Smithsonian Card

MBNA has snagged an affinity card deal with the Smithsonian Institution. In 1997, the Smithsonian first inked a deal with Dean Witter, Discover & Co’s NOVUS Services business unit to issue the “Smithsonian Card.” The NOVUS/Smithsonian card offered cardholders the opportunity to earn a $50 Savings Bonds for each $5,000 charged to the card. NOVUS Services also made a contribution to the Smithsonian for every card issued or renewed. The new MBNA version does not offer a cardholder rebate, but does offer a free “2003 Smithsonian Treasures Calendar” after the account is activated and the first transaction is made. MBNA will continue to deliver a percentage of each purchase to the Smithsonian, under the typical affinity card contract. MBNA is offering a 1.7% six-month intro rate on balance transfers and cash advance checks, followed by a fixed 12.99% APR, according to CardWatch ([www.cardwatch.com][1]). The Smithsonian has more than two million members and nearly 30 million annual visitors to its museum and research complex.

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

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Euronet Worldwide Names New Board Member

Terrapinn Ltd announced that MasterCard International has agreed to host
the “4th Annual Cards Middle East” conference and exhibition in Dubai. The
event is scheduled for May 19-21 at the Al Bustan Rotana Hotel. Other
sponsors and exhibitors at the exhibition include ACI Worldwide, Thales
e-Security, Card Tech Ltd, Intercard Wireless, Narboni, Verisoft, Samsung,
and First Data. Key speakers include Mohamed Belarj, General Manager MENA,
MasterCard International and Louis Scotto, General Manager, Retail Banking,
Emirates Bank Group.

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Infrared Standard

After a three year effort, a standard has been released for global, wireless, proximity payments. IrDA yesterday released the standard for infrared payments to be used by cell phones and PDA’s that beam transaction information between card readers, ATMs, kiosks, gas pumps, turnstiles and toll booths. The new “IrFM” specification utilizes existing financial services infrastructures to process wireless payment transactions (credit cards, debit and smart cards, checks and loyalty programs) at the POS. Harex InfoTech in South Korea tested the standard in 2002 for nine months. During the past 4 years an estimated 200+ million IrDA enabled cell phones and PDA’s have been shipped throughout the world.

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XTREME INTEGRATED

CIBC reported that it’s the annual cash payout to CIBC “Dividend
VISA” and “Dividend Platinum VISA” credit card customers exceeded $25
million. The rebates, based on 2002 cardholder purchase volume, were down
16% compared to 2001, presumably due to the softness in overall credit card
volume in Canada produced by the global weak economy. This year, CIBC says
active card users are now receiving annual cash rebates ranging from $50 to
$900. CIBC “Dividend VISA” and “Dividend Platinum VISA” cardholders earn
cash rebates of up to two per cent on every purchase. The rebate is
credited at the end of the
year. Since the inception of the cards in 1998, cardholders have earned
more than $100 million in cash rebates.

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FFIEC Guidelines

The Federal Financial Institutions Examination Council yesterday issued new guidance governing account management and loss allowance practices for credit card lending. The overhaul was largely driven by the collapse of sub-prime credit card market, however, the new standards will apply to all banks and thrifts regardless of portfolio quality. The new guidance says that institutions significantly increase credit exposure by offering customers additional cards, including store-specific private label cards and affinity relationship cards, without considering the entire relationship. In extreme cases, some institutions have granted additional cards to borrowers already experiencing payment problems on existing cards. It is expected that institutions offering multiple credit lines will have sufficient internal controls and management information systems to aggregate related exposures and analyze performance prior to offering additional credit lines. The new guidance also set new standards for minimum payment requirements. New formulas that have the effect of further delaying principal repayment are gaining popularity in the industry. These problems are exacerbated when minimum payments consistently fall short of covering all finance charges and fees assessed during the billing cycle, producing a negative amortization. In these cases, the lender is recording uncollected income by capitalizing the unpaid finance charges and fees into the account balance owed by the customer. The FFIEC says the pitfalls of negative amortization are magnified when sub-prime accounts are involved, and even more so when the condition is prolonged by programmatic, recurring over-limit fees and other charges that are primarily intended to increase recorded income for the lender rather than enhance the borrowers’ performance or their access to credit. For a complete list of the new FFIEC standards visit CardFlash Online ([www.cardflash.com][1]).

