Digital Insight Launches FinanceWorks

Intuit’s Digital Insight is now offering the “FinanceWorks ” online financial management solution to banks and credit
unions not currently using Digital Insight’s Internet banking platform. Financial institutions offering FinanceWorks have already found that
providing online financial management capabilities can deliver tangible
business benefits to banks and credit unions. Data on early FinanceWorks
users indicates they are up to four times more profitable than the average bank or
credit union customer. They have twice as many accounts, nearly 30% higher loan balances, and tend to have higher incomes.
Customers log in to online banking twice as often as active online banking
users, and are more active online bill payers and are so highly satisfied with the online financial management
experience that 78% would recommend their financial institution
based on the solution.

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Smart Card Alliance Elects New Leaders

The Smart Card Alliance has announced its 2009-2010 board and seven-member executive committee.
The committee includes the Chair, Neville Pattinson of Gemalto; Vice chair Bryan Ichikawa of Unisys; Treasurer Bob Merkert of CardLogix;
Secretary Wendy Humphrey of First Data Corporation; Assistant Treasurer Willy Dommen of Booz Allen Hamilton; Assistant Secretary John McKeon of IBM and
Technology Vice Chair Bob Gilson of the U.S. Department of Defense/Defense Manpower Data Center. Elections were
held during the 8th Annual Smart Cards in Government Conference, taking
place this week through October 30th at the Washington DC Convention Center.
The Smart Card Alliance is a not-for-profit, multi-industry association
working to stimulate the understanding, adoption, use and widespread
application of smart card technology.

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NCR Opens New Georgia ATM Plant

NCR Corporation has opened its new ATM manufacturing facility in Columbus, Ga. with the rollout of
“NCR SelfServ” ATMs. In less than five months after announcing plans to build
a domestic manufacturing facility, NCR was able to open the 350,000
square-foot facility and begin production of ATM machines for its North
American customers. Approximately 870 jobs will be created the new site over
the next three years. In addition, NCR’s campus-like ecosystem between its partners, suppliers
and Georgia’s academic institutions will help drive and improve
cross-functional collaboration, training and innovation — ensuring that
NCR’s manufacturing process is cutting edge.

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DAHABSHIIL ECASH

Dahabshiil international money transfer has debuted its “Dahabshiil
eCash” debit card service in Somalia to ease making and receiving
payments. “Dahabshiil eCash” is designed to allow users to pay for goods
and services at any official Dahabshiil merchant with a POSand is
available to those with a Dahabshiil account and debit card. These
merchants include shops, restaurants, hotels and petrol stations located
throughout the country and there are plans in the works to expand its
eCash service to utility providers and educational institutions to allow
students to pay for tuition fees. Although the debit card requires both
PIN and signature authorization like that of a traditional debit card
offering, transactions are made over the internet connection, which
means that the money is transferred from the card holder’s account to
the merchant’s account immediately.

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Average U.S. Credit Card Ticket Falls Nearly 9%

The average purchase transaction on a Visa or a MasterCard-branded
credit card has declined 8.2% over the past twelve months from $90.38 to
$82.56 in the U.S. The average Visa credit card transaction declined
7.6%, from $91.10 for 2Q/08 to $84.14 for 2Q/09. (Visa released second
quarter data this week.) The average MasterCard credit card transaction
dropped 10.2% over the same period, falling from $89.31 to $80.16.
(MasterCard will release third quarter data next week.) According to
CardData, Visa posted $192 billion in purchase dollar volume with 2.28
billion transactions for 2Q/09, while MasterCard posted $120 billion in
purchase dollar volume with 1.50 billion transactions for 2Q/09. The
combination of the recessionary impact on spending and the rising shift
to debit cards has been driving the decline in credit card PDV. Gross
dollar volume for Visa credit cards declined 15% between 2Q/08 and
2Q/09. MasterCard credit card GDV declined 18.7% during the same period.
Combined, debit card GDV was up 5.4% at mid-year. For the latest Visa
and MasterCard statistics visit CardData (www.carddata.com).

AVERAGE CREDIT CARD PURCHASE
Visa MasterCard
2Q/08: $91.10 $89.31
3Q/08: $89.98 $88.34
4Q/08: $85.29 $83.43
1Q/09: $84.49 $81.47
2Q/09: $84.14 $80.16
Source: CardData (www.carddata.com)

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USA Technologies Wins its 71st Patent

Cashless technology provider USA Technologies has been issued its 71st patent.
The patent for invention number 7,593,897 is for a wireless system for
communicating cashless vending transaction data and vending machine
audit data to remote locations. The patent covers the technology in USAT’s ePort cashless payment system
for accepting financial card identification data as payment for items
vended, and an interactive interface, protocol, and support for
interconnecting the system to a computing platform. It further covers
the ePort technology to accept card ID data, authorizes the validity of
the card, and executes and settles the transaction payment for the goods
and services that are vended.

