NEWS

BJ's Settles FTC Charges

BJ's Wholesale Club Inc. agreed to settle Federal Trade Commission (FTC) charges that its failure to take appropriate security measures to protect customer information violated federal law. The agency alleges that BJ's failed to encrypt consumer information transmitted or stored on computers, created unnecessary risks by storing information for up to 30 days, and stored the information in files that could be accessed using default user IDs and passwords.

According to the FTC, criminals used this information to make millions of dollars worth of fraudulent purchases. The settlement will require BJ's to implement an information security program and obtain audits every two years for the next 20 years.

Security Worries Change How People Use Internet

The Conference Board reported that 13% of all Internet users say they or a member of their household has been a victim of identity theft. According to The Consumer Internet Barometer, produced by The Conference Board and TNS NFO, consumers are most wary of online financial transactions, followed by online purchases. More than half say their level of concern has grown over the past year. Nearly 70% installed additional security software on their PCs, 54% now "opt-out" of special offers, and 41% purchase less online. Identity Fraud Safety Scorecard Released

Javelin Strategy & Research released the results of the "Identity Fraud Safety Scorecard for Credit Card Issuers." The report ranks the online identity fraud prevention, detection and resolution capabilities of 39 credit card issuers.

The results show that issuers differ significantly in areas that influence cardholder adoption, usage and loyalty. The top five providers were Discover Financial Services, First National Bank of Omaha, Citibank, Bank of America Corp. and American Express Co. (AmEx). According to the report, the annual volume of identity fraud is $52.6 billion with 9.3 million victims.

MasterCard Analyzes Affluent Consumers

MasterCard International announced a report that describes factors shaping purchasing decisions among households earning more than $100,000 annually. The report is based on the Yankelovich MONITOR 2004, an annual study of consumers. According to the report, affluent consumers demand heightened levels of customer service.

Nearly three-quarters will walk out of a store if mistreated, even if the store has exactly what they are looking for. More than half have refused to buy a particular product or service during the past year as a form of activism. Among those online, the most popular activities are getting travel information (67%, up from 51% in 2000), shopping for products or services (63%, up from 44%), and purchasing airline tickets (52%, up from 37%).

ANNOUNCEMENTS

Credit Union Returns $6 Million to Members

Credit Union 24 paid its network-participating credit unions nearly $6 million in dividends and rewards for 2004. The disbursement covers both a $2.3 million patronage dividend declared by the Credit Union 24 Board of Directors, and more than $3.5 million earned by credit unions through the network's Platinum POS Rewards program.

EMG Opens Chicago Office

Eliot Management Group (EMG) recently opened its 17th branch office in Chicago. This location will provide the area with sales, service and support for EMG's credit card and electronic payment processing services.

The expansion is part of EMG's continuing "on-market" service approach that began on Aug. 20, 1999. The company's goal is to secure office space in all EMG markets.

First Community Bank Selects Phoenix System

First Community Bank, NA, of San Benito, Texas, selected Harland Financial Solutions' Phoenix System to fulfill its bank core processing needs. The bank chose to outsource the operation of the system through Harland Financial Solutions' Enterprise Services Center in Cincinnati, Ohio.

Heartland Payment Systems Celebrates 100,000th Customer

Heartland Payment Systems Inc. reached a record milestone recently by exceeding its 100,000th active customer, King Wang restaurant. Heartland has experienced rapid growth in the restaurant industry throughout the past several years. Restaurant merchants now account for 33% of its customer base.

ICE Launches ISO Rep Program International Card Establishment Inc. (ICE) launched its ISO Rep program. The company recently formed an agreement to handle all of the credit card processing for Foresite Merchant Solutions Inc.

Foresite is currently opening 200 new merchant accounts per month and expects to build its volume to more than 500 new merchant accounts monthly by year end. ICE is enlisting qualified ISOs and bankcard agents to enhance its portfolio.

