SCA Promotions to Offer AmEx STV Cards

Dallas-based SCA Promotions, a specialist in contests and promotions, has teamed with American Express Incentive Services to offer a stored-value gift card. Under terms of the deal, SCA assume the risk of over-redemption, enabling it to offer the cards at very attractive pricing. Cards are available in a multitude of denominations. Sponsors determine the values, expiration date, graphics, logos and the delivery mechanism. AEIS’ patented filter technology also allows sponsors to determine whether cards are redeemable everywhere AmEx is accepted, or limited to a particular retailer or even store location. This feature supports sponsors’ co-marketing and trade marketing efforts. SCA clients include AT&T, Coors Brewing Company, Cumulus Media, General Mills, Grab.com, Hershey’s, Pepsi and Sony.

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TowerGroup Membership Program Launched

MA-based TowerGroup has launched a “Membership Program” to offer financial services institutions greater flexibility in accessing research reports. The Program allows the institutions the to choose the research they need from all of TowerGroup’s research categories, as well as direct access to all of TowerGroup’s industry-leading analysts. The TowerGroup Membership Program is designed to address the unique needs of financial institutions as they look to compete in an increasingly converged and competitive marketplace.

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Usage Patterns in China Have No Pattern

Cardholder activities among consumers in Shanghai, Guangzhou, Shenyang, Deyang, and Hangzhou vary widely according to a new research report. Holders of credit cards in Shanghai and Guangzhou use their cards more frequently for purchase transactions than do their counterparts in other major cities, with 71.7% of card holders in Guangzhou using their credit card at least seven times per month over a six-month period compared with just 25.5% in Deyang and around 30% in Shenyang. According to the study by the School of Management at Fudan University in Shanghai and underwritten by MasterCard, cardholders in Shanghai and Guangzhou use their cards more frequently for shopping than their counterparts in Shenyang, Hangzhou and Deyang, with cardholders in those three cities spending comparatively more, and using their cards more frequently, on hotel accommodation. Not surprisingly, taken across all cities expenditure on shopping and dining out accounts for most of the credit card transaction volume.

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MBNA European Cards Up 45%

MBNA reported that managed loans in Europe increased 45% during the second quarter to $14.5 billion while managed loans in Canada grew 43% to $3.2 billion. During the second quarter MBNA added 460,000 new accounts in Europe and 260,000 in Canada, a 50% increase over the second quarter of 2002. The card issuer also added 16 new affinity programs in Europe, and 46 new affinity programs in Canada, during the quarter, according to CardFlash International. To-date, MBNA has 910 card programs in Europe, and 510 card programs in Canada. In April MBNA announced plans to market credit cards and related products in Spain through offices located in Madrid. Spain is the fourth international market entered by MBNA preceded by the United Kingdom, Ireland, and Canada. Since operations began in Spain the issuer has signed 29 affinity programs in the country.

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Cardinal Systems Hires Evans as RSM

AR-based Cardinal Systems, has hired Raymond Evans, formerly with Aurum, as Regional Sales Manager. Evans new responsibilities include introducing the Cardinal/400 core bank system to community banks throughout Florida and Georgia. Mr. Evans has over 15 years of experience in sales and sales management in the financial and utility industries. Prior to joining Aurum, he served as regional vice president at First Commerce Technologies, where he was in charge of sales and marketing of the company’s core and item processing solutions.

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NCR’s ATM Revenues Up 2% in 2Q/03

NCR reported Thursday that its ATM division generated second-quarter revenue of $260 million, a 2% gain over the year-ago period. The company says revenue growth in the Americas region offset continued market weakness in Europe and the impact of SARS in China. The Retail Store Automation unit produced $204 million in revenue, up 17% from the second quarter of 2002. During the quarter, NCR signed $25 million of orders for NCR’s advanced-function ATMs for five large US banks. Internationally, the company inked a deal with the State Bank of India to install and manage 1,500 ATMs and also signed an agreement with the Bank of Communications and Agricultural Credit Union Bank in China for “Personas” ATMs and “APTRA” software. In the Company’s Retail Store Automation business, NCR was awarded a $40 million contract during 2Q/03 with the USPS for POS terminals and services including software development, project management, installation, help desk and maintenance. NCR also signed an UK deal to refresh Sainsbury’s POS technology in all of its 500 supermarkets and 200 gas stations with “RealPOS 80c” terminals and “RealScan” bar-code scanners. For complete details on NCR’s 2Q/03 results visit CardData ([www.carddata.com][1]).

