NEWS

ccording to an American Express Co. Gift Card survey, 57% of respondents plan to purchase gift cards this year, spending on average $339. This is a 2% increase from last year. Survey respondents plan to spend an additional $679 for other gift items this year. Gift cards maintain a strong ranking as No. 4 on the list of items consumers plan to give, after clothing (68%), toys and games (63%), and music (62%).

Holiday Shopping to Remain Constant

According to the Deloitte & Touche 20th Anniversary Holiday Mood Survey" commissioned by Deloitte & Touche USA LLP, 68% of households are likely to spend the same or more this year than last. While overall spending is expected to increase, spending on gifts is expected to decrease slightly from last year. Sixty-seven percent of respondents indicated they will purchase an average of 4.9 gift cards. Nearly 70% of consumers will spend some of their holiday budget shopping on the Internet, which represents 21% of their total holiday spending. The survey also found that consumers aged 55 years and older plan to spend 22% more on gifts than the average consumer ($735 versus $604).

FMI Urges Court Not to Shield Card Companies From Antitrust Laws

The Food Marketing Institute (FMI) urged the U.S. Supreme Court to reject an invitation from Visa to create an antitrust safe harbor allowing Visa and MasterCard to continue to set credit and debit card interchange fees with their member banks. FMI joined with the Retail Industry Leaders Association in the filing for the case of Texaco v. Dagher, et al. Visa argues that its practice of having member banks collectively fix the price of interchange debit and credit transactions should be immune from challenge.

Smart Card Market to Grow Rapidly

The Frost & Sullivan "Americas Smart Card Market Analysis" report predicts that the smart card industry will grow rapidly in North America, at a 27.7% compound annual rate over the next five years, from the 132.2 million cards shipped in 2004. The report predicts even greater growth in Latin America, a 59% compound annual growth rate over the next five years, from 136.4 million cards shipped in 2004.

Wachovia, MBNA End Card Agreement; Wachovia to Re-enter Card Business

MBNA Corp. and Wachovia Corp. announced the end of an agreement under which MBNA issues Wachovia-branded credit cards. MBNA will retain and service the existing Wachovia-branded credit card loans and will begin issuing replacement credit cards. The decision to end the agreement comes in the wake of the MBNA shareholder-approved merger between MBNA and Bank of America. The merger is expected to close in early January 2006. Wachovia will re-enter the credit card market as a direct issuer beginning in January.

ANNOUNCEMENTS

ETA Accepting Nominations for Board

Electronic Transactions Association (ETA) is seeking industry professionals to serve on its board of directors. Those interested in serving on ETA's board or recommending another industry professional for service should contact the association at info@electran.org or 800-695-5509. The deadline for submitting applications is Dec. 2, 2005.

First Data Hires Advisor to Review Card Business

First Data Corp. engaged Morgan Stanley to assist the company in exploring options for its U.S. credit card issuing business. The company reports that the business continues to dampen the growth rates of the entire company. It also announced that its board of directors approved an additional share repurchase program of up to $20 million in common stock. The company has $800,000 remaining on a previously approved $10 million share repurchase authorization.

Hypercom Receives Certification

Hypercom Corp.'s Optimum L4105 terminal received certification for use within the Interac Direct Payment network in Canada. Certification means that retailers can use the L4105 in Canada, and that those with stores in both the United States and Canada can establish integrated cross-border payment systems.

New Edge Networks Expands Direct Connections; RBA Roster Tops 100

New Edge Networks is expanding its direct connections to bankcard payment processors to also include other retail suppliers and clearing houses. The company is building direct connections to back-office online solution providers, payroll services, health benefit management companies and ATM network providers, among others. In other news, the company's Retail Broadband Alliance roster now includes more than 100 member companies. NOVA Information Systems Inc. became the 100th member. A list of member companies is available at www.newedgenetworks.com/solutions/rba/.

PaymentOne Among Fastest-growing Companies

Inc. magazine added PaymentOne Corp. to the Inc. 500 list of fastest growing private companies. PaymentOne achieved 321% growth over the past three years. To be eligible for this year's list, companies had to be U.S.-based, independent and privately held through their fiscal year 2004.

Peppercoin Completes $10 Million Funding

Peppercoin completed its $10 million, second round of funding with an additional $2 million investment from Total Technology Ventures. The second round includes previous investor Pod Holding.