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AUGUST LEI

The Conference Board Leading Economic Index (LEI) for Mexico increased
by 1.1% while The Conference Board Coincident Economic Index (CEI)
declined 0.6% in August. With the 1.1% increase in August, the
Conference Board LEI for Mexico now stands at 111.3 (2004=100) after
having increased 1.2% in July and 2.2% in June. Meanwhile, the CEI
posting for the month was preceded by a 0.4% increase in July, a 0.1%
decrease in June and now stands at 105.6 (2004=100). LEI results for the
month were attributed to positive gains in 5 of the 6 components, which
include US refiners’ acquisition cost of domestic and imported crude
oil, the (inverted) real exchange rate, stock prices, and net
insufficient inventories while the construction component decreased in
August and the (inverted) federal funds rate
remained unchanged.

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Exchange Rates Dampen Affinion Q3 Revenue Growth

Loyalty and credit card enhancement specialist Affinion reported
net revenues declined 1% for the third quarter to $361.1 million. The net loss for the quarter was $16 million, compared to $20 million for the year ago quarter. The decrease in net revenues was due to a decline in North American products net revenue, as a higher cost of insurance was only partially offset by a modest increase in International products net revenue. Excluding the negative impact of foreign-exchange in the quarter, net revenues would have grown 1.1% from 3Q/08. In North America Membership products revenue increased 0.9% to $184.8 million. Insurance and Package products revenue decreased 5.7% to $89.7 million. Loyalty products revenue decreased 6.7% to $19.6 million. International revenue increased 1.6% to $67.8 million. For more details on Affinion’s latest performance visit CardData (www.carddata.com).

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Credit Card ABS Yield Continues to Remain Strong

Based on current metrics among credit card-backed securities charge-offs will likely remain elevated in the coming months based on rising delinquencies. Fitch also reports that gross yield continues to be strong relative to historical data as a result of discount options and repricing initiatives in various trusts. During October, gross yield decreased 27 bps to 19.39%. Compared to last year, gross yield is up 254 bps or 12%. During the month, Fitch’s “Credit Card Chargeoff Index” declined 77 bps to 10.75%, marking just the third month-over-month improvement. Measured by Fitch’s 60+ day delinquency index, late payments rose 16 bps to 4.22% after a 20 bp dip last month. Late stage delinquencies are running 33% higher on a year-over-year comparison. Early stage late payments increased for the month as well, with 30+ day delinquencies rising 13 bps.

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Without V/MC AmEx and Discover Have 2009 Losses

While American Express and Discover posted credit card profits for the third quarter, they were propped up by Visa and MasterCard. Discounting the antitrust litigation settlement payments, AmEx had an $81 million pre-tax loss and Discover’s pre-tax profits were $441 million for 3Q/09 in their U.S. Card segments. According to CardData, since the third quarter of last year Discover received $2.28 billion and American Express received $1.1 billion from Visa and MasterCard. Over this five quarter period Discover’s pre-tax profits were actually $75 million. Even with the V/MC payments, American Express lost $1.03 billion pre-tax for its U.S. Card business. For 2009, AmEx has lost $1.17 billion and Discover has lost $170 million. Discover’s third quarter profits were driven by lower interest expense and lower provision for loan loss. For complete details on American Express and Discover third quarter performance visit CardData (www.carddata.com).

DISCOVER U.S. CARD PROFITS
($ millions)
REPORTED V/MC PYMNTS
3Q/08: $245 0
4Q/08: $646 $846
1Q/09: $167 $475
2Q/09: $388 $473
3Q/09: $913 $472

AMERICAN EXPRESS U.S. CARD PROFITS
($ millions)
REPORTED V/MC PYMNTS
3Q/08: $364 $220
4Q/08: -$48 $220
1Q/09: -$50 $220
2Q/09: -$332 $220
3Q/09: $139 $220

Source: CardData (www.carddata.com)

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PayPal to Offer Up to 20% for Holidays

PayPal has announced that starting November 3, it will offer its 2009
holiday promotions that includes savings up to 20% off, cash-back or free shipping from online
retailers. PayPal is also working with MicroPlace to provide holiday shoppers with
a unique gift that helps the world’s working poor. Shoppers who purchase
a gift certificate on MicroPlace.com will get a free $20 gift
certificate to give to someone else on their list. These gift
certificates will provide much needed capital to organizations that
provide financial services to poor people around the world. This gift
could help someone get access to a loan to start a business, generate
income and work their way out of poverty.

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