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

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Metris Takes a Beating on Wall Street

Metris is taking a beating on Wall Street this morning as its stock tumbled another 23% to $2.50 per share, after a shakedown yesterday. Yesterday the company released its 2Q/03 report showing lower losses, and also announced it would eliminate $565 million of insured deposits at its bank subsidiary by the end of September in response to a request from the OCC. On Thursday, the company reported a second quarter loss of $15.7 million, compared with a $36.4 million loss last year. S&P cut its credit ratings on Metris yesterday citing concerns about the Company’s ability to replace the funding derived from the $565 million of insured deposits. According to CardData, Metris’ 2Q/03 managed net charge-off rate was 19.1%, compared to 18.0% for the prior quarter, and 14.9% for the second quarter 2002.

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EMV CARDS

Smart cards are gaining momentum in Asia Pacific, as evidenced by more than 12 million VISA-branded EMV smart cards issued regionally, alongside over 120,000 EMV POS terminals. VISA aims to migrate the majority of payment cards and terminals to EMV chip standards in Asia Pacific by end 2008. VISA recently sponsored a “VISA Smart Vendor Conference” in Kuala Lumpur yesterday attended by more than 120 chip and technology professionals from 70 international companies. More than 70 leading vendors already participate in the “VISA Smart Program,” and many are actively supporting VISA members in their coming launches of VISA EMV card programs. Besides global vendors, an increasing number of Malaysian vendors, such as Cassis, have recently joined the program. The migration to smart cards is gaining speed in Malaysia and the country could very well be the first country in the region to complete national migration to EMV. In Asia Pacific, VISA has a greater market share than all other payment card brands combined with 59% of all card purchases at the point of sale being made using VISA cards. There are currently more than 365 million VISA cards in the region. During 2002, US$700 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using VISA cards, an increase of 43% over the previous year.

FULL STORY:

Smart cards are gaining momentum in Asia Pacific, as evidenced by more than 12 million VISA-branded EMV smart cards issued regionally, alongside over 120,000 EMV POS terminals. VISA aims to migrate the majority of payment cards and terminals to EMV chip standards in Asia Pacific by end 2008. VISA recently sponsored a “VISA Smart Vendor Conference” in Kuala Lumpur yesterday attended by more than 120 chip and technology professionals from 70 international companies. More than 70 leading vendors already participate in the “VISA Smart Program,” and many are actively supporting VISA members in their coming launches of VISA EMV card programs. Besides global vendors, an increasing number of Malaysian vendors, such as Cassis, have recently joined the program. The migration to smart cards is gaining speed in Malaysia and the country could very well be the first country in the region to complete national migration to EMV. In Asia Pacific, VISA has a greater market share than all other payment card brands combined with 59% of all card purchases at the point of sale being made using VISA cards. There are currently more than 365 million VISA cards in the region. During 2002, US$700 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using VISA cards, an increase of 43% over the previous year.

More than 120 chip and technology professionals from 70 leading international companies gathered at the Visa Smart Vendor Conference in Kuala Lumpur yesterday to discuss the latest developments and strategies for managing and delivering EMV chip-based products and services to Visa member banks and merchants regionally.

Focusing on ‘Driving EMV and Beyond’, the conference aims to share relevant information on the implementation of Visa chip products and services in Asia Pacific and to ensure that the move to chip is fully supported by the various industry players.

Bruce Mansfield, Head of Chip Implementation for Visa Asia Pacific, said, “ In recognition of the continued strong progress in the deployment of Visa smart cards and terminals in Asia Pacific, Visa hosts the conference annually for vendors to educate them on the latest policies and strategies, as well as to help shape the successful introduction of chip infrastructure, hardware, software and applications.”

