Oberthur & Thales

Thales and Oberthur Card Systems are joining forces to develop smart card-based technologies and solutions for financial services, identification/government, and physical/network security. The partnership will bring together Oberthur Card Systems’ expertise in smart card technologies, peripherals and mass personalization solutions with Thales’ global security offerings in the networking and communications, transaction and payment, and enterprise and ID markets. With its exclusive transaction security products, EMV payment terminals and associated products, Thales holds a unique global leadership position in the provision of the security cornerstones for EMV. Oberthur Card Systems is the number one supplier of banking cards and has a worldwide capability with industrial facilities and personalization centers. Combining these strengths, Thales and Oberthur will deliver a smooth migration to EMV, full interoperability and secure, end-to-end solutions for standard and value-added services.

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M-COMMERCE

An industry conference in London revealed that the ideal target for
m-payments is the youth market (15-24 years old). However, Vodafone said
62,000 mobile phones were left in London taxis in the last six months or an
average of three per taxi. Use of m-payments will run the gambit from
digital goods, parking and ticketing, to subscriptions etc. Ease of use is
the key (m-wallet to enable one click pay) according to Vodafone. Some
banks have had limited success with m-payments thus far, such as ING
Postbank (Netherlands) with 200,000 active accounts, according to Macalla
software that was involved in the project. M- commerce transactions have a
way to go was the conclusion reached by the conference. The conference said
they felt SMS may be the perfect “electronic receipt” on most European
phones but it was hardly utilized in the beginning. For m-payments to be
utilized on a large scale, if at all, estimates ranged from 3 to 6 years
and some said 5 to 10 before it takes off.

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PocketChange

Wirca announced the launch of the “PocketChange” payments solution for the Aloha Technologies POS platform. “PocketChange” is based on Wirca’s revolutionary mobile payment technology that allows a consumer with any mobile phone to complete purchases in retail stores and restaurants as well as from vending machines. It also allows a consumer to make a person-to-person cash transfer. “PocketChange’s” mobile payment interface for the Aloha Technologies POS terminal is a software-only solution that easily integrates into the merchant’s existing system.

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PASS PRIVILEGE

Grupo Uno has licensed “Pass Privilege’s” consumer loyalty
technology platform. “AwardTrack” will be part of Grupo Uno’s
“MultiPremios” consumer loyalty program. Grupo Uno is the largest consumer
credit provider in Central America and Panama. Using a credit card
technology platform; which presently serves more than 600,000 clients in
the region, issuing VISA and MasterCard products throughout their regional
bank network (Banco Uno) and their Issuance /Acquiring Business (Aval
Card). Grupo Uno has consolidated some of the most successful alliances in
the region with important players such as Grupo TACA,
Grupo Real (Intercontinental Hotels), COPA / CONTINENTAL, PRICESMART, AVIS
Rent-a-Car and others to provide their clients with the best credit card
products and benefits in the region. Currently Grupo Uno runs the most
successful loyalty program (“MultiPremios”) in Central America. The
program serves more than 300,000 active clients and awards more than 55
million “MultiPremios” miles a month.

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GMR Expands

WI-based GMR Marketing, which handles VISA USA’s sponsorship, sports marketing and hospitality business, has added General Manager responsibilities to Jill Gregory’s role as VP/Client Services; promoted Todd Marble to VP/Client Services; and has hired Rick Hall, formerly Group Manager/Corporate Sports Marketing for Sprint, as Director-Field Operations. Gregory joined GMR in 2000 as Vice President of Client Services where her primary responsibility was managing GMR’s Visa USA business. The San Francisco office manages all of Visa USA’s sponsorship, sports marketing and hospitality business and is responsible for evaluating sponsorship effectiveness.

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CompuCredit CIO

Atlanta-based CompuCredit has hired Guido Sacchi, formerly of Deloitte Consulting, as CIO. Mr. Sacchi most recently served as Senior Manager at Deloitte Consulting. Prior to that position, he was a Manager in the operations consulting division at PricewaterhouseCoopers. Mr. Sacchi’s background includes 13 years of international experience across industries, degrees in engineering from the University of Rome (Italy), and appointments at the Massachusetts Institute of Technology.

