MBNA Becomes the First US Issuer of AmEx Cards

After nearly eight years of looking for a U.S. financial institution to issue its payment cards domestically, American Express has finally landed one . . . a big one. MBNA, the nation’s second largest issuer of VISA and MasterCards, announced this morning it will begin to issue American Express-branded credit cards in the USA by the end of this year. The unprecedented partnership in the USA, comes less than three weeks after VISA and MasterCard lost their appeal to U.S. District Court Judge Barbara S. Jones’ October 2001 ruling that the card associations violated antitrust laws by prohibiting their members from issuing competitive cards such as American Express and Discover cards. Judge Jones ruled that VISA’s bylaw “210(e)” and MasterCard’s “Competitive Programs Policy” weaken competition and harm consumers in a number of ways. On January 9th, all 12 members of the Second U.S. Circuit of Appeals rejected VISA’s and MasterCard’s request for a review of the October 2001 decision. VISA and MasterCard have since indicated they will take their request to the U.S. Supreme Court. Under terms of today’s MBNA/AmEx deal, MBNA will also issue AmEx-branded credit cards in Canada, Spain, and the United Kingdom. MBNA says the new AmEx credit card products will be marketed to MBNA’s qualified existing customers and new prospects. In the last several years American Express’ Global Network Services has developed close to 80 card-issuing relationships in more than 80 countries outside the USA.

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NPC Renews Value City, Filene’s and DSW Contract

OH-based Retail Ventures, which operates 116 Value City Department Stores, 21 Filene’s Basement stores, and 142 DSW stores in 29 states, has renewed its credit card processing agreement with National Processing Company. Retail Venture stores are filled with a wide assortment of designer, department, discount and specialty store brands at prices substantially lower than the competition. National Processing, Inc. through its wholly owned operating subsidiary, National Processing Company is a leading provider of merchant credit and debit card processing. National Processing is 84 percent owned by National City Corporation, one of the nation’s largest financial holding companies.

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Shift4 Racks Up $6 Billion in 2003 Card Volume

Las Vegas-based Shift4 reports that “$$$ ON THE NET,” a web-based e-payment solution with real-time electronic payment authorization, processed nearly $6 billion in payments in 2003, almost quadruple 2002’s volume. Contributing to Shift4’s strong growth was a number of significant new customer signings, including the N9NE Group, Purdue University and Kohler’s American Club, who selected $$$ ON THE NET to process their credit, debit, gift card and check transactions. Shift4, a leading developer of financial transaction processing software and services, provides web-based, real-time enterprise payment solutions for leaders in the hospitality, retail, foodservices and e-commerce markets.

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Card Bond Issuance Could Top $73 Billion

Credit card asset-backed security issuance could reach a record $73 billion this year, a 7% increase over the total issuance of $68 billion in 2003. According to Standard & Poor’s Ratings Services’ recent survey of top U.S. credit card ABS issuers, the growth will be driven by $57 billion of expected refinancing opportunities associated with maturing transactions, and the possibility of incremental securitization from some of the major third-party processors. S&P says it is encouraged by how well these deals are performing, especially those in the prime segment. Prime credit card ABS transactions improved during the second half of 2003, performing as expected with no rating actions. In fact, the average loss rate for the Standard & Poor’s “Credit Card Quality Index” for the three-month period ending in November was 6.9%. This is 60 basis points below the 7.5% loss rate experienced from March to May in 2003, which represented the highest three-month average that year. The trend in the CCQI loss and delinquency rates appeared to peak during early 2003, averaging 7.4% and 5.3%, respectively, for the first six months, compared with 7.0% and 5.2% for the last five months reported.

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UAL Unwraps the Ameniti Card for the Public

United Airlines officially launched its new “Ameniti” card yesterday and announced a major partnership with Starwood Hotels & Resorts offering cardmembers complimentary room upgrades and automatic “Gold Status” in Starwood Hotels’ “Preferred Guest” loyalty program. To enjoy all of the benefits Ameniti has to offer, members pay an introductory charter membership fee of $295 per year. United and United Express operate more than 3,400 flights a day on a route network that spans the globe. 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 105,000 employees at its owned and managed properties.

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Insta-Check and BankServ Check Services Merge

Insta-Check and BankServ Check Services have formed a new combined company. EnCircle will offer a full suite of programs, including electronic check conversion, verification, guarantee, collections, RCK, consolidated returns, check imaging, and administrative returns handling. Additionally, EnCircle will offer “ARC” and “TEL” to “VISA POS Check” customers. The Company will leverage over 25 years of experience, technology and operating infrastructure. EnCircle’s top management team represents over 100 years of combined experience in national check acceptance services.

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Spantel Communications Enters $300 Million Pre-Paid Calling Card Market

Fuengirola-based Spantel Communications is moving into the pre-paid calling card market. The Company will introduce its first card product on February 2nd.
The pre-paid calling card market in Spain is estimated to be in range of US$300 million. The Company says it recently installed the equipment to route the calls for this division and have made the necessary adjustments so it would be compatible with Spantel’s proprietary billing system.

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IP-Version Omni 3750 is Class A Certified

VeriFone announced that its “Omni 3750” with IP capabilities has won its first “Class A” certification from Paymentech. The Omni 3750 features a powerful 32-bit processor to meet the security and networking demands of broadband communications. With its built-in Ethernet connectivity and industry standard SSL encryption, it has the power to securely send transactions over public or private networks. aymentech, L.P. processes more payment transactions than any other company in North America – and more than half of all Internet transactions – for retailers accepting U.S. and international payments via traditional point of sale, Internet, catalog and recurring payments. VeriFone, Inc., (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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Financial Insights Hires 30-Year Veteran of Financial Services Technology

IDC’s Financial Insights has named Robert Giffords to Director of Research and Consulting for the EMEA Region. Under Giffords’ direction, the Company will launch the “European Retail Financial Advisory Service” which looks at the consumer banking sector in Europe and provides decision-makers with comprehensive information on business model analysis, competitive positioning, IT trends and market forecasts. Financial Insights provides independent research services to users and providers of financial industry technology. The company was formed in November 2002 by combining Meridien Research and the IDC Financial Services Advisory group. The Retail Financial Services practice offers four areas of focus: Payments, Channels, Wealth Management, and Consumer Banking and Credit Financial Advisory.

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STMicroelectronics Smart Card Revenues Up 14% in 4Q/03

Geneva-based STMicroelectronics reported net revenues for the fourth quarter of $2.1 billion, an 18.3% gain over one-year ago. Gross profit was $760 million, 15.0% above last year’s fourth quarter gross profit of $661 million. Each of the Company’s key targeted market segments performed well in the fourth quarter. On a sequential basis, Telecom was up about 26%; Consumer increased nearly 18%; Computer rose over 11%; Automotive was up around 8% and Industrial and Others, which includes Smart Cards, increased nearly 14%.

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VISA International Partners with a Global Philanthropic Exchange

VISA International and GlobalGiving launched a partnership that will innovate international aid by enhancing the efficiency of funding entrepreneurial
social and economic development projects. Under terms of the deal, VISA will become the preferred payment brand for GlobalGiving, provide resources and co-promotion of the partnership, help optimize the collection of donations and refine best practices for security and privacy of donor financial information. GlobalGiving grew out of a World Bank initiative to boost the effectiveness of international aid.

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