Gen X & Y

The Certified Financial Planner Board has released its “2002 Consumer Survey” which shows that financial goals of people ages 20-39 have shifted toward managing and reducing debt and away from saving for education, travel, housing and retirement. Almost half of this group (47% vs. 39% in 1999) list debt reduction/management as a current financial goal. This group also expressed diminishing interest in home purchase/renovation (37% vs. 42% in 1999), vacation/travel (33% vs. 40% in 1999) and retirement planning (72% vs. 77% in 1999). The CFP expressed concerns that credit card debt is a growing problem for Americans in their 20s and 30s, and they believe millions of college-age consumers are especially vulnerable.

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ARGUS DEAL

Abacus Financial Management Systems Limited has placed its first significant purchase order for 320 “Argus” bill validators to be installed as part of the Abacus cash management system in a major U.K. retailer.
AFM Systems Limited is a UK-based manufacturer and product development company, providing a range of cash and coin management systems for the retail market. The company is a partnership between James Redding and US-based Global Payment Technologies. The unidentified U.K. retailer will deploy the Abacus systems in 57 of its locations. The installation is expected to be completed by December.

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CELLBUCKS EXPANDS

Ontario-based CellBucks has teamed with Ovations Food Services to offer its micropayment system to baseball fans attending the Joseph P. Riley Stadium in Charleston, South Carolina. The new program enables Charleston Riverdogs fans to order and pay for food and beverages from their cell phones and have it all delivered right to their seats. The CellBucks payment system is compatible with any type of cell phone on any cellular service provider’s network. Users can registerfor the service by going online to the CellBucks Web site or by phone call. CellBucks will accept VISA, MasterCard, Discover and American Express. Members will instantly be given a personal pass code for immediate use of the CellBucks service. Last week, CellBucks and Ovations Food Services sealed their first deal with the Bowie Baysox at Prince George’s Stadium in Maryland.

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B-CARD

Grupo Financiero Banamex is projecting it will issuer more than 200,000 smart cards by the end of 2002. El Economista says the new “B-Card” will be issued to customers with a minimum income of 5,000 pesos. Grupo Financiero Banamex says it is the first Mexican bank to begin the migration from magnetic stripe cards to smart cards.

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TSAI Re-Audit

Omaha-based Transaction Systems Architects said yesterday it will conduct a re-audit of fiscal years 1999, 2000 and 2001 following concerns over several transactions involving one of the Company’s customers that may not have been accounted for appropriately. The transactions with the customer primarily involved two software license agreements, a distribution agreement and investment in the customer’s common stock and warrants. The transactions that occurred in the second quarter of fiscal 1999 resulted in revenues of approximately $4.4 and the transaction that occurred during the second quarter of fiscal 2000 resulted in revenues of approximately $4.3 million. TSAI says revenue from this customer is not expected to be material to the Company’s future operations. The Company also made investments in the aggregate amount of $11.7 million in the publicly traded common stock of the customer during fiscal 1999 and 2000. The Company sold approximately $2.8 million of this common stock during fiscal 2000 that resulted in a profit of approximately $1.2 million. The price of the customer’s common stock declined significantly during late 2000 and declined further in 2001, and the Company recorded a non-cash charge to earnings of approximately $8.1 million and $900,000 in the fiscal quarters ended December 31, 2000 and September 30, 2001. For complete details on TSAI’s latest performance visit CardData ([www.carddata.com][1]).

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

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Multi-Merchant Loyalty Program

CO-based Smart Transaction Systems has introduced a multi-merchant program that tracks the cardholder’s point balance at each of the participating merchants and produces real-time reward messages printed from the POS terminal that change as the cardholder’s point balance changes. Additional enhancements include an option that allow merchants to process customer loyalty transactions using the customer’s phone number if the customer does not have his/her card or key tag handy.

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Cap One Adjustments

In conjunction with certifying its SEC filings, Capital One restated its stock option-adjusted net income lower for the past two years due to a computational error. As a result, the card issuer adjusted its 2001 net income from $597 million to $545 million, a 9% decline. Cap One also restated its 2000 stock option-adjusted net income as $401 million instead of $413 million, a 3% decrease. Cap One amended its Annual Reports on Form 10-K to correct the pro forma net income and earnings per share previously disclosed. The card issuers says the amendment does not affect the Company’s historical results of operations, financial conditions or cash flows for any period presented. Cap One says that other than this change, there is no change to the consolidated financial statements, the notes to the consolidated financial statements, the report of the independent auditors or the report of management. In pre-market trading this morning Cap One’s stock was down slightly from $31.05 to $31.00. Yesterday, the firm’s stock briefly dipped to $26.30. For complete details on Capital One’s latest performance visit CardData ([www.carddata.com][1]).

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

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College Debt

FL-based Consolidated Credit Counseling Services said this morning that 35 out of the nation’s top 50 credit cards issuers now compete in the college market. The firm also says an estimated 80% of the nation’s colleges and universities permit some form of on-campus solicitation. Four out of ten graduating seniors have credit card debt, with an average balance just over $3,000. The number rises to 48% when the students also have loans. The debt management firm also noted that a survey from VISA found 8.7% of bankruptcies are from people under 25 years old.

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MBNA Adjustments

MBNA warned yesterday, after certifying its SEC filings, that it may take a $200-$300 million charge due to proposed FFIEC regulations. MBNA said the proposed new regulatory rules might require it to create a reserve to cover uncollectible accrued interest and fees on managed loans, on non-accrual status. Currently, in accordance with generally accepted accounting principles and generally accepted industry practice, MBNA accrues interest and fees on loans until the loan is paid or charged off, at which time MBNA reverses the accrued interest and fees and, if the loan is charged off, charges them against current income. The bank credit card issuer has followed this practice and has disclosed it in its annual reports since it was established in 1991. MBNA says it does not believe an increase or decrease in the reserve for accrued interest and fees would significantly affect earnings in subsequent periods. MBNA’s stock gained more than 5% yesterday, closing at $19.60, after opening at $17.95 per share. For complete details on MBNA’s latest results visit CardData ([www.carddata.com][1]).

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

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