit for the Company’s financial services
unit increased 29%, from $8.2 million one-year ago to $10.6 million for 2Q/04. Financial services revenues increased from $46.7 million to $53.8
million during the same period, a 15% gain. Financial services revenue
growth was primarily driven by EMV and, to a lesser extent, by Pay-TV
cards. EMV shipments continued to improve with strong growth in
Scandinavia, France and Mexico. Microprocessor card revenue growth was
partly offset by lower sales in magnetic stripe cards, due to
cannibalization by EMV cards.

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GlobeTel Launches a STV MasterCard in Australia

FL-based GlobeTel Communications and Australian-based QnQ have teamed to launch a stored value MasterCard in Australia. The new “OnQ Bill Express Magic Money MasterCard” will be distributed through QnQ’s 8,000 points of sale throughout Australia. The new prepaid debit card can be topped up at selected retail outlets and used wherever the MasterCard and Maestro logos are featured. The OnQ Group of Companies specializes in e-Commerce and business solutions through products that provide clients with a “one-stop” shop for multiple solutions, or specific solutions, for specific needs. GlobeTel is in the international carrier termination business and is expanding to provide strategic advantages to commodity telecommunications based products.

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Comdata Payroll Cards Get Free eFunds ATM Access

TN-based Comdata has signed an agreement with eFunds to offer a surcharge-free network option to its payroll card customers. The service, expected to be available later in the year, will give Comdata cardholders surcharge-free access to eFunds’ U.S. ATM network of more than 15,000 ATMs. More than 5,600 businesses throughout retail, transportation, and many other industries rely on Comdata for electronic payroll distribution. The payroll electronic distribution services are primarily provided through Comdata’s Stored Value Systems subsidiary. Comdata’s payroll card functionality is one of several innovative corporate payment tools offered as part of “BusinessLink,” a one-card business solution for purchasing, T&E, fleet and payroll/expense reimbursement.

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Hong Kong Orders 5 Million More SMARTICS Cards

The Hong Kong Government has signed a contract with Keycorp Limited for 4.7 million smartcard chips for its citizens. Keycorp has already supplied over 2 million chips for the “Smart Identity Card System.” The cards are being provided to the Hong Kong Government via a consortium led by Unihub Limited. The multi-function smart ID card securely contains the photograph, basic identity details and fingerprint biometric of each cardholder. It can also contain an electronic certificate for e-transactions. The government has also made available a public library card application and may in future also add a driving license application. The card can even have an e-wallet installed. In the first phase of their introduction, “SMARTICS” cards were provided to new arrivals, those who have lost or damaged their existing cards or people who wished to amend their existing details. Police and other government officials have been supplied with new cards under the first phase of the program. The second phase will address the remainder of Hong Kong’s citizens, progressively replacing their cards in a rolling program based on birth dates.

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Amazon.com Offers an Incentive to AmEx Merchants

American Express has inked a deal to promote merchant participation on Amazon.com. Under terms of the deal, businesses in the U.S. that accept the American Express card can join the “Amazon Services Pro Merchant” program to sell on Amazon.com with no subscription charges for the first three months. The “Pro Merchant” program offers retailers volume-listing tools, Amazon.com storefront capabilities, and unlimited free listings for a monthly subscription cost of $39.99 plus a commission when products sell.

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NCR ATM Revenues Climb 27% in the Second Quarter

OH-based NCR reported that its ATM division posted second-quarter revenue of $330 million, up 27% from the year-ago period. The Company says it is seeing continued growth in upgrades, replacements and the purchase of new ATMs as banks focus more on branch banking, transaction migration, and compliance with regulatory changes. NCR says these new deposit-capable ATMs should allow banks to reduce cash-handling, check-processing and transportation costs. NCR’s Retail Store Automation unit generated $212 million of revenue, up 4% from the second quarter of 2003. NCR says retailers continue to be disciplined in their capital spending, but they have begun to replace and upgrade their point-of-sale terminals and expand their deployment of self-checkout systems. NCR’s overall revenues for the second quarter grew 6% to $1.45 billion. For complete details on NCR’s 2Q/04 performance visit CardData ([www.carddata.com][1]).

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

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Rewards Network Hotels Signs Marc Resorts Hawaii

Marc Resorts Hawaii has joined Rewards Network Hotels offering members up to 15% “Cashback Rewards,” and airline members up to 10 airline miles for every dollar spent on the room rate. With 13 destinations in premier Hawaiian locations spanning five islands, Marc Resorts Hawaii offers deluxe accommodations and consistent standards of excellence for travelers. Rewards Network SM provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform. Incentives are offered through the Rewards Network branded program, airline frequent flyer dining programs, club memberships and other affinity organizations.