Bruce added that the industry participants must play their role in educating their audiences about the benefits of chip with regard to fraud reduction and the introduction of new services on multi-application cards. He also stressed how essential it was for national governments, vendors and banks to cooperate in order to make chip migration a success.

“The Visa Smart Vendor conference was an excellent opportunity for like-minded professionals to engage in productive discussions and to exchange their knowledge and experiences in the various stages of EMV implementation. It further reinforces the need for collaboration by all industry players to ensure migration is completed within schedule,” Bruce said.

Strong Global and Local Vendor Support

As part of the industry collaboration, Visa has been working with leading global and local vendors in developing EMV chip products and services for its members. More than 70 leading vendors already participate in the Visa Smart Program, and many are actively supporting Visa members in their coming launches of Visa EMV card programs. Besides global vendors, an increasing number of Malaysian vendors, such as Cassis, have recently joined the program.

Smart cards are gaining momentum in Asia Pacific, as evidenced by more than 12 million Visa-branded EMV smart cards issued regionally, alongside over 120,000 EMV POS terminals. Visa aims to migrate the majority of payment cards and terminals to EMV chip standards in Asia Pacific by end 2008.

Bruce added, “We have been making great strides globally in our EMV migration efforts and more than 30 member migrations are now underway in Asia Pacific with the same number again planning to implement shortly. We are glad to have the entire industry supporting our initiatives for EMV chip migration. Our Visa Smart Program has expanded to include more vendors supporting a wide range of activities including manufacture and personalization of EMV compliant smart cards and terminals, as well as consultation and support services. We are also looking at future offerings in areas such as ATMs and host systems. Ultimately, our goal is to equip our Visa Smart vendors to better serve our member banks in ensuring the success of their chip implementations.”

Malaysia’s Migration on Track

The migration to smart cards is gaining speed in Malaysia, which was among the earliest adopters of smart cards through its government-sponsored programs.

Jack Pan, Visa’s head of chip implementation in Southeast Asia said given the heightened interest in and stronger focus on the pace of migration, Malaysia could very well be the first country in the region to complete national migration to EMV. He said,

“Visa has seen encouraging progress in Malaysia with its members’ chip migration efforts. HSBC recently launched its Visa EMV card issuance program in June and we are anticipating subsequent member announcements in the coming weeks. Our members can also expect more in-country support with additional card manufacturing and personalization bureaux to help them efficiently and cost effectively mass produce Visa EMV chip cards. This will enable them speed up EMV card issuance and accelerate the migration process in Malaysia.”

He said Visa would continue to strengthen its collaboration with regulators, vendors, and member banks in Malaysia in this vital migration exercise.

The Visa Smart Program is a comprehensive set of products and services on chip migration for Visa member banks. The program aims to significantly reduce financial, technical and time-to-market barriers currently faced by card issuers and acquirers in their chip migration efforts, and to accelerate the adoption of Visa Smart debit and credit cards in the region. Many Visa members have benefited from the cost-effective chip products, wide choice and flexibility in customizing smart card products to serve specific segments of consumers, while generating savings from reduced card fraud.

The Visa Smart Program supports member banks in all key functions of the chip migration process, including
·Visa Smart Cards:34 vendor offerings from as low as $0.99
·Visa Smart Devices: 3 vendor offerings from as low as $145
·Visa Smart Personalization:Solutions from as low as $0.50 per card
·Visa Smart Vendors:0ver 70 vendors actively supporting EMV

About Visa International

Visa is the world’s leading payment brand with more than 1.1 billion cards in circulation worldwide. Visa-branded cards are used to purchase over US$2.5 trillion worth of goods and services every year and are accepted at more than 30 million merchant locations and over 810,000 ATMs in more than 150 countries. Visa is a leader in Internet based payments and is pioneering the creation of universal commerce – the ability to conduct commerce anywhere, anytime, and any way.

Visa in Asia Pacific

In Asia Pacific, Visa has a greater market share than all other payment card brands combined with 59 percent of all card purchases at the point of sale being made using Visa cards. There are currently more than 365 million Visa cards in the region. During 2002, US$700 billion was spent at point of sale or withdrawn from ATMs in Asia Pacific using Visa cards, an increase of 43 percent over the previous year. Visa Asia Pacific’s Internet address is www.visa-asia.com.

