Taxi Deal

Canada’s Mobile Knowledge has signed a key contract worth over US$300,000 with Yellow Checker Cab Company of San Jose, California. Earlier this month, the company signed a contract with Taxi Equipment Company. Taxi Equipment Co. provides taxi dispatch, support and technology services to six related operating companies, including LA Taxi Co-op and Long Beach Yellow Cab Co-op in California. The company previously inked a deal with Washington, DC-based Barwood Inc. All three contracts involve Mobile Knowledge’s “Series 6000” terminals. The terminals provide taxi drivers with the ability for customers to use credit cards and smart cards. The terminals feature multimedia color touch screens for use by both drivers and passengers, and full GPS location-tracking services. (CF Library 10/1/02)

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Incurrent CMO

NJ-based Incurrent has hired William Kinnelly, formerly COO of Retail Decisions’ U.S. division, to the position of Chief Marketing Officer. Kinnelly comes to Incurrent from Retail Decisions, Inc., a global credit card payment processor to telecom and ecommerce firms. During his tenure as COO of the US Company and President of the telecom business unit, revenue increased by 100% and profit grew four-fold.

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SEARS & TSYS

TSYS has been selected as the exclusive processor for Sears Canada’s 9
million retail cards and will begin the migration next year. More than 80%
of Canadian households are Sears cardholders. TSYS has processed card
accounts in Canada since 1989 and is the dominant processor with 20% of the
overall card market. Ninety percent of adult Canadians own a banking card,
and the average Canadian carries three different credit cards. Canada has
approximately 35,000 ATMS and over 600 credit card issuers for a population
of nearly 31 million people. More Canadian households use credit cards than
in the USA — 89% versus 76%. TSYS also processes for Canadian Tire.

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EURONET CFO

Budapest-based Euronet Worldwide has named a new CFO and controller. Rick
Weller, formerly COO of ionex telecommunications, has been named EVP/CFO.
Kendall Coyne, fomer CFO will become Euronet’s controller, focusing on
streamlining accounting, reporting and business processes and controls. At
mid-year, Euronet owned and/or operated a total of 2,840 ATMs. The company
owns and/or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech
Republic, the U.K., Greece and Egypt.

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SCM 3Q/02

SCM Microsystems reported third quarter revenues of $40.9 million, down
12% from revenues of $46.5 million in the third quarter of 2001. The
Company recorded a pro forma operating loss of $1.3 million in the third
quarter. Revenues from the Company’s Security division were $14.3 million.
SCM says it expects to see continued strong demand for its smart card
reader technology for US government security applications. For the fourth
quarter, management estimates that revenues from the Security business will
be in the range of $15 million to $18 million.

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Euronet CFO

KS-based Euronet Worldwide has named a new CFO and controller. Rick Weller, formerly COO of ionex telecommunications, has been named EVP/CFO. Kendall Coyne, fomer CFO will become Euronet’s controller, focusing on streamlining accounting, reporting and business processes and controls. At mid-year, Euronet owned and/or operated a total of 2,840 ATMs. The company owns and/or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech Republic, the U.K., Greece and Egypt.

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POS Ground Guard

Wincor Nixdorf has signed a deal to resell POWERVAR’s “Ground Guard” power conditioning products to protect POS systems in hospitality and foodservice establishments. POWERVAR’s Ground Guard power conditioners eliminate the need for dedicated electrical circuits and isolated ground wiring, through a “ground conditioning” feature combined with standard power conditioning elements. This assures a steady supply of clean power that allows mission-critical POS appliances to operate efficiently.

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ARTERIUM 3.0

Sydney-based Cards etc has launched the third release of its smart card
management software for card issuers and service bureaus. “Arterium 3.0” is
four times faster than the previous version and offers “Key Manager,” which
provides all the key management capabilities necessary to support Arterium
data preparation and personalization processes, making it easy to create,
generate, import and migrate keys securely.
The software also features an “Application Programming Interface” and
“Software Development Kit,” enabling third parties to develop Arterium
support for their own applications. The software development kit provides a
rapid development environment for developers to build and test code using
the “API.” Arterium manages the entire lifetime of the card from launch
through to expiry and enables partners who share space on the chip to
retrieve and update cardholders, cards and products. Arterium is currently
in use by First Data, Acer Corporation in Taiwan, and ECard in Australia.

