Card Sectors

After outpacing the rest of the industry for the past five years, the sub-prime segment has become the worst performing credit card market segment. Meanwhile, the co-branding sector has recaptured its luster, and credit unions continue to turn in solid numbers. Based on EOY 2002 data gathered by CardData (www.carddata.com), the co-branding sector grew 9% last year with an average balance of $2,704 and year-to-date volume of $5,262 per active account. The average balance per active account for the sub-prime segment was $1,886 with annual volume of $1,824 per active account. Sub-prime balances decline 1% last year, on average. Credit Unions delivered an average balance of $2,811 and an annual charge volume of $5,678 per active account. For example, cardholders at Boeing Employees Credit Union charged an average of $7,806 last year, compared to Capital One’s $2,636.

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FIFA UEFA CONMEBOL

MasterCard International has renewed its sponsorship of international
soccer’s five most prestigious events. The events include the “2006 FIFA
World Cup” in Germany, “2004 UEFA European Football Championship” in
Portugal, “UEFA Champions League” (through 2006), “2004 CONMEBOL Copa
America,” and “2003 Copa Toyota Libertadores.” As an official sponsor of
these five major properties, MasterCard’s exclusivity as the official
payment system includes all real and/or virtual payment and/or account
access systems (including credit cards, charge cards, ATM cards and
networks, and travelers cheques). In addition to the high-profile
properties, MasterCard has also enjoyed a long-standing relationship with
soccer great Pele. Pele has made over 150 appearances worldwide in six
regions on behalf of the company, helping spur the issuance of more than 2
million FIFA World Cup-themed affinity cards bearing his
likeness. Furthermore, MasterCard and its member financial institutions
have utilized Pele in over 20 million cardholder inserts, mailings and
promotional collateral materials.

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MC SMS

MasterCard International has launched a service to help its members take advantage of short message service text messaging. MasterCard says it worked with a number of European members last year on marketing campaigns that experienced response rates approaching 10%, thanks to SMS. The new “MasterCard SMS” program also includes “code-of-practice” which provides guidelines and protection for the consumer, focusing on such key areas as obtaining permission from cardholders, agreeing message delivery times and types of text-messages, e.g. alerts/information/coupons. The first SMS based marketing campaign linked to MasterCard took place in Poland, where despite only 30% mobile penetration in the country, 360 million SMS messages are sent on average every month. Last Spring, eleven banks linked up with MasterCard Poland to organize a competition for Champion League football prizes. To compete, Maestro and MasterCard cardholders had to send an SMS with contact details following a purchase. More than 25,000 cardholders participated. So successful was the campaign that a similar version was run in November and December, linked to the MasterCard Priceless campaign with holiday prizes. The holiday promotion attracted 55,000 cardholders. MasterCard says future SMS messages might include getting a discount in a store just by showing the message on your mobile phone to the sales clerk.

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Fiserv EFT/CNS

WI-based Fiserv has combined the operations of Fiserv EFT and Consumer Network Services to become the second largest third-party processor of EFT transactions nationwide. The new Fiserv EFT/CNS unit will continue to operate two main offices in Oregon New Jersey. Grant Christenson, formerly President of Fiserv EFT, is CEO of the new unit, and Tony Catalfano, formerly Director of CNS, is President and COO. The new organization will have 4,000 clients (direct and indirect). The new unti will drive 17,500 ATMs, proces approximately 320 million transactions monthly.

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Direct Payments

The Federal Reserve and the Electronic Payments Network will collaborate, for the first time, on a national advertising campaign to promote the benefits of direct deposit and direct payment to consumers. The advertising, to be launched in May, will feature a people doing things they enjoy with their families and friends rather than waiting in line to deposit paychecks or sitting at home paying bills. A print campaign will run in national magazines, Sunday newspaper magazines, metropolitan city magazines, and newspapers. A national radio advertising campaign will also be launched. The campaign is being administered by NACHA.

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IDT 4Q/02

NJ-based IDT Corporation reported this week that revenues for the quarter ending January 31st were $450.8 million, a 20.5% increase over the prior year quarter. The net loss for the quarter narrowed from $17.2 million last year to $12.5 million. Calling card revenues amounted to $268.6 million for the quarter, 8.4% more than the year-ago quarter. Gross margins for calling cards were 20.7% in the quarter, versus 21.6% one year ago. In the middle of the quarter, IDT entered into an agreement with Walgreen to become the exclusive provider of Walgreen’s prepaid calling cards. The cards were rolled out to the retail chain’s 4,000 stores during December and January. For complete details on IDT’s latest performance visit CardData (www.carddata.com).

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Bank One E-Check

Bank One’s Consumer Payments Solutions has developed a new product that converts consumer checks into electronic debits for next-day settlement. Electronic Check Conversion Services uses high-speed image technology to scan paper checks and capture accounts receivable data and bank account information, then it is converted into ACH debits and is processed as an accounts receivable conversion payment.

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Smart Labels

Shoplifting will be a thing of the past as retailers embrace advanced RFID labels and begin to integrate the new technology with their POS payment systems. Benetton announced this morning it is now undertaking the largest item level tagging implementation of RFID technology in the fashion industry to-date. Benetton says this new technology will be employed at the point of sale, automatically registering sales and returns and feeding information back into the company’s ordering system. Clothes produced under Benetton’s core brand “Sisley” have been fitted with RFID-enabled labels based on Philips’ I.CODE semiconductor technology. Philips teamed with LAB ID and Psion Teklogix to produce the smart labels system. Philips says it expects to ship 15 million “I.CODE ICs” to Benetton this year. Philips’ I.CODE ICs enable a highly automated scanning process that does not require line of sight and can scan multiple items at once. This means that a box containing a variety of garments in different styles, colors and sizes, which traditionally would have been unpacked and checked by hand, can be scanned in one go and the information uploaded directly into the company’s main computer system. In store, Benetton will use RFID technology in smart shelves and in dressing rooms to highlight where individual garments are located.

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