SUREFIRE 4Q/02

Montreal-based SureFire Commerce reported that it has returned to
operating profitability, with operating earnings of $443,000 in the quarter
ended December 31st. One year ago the company posted an operating loss of
$2.2 million for the same quarter. Revenue for the quarter was $12.7
million, an increase of 22% compared to the prior quarter’s revenue. The
company says the operating profitability is due to
three quarters of restructuring. SureFire processes credit card payments
for Internet, mail-order/telephone-order, and bill payment transactions, as
well as processing checks online and by phone.

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PULSE Sales Exec

TX-based PULSE EFT Association has hired Marie Braeutigam, formerly with NYCE and National City, to represent the network in the Michigan, Ohio and Pennsylvania markets. PULSE is the nation’s leading independent financial industry-owned and controlled electronic funds transfer network, currently serving more than 3,800 bank, credit union and savings bank members across the country.  It is the only major network solely owned by financial institutions.

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InterCept Changes

Atlanta-based InterCept has restructured its merchant services division and appointed several new key officers. InterCept’s merchant services operations, including Internet Billing Company, InterCept Payment Solutions (formerly EPX), as well as InterCept’s merchant portfolio operations in Tennessee, will now operate as a single business unit known as InterCept Payment Solutions. John Perry has been named CEO of the unit. Tim Barnett, formerly with NOVA, has been hired to serve as EVP/COO. Julie Counterman, also from NOVA, was named EVP/Chief Marketing Officer for the new unit. Pam Clepper, formerly with The Bankers Bank in Atlanta, will serve as EVP of the financial institution division of InterCept Payment Solutions.

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Debit Promotion

MasterCard this morning announced its most significant debit card promotion to-date. The “Priceless Night on the Town” sweepstakes offers consumers a chance to win a night on the town anywhere in the USA by using their debit MasterCard card between April 1st and May 31st. MasterCard will award 100 winners the grand prize, a $2,500 value, for an evening for two in any U.S. city of their choice. MasterCard will also award 1,000 first prize winners with a $200 prepaid “MasterCard Gift Card.” Nearly 250 MasterCard member financial institutions will support the sweepstakes. The sweepstakes will be supported by advertising including the MasterCard “Priceless” commercial entitled “Date,” which will be tagged with a promotional message. This spot will begin airing April 1st. Four 60-second promotion-specific radio spots will also begin airing on that date. More than 80 members have ordered the online component of the marketing package, which includes Web banners and promotional pages to feature on their Web sites to cardholders. At year-end 2002, MasterCard has 47.1 million off-line debit cards in-force, in the USA, according to CardData ([www.carddata.com][1]).

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

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GM Card & PGA Golfer

General Motors and Household Bank have signed an endorsement agreement with PGA golfer J.J. Henry whereby he will carry a bag branded by “The GM Card” at all remaining 2003 PGA Tour events, and make a number of personal appearances on behalf of the co-branded card.   The GM Card is one of the richest co-branded credit cards in existence, rewarding customers with 5 percent Earnings on every credit card purchase that can be used to purchase or lease new GM cars and trucks.  As of January 2003, there were 6.9 million GM Cardmembers, and since The GM Card’s inception, more than 3.9 million GM vehicles have been purchased or leased with GM Card earnings.

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ATM Express Joins NYCE

MT-based ATM Express and its 5,024 ATMs have joined the NYCE Network.  ATM Express, which began deploying ATMs in 1999, added to the NYCE Network 5,024 ATMs that it operates throughout the United States. As with all independent deployers in the NYCE Network, ATM Express’ network participation is sponsored by a participating financial institution. ATM Express is also relying on NYCE’s EFT Processing Services division to drive its terminals.

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Disney VISA

Mickey Mouse, Disney’s Michael Eisner and Bank One’s Jamie Dimon this morning will ring the opening bell at The New York Stock Exchange to celebrate the launch of the new Disney co-branded credit card. The “Disney VISA Credit Card from Bank One” is the result of separate deals signed last June by VISA and Bank One with Disney which became effective in January of this year. The co-branded card’s key feature is its “Disney Dream Reward Dollars” program. Cardholders earn 1% of their purchase volume back in “Disney Dollars,” which can be redeemed with as little as 20 “Dollars.” Rewards can be redeemed toward merchandise, theme park tickets, hotel rooms at Disney facilities. The card carries no annual fee, and variable APRs, ranging from prime + 6.90% to prime +10.90%. Bank One says nearly 100,000 people have pre-registered for the card after Disney offered its most loyal customers the opportunity to be first-in-line for the new product last month. In addition to a significant direct mail campaign and retail banking center promotions, Bank One will launch a national multi-million-dollar television and print advertising campaign to promote the card. The television advertising campaign will begin airing the week of March 10. All applicants approved during the first year will be recognized with a “Charter Cardmember” distinction, which will be embossed on their card. Prior to the Bank One and VISA deals, Disney had a long term association with American Express. In 1997, Disney became a global partner in the American Express “Membership Rewards” program. (CF Library 6/5/02)

