Off-Line Debit Stays Strong Despite Rising Threats

Debit card executives from Bank of America, FleetBoston, and Suntrust told attendees at the ABA/Foreward Financial Bank Card Conference in Dallas this week that charging fees to consumers for debit card transactions to offset the recent reduction in interchange for merchants, is a knee-jerk reaction that could ultimately hamper growth. Beyond the recent margin compression of off-line debit cards, the executives listed off other threats to off-line debit growth including the expanded deployment of PIN pads, Wal-Mart’s promotion of ACH transactions, the “Debitman” card, and the Western Union/NYCE debit card. With only 30% of U.S. merchants currently using PIN pads at the POS, and with the 33% reduction in off-line debit interchange, all agreed that the shift to PIN will most likely level off. On Monday, VISA USA’s CEO said that since the debit card settlement, there has been no impact on off-line debit card activity. Card Pascarella said between May and August, VISA “Check Card” transactions were up by 24%.

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Gemplus Beefs-Up its North American Conventional Card Business

Gemplus is ramping-up its North American conventional card business to take a life of its own, with local management, dedicated sales and technical teams, and a local manufacturing facility with high-volume production capacity. The company also announced it has named Timothy Wright as Director of North America Conventional Card Sales. Wright previously served as VP/Sales for the De La Rue Brand in the USA from 2000 to 2002. He is also a current member of the International Card Manufacturers Association Board of Directors. Gemplus has a production facility in Montgomeryville, Pennsylvania that is “ISO 9002” and “ISO 1400” certified. Gemplus products include conventional card products, which include PVC cards, “GemLucence” (translucent PVC card body), and “HoloGem” (PVC card body covered with foil to produce a holographic or mirror effect).

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Visanet Brazil Securitizes US$500 Million Through Bank of New York

Companhia Brasileira de Meios de Pagamento has named the Bank of New York to act as trustee, registrar, and paying agent for its $500 million credit card securitization. This is the first credit card securitization issued out of Brazil. Companhia Brasileira de Meios de Pagamento (Visanet) was created in 1995 by VISA International and four Brazilian bank acquirers of VISA credit and debit cards to centralize certain aspects of the operation of the VISA program in Brazil. Visanet’s two largest shareholders, Banco do Brazil and Banco Bradesco, are participating in this securitization, each in the role of a “Designated Bank” acting through its Grand Cayman branch.

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Catuity Raises Funds as US and Canada Programs Gear Up

Catuity’s shareholders have approved the private placement of 3 million shares of common stock. As previously announced, the funds raised in the placement will be used primarily for general operations of the Company as its business accelerates. The Company also announced that its applet is being added to 20,000 VISA cards in Canada this fall as part of a smart card market trial. Catuity also said the “Smart VISA Rewards” program continues with a successful operational trial earlier this year as well as the national deployment of the system with the Company’s major retail customer. The rollout, which commenced in July, is now in its marketing pilot phase in all stores of this retailer. The Company’s revenues are expected to be in the US$4.3 million to US$4.6 million range for 2003.

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CardWeb.com Launches New Publications and Conference Exhibit

On the eighth anniversary of its Web site, CardWeb.com this week announced a series of new online publications and launched a new “Super Hero”-themed conference exhibit program at the ABA/Foreward Financial Bank Card Conference in Dallas. In September 1995, CardWeb.com used the ABA Bank Card Conference in New York City as a platform to launch its initial Web site. Speaking at a news conference at the St. Regis hotel in Los Angeles, CardWeb.com’s CEO, Robert McKinley, detailed the Company’s plans to expand its CardFlash, CardData, and CardWatch professional services to an international level. He said the Company recently launched a weekly CardFlash International service, and will introduce CardData International and CardWatch International during the fourth quarter. Some of international content will be produced from the firm’s branch offices in Australia and the UK. McKinley also indicated the Company plans to leverage its extensive news database to introduce two new services in the first quarter of 2004, namely CardPeople and CardDesign. CardWeb.com and its sister firm, RAM Research Group Ltd., have followed the payment card industry on a daily basis since 1986.

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American Express Rolls-Out a Major Ad Campaign for Blue Cash

American Express said Tuesday it will launch a major national advertising and marketing campaign for its highly successful “Blue Cash” card. A key component of the program is “Sting Live at the Blue 5,” a free, ticketed concert to be performed by recording artist Sting in Chicago’s Grant Park on October 7th. American Express is offering Sting tickets via radio promotions, street teams and via the Internet. Four different 15- and 30-second national television spots are airing on cable and on local prime-time, and will be followed by “Blue Cash” ads broadcast on national network prime-time. In print, “Blue Cash” ads have begun appearing in lifestyle and news publications with September published dates. Large billboards and public telephone kiosks were also launched in New York, Los Angeles and San Francisco, this month.

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Paymentech Re-brands Prism Processing Services

Prism Processing Services has been re-branded and will now operate under the Paymentech name. Paymentech acquired the assets of Prism Processing Services in 1998, to provide independent and community banks, credit unions and savings and loans a vehicle to outsource payment processing to their merchant customers. Operating as a division of Paymentech, Prism offered customized merchant processing solutions, including full turnkey operations.

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