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Fleet NYC ATMs

FleetBoston will expand its Manhattan retail network with the opening of two new Midtown branches by year-end, a branch relocation in Harlem in January, and signed leases on six new remote ATM sites to open in early 2003. The new state-of-the-art branches feature consumer, small business, and brokerage sales and service specialists, including representatives of Quick & Reilly, Fleet’s wholly owned brokerage firm.

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EBPP Penetration

Consumers using EBPP outnumber non-users two-to-one in America’s most affluent families, and are 50% less likely to leave their financial institution than non-EBPP users according to new consumer research from Collective Dynamics. With 16% of respondents currently using an EBPP service, the study showed 65% get their service from a bank, and 30% use a portal. Almost 75% of this group comes from households with incomes over $40,000 per year. At the upper income level of $80,000 or more per year, EBPP users outnumber non-users two-to-one. When asked what effect being enrolled in an EBPP program through their primary financial institution would have, 38% of the current EBPP users said they would be less likely to change banks versus 24% for non-EBPP users. In other words, EBPP users are more than 50% less likely to leave their financial institution than non-EBPP users.

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Card Bond Pulse

Bank credit card charge-offs, among credit card-backed securities, rose slightly in September, following declining losses in August. The monthly charge-off rate rose slightly by 20 bps to 6.8% in September from 6.6% in August. Standard & Poor’s “Credit Card Quality Indexes” also found that delinquency rates in August rose to 5.20%, a 10 bps increase from July’s number. In September, delinquencies came in at 5.45%, a 25 bps increase. S&P expects bankruptcy-related defaults to add to a growing default trend heading toward the end of the year. Yield remained stable in September at 18.3%, but with the Federal Reserve cutting rates this month and another cut likely, Standard & Poor’s anticipates that yield may drop further. However, the impact of a further cut would be minimal, as many issuers have already hit their cap floors. The weighted average base rate for the trusts tracked by the indexes continues to benefit from recent Federal Reserve actions and remains unchanged at the current low level of 4.4%.

STANDARD & POOR’S CARD BOND QUALITY INDEX
Performance Month Sep 00 Sep 01 Jul 02 Aug 02 Sep 02
Yield(%) 18.9 18.9 18.7 18.3 18.3
Charge-offs(%) 5.1 6.5 6.8 6.6 6.8
Weighted base rate(%) 8.4 5.7 4.4 4.4 4.4
Excess spread (%) 5.5 6.7 7.5 7.4 7.2
Delinquencies (%) 4.4 5.1 5.1 5.2 5.4
Payment rate (%) 15.4 14.8 16.1 16.1 15.6
Source: Standard & Poor’s Ratings Services

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Marriott Gift Card Bonus

Marriott offering a “$25 Bonus Coupon” for any purchase of a “Marriott GiftCard” valued at $50 or $100 between now and the end of the year. The $75 or $125 value can be used to treat family, friends or yourself to a host of services and amenities from hotel stays and dining to spa treatments and rounds of golf at more than 2,000 Marriott locations worldwide, including Marriott Vacation Club International resorts.

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Home Trust & FDC

Toronto-based Home Trust has signed a deal to offer VISA credit card acceptance services to Canadian merchants through First Data. First Data will provide Home Trust with processing, risk management, and sales and marketing expertise through a Canadian subsidiary, CardSolve International Inc. A referral arrangement between CardSolve and First Data Loan Company, Canada – a MasterCard member – will provide Home Trust merchants with a one-stop solution offering both Visa and MasterCard acceptance, as well as other card payment methods.

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Online Fraud

Two-thirds of U.S. merchants are taking more online fraud precautions this year than they did in 2001 with such tools as address verification service, data encryption, and penetration audits. The fourth annual “CyberSource Fraud Survey” found that 71% of merchants plan to use AVS compared to 46% the year before. To battle identity theft, 59% of merchants say they are now encrypting stored credit card numbers, an increase of 11% over last year’s 48%. Penetration audits, checks to determine if a site has been hacked, have nearly doubled since last year (63% vs. 33%), and nearly half of the survey respondents (49%) now report having a paid risk management employee responsible for battling online credit card fraud. Survey numbers suggest merchants are confident their newly installed anti-fraud measures are working. The percent of respondents rating online credit card fraud a “Serious” or “Very Serious” business issue fell to 46% this year from 59% in 2001.

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