Visa Holds Up the Best in Q2 GDV Contraction

Payment card gross dollar volume in the U.S. declined 7.2% at mid-year.
Among the four major card networks Visa fared the best with only a 4%
year-over-year decline, compared to a 16% decline for American Express.
MasterCard was down 10% at mid-year while Discover was off by 5%.
Combined, the four major card networks posted $858 billion in second
quarter GDV, compared to $920 billion for 2Q/08. Visa had $505 billion
in Q2 GDV while MasterCard posted $245 billion, American Express $84.1
billion and Discover with $24.3 billion. For the third quarter
MasterCard reported an 8% decline to $247 billion. American Express was
down 13% to $85.2 billion and Discover was down 16% to $24.0 billion
for the third quarter. Visa will report third quarter data at the end of
the year. Discover’s third quarter ended August 31st. For complete
details on U.S. payment card performance visit CardData (www.carddata.com).

GROSS DOLLAR VOLUME
2Q/08 2Q/09
Visa $526 billion $505 billion
MC $268 billion $245 billion
AmEx $100 billion $ 84 billion
Disc $ 26 billion $ 24 billion
Source: CardData (www.carddata.com)

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Heartland Wants Merchants to Contact VeriFone

VeriFone says Heartland Payment Systems has filed a court briefing in the Superior
Court of New Jersey saying it now expects its merchants using e-payment provider VeriFone systems to contact VeriFone
directly for support. Heartland merchants are contacting VeriFone for free
continuous support. VeriFone has informed Heartland that it will cease
support of VeriFone systems connected to the Heartland network at end of
day, December 31, 2009. VeriFone estimates that approximately 75% of Heartland merchants depend
on VeriFone for their payment processing technology.

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Card Issuers Look Beyond Co-Branding in 2010

Payment card issuers are exploring growth opportunities in relatively
untapped segments and are finding inspiration in emerging global trends,
namely for healthcare-related cards, chain supermarkets and drug stores.
The millions of consumers enrolled in health plans, the affluent
consumer and the under-banked represent a huge potential new audience
for co-branded and affinity cards as frequent-usage, benefits-oriented
card holders. This, according to the Packaged Facts “Co-Branded and
Affinity Credit Cards in the U.S., 3rd Edition” report, also shows
co-brand programs are generally poised to take advantage of affluent
consumers’ interest in being engaged in a rewards and loyalty value
proposition relevant to their lifestyle while the under-banked and the
unbanked remain a greatly underserved group. Packaged Facts projects the
CAGR on transaction values between 2009 and 2012 will approach 5%.

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GEMALTO ECO

Gemalto digital security is expanding its eco-friendly offering to
banking, telecom and government customers worldwide to reduce its
overall environmental impact. In doing so, Gemalto will be providing
chlorine-free manufacturing materials, using non-chlorine polymers in
its Polyethylene Terephthalate Glycol (PETG) based card products; ABS
molded cards; PC TWIN Reader smart card reader; and small form factor
cards. The company also will be providing Hazardous substance reduction
and promote renewable and recycled material with its Polylactic acid
(PLA) card using material derived from corn, sugarcane or potato starch;
paper-based materials for short-term use, such as scratch cards;
“ECOPack” Eco friendly packaging made of 100% recyclable materials for
Gemalto fulfillment services and waste material from manufacturing
process being recycled and used in the production of sailboat masts.
Additionally, Gemalto is certified with “ISO 14001:2004” certification
and the “KEMA” certification for power consumption.

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UK Credit Card ABS Sept Charge-Offs Hit 11.4%

Fitch Ratings says in its forthcoming quarterly Credit Card Movers & Shakers (UK) report, that the performance of the UK credit card master trusts continued to deteriorate during Q309, reflecting the negative impact of the current recession on cardholders’ ability to meet payments. The agency retains its negative outlook for the sector, in light of recent transaction performance and its expectations for UK economic performance.

The Fitch Charge-Off Index reported its eighth consecutive monthly increase, reaching a new high of 11.4% in September 2009. The elevated level of charge-offs was driven most notably by MBNA’s (‘A+’/Stable/’F1+’) CARDS I and CARDS II trusts. In contrast, the Fitch Delinquency Index recorded its fourth consecutive monthly decrease. At 4.8% for September 2009, delinquency levels were in line with those last seen at the start of 2009. The gradual improvement in delinquencies is a potential positive factor; however, Fitch remains concerned by the ongoing impact of the current economic environment, and does not expect to see improved charge-off performance in the near term.

The Fitch Monthly Payment Rate Index and Fitch Yield Index finished the quarter positively, increasing 0.6% and 0.8%, respectively, relative to June 2009. However, the increased charge-offs caused the Fitch Excess Spread Index to fall by 0.3%.

The high charge-off levels are consistent with personal insolvency levels. Recent data shows that, for Q209, personal insolvencies in England and Wales totalled 33,073, an increase of 7,290 over Q208. The 2009 data included 1,978 insolvencies under the new Debt Relief Order scheme, introduced in April 2009.

A copy of the latest quarterly report, entitled ‘Credit Card Movers & Shakers (UK) Q3 2009 Performance’, will be available early next week, on the agency’s website, www.fitchratings.com.

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MYMAX NFC

INSIDE Contactless advanced, open-standard contactless and NFC chip
technologies has partnered with TWINLINX NFC technology platforms and
applications to collaborate payment solutions. In doing so, INSIDE will
integrate its secure components in the TWINLINX “MyMax” NFC sticker to
gain type approval from major bank card brands while supporting
TWINLINX’s initial go-to-market initiatives as part of INSIDE’s
initiative to jumpstart the mobile payments market in 2010. The “MyMax”
NFC sticker, a thin electronic sticker designed to upgrade existing and
future Bluetooth phones with NFC functionality for payment, transport,
loyalty, access control and smart posters, is incorporating the
“MicroPass” payment platform for quick NFC payment and communication
capability. Approved by all major payment brands, “MicroPass” is the
most widely adopted contactless payment platform.

