Marketshare 1Q/03

Gross dollar volume on credit and off-line debit cards increased 9.7% to $477.1 billion in the first three months of this year, compared to one year ago. Among the four major U.S. payment card networks, only MasterCard’s market share, based on total transaction dollars, increased. The market share of American Express declined 20 basis to 12.3% between the first quarter of 2002 and the first quarter of 2003. VISA and Discover both remained level at 51.4% and 5.5%, respectively. MasterCard’s market share increased from 30.6% one year ago to 30.7% this year. During the first quarter of 2003, Americans charged $245.4 billion to VISA-branded cards, $146.7 billion to MasterCard-branded cards, $58.9 billion to American Express cards, and $26.1 billion to Discover cards. (The Discover figure covers the months of December, January and February while the others cover January, February, and March.) VISA remains the dominate player in the USA, as Americans racked up more than $1 trillion in VISA transactions in the twelve-month period ending March 31st, 2003.

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eONE Acquires IVR Firm

eONE Global’s govONE Solutions unit has acquired the assets of Frank Solutions, an IVR specialist for the government, court, utility, insurance and higher education marketplaces. Frank Solutions will operate as a unit of GovConnect, a govONE Solutions subsidiary, which specializes in digital service delivery solutions, professional services and payment processing for government agencies. govONE Solutions already serves more than two million taxpayers, processing 40 million payments valued at $1 trillion annually. Frank Solutions will remain headquartered in Englewood, Colorado, where govONE Solutions and First Data Corp. also are based.

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ScanGuard

Boston-based Arthur Blank & Company has introduced a gift card management solution that uses a unique software and monitoring solution to verify card serial numbers, lot sequencing, dollar value, and corresponding barcode and mag stripe matching. “ScanGuard” is designed to eliminate concerns about duplicate and missing cards, order and distribution tracking, and card issuing and redemption errors. As each card is manufactured and then electronically inspected, card tracking numbers are matched to a master database, ensuring each card number is accurate and unique. All card information is then maintained in Arthur Blank’s “ScanGuard” database to avoid any duplicate orders. Should there be a lost or stolen shipment, individual cards, sleeves, cartons, or pallets can be eliminated from the retailer’s gift card system.

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PowerSwipe

Motorola, Nextel, and Creditel have partnered to launch a new solution to enable businesses to turn their Nextel phones into POS devices. The solution employs Creditel’s “PowerSwipe” device and “PowerPay J2ME” application running on Nextel’s national packet data network. Chase Merchant Services, provides merchant processing services for the “PowerPay” solution. “PowerSwipe” physically connects to the Nextel phone for unobstructed use, weighs 3.1 ounces, and incorporates a magnetic stripe reader, infrared printing port, and pass-through connector for charging the handset battery. The device will work on Motorola “i50sx,” “i55sr,” “i58sr,” “i85s” and “i88s” handsets for Nextel. Motorola will distribute the Creditel POS solution in the United States and Canada through its Motorola authorized two-way radio and reseller channels. Nextel will distribute it through its direct and indirect sales channels.

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Blue for Save The Music

American Express and Infinity Broadcasting have teamed to launch a new nationwide fundraising and awareness tour to support music education programs in U.S. public schools. Boyd Tinsley, the violinist for Dave Matthews Band, will serve as official spokesperson for the year-long Blue for Save the Music campaign, a collaboration between Blue from American Express and the VH1 Save the Music Foundation. Blue from American Express and the Save the Music Foundation launched Blue for Save the Music in February 2003 to bring greater attention to the lifelong benefits of music education and to help restore music education in America’s public schools. Blue from American Express pledged to raise at least $1 million this year toward restoring public school music education programs, and is contributing significant visibility via promotions, special events and advertising.

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BEETLE Chips

TX-based Wincor Nixdorf is now offering the Intel “Pentium III 1.26GHz” and Intel “Celeron 1.2GHz” processors to the standard list of options for its “BEETLE” family of POS systems. The new processors offer retailers maximum performance for their point-of-sale systems. The new models are based on the BEETLE One architecture, which includes a common motherboard based on an Intel embedded chip set, a choice of Intel processors, a full complement of industry-standard peripheral interfaces, and a wide range of storage, expansion, and display options.

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First Data & GE

First Data has signed a five-year extension of its long-term agreement to provide transaction processing services for GE Consumer Finance-Americas. First Data is actively converting GE Consumer Finance-Americas portfolios to the First Data system, which processes bankcard and private-label credit card transactions. Transaction processing entails a host of services, including posting of transactions, account management and statementing of accounts. The conversions are scheduled to be complete by the end of 2004.

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Photo Expressions

TN-based Internet Pictures Corporation has launched a new service to enable Bank of America cardholders to customize their credit cards with personal scanned images. Under the “Photo Expressions” option, cardholders transmit, via the Internet, an electronic image of their choice, such as a photo of their pet or recent vacation. Cardholders can then make minor adjustments to that image and then, preview exactly what their new, personalized credit card design will look like before accepting. The option is exclusively available to existing Bank of America “Classic,” “Gold” or “Platinum” consumer credit cardholders. iPIX is the largest online image management and distribution company in the world serving over a billion image views and two million image submissions daily for customers such as eBay, Homestore and the Los Angeles Times.

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COF Cut-Backs

Capital One yesterday announced plans to close its Fredericksburg, Virginia operations center to reduce operating expenses. The closure, scheduled for December 1st, will affect approximately 650 employees. Cap One says all of the employees will be offered positions at other Virginia locations, primarily in the Richmond area. The card issuer said it will honor its existing community commitments. In the first quarter, Cap One reported profits of $309 million driven by a $112 million decline in marketing expenses, according to CardData ([www.carddata.com][1]).

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

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AHP Verification

Electracash and TouchCredit Financial Services have developed an online check processing system that employs biometric verification. Merchants using Electracash will now be able to have real-time “Account Holder-Present” verification. By using existing hardware devices, such as keyboards, consumers verify their presence during a transaction based upon their unique keystroke rhythm. Standard microphones can also be used for voice verification, or finger scanners can be used for finger print verification. The new feature is available immediately to over 500 of Electracash’s existing merchant customers who service several thousand web sites; it is also included in the Electracash “Basic ACH” payment service for new merchants.

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VBV CASH

The first marriage between VISA’s “Verified by Visa” authentication process and online cash advances is up and running. Taishin Bank says that due to the recent SARS outbreak, its existing online cash advance service has experienced a surge in usage. The addition of the “VbV” program will now provide users with a higher level of safety and security when conducting such transactions online. VISA Asia Pacific says that in April and May, the fear of SARS has caused an increase in online banking and online shopping in Asia Pacific by 20% to 30% percent. In April alone, some VISA bank members have reported a surge in Internet cash advance transactions by as much as 50%. Also in Taiwan, Chinatrust Commercial Bank and Union Bank of Taiwan have already completed the “Verified by Visa” implementation, and are rolling out the service to cardholders and merchants later this month. There are 8.7 million Internet users in Taiwan as of end of March.

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