TALKLINE VISA

Mobile phone specialist, Talkline, has partnered with BarclayCard to launch a co-branded VISA credit card. The card offers discount of up to 10% on Talkline products plus a credit of 20 Euros towards the customer’s mobile phone contract. If the card is used with the first six weeks, a 50% discount will be applied. The card carries an interest rate of 1.7% and offers a eight week grace period.

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Revolving Credit Hits the Brakes after a Flying Start

Even with an extra day, Americans downshifted during “President’s Month,” adding about half as much revolving credit as they did one-year ago. The slowdown in February followed a very robust January wherein consumers added nearly $8 billion to revolving credit, compared to $3 billion in January 2003. According to figures released yesterday by the Federal Reserve, consumers added $1.6 billion in revolving credit in February, compared to $3.1 billion one-year ago. At the end of February 2004, Americans owed $754.8 billion in revolving credit. The annual growth rate was 2.5% for February 04, compared to 5.9% for February 03. In January 2004, the annual growth rate was a revised 12.6%. Bank credit card debt (excluding store and gas credit cards) at the end of the fourth quarter was $672.3 billion, or roughly 89% of total revolving credit, according to CardData (www.carddata.com). At the end of February, Americans were $2018.5 billion in debt, excluding home mortgages.

REVOLVING CREDIT HISTORICAL ($billions)
Feb 04 Jan04 Dec03 Nov03 Oct03 Sep03 Aug03
GRWTH: 2.5% 12.6 2.2 4.9 5.2 6.8 3.4
$OWED: $754.8 753.2 745.4 743.8 740.5 737.3 729.1

Jul03 Jun03 May03 Apr03 Mar03 Feb03 Jan03
GRWTH: 1.4% -2.4 7.7 3.4 4.1 5.9 5.2
$OWED: $726.8 725.9 727.9 722.8 720.7 718.6 715.5

Source: Federal Reserve; revised figures as of 4/07/04;
For complete historical data visit CardData (www.carddata.com)

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Sheraton Speed Check Kiosks Go Nationwide

Starwood Hotels announced yesterday it will deploy self-service kiosks to more than two dozen Sheraton U.S. properties and ultimately be installed nationwide. Starwood recently tested and refined kiosks at two hotels and is launching its new and improved kiosk in its largest brand, Sheraton. Sheraton Speed Check makes its debut today at the brand’s flagship, the newly renovated Sheraton New York Hotel & Towers in midtown Manhattan, and will roll out over the next several months to more than two dozen U.S. properties and ultimately nationwide. Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 740 properties in more than 80 countries and 110,000 employees at its owned and managed properties.

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TSYS Renews First Hawaiian Bank Contract

Hawaii’s largest merchant processor and card issuer, First Hawaiian Bank, has signed an exclusive five-year card processing agreement, extending its relationship with TSYS until 2009. In addition First Hawaiian will continue to utilize TSYS’ subsidiary ProCard, which provides technology support and services for its commercial card accounts. First Hawaiian Bank is the largest Hawaii bank, with total assets of $9.9 billion. ProCard, a wholly owned subsidiary of TSYS, is the leading provider of technology and services for commercial card programs. TSYS brings integrity and innovation to the world of electronic payment services as the integral link between buyers and sellers in this rapidly evolving universe.

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Model Form for Negative Information Proposed

The Federal Reserve Board has issued proposed amendments to “Regulation V,” which implements the “Fair Credit Reporting Act.” The amendments would add a model form for financial institutions to use if they furnish negative information to consumer reporting agencies. The Board is required to publish a concise model form (not to exceed thirty words in length) that financial institutions may use to comply with the notice requirement for furnishing negative information to consumer reporting agencies. The model form must be issued in final form by June 4th. The model form could be used by all financial institutions, as defined by the act. Comment on the proposed rule must be received by May 9, 2004.

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Fair Isaac Expands Board to Nine Members

Fair Isaac has named Andrew Cecere, a vice chairman at U.S. Bancorp, to the company’s Board of Directors. Prior to U.S. Bancorp’s 2001 merger with Firstar Corporation, Cecere served as chief financial officer with the former U.S. Bancorp, where beginning in 1985 he played a series of leadership roles, managing financial processes across many business areas, including tenures as vice chairman of U.S. Bank overseeing commercial services and vice president of finance. Fair Isaac Corporation is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company’s predictive modeling, decision analysis, intelligence management, decision management systems and consulting services power billions of mission-critical customer decisions a year.

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First Data Renews a Second Contract this Week

First Data’s Star Systems announced another contract renewal this morning. Union Bank of California signed a long-term agreement for the “STAR Network” to continue providing PIN-secured debit access at retailers and ATMs, and ATM and signature debit card processing. Union Bank has 560 ATMs and 1.2 million ATM and signature debit cards. Earlier this week, Star Systems reported that a renewal of its agreement with KeyBank. Under the terms of the long-term agreement, the “STAR Network” will continue to provide PIN-secured debit access at retailers and ATMs, and ATM and signature debit card processing for KeyBank’s 2,200 ATMs and 4.6 million credit and debit cards. Last year, the “STAR Network” served 1.26 million ATM and POS locations nationwide. It processed nearly 7 billion transactions in 2003 at 6,100 participating financial institutions. (CF Library 4/6/04)

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First Quarter Contraction Not Felt by All Issuers

SD-based Wells Fargo Financial Bank posted an uptick in first quarter card outstandings, bucking the seasonal contraction experienced by most U.S. issuers. Wells reported first quarter outstandings of $1.4 billion compared to $1.3 billion in the fourth quarter. Wells also added more than 50,000 cards during the quarter, according to CardData (www.carddata.com). Meanwhile, OH-based National City’s outstandings dropped from $2.6 billion in the fourth quarter to $2.4 billion. Navy Federal Credit Union also slipped from $1.60 billion at the end of last year, to $1.55 billion in the first quarter.