Visa Pursues Small Payments

Visa U.S.A. unveiled its strategy to accelerate Visa card acceptance and consumer usage at traditionally cash-heavy, smaller ticket businesses. Visa will offer lower debit interchange rates to acquirers. Effective April 2006, Visa will allow merchants to forgo obtaining a cardholder's signature for authorized transactions less than $25. This signature exception will be available in merchant segments where fraud has been historically low.

PARTNERSHIPS

Certegy Forms Agreement With Canada's Home Trust Co.

Certegy Card Services Inc. announced a five-year agreement with Home Trust Co. of Canada. The agreement marks a first for Certegy in establishing a card-processing relationship across the northern U.S. border.

Digital Matrix Systems Teams With ID Analytics

Digital Matrix Systems Inc. partnered with ID Analytics Inc. to integrate ID Analytics ID Score into three DMS products. ID Score calculates the risk associated with an identity at any point in the customer lifecycle.

First Data Extends Agreements

The PNC Financial Services Group Inc. and First Data announced the five-year extension of their PNC Merchant Services alliance agreement that began in 1996. The new agreement includes PNC's purchase of 20% of the merchant alliance, increasing its ownership to 60%. First Data also extended its Australian alliance for merchant services with BankWest, part of HBOS Australia. First Data will provide management of BankWest-branded ATMs within 7-Eleven stores, including provision of ATM hardware, transaction switching and processing, maintenance, and regular cash replenishment.

Lunarpages Selects e-onlinedata

Lunarpages formed a strategic alliance with e-onlinedata to provide Lunarpages Web hosting customers with Internet credit card processing services. Merchants will be able to authorize and settle credit card orders directly from their e-commerce storefront and virtual terminal, using the Authorize.Net Internet protocol payment gateway service.

Q Comm Expands Relationship; Signs Broker Referral Agreement

Q Comm International Inc. formed an expanded relationship with Hargray Wireless to provide bill payment at the POS for Hargray's postpaid wireless, Internet access and long distance telecommunications.

Additionally, Q Comm will add Hargray's prepaid long distance product to its product library. Q Comm also entered into a broker referral relationship with prepaid phone card provider CCI Communications. CCI will begin referring its new resellers to Q Comm for prepaid POS solutions.

Wawa Purchases 2,000 Hypercom Terminals; Will Accept PayPass

Grocer Wawa Inc. purchased and installed more than 2,000 Hypercom Optimum L4100 terminals at 540 retail stores in Delaware, Maryland, Pennsylvania and Virginia. Wawa also named Hypercom its preferred supplier of card payment devices. The chain will also begin accepting MasterCard PayPass in all stores.

ACQUISITIONS

First American Payment Systems Acquires Govolution

First American Payment Systems LP recently acquired Govolution Inc., a provider of electronic payment technology and services to the public sector.

The company enables federal, state and local governments and their depository financial institutions to electronically process consumers' credit, debit and automated clearing house payments.

Valutec Card Solutions Acquires Mellennia

Valutec Card Solutions Inc. acquired Mellennia, a division of Prime Time Communications Inc. Mellennia provides stored value solutions to merchants in the retail, financial, healthcare and government markets.

APPOINTMENTS

Dunn Joins TNS

Transaction Network Services Inc. (TNS) appointed Thomas M. Dunn to head strategic account development for the POS division. Dunn brings nearly 30 years of industry experience to TNS. He is the former President, CEO and co-founder of CardPoint Inc. Prior to CardPoint, he spent 13 years with Global Payments Inc. and served that organization as Chief Operating Officer.

NAOPP Appoints Two New Directors

The National Association of Payment Professionals (NAOPP) appointed Ty Rosean MLS Director and Jim Britt Director at Large. Rosean, an MLS based in Montana, will also chair the association's Membership Committee. To volunteer to work on the Membership Committee, e-mail tyr@bpsmerchant.net .

Britt, an MLS based in Florida, has more than four years' experience in the payment processing industry.

Abanco Appoints Senior Executive

Abanco International LLC appointed Harvey Stone Vice President of Sales. Stone has held executive positions with Pay by Touch, CES, First Data, CPS and Concord.

In this newly created position, he will be responsible for driving the company's strategic sales direction, world-wide payment processing sales and ISO operations.