Komercni Banka Begins Mass Issuance of Multi-Application EMV Cards

Prague-based Komercni Banka, part of the Societe Generale Group, is now issuing mass volumes of Gemplus EMV multi-application cards. Gemplus has provided smart cards, consulting services, a turnkey
personalization solution and a set of applications ranging from micro-payments to authentication and loyalty. Komercni is issuing both EMV Maestro and VISA cards. The project between Komercni and Gemplus is an outcome of a two years cooperation in other smart card projects, such as “Guaranteed Payment” with major retail chains & channel authentication, whilst modelling and designing an EMV migration plan to reflect the long term business plans, market opportunities and customer expectations of the bank.

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IntelliPay Desktop Terminal Product Unveiled

IntelliPay has unveiled a new software-based credit card terminal enabling a business to accept credit cards from any personal computer, operating on all Microsoft operating systems. This product offering represents a joint effort between IntelliPay, First Tennessee Bank and First Horizon Merchant Services who will provide the initial distribution for the product. Pacific WebWorks provides a comprehensive suite of affordable, easy-to-use software programs for small businesses that want to create, manage, and maintain an effective Web strategy including full e-commerce capabilities.

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Low APRs Drive EU Credit Card Volume Up 76% Last Year

Europeans charge nearly three times as much on debit cards as they do on credit cards, however, credit card charge volume increased 76% last year. Consumers in EU countries used debit cards to charge 673 billion euros and credit cards to charge 244 billion euros during 2003. According to a new report by Mintel, there are 105 million VISA- and Mastercard-branded credit cards in the EU, about 8 million more than the previous year. The UK holds the lion’s share with 63.9 million credit cards, followed by Spain with 17.9 million credit cards. At the end of 2003, the number of credit cards in Italy was 5.7 million, Greece 4.3 million, France 2.8 million, and Germany 2.3 million. There are more than 450 million credit and debit cards in circulation across the 15 EU member states. Mintel says low interest rates across drove the increase in credit card volume last year.

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Discover Delivers Record Profits in Q1

Morgan Stanley reported this morning that its Credit Services division, including the “Discover Card,” posted a record $365 million in pre-tax profits for the quarter ending February 29th, a 26% gain over the year-ago quarter. The Company says it decreased its promotional efforts during the quarter to focus on improving profitability, pumping up the yield to 12.20%. Merchant and cardholder fees were $519 million, down 5% from last year’s first quarter. Discover says an increase in cardholder rewards and a decline in late fees, was partially offset by an increase in merchant discount revenues. Managed credit card loans of $47.3 billion at quarter end were 8.7% lower than a year ago, mainly due to lower balance transfer volume. Total transaction volume declined 7.3% to $24.2 billion. The account base contracted during the quarter by 1.3% year-over-year, down 200,000 accounts since the prior quarter. Active accounts also declined 9% from 1Q/03. The credit card net charge-off rate was 6.31%, 14 basis points higher than a year ago, but 56 basis points lower than the fourth quarter. The net charge-off rate declined as Discover’s bankruptcy losses dropped to their lowest level in nearly three years. The over-30-day-delinquency rate declined 53 basis points from 1Q/03 to 5.80%, and the over-90-day-delinquency rate declined 9 basis points over the same period to 2.86%. The decline in the over-30- day-delinquency rate was the fourth consecutive quarterly decrease. For complete details on Discover’s first quarter performance visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
1Q/03* 2Q/03* 3Q/03* 4Q/03* 1Q/04* Y/Y CHNG
Outstandings: $51.8b $50.9b $50.0b $48.4b $47.3b -8.7%
Volume: $26.1b $24.0b $24.8b $23.0b $24.2b -7.3%
Accounts: 46.5m 46.4m 46.3m 46.1m 45.9m -1.3%
Actives: 22.3m 21.8m 21.3m 20.8m 20.3m -9.0%
Chargeoffs: 6.17% 6.50% 6.90% 6.87% 6.31% +14bps
Delinquency: 6.33% 6.21% 6.05% 5.97% 5.80% -53bps
Yield: 11.78% 11.97% 11.94% 12.05% 12.20% +42bps
1Q/03 ended 2/28/03; 2Q/03 ended 5/31/03; 3Q/03 ended 8/31/03;
4Q/03 ended 11/30/03′ and 1Q/04 ended 2/29/04.
Source Source: CardData (www.carddata.com)

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

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MY-EMV

SCM Microsystems unveiled the “myEMV,” a two-factor authenticator designed for use with EMV smart bankcards and the MasterCard “Chip Authentication Program.” “myEMV” is a battery operated smart card reading device with a display and keypad for entering PIN codes. It is only slightly larger than a credit card, with a highly stylized design featuring an oval shape and perimeter key placement. The device generates a one-time password or transaction authentication number for the authentication of online transactions such as e-commerce or e-banking. When a smart bank card is inserted, the cardholder is
prompted to enter his or her PIN. The reader then generates the one-time transaction authentication code, which the cardholder enters when making an online purchase using a standard Internet browser. The authentication data is transferred across the network and validated by the issuer, providing a type of card-present verification method for online transactions. SCM will market the terminals to banks and their systems integrators in countries migrating to EMV.

