BANQUE RAIFFEISEN ATMS

Banque Raiffeisen has signed a five-year contract with Diebold for
maintainence and management of its network of ATMs in Belgium and
Luxembourg. Under the terms of the contract, Diebold will take full
responsibility for the “Monetic Server Luxembourg” through which Banque
Raiffeisen’s ATM network is routed. The “MoSeL server,” developed by
Diebold in the early 1990s, manages the operations of the country’s 360
self-service terminals. Diebold already carries out ATM maintenance and
software support for Banque Raiffeisen. The company is also the preferred
self-service terminal provider to all of the country’s leading banks.

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Dialing for Deception

The Federal Trade Commission has secured $1.4 million from two firms engaged in an advance-fee credit card scheme. The case, brought through the FTC’s April 2002 “Dialing for Deception” law enforcement sweep, targeted defendants who allegedly placed ads in magazines or mailed postcards to consumers to pitch advance-fee credit cards to prospective buyers deceptively. As a result, the FTC filed a complaint against Thomas Gregg Holloway, First Freedom Financial Corporation, and Southern Telmark Corporation. According to the Commission, since at least 1996, the defendants used advertisements in magazines and on postcards to deceptively pitch consumers an unsecured credit card in return for a fee averaging between $79 and $229. The FTC alleges that when consumers responded to the ads by calling a toll-free number, the defendants offered either a Visa or MasterCard credit card with no security deposit, regardless of the consumers’ credit history. The defendants allegedly said the application fee was a one-time processing fee. The FTC alleges that none of the consumers received the promised card after paying the fee.

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Fifth Third & Masco

Fifth Third Bank Processing Solutions has been selected by Masco Corporation, one of the world’s largest manufacturers of brand-name consumer products, to provide merchant services for its credit and debit card transactions and Fifth Third’s back-office management system. With Fifth Third Direct, Masco Corporation will be able to conveniently and seamlessly handle their back-office through automated access to transaction, deposit and chargeback data as well as the ability to scan receipts, handwritten notes, or other documents into their system for quick reference.

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THIN LOYALTY CARDS

Black Sun and MORI have released a report on loyalty cards that shows 57%
of the U.K. population have one or more of the 39 million loyalty cards in
circulation; yet 25% of cardholders never redeem their points; only 40% say
that having the card makes them shop at the store; 69% say they are not
swayed by having a card; and 85% of card holders regard lower prices as
preferable to loyalty points. Speaking this week at “Cards Europe 2003,”
Black Sun`s Knowledge Management Director explained that the key reason for
this is that the current loyalty programs are strong on volume and weak on
value. Black Sun says the current loyalty programs are little more than
thinly disguised discount programs. Not only is the discount “thin”, its
usually 1%, but also the fact that it is simply a discount scheme is only
slightly disguised by the issuing of points for earnings and redemption.
Black Sun cited the “Nectar” loyalty card as an example.

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iPIN Joins MPF

Belmont, CA-based iPIN has joined the “Mobile Payment Forum,” founded by American Express, JCB, MasterCard, and VISA. ith extensive experience developing and implementing multi-carrier payment networks, iPIN looks forward to collaborating with the members of the Mobile Payment Forum and believes that its insights on payments and interoperability will be valuable to the ongoing development of global mobile payment standards. Since its inception, iPIN dedicated significant time and resources to ensure that its product suite remained open and flexible.

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SEARS MASTERCARD

Sears Canada confirmed yesterday it plans to expand its “Sears
MasterCard” program across the country this year. The company launched the
MasterCard in September in Ontario only, and at year-end 2002, had
activated 125,000 accounts with $150 million in outstandings. Sears Canada
has nine million retail cardholders, the largest store credit card program
in Canada. At year-end 2002, the Sears Canada card had $2,753,000,000 in
card outstandings. Sears Canada is a multi-channel retailer with a network
of 123 department stores, 40 furniture and appliances stores, over 2,100
catalogue pick-up locations, 140 dealer stores, 17 outlet stores, 45 floor
covering centers, 52 auto centers and 111 Sears Travel offices. In the
U.S., Sears has $12.3 billion in outstandings in the “Sears Gold
MasterCard” program, compared to $5.3 billion on year ago.
U.S.-based Sears has $18.5 billion in store card outstandings.

