OBERTHUR OUTLOOK

Smart card specialist Oberthur Card Systems says it expects second
half revenue to be in the range of 218 million Euros, which brings the full
year figure to approximately 435 million Euros. Second half EBITDA
(earnings before interest, tax, depreciation and amortization) is estimated
to be above 22 million Euros, to be added to the 7.9 million Euros EBITDA
of the first half. Oberthur says this enables the company to post positive
EBITDA for the full year.

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Greedy Issuers

A new study has found that 70% of Americans believe credit card companies are “too greedy.” Two-thirds said that “the government lets credit card companies get away with murder,” and over half felt that credit card companies try to manipulate both current and new customers. The findings come from a study released this month by Buzzback, an online research firm, and Wharton Strategic Services, a marketing consulting firm. The survey revealed other problems with the credit card industry. Seventy-nine percent of respondents said they get too much junk mail from credit card companies, and 77% feel issuers are too aggressive in their sales tactics. Of the more than 1,000 consumers surveyed, 32% of all consumers and 41% of young adults admitted they don’t know the interest rates on any of their credit cards. In addition, 81% felt the credit card companies should do a better job of educating customers.

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InterCept Appointment

Atlanta based Intercept announced today the addition of John M. Perry to its executive team. Perry, a former executive at NOVA Corporation, will focus on InterCept’s merchant services business. Prior to joining InterCept, Perry served as the Chairman and CEO of Spectrum EBP, LLC, a company specializing in electronic bill presentment and payment that was acquired by Metavante in August 2002. InterCept’s products and services include core data processing, check processing and imaging, credit and debit card processing, electronic funds transfer, data communications management, and related products and services.

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Holiday Spending

A survey by debit card “Switch” projects holiday spending to hit £862 this year, an increase of £36 over 2001. In November 2001 like-for-like sales were already up 5.8% on the previous year. With figures up only 2% as at November this year, “Switch” projects a spending spree in the final days leading up to Christmas. The survey found that presents will be the biggest expense. Indeed, over a third of those surveyed (34%) said they will spend £500 or more on gifts alone, buying for between 8 and 20 of their family and friends. The study found that 56% will fund their Christmas expenditure from normal savings, although almost a quarter (23%) ignore advice and fail to budget for Christmas at all. While cash is still top choice on the high street, “Switch” and “Solo” debit cards are the next most popular way to pay (one in five opting for Switch/Solo).

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HOLIDAY SPENDING

A survey by debit card “Switch” projects holiday spending to hit £862 this
year, an increase of £36 over 2001. In November 2001 like-for-like sales
were already up 5.8% on the previous year. With figures up only 2% as at
November this year, “Switch” projects a spending spree in the final days
leading up to Christmas. The survey found that presents will be the biggest
expense. Indeed, over a third of those surveyed (34%) said they will spend
£500 or more on gifts alone, buying for between 8 and 20 of their family
and friends. The study found that 56% will fund their Christmas expenditure
from normal savings, although almost a quarter (23%) ignore advice and fail
to budget for Christmas at all. While cash is still top choice on the high
street, “Switch” and “Solo” debit cards are the next most popular way to
pay (one in five opting for Switch/Solo).

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BillingZone Sold

eONE Global, a California based subsidiary of First Data Corp, announced this morning that it has acquired BillingZone from PNC Bank, National Association and Perot Systems Corporation. BillingZone, formed in 2000, offers market-leading solutions to help transform accounts payable and accounts receivable processes from manual to fully electronic and automated. The company’s apConnect and arConnect solutions helps BillingZone’s customers streamline the complexity of invoicing and payment transactions, realize cost savings through the elimination of paper and manual practices, and enhance trading partner relationships.

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JCB PAYMENTS

JCB has revised its credit card payment program to enable its cardholders
to choose the amount of money to pay on their credit card each month. Under
the new “Maximum Monthly Payment Option” the card balance may be cleared in
one month, or if purchases and other amounts due exceed the maximum, the
remainder is rolled into the card’s revolving balance. More importantly,
with existing cards any unpaid amount is subject to finance charges from
the closing date, but under the new option no charges apply until after the
date of the first monthly payment. The maximum monthly payment amount may
be set in increments of 5,000 yen (approximately USD40.00), which can be
registered and changed via telephone or Internet as well. The Japanese
banking settlement system is unique in that it relies on automatic
transfers rather than personal checks for credit card payments,utilities,
loans, and other payments. Until now customers have had various choices at
time of payment, including: paying off the bill at one time through
automatic debit (one time payment), installing the payment over multiple
months, or fixing the monthly payment amount for each settlement (revolving
payment). JCB says this is the first such program in Japan and it expects
one million cardholders to sign up. Worldwide, JCB has 42 million cardholders.

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MONDOCARDS

Santiago-based Radiotronica has agreed to distribute the first
500,000 “MondoCards” from Miami-based Mondopolitan. Radiotronica is a large
constructor and owner of cellular towers in the Mercosur region with access
to a targeted database of prepaid cellular and long distance card users.
The company plans are to replace 500,000 cards currently held by users
based on tracked usage of long distance calls to the U.S. from the Mercosur
region. The re-issuance of cards would be directed at countries in the
region receiving larger proportionate amounts of the U.S. remittances being
mostly in Peru, Argentina and Bolivia. The new cellular calling cards
would be more useful to the consumer in that the card will gain three extra
functions. The stored value card will now serve as a remittance tool, a
debit platform for all the pre-paid services and a safe harbour where the
stored value on these cards would be held in U.S. dollars and not subject
to the volatile currency fluctuations in each of those countries.

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Provident POS

Provident Bank announced last week it is partnering with Visa U.S.A. to launch a new POS check acceptance system. Provident Bank is one of the first eight banks to pilot the Electronic Check Conversion service, which provides direct online access to consumer checking accounts for authorization on checks drawn on Visa member banks, similar to debit card transactions. The deduction to the account will be more accurate, quicker and require fewer steps than the traditional process. To date, 380 merchants in 44 states have signed up for Visa’s service. However, paper checks still account for about 50 percent of all personal consumption expenditures in the nation. VISA launched the Electronic Check Conversion system in December 1999.

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French Egg

London-based Egg plc reported this week it has signed up nearly 30,000 French consumers for its new “la Carte Egg VISA” card. The “Egg in France” card was launched November 2nd. Egg says the average salary of applicants is Euro 50,000, which is 30% higher than the French average and is consistent with the appeal of the Egg brand to the upmarket (aged 25-49 with above average income) in the UK. Egg says its advertising in France has achieved a 40% brand awareness at the end of November. The “la Carte Egg” card is the first VISA card in France to offer cashback. The card offers 1% cash back on all purchases, as well as a 12.99% APR. Consumers applying before the end of the year will have their annual fee waived for the first year (normally Euro 35) and 5% cash back on purchases up to the year-end. Launched in October 1998, Egg is an e-commerce company created by Prudential.

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Fidelity Sale

Atlanta-based Fidelity National Corporation has signed a definitive agreement to sell its $74 million credit card portfolio to Bank One, the companies announced today. The portfolio includes approximately 41,000 accounts. The companies also agreed on a long-term agent bank relationship to offer Fidelity-branded credit cards to customers with servicing provided by Bank One.

4th Quarter 2001 FIDELITY SNAPSHOT
Receivables 82,000,000
Volume 29,000,000
Gross Accounts 65,000
Active Accounts 34,000
Cards 63,000
Source: CardData (www.carddata.com)

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