Three Largest Issuers See Revenue Up 6.5%

Revenues for the three largest U.S. payment card networks were up 6.49% in the second quarter to $6.3 billion by $406million. MasterCard and Visa second quarter global revenues were up 7.7% and 12.4%, respectively. According to CardData (www.carddata.com), MasterCard’s second quarter global net revenues were $1.4 billion, compared to $1.3 billion for 2Q/09. Visa’s global operating revenue rose to $1.7 billion, up $19 million from the year ago quarter. American Express revenue (net of interest) for 2Q/10 was $3.6 billion for its U.S. Cards unit, compared to $2.8 billion one year ago and $3.5 billion in the previous quarter. For complete details on second quarter performance visit CardData (www.carddata.com).

REVENUES ($ millions)
AmEx Visa MasterCard

2Q/08: $3593 $1613 $1240
3Q/08: $3459 $1709 $1338
4Q/08: $3223 $1739 $1225
1Q/09: $3074 $1647 $1156
2Q/09: $2805 $1646 $1280
3Q/09: $2900 $1535 $1360
4Q/09: $3100 $2000 $1300
1Q/10: $3500 $1459 $1300
2Q/10: $3600 $1665 $1400
Note: American Express Figures are U.S. Cards Revenue
Net of Interest; Visa is Global Operating Revenue; MasterCard is Global
Net Revenues. Source: CardData (www.carddata.com)

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MasterCard Posts 2Q/10 Revenue Up 6.7%

MasterCard announced financial results for 2Q/10, with a net income of $458 million and a net revenue of $1.4 billion, a 6.7% increase versus the same period in 2009 (7.9% a constant currency basis). This was thanks in great part to an increase in cross-border volumes of 15.2%; Growth in MasterCard’s gross dollar volume by 8.5% to $656 billion; and pricing changes of ± 4 percentage points. Additionally, worldwide purchase volume was up 7.9% year-over-year to $493 billion; processed transactions increased 0.1% compared to the year ago period to 5.6 billion with 1.6 billion cards in circulation. Net revenue for 1H/10, meanwhile, totaled $2.7 billion for an increase of 9.7% over the year ago period; net revenue was up 9.0%; cross-border volume growth was 13.1%, gross dollar volume growth was 8.4%, and the net impact of pricing changes of approximately 5 percentage points.

2Q/10 NET REVENUES ($ millions)
2Q/08: $1.24
3Q/08: $1.34
4Q/08: $1.23
1Q/09: $1.16
2Q/09: $1.28
3Q/09: $1.36
4Q/09: $1.30
1Q/10: $1.30
2Q/10: $1.40
Source: CardData (www.carddata.com)

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Back to School to Cost Average Family $550

Among consumers with children in preschool through high school, 39% expect to spend more per child on back to school shopping while 41% expect to spend the same this year. With this, the average family of four will spend $550; 39% plan to spend more on back to school shopping this year than in 2009; 63% will have a set budget and virtually all parents; and 94% will look for ways to be resourceful. These findings, according to the latest American Express Spending & Saving Tracker, also show 34% intend to buy electronics, the most common being laptops(18%) with an average ticket price of $530.

BACK-TO-SCHOOL
ITEM ON LIST AVG EXPENSE
Clothing 88% $240
Shoes 86% $100
Supplies 85% $90

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Bank Freedom & MoneyGram Ink Loading Agreements

Bank Freedom of Prepaid Card Holdings has inked a ‘Prepaid Card Program Manager Loading Agreement’ with MoneyGram International. With this, Bank Freedom prepaid debit cardholders, including a 1.6 million member union, will be able to load their prepaid debit cards for $3.95 at any of the over 40,000 MoneyGram agent locations nationwide. The MoneyGram load network allows cardholders to add cash to their prepaid cards in real-time for instant availability of funds. Three Bank Freedom prepaid debit card programs are now eligible to load cash through the MoneyGram network. The three eligible prepaid card programs are CardNow® prepaid debit cards, AFSCME® Advantage, a 1.6 million-member union, and Bank Freedom prepaid debit cards.

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cMoney Promotes New CEO

William Watson has been promoted CEO from CFO with C$ cMoney mobile phone-based payment and money transfer technologies. With this, Watson will oversee the strategic direction of cMoney, work with the board of directors and act as the official corporate spokesperson. A seasoned executive with 20 years of experience providing executive management and leadership to public and private telecommunications and mobile technology companies, Watson will assume his new role immediately. TX-based C$ cMoney allows users to send money and pay for goods and services using a mobile phone and the text messaging system.

