Marceco & Q Comm

Marceco, a wholesaler of prepaid telecommunication products, has selected Q Comm’s transaction processing platform and “Qxpress 200” POS technology for the electronic distribution of prepaid services through Marceco’s retail network. Under the agreement, Marceco will purchase Qxpress 200 terminals and pay Q Comm a fee for each transaction processed through the terminals. Rollout of a limited number of terminals has just begun. Marceco intends to eventually install Qxpress terminals in all 400 retail locations that it services.

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eN-Touch Milestone

Ingenico says it has shipped its 200,000th “eN-Touch 1000” touch screen and signature capture terminal to major retailers in the USA. The eN-Touch 1000’s durable capacitive screen technology provides optimal finger touch sensitivity for customer PIN entry, complemented by proven electrostatic pen technology for electronic signature based transactions. Together, these resilient technologies provide optimal ease of use and a much lower cost of ownership than competitive terminals featuring membrane-based resistive touch screens.

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CRYPTOCARD OPSEC

Ottawa-based CRYPTOCard Corp. has achieved “OPSEC” (Open Platform for Security) certification for its “CRYPTOAdmin 5.32” authentication server, from Check Point Software Technologies. Through “OPSEC” certification, “CRYPTOAdmin 5.32,” coupled with CRYPTOCard’s multi-function smart cards, hardware tokens, or software tokens, seamlessly integrates with Check Point’s “VPN-1/FireWall-1” solution, enabling organizations to positively authenticate users regardless of location or server platform before access is permitted through “FireWall-1” and before the “VPN-1” tunnel is established. The solution enables organizations to positively authenticate all users requesting physical, network, or remote access while simultaneously providing users with the convenience of an ATM-style protocol.

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Discover Network

Discover Financial Services and Metavante have teamed to enable issuers, other than Discover Bank, to issue card products and use the Discover/NOVUS Network. The first products to be issued under the partnership will be stored value/gift cards. The companies said the key benefits of their program include neutral branding, real-time authorization, and a zero floor limit. The Discover/NOVUS Network currently has more than 4 million merchant and cash access locations. Discover is also accepted in some travel related merchants in Canada, the Caribbean and Mexico. Metavante is wholly owned by Marshall & Ilsley Corporation.

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KOOKMIN CARDS

Kookmin Bank announced it is merging its in-house credit card unit with
its affiliate Kookmin Credit Card Co in an effort to cut costs.
In April, Kookmin Credit Card announced a 20% reduction in its work force
in the wake of rising credit card losses throughout the country.
Kookmin Bank, which owns nearly 75% of Kookmin Credit Card Co, says it
expects to close the merger by the end of the third quarter. Two months
ago, the Financial Supervisory Service reported that major companies and
banks agreed to raise approximately $3.6 billion to fend off potential
bankruptcy in their credit card subsidiaries. Also, government-run Korea
Asset Management is buying between $4 billion and $5 billion worth of bad
credit card loans. The Korean credit card industry has been hit hard by an
economic crisis. The FSS recently reported that card payments, 30+ days
overdue, increased 23% to $6.3 billion in January from $5.1 billion in
December. Credit card issuers lost a total of $207 million in 2002. In
January, credit card losses topped $326 million.

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Paymentech & Mac’s

Paymentech has inked an agreement to provide complete payment processing services for more than 400 Mac’s Convenience Stores including the Big Foot, Dairy Mart, and Handy Andy brands. Paymentech’s comprehensive payment options and premium service is well known in the convenience store industry. From high-speed authorizations, customized pre-paid cards and innovative reporting solutions.

