UFJ + NIPPON SHINPAN

UFJ Bank Limited announced it will merge Nippon Shinpan with UFJ Card next year, after it purchases Nippon Shinpan and makes it a consolidated subsidiary of UFJ. The planned action will create the second largest Japanese issuer with 23 million cardholders, about three times UFJ Card’s current size. The merger is the first in the local card industry between a credit-related card company and a bank-related card company. UFJ also announced it will seek to enhance cost competitiveness through cooperation with JCB in the areas of administration and information systems. Nippon Shinpan also plans to issue credit cards under the JCB brand, in addition to VISA and MasterCard brands. JCB is the largest issuer in the country with 48 million cardholders. UFJ is in the process of buying Nippon Shinpan for Y200 billion.

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Diebold and Hypercom Target Drive-Up Pharmacies

Diebold and Hypercom have teamed to provide card payment technology to drive-up pharmacies in the US and Canada. Diebold will distribute a system that includes Hypercom’s “HFT 505” outdoor card payment terminal which conveniently mounts near the retail transaction drawer, or the pneumatic prescription delivery terminal at pharmacy drive-up locations. Last year, Delphi Display Systems, a manufacturer and designer of outdoor digital video display systems for the QSR industry, integrated Hypercom’s “HFT500” transaction technology into its “Order Confirmation System”. Delphi introduced a visual order confirmation interface complete with an easy-to-read LCD panel, an integrated PIN pad, and debit or credit card accessibility located at the order-point in the drive-thru. (CF Library 1/28/03)

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GEMPLUS HIRES

Gemplus International has named two new members to its Operations Committee, and announced the head the Financial Services Business Unit. Ernie Berger is joining Gemplus in the USA as the President of
Gemplus North America and is based in the Philadelphia area. Remi Calvet is joining the Company VP/Corporate Communications. Justin D’Angelo has also been promoted and will head the Financial Services Business Unit as SVP. Berger has 15 years of experience in the financial services sector with American Express and First USA, where he held senior management positions. Calvet has worked for Unilever, DMC, and Philip Morris International. The former “Financial and Security Services Business Unit” has been divided into two distinct entities: the Financial Services Business Unit, comprising banking, retail, transport, and conventional cards; and the ID & Security Business Unit, comprising ID, security and smart card interface (hardware and readers). D’Angelo will head the Financial Services Business Unit and Jacques Seneca
will head the ID & Security Business Unit.

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OTI Reports 75% Increase in FuelMaster Volume

On Track Innovations reported that “FuelMaster by BP” sales increased from 26 million gallons in 2002 to approximately 46 million gallons last year in South Africa. The “FuelMaster Express” program, which is aimed at private motorists, uses an OTI contactless smart key fob to carry a driver’s payment information. The key fob is presented to the reader located on the pump and can be used at the convenience store for purchasing and gaining loyalty points. In 2003 ABSA, the largest retail bank in South Africa joined the program. the “EasyFuel” wireless solution represents the next generation of OTI’s
gasoline management system, a totally wireless solution for gas stations. OTI recently announced the introduction of “EasyFuel” to Spain and Mexico.

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EGG BIDDING

Speculation is rampant that Royal Bank of Scotland is in final discussions to purchase Prudential’s Internet bank, Egg, for £1.5 billion to £1.6 billion. Earlier rumors suggested that US-based MBNA and Capital One were in talks to purchase Egg with its two million credit card customers. Last week, Prudential confirmed it is was in discussions to unload its 79% stake in the Internet bank after it started to shop for potential buyers in October. Reportedly, Egg hit tough times after purchasing an Internet bank in France in 2002. Through the third quarter, Egg lost £70 million. Egg launched the “la Carte Egg VISA” card in France during November 2002. The card has since failed to meet projections. Prudential launched Egg in October 1998.

