First Data Profits Rise 14%, Topping $400 Million

First Data reported that fourth quarter net income rose 14% to $401.6 million on revenues of $2.2 billion. The increase was driven by an 18% rise in “Merchant Services” revenue, and a 13% gain in “Payment Services” revenues. However, “Card Issuing Services” revenues declined 1% in 4Q/03 to $518.1 million, and operating profits for the quarter declined 16% to $84.6 million. Merchant Services operating profits increased 24% during 4Q/03 to $244.8 million. Merchant transactions grew 20% for the quarter. Payment Services, comprised primarily of Western Union, produced fourth quarter operating profits of $323 million, a 13% increase compared with the fourth quarter of 2002. For the full year, Western Union and ValueLink, combined, handled more than one billion transactions, up 26%. Consumer-to-consumer, consumer-to-business and prepaid transactions grew 19%, 12% and 32%, respectively during 2003. Merchant Services transactions were 12.2 billion last year, up 23%. Card Issuing Services completed 41 separate client conversions totaling nearly 36 million accounts. The pipeline of accounts to be converted is approximately 70 million accounts, with all of the accounts scheduled for conversion by the end of 2004. At year-end, accounts on file were 348 million. For 2004, FDC expects revenue growth of greater than 20% due to the Concord EFS merger. FDC said this morning it expects the Concord acquisition to close on February 27th. For complete details on First Data’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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Principal Targets Teens with a New Bank Account

IA-based Principal Bank has introduced a new bank account package for students, ages 14 and over, which includes a free debit/ATM card with no Principal Bank transaction fees. Features of the new student package include a low opening balance, no monthly minimum balance requirement, free checking and free savings account, free debit/ATM card with no Principal Bank transaction fees, free unlimited BillPay, automated overdraft protection from a Principal Bank savings account and educational tools to help students learn the importance of financial responsibility. The Principal Financial Group(R) (The Principal (R))(1) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance and mortgage banking through its diverse family of financial services companies.

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Wells Fargo to Top 5 MM Internet Users

Wells Fargo has hit a record $12 billion in Internet payments volume last year, doubling its e-commerce payment volume from 2002. Additionally, Wells Fargo Home Mortgage will receive NACHA’s “2004 George Mitchell Payments System Excellence Award” next month. According to the Department of Commerce, Wells Fargo’s e-commerce processing accounts for 15% of the nation’s total online shopping volume. Wells Fargo was the first financial services company to provide person-to-person payment services through eBay in March 2000, and today processes payments for 95% to 99% of the domestic Web auction market. In June 2002, Wells Fargo became the payment provider for PayPal, and subsequently began to provide its international currency service. Today, Wells Fargo processes payments for over 60,000 online merchants and has 415,000 active online small business banking customers, up 40% from a year ago. In February, Wells Fargo will also sign up its fifth million active consumer Internet customer. Meanwhile, Wells Fargo Home Mortgage says it will process nearly 88% of its customers’ payments electronically in the first quarter, compared with 81% by paper in the first quarter of 2000. In recognition of its accomplishment, Wells Fargo Home Mortgage will receive a special NACHA award at NACHA’s “PAYMENTS 2004” conference in Seattle, Washington on March 22nd.

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MasterCard’s Retail Index Points to Strong Retail Sales in the First Half

MasterCard’s “MasterIndex of Retail” for Asia/Pacific shows robust potential growth in retail sales during the first half of 2004. All 12 Asia/Pacific markets included in the forecast are predicted to see positive expansion, with China maintaining its lead with an anticipated 14.0% year-on-year growth. Thailand takes the number two spot in the retail sales growth predictions with 10.8% year-on-year growth, followed closely by two other South East Asian markets which also show impressive growth prospects: Malaysia (9.2%), Indonesia (8.0%). While not as bullish, the Philippines (5.6%) and Singapore (3.9%) are also indicating positive year-on-year growth prospects. Korea shows strong recovery, driven by particularly rapid expansion in exports. With domestic consumption starting to recover going into 2004, retail sales growth is predicted to hit 8.2% year-on-year, up from its 2003 year-on-year contraction of 0.7%. Hong Kong and Taiwan show post-SARS retail recovery forecasts at a healthy year-on-year growth of 6.8% and 5.5% respectively. Japanese consumers are also reasonably positive; retail sales are anticipated to grow by 4.5% over the previous year. The Australian and New Zealand retail sectors are both optimistic with anticipated 4.5% and 5.0% year-on-year growth respectively. The analytical foundation of the “MasterIndex of Retail” is based on the development of a set of techniques that have successfully linked MasterCard’s “MasterIndex of Consumer Confidence” with retail sales statistics. The survey findings of the “MasterIndex of Consumer Confidence” are used as a leading indicator of how consumers may act in terms of retail spending over the six-month period ahead. Thus, a link is made between consumer sentiment and actual consumer behavior.