United Cash Solutions Relocates

United Cash Solutions, the ATM division of United Bank Card Inc. (UBC), relocated its headquarters from Tucson, Ariz. to Beverly, Mass., a Boston suburb. The move will enable the ATM processor to accommodate up to 40 employees. The new facility is 10,000 square feet and will include space for expanded customer service and technical support departments.

UBC Implements New Bonus Programs

UBC implemented weekly bonus programs for its ISO/agent partners. ISO/agent partners now have an opportunity to earn an additional $30 to $40 bonus on every approved Discover merchant.

UBC also initiated a conversion bonus that rewards partners for switching existing merchants from a competitor to UBC. UBC will pay ISO/agent partners $150 for every merchant processing a minimum of $20,000 per month in Visa U.S.A/MasterCard volume. Additionally, UBC upgraded its $100 Free Equipment Program bonus to weekly payment.

PARTNERSHIPS

AmEx Teams With Sovereign Bank and JetBlue

Sovereign Bank will be the first retail bank to offer AmEx-branded credit cards issued by MBNA Corp. The no-fee Sovereign Bank Rewards AmEx Card includes the Sovereign Rewards program, which offers redemption options such as cash, travel, gifts and merchandise. Card members will also have access to AmEx travel service offices, emergency assistance service and VIP concierge service.

In other news, AmEx and JetBlue Airways formed an agreement to issue a co-branded credit card. The agreement is the first of its kind for JetBlue. The card will allow cardholders to earn awards that they can convert to TrueBlue points redeemable for JetBlue flights.

BluePay Exclusive Provider for CartWIZ

BluePay Inc. teamed with Elemental Software Inc. BluePay will become the exclusive payment gateway and merchant account provider for Elemental Software's shopping cart software product, CartWIZ.

First Data Announces Two New Partners

Banca Nazionale del Lavoro (BNL), one of the largest banking groups in Italy, and First Data Corp., will create a joint venture to provide merchant acquiring services for Italian merchants. Services include the technical and commercial management of POS payment transactions.

In addition, First Data and International Card Services (ICS), a Dutch card issuer and acquirer, will launch an alliance for merchant and ATM acquiring in the Dutch market. ICS has relationships with more than 90,000 merchants in the Netherlands for the acceptance of Visa-branded cards. The joint venture will further develop these relationships and offer services to new merchants.

Hershey Selects Cygnus

Cygnus eTransactions Group Inc. signed a contract with Hershey Entertainment and Resorts Co. (HE&R) to provide online ticketing technology and services for HERSHEYPARK and Dutch Wonderland Family Amusement Park.

Cygnus will develop two online ticket stores for HE&R, which will use Cygnus' e-commerce engine, print technology and payment processing services.

EFMARK Wins Contract

EFMARK Premium Armored formed an agreement with Fiserv EFT to provide maintenance and cash replenishment services for 4,000 ATMs in 7-Eleven Inc. retail stores nationwide. The multi-year deal expands an existing relationship between EFMARK and Fiserv EFT.

CVS Purchases Hypercom Terminals

CVS/pharmacy named Hypercom Corp. its preferred supplier of card payment terminals. The Hypercom terminals are configured to CVS/pharmacy specifications and accept magnetic stripe cards, smart cards, and contactless cards or key fobs.

Payment Data Systems to Provide Thalassa Services

Payment Data Systems Inc. (PDS) signed a multi-year agreement in which Thalassa will serve as an exclusive referrer of PDS solutions and will use the company's services for its nationwide roll-out of 10,000 kiosks. As part of the agreement, PDS will also have non-exclusive marketing and distribution rights to the Debit Card Load Kiosk, delivered by Thalassa.

ACQUISITIONS

HSBC to Acquire Credit Card Portfolio

HSBC Retail Services will acquire Bon-Ton Stores Inc.'s portfolio of private label credit card accounts, including outstanding balances. Under the multi-year agreement, Bon-Ton will receive cash for the outstanding balances, plus a premium. Bon-Ton will also participate in the revenue generated by credit sales.