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ONEX & AIR CANADA

Toronto-based Onex Corporation may run into some turbulence in its bid to
acquire a 35% equity interest in Air Canada’s “Aeroplan” loyalty program.
Ernst & Young, the court-appointed monitor for Air Canada, have asked for
an extension to the talks between Onex and Air Canada, and have indicated
it may recommend that Air Canada solicit for other bids. In late January,
Air Canada agreed to let Onex acquire a 35% equity interest in
its”Aeroplan” loyalty program for US$177 million. Ernst & Young says the
recent revisions to the “CIBC Aerogold VISA” deal, as well as the inclusion
of another credit card issuer in the program has affected the value of the
Onex-Aeroplan agreement. “Aeroplan,” launched in 1984, has more than six
million members. In January 2002, “Aeroplan” became a wholly-owned
subsidiary of Air Canada. Last year, “Aeroplan” generated cash revenue in
excess of $600 million, of which less than forty percent represented
billings to Air Canada. Approximately 1.4 million round-trips were redeemed
for travel on Air Canada and its worldwide “Star Alliance” partner airlines
in the past year. Aeroplan has more than 90 partnerships with airline,
hotel, car rental, financial, telecommunication, retail, services and
entertainment partners.

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Debit Upgrade

Toronto-based Triversity has come up with a solution that adds a debit card function to NCR POS systems without new hardware. The company recently implemented a “DOS Thin Client” version of its “Transactionware” POS software along with “Transnet,” Triversity’s file and message transfer solution for credit and debit transactions, for a Seattle-based drugstore chain. Bartell Drugs was willing to upgrade its existing DOS-based software to accommodate debit, but the company’s POS hardware could not handle the additional memory and storage requirements of a Windows-based solution. The family-owned drugstore chain wanted to preserve its hardware investment and migrate to Windows on its own timetable. As part of the upgrade, Bartell Drugs is replacing its previous dial-up connections with a frame relay network for faster debit and credit authorization.

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CONVERT-A-CHECK

Vancouver-based LML Payment Systems and its licensee Global eTelecom have been selected as the back end processor for Merchant Services Network’s Electronic “Convert-A-Check” program. The program enables merchants to accept and process paper checks electronically, similar to a credit card transaction. Global eTelecom’s check services are licensed under four U.S. Patents held by LML. Florida-based Merchant Services Network has been in the merchant bank card processing business for more than 10 years.

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GCA Clients

Global Cash Access has signed 16 gaming properties for its ATM cash access services to bring its total customer base to approximately 1,000 gaming properties. GCA offers an array of products and services, ranging from the latest ATM technology to guest development marketing services that help casinos better understand their customers and increase traffic to the gaming floor and special events.

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HumanaAccess Card

Humana, Evolution Benefits, and BANKFIRST have teamed to launch a prepaid MasterCard that provides access to “Flexible Spending Accounts” and/or “Health Reimbursement Arrangements.” The “HumanaAccess MasterCard” will initially be issued to Humana employees, however the firm intends to make the new card available to Humana commercial members with HRA-style plans in 2004. The card is powered by the Evolution Benefits’ “Benny Card” that enables users to access FSA/HRA funds they set aside by swiping their card at the provider’s office or pharmacy. KY-based Humana has approximately 6.6 million medical members located primarily in 18 states. On May 6th, the IRS issued its stored value card guidance in the form of Revenue Ruling 2003-43. The ruling addresses the use of stored value cards with FSA/HRA accounts. The Ruling upholds the existing IRS substantiation requirements that call for third-party receipts and adjudication of all claims.

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BestBank Indictments

The former CEO and founder of Colorado-based BestBank, a now defunct issuer of sub-prime credit cards, was arrested Friday afternoon as he was passing through customs in Los Angeles. Edward Mattar III, and four other executives, were indicted two weeks ago on 95 counts of fraud in connection with the 1998 failure of BestBank which cost depositors more than $200 million. The other four individuals indicted and arrested include: Thomas Alan Boyd, a former director and president at BestBank; Jack Grace Jr., former director and CFO of BestBank; and, Glenn Gallant and Douglas Baetz, principals of Florida-based Century Financial. The indictment alleges that Mattar, Boyd, Grace, and Gallant fraudulently took more than $5 million each. BestBank offered a sub-prime credit card that included a travel club membership. Under the “BestBank VISA” program consumers would received a $600 credit limit in exchange for a $498 club membership fee and a $45 annual card fee. The program signed up 500,000 cardholders in its two year run and produced $240 million in credit card outstandings. The bank was seized by authorities after BestBank’s bad debt topped $134 million. (CF Library 7/27/98; 8/27/98)

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