SCA Conference

The “10th Annual Conference of the Smart Card Alliance” will be held Oct 7-9 in Arizona and will focus on ‘Catalysts for Convergence,’ with featured speakers such as MasterCard’s Simon Pugh and Joseph Giordano of ExxonMobil Speedpass. Executives will share lessons learned from large-scale rollouts of smart cards in financial services and retail, and from deployments of secure identity cards in government and corporate IT.

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TSYS Gift Card

Canadian Tire Retail has inked a deal with TSYS to convert its existing paper gift certificates to electronic gift cards. Under the agreement, services already provided by TSYS to Canadian Tire Financial Services will be extended to integrate the existing electronic payment system with a new gift card system. Canadian Tire will offer the cards through its network of more than 450 stores. Totally, the company has more than 1,000 locations including gas bars across Canada. Canadian Tire has worked with TSYS since 1998, when Canadian Tire Financial Services converted its private label and MasterCard accounts from an in-house system to the TS2® processing system by TSYS.

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2Q/02 Delinquency

Delinquency rates among the top U.S. issuers began to slow during the second quarter, now growing at an annual rate of less than 8%. Among the top VISA and MasterCard issuers, Bank One/First USA, Capital One, BofA, and Fleet reported lower delinquency rates this year than 2Q/01. Sub-prime issuers Providian, Direct Merchants, and Household led the top ten issuers with the highest delinquency rates and the largest increases during 2Q/02, compared to same quarter one year ago. Over the past twelve months, delinquency (30+ day) among the nation’s top issuers, has increased 41 basis points, from 5.45% to 5.86%. according to CardData (www.carddata.com). Meanwhile, Discover reported a 30+ day delinquency rate of 5.63% for the quarter ending 5/28/02, compared to 5.84% for the year-ago quarter. American Express delinquency rate stood at 3.1% for 2Q/02, compared to 2.9% for 1Q/01.

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 2Q/02 1Q/02 4Q/01 3Q/01 2Q/01 Y/Y CHG
1. Citigroup: 90+ 1.84% 2.13% 1.98% 1.82% 1.72% +7.0%
2. MBNA: 30+ 4.80% 4.97% 5.09% 4.90% 4.57% +5.0%
3. First USA: 30+ 3.83% 4.27% 4.46% 4.25% 4.10% -6.6%
4. Chase: 90+ NR 2.29% 2.22% 1.95% 1.90% NA
5. Cap One: 30+ 4.54% 4.80% 4.95% 5.29% 4.92% -7.7%
6. Providian: 30+ 10.16% 10.22% 8.81% 8.66% 8.04% +26.4%
7. BofA: 30+ 3.78 4.16% 4.12% 3.95% 3.81% -0.8%
8. Household: 60+ 3.90% 4.39% 4.10% 3.91% 3.60% +8.3%
9. Fleet: 30+ 3.74% 3.97% 4.05% 4.13% 4.40% -15.0%
10. Dir Merch: 30+ 10.2% 9.80% 9.70% 8.90% 8.30% +22.9%
30+ DAY AVG*: 5.86% 6.03% 5.88% 5.73% 5.45% +7.5%
NR- not reported * 60+ day and 90+ day are not meaningful
SOURCE: CardData (www.carddata.com)

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I-COM EXPANSION

ASB Bank, Bank of New Zealand and one of the large Australian banks have confirmed they will use Carreker’s Internet-enabled cash inventory management solution to aid in the management of their cash inventories. The “Integrated Cash Operations Modules” (iCom) solution uses demand-based inventory management techniques to identify a daily cash activity profile for each cash point. The technology determines the
optimal inventory, order, and shipment amounts for cash at individual branches, ATMs, transportation providers, and vaults. It interprets and imitates historical cash usage data to define customer behavior and adjusts
for variables to forecast future customer demand. In addition, iCom provides multiple levels of customized alerts to prevent cash outage situations.

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PAYMASTER ACQUISITION

Colorado-based Equitex has closed its previously announced transaction with Paymaster Jamaica Limited. Under terms of the agreement, Equitex has provided a capital advance to Paymaster Jamaica that may be converted into stock of a newly formed subsidiary, Paymaster Worldwide, Inc. Paymaster Worldwide will be equally and jointly owned by Equitex and Paymaster Jamaica and its purpose is to replicate and commercialize the Paymaster Jamaica business model throughout North America, and possibly worldwide. Equitex also announced today the formation of a new subsidiary, Denaris Corporation, which will act as the stored value card operation of Equitex. Denaris will support Equitex’s transaction with Paymaster Jamaica as well as all future stored value card programs.

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INFOCARD EXPANDS

Wisbech, Cambridgeshire-based Burall InfoCard Ltd is expanding its system-integration services to manage a contract to supply an initial 40,000 smart card readers for the new Vehicle Inspectorate MOT system, due to be launched by the British Government in 2003. The system will use smart card technology to assist in the capture of data regarding MOT tests for 30 million vehicle inspections each year, which is then transferred to a central computer. Checks will be made against every vehicle registration which will trace the MOT tester in which garage issued a particular vehicle with its MOT, including the detail of its emission test. The smart card technology will also provide garages with a robust, secure and portable data storage system that will log information and prevent fraud. InfoCard also announced it has named Lawrence Faulkner to serve as Divisional Director. Siemens Business Services was awarded the prime contract of £2 million to supply readers for the new Vehicle Inspectorate MOT system.

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TOWERGROUP EXPANSION

TowerGroup has appointed John Stone to the role of managing partner, International Advisory Services. In his new London-based position, Mr. Stone will oversee all TowerGroup consulting and advisory operations outside of North America. He will also oversee the ongoing business development efforts of TowerGroup managing director, EMEA, Ole Skjodstrup. The company also announced that Greggory Kobelski, who currently serves as managing director, will assume Mr. Stone’s former role as partner-in-charge, Consulting Services, North America.

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Gaming Chips

Salt Lake City-based Smart Chip Technologies announce that RNG Gaming has agreed to license and pay advance royalties to use Smart Chip’s loyalty patent and end-to-end loyalty system for gaming. RNG Gaming will integrate Smart Chip Technologies’ “e-llegiance” and “LoyaltyCentral” loyalty system with its gaming software and back-end tracking system to provide smart card driven wireless terminals for in-room and off-site online gaming in casinos, resorts, airplanes, and other venues. Under the terms of the licensing agreements, RNG Gaming has an exclusive worldwide license and sublicensing rights for gaming and has agreed to pay SCTN a minimum of $1.5 million in the first two years, with anticipated SCTN revenues of at least $9,000,000 in year five. In addition, RNG Gaming has prepaid SCTN a portion of projected licensing fees, generating the first significant revenues for the development stage company.

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