7-Eleven Micro Card

7-Eleven and Alliance Data Systems have launched the new “7-Eleven Convenience Card,” which includes a smaller keychain version. Available at participating 7-Eleven stores, the card may be loaded with any cash-value amount between $5 and $500. To reward card-users, any customer who loads or reloads a card with at least $25 will receive a free 16-ounce cup of 7-Eleven coffee, 22-ounce “Slurpee” or 32-ounce “Big Gulp” fountain drink. The new re-loadable stored-value card will feature collectible graphics. The designs will feature “Slurpee,” coffee, gasoline and a 7-Eleven logo card. New designs will be introduced throughout the year including holographic images and cards featuring X-treme sports. The card may be re-loaded online or by calling a toll-free number using a credit card. Customers may also register their card on the 7-Eleven Website to protect against a lost or stolen card. Customers may also check their “Convenience Card” balance at any store, online or by calling a toll-free number. 7-Eleven does not charge any transaction fees for loading or reloading the cards. If a card is inactive for 12 months, a $2 per month service fee will be assessed until the card is used again. (CF Library 2/3/03)

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Ethan Allen Card

Furniture king Ethan Allen has launched the “Ethan Allen Finance Plus Card.” The card, issued by GE’s Monogram Credit Card Bank of Georgia, offers customers at the POS the option to make payments under an installment plan or a revolving credit card plan. The “Simple Finance Plan” offers fixed monthly payments, ranging from 12 to 60 months. The installment plan requires a $2,000 minimum purchase. The new card also offers special-offer financing promotions when offered. Interest rates start at 9.99%. Ethan Allen operates an exclusive network of more than 300 stores in the United States, Canada, and Mexico, and there are 19 overseas. Currently, MCCBG supports a portfolio of more than 60 clients with merchants in over 60,000 locations, including: Ford, Sony, PC Richard & Son, Tweeter, Ultimate Electronics, Suzuki, Brandsmart USA, H.H. Gregg Electronics, Whitehall Jewelers, Shaw Industries and Mohawk Industries. Last year, GE bought out Bank One’s share of the Monogram Credit Services. (CF Library 6/7/02).

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Cardtronics & Genpass

Houston-based Cardtronics has signed its first long-term agreement with Genpass Service Solutions to provide service and maintenance for 1,150 Cardtronics ATM machines located at ExxonMobil Corporation retail outlets and Winn-Dixie Stores locations. For Cardtronics, this marks their first time to work with Genpass, Inc., one of the top five ATM drivers in the U.S., and owner and operator of the MoneyMaker and MONEY BELT(R) EFT Networks.

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Starbucks Vespa Card

Starbucks Coffee Company, which recently signed a co-branded VISA deal with Bank One, has teamed with Piaggio USA, manufacturer of the “Vespa” motor scooter, to launch a sweepstakes for holders of its stored value cards to win loaded Italian vacations and prizes. Starbucks Card holders can enter to win prizes in the “Starbucks Stirs You, Vespa Moves You” Sweepstakes by making purchases or reloads on their registered Starbucks Cards from February 26 through April 22, 2003. Each registered Card transaction will automatically enter customers in weekly drawings for loaded Starbucks Cards and for the overall drawing to win Starbucks Cards, Vespa motorscooters and Vespa-themed prizes.

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TELECASH ACQUISITION

Bonn-based T-Systems International GmbH, a division of Deutsche Telekom
AG, has signed a deal for First Data to acquire its TeleCash
Kommunikations-Service GmbH subsidiary. TeleCash is an electronic payment
network operator that enables merchants to accept debit, credit and charge
card payments through a network of 166,000 POS terminals. The company, with
340 employees and based in Stuttgart, also has offices in Frankfurt am
Main, Berlin, Hamburg, Dusseldorf and Munich. First Data has operated in
Germany from its Nurnberg base since 1997.

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US Air Dilemma

Bankrupt US Airways Group admitted this week that it may be forced to shut down at the end of March because it will lose its credit card processor. The US Airways CEO informed the bankruptcy court earlier this week that its credit card processor, National Processing, has given it a March 31st deadline to emerge from reorganization or face termination. US Airways is concerned that negotiations over pilot pensions could drag out past the NAP deadline. However, the shutdown of US Airways’ processing contract could have an impact on National Processing. NAP could face a significant charge-back liability over tickets already issued by the bankrupt airline. In a 10K filing last week, the company reported the dollar value of tickets purchased, but as yet unused, was approximately $1.0 billion. At year-end 2002, NCBK held $139.5 million in merchant deposits and withheld settlement funds for certain airline merchants. The merchant deposits collateralize only individual airline merchants and some airline merchants have no deposits. Of the total merchant deposits, $125.0 million was related to a single airline merchant. NAP management said it believes liquidations are unlikely for any of the Company’s six airline customers. Airline customers represented approximately 8% of the Company’s consolidated revenue (5% from Merchant Card Services and 3% from Payment Services) for the 2002, according to CardData ([www.carddata.com][1]). In May 2002, NAP announced its decision to discontinue processing debit and credit card transactions for the airline industry. The Company will honor its existing contractual obligations to the airlines it currently serves but does not intend to renew such contracts when their current terms expire. The contracts currently in effect have various expiration dates extending through November 2005. (CF Library 5/30/02)

