Gemplus Smart Payment Card Revenues Up 37%

French 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. 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. For complete details on Gemplus’ second quarter performance visit CardData ([www.carddata.com][1]).

GEMPLUS SNAPSHOT
Revenues Gross Profit
2Q/03: $46.7 million $ 8.2 million
3Q/03: $57.5 million $15.2 million
4Q/03: $54.4 million $ 8.7 million
1Q/04: $48.7 million $11.0 million
2Q/04: $53.8 million $10.6 million
Source: CardData (www.carddata.com)

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

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NRF Is Hopping Mad about PIN POS Fees

The National Retail Federation says that fees for PIN POS debit card transactions are causing confusion in the marketplace as consumers believe the fees are charged by the retailer instead of the bank issuer. The NRF last week asked the Federal Reserve Board to require more disclosure on such fees. In the July 23 comments, NRF asked the FRB to require any bank that charges a fee for PIN transactions to “fully disclose the fee it will charge and the name of the bank that will receive the fee.” The NRF says a bank should be required to reveal that it is already receiving an interchange fee, and to bear all costs of disclosure, including any hardware or software the merchant would be required to install. If banks are not required to make meaningful disclosure and pay for related costs, they should be barred from charging PIN fees, the NRF said. The NRF says the bank fees, which range from $0.50 to $1.50 per transaction, have prompted consumers to demand refunds from countless retailers.

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Comdata’s SVS Buys into ProfitPoint

Comdata’s Stored Value Systems has acquired a minority interest in TN-based ProfitPoint, which provides integrated gift card and loyalty programs for small and medium-sized retailers and restaurants. The investment reflects SVS’ continuing commitment to the development of innovative stored value solutions, particularly in this high-growth market segment. Stored Value Systems, Inc. (SVS) is one of the world’s leading providers of electronic gift cards and other card-based transaction programs. ProfitPoint is a payment services company that markets value added, card based loyalty programs to businesses which enables them to attract new customers, encourage repeat visits, track, monitor and report customer purchasing patterns and reduce the risk of shrinkage and exposure to fraud.

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Forrester Launches the Ultimate Consumer Panel

Forrester Research has launched a single-source, opt-in, highly secure panel that electronically captures online and offline behavior from a representative group of more than 10,000 U.S. households. The “Ultimate Consumer Panel” captures three types of data from its panelists including 24,000 electronic monthly statements, online behavior/activities, and survey data. The monthly statements include more than 8,000 credit card statements, 2,800 bank account statements, and 2,500 wireless and 3,700 residential phone bills. The “Panel” monitors daily Web behavior, including the URL for every site online panelists visit and what they do on those sites. The “Panel” is also surveyed bimonthly. Current “Ultimate Panel” clients include MasterCard, Wells Fargo, and Household.

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Girl Scouts Targeted for Financial Literacy

VISA USA and the Girl Scouts of the USA have teamed to promote financial literacy among tween and teen girls. These resources are being launched at a time when a new survey shows that teen girls lack an understanding of financial basics. In a recent Visa USA survey, only 33 percent of girls aged 13-17 were able to correctly identify six or more common terms such as interest, APR and IRA. Girl Scouts of the USA is the preeminent organization for girls, and has more than 3.8 million girl and adult members. Visa is the world’s leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with a wide variety of payment alternatives.

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Barter Gift Cards Set to Launch

FL-based Bentley Commerce has launched gift and stored value scrip cards that can be purchased by members of participating barter exchanges with trade dollars. The Gift Card follows the introduction of Bentley Commerce’s Platinum Business Trade card, introduced last week , which is used for debit card purchasing using barter at the point of sale, and works off the same proprietary swipe card software technology on new terminals provided to merchants, or uploaded to merchants’ existing supported terminals. Bentley Commerce Corp. is a business-to-business, Internet e-commerce company that is establishing a new marketplace and distribution channel for worldwide barter and trade. Through the development of a seamlessly integrated family of online barter services, it envisions that most barter transactions can be handled over the Internet in real time, with its proprietary VirtualBarter software.

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Zebra Unveils a New Loyalty Card Printer

Zebra Technologies has unveiled the low-cost “P205” card printer, a single-sided monochrome plastic card printer designed for organizations looking to create personalized identification, membership, and guest or loyalty cards. The printer easily adds information such as a customer’s name, black & white photo, account number, and length of affiliation to the front or back of a card. Additional information can also be printed on the card in the form of a bar code. Zebra Card Printer Solutions is a division of Zebra Technologies Corporation, which delivers innovative and reliable on-demand printing solutions to businesses and governments in more than 90 countries around the world.