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PayPal X Developer Challenge is Underway

Alternative payment provider PayPal is offering a $75K prize to developers by kicking off the “PayPal X Developer Challenge”.
Contestants must build their applications using the PayPal X application
programming interfaces (APIs). The challenge: create the most innovative
payment application for businesses in areas such as services, social
media, gaming, mobile and consumer electronics. The first and second prizes are $50,000 and $25,000 in cash,
respectively, and $50,000 and $25,000 in waived PayPal transaction fees. The winners will be announced in March. Entries must
include a link to a demo application and an accompanying video
describing how it would work.

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WESTERN UNION & PSBC

Western Union money-transfer services has renewed agreements with the
Postal Savings Bank of China (PSBC) to provide its services. PSBC
currently has more than 20,000 locations offering Western Union Money
Transfer services throughout China and has been a Western Union Agent
since 2001. PSBC’s locations stretch beyond the major cities and into
the country’s rural regions, giving consumers even greater accessibility
to money-transfer services while Western Union has remained committed to
the China market for over 10 years. Western Union provides a dependable
financial lifeline between consumers and their family members overseas
with fast, reliable and convenient services.

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Oct Consumer Bankruptcy Filings Leap from Sept

The sequential rise in bankruptcy filings during October gives more evidence the U.S. economy is still sputtering. Consumer bankruptcy filings rose 9% and business bankruptcy filings rose 7% between September and October. Year-on-year consumer filings are up 28% in October and represent the fifth highest month since the 2005 reform laws. In September, filings rose at a 41% annual clip, compared to a 24% annual pace in the prior month and 34% in August. According to the American Bankruptcy Institute and the National Bankruptcy Research, consumer filings totaled 135,913 in October, compared to 124,790 in September and 106,266 in October 2008. Chapter 13 filings constituted 28.5% of all consumer cases in October, slightly higher than September. According to the Administrative Office of the U.S. Courts, total filings in the second quarter of this year hit 381,073, compared to 330,477 for the first quarter and 276,510 one-year ago. Bankruptcy filings for the 12-month period ending June 30th, were up 35% over bankruptcy filings for the 12-month period ending June 30th, 2008. Consumer filings for the 12-month period ending June 30th, totaled 1,251,294, up 34% from the same period one-year ago. ABI forecasts that total bankruptcies this year will exceed 1.4 million. (CF Library 8/27/09)

BANKRUPTCY FILINGS
Oct 08: 106,266
Nov 08: 99,925
Dec 08: 84,926
Jan 09: 88,773
Feb 09: 98,344
Mar 09: 121,413
Apr 09: 125,618
May 09: 124,838
Jun 09: 116,345
Jul 09: 126,434
Aug 09: 119,874
Sep 09: 124,790
Oct 09: 135,913
Source: ABI/NBKRC; CardData.com

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ROOTS & MASTERCARD

The focus of a major MasterCard TV ad campaign, Roots is set to unveil
its new “Canada Collection By Roots” with a fashion show and media event
in Toronto on Thursday, Nov. 5 at 6 pm. Inspired by the country’s
history and physical beauty and the athletic heritage of Roots, “Canada
Collection By Roots” features clothing, accessories and leather goods
for the entire family. A portion of proceeds from all purchases of the
collection will benefit the “Right To Play” Canadian-based humanitarian
organization that improves the lives of almost 700,000 children weekly
around the world suffering from war, poverty, and disease. The
MasterCard TV ad campaign was filmed in Africa to highlight its work and
explains how it will benefit from the Canada Collection By Roots.

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Gaming Industry Remains Challenging for GCA

Global Cash Access reported revenues of $164.3 million, a decrease of 11% over 3Q/08. Income from continuing operations in the third quarter was $13.1 million, down 5% from the year ago quarter.
Business conditions in the gaming industry clearly remain challenging says GCA. During the quarter Global Payments entered into agreements to provide MI-based FireKeepers Casino, MN-based Fortune Bay Resort Casino, RI-based Twin River Casino and NY-based Mohawk Bingo Palace & Casino with its comprehensive suite of cash access products. Also, GCA executed a processing services agreement with TSYS Acquiring Solutions. The Company now believes that revenue will be between $677 and $681 million for the year, somewhat above the $671 million reported in the prior year. For complete details on GCA’s latest results visit CardData (www.carddata.com). (CF Library 8/25/09; 10/13/09)

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MC EUROPE 3Q/09

MasterCard Europe has announced its 3Q/09 operating results for the
Europe region with gross dollar volume having increased 0.2%; purchase
volume having grew 1.6%; purchase transactions increased
5.2%, and cash transactions decreased 2.7% since the year ago period.
From 1 July until 30 September, European cardholders made more than 1.7
billion purchase transactions with their MasterCard-branded cards, 197
million MasterCard cards had been issued by MasterCard customer
financial institutions across Europe (up 1.9 % since 3Q/08) and were
accepted for payment at 8.7 million locations in the region and 29.4
million locations worldwide. Achievements include Mastercard’s extended
partnership with the Royal Bank of Scotland, Citi, Egg (with the “Money
World MasterCard and Tesco Bank. MasterCard’s prepaid business continues
to gain ground in the Italian payments market with the the “Social Card
with Poste Italiane” and MasterCard’s pioneering work in the ‘lean card’
segment, with prepaid cards that work as an alternative to a current
account. Maestro acceptance reached an important milestone in Belgium
this summer with the debut of e-commerce acceptance in the country
through the support of KBC, CBC and Centea banks.

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