CARD OUTSTANDINGS
ISSUER 1Q/04 4Q/03
National City $2,443,320,152 $2,557,885,054
Navy FCU $1,555,352,486 $1,604,048,644
Wells Fargo* $1,428,558,931 $1,342,149,879

*Wells Fargo Financial Bank; does not include Wells Fargo Card Services
SOURCE: CardData (www.carddata.com)

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V/MC WORLDWIDE

VISA’s global card sales volume hit $2.9 trillion last year, rising 10% over 2002, as MasterCard’s worldwide gross dollar volume during 2003 grew 6%, to nearly $1.3 trillion. VISA’s fastest growing region was Central Europe, Middle East and Africa, where annual volume grew 34%, while MasterCard’s hottest region is Latin America, where 2003 GDV increased 31%. However, both networks posted decreases in Asia-Pacific, primarily due to the collapse of the South Korean card market. VISA’s Asia Pacific region produced card sales volume of US$438 billion, a 2% decline over 2002. MasterCard’s Asia/Pacific region reported GDV of $213.1 billion in 2003, a 9% decrease. VISA’s European Union region achieved card sales volume of $943 billion, an 11% increase over 2002, as MasterCard’s European GDV rose 13.5% in 2003 to $316.1 billion. VISA’s Latin America and Caribbean area produced card sales volume of $181 billion, a 16% increase over the prior year, while MasterCard’s Latin America region posted a substantial increase in GDV of 31.2% for 2003 to $53.0 billion. VISA’s volume in Central Europe, Middle East and Africa region was $139 billion, a 34% increase. MasterCard’s South Asia, Middle East/Africa regional volume grew 17.5% during 2003 to $11.3 billion. VISA’s Canadian card sales volume of $89 billion, represented a 9% increase over 2002, as MasterCard grew 15% in Canada to $41.7 billion in 2003 GDV. In the USA, VISA grew 10% to $1.1 trillion and MasterCard grew 6% to $637 billion.

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VISA Wins Synovus’ Debit Network Business

GA-based Synovus has selected VISA’s “Plus” and “Interlink” as its primary debit network providers, effective April 1st. In October, Wells Fargo announced a contract renewal with VISA for debit and credit cards and is now replacing MasterCard’s “Cirrus” network with VISA’s “Plus” network on its 15 million debit card accounts. Wells also agreed to expand its commitment to “Interlink.” Also in October, AmSouth Bank renewed its contract with VISA for signature-based debit, added “Interlink” PIN-based debit, and chose VISA “DPS” and “PULSE” to handle the bank’s PIN-based debit processing. In August, Wachovia announced it chose VISA “DPS” to handle the bank’s offline debit processing, and “Interlink” for PIN POS transactions. Wachovia also announced plans to switch its ATM transactions business from Concord EFS to NYCE. The “PLUS” network has more than 840,000 ATMs in 144 countries, with 364,000 in the USA. At the end of the fourth quarter, “Interlink” had 1,266,024 merchants locations, and 71 million “Interlink”-branded debit cards in the marketplace. To date, there are more than 980 issuers of “Interlink.” For 2003, “Interlink’s” transaction dollar volume was $35.2 billion produced by 999,589,000 transactions, according to CardData (www.carddata.com). During 2003, VISA handled 434,222 “PLUS” transactions. (CF Library 8/29/03; 10/20/03; 10/27/03)

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Citi Commits $200MM to Financial Ed; Pays $240MM FTC Settlement

“National Financial Literacy Month” got a big boost this morning as Citigroup announced a 10-year, $200 million commitment to global financial education, and the hiring of the former Executive Director of the Washington, DC-based Jump$tart Coalition for Personal Financial Literacy to run the new Office. Citigroup also began sending out refund checks and posting credits this month in a major settlement to provide $240 million in consumer redress for two million Associates borrowers who were victims of past deceptive and abusive lending practices. Today, Citi is forming an Office of Financial Education and has hired Dara Duguay as the head of the new Office. Citi says the new Office will teach millions of people in nearly 100 countries the basics of financial education. The Office will also encourage Citi’s 275,000 employees around the world to devote time to support financial education and other charitable causes. The global commitment is focused in three areas: Personal Financial Education, Small Business Financial Education, and Institutional Financial Education. Meanwhile, Citigroup’s $240 million in consumer redress for The Associates customers, now CitiFinancial Credit Company, is the result of a settlement obtained by the FTC in September 2002. It is the largest consumer protection settlement in FTC history. Citigroup acquired The Associates in November 2000. In March 2001, the FTC sued The Associates in U.S. District Court alleging that it had violated the FTC Act through deceptive marketing practices that induced consumers to refinance existing debts into home loans with high interest rates and fees, and to purchase high-cost credit insurance.

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CU24 Network Teams with the CO-OP Network

The CU24 network has become a member-shareholder in the CO-OP Network and has signed a contract with the CO-OP Network to become the processor for its current participating credit unions, located principally in New York and New Jersey, upon expiration of its current processing agreement with another vendor. The agreement allows CU24 participating credit unions to expand ATM access for their members through CO-OP Network’s nearly 18,000 surcharge-free machines around the country. Ontario, Calif.-based CO-OP Network is the no. 1 credit union ATM network in the country, offering the industry’s largest system of surcharge-free ATMs, including more than 800 machines in New York and New Jersey, to its membership of nearly 1,500 credit unions. CO-OP Network ([www.co-opnetwork.org][1]), established in 1981, is wholly-owned by its credit union shareholders.

[1]: http://www.co-opnetwork.org

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