Hypercom Improves Top-Line, Boosts Margin, and Cuts Loss

Despite a seasonally slow first quarter, Phoenix-based Hypercom Corporation reported first quarter revenues of $50.8 million and a net loss from continuing operations of $0.5 million, compared to $49.8 million in revenues and a net loss from continuing operations of $0.9 million in the year ago quarter. The terminal manufacturer says it still expects 2004 revenues to range from $254.0 million to $266.0 million with income from continuing operations between $21.0 million and 25.5 million. Hypercom’s gross margin increased to 41.9% in 1Q/04, versus 40.0% for 1Q/03. The Company closed the quarter with a sales backlog of $54.9 million, versus $57.0 million at the end of the fourth quarter, and $83.7 million at the end of 1Q/03. During the quarter, the Company released several new 32 bit terminal products in the “Optimum” family including the “L4100” for high volume multi-lane retailers worldwide, the “T4100” countertop terminal, and the “M2100” handheld, wireless terminal. Hypercom also introduced the “IN-tact 1101” IP gateway device, and announced the HBNet advanced data communication service for dial and IP POS processors. For complete details on Hypercom’s first quarter performance visit CardData ([www.carddata.com][1]).

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

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U.S. Patent Awarded for Exchanging Points Online

Japan’s AD.Ken Corporation last week announced it has received a U.S. Patent for a business model in exchanging points, via the Web, acquired by consumption activity, such as credit cards. The characteristic feature of our patent lies in that points received from real shops, EC sites or credit card payments are defied as “communication points” at the time of on-line-processing. This feature gives our patent sufficient competitive strength as intellectual property against preceding point-exchanging models.

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VISA Cardholder Winners Attend a Private Magic Kingdom Party

U.S. Bank announced its winners in VISA’s “Unlock the Magic” promotion which included, as part of the grand prize, a private after-hours “Magic Kingdom” party at Walt Disney World. As part of Visa’ s Unlock the Magic promotion, each of the U.S. Bank Visa cardholders won admission to an after-hours Magic Kingdom party for themselves and seven guests simply by using their Visa card for an everyday purchase. 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. Nearly 21,000 financial institutions worldwide rely on Visa s processing system, VisaNet, to facilitate $2.4 trillion in annual transaction volume with virtually 100 percent reliability.

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Comdata’s Gift Card and Payroll Card Business Gets a New Leader

TN-based Comdata Network, has hired Bob Skiba, formerly with the Gap, Home Depot, and Sears, as EVP/GM of the company’s Stored Value Systems subsidiary. Comdata(R) Corporation ([www.comdata.com][1]) is redefining the movement of money and information through technology for businesses, their customers and employees. Stored Value Systems, Inc. is one of the world’s leading providers of electronic gift cards and other card-based transaction programs.

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

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MBNA & EGG

The British press is reporting that MBNA and credit-card issuer Egg are about to ink a deal wherein MBNA will pick up Prudential’s 79% stake in Egg for $2.5 billion. The scramble for Egg began in late January as
MBNA, Royal Bank of Scotland, Capital One, GE Consumer Finance, Barclays, Citigroup, HSBC, BNP Paribas, and National Australia Bank all took a look at the potential purchase. Meanwhile, Egg last week reported that it cut its losses substantially in the first quarter from $27.8 million one-year ago to $8.7 million. The issuer says it managed discretionary expenditures tightly and is still in the process of unloading its credit card business. In the UK, Egg posted first quarter profits of $26.6 million, and in France the loss for the quarter reduced to $28.3 million. Egg says it added 148,000 net new customers in the UK during the first quarter. Unsecured lending balances in the UK grew by $421 million to quarter end balances of $8.9 billion. In France, card balances increased $222 million, up 9% on the prior quarter. At the end of the quarter, Egg France had 71,000 cards in issue with 85% of card balances revolving.

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Starwood Loyalty Program Named Tops, Again

Last week, Starwood Preferred Guest was once again voted “Program of the Year” in both America and Internationally during the “16th Annual Freddie Awards.” The loyalty program also took top honors as “Best Website,” “Best Award” Redemption, “Best Customer Service” and “Best Elite Level.” Starwood has a co-branding credit card relationship with American Express. The “Starwood Preferred Guest” program was born in February 1999. Starwood owns the St. Regis, The Luxury Collection, Westin, Sheraton, W Hotels and Four Points by Sheraton.

