ALL ASIA PASS

MasterCard, Travelocity.ca, and Cathay Pacific have teamed to offer Canadian travellers a special discount on travel to Asia this summer. The All Asia Pass, which includes roundtrip Economy Class airfare between Toronto or Vancouver to Hong Kong and up to 21 consecutive days air travel to 16 Asian cities, is priced at CD$1,599 for Vancouver departures and CD$1,699 for Toronto departures. Travelocity.ca members using a MasterCard card to purchase The All Asia Pass will save an additional $200. The All Asia Pass is available for travel from July 22 to December 4.

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OPC Signs AZ County

Official Payments Corporation announced today that Maricopa County, Arizona plans to offer the company’s electronic payment options to citizens who owe property taxes. When the systems go live in August, Maricopa County residents will be able to pay these taxes with their Visa, American Express, MasterCard and Discover cards, via Internet or telephone. Maricopa County, which is the largest county in Arizona, collected over $2.5 billion in property taxes last year.

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Home Depot Heat

Home Depot’s confusing position over acceptance of business cards for government purchases has created negative publicity this week, leading the company to defend itself. The home improvement chain reportedly sent out a memo earlier this month advising store managers not to process purchases connected with the U.S. Government, including those made with GSA payment cards. The company indicated its decision is largely based on a concern that it could be responsible for compliance with federal law involving discrimination and affirmative action. Home Depot said yesterday the policy on not doing business with the Federal Government is a long-standing policy but could change. However, the firm emphasized it has a long record of “unwavering commitment to support its communities, federal and local government, and all disaster agencies in times of emergency and natural disasters through generous donations of supplies and materials.”

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GoPin Changes Name

MD-based GoPin Inc., creators of the Bill Me Later network, have changed their name to I4 Commerce Inc. effective immediately. With the introduction of Bill Me Later this year, the company has taken the opportunity to change the corporate name to reflect their merchant-centric mission. The company currently has strategic relationships with the industry’s largest payment processors, including Paymentech and First Data Corporation.

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Personalized Holograms

Israeli firm SafeCard ID system 7 is introducing new technology enabling the creation of personalized holograms for ID cards and possibly payment cards. The hologram may contain the card bearer’s photograph which is embedded in the card and cannot be altered. The special process makes the card bearer’s face appear as a shiny face integrated within other holographic elements. SafeCard’s patented system can also be used as a platform for printed biometric data. The system can also handle smart cards. SafeCard can selectively metallize the card in any size and shape and in several colors. The company is currently moving its headquarters to Norfolk, VA from Caesaria, Israel.

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Wider Margins

The gap between the cost of funds and interest revenues continues to widen for credit card issuers this year. Meanwhile, average credit card interest rates have edged upward by 20 bps since the start of this year. Yesterday, Discover reported that its interest rate spread widened 123 basis points for the second quarter compared to 2Q/01, driven by a decline in cost of funds. Other top issuers are expected to report similar gains when second quarter reports come out next month. The Feds have not adjusted rates since December.

INTEREST RATE YIELDS
Jan 01: 8.71% Jun 01: 9.35% Nov 01: 10.14% Apr 02: 10.45%
Feb 01: 8.79% Jul 01: 9.43% Dec 01: 10.26%
Mar 01: 9.04% Aug 01: 9.68% Jan 02: 10.40%
Apr 01: 9.12% Sep 01: 9.80% Feb 02: 10.39%
May 01: 9.28% Oct 01: 9.96% Mar 02: 10.39%
Source: CardData (www.carddata.com)

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Sony & GlobalCollect

TPG N.V.’s GlobalCollect subsidiary has inked a contract with Sony Online Entertainment to provide the WebCollect global online payment service for Sony’s multiplayer online subscription-based gaming business which includes the EverQuest series with more than 430,000 subscribers. With WebCollect, Sony is no longer limited to only accepting credit card payments. The company can now process subscription-based orders anywhere in the world in the currency and payment method that customers choose.

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AB 865

A new law that is set to go into effect in California on July 1st which requires credit card issuers to show certain consumers the impact of making minimum payments may be blocked at the end of this month. A group of major credit card issuers, including Citibank, who had a hand in crafting the legislation last year, have filed a lawsuit in U.S. District Court this month to block the new law. As a result, consumer groups are furious. The new law, AB 865, requires credit card companies to disclose on customer bills the total costs and length of time it will take to retire credit card debt of $1,000, $2,500, and $5,000 if a consumer makes just the minimum payment. Consumers who make the minimum payment for six months will receive this information based on their exact outstanding balance. Credit card companies are also required to maintain a toll-free telephone number to call a “live” customer service representative so that individualized minimum payment information can be obtained. The new disclosure requirement was a compromise proposal signed into law after the financial industry lobbied Governor Gray Davis in 2000 to veto a stronger version of the bill that would have required credit card issuers to send minimum payment warnings to all cardholders. Citigroup drafted the outline of the compromise that eventually watered-down the legislation. Consumers Union says no financial institutions opposed the compromise proposal when it was considered and adopted by the California legislature last year. The card issuers’ lawsuit claims that the new state law is preempted by the National Bank Act and that national banks cannot be required to abide by state laws that impede their business. It also alleges that the California law violates the commerce clause by significantly impeding interstate commerce. The case is scheduled for a hearing on June 28.

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Slot Machine ATM Access

FDC’s Global Cash Access and its QuickPlay Infonox subsidiary have inked a deal to deploy Infonox’s Active Payment Platform to enable casino customers to use their ATM cards at the slot machine. The Active Payment Platform has been extended to not only manage the EFT side of transactions but also to operate the entire monitoring and configuring of the transaction system. Key requirements in such a system, including message and data encryption, key management, POS and server configuration and management as well as back-end systems such as dispute resolution, transaction tracking and reporting, reconciliation, and settlement are all handled by the Infonox APP.

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