NCE Goes Live

The National Check Exchange, a new check exchange business recently formed by The Clearing House and 35 banks, operated its first exchange Monday. A clearinghouse allows its members to exchange checks among themselves to reduce costs and increase the efficiency of the check clearing process. The National Check Exchange, which is owned and led by its 35 members, has standardized rules, allows sharing of common functions such as a transportation network, and will be attractive to new participants because it provides cost effective clearing methods as alternatives to those of other check clearing venues.

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PegaCARD Customer Care

MA-based Pegasystems has released “PegaCARD Customer Care,” that provides differentiated customer service and automation capabilities by integrating front- and back-office processes for card issuing organizations. PegaCARD Customer Care is an evolution of Pegasystems’ card services technology that includes solutions extending from customer service into collections, dispute and chargeback management, credit, fraud and correspondence management. Built on the company’s patented rules architecture, PegaCARD Customer Care embeds best practices for consistent customer interactions.

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AFFINA-POWERED

Luottokunta’s new multi-application smart card will be powered by the
Datacard “Affina” life cycle management system. Two weeks ago, Luottokunta
announced that it selected LogicaCMG as the primary contractor to provide
the national implementation of a new end-to-end card processing solution,
enabling the issuance of multi-application smart cards. LogicaCMG selected
Datacard as a partner to implement a life cycle management system to
provide all the card management needs for the initial launch, and
ultimately manage the life cycle of the card population, including adding,
deleting or modifying applications to any issued card. The application will
support 1.5 million cards, which will be issued in two phases. The first
phase will be launched in the third quarter with completion projected in
January 2004. The Luottokunta card is Finland’s first national smart card
payment program.

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NYCE Beefs-Up Web Services

NYCE is migrating its “InfoManager” administrative workstation application to the “Stratus ftServer” platform to beef-up access to its Web-based application which provides reports, transaction histories, technical operations bulletins and manuals, as well as other data and services to NYCE 2,200 members. The Stratus ftServer family is the computer industry’s first line of 1- to 4-way SMP fault-tolerant Intel(R) processor-based servers for Microsoft(R) Windows(R) Advanced Server computing environments. ftServer systems are simple to deploy, operate and maintain, and they provide the highest level of reliability for applications where business continuity and continuous processing are critical. The product family includes a range of models, configurations, and price points to meet departmental- to data-center application requirements.

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CompuCredit 4Q/02

CompuCredit, issuer of the “Aspire” and “Emerge” sub-prime VISA cards, reported yesterday that outstandings dropped nearly 8% during the fourth quarter to $2.8 billion. The Atlanta-based issuer also reported a decline in the gross number of accounts from 4.0 million to 3.5 million. During 3Q/02, CompuCredit added 2.3 million accounts from Providian. During the fourth quarter, CompuCredit opened 53,000 new accounts. The adjusted net charge-off rate was 9.2% in the fourth quarter, as compared to 8.3% for the third quarter of 2002. At year-end 2002, the 60+ day managed delinquency rate was 13.9% as compared to 12.3% for 3Q/02, and 11.1% one year ago. For the fourth quarter, CompuCredit posted net income attributable to common shareholders of $16.7 million. For complete details on CompuCredit’s 4Q/02 performance visit CardData ([www.carddata.com][1]).

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

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Intelli-Check Board

NY-based Intelli-Check announced Monday it has appointed former U.S. Assistant Secretary of Defense and Defense Department CIO Arthur Money to its Board of Directors. Mr. Money, who has more than 40 years of management and engineering experience with the defense electronics and intelligence industry, currently serves as a member of the advisory board of several corporations including the Boeing Company. He also serves on the Board of Directors of numerous companies including Silicon Graphics, Inc. and CACI International and has been recognized for his vision, leadership and commitment to excellence in systems and process re-engineering.

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SOSPITA E-GATE

Mandal-based Sospita has signed an agreement with SchlumbergerSema to
jointly provide the software industry with a high security smart card
license protection solution.The combined solution will employ the Sospita
security hardware license protection solution along with the new
“SchlumbergerSema e-gate” token to decrypt parts of the digital content in
real-time, allowing a level of security far above anything that exists
today. The secret keys protecting the content will be held within the
tamper-proof e-gate device and not on the hard disk, making the task of
hacking the software extremely difficult. Industry analysts say that 37% of
software is pirated on average worldwide each year. In China the piracy
rate is over 90%. The software protection market in China is currently
doubling annually and growth rates are high in Asia and other emerging
countries where piracy is a serious problem.