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First Commons Bank Launches New Website

First Commons Bank has launched its new website at www.firstcommonsbank.com just after one year of operation. The bank opened for business on July 22, 2009. The website provides access to detailed information on First Commons Bank’s business and personal banking services, savings and lending rates, ATM services, and more. First Commons Bank full-service community bank is dedicated to serving the banking needs of small to mid-sized businesses and individuals in Newton, Wellesley, Waltham, and eastern Massachusetts, including online banking, ATM/debit cards and cash management services.

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DRAGONPAY

Mozcom PayEasy Online Payment System has partnered with Dragonpay to offer online payments to its e-commerce merchants via bank payments. As an alternative payment start-up that offers payment options, Dragonpay provides greater security and convenience than traditional methods like credit cards. By utilizing the Philippine bank network and non-traditional outlets like convenience stores, remittance centers and pawnshops, Dragonpay provides a greater reach to the local potential market given that the Philippines has a very low penetration of credit cards. Buyers can make an online purchase, and carry out the payment by going to a physical brick-and-mortar outlet like a bank or a convenience store.

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MasterCard Names Chief Emerging Payments Officer

Ed McLaughlin has been appointed chief emerging payments officer, MasterCard Worldwide, effective immediately. He will be responsible for leading the development and commercialization of payment product platforms and solutions. Ed will focus on e-Commerce, Mobile, P2P, PayPass/Transit, inControl, Bill Payment, Chip, and the Mobile Payment Solutions joint venture. Most recently having served as group executive for MasterCard’s Franchise Development group, he joined MasterCard in 2005 as group head, Bill Payment and Healthcare. He also served as group vice president, Product and Strategy at Metavante, which he joined in 2002 through the acquisition of Paytrust, and was executive VP with LogicWorks data modeling.

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ACG

While credit card fees in general remain unpopular there is growing acceptance from UK consumers that fees are here to stay, with significant opportunities to target customer segments with fees that they perceive as added value. With this, 26% of credit card users paid activity based fees in the last 12 months; 50% of credit card users indicated that they would be willing to pre-pay fees for additional services like insurances, access to special events, and concierge services; and affluent consumers were more than twice as likely as non-affluent consumers to be interested in pre-paying fees. These findings, according to a recent study published by Auriemma Consulting Group (ACG), also showed 12% of credit card users would be extremely interested in pre-paying for a service package where they would pay a single annual charge to avoid paying activity-based fees like foreign exchange and cash advance fees.

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Cardtronics to Manage Kroger ATMs

Cardtronics USA has entered into a multi-year ATM managed services agreement with Kroger food and drug retailers, expected to be effective by 3Q/10. With this, Cardtronics will provide comprehensive ATM management services in approximately 800 Kroger grocery and convenience store locations, including ATM installation, complete cash management, maintenance, customer service, monitoring, and transaction processing services. Kroger is hoping the newly forged relationship will help make shopping easier for its customers.

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SOCGEN MOBILE

While only 32 million people in M-BRIC currently use mobile financial services, this number is projected to increase to 290 million users by 2015. While every second person owns a mobile device in M-BRIC countries, 70% of their population is currently excluded from the banking sector. As such, according to ‘M-Payments in M-BRIC’-the latest research from Arthur D. Little-, there is great potential for new entrants to actively shape the local m-payment market. The findings conclude Mexico is currently the best option for fast market entry, followed by Brazil, Russia, India and China.

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Visa Launches Online Shopping Tool

Visa has introduced its “Rightcliq” online shopping, focused on
improving retail browsing, checkout on merchant websites, and delivery
tracking. Featuring the “Wishspace” visual wish list to let users
collect, organize and share images of products they’re considering
purchasing, “Rightcliq” also provides merchant offers from popular
brands, a P2P advice section, and auto-fill payment information at POS.
The auto-fill payment information applies personal, payment and shipping
information from the digital wallet, which can hold any credit, debit or
prepaid card. The downloadable “Rightcliq” plug-in lets users add
products of interest to the “Wishspace” with a click and initiates Zero
Liability for fraudulent transactions through Visa payment accounts.

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