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Providian 3Q/02

Providian reported third quarter net income of $42.1 million compared to second quarter net income of $153.9 million, and net income of $57.2 million one year ago. Providian is in the process of shedding sub-prime accounts and says its portfolio mix is now 60% middle market/40% prime market. This month the Company completed the transfer of servicing for the higher-risk portfolios to CardWorks and CompuCredit. During the third quarter, the Company originated over 520,000 new customer accounts compared to the origination of approximately 350,000 new customer accounts in 2Q/02. Providian ended the third quarter with $19.4 billion in total managed credit card loans and 12.7 million accounts, compared to $19.6 billion in managed credit card loans and 12.9 million accounts at the end of the second quarter. Delinquency is running nearly 29% above last year levels, and charge-offs are up 60% over 3Q/01. For complete details on Providian’s third quarter performance as well as prior quarter visit CardData ([www.carddata.com][1]).

Providian Card Portfolio Snapshot
3Q/02 2Q/02 1Q/02 4Q/01 3Q/01 Ann Chng
Loans $19.4b 19.6b 22.1b 32.6b 31.7b -38.8%
Accounts 12.7m 12.9m 15.0m 18.4m 17.9m -29.1%
Delinq* 11.23% 10.16% 10.22% 8.81% 8.71% +28.9%
Losses 16.71% 17.53% 15.05% 12.70% 10.43% +60.2%
* 30+ days past due;
Source: CardData (www.carddata.com)

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

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Sears Canada Processing

TSYS has been selected as the exclusive processor for Sears Canada’s nine million retail cards and will begin the migration next year. More than 80% of Canadian households are Sears cardholders. TSYS has processed card accounts in Canada since 1989 and is the dominant processor with 20% of the overall card market. Ninety percent of adult Canadians own a banking card, and the average Canadian carries three different credit cards. Canada has approximately 35,000 ATMS and over 600 credit card issuers for a population of nearly 31 million people. More Canadian households use credit cards than in the USA — 89% versus 76%. TSYS also processes for Canadian Tire.

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Metris Ratings

Fitch Ratings yesterday downgraded the Metris Master Trust Class A/B/C notes, affecting approximately $4.2 billion of $8.8 billion credit card backed securities issued from the trust. Fitch says the rating actions primarily reflect persistent weakness and expected further deterioration of key performance variables as well as the challenging financial and regulatory environment in which Metris’ continues to operate. Fitch says credit quality has worsened significantly beyond its original expectations and continues to deteriorate. In September, gross charge-offs reached 16.83%, compared to an average of 12.8% in 2001 and 11.18% in 2000. In addition, late stage delinquencies reached 11.1% in the latest period. For complete details on Metris/Direct Merchants Bank quarterly performance visit CardData ([www.carddata.com][1]).

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

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AmEx 3Q/02

American Express reported its Travel Related Services division produced third quarter net income of $553 million, twice last year’s third quarter earnings, but down $12 million from 2Q/02. The earnings were driven by higher volume and wider net-interest yields, despite flat card growth for the third consecutive quarter. Volume was up 7% over 3Q/02, but lower than the second quarter level. As a result, merchant fees rose 5% as average discount rates declined from 2.67% for 3Q/01, to 2.63%. AmEx says charge card interest expense decreased 33% due to lower funding costs and lower receivable balances. Human resources expense declined primarily as a result of lower staffing levels, outsourcing, and other cost containment efforts. The AmEx card portfolio also showed that delinquency and charge-offs were flat compared to one year ago. However, delinquency edged up slightly to 3.2% for the third quarter. Charge-offs declined significantly from the second quarter from 6.2% to 5.6%. AmEx also noted that marketing and promotion expenses rose 31% from year-ago levels, reflecting expanded card acquisition programs and the introduction of new rewards-oriented card products during the quarter. Other operating expenses increased due in part to higher cardholder loyalty program costs and the impact of the technology outsourcing agreement with IBM. For complete details on AmEx’s third quarter performance as well as prior quarter visit CardData ([www.carddata.com][1]).

American Express U.S. Card Portfolio Snapshot
3Q/02 2Q/02 1Q/02 4Q/01 3Q/01 Ann Chng
Volume $58.2b 58.7b 54.3b 55.8b 54.4b +7.0%
Loans $32.2b 31.6b 31.3b 32.0b 31.3b +2.9%
Cards 34.8m 34.8m 34.8m 34.6m 34.7m +0.3%
Delinq* 3.2% 3.1% 3.4% 3.3% 3.2% NC
Losses 5.6% 6.2% 6.5% 5.9% 5.6% NC
Yield** 9.7% 9.8% 9.6% 9.6% 8.8% +10.2%
* 30+ days past due; ** net interest yield
Source: CardData (www.carddata.com)

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

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