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Egg Cuts Losses by 68% in the First Quarter

Prudential’s Egg credit card and personal loan business in Europe cut its losses substantially in the first quarter from $27.8 million one-year ago to $8.7 million. The issuer says it managed discretionary expenditures tightly and is still in the process of unloading its credit card business. CardFlash International this morning reported that MBNA and Egg and close to signing a deal. In the UK, Egg posted first quarter profits of $26.6 million, and in France the loss for the quarter reduced to $28.3 million. Egg says it added 148,000 net new customers in the UK during the first quarter. Unsecured lending balances in the UK grew by $421 million to quarter end balances of $8.9 billion. In France, card balances increased $222 million, up 9% on the prior quarter. At the end of the quarter, Egg France had 71,000 cards in issue with 85% of card balances revolving. For complete details on Egg’s first quarter performance visit CardData ([www.carddata.com][1]).

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

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GlobeTel Hires Former Philippines VISA Executive

Miami-based GlobeTel Communications has hired Anton Romulo, former Philippines Country Manager for VISA International, as their new Philippines Country Manager. Prior to joining GlobeTel, Mr. Romulo was with Visa International as their Philippines Country Manager where he oversaw a portfolio of 1.9 million credit cards and 2 million debit cards issued by 8 member banks. Mr. Romulo will report to GlobeTel’s President, Mr. Leigh Coleman. GlobeTel is an IP solutions/applications based company. Although international carrier termination business is the base and the beginning of the Company’s services, GlobeTel’s goal is to provide strategic advantages to commodity telecommunications based products.

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VISA Pilots an EMV Contactless Combi Smart Card in Kuala Lumpur

VISA Asia Pacific introduced “VISA Wave,” the first-ever VISA contactless
smart card that is fully compatible with global EMV smart card standard.
The first 2,000 “VISA Wave” cards will be issued by MBF Cards in Malaysia
in a trial that runs until August 31st. The pilot involves more than 150
merchant locations in Kuala Lumpur. ‘VISA Wave” is a combi chip card with
both contact and contactless interfaces. Since last year, VISA has
conducted extensive focus group research among consumers between the ages
of 20 and 35 in Malaysia to test the appeal of contactless card products.
The majority of consumers in the research find the concept of contactless
payment appealing. Consumers surveyed expressed an interest in using the
contactless interface of the card for quick and easy payment of
low-ticket purchases. Supermarkets and fast food chains are among the top
retail locations that consumers will use for contactless payments,
according to VISA’s research.

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International CyberTrans Renews GPN Processing Contract

Global Payments has renewed its processing contract with CyberTrans, providing authorization, capture, settlement and BIN sponsorship for credit, debit, and EBT payment card processing. In addition, Global will provide ICT access to its leading-edge, proprietary POS systems for numerous vertical markets, and also to hundreds of its Certified Application Providers for integrated payment services. ICT provides merchant acquiring solutions to the small to mid-tier markets nationwide and specializes in providing merchants and sales channels with superior customer service through a dedicated staff of industry professionals. Global Payments Inc. is a leading provider of electronic transaction processing services to consumers, merchants, Independent Sales Organizations, financial institutions, government agencies and multi- national corporations located throughout the United States, Canada, Latin America and Europe.

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MBNA Adds Two Independent Directors

MBNA, which has been under criticism for the closeness of its Board to management, announced two new directors this morning. The issuer says the appointments will make seven of its nine Board members “independent” and comes one business day before Monday’s shareholders? meeting. Mary Boies, a partner at the law firm of Boies & McInnis, and Laura Unger, former Acting Chairman of the SEC, have been appointed to the MBNA Board , effective June 1st. Ms. Boies is also the founder and CEO of Mary Boies Software, a publisher of educational software. Ms. Unger, was the former Acting Chairman of the SEC between 2001 and 2002. She also served as Commissioner of the SEC between 1997 and 2001. She currently serves as the independent consultant for independent research at JPMorgan. Earlier this month the Teachers Insurance and Annuity Association – College Retirement Equities Fund released a letter to shareholders of MBNA asking them to support its proxy resolution seeking greater board independence. The California Public Employees’ Retirement System also announced this week it would withhold votes from directors at MBNA. (CF Library 4/12/04)

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Opteva and OpeN/2 Open Up Envelope-Free ATM Cash Depositing

Diebold’s “Opteva” bulk note acceptor module is being supported by S2 Systems’ “OpeN/2” platform. S2 Systems’ OpeN/2 platform provides the infrastructure framework for enterprise payments to help transform the customer’s multi-channel experience by leveraging the next generation of self-service technologies. S2 Systems, Inc. is a leading global provider of mission-critical enterprise payment and transaction management solutions for the banking, financial services, retail, telecommunications, utilities and travel & hospitality industries. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security and services.

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