SMART CARDS 2002

Brussels-based Eurosmart reported that banking/retail smart cards grew 16% last year worldwide, reaching 175 million units. The industry group predicts that smart cards in this category will grow 17.1% in 2003 to hit 205 million units. Overall, more than 700 million microprocesor-based smart cards were shipped last year, with telecom making up 430 million of the total shipments. Eurosmart also reported that shipments of smart cards containing a memory chip with read/write capability and in some cases hardwired security functions totalled more than 1 billion last year, with 95% used in telecom. Memory cards are not considered smart cards by many. Eurosmart is the main international smart card association, representing the “Voice of the Smart Card Industry” for multi-sector applications. Its members include ASK, Ascom Monetel, Atmel, Cyber-COMM, Datacard, ELVA, Emosyn, FNMT, Fujitsu, Gemplus, Giesecke & Devrient, Hitachi, Incard, Infineon Technology, Ingenico, INSIDE Technologies, Microelectronica Esp., MCO, NEC, Oberthur Card Systems, ORGA, Philips Semiconductors, PPC Card Systems, Rafsec, Sagem, Samsung, SchlumbergerSema, Setec Oy, Sharp, STMicroelectronics, Thales e-Transaction, Wave Systems and Xiring.

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April Card Bonds

Charge-offs among credit card-backed securities rose 18 bps in April, the highest level since January 1998. According to the Fitch credit card index charge-offs hit 6.73% last month. However, delinquencies moved in the opposite direction falling 8 bps to 3.63%, a possible sign that deterioration in credit quality may give way in the months to come. Although bankruptcy filings declined month over month for the first time in 2003 falling 0.54%, year-to-date filings were up 9.3% from levels one year ago. Fitch expects bankruptcies to increase by roughly 8.0% in 2003 to 1.65 million.

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PAZ STOREPOINT

The leading fuel company in Israel has selected the Retalix “StorePoint” store solution with integrated fuel and food service modules to be installed in all its fuel stations nationwide. PAZ Oil Company operates 245 fuel stations as well as 45 convenience stores that operate under the “Yellow” banner. “StorePoint” is currently installed in all “Yellow” convenience stores. A new “StorePoint” feature for PAZ incorporates standard point-of-sale capabilities at the pump, using the pump terminal as the checkout display. This capability allows PAZ employees to sell typical in-store products at the fuel pump. Additionally, “StorePoint” supports PAZ fleet management by interfacing with automatic vehicle identification devices.

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MONEYBOX ATMS

UK-based Moneybox Corporation has inked a deal to deploy 250 new off-premise ATMs throughout the Netherlands. MoneyBox will use NCR’s “Personas 70” ATM equipped with “Fluiditi” technology. “Fluiditi” protects cash during delivery to the ATM, across the pavement outside the “cash in transit” vehicle, during replenishment, as well as when the ATM is in operation. At each stage, any physical attack will result in cash inside the unit being spoiled by indelible ink, rendering the cash worthless. Fluiditi Ltd is a wholly owned subsidiary of NCR Corporation. Moneybox launched its first convenience ATM in June 1999 and now owns and manages the leading independent ATM network in the UK where it has a total deployment of more than 2,100 ATMs.

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PIN Debit Fees

A new survey has found that only 12% of consumers get charged for PIN-secured debit purchases, while 4% are charged for signature transactions. The survey also found that only 6% of consumers participate in ATM/debit card reward programs. The annual study by Concord’s Star Systems of 11,000 consumers revealed that participants in reward programs were evenly split between PIN-secured debit reward programs and signature debit reward programs. The types of rewards offered ranged from airline miles (47%), points toward purchases (55%) and sweepstakes entries (32%), to discount coupons (36%) and a percentage of purchase returned (40%). Star also found that 51% of consumers prefer PIN-secured debit payment, versus 28% who prefer signature transactions. More than four out of five U.S. accountholders have an ATM/debit card, and 86% of users made a card purchase in the past 30 days.

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CHIP & PIN

A new payment card program, that combines a smart card with a PIN to fight fraud, went live yesterday in Britain. The “Chip and Pin Programme” pilot in Northampton involves more than 1,000 retailers and 150,000 cardholders. It is the first pilot of the new technology in the country, although France has used a similar system for several years. Over the next eighteen months the project is expected to include 850,000 retailer terminals, 120 million cards, 40,000 ATMs, and 40 million cardholders. By 2005, the liability of fraud at the POS will shift to retailers from issuers as a result of the upgrade to EMV/PIN. APACS says payment card fraud in the UK hit about US$750 million last year with counterfeiting making up approximately $250 million of the total.

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Chip & PIN

A new payment card program, that combines a smart card with a PIN to fight fraud, went live yesterday in Britain. The “Chip and Pin Programme” pilot in Northampton involves more than 1,000 retailers and 150,000 cardholders. It is the first pilot of the new technology in the country, although France has used a similar system for several years. Over the next eighteen months the project is expected to include 850,000 retailer terminals, 120 million cards, 40,000 ATMs, and 40 million cardholders. By 2005, the liability of fraud at the POS will shift to retailers from issuers as a result of the upgrade to EMV/PIN. APACS says payment card fraud in the UK hit about US$750 million last year with counterfeiting making up approximately $250 million of the total.

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eStorebuilder

Moneris Solutions, a joint venture of the Royal Bank of Canada and the Bank of Montreal, and GLS Global Assets Ltd. have teamed to launch an e-commerce solution for North American Web merchants. The companies also announced that Ophthalworld.com has inked a deal to enable its ophthalmology clients to obtain a merchant account from Moneris to accept credit card payments from their patients. The combination of the GLS “eStorebuilder 5.0,” and Moneris Solutions’ merchant account services provides an off the shelf or online solution for Web merchants to accept credit cards online without the need of a programmer. Moneris Solutions uses SSL 128-bit encryption for Web transactions.

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Laptop Incentive

WI-based Universal Savings Bank has launched a VISA credit card program offering a free HP laptop as an incentive for transferring at least a $5,000 balance from another credit card. The savings bank, which specializes in home equity loans, says it will launch a direct mail, Web-based campaign over the next year to market the promotion to more than 14 million households nationwide. The “Universal Savings Bank Platinum VISA” credit card will offer a free “Compaq Evo N1015v” notebook PC. The offer will only be available to consumers with excellent credit ratings and by invitation or pre-approved offer. The”Compaq Evo N1015v” sells for about $800 retail.

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