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VeriFone Snags Edwards from Hypercom

VeriFone has hired Doug Edwards, former SVP/National Sales Manager for Hypercom, for its North America sales team. Prior to joining VeriFone, Edwards was at Hypercom for seven years, primarily responsible for the managing the sales team servicing major financial accounts throughout the United States and Canada. VeriFone, Inc. 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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Hansabank will use Thales e-Security’s P3 for EMV Smart Cards

TietoEnator, a leading IT services provider in the Nordic countries, has chosen Thales e-Security’s “P3” smart card personalisation and preparation process for Estonia based Hansabank. EMV migration in the Baltics is moving fast with the first EMV smart cards issued in December 2002. To-date Baltic banks have issued more than 200,000 smart cards. Hansabank issued its first VISA smart cards in August. The “P3” system is designed to provide card issuers with a ready-made way of migrating from magnetic stripe cards to smart cards. Aimed primarily at the payments card industry, it offers the ability to generate data for credit/debit and electronic purse payment cards. Using P3 reduces or eliminates the need to make changes to the issuer’s host system thereby reducing implementation costs and timescales. Thales’ “P3” sits at the core of TietoEnator’s EMV solution and helps simplify the smart card migration process by providing all the cryptographic data required. The key benefits of Thales’ “P3” are a secure data preparation process, 100% in-house control over cryptographic keys and limited impact on the banks’ host systems. P3 is developed in conjunction with MasterCard and Visa and has been sold to smart card issuers in more than 30 countries around the world.

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NPC Renews Kwik Trip Contract

National Processing Company has renewed its credit card processing contract for Kwik Trip and its 350 convenience stores. Under the terms of the renewal, NPC will continue to provide credit card authorization and settlement services for all Kwik Trip VISA and MasterCard transactions. Kwik Trip Inc. is known for its outstanding service, convenience, freshness and cleanliness, and prides itself on providing quality products and quality service to its customers. National Processing, Inc. is a leading provider of merchant credit and debit card processing.

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Providian Profits Up Five-Fold in Fourth Quarter

Providian reported net income for the fourth quarter of $67.1 million, a five-fold increase over one-year ago, but down from the third quarter’s $85.3 million. During the quarter, the issuer added approximately 420,000 gross new accounts, and ended the quarter with about 10.5 million customer accounts. Providian’s managed loans declined to $16.93 billion from $16.95 in the previous quarter. The issuer says that its net credit losses in the fourth quarter were better than expected at $147.9 million, resulting in a managed net credit loss rate of 14.33%. The third quarter net credit loss rate was 14.37%. Providian’s managed 30+ day delinquency rates at the end of the fourth quarter were 9.29%, compared to 9.68% at the end of the third quarter. For complete details on Providian’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

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Issuers Make a Scramble for Europe’s Egg

CardFlash International reports that speculation is rampant that Royal Bank of Scotland is in final discussions to purchase Prudential’s Internet bank, Egg, for $2.7 billion to $2.9 billion. Earlier rumors suggested that US-based MBNA and Capital One were in talks to purchase Egg with its two million credit card customers. Last week, Prudential confirmed it is was in discussions to unload its 79% stake in the Internet bank after it started to shop for potential buyers in October. Reportedly, Egg hit tough times after purchasing an Internet bank in France in 2002. Through the third quarter, Egg lost $127 million on the card. Egg launched the “la Carte Egg VISA” card in France during November 2002. The card has since failed to meet projections. Prudential launched Egg in October 1998.

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Generic Miles Programs Offer Lower Value

CardTrak reports that reward credit cards offering air miles, and not affiliated with any airline, average 1.6 cents per mile, compared to the 2.5 to 3.0 cents per mile offered by credit cards sponsored by a specific airline. However, the non-affiliated air mile programs do offer lower redemption thresholds than the typical 25,000 miles needed to get a free domestic ticket. Overall, Diners Club offers the best value and the most flexibility of all the non-affiliated cards offering air mile options. Diners “Club Rewards” cardholders can convert their points-to-miles, effectively earning one air mile on any major U.S. airline for each dollar charged. American Express cardholders who earn double “Membership Reward” points can do the same but are limited in their choice of U.S. airlines. Discover cardholders can get a value as high as 2.2 cents per mile if they use their miles to fly to Canada or Mexico, otherwise domestic tickets carry a 2.0 cent per mile value and discount certificates have a 1.0 cent per mile value. Among VISA and MasterCard issuers, Fleet’s “Miles Edge” program ranks the highest in value while Capital One’s “Go Miles” and Bank One’s “Travel Plus” programs offer the least value. However, Capital One and Bank One programs do offer the lowest redemption thresholds of 9,000 miles and 5,000 miles, respectively.

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