Alliance Data Systems Charge-Offs Ease-Back

TX-based Alliance Data Systems Corporation loyalty and marketing
solutions has provided an update on its Private Label Credit segment. In
conjunction with the release of the Company’s Master Trust Monthly
Noteholder’s Statement, the Company is releasing similar metrics for the
overall total managed portfolio. The Master Trust data represents a
subset of the Company’s total managed portfolio. Derived from
transaction-rich data, Alliance Data provides loyalty and marketing
solutions to help clients create and enhance customer loyalty to build
consumer relations, employs approximately 7,000 associates at
approximately 50 locations worldwide.

SEP 30, 2009 1 Mo END 3 Mo END 9 Mo END
Y/Y RECEIVABLES $4.3BIL $4.3BIL $4.2BIL
PORT. GROWTH 14% 12% 10%
CHARGE OFFS 32,444 101,303 298,977
PCT OF C/O/REC 9.0% 9.4% 9.4%
SOURCE:ADS

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AUG DEBT

The recovery is still very sluggish as credit card gross dollar volume rose a mere 62 basis points and credit card outstandings edged up by only 18 basis points in August, compared to one-year ago. Despite setting a new high in June, credit card loan growth has been sluggish in 2009. Annual growth in July was 1.6%, June was 2.0%, compared to May at 2.1%, 2.3% for April and 4.4% for March. According to the Reserve Bank of Australia credit card balances posted at A$44.9 billion for August versus A$44.1 billion one-year ago. Credit card volume came in at A$18.9 billion, compared to A$19.2 billion in July and and A$17.8 billion for August 2008. Credit limits now stand at A$125.2 billion, compared to A$120.8 billion in August 2008. According to the RBA there are currently 14.4 million credit card and charge card accounts in Australia, compared to 14.0 million one-year ago.

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DIEBOLD SALES

Diebold ATM provider has formed a direct sales operation in Turkey to
build closer relationships with financial institutions, eliminating its
need for a distributor. Led by a local team, with the additional support
and commitment of the company’s regional operations in EMEA, the Diebold
direct sales operation is expanding with sales staff to further develop
customer and partner relationships. With this, the company will supply
products directly to customers and will work with local service partners
for installation, warranty and maintenance services. Diebold is piloting
and certifying its latest products and services in the region to assess
customer requirements, working to certify “Agilis EmPower” software
portfolio solution to allow financial institutions to make changes to
their ATM functions without the need to employ specialized programming
skills.

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Citi Posts a Small Q3 Credit Card Profit

Citibank reported a $6 million third quarter profit for its North American cards division. However, Citi-branded cards revenue was down 8% to $2.36 billion. Third quarter outstandings for North America were down 2% to $115.1 billion, compared to the year ago quarter. Purchase volume dropped 13% from 3Q/08 to $65.5 billion. Managed charge-offs hit 10.29% for the third quarter, compared to 10.18% in the second quarter and 6.39% in the third quarter of last year. Delinquency (90+ days) edged down to 2.51% for 3Q/09, compared to 2.91% in the prior quarter and 2.00% one-year ago. For complete details on Citi’s third quarter performance visit carddata.com.

CITI-BRANDED ACCOUNTS
3Q/08: 61.1 million
4Q/08: 57.7 million
1Q/09: 57.2 million
2Q/09: 55.8 million
3Q/09: 54.6 million
Source: CardData (www.carddata.com)

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OBERTHUR SERVICE CENTER

Oberthur Technologies has received both MasterCard and VISA magstripe
and chip card certifications for its service center in Mexico City,
capable of personalizing up to 20 million secure payment cards, SIM
cards and ID cards annually. This is part of Oberthur’s continued growth
worldwide, with more than 50 sales offices and a network of more than 30
service centers around the globe. With 2008 sales of more than EUR882
million, over 1 million financial cards are issued everyday by Oberthur
secure technologies. Innovation and high quality services ensure
Oberthur Technologies’ strong positioning in its main target markets,
which include card systems, identity, security printing and cash
protection.

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Bank Freedom Prepaid Card Waives Fees

Prepaid Card Holdings’ Bank Freedom will waive the monthly fee for customers of its
“Bank Freedom Prepaid MasterCard” program for depositors meeting the minimum monthly deposit. Customers must deposit either $350 or more
by direct deposit or $700 or more in cash each month to qualify. For consumers who
don’t meet the monthly deposit minimum, Bank Freedom has lowered their
monthly fee from $9.95 to only $5.95 per month. “The Bank Freedom Prepaid MasterCard” is issued by MetaBank
pursuant to license by MasterCard International Incorporated. Prepaid Card Holdings, Inc. is a publicly traded holding company whose
current holdings consist of a 100% interest in Merchant Processing
International Inc. DBA Bank Freedom and the Berman Marketing Group, Inc.
a multi-channel direct market firm specializing in direct response
marketing through Television, Radio, Internet and Print media.