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Corp E-Checks

The Association for Financial Professionals said this morning that the majority of its members oppose having their corporate checks converted to ACH debits. In a January survey, 79% of corporate treasury and finance professionals stated that their companies would not permit its checks to be converted to ACH debits. The members say that conversion of corporate checks to ACH debits disrupts corporate cash management practices and controls, and increases exposure to fraud. Under proposed NACHA rules, payees would be able to convert payments to ACH debits and paying companies would be able to prevent conversion if they use an auxiliary on-us field in the MICR line of their checks. The AFP survey revealed widespread uncertainty about the auxiliary on-us field and how it would work as a barrier against check conversion. AFP recommends a delay in implementation until March 2004.

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Kroger & Western Union

First Data’s Western Union Financial Services has renewed an agreement to provide money transfer and money order services to The Kroger Co. that also extends Western Union’s existing agreement and includes the addition of 500 Kroger locations, in Texas, California and Indiana for money transfer services and the addition of 1,000 Kroger-owned for money order services. Western Union and its subsidiary, Orlandi Valuta, together make up one of the world’s largest money transfer networks with a total of approximately 151,000 Agent locations in more than 195 countries and territories.

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Slammer & ATMs

PA-based Genpass says its ATMs were unaffected by the recent “slammer” virus because they use an architecture based on the newest Compaq/Tandem fault tolerant and Compaq server-based technology. Thousands of ATMs went down last month as the computer virus infiltrated ATM systems that relied on Microsoft’s open systems architecture. Genpass says reports show that Bank of America, Canadian Imperial Bank, and EDS experienced system disruptions. The company says its systems are designed specifically to secure Internet and other remote financial transactions. Genpass says networks which allow non-financial transactions to be performed on the same system platforms as financial ones are wide open to such an attack. Non-financial transactions may include information gathering, via the Internet, for marketing follow-up or for routine enrollments or customer requests such as statements or downloads. Closed systems, those protected by built-in firewalls and encryption, are, generally, safe from such attacks. Genpass owns the “MoneyMaker” and “MONEY BELT” networks, drives approximately 24,000 ATMs, and processes over 360 million transactions annually.

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Adams Leaves FDC

First Data announced this morning that Eula Adams, president of Card Issuing Services, will leave the company effective March 1. As a leader in electronic commerce and payment services, First Data serves approximately 3 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of payment.

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E*TRADE ATMs

E*TRADE Access said Tuesday it has acquired a portfolio of more than 4,000 ATMs from CIBC’s “XtraCash” ATM network. The deal brings E*TRADE Financial’s ATM network to more than 15,000 ATMs, the second largest ATM network in the USA. The newly acquired ATMs will expand the company’s reach in California and the western United States. During the third quarter, CIBC announced its plans close its U.S. electronic banking operations, including the Amicus FSB and CIBC National Bank. As part of the shutdown, CIBC transferred customer deposits with a balance of $1,000 or more to E*TRADE Bank. E*TRADE Access is a wholly owned subsidiary of E*TRADE Group and was founded in 1993 as an off-premise ATM network. In May 2000, E*TRADE completed the acquisition of Card Capture Services to bring its network to 8,800 machines. In October of 2001, E*TRADE Bank signed a deal to issue VISA cards. The card was introduced last year. E*TRADE says it wanted to provide a single card that can be used by all its customers for access to E*TRADE Bank and E*TRADE Securities. Customers using selected E*TRADE ATMs have the ability to make withdrawals, request balance inquiries and transfer funds from and between E*TRADE Bank and E*TRADE Securities accounts. In 1998, E*TRADE and First USA launched two co-branded VISA cards. (CF Library 6/29/98; 5/9/00; 10/11/01; 11/15/02; 12/2/02)

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