FDC & HBOS

First Data has expanded its UK and European acquiring presence with the signing of a new agreement this morning. HBOS PLC 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.

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Sears MC 2003

Sears admitted Tuesday that going outside its extensive customer base for credit card customers has not been profitable. In a meeting with investors yesterday, the retailer said that 15% of the “Gold MasterCard” balances it acquired last year, through direct mail, have proven to be low quality with higher than average loss rates. Sears introduced the “Gold MasterCard” in 2000, converting 12 million of its 60 million retail cardholders to the “Sears Gold MasterCard” within the first twelve months. Sears National Bank initially targeted inactive and non-revolving cardholders of its store credit card for the MasterCard product. However, the migration from private label to bank card began to slow last year as Sears topped 24 million bank MasterCard accounts. Launching a direct mail campaign to non-Sears store cardholders in 2002, the company regained growth, ending 2002 with more than 31 million cardholders. In January, Sears reported “Gold MasterCard” outstandings of $12.3 billion, compared to $5.3 billion one year ago. Revenues for credit services was $1.5 billion for 4Q/02, a 4.1% increase over 4Q/01. Overall credit card outstandings at EOY 2002 hit $30.8 billion, an 11.5% increase. However, the overall net charge-off rate for the fourth quarter increased to 5.40% from 5.23%. The charge-off rate for the “Gold MasterCard” segment was 6.36% for 4Q/02, compared to 5.77% one year ago. Sears said Tuesday it expects MasterCard charge-offs to average between 6.5% and 7.0% in 2003. For complete details on Sears’ 4Q/02 performance visit CardData ([www.carddata.com][1]). (CF Library 5/7/01; 1/16/03).

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

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Pitney Bowes & TSYS

TSYS and Pitney Bowes have signed a seven-year agreement to process Pitney Bowes’ 1.5 million postage payment and credit accounts in the USA, the UK and Canada. TSYS can process in multiple languages and currencies on one platform. TSYS also provides corporate customers with a consolidated invoice for multiple products and services. With an 86 percent share of the U.S. Visa and MasterCard commercial card market, TSYS processes more corporate and commercial cards than any other processor.

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Chase Debit

Chase reported this morning that cardholders of its cobranded “Continental Airlines MasterCard” debit card earned over a billion miles last year. Chase is the only institution offering “Continental One Pass Miles” on both signature and PIN POS debit card transactions. Chase also announced yesterday it has launched a 30-day sweepstakes to offer individuals who open a new Chase checking account, between now and March 25th, the chance to win 250,000 “OnePass Miles.” Each day Chase will give away 250,000 miles. Chase is also offering new checking customers a 10,000 mile bonus for signing up for a “Chase/Continental Airlines Debit Card.” The special promotion is only open to legal residents of CT, NJ, NY and TX. Chase said it will blanket these markets with visible print advertising, TV advertising, frequent radio spots, digital taxi tops and branch window merchandising. In February 1999, Chase Manhattan launched the first co-branded debit card program in the USA with the Continental Airlines deal. In 1998 Chase took over the Continental co-branded credit card program from Marine Midland Bank. Earlier this month, Cleveland-based KeyCorp introduced a MasterCard debit card offering Continental “OnePass” miles for off-line purchase transactions. Key plans to offer its two million “MasterMoney” debit cardholders the opportunity to upgrade to the new rewards debit card in the second quarter. (CF Library 3/20/98; 5/4/98; 2/23/99; 8/3/99; 2/7/03)

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MASTERCARD & UNICERT

Baltimore Technologies has been selected by MasterCard International to
provide the PKI for the MasterCard “SecureCode.” “UniCERT,” Baltimore’s
flagship PKI product, will allow MasterCard to issue and manage digital
certificates for its member financial institutions, providing enhanced
payment guarantees for online transactions. The MasterCard “SecureCode”
solution helps overcome two of the most pressing issues in e-commerce
today: cardholder concerns about the safety of online shopping and Internet
merchants’ need for an enhanced payment guarantee. The program provides
card issuers a way to authenticate the identity of the person completing
Internet payment transactions, significantly reducing online fraud and the
number of related chargebacks.