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Top Ten Charge-Offs

Charge-offs among the top ten U.S. VISA/MasterCard issuers rose 55 basis points during the fourth quarter, ending the year at a level 129 basis points above the EOY 2001. However, discounting the impact of the sub-prime portfolios of Metris and Providian, the charge-off rate among the nation’s top issuers is only up a modest 23 bps. Furthermore discounting the impact of Capital One, which has between a 35% and 40% exposure to sub-prime, would make the charge-off rate among the top issuers flat since 4Q/01. The rapid deterioration in the sub-prime portfolios of Metris and Providian has been nothing less than stunning. Metris losses are up 640 bps over last year and Providian’s loss rate has climbed 464 bps. Capital One experienced a 179 bps rise in charge-offs since 4Q/01. Meanwhile, Citigroup, Bank One, and Fleet reported declines in their credit card loss rates. For 4Q/02, Discover reported a charge-off rate of 5.96%, compared to 6.02% in the previous quarter, and 5.85% one year ago. For American Express, losses slowed from 5.6% in 3Q/02 to 5.50% in the fourth quarter. During 4Q/01, American Express experienced a charge-off rate of 5.90%. For historical data on charge-offs visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MC ISSUER CHARGE-OFFS
4Q/02 3Q/02 2Q/02 1Q/02 4Q/01 ANN CHNG
1. Citigroup: 5.85% 5.86% 6.50% 6.41% 5.91% – 6 bps
2. MBNA: 5.04% 4.84% 5.09% 5.00% 4.86% + 18 bps
3. Bank One: 5.13% 5.00% 5.62% 5.69% 5.59% – 46 bps
4. Chase: 5.75% 5.59% 6.41% 5.82% 5.56% + 19 bps
5. Cap One: 6.21% 4.96% 4.98% 4.70% 4.42% + 179 bps
6. Providian: 17.34% 16.71% 17.53% 15.05% 12.70% + 464 bps
7. BofA: 4.99% 5.13% 5.59% 5.43% 4.90% + 9 bps
8. Household: 6.98% 6.81% 7.54% 7.17% 6.69% + 29 bps
9. Fleet: 5.16% 5.25% 5.81% 5.42% 5.38% – 22 bps
10. Metris: 18.20% 15.10% 15.00% 13.00% 11.80% + 640 bps
AVERAGE: 8.07% 7.52% 8.01% 7.37% 6.78% + 129 bps
Source: CardData (www.carddata.com)

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

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FDC & ClearCommerce

First Data says it will offer ClearCommerce’s online payment and risk management platform to its alliance channels, building on an agreement to use ClearCommerce’s software to power its “LinkPoint Secure Payment Gateway”. The new agreement will extend that offering as the LinkPoint gateway is rolled out to First Data’s channel partners and clients that use First Data’s transaction processing services.

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BIOMETRIC PURCHASES

Sao Paulo-based CTF Technologies do Brasil Ltda. has introduced a
fingerprint biometric reader to control the authorization for refueling at
CTF-enabled highway refueling depots. The new process will eliminate the
need for cash advances, cheques, credit cards or any other freight card to
be issued to contract drivers by fleet owners subscribing to the CTF –
FRETE system. CTF Technologies owns and operates the CTF refueling system,
which is an advanced computerized management system for the transportation
industry that controls refueling and credit authorization through two of
Brazil’s largest private banks, Banco Bradesco
and Unibanco. Initially, only stations operated by Cia. Ipiranga de
Petroleo will participate in this program. CTF has exclusive agreements
with both Ipiranga and Petrobras Distribuidora, Brazil’s largest fuel
distributor,
which together deliver over 50% of the total fuel sold in Brazil.

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Humboldt Deal

Humboldt Bank has entered into a definitive agreement for the sale of its proprietary merchant processing operations to an affiliate of First National Bank Holding Company. Under the terms of the agreement, Humboldt Bank will receive $32 million in cash, and expects to recognize an after-tax gain on sale during the first quarter of approximately $18 million. The transaction is expected to be completed by March 15th. Humboldt will continue to provide card sponsorship processing for two ISOs. However, these agreements mature over the next 13 months and the bank does not expect to renew these agreements or to enter into any new ISO processing agreements. In October, Humboldt Bancorp terminated a deal to sell its proprietary merchant bankcard operations to Nashville-based iPayment Holdings. (CF Library 10/8/02)

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Credit Bureau Lawsuit

TransUnion and Equifax have agreed to reach a settlement in a class-action lawsuit involving bankruptcy notations made in consumer credit files. Experian has already finalized a settlement. The lawsuit grew from South Carolina case wherein a consumer was unable to get a car loan because of a bankruptcy notation in his credit file. The man had co-signed a loan for his son-in-law, who later filed for bankruptcy. The case was heard on January 17th, at which time Experian offered its settlement. U.S. District Judge Margaret Seymour has set a preliminary settlement conference for next Tuesday.

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