ATM CONTRACT

Bank of Communications and Agricultural Credit Union Bank have awarded NCR an ATM deal worth $6.7 million. In the two separate deals, NCR will provide the Bank of Communications in Shanghai with ATMs for the bank’s 50 branches throughout China and furnish “Personas” ATMs for Agricultural Credit Union Bank’s Dongguan city branch. The deals also include NCR’s “APTRA” software. China now has 50,000 ATMs.

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BART Upgrade

San Diego-based Cubic Transportation Systems has been awarded an additional $2.2 million by San Francisco’s BART to enable commuters to park with the same ticket they use for trains and buses whether it is a magnetic ticket or smart card. The $2.2 million parking application is the latest of a series of systems upgrade options awarded by BART to Cubic since 1999. The new parking application will installed at three of the stations set to open as part of the San Francisco International Airport Extension — Millbrae, South San Francisco, and San Bruno — and the existing Daly City and Colma stations.

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eMac NewPOS

McDonald’s, which divested its stake in eMac Digital this week, announced yesterday it has signed a long-term agreement with eMac to develop its next generation point-of-sale software system worldwide, as well as to continue its existing “NewPOS” software license. The newly independent eMac said yesterday it will now expand the “NewPOS” software to more foodservice retailers in addition to being marketed within the McDonald’s worldwide system. eMac provides its services to over 2,700 restaurant locations in the USA across 30 restaurant brands including Pizza Hut, KFC, Applebee’s, Domino’s Pizza and McDonald’s. Accel-KKR Company, McDonald’s partner in the eMac venture, purchased McDonald’s share.

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Datamark on on T7 Plus

Datamark Technologies has “Class A” certified their gift and loyalty application on Hypercom’s standard “07A” card payment terminal software, and will use Hypercom’s new “T7Plus” card payment terminal in the application’s national roll-out. Datamark offers turnkey solutions, including all hardware and software, system integration, licensing, database management, customer service and technical support, report generation, and database analysis software. Hypercom has shipped more than six million terminals in over 100 countries, which conduct over 10 billion transactions annually.

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Stage Stores Cards

Houston-based Stage Stores has agreed to sell its portfolio of approximately 2.2 million existing private label credit card accounts to Alliance Data Systems. Stage, which operates 362 stores in 13 states under the Stage, Bealls and Palais Royal names, says total card balances at the end of first quarter were $241 million. Under terms of the deal, ADS, will also own the new accounts and balances generated during the ten-year term of the alliance. Approximately 220 associates currently employed at Stage Stores’ Credit Support Center in Jacksonville, Texas, will be employed by Alliance Data. Citigroup Global Markets is the financial advisor to Stage Stores on the transaction.

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Smart Loyalty Patents

VISA, Australia’s Catuity, and France’s Welcome Real-time have hammered-out a patent cross license agreement to increase the availability of interoperable systems for smart-card based loyalty rewards at the POS. Catuity and Welcome Real-Time had been embroiled in a patent dispute in 2001 over smart card loyalty software. The companies settled their disputes in April 2002. Under the “VISA Loyalty Program Patent Agreement,” announced this morning, the three companies will cross license existing and future patents for VISA smart loyalty programs. This cross license will be worldwide and royalty-free until the last patent expires. The cross license will extend to all Visa affiliates, members and merchants. Participants will develop and promote interoperable loyalty solutions by integrating the VISA interoperability toolkits within their platforms. (CF Library 5/18/01; 7/27/01; 4/2/02)

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VIRGIN START

Virgin Money Group reported this week it has received more than 50,000 applications for its new “Virgin MasterCard” announced last week. The response is unprecedented in the country’s credit card industry. Virgin said the combination of its low interest rate, no annual fee, and instant rewards hit the hot buttons of consumers. At launch, Virgin chief executive Richard Branson said the card is intended to “shake up” the credit card business in Australia and stop the “ripping-off” of consumers. In January 2002 Virgin launched a credit card in the UK, which has since attracted more than 300,000 cardholders. The new “Virgin MasterCard” for Australia is being issued by Westpac Banking in association with Virgin Money Group, a joint venture between Virgin and AMP. The new card features the “Mates Rates” rewards which offers cardholders automatic, instant discounts when using the card at participating merchants. The “Virgin MasterCard” offers a six-month 4.9% intro rate followed by ongoing interest rate of 11.9%. There is no annual fee and a 55 day grace period.

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MC VS RBA

MasterCard took its turn in Federal Court today to take on the new credit card rules issued by the Reserve Bank of Australia. MasterCard said the RBA was in a rush to make reforms even though a joint study by the Australian Competition and Consumer Association and the RBA provided no basis for sweeping reforms. Like VISA, MasterCard argued that it is not a “designated payments system” and therefore not subject to RBA regulatory power. Last year, the RBA issued new reforms on the credit card business permitting merchants to recover from cardholders the costs of accepting credit cards. The new standard went into effect January 1st. Also under the new RBA rules, interchange fees will decrease from around 95 basis points to approximately 55-60 basis points by July 1st. MasterCard is represented by Coudert Brothers.

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Discover Gift Card

A shopping mall gift card pilot tied to the Discover card network is being expanded. NBO Systems said Tuesday it is adding three additional malls to the pilot after the success with the program at a mall in Des Moines, Iowa. The mall gift card program is the result of a partnership between Discover Business Services, Metavante Corporation, and NBO Systems. The mall gift card is a non-embossed card featuring the mall’s logo and name on the front, allowing the mall the benefit of center branding. NBO provides the software, cards, marketing collaterals and accounting to manage and implement the stored value program. Salt Lake City-based NBO has been in the gift certificate/gift card business for over five years. NBO, Inc. stands for Neighborhood Box Office, Inc. (CF Library 4/25/01)

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CARD USAGE

A new analysis conducted for MasterCard International has found only 18% of debit cards issued in China are active compared to 63% of credit cards. Of the 413 million debit cards issued to-date, only 74 million can be considered as active cards, with 82% non-active. By comparison, only 36% of secured credit cards and 38.6% of credit cards are considered non-active. “Non-active” is defined as being used less than once a month. Chinese banks issued debit cards aggressively in order to have more savings accounts as they began to compete for market shares in the mid-1990s. A debit card requires a savings account in good standing in order for it to be functional, hence each debit card issued entails a new savings account. A related contributing factor is that the banks also issued debit cards to their existing savings account holders as “pre-approved” customers. This added massively to the number of debit cards issued in the late 1990s. A third factor is a legacy of the past practice of “group applications”. This refers to a department head or manager of a business unit applying for debit cards on behalf of all the workers in that unit, often without prior consultation with the workers, frequently for the purposes of facilitating payroll management. MasterCard projects the credit card industry will explode in China over the next decade to 160 million cardholders. Currently there are one million credit cardholders and 24 million secured credit cardholders in China. MasterCard says there are already 50 million people in China who can be characterized as “cardable.”

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