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AUGUST LEI

The Conference Board Leading Economic Index (LEI) for South Korea
declined by 0.3% while The Conference Board Coincident Economic Index
(CEI) increased 0.1% in August. With the 0.3% decrease in August, after
six consecutive months of increases, the Conference Board LEI for South
Korea now stands at 105.8 (2004=100) after increases of 1.4% in July and
1.5% in June. Meanwhile, the CEI now stands at 107.9 (2004=100), after
having increased 0.1% in July and 1.3% in June. LEI results for the
month were attributed to positive gains in 4 of the 7 components, which
include real exports FOB, letter of credit arrivals, stock prices, and
private construction orders while negative contributors include the
(inverted) index of inventories to shipments, value of machinery orders,
and the (inverted) yield of government public bonds.

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Aite Group Issues a New Prepaid Report

A new report from Aite Group
provides an overview of branded prepaid card processors, and looks at
trends shaping branded prepaid card processing. The report evaluates
and profiles nine branded prepaid card processors:
eCommLink, Fidelity National Information Services, First Data, FSV
Payment Systems, Galileo Processing, i2c Inc., Metavante Corporation,
Springbok Services and TxVia. The processors were scored on elements
pertaining to their business
strengths and weaknesses, and the functionality of their offerings. As
the market continues to grow and legislation threatens to change the
way branded prepaid issuing is done, processors need to invest in
technology to play a significant role in meeting all new demands and
remain competitive. The technology platform utilized by the profiled
processors dictates how that processor will implement changes and move
beyond the status quo. It is important that processors invest in newer
technology in lieu of adding more patches to an antiquated processing
system that continues to approach the end of its life.

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Cap One U.S. Card Losses Head Higher in Sept

Delinquency for Capital One’s U.S. credit cards rose for the third month in September and charge-offs resumed an uptick after dropping to its lowest level in four months. U.S. Card delinquency increased from 5.09% in August to 5.38% for September. The charge-off ratio also rose from 9.32% in August to 9.77% for September. One-year ago delinquency stood at 4.20% and charge-offs at 6.34%. Capital One previously reported a second quarter managed delinquency rate (30+ days) for U.S. credit cards of 4.77% for the second quarter, compared to 5.08% for 1Q/09 and 3.85% for the second quarter of 2008. The net charge-off rate for U.S. credit cards rose to 9.23% for the second quarter, compared to 8.39% for the first quarter and 6.26% one-year ago. For complete details on Capital One’s second quarter and monthly performance, visit CardData (www.carddata.com).

CAPITAL ONE HISTORICAL
DELINQUENCY CHARGE-OFF
Sep 08: 4.20% 6.34%
Oct 08: 4.48% 6.54%
Nov 08: 4.70% 6.98%
Dec 08: 4.78% 7.71%
Jan 09: 5.02% 7.82%
Feb 09: 5.10% 8.06%
Mar 09: 5.08% 9.33%
Apr 09: 5.04% 8.56%
May 09: 4.90% 9.41%
Jun 09: 4.77% 9.73%
Jul 09: 4.83% 9.83%
Aug 09: 5.09% 9.32%
Sep 09: 5.38% 9.77%
Source: CardData.com

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PaymentsMoney Mindset Index is Very Revealing

The latest edition of Western Union’s “Global Business PaymentsMoney Mindset Index”
reveals that one-third of Americans admit they hide
their purchases from spouses or significant others and 40% percent do it to
avoid an argument about finances.
Other findings reveal 47% of Americans have been
successful in the past at staying within their holiday budget, but this
year 51% are concerned and 33% are convinced that they
will exceed their budget. Respondents are setting resolutions for 2010 which include
65% plan to pay bills on time and 65% resolve to save more money out of each paycheck.

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ZKA & VERIFONE

VeriFone Holdings has expanded its portfolio of payment solutions for
validation with the EMV POS specification of the Zentraler
Kreditausschuss (ZKA), Germany’s Central Credit Committee. The
certification covers Verifone’s “Vx 810 DUET” dual-use compact
countertop device and its “Vx 810” PINpad, allowing CCV Deutschland,
Verifone’s local partner, to distribute the systems across the country.
With this, the “Vx 810” and “Vx 810 DUET” joins already ZKA-approved
Verifone products, including the “Vx 570” countertop and the “Vx 670”
portable devices. CCV operates internationally, with headquarters in
Arnhem, the Netherlands, and branches in Belgium, Germany, and Switzerland.

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