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AmEx TRS Profits Up 16%; Adds 400K US Cardholders

American Express Travel Related Services reported second quarter net income of $732 million, compared to $665 million in the previous quarter, and $634 million one-year ago. Charge volume in the U.S. increased 17% year-over-year, compared to a 19% annual increase posted for the first quarter of this year, and a 10% annual growth rate for 2Q/03. AmEx says U.S. and global discount revenue grew 18% driven by a 19% increase in billed business. The issuer added 400,000 net new cardholders in the second quarter for the USA, compared to 600,000 in 1Q/04, and 200,000 in 2Q/03. AmEx no longer breaks-out its U.S. lending component. Worldwide, AmEx had $45.1 billion in card loans, a 7.2% increase over 2Q/03. Worldwide delinquency was 2.5% for 2Q/04, compared to 2.8% one-year ago. Worldwide net charge-offs were 4.5% for the second quarter, compared to 5.4% for 2Q/03. For complete details on AmEx’s second quarter performance as well as prior quarters visit CardData ([www.carddata.com][1]).

American Express U.S. Card Portfolio Snapshot
2Q/04 1Q/04 4Q/03 3Q/03 2Q/03 Ann Chng
Volume $75.7 70.1 72.3b 66.3b 64.6b +17.2%
Cards 37.4m 37.0m 36.4m 35.9m 35.4m +5.6%
Source: CardData (www.carddata.com)

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

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VisaNet Certified to Handle 6K/Sec Transactions

VISA USA this month successfully tested its global payment system, “VisaNet,” in advance of the upcoming holiday season. The stress test assumed a 20% increase in transaction volume, certifying that its system can sustain a peak of more than 6,000 transaction messages per second. VISA engineers conducted the annual test on a full model of “VisaNet” that assumes the model must handle all of VISA?s expected traffic, without the help of the redundant data centers VISA employs around the world. The test bed was built at an IBM technology lab outside Washington, D.C. The test system included five high-performance computer systems, 65 Terabytes of disk storage, and 2 Gigabyte router capacity, making it the most complex, high volume payment system tested in a lab environment. VISA engineers fed the system one week?s worth of actual transactions, captured at an earlier time and fed at various rates to the test system.

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Providian Fundamentals Point to a Strong 2004

Providian reported net income for the second quarter of $69.7 million, a sharp decline from last quarter’s $102 million profit, but up 79% compared to 2Q/03. During the quarter, the issuer signed up more than 500,000 new accounts but lost just as many, ending the quarter at approximately 10.3 million accounts. The Company’s managed 30+ day delinquency rate at the end of the second quarter decreased to 6.44% from 7.36% at the end of the first quarter, and down significantly from last year’s 9.72%. Managed net credit losses in the second quarter were $525.4 million, resulting in a managed net credit loss rate of 12.53%, compared to 13.88% in the first quarter, and 16.84% for 2Q/03. The net interest margin on average managed loans in the second quarter was 13.75%, compared to 14.12% in 1Q/04, and compared to 15.09% for 2Q/03. Managed loans receivable as of June 30th, increased to $17.3 billion compared to $16.7 billion at the end of the prior quarter and $17.8 billion one-year ago. For complete details on Providian’s second quarter performance as well as prior quarters visit CardData ([www.carddata.com][1]).

Providian Net Income Track Record
2Q/03: $39.0 million
3Q/03 $85.3 million
4Q/03: $67.1 million
1Q/04: $101.7 million
2Q/04: $69.7 million
Source: CardData (www.carddata.com)

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

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Marsh Supermarkets to Offer Jeanie POS Service

IN-based Marsh Supermarkets has signed a new five-year contract with Fifth Third Bank Processing Solutions to offer “Jeanie” POS services at its 110 stores. Marsh operates 67 Marsh(R) supermarkets, 37 LoBill(R) Foods stores, nine O’Malia(R) Food Markets, 164 Village Pantry(R) convenience stores and one Savin(SM) store in Indiana and western Ohio. Fifth Third Bank Processing Solutions processes over nine billion ATM and POS transactions per year for more than 207,000 retail locations and 1,350 financial institutions worldwide, including The Kroger Co., AutoZone, Abercrombie & Fitch, Nordstrom, Inc. and The Finish Line. Annually, Fifth Third processes $97 billion in credit card sales.

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Newtek Signs More Credit Union Leagues

NY-based Newtek Business Services has secured the endorsement of 11 state credit union leagues to provide electronic payment processing services, representing a total of 1,540 credit unions nationwide, in addition to CUNA’s 9,600 credit unions. Ten of the state credit union leagues have endorsed Newtek Business Services for both SBA lending and electronic payment processing. Newtek Business Services, Inc. is a premier provider of business services and financial products to the small to medium-sized business market.

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