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Diners Launches Summer Promotion

Diners Club has launched a “Summer Family Rewards” promotion, offering seasonalized and customized redemptions for cardholders with 100,000+ points. From shopping the Club Rewards Catalog or customizing vacations through a travel consultant, Diners Club Cardmembers’ redemption options are endless. Diners Club serves more than 8 million Cardmembers worldwide, and is issued in more than 200 countrises and 67 local currencies.

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E-FRESH CLIENTS

Vancouver-based VendTek Systems has now deployed 1,000 “e-Fresh” clients in POS terminals in retail stores across the country.
In addition to the total retail sites already offering “Now Prepay” services, the Company has already sold an additional 600 client licenses
bringing the committed total client deployment to 1600 in Canada. Each deployed “e-Fresh” client in a retail site connects back to the “Now Prepay” server and creates recurring transaction revenues from the sale of prepaid services. “Now Prepay” began selling the client licenses in November 2002.

FULL STORY:

VendTek Systems Inc., a leading provider of software for
prepaid service distribution, is pleased to announce that it has reached a
milestone in the development of its Now Prepay business. The Company has now
deployed 1000 e- Fresh Clients in POS terminals in retail stores across
Canada.

In addition to the total retail sites already offering Now Prepay
services, the Company has already sold an additional 600 client licenses
bringing the committed total client deployment to 1600 in Canada. Each
deployed e-Fresh(TM) client in a retail site connects back to the Now Prepay
server and creates recurring transaction revenues from the sale of prepaid
services. Now Prepay began selling the client licenses in November 2002.

“This is a tremendous achievement for VendTek and Now Prepay. The growth
rate has been excellent and recent trends indicate we can expect that to
continue. Our customers have shown their approval for our product by the
amount of re-orders that we have received. The feedback has been extremely
positive.” said Paul Brock, President of VendTek Systems Inc.

Now Prepay is joining forces with POS terminal distributors and
transaction processing organizations to integrate VendTek’s e Fresh(TM)
software with debit card and credit card processing software. The combined
applications provide a value added solution to the channels presently served
by physical cards for prepaid telecom services. Given the anticipated future
discontinuation of physical cards by Canadian Cellco’s, VendTek, through Now
Prepay, is poised to capture a significant share of the electronic
distribution of prepaid services market in Canada.

For more information, or to receive news and updates as they become
available, please contact Samantha Haynes at 1-800-806-4958 or 604.940.2239.

About VendTek and Now Prepay (http://www.vendteksys.com / http://www.nowprepay.com)
VendTek Systems Inc. develops and licenses e-Fresh(TM) software and
related technologies, which provides electronic distribution of prepaid
telecommunication and financial services. VendTek is commercializing the e-
Fresh(TM) software under license to create sustainable and recurring revenues.
VendTek’s customers and its subsidiaries, Now Prepay Corp. (in Canada) and
VendTek Systems Technologies (in China), are using e-Fresh(TM) software to
build electronic, prepaid services networks which enable consumers to purchase
prepaid services via POS and self-serve terminals connected to a central e-
Fresh(TM) server. This system creates significant value through improved
efficiencies compared to the traditional distribution paradigm. e-Fresh(TM)
reduces shrinkage and inventory requirements while improving consumer access
to prepaid services since it is completely electronic and eliminates physical
cards and vouchers.

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Cambridge Credit Counseling Pays $10MM+ To Good Payers

MA-based Cambridge Credit Counseling reported it has rebated more than $10 million to 60,000 of its 180,000 customers since 1996. The “Good Payer Program” is eligible to all of Cambridge’s customers nationwide for paying their monthly bills on time. Cambridge Credit Counseling Corp. provides credit counseling, educational assistance and budget planning services to clients throughout the United States, and enrolls about 6,000 consumers each month.