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VISA Renews Hotline Program with WorldTeq Group

MD-based WorldTeq Group, a full-service solutions provider of Affinity Services including long distance, toll-free services, hosting services, and financial services has renewed the U.S. “VISA Hotline” program. WorldTeq Group International offers a wide range of telecommunications, merchandising and financial services with related products via independent agents, associations, sales organizations, and affiliate marketing.

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First Data Nabs Schoedinger to Head Card Issuing Services

First Data has hired James Schoedinger, formerly president of Transamerica Real Estate Information Services, and a sixteen-year veteran of GE Capital credit card businesses, as president of the company’s Card Issuing Services business unit. Schoedinger most recently served as president of Transamerica Real Estate Information Services, one of Transamerica Corporation’s largest business units, where he led a turnaround of the business using Six Sigma quality initiatives to drive out costs while increasing the quality of service. He also led the company’s commercial and consumer finance business, which included a variety of financial products, such as vendor leasing and private label consumer credit cards. First Data serves approximately 3 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of payment.

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InteliData Technologies Snags Kracher as Marketing Overseer

VA-based InteliData Technologies has hired appointed Karen Kracher, formerly with TCF Financial, Travelers Express, and Deluxe Corporation, as Chief Sales and Marketing Officer. With more than 25 years of executive experience in sales, marketing and operations within the financial services and electronic payments industries, Kracher most recently served as Senior Vice President of Sales and Marketing for John H. Harland Company, where she had P&L responsibility for a $500 million business unit. With over a decade of experience in the industry, InteliData provides Internet banking and Electronic Bill Payment and Presentment (EBPP) technology and services to leading banks, credit unions, brokerage firms, financial institution processors and credit card issuers.

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Family Dollar Deploys Concord PIN Debit

Family Dollar announced Friday it has completed its roll-out of Concord EFS PIN-secured debit. More than 4,800 of Family Dollar’s 5,100 stores are now using Concord to enable PIN-secured debit payments and process transactions. Star is among the networks that will switch the new transactions. During the roll-out, Family Dollar trained store district managers and educated consumers through an in-store promotion program using banners and decals at entryways. They also placed signage on POS terminals encouraging consumers to use their ATM/debit card.

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TSYS Job Cuts Likely as Evaluation gets Underway

TSYS indicated Friday it is in the process of evaluating every job within the company, and that the first job cuts in the Company’s history are likely. While the impact of the merger between Bank One and Chase on TSYS is cloudy, the Company says the process of migrating Bank One from First Data to in-house processing, via TSYS, is proceeding according to schedule, and is expected to be complete by the fourth quarter of this year. Chase uses First Data. The Company’s plans to eliminate positions is a result of a number of factors, including its forecasted slower growth in 2004. TSYS says details of the reduction will be confirmed as soon as the company’s internal assessment is completed. TSYS has about 5,700 employees worldwide. About 5,200 work in the Columbus, Georgia area.

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U.K. Egg Portfolio Draws Strong Interest

There is speculation that more issuers are lined up to take a crack at bidding on Prudential’s 79% stake in the “Egg” credit card portfolio. The mad scramble reportedly includes MBNA, Royal Bank of Scotland, Capital One, GE Consumer Finance, Barclays, Citigroup, HSBC, BNP Paribas, and National Australia Bank. The strong interest in purchasing the three million account portfolio is pushing up its potential price to more than $2.9 billion. Prudential put its stake on the sale block three months ago after “Egg” lost nearly $127 million in the first three months of 2003 in regard to its business in France. Egg produced a profit in the U.K. of $103 million during the same period. The issuer ended up with an overall pre-tax loss of about $45 million through the third quarter. Egg launched the “la Carte Egg VISA” card in France during November 2002 after purchasing Zebank, a local Internet bank for $9 million. Since its launch in France it has signed up less than 60,000 cardholders. In the U.K. Egg has signed up 3.1 million cardholders since its launch in October 1998.

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National Consumer Protection Week Launched This Week

Federal, state and local agencies, as well as national consumer organizations, have launched the sixth annual “National Consumer Protection Week” for February 1st to the 7th, with the theme: “Financial Literacy: Earning a Lifetime of Dividends.” During NCPW, representatives from federal, state and local agencies and national consumer organizations will help consumers of all ages understand how the decisions they make in the marketplace affect their overall fiscal fitness. The FDIC insures deposits at the nation’s 9,237 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.

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Wal-Mart to Accept Jeanie Cards Next Month

Wal-Mart Stores announced Friday that effective February 1st, “Jeanie” debit cardholders will be able to make PIN-based purchases at Wal-Mart and SAM’S CLUB stores. The “Jeanie” network was launched in 1977 by Fifth Third Bank, and today has nine million cardholders and 14,000 merchants in the USA. Fifth Third Bank Processing Solutions processes over nine billion ATM and POS transactions per year for more than 198,000 merchant locations and 1,500 financial institutions worldwide.

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