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Contactless Payments

A new study has determined that if the future of payments lies in cell phones, radio frequency keychain fobs, or chip-based smart cards then it will largely depend on how effectively these methods can provide clear value to the consumer. The TowerGroup study shows that electronic payments continue to gain share at the expense of cash and checks in the USA. In the USA, check-based payments have fallen from 86% to 55% of the total volume of retail noncash payments since 1979. In the next phase of this shift, TowerGroup expects convenient and cost-effective macropayments and high-value micropayments to expand further into new consumer arenas, like movie theaters and fast-food restaurants. TowerGroup says this move is already visible in the introduction of stored value cards by chains like Starbucks, and in the piloting of swipe and contactless cards at fast-food and convenience store chains.

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CIBC 4Q/02

Toronto-based CIBC reported that it maintained its market dominance during
the quarter ending January 31st with a market share of 32% in card purchase
volume and a 21.4% market share in card balances outstanding. For the
quarter, CIBC reported $313 million in card revenue, up slightly from $307
million in the year-ago quarter. Provision for credit losses for the
quarter was $339 million, down from $540 million in the first quarter of
2002 and up from $280 million in the prior quarter. The quarterly business
and government provision for credit losses was $204 million of which 52%
related to the telecommunications and cable, and utilities sectors. Credit
card losses represented 68% of the $135 million in the consumer provision
for credit losses for the quarter.

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Over-Limit Fees

Average over-limit fees have topped $28.00 for the first time, as average late payment fees have climbed above $30.00. Five top issuers now charge $35 over-limit fees. Last week, Discover said it is set to raise its over-limit fee to $35 for balances that exceed $1,000, effective April 1st. If the total Discover balance is less than $1,000, then the over-limit fee is $15. Household, Providian, Fleet, and Chase currently impose a $35 over-limit fee. Providian’s over-limit fee applies to accounts that are more than 2% over the credit limit. Fleet charges a $15 over-limit fee for balances under $500; $29 for balances between $500 and $1,000; and, $35 for balances over $1,000. Chase charges a $29 over-limit fee on all accounts except those subject to “non-preferred” pricing, which are assessed a $35 fee. Close behind is Bank of America, which now charges a $32 over-limit fee. As of the February, the average over-limit fee is $28.01, compared to $27.04 one year ago. The average late payment fee is now $30.07 compared to $28.79 one year ago, according to CardData ([www.carddata.com][1])

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

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IRIS

Paris-based Sagem, a fingerprint identification systems specialist, and
New Jersey-based Iridian Technologies, an iris recognition technology
specialist, have agreed to team. Under terms of the deal, Sagem will adapt
and integrate in its biometric identification systems the iris recognition
technology developed by Iridian. Sagen says that fingerprint recognition
technology is one of the most reliable and high performing solutions,
especially for the management of very large databases. The addition of the
iris recognition technology, renowned as one of the best biometrics, will
enable the development of multi-biometric solutions with unequalled
performance.

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Hacker Update

Omaha-based Data Processors International, a/k/a DPI Merchant Services, confirmed this morning that the total number of credit card accounts impacted from a recent break-in to its database has risen to 10.2 million. However, DPI says the increase from 8 million to 10 million is not related to any new unauthorized intrusions into its payment processing system. On February 3rd, DPI discovered a hack attack on its database, which involved 3.4 million VISA cards, 2.2 million MasterCards, and undetermined number of American Express and Discover cards. VISA says it has levied substantial fines in the matter. VISA also noted that there has been no fraudulent activity to-date. The other card networks also indicate there is no evidence of widespread fraud. So far, Pittsburgh-based PNC Bank, RI-based Citizens Financial Group, and First National Bank on South Africa announced they have de-activated and re-issued affected cards. DPI Merchant Services was acquired by TransFirst in March 2002. DPI reported $850 million in processing volume in 2001. (CF Library 3/15/02; 2/19/03; 2/25/03)

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