Insurance Card

Standard Insurance Company launched its Standard SecureCard today in conjunction with individual disability insurance policies. Benefit payments are automatically credited to the stored value card, which can be used at ATMs nationwide or as a debit card for VISA POS purchases. The Standard SecureCard was first introduced in January 2001 for group disability policyholders. The card also may be used to transfer funds as needed to checking and savings accounts with a phone call. Balances and transactions are monitored through a personal Web site account.

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APTUS Financial Launched

David Grano, former president and CEO of Card Capture Services and Rick Holt, former VP of sales at E*TRADE Access, have teamed to form Portland, OR-based APTUS Financial which offers a payment platform that allows wireless carriers and online service providers to expand into the prepaid service market. APTUS is developing additional proprietary solutions to allow for alternative delivery by financial institutions and transaction processors via ATMs and point-of-sale terminals. Additional applications include in-branch check cashing terminals and traditional ATM programs in the United States and Canada.

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Intl Money Transfer Competition

San Francisco-based Financial DNA has released a research report that says First Data’s international money transfer operations will face significant competition from groups such as the Inter-American Development Bank which is building a network comprised of Latin American banks. Moreover, the growth of Person-Person fund transfers using international banking affiliations and the enabling platforms of new technology vendors pose a serious, long-term threat to Western Union’s pricing regime.

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GTS Joins DuoCash

GTS PrePaid phone cards have joined the DuoCash network to expand functionality by enabling cardholders to do online transactions at select e-merchants. GTS Prepaid is a provider of prepaid products and services primarily targeted to the supermarket and convenience store industries, including such large chains as Sunoco, Circle K and A&P. Additionally, GTS recently announced a distribution agreement with Fleming, a major distributor in the food, drug and specialty store industry—servicing over 3,000 grocery stores and more than 5,000 convenience stores.

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InfiCorp Acquisitions

Atlanta-based InfiCorp Holdings has purchased the credit card loan portfolios from Midwest United Credit Union in Blue Springs, Missouri and Medical Community Credit Union In Odessa, Texas. Midwest’s portfolio has $6.6 million in outstandings while Medical’s portfolio has $3.6 million. Both credit unions also established a long-term credit card agent relationship with InfiCorp. Both credit unions sold their portfolios through AssetExchange, which managed the marketing, bidding and transaction process for the sale. InfiCorp Holdings is a wholly owned subsidiary of First National of Nebraska.

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Class Act

The merchants’ counsel said Monday it is ready to give notice to the class members and proceed to trial in its debit card lawsuit. Constantine & Partners also said most of the key legal issues have already been decided against VISA and MasterCard in the U.S. Goverment’s antitrust case, which was won by the Government last year. Constantine & Partners says under the legal principle of collateral estoppel, the decisions in the already-decided U.S. case will likely be applied in the merchants’ case. The class-action lawsuit, filed by Wal-Mart, The Limited, Sears Roebuck, Safeway, Circuit City, three trade associations — the National Retail Federation, the International Mass Retail Association and the Food Marketing Institute — and 13 other large and small retailers, charges VISA and MasterCard with violating U.S. antitrust law by attempting to monopolize the debit card market and forcing merchants to accept off line debit cards, which carry a much higher transaction fee than online PIN debit transactions. The class action is expected to cover upwards of four million merchants. Constantine & Partners expects the trial to begin early next year.

DEBIT CARD HISTORICAL
(off-line or signature-based debit cards)

Dollar Volume 2001 2000 1999 1998 1997
VISA $324.0b $239.3b $183.8b $134.7b $ 93.7b
MasterCard $ 96.7b $ 62.6b $ 48.2b $ 35.1b $ 16.8b
TOTAL $420.7b $301.8b $232.0b $169.8b $ 110.5b
Source: CardData (www.carddata.com)