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MC PRESIDENT

MasterCard International has named Alexander Labak, President of MasterCard Europe, succeeding Peter Hoch, who will retire this July. Labak is currently Chief Marketing Officer of Deutsche Bank AG. He will join MasterCard on May 1. MasterCard Europe’s Board is now under the chairmanship of Norman McLuskie, who is also the chairman of the Retail Direct division of the Royal Bank of Scotland Group in the UK. He takes over the position from Jean-Pierre Ledru who has served as chairman since the integration of MasterCard International and Europay International in 1992. At the end of the fourth quarter, MasterCard Europe had $316.1 billion in YTD gross dollar volume, a 13.5% gain over the same year-ago period.

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Catalina Unloads Loyalty Card Center

FL-based Catalina Marketing has sold its loyalty card and data-entry services business located in Farmingdale, NJ to Capture Resource, which currently provides 99% of the data-entry services performed by the unit. As part of the agreement, Capture Resource will absorb the card and data-entry employees and the facility located in Farmingdale, New Jersey. Catalina Marketing’s card and data-entry services business provides application and data processing, card production and fulfillment services related to loyalty card programs for retailers. Catalina Marketing Corporation was founded 20 years ago based on the premise that targeting communications based on actual purchase behavior would generate more effective consumer response.

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MasterCard Europe Names a New President

MasterCard International has named Alexander Labak, President of MasterCard Europe, succeeding Peter Hoch, who will retire this July. Labak is currently Chief Marketing Officer of Deutsche Bank AG. He will join MasterCard on May 1. MasterCard Europe’s Board is now under the chairmanship of Norman McLuskie, who is also the chairman of the Retail Direct division of the Royal Bank of Scotland Group in the UK. He takes over the position from Jean-Pierre Ledru who has served as chairman since the integration of MasterCard International and Europay International in 1992. At the end of the fourth quarter, MasterCard Europe had $316.1 billion in YTD gross dollar volume, a 13.5% gain over the same year-ago period, according to CardFlash International ([www.cardflashinternational.com][1]).

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

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InfoNow’s Channel Insight Drives Growth

Denver-based InfoNow reported fourth quarter revenues of $3 million, up 6% from the prior quarter. Net income soared to $385,000 for the fourth quarter compared to $78,000 in the third quarter. During 2003, InfoNow renewed or expanded the software and services it provides to approximately 70% of its existing clients, including companies such as ABN AMRO, Avaya, Bank of America, H&R Block, The Hartford, Hewlett-Packard, Lexmark, Maytag, VISA and Wachovia. In the fourth quarter, the Company signed “Channel Insight” agreements with a number of new customers, including StorageTek, Enterasys Networks and a leading provider of mobile and wireless Internet solutions. “Channel Insight” consists of the “Channel Insight POS Platform and a suite of data modules that address specific business challenges of channel-focused companies. For complete details on InfoNow’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

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Childers Oil Selects GraphiCard for Loyalty

KY-based Childers Oil Company has selected Visible Results USA’s “GraphiCard” card technology and CRM system as the base for a new rewards program to be implemented in its Double Kwik convenience stores. With the patented technology from Overland Park, Kan.-based Visible Results USA, program members’ cards are inserted into a smart point-of-sale terminal during each sales transaction. Childers Oil Company has grown to operate 40 convenience store/gasoline station sites throughout Eastern Kentucky and Virginia. The Visible Results Group of Companies has, since its inception in 1997, emerged as one of the world’s leading customer relationship firms, serving a growing client base across convenience, fast food, fuels and the general retail industry.

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VISA Data to Flow Into SAP’s ERP System

SAP AG and VISA International are teaming to integrate “SAP NetWeaver” with VISA’s “Commercial Format”, a standard data set containing enhanced spending data from all VISA Commercial payment products. The combination will provide unprecedented levels of data delivery to corporations that use VISA with SAP’s ERP systems. The transparent delivery and open technology of “SAP NetWeaver” will give shared clients better utilization of spending data without significant integration investments resulting in process improvements and lower operational costs on a variety of business processes. As a result, data from banks, airlines, hotels and other merchants, will flow directly to the clients’ ERP systems. “SAP NetWeaver” will enable continued secure automated delivery and integration of VISA-provided data to clients’ back-office systems and expense reporting software helping them to monitor volume and compliance, identify trends and patterns and view detailed spend data and analytics.

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