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

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Qantas Fees

The decision this week by Qantas Airlines to begin imposing a 1.0% surcharge for all credit card transactions within the new few weeks in Australia, may cost it a valuable co-branding relationship, according to today’s issue of The RAM Report ([www.ramreport.com][1]). ANZ Bank is tinkering with its “Qantas VISA” and “VISA Gold” program. ANZ is reportedly considering raising annual fees for the basic “Qantas VISA” from A$40 to A$120, and increasing annual fees for the “Qantas VISA Gold” from A$95 to A$285. ANZ also charges a “rewards” annual fee of A$55 for each card. ANZ is looking into changing the mileage earning structure on the card, from one mile for each A$1 charged, to one mile for each A$2 charged. An annual cap of 50,000 miles is also being considered. ANZ hinted it may drop the annual fee and assess a 1% monthly fee on card volume. ANZ raised annual fees on all its credit cards by nearly 150% in December, just ahead of the credit card reforms that took effect January 1st. Last year, the Reserve Bank of Australia issued new credit card rules permitting merchants to recover from cardholders the costs of accepting credit cards. Most smaller merchants are charging customers between 2.5% and 4.5% for VISA, MasterCard, American Express, and Diners Club credit card transactions. However, most of the 4000 or so members of the Australian Retailers Association have not introduced the surcharge. VISA and MasterCard filed a lawsuit in October with The Federal Court of Australia over the new RBA credit card laws. The Court has set a trial date of May 5th. (CF Library 1/14/03)

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

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Metris Bonds

Fitch Ratings has lowered the senior and bank credit facility ratings of Metris Companies to ‘CCC’ from ‘B-‘. In addition, the long-term deposit rating of Direct Merchants Credit Card Bank, N.A. (DMCCB) has been lowered to ‘B’ from ‘B+’. Approximately $350 million of holding company debt is affected by this rating action. Fitch says its action reflects heightened execution risk as Metris attempts to address liquidity concerns with its various credit providers. Furthermore, Fitch remains concerned with low excess spread levels in the Metris Master Trust. Under the company’s current bank credit agreement, Metris must maintain at least 1% excess spread in the MMT. Moreover, if trust level excess spread becomes negative, on a three month rolling average, an early amortization of the MMT would occur. If an early amortization of the trust were to take place, Fitch does not believe that Metris would have sufficient liquidity to withstand such an occurrence.

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HBOS PROCESSING

HBOS PLC has signed a deal for First Data to take over merchant
processing. HBOS confirmed the signing of a long-term “Revenue Sharing
Alliance” agreement with FDC. Under the terms of the contract, FDC will
provide full merchant processing for HBOS’ 14,000 merchant outlets. The
transactions will be processed via First Data’s “MerchantStar
International” platform in the UK and will include VISA, MasterCard and
Switch payment cards. In 2001, the Bank of Scotland merged with Halifax to
create HBOS PLC. Servicing major banks and financial institutions in the
United Kingdom, Germany, Spain, The Netherlands and the Middle East, First
Data has been active in the UK for more than 10 years.

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Card Scam

Insurance giant Nationwide issued a credit card warning to consumers this morning. The company says a firm doing business as Nationwide Credit Corp., Nationwide Information Services Group and/or Skyrise Marketing, has been contacting individuals and offering secured credit cards for a fee. According to customer complaints received by Nationwide, as well as more than 100 complaints received by the Better Business Bureau, the company contacts individuals by phone and offers a secured credit card in exchange for a $219 fee. However, the individuals did not receive the credit card and have been unable to collect a refund. The company claims to be based in Corning, N.Y. but has given contact information in Toronto, Canada. The Federal Trade Commission has been on the trail on many cross-border credit card scams. In January, the FTC opened a new Web site devoted to fighting cross-border fraud which includes advance-fee loan scams and unnecessary credit card loss protection offers. (CF Library 1/9/03)

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Cardtronics ATMs

TX-based Cardtronics has acquired the ATMs and related processing contract covering 938 Winn-Dixie stores in the southeastern U.S. from XtraCash ATM. Founded in 1989 and headquartered in Houston, Texas, Cardtronics is the nation’s largest independent owner/operator of ATMs. With a network of more than 10,000 locations in every major U.S. market, Cardtronics is one of the largest and fastest-growing ATM deployers in the U.S.

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