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HOME CAPITAL 2Q/03

Toronto-based Home Capital Group reported that its personal and credit card loans doubled in the second quarter, from $17.9 million in 2Q/02 to $34.4 million in 2Q/03. The gross credit card receivable balance is comprised of $18.1 million in accounts secured by cash deposits or residential mortgage collateral, and $5.8 million is unsecured. The total credit approved is comprised of $27.3 million in secured and $7.3 million in unsecured accounts. Security deposits on VISA accounts amounted to $12.0 million. “Equity Plus VISA” credit cards are secured
by a collateral residential mortgage, and this product now amounts to $10.8 million of the credit card receivable balance.

FULL STORY:

Home Capital Group Inc. has
maintained its uninterrupted record of rising quarterly growth and financial
performance with significant increases in earnings, earnings per share, and
total assets in the second quarter of 2003. The Company has now achieved
consistent quarter-over-quarter increases in earnings for 32 consecutive
quarters.

This performance reflects the underlying strength of Home’s business
strategy and adherence to a well-developed set of business principles, as well
as the strong demand for Home Trust Company’s products and services within our
large target market. It is also due to the efforts and dedication of our
mortgage broker network and our employees.

– Earnings rose 35.4% to $6.9 million for the three-month period ended
June 30, 2003, compared with earnings of $5.1 million during the
same quarter one year earlier. Earnings per share increased by
32.3% to $0.41, compared with $0.31 for the comparable quarter of
2002. Net income for the first six months of 2003 rose by 31.4% to
$12.9 million from the $9.8 million recorded in the first half of
2002. Net income per share for this six month period increased from
$0.60 to $0.77, and on a fully diluted basis from $0.56 to $0.75.

– Return on equity for the second quarter was 26.7%, compared to
24.6% for the comparable quarter of 2002 and up from 24.8% in the
first quarter, 2003. For the first six months of 2003, return on
equity was 25.7%.

– Total assets were $1.62 billion at June 30, 2003, a substantial
increase of 28.3% over assets of $1.26 billion one year earlier and
16.2% greater than $1.39 billion in assets recorded at the close of
2002.

– The Company issued a further $36.2 million in MBS poolings of
residential mortgages, generating $1.5 million in revenues. The
comparable figures for the second quarter of 2002 were $16.1 million
and $0.3 million respectively. The MBS portfolio administered by
Home Trust stood at $208.1 million at June 30, 2003.

– Home Capital’s consumer lending business, comprised of retail credit
services and VISA products, continues to grow profitably. Earnings
from this segment of $301,000 in the second quarter of 2003
represented a substantial increase over $52,000 in earnings in the
first quarter of the year.

– Net impaired loans at June 30, 2003 represented 0.33% of the total
portfolio down from 0.35% at March 31, 2003 and 0.46% in the second
quarter 2002.

During the quarter, the holders of the Company’s remaining Class A multi-
vote shares agreed to convert these shares into an equal number of single-vote
Class B subordinated voting shares without benefit or enhancement. The
completion of this milestone conversion program increased the float of
publicly traded Class B shares from 15,490,228 to 16,744,195 with no dilutive
effect on the Company’s earnings per share. The dual class structure benefited
the Company during its formative stages; however, the Company’s subsequent
growth and increasingly strong financial performance in recent years made this
a suitable time to adopt a single class share structure. In completing this
transition, the Board of Directors and the Class “A” shareholders fulfilled a
long-standing commitment to eliminate the dual class share.

At the company’s Annual Meeting of May 27, 2003, the company announced an
increase of 25% to the annual dividend from 12 to 15 cents per year,
annualized. As a result, there will be a dividend of $0.0375 per share payable
on September 1, 2003 to shareholders of record at the close of business on
August 15, 2003.

Home Capital Group continues to increase its market share of the large
and expanding Canadian residential mortgage sector and to deliver exceptional
results across all measures of business performance. At the beginning of 2003,
the Company identified four key performance targets for the year ahead. These
are to achieve 20% ROE for the sixth consecutive year; as well as 20% growth
in each of earnings, diluted earnings per share, and total assets, each for
the eighth consecutive year. As was stated at the 2003 Annual General Meeting
of Shareholders, “We are on track to meet or exceed all of these goals.”

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