2Q/02 Brand Volume

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MasterCard continues to lead in growth rates for U.S. payment card volume. During the second quarter MasterCard’s gross dollar volume increased 16.9% compared to 2Q/01, while VISA was 11.2%, American Express down slightly, and Discover flat. Across the industry, total card volume is growing at an 11.9% annual rate at mid-year. Purchase volume is up 10.4% while cash volume soared by 30.2%, according to CardData ([www.carddata.com][1]).

Second Quarter 2002
U.S. Quarterly Charge Volume by Brand
(credit + off-line debit)

PURCHASE VOLUME
VISA $188.9b (+7.6%)
MasterCard $110.5b (+15.7%)
TOTAL $299.4b (+10.4%)

CASH VOLUME
VISA $59.5b (+24.5%)
MasterCard $40.2b (+39.6%)
TOTAL $99.7b (+30.2%)

TOTAL VOLUME
VISA $248.4b (+11.2%)
MasterCard $150.7b (+16.9%)
AmEx $58.7b (-0.2%)
Discover $23.5b (NC)
TOTAL: $481.3b (+11.9%)
Source: CardData (www.carddata.com)

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

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Charge-Offs Improve

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Performance among securitized credit card receivables provide more evidence that charge-offs are declining. Last week, CardData reported a decline in charge-offs for four consecutive months for managed credit card receivables, which include securitized and non-securitized credit card loans. According to Standard & Poor’s “Credit Card Quality Index,” bank credit card charge-off rates decreased by about 10 basis points in July, while delinquency rates stayed flat. Much of the loss improvement may be due to seasonality, as losses tend to decline in the summer months. S&P says 60% of the credit card trusts it tracks reported decreases in charge-offs. For the major trusts, a significant increase was seen only in Fleet and First USA. Losses for Fleet increased to 6.8% from 5.8%, and for First USA, losses jumped 200 bps to 6.1%. Conversely, a significant decline was seen in Providian Master Trust. Losses in this case dropped to 7.8% from 9.0%. S&P noted that the payment rate improved last month as well. July’s 16.1% payment rate was a 90 bps improvement from June’s figure. CardData ([www.carddata.com][1]) reported last week July charge-offs of 6.39% compared to 6.44% in June.

CARD BOND PERFORMANCE
Performance month Jul 00 Jul 01 Jul 02
Outstandings (bil. $) 323.3 363.2 384.9
Yield (%) 19.6 19.9 18.8
Charge-offs (%) 5.2 6.6 6.8
Delinquencies (%) 4.2 5.0 5.1
Payment rate (%) 16.1 16.3 16.1
Source: Standard & Poor’s Ratings Services

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

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EUROBANK & FUNDTECH

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EFG Eurobank Ergasias confirmed it is now in production with Fundtech’s “PAYplus” solution. The solution will enable Eurobank to consolidate payment systems, enhance payment automation, and increase payment volumes while reducing costs. The solution will serve as Eurobank’s central payment processing utility for both domestic and international payments. PAYplus connects Eurobank’s back office systems, various payment initiating departments, and over 400 of its branches to Greece’s national payment systems, DIAS and Hermes, as well as to the SWIFT, EBA, ERP and TARGET international payment mechanisms.

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Certegy Card Services Execs

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Certegy has hired Robert Bream, formerly with United Airlines Employee’s Credit Union, as SVP/GM – Card Services North America, and has also promoted Vince Pavese to SVP/GM – International Card Services. Certegy provides credit and debit processing, check risk management and check cashing services, and merchant processing to over 6,000 financial institutions, 117,000 retailers and 100 million consumers worldwide.

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FNBO Taps LiquidCredit

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First National Bank of Omaha is utilizing Fair, Isaac’s newest “SBSS 5.0” commercial card risk models embedded within the “LiquidCredit” service to manage its commercial card originations. First National, one of the nation’s top commercial card issuers, will use Fair, Isaac’s browser-based credit risk decisioning solution to process applications and offer credit and purchasing power to small business customers.

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VISA FILM ROOM

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VISA Canada is sponsoring the “Vancouver International Film Festival” for the fifth year. As part of the 16-day event, VISA unveiled the “VISA Screening Room Pass” this week. For $68, passes will be exchanged for ten tickets to any screening at the screening room, excluding galas. “VISA Gold” and “VISA Platinum” cardholders will also be able to purchase special packages including a “VISA Gold Pass” and three exclusive gala packages. The “VISA Screening Room” will be held at the historic 1,000-seat Vogue Theatre located on Granville Street in Vancouver.

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Diebold China

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China Construction Bank has signed a US$12 million ATM deal with Diebold. Under terms of the agreement, Diebold will provide both cash dispensers and ATMs to CCB branches in more than 20 provinces. This order is the second this year to be granted by CCB to Diebold. The first was valued at approximately US$15 million and was announced in July. CCB operates more than 13,000 branches throughout Greater China.

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OPEN & Staples

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Staples has joined American Express’ “OPEN: The Small Business Network.” Under the program small business cardholders will receive an automatic 2% savings for office supply purchases made with an “American Express Business Card.” The discount may be combined with other Staples promotion or coupon and will appear as a credit on the cardholders’ monthly billing statements. Staples is an $11 billion retailer and has more than 1,400 locations. Other OPEN participants include Dell, FedEx, Kinko’s, Hertz, ExxonMobil, Hilton, and Qwest. In most cases, the savings occur automatically when a small business owner uses an AmEX business card.

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First Equity Business Card Processing

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PA-based First Equity Card has signed a five-year agreement for TSYS to process a new commercial credit card specifically designed for businesses with fewer than 10 employees. The new commercial card will give small businesses an independent line of credit, specialized account management reports and additional cards for employees with individualized spending limits. These businesses will no longer need to rely on personal consumer cards for their small-business expenditures.

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Truth MasterCard Support

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Q Comm has signed an agreement with Next Estate Communications to support loading value onto the Next Estate prepaid “Truth MasterCard”, issued by Columbus Bank & Trust. Once the account has been set up and activated, Next Estate allows the customer to use his or her Virtual MasterCard account immediately for non face-to-face purchases, like online purchases, and then sends the customer their personalized, embossed Truth(TM) MasterCard(R) card in the mail, if requested.

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Euronet Acceptance

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Euronet’s UK operation announced this morning it now offers VISA and MasterCard acceptance on Euronet ATMs for cash withdrawals and credit card cash advances. Citibank International, plc is sponsoring Euronet in the UK initiative. Euronet is currently partnered with Citishare and Citibank in six countries, including the ATM outsourcing program for Citibank Greece. Euronet says the UK expansion has already increased ATM transactions by 3%. As of June 30th, Euronet owned and/or operated a total of 2,840 ATMs compared to 2,548 ATMs on March 31st. The compnay owns and/or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech Republic, the U.K., Greece and Egypt.

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