Target 1Q/03

Target Corporation reported yesterday that it experienced its first contraction in bank credit card receivables in the three month period ending May 3rd. The signs of maturation were also evident in Target’s delinquency and charge-off figures for the first quarter. As of May 3rd, Target had $3,751,000,000 in “Target smart VISA” receivables compared to $3,774,000,000 three months ago. Target’s net charge-off rate for its VISA program was 8.5%, compared to 7.3% in the fourth quarter, and 6.9% in the third quarter. Net write-offs for its store credit card program were 8.2%, compared to 8.4% for 4Q/02, and 7.9% in 3Q/02. The 90-day+ delinquency rate for “smart VISA” was 3.3% compared to 3.1% for the prior quarter, and for its “Guest Card” program the figure was unchanged at 5.1%. Target’s profits from its credit card operations was $151 million, slightly above the $150 million profit recorded in the fourth quarter, but well above 1Q/02 profits of $115 million. Totally, Target earned $349 million in 1Q/03. Target also noted yesterday that it was happy with the recent proposed VISA/MasterCard debit card settlement as approximately 25% of its in-store sales are on debit cards. Target says about 50% of its debit card transactions are non-PIN transactions. For complete details on Target’s 1Q/03 performance visit CardData ([www.carddata.com][1]).

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

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PVN April

Providian reported Thursday that its charge-off rate among its securitizations declined to 19.80% for April, compared to 19.89% for March. However, the figure is up compared to February’s 18.23%, and January’s 19.38%. Delinquency (30+ days) for its securitizations also dropped from 12.46% for March, to 12.27% for April. Previous delinquency was 12.89% for February, and 13.26% for January. The loss rate on reported card loans declined from 15.91% in March to 14.50% in April. Reported delinquency also declined from 8.76% in March to 8.34% in April. Providian ended the first quarter with $18,470,000,000 in card outstandings and 11.7 million accounts, acoording to CardData ([www.carddata.com][1]).

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

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Catuity 1Q/03

Loyalty software specialist Catuity reported its first profitable quarter with earnings of $305,000 in 1Q/03, as compared to a net loss of $355,000 one year ago. Catuity, Inc. is a leading provider of application software that allows merchants, transaction processors and card issuers to establish and administer customer loyalty programs integrated to the payment system at the point-of-sale.

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THINK WESTERN MASTERCARD

Edmonton-based Canadian Western Bank has joined with MBNA Canada Bank to issue a new suite of MasterCards for business and personal use. The “Think Western MasterCard” will be offered in a business version and three personal credit cards. Under terms of the agreement, MBNA Canada Bank will provide the marketing and operational expertise including card delivery and fulfillment. Canadian Western Bank has 27 branch locations and is the largest “Schedule I” chartered bank headquartered in and regionally focused on Western Canada.

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COF Marketing

Capital One says its “What’s in Your Wallet” campaign has resulted in the card issuer achieving brand awareness and brand equity scores among the highest in the credit card industry. The company expects its marketing expense to gradually increase this year from the $242 million it spent in the first quarter. Even though the issuer will expand its marketing investments the Company expects little or no account growth this year. However, the Company expects managed loans outstanding to increase by approximately 15%-20% in 2003, with more of the growth comprising “super-prime” and “prime” accounts rather than “sub-prime” assets. Cap One has previously held as much as 40% of its managed loans in the “sub-prime” or under FICO 660 market. The company’s managed loan balances ended the first quarter at $59.2 billion, a 21.9% increase over 1Q/02. U.S. consumer loans, mostly credit cards, accounted for $46 billion of the total.

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LML & CARD-PAYMENT

Vancouver-based LML Payment Systems and Global eTelecom have renewed their processing agreement with ISO CardPayment Solutions. Under terms of the contract, Global eTelecom will continue to provide complete back engine processing and support for the CardPayment Solutions’ Electronic Check Conversion programs. Global eTelecom’s Electronic Check Services include: Electronic Check Conversion (Point-of-Purchase), Electronic Mail Order / Telephone Order Checks (MOTO), ARC Lockbox Conversion, Electronic Recurring Debit, Electronic Represented Check Collection (RCK), Electronic Check Image Capture, and Secure Web Based Check Image Retrieval.

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Datacard SE48

Datacard Group has introduced a new card issuance system that enables card issuers to produce ready-to-use ATM, debit or credit cards in less than 30 seconds. The new “Datacard SE48” card issuance system offers embossing, magnetic stripe encoding, and smart card personalization capabilities. Personalization features for the new SE48 system include embossing, topping, magnetic stripe encoding and both contact and contactless smart card personalization. Advanced indent capabilities allow for front, rear and combined front-and-rear indent printing. The system supports CPX protocol and 3-DES encryption for secure host data exchange. Card processing and card stock are restricted and accessible only by key and password. The system also includes bolt-down tabs that allow the unit to be secured to its station. A fraud-resistant card counter registers all cards, whether they enter the system via the input hopper or the exception card feeder.

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COGNITEC & SAGEM

Dresden-based Cognitec Systems has agreed to give SAGEM access to all aspects of the face recognition technology it has developed. SAGEN will adapt and integrate face recognition in its biometrics-based identification systems. SAGEM says the deal with Cognitec follows an agreement with Iridian, last February, and now perfectly complements its multi-biometrics offerings. Cognitec Systems is known for the leading recognition performance of its “FaceVACS” technology.

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MIFARE Deployment

The Metro Transit in Minneapolis / St. Paul, Minnesota has selected Philips Electronics “MIFARE” contactless smart card technology for use in its contactless automatic fare collection system provided by Cubic Transportation Systems. The Cubic system will be the nation’s first regional ticketing system that accepts smart cards for fare payment for light rail, city bus and future bus rapid transit system. The solution includes computers, software, communications, ticket vending machines, platform and on-board smart card validators, hand held read/write devices, and will be equipped with the “Cubic Tri-Reader” architecture. The initial roll out, which is planned to be by the end of this year following a 30-day operational field test, will provide an automated smart card-based ticketing system for the Minneapolis / St. Paul population, eventually replacing most magstripe tickets with contactless smart cards on the Twin Cities’ bus network. Metro Transit serves a quarter of a million customers each business day with services on nearly 130 routes and more than 900 buses operating on fixed-route services.

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