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FIC & HNC Merger

Fair, Isaac and HNC Software confirmed this morning they have received a request for additional information from the U.S. DOJ relating to their proposed merger. The companies said they intend to respond promptly and noted that a second request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 during which the DOJ is permitted to review a transaction. However, the companies continue to anticipate the merger will close in the third calendar quarter. On April 29, Fair, Isaac and HNC Software announced plans to merge in a deal valued at $810 million. Under the tax-free merger agreement, HNC stockholders will end up owning approximately 35% of the total outstanding capital stock of the merged company. The merged company will operate under the Fair, Isaac name and Tom Grudnowski will remain the CEO. (CF Library 4/29/02)

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Credit Pace

Revolving credit for this year continues to reach new highs, but growing at half the pace of 2001. During April, revolving credit, 90% of which is credit card debt, topped $711 billion, According to figures released Friday afternoon by the Federal Reserve, revolving consumer credit is growing at an annual rate of 7% compared to 14.2% for April 2001. On an actual dollar basis, Americans added $4.2 billion to revolving credit in April 2002 compared to $9.4 billion one year ago. At the end of April 2002, American consumers were $1.698 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
($billions)
Apr 02 Mar 02 Feb 02 Jan 02 Dec 01 Nov 01 Oct01
GRWTH: 7.0% 4.1 2.2 1.8 -9.7 12.7 -7.1
$OWED: $711.5b 707.3 705.0 702.4 692.4 698.0 686.4

Sep01 Aug 01 Jul 01 Jun 01 May 01 Apr01 Mar01
GRWTH: 0.6% -2.2 -3.7 2.1 4.5 14.2 11.9
$OWED: $692.7 693.5b 698.1 700.3 699.0 697.6 688.2

Source: Federal Reserve; revised figures as of 06/07/02;
For complete historical data visit CardData (www.carddata.com).

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PostCard

Mosaic Software launched PostCard, a complete debit card management and issuer services system. PostCard integrates with the Postilion Realtime Framework to enable processors to service any number of issuers, each with potentially very different requirements. With PostCard, operators on card issuers’ premises can define new cards, update existing cards and delete existing cards. The product also runs a card production staging process on a regular basis, allowing files to be built for the production of payment cards. The files can be used by the PostCard owner or by an independent card production company for the encoding of magnetic-stripe cards or personalization of EMV smart cards.

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Personalized Rewards

Diners Club has introduced the Personalized Rewards program for cardholders with more than 100,000 points, about 20% of its portfolio. Diners Club also offers the flexible option to redeem points for more than just airline miles. Issued in more than 200 countries and 54 local currencies, Diners Club serves more than 8 million Cardmembers worldwide who, in 2001, charged more than $31 billion.

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Consumer Pulse

A recent survey released by Cambridge Credit Counseling Corporation found that 79% of consumers say that if the new bankruptcy law were enacted, they would be less likely to file for bankruptcy if they were in a position to do so. Cambridge representatives also asked callers for the primary reason that they found it necessary to get help with their debts now. Of the 1598 people who answered, 27% said they were frustrated with high bank rates and fees, while 25% said their income has been reduced from a lower salary, less overtime or layoff.

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Memorable Moments

MasterCard International has teamed up with Major League Baseball to create the “Memorable Moments” program which includes a sweepstakes that gets underway July 9th. It is the largest and most comprehensive sports marketing program that major league baseball has ever done. Consumers using their MasterCard card from July 9th through September 20th, will automatically be entered to win a once-in-a-lifetime opportunity to participate in the “Memorable Moments” celebration at the 2002 World Series. The program also gives fans the opportunity to vote on baseball’s “most memorable moment” via in-stadium balloting and on MLB.com. The “Memorable Moments” program will build on MasterCard “Priceless” ad campaign. The “Memorable Moments” program will be unveiled to a national television audience during the All-Star Game Pre-Game Show on FOX July 9th. Barry Bonds will be the lead spokesman. To date, more than 150 members and 350,000 merchant locations have signed on to take part in the integrated marketing program supporting “Memorable Moments. MasterCard has been the Official Card of Major League Baseball since 1997.

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