MasterCard GDV Picks Up; Credit Card Base Declines

MasterCard International yesterday reported that its U.S. gross dollar volume for the first quarter increased 7.3% over 1Q/03 to $157.5 billion, compared to a 4.1% annual growth rate for the prior quarter. However, the number of U.S. credit card accounts declined 3.9 million, and the number credit cards decreased 10.6 million, compared to year-end 2003. MasterCard added 2.1 million debit card accounts during the first quarter. Credit card volume was up 8.0% to $126.7 billion, and debit card volume increased 4.6% to $30.8 billion. Combined purchase volume for U.S. credit and debit cards in the first quarter increased 12.5% to $102.8 billion, compared to one-year ago. At the end of the first quarter, MasterCard had 211.8 million credit card accounts representing 262.0 million cards. Debit card accounts stood at 49.6 million representing 54.4 million cards. During the quarter MasterCard processed 1.2 billion credit card transactions and more than 600 million debit card transactions in the USA. For complete details on MasterCard’s 1Q/04 results visit CardData ([www.carddata.com][1]).

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

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Diebold and Bosch Security Ink a Partnership

Diebold announced it will take on the full line of CCTV products from Bosch Security Systems, and has signed a re-seller agreement to offer Bosch’s GSA-approved alarm and CCTV products for the government market. Bosch has a wealth of product knowledge and expertise in addition to its commitment and relationships with those in the government market. Diebold is proud to be a GSA Federal Supply Schedule Contractor, and can provide a total solution for any size government application from initial site surveys through the installation phase. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security and services.

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CO-OP Network & Ingeniux Form ResolverGroup

The CO-OP Network has teamed with Ingeniux to form ResolverGroup LLC and offer “Check Management Solutions.” To bring Check Management Solutions to the marketplace, CO-OP Network partnered with Ingeniux, a leading provider of XML-based Web content, and attorneys specializing in check training, business analysis and process improvement to form ResolverGroup LLC. The result of this partnership is a Web-based product that interactively leads credit unions through an online interview process to identify their particular check issue. CO-OP Network (www.co-opnetwork.org), established in 1981 and located in Ontario, Calif., is wholly-owned by its credit union shareholders and provides volume discounts on products and services that include risk management as well as debit and deposit access.

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Top Ten Post 11% Increase in First Quarter Card Loans

Four of the top five U.S. credit card issuers posted single digit gains in credit card outstandings during the first quarter, but as a group the top ten averaged an 11% increase. Citigroup, the nation’s largest issuer, escaped the distinction due to its fourth quarter acquisition of the Sears card portfolio. Bank of America, the top issuer with the highest organic growth, posted a 28% increase in credit card loans during the first quarter. Marketing powerhouse, Capital One, was only up 17% in the first quarter. Collectively, the top issuers held card loans of $553.9 billion at the end of the first quarter, compared to $499.2 billion as of EOY 2003, according to CardData (www.carddata.com).

Top Ten U.S. Bank Credit Card Issuers
RANK/ISSUER 1Q/04 1Q/03 CHNG
1. Citigroup* $142.3b $108.6b +31%
2. MBNA 82.9b 78.3b +6%
3. Bank One 74.2b 72.8b + 2%
4. JPM Chase 51.0b 50.6b +1%
5. Discover** 47.3b 51.8b – 9%
6. Cap One 45.3b 38.7b +17%
7. AmEx 38.1b 34.6b +10%
8. BofA 37.3b 29.1b +28%
9. HSBC/HH*** 18.8b 16.2b +16%
0. Providian 16.7b 18.5b -10%
TOTAL: $553.9 $499.2 +11%

*Citigroup includes some non-US cards, possibly $5 billion
** Discover data as of 11/30/03 ***HSBC/HH is preliminary

Source: CardData (www.carddata.com)

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Chase – Bank One Merger to Close Mid-Year

JPM Chase and Bank One announced yesterday that their merger will close mid-year and that the combined company will have 16 board members, consisting of eight Directors from each company, with fourteen independent directors except for William Harrison, who will be Chairman and CEO, and James Dimon, who will be President and COO. The Directors elected at the annual meetings on May 25 will serve until the merger is completed. Bank One Corporation ( ) is the nation’s sixth-largest bank holding company, with assets of $320 billion. J.P. Morgan Chase & Co. ( ) is a leading global financial services firm with assets of $801 billion and operations in more than 50 countries.