[1]: http://cardflash.com

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Cross-Border Fraud Site

The FTC yesterday opened a new Web site devoted to fighting cross-border fraud which includes advance-fee loan scams and unnecessary credit card loss protection offers. Consumers can download many valuable consumer education publications, including “Hang Up on Cross-Border Phone Fraud,” “Border-Line Scams are the Real Thing,” and “Straight Talk About Telemarketing.” The site also includes a full-color downloadable poster – “Foreign Lotteries: The Games You Can’t Win”- for legitimate lottery vendors to help customers avoid common, costly foreign lottery scams.

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Online Banking Europe

Online banks reached more than 30% of the active Internet audience in five major markets in November. According to Nielsen//NetRatings, between October 2001 and October 2002, the number of European surfers visiting financial services sites grew from 15 to 25 million, while the percentage of European Internet users who regularly visit a financial services site steadily rose to 37%. On a country-by-country basis, online bank domains in Sweden attracted the highest percentage of active users in November, with more than half that country’s surfers visiting a bank or credit union site and spending an average of more than an hour on those sites during the month.

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TransXpress Secure

VA-based Transaction Network Services has introduced the “TransXpress Secure” service enabling merchants and ATM terminal operators the ability to access TNS’ private transaction data network via the Internet using SSL encryption methodologies. TransXpress® Secure overcomes security concerns associated with Internet connectivity by providing a secure path between the client and the TransXpress® Secure gateway SSL server. With TransXpress® Secure, processors can enable retail merchants and ATM terminal operators to use their existing Internet connection provided by the local Internet Service Providers (ISPs).

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New England Smart Card Pilot

Hitachi America has been awarded a contract by the New England Partners to implement a comprehensive pilot program employing smart card solutions for eight automated government programs in six New England states. The New England Partners Project is financed under an Agreement with the New Hampshire Department of Health and Human Services, Office of Community and Public Health, with funds provided in part or in whole by the State of New Hampshire and/or the United States Department of Agriculture, Food and Nutrition Service.

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SP35 Sales Leap

Datacard Group says that sales of its new “SP35 Card Printer,” which delivers up to 120 full-color and 500 one-color cards per hour, has exceeded the company’s forecast for the first three months by nearly 100%. In addition to a low purchase price and a compact footprint, the Datacard SP35 card printer offers superb image quality, intuitive operation and a sleek design that poses a stark visual contrast to other printers on the market today.

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VISA Canada Releases Updated Owner’s Manual and Holiday Survey Results

Canada Safeway has signed a multi-year agreement to renew as a “Sponsor”
in the “AIR MILES Reward Program.” The program is operated by Alliance Data
Systems Corp’s subsidiary, The Loyalty Group.
Canada Safeway has been part of the program since its inception in 1992.
More than 60% of Canadian households, or 12.5 million Canadians, actively
collect “AIR MILES” reward miles. “AIR MILES” reward miles can be redeemed
for more than 500 different rewards, such as travel, movie passes,
entertainment attractions, and electronic merchandise.

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Biometric Acceptance

A new study shows that the majority of the U.S. public believes it is acceptable for the private sector to use biometric technologies. Although consumer experience with biometrics is generally low, 56% to 91% say it is acceptable for the private sector to request a biometric scan when checking the identity of an individual buying a gun against a database of convicted felons (91%); verifying the identity of those making credit card purchases (85%); withdrawing funds from an ATM (78%); accessing sensitive files, such as medical or financial (77%); conducting background checks (76%); and, screening out those banned from gambling or professional card counters in casinos (56%). The recently released two-wave survey was commissioned by SEARCH, funded by the U.S. Bureau of Justice Statistics, and developed by Dr. Alan Westin, President & Publisher of Privacy & American Business.

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