Target 2Q/02

Target Corporation reported a 73% increase in credit card receivables over the past twelve months, driven by its highly successful launch of a “smart VISA” card. Since the end of the previous quarter, Target has advanced from #23 to #18 among the nation’s top bank credit card issuers, and has retained its leadership role as the largest issuer of smart credit cards in the USA with seven million issued. Since August 4, 2001, Target’s private label credit card receivables have declined nearly 18% as the company migrates current “Guest Card” users to the “Target VISA” program. Target says it is gearing up to offer about one million “Guest Card” holders the opportunity to upgrade to the VISA program during the current quarter. Target has also begun the in-store deployment of smart card readers and is teaming with Proctor-Gamble, Unilever, Pepsi and others to deliver incentives via the VISA chip. Profits (pre-tax) for Target’s credit card business have grown from $103 million for 2Q/01 to $129 million for 2Q/02. At the end of the quarter ending Aug 3, 2002, Target had $2.53 billion in VISA receivables, $865 million in “Guest Card” receivables, $586 million in Mervyn’s card receivables, and $651 million in Marshall Field card receivables. Delinquencies (60+ days) were 5.6% for 2Q/02 compared to 6.8% one year ago. For complete details on Target’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

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

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LOGICA PICTURE-IQ

London-based Logica, a major supplies of mobile payments, and PictureIQ, have signed an agreement to enhance the real-time delivery of multimedia messages by ensuring interoperability between different mobile handsets or Internet-connected devices. Under the terms of the agreement, Logica will incorporate PictureIQ’s “TransForce MTS” into its own Picasso Multimedia Messaging Service Centre to deliver rich-media transcoding services that will facilitate the management of multimedia content including images, animation, video and audio messages. PictureIQ’s “TransForce MTS” solution is an enabling server software
platform capable of powering the real-time optimization and rendering of content and messaging services for varied aspects of Internet and mobile device delivery, including device displays, formats, screen resolutions, audio players and more.

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Equifax Buys Email Database

Equifax is getting into mass email. The firm yesterday announced the acquisition of Naviant, Inc. for $135 million. Naviant has an email database of more than 100 million unique permission-based addresses. The email lists include physical address, demographics and purchasing power on consumers who have given their consent to receive marketing information. Equifax says the deal will accelerate growth in Equifax’s marketing services business and enable it to reach into new industries and further penetrate Naviant’s 3,000 customers. The company also said the acquisition will provide a significant new distribution channel for Equifax’s rapidly growing direct-to-consumer business. Naviant’s full-year 2002 revenues are expected to be approximately $60 million.

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Sub-Prime Bankruptcy

The Credit Store Inc. announced that, in order to facilitate the completion of its restructuring initiatives, the Company filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. The Company is negotiating a sale of its assets and expects, subject to overbids in Bankruptcy Court, to conclude a sale, recapitalization, or merger in the next 30-45 days.

The Court has scheduled a hearing on the Company’s first day motions on Friday, August 16, 2002, before the Honorable Irvin N. Hoyt at the U. S. Bankruptcy Court in Pierre, SD.

The Company said its decision to seek judicial reorganization was based on a combination of factors, including a rapid decline in liquidity when it was unable to obtain additional financing and/or accommodations from its existing creditors and was unable to extend the maturity of its credit facility with Coast Business Credit.

The Company has retained J. Richard Budd, of Marotta Gund Budd & Dzera, Management, LLC, as Corporate Restructuring Officer to assist the Company in its reorganization, and the law firm of Neligan Stricklin, L.L.P. as special counsel, both subject to court approval.

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GPN & Health Care

Global Payments has signed an agreement to provide transaction authorization and settlement processing services, merchant accounting, and risk management services to HealthCard Systems. HealthCard Systems focuses on the transaction processing needs of the healthcare industry by offering a proprietary system that meets the unique needs of the healthcare sector to produce a value added and unified management tool.

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ONE-SOURCE USA

Mumbai-based ICICI Group’s OneSource subsidiary is targeting large and mid-sized banking, insurance and other financial services companies to offer outsourced contact center and transaction processing operations offshore. Since 1998, the company has been processing transactions for US and UK-based companies at its offshore contact center and transaction processing facilities in Bangalore and Mumbai.
The company is handling call and transaction volumes as high as 400,000 per month and features a highly skilled, low cost workforce and sophisticated technological base. ICICI Group has committed $40 million in funding to the new venture. Susheel Kurien has been named President of ICICI OneSource’s US operations.

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Check Volume

Revised check volume data released by the Federal Reserve System this week has taken the payments industry by surprise. The FRS lowered its estimate of the number and value of checks written by American consumers, businesses and government agencies in 2000, suggesting check use may have peaked in the mid-1990s. The revised annual check volume in 2000 is 42.5 billion checks valued at $39.3 trillion compared to a previous estimate of nearly 50 billion checks, valued at $47.7 trillion. In 1995, a peak of 49.5 billion checks was reached, while the volume in 1979 was 32.8 billion checks. Check use as a percentage of retail noncash payments, which includes credit card, debit card, automated clearinghouse payments and other electronic payments, declined from 85.7% in 1979 to 77.1% in 1995 to 59.5% in 2000. The Federal Reserve System was initially released in November of last year. Based on the initial study, some industry consultants/newsletters projected a checkwriting peak in 2005.

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