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FTC Nails Bogus Debt Management Services Peddlers

A lawsuit has been filed against JPMorgan Chase alleging violations of the “Fair Labor Standards Act” overtime regulations at call centers in 11 states. According to the FTC, consumers who respond to DMFS’s messages or Internet advertising speak with representatives who claim that DMFS is a nonprofit company that consolidates consumer credit card debt. The representatives allegedly identify a specific, monthly payment amount that the consumer will be permitted to make if he or she consolidates debts with DMFS. The representatives allegedly tell consumers that, to receive these benefits, each consumer must pay DMFS up-front fees that run as high as $1,000, and also pay monthly fees of $20 to $49.

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Advanta Lifts Earnings Estimates as Metrics Improve

MasterCard business card specialist, Advanta, raised its 2004 earnings estimates by 6% due to “favorable asset quality performance.” Yesterday, the issuer reported that its 30+ day delinquency ratio declined 24% from year-ago figures, and 11% sequentially. Charge-offs also declined 11% from 2Q/03, and 4% since the first quarter of this year. Managed receivables hit $3.1 billion compared to $2.8 billion one-year ago. Over 30 day delinquencies on managed business credit card receivables declined to 4.80%, and over 90 day delinquencies decreased to 2.50%. Managed charge-offs dropped to 6.99% for the second quarter, compared to 8.03% one-year ago and 7.19% in the prior quarter. Charge volume was $2.0 billion for the second quarter, a 19% gain over the second quarter of 2003. For complete details on Advanta’s 2Q/04 performance visit CardData (www.carddata.com).

ADVANTA’S CARD PORTFOLIO SNAPSOT
2000: $1.4 billion
2001: $1.9 billion
2002: $2.2 billion
2003: $2.8 billion
2004: $3.1 billion
Source: CardData (www.carddata.com)

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GE Buys the Target Mervyn’s Store Card Portfolio

Target has agreed to sell its Mervyn’s private label credit card portfolio to GE Consumer Finance for $475 million. At the end of May, the Mervyn’s portfolio had $481 million in outstandings, compared to $541 million one-year ago. The sale is part of Target’s plans to unload its entire Mervyn’s unit. Target is selling its Mervyn’s stores and distribution centers to a consortium of investors, including Sun Capital Partners, Cerberus Capital Management, and Lubert-Adler/Klaff and Partners. Mervyn’s is a promotional, middle-market department store, based in the San Francisco Bay area with 257 stores in 13 states, primarily in the west and south. GE is the largest private label credit card issuer in the world. Target’s private label credit card outstandings have been slowly contracting since the introduction of the “Target VISA” card in September 2001. At that time, Target had $2.4 billion in private label credit card outstandings, compared to $1.8 billion at the end of May of this year. During the same period Target’s bank credit card portfolio has grown to $4.0 billion. GE said it expects to close the Mervyn’s acquisition by the September 30th. For complete portfolio details on Target and GE visit CardData (www.carddata.com).

MERVYN’S CARD LOAN HISTORICAL
4Q/02: $626 million
1Q/03: $541 million
2Q/03: $519 million
3Q/03: $503 million
4Q/03: $550 million
1Q/04: $481 million
Source: CardData (www.carddata.com)

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Albertsons to Offer Coinstar’s e-Payment Products

Albertsons has agreed to deploy Coinstar’s e-payment products and services in over 1,800 grocery and drug store locations in the USA. Coinstar expects all 1,800 installed Albertsons locations to be equipped with Coinstar’s e-payment services, including prepaid wireless airtime and Green Dot(TM) Prepaid MasterCard(R) cards. This stored-value card may be purchased at the Coinstar Center and loaded with dollar amounts from $20 to $500. Coinstar Inc. pioneered self-service coin counting to provide consumers a convenient and innovative means to convert loose coins into cash.

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Usher Raymond IV Debit MasterCard Launched

SD-based BANKFIRST has launched the “Usher Raymond IV Debit MasterCard” providing exclusive access to “The World of Usher,” which offers merchandise discounts and concert tickets. The Usher Raymond IV Debit MasterCard enables its user to prepay or store money in a financial account that can be accessed for purchases, bill payment, or ATM cash withdrawals. The Usher Debit MasterCard is accepted at millions of locations worldwide, and includes optional cash access through the Cirrus ATM network worldwide. The card can be reloaded with additional funds, and if subject to loss, theft or fraud, MasterCard Zero Liability protection applies. BANKFIRST is a privately-held service financial group with approximately 1,000 employees across operations in South Dakota, Minnesota and Arizona.

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