WildCard Systems Acquired by eFunds

The company eFunds Corp. signed an agreement to acquire WildCard Systems Inc., a privately held provider of prepaid and stored-value solutions. The companies signed a distribution agreement in November 2004 and have since signed two deals under eFunds' existing alliance with MasterCard. The purchase price consists of an upfront payment of $228.8 million plus an earn-out of up to $58.8 million.

First Data Will Acquire European Processor

First Data plans to acquire EuroProcessing International, a card processor in Central and Eastern Europe. EuroProcessing is active in 10 Central and Eastern European countries and has relationships with Western European banks. The company supports these banks with services including ATM and POS transaction processing, debit and credit card management and electronic top-up of prepaid mobile airtime.

APPOINTMENTS

TNS Appoints Vice President

Transaction Network Services (TNS) appointed Franz Bader to head its Central and Eastern European operation. As Vice President, Bader will develop TNS' presence in Austria, Poland, Hungary and the Czech Republic in addition to establishing relationships within new markets and expanding the customer base. Bader most recently served as head of international wholesales with Vienna-based Telekom Austria.

American Bank Note Holographics Adds to Team

American Bank Note Holographics Inc. appointed Mark J. Bonney Executive Vice President and Chief Financial Officer; Ron G. McClenny Vice President of Engineering and Quality Assurance; and Dr. John Hynes Vice President and Chief Technology Officer.

Bonney has served on the company's Board of Directors since 2003. He was previously CFO of Zygo Corp. McClenny was previously Vice President and General Manager of JVC Magnetics America. He has more than 25 years of experience in high quality factory operations. Since 1990, Hynes has served as President of Card Based Information Technologies Inc.

Alogent Names Three Executives

Alogent Corp. recently named three additions to its senior management and operations teams. The company appointed Michael Hackney Executive Vice President of Business Development; Richard Gosk Vice President of Customer Support; and Chris Styga Vice President of Sales Operations.

Hackney joined Alogent from Ingenico, where he most recently served as Vice President of Business Development. Gosk was previously Vice President of Operations and Customer Support for Fundtech Corp. and Director of Customer Support for CheckFree Corp. Styga has more than 25 years of experience in check processing and treasury management.

CO-OP Network Names Hollen CEO

CO-OP Network appointed Stanley C. Hollen Chief Executive Officer. Hollen is the former President and CEO of Liberty Enterprises. He has spent his entire career in the credit union arena, first serving on a credit union board at age 19. Hollen previously served as Vice President at Construction Equipment Federal Credit Union and CEO of The Golden 1 Credit Union.

Moscicki Intelligent Results CEO

Intelligent Results named John Moscicki CEO. Kelly Pennock, Co-Founder and former CTO, remains President of the company. Moscicki comes to Intelligent Results with more than 20 years of management and technology experience, most recently at Columbia Ultimate, where he served as President and CEO.

Card Express Inc. Announces Executives

Judy Pappalard and Marilyn Sproule joined Card Express Inc. (CardEx)'s executive team. Pappalard will serve as Vice President of Sales, reporting from CardEx's new Pittsburgh, Penn. office. Pappalard will oversee direct sales for corporate incentive and recognition programs, as well as its Agent Bank Program. She formerly held positions with Mellon Bank and �lan Financial Services.

Sproule, also based in Pittsburgh, is CardEx's new Vice President of Relationship Management. She is charged with the overall management and expansion of the company's customer service areas and call centers. Sproule most recently served as a Vice President at the STAR Network.

BOTTOM LINES

• As part of a pilot program, The Home Depot Inc. plans to open convenience stores in the parking lots of four of its Nashville, Tenn. locations, the "Dallas Morning News" reported.

• Retail space will serve as an integral part of redevelopment at Ground Zero in New York City, "The Wall Street Journal" reported. Retail locations at the site prior to Sept. 11, 2001 were some of the most profitable in the country.

• POS technology company MICROS Systems Inc. plans to expand its presence in hotels and restaurants around the world. The company's annual sales tripled between 1996 and 2004. MICROS will also diversify into new arenas such as retail, healthcare and casinos.