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Tax Miles

American Express and Bank One have launched promotions to reward consumers who charge tax payments to credit cards. Yesterday, American Express announced that “Delta SkyMiles Credit Card” users can earn double miles when paying federal income taxes now through April 15th, and one mile for every dollar spent when paying their state income taxes on the card. The AmEx “Starwood Preferred Guest Credit Card” also offers double “Starpoints” on the first $4,000 in federal income taxes paid on the card from March 15th through April 15th, and single “Starpoints” on every dollar thereafter. In addition, “Starwood Preferred Guest Card” users can earn one point for every eligible dollar spent when paying their state income taxes on the card. To-date, the District of Columbia and 22 states accept credit card payments. Last week, United Airlines and Bank One announced they are offering double miles for using the “United Mileage Plus VISA” card to pay federal and state personal income taxes from March 1 through April 30th. (CF Library 2/20/03)

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TASQ & NURIT

First Data’s TASQ Technology unit has renewed and extended its distribution agreement with Lipman Transaction Solutions to offer both wired and wireless “NURIT” products. Lipman is the leading supplier of wireless point-of-sale terminals in the United States. Lipman features both landline and wireless point-of-sale (POS) solutions under the NURIT brand name. This complete product line includes wired and wireless POS terminals, electronic cash register (ECR), ATM and kiosk solutions for the retail, restaurant, mobile commerce, direct marketing and fleet markets.

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Government Card Meeting

The Electronic Funds Transfer Association yesterday announced is has scheduled a May 6th summit meeting covering the future of electronic card technology for government applications. It will be hosted by EFTA’s EBT Industry Council, the nation’s oldest trade group for government electronic payment and service vendors. The program is aimed at government agency managers responsible for planning programs that will use debit or smart card technology to distribute government payments or services.

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SMS VBV

BOC Credit Card (International) Ltd., mobile communications specialist
CSL, and VISA International have teamed to offer the world’s first “Short
Messaging Service”-based m-commerce service using “Verified by Visa”
beginning March 1st. Based on an open m-commerce standard, the three
collaborating parties will partner with a variety of merchants to offer
such applications as phone bill payment, Broadway movie ticket purchases,
and OGC Golf City golf bay booking during the six-month pilot. More and
different types of applications will be explored and developed afterwards.
The first 3,000 successfully registered customers will be able to
participate in the pilot and will have a chance to win a new “Siemens S57”
color handset or other incentives. “Verified by Visa” has already been
adopted as a secure online payment standard by over 6,000 VISA card issuers
worldwide. The BOC Credit Card product family includes “Platinum Card,”
“Gold Card,” “Classic Card,” “Business/Corporate Card,” “Purchasing Card,”
“Co-branded Card” (over 17 co-branding corporations, organizations, and
communities), “U-point Credit Card”, “y not Credit Card,” “Intown Virtual
Credit Card” and “BOC Express Cash Card.”

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EBPP Report

St. Louis-based Murphy & Company has released an executive report on EBPP that covers standards, compliance, procedure, and technology issues; and examines security, privacy, marketing, and customer expectations. The contents of the Executive Report define EBPP and how it works; reviews EBPP standards, compliance, procedure, and technology issues; and examines security, privacy, marketing, and customer expectations. It is written for executives and managers who want to begin the process of moving from being “aware” of EBPP to making informed business decisions.

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FINGERPRINT & TI

Gothenburg-based Fingerprint Cards AB is joining the Texas Instruments
digital signal processing third party network. Fingerprint Cards’ “DAD
Algorithm” is one of the most compact (8Kb) fingerprint algorithms on the
biometric technology market. It supports two types of compact, low-cost
fingerprint sensor technology developed by Fingerprint for a range of
product markets including mobile electronic devices. The Fingerprint “DAD
Algorithm,” is available on both TI’s “TMS320C5000” and “TMS320C6000” DSPs.
Through TI’s third party network the two companies will be in a position to
offer coordinated support to benefit mutual customers in the implementation
of embedded fingerprint authentication.

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FCNB Liquidation

It appears that sub-prime specialist OR-based First Consumers National Bank will liquidate its credit card portfolio by the end of April as the bank has been unable to find any buyers. Under OCC-approved plans, FCNB must sell or liquidate its portfolio by April 30, 2003. Yesterday, Fitch Ratings downgraded all First Consumers Credit Card Master Note Trusts. On February 18th, FCNB notified the trustee, Bank of New York, that as per the direction of the OCC, it sought to be replaced with a successor servicer or resign as servicer under the “Pooling and Servicing Agreement and Transfer and Servicing Agreement.” BONY will assume servicing responsibilities over the interim or until a successor servicer is appointed. Fitch says it believes the OCC will require FCNB to take other actions in weeks to come in preparation for the bankcard portfolio liquidation, including ceasing originations and eventually closing down the ‘open-to-buy’ on outstanding accounts.

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