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VeriFone Lands Top QSR Chains

VeriFone reports that its IP-enabled payment terminals have been selected by eight of the top QSR chains in the USA. VeriFone’s growing list of QSR customers includes many of the industry’s biggest names, such as McDonald’s, BURGER KING, Taco Bell, Pizza Hut, and KFC restaurants, which are in a heated race to offer the speed and convenience of electronic payment at their restaurants nationwide. VeriFone, Inc., (http://www.verifone.com) recognized worldwide as the trusted leader in secure electronic payment technologies, provides expertise, solutions and services for today with a smart migration strategy for tomorrow.

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NOVA Pounces on European Outsourcing Opportunities

Atlanta-based NOVA Information Systems, a subsidiary of U.S. Bancorp, made a major expansion into Europe last week with deals to purchase Alliance & Leicester Commercial Bank’s merchant acquiring business, euroConex Technologies, and CardPoint. The Alliance & Leicester deal, announced Friday, gives NOVA more than 27,000 merchants in the UK. On Thursday, NOVA purchased the remaining 50% shareholding position of euroConex from Bank of Ireland. The previous Friday it purchased Polish card processor CardPoint from Bank Zachodni WBK, a subsidiary of AIB Group. In addition to the three European deals, NOVA signed a deal to acquire Union Bank of California’s merchant accounts and will provide processing services, customer service and support operations to the bank’s 10,000 merchants. NOVA provides credit and debit card processing services, software applications, electronic check conversion, gift card solutions and other value-added services to more than 650,000 merchant locations in the USA and Europe. The processor handles about $110 billion in annual credit and debit card transaction volume. (CF Library 4/28/04; 4/29/04)

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Asset Acceptance Revenues Up 43% in the First Quarter

Asset Acceptance Capital reported net income, exclusive of special items, for the first quarter of $10.9 million, a 73% increase compared to $6.3 million for the same period last year. The purchaser and collector of charged-off consumer receivables, also reported a 48.1% increase in cash collections to $65.2 million and a 43.1% increase in total revenues to $49.7 million. AAC took a one-time compensation charge of $45.0 million due to the vesting of share appreciation rights, together with $0.7 million of related payroll taxes which occurred upon the initial public offering and the deferred income tax charge of $19.3 million as a result of the reorganization in anticipation of the IPO. During the first quarter, the Company paid $12.4 million to purchase consumer debt portfolios with a face value of $514.1 million, for a blended rate of 2.42% of face value. Purchases during the first quarter consisted of 17 portfolio pools from 14 sellers. This compares to the first quarter of last year, when the Company purchased consumer debt portfolios with a face value of $897.9 million for $23.1 million for a blended rate of 2.57% of face value. For complete details on Asset Acceptance Capital’s first quarter performance visit CardData ([www.carddata.com][1]).

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

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Cubic Card Services Group Nets an Oyster Card Executive

San Diego-based Cubic Transportation Systems has landed Nicole Carroll, former marketing director for the Oyster Card, as VP of Card Services. Carroll will have global responsibility for identifying and evaluating new smart card applications that can evolve from Cubic’s core transportation-related customer base including market analysis, proposal development, and participation in industry meetings and conferences through speaking opportunities and committee memberships. Cubic Transportation Systems, Inc. is the world’s leading turnkey solution provider of automated fare collection systems for public transport, including bus, bus rapid transit, light rail, commuter rail, heavy rail, ferry and parking.

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Citigroup Targets Latin America for Commercial Cards

Citigroup Global Transaction Services last week confirmed it is launching multiple commercial payment and information management VISA card programs in Latin America and the Caribbean. Citigroup estimates the annual card spend will reach $1.4 billion by 2008. The commercial card programs will be launched initially in Argentina, Brazil, Chile and Mexico. Citibank currently offers commercial cards in over 30 countries and has more than one million corporate and government cardholders. In the last four years, the number of VISA cards for businesses and public sector institutions in Latin America grew at a compounded annual growth rate of 27% and VISA commercial cards generated $1.5 billion in annual sales volume.

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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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