American Consumer Confidence Waxes and Wanes

Consumer confidence which has been steadily growing over the summer, retreated slightly in September. Consumers’ short-term outlook was also
slightly more pessimistic. The Conference Board “Consumer Confidence
Index” now stands at 53.1, down from 54.5 in August. The “Present
Situation Index” decreased to 22.7 from 25.4. The “Expectations Index”
declined to 73.3 from 73.8 last month. Consumers’ assessment of current
conditions was less favorable in September. Those claiming business
conditions are “bad” increased to 46.3% from 44.6%, while those claiming
conditions are “good” increased to 8.7% from 8.5%. Those expecting more
jobs in the months ahead edged down to 17.9% from 18.0%, while those
expecting fewer jobs remained the same at 23.1%. The proportion of
consumers expecting an increase in their incomes increased slightly to
11.2% from 10.8%.

Consumer Confidence Index
Jan 09: 37.4
Feb 09: 25.3
Mar 09: 26.9
Apr 09: 40.8
May 09: 54.9
Jun 09: 49.3
Jul 09: 47.4
Aug 09: 54.5
Sep 09: 53.1
Source: The Conference Board

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Javelin Report Looks at PFM Tools

Javelin has released the results of a survey that focuses on the
opportunities for banks and credit unions to expand and refine personal
finance management tools.
The survey of more than 2,000 consumers in August underscores that banks
and credit unions are
in an ideal position to use online banking to provide a financial portal
that can help customers see all their accounts in one place in real
time, track and analyze their spending, and achieve their financial
goals.Javelin asked what methods do consumers typically use to manage
their finances
today; what methods would they prefer to use, what benefits and features
do they value most when it comes to
picking a money-management system,; who is winning the battle for
consumers: banks or PFM websites amd what is the return on investment
for PFM tools?
Financial institutions and online-banking vendors
generally have been slow to keep pace with their non-bank rivals,
forcing customers to look elsewhere for PFM tools – potentially
squandering their significant trust advantage with consumers.

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2009 POSIE AWARDS

GuestLogix onboard airline retail solutions has awarded its 2009 POSie
Awards at the closing session of the first annual GuestLogix User Group
Conference in Toronto. Conceived by the GuestLogix’ Board of Directors
and industry partners to recognize outstanding leadership in the
deployment of onboard retail solutions and enhancing passenger
experience, POSie Awards is the first and only one dedicated to onboard
retail innovation. Its 2009 winners include American Airlines for “First
Fleet-Wide Onboard Retail Solution Deployment” for being the first
global airline to establish retail services onboard. Spirit Airlines was
also awarded “First Complete Cashless Onboard Retail Solution
Deployment” for being the first carrier to adopt credit card only retail
services onboard.

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Prepaid CardNow Trademarks Approved

Prepaid Card Holdings has been given trademark approval for “Card Now” and “CardNow”.
The international class 36 trademarks were registered in connection of
the following services. Debit card and credit card services, namely
issuing debit cards and credit cards, debit card and credit card payment
and transaction processing services, debit card and credit card
verification, providing electronic processing of debit card and credit
card transactions and electronic payments via a global computer network,
providing electronic processing of electronic funds transfer, ACH,
credit card, debit card, electronic check and electronic payments,
providing financial risk management services for electronic funds
transfer, credit and debit card and electronic check transactions via a
global computer network.

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Aite Report Explores Gen Y Impact

A new report from Aite explores Gen Y’s activities and levels of trust towards banks.
The report segments the
generation into levels of financial engagement and discusses tactics
for winning Gen Yers’ between the ages of 19 and 24
financial services business. After failing to develop strong relationships with older consumers,
banks are now turning to Generation Y – with its emerging demand for
banking products – as a source of growth in a weak economy. In addition,
banks have an opportunity to start fresh and avoid the relationship sins
they have committed in the past. Gen Yers’ trust in banks is slipping,
however. Only 14% of Gen Yers report that their trust in their primary
bank has increased over the past year, while 22% say that their trust
level has decreased over that time frame.

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FDIC and BBT Join the Overdraft Fee Overhaul Beat

The FDIC is now calling for tighter restrictions on overdraft fees
amidst the building momentum for federal lawmakers to address the issue
that is directly linked to growing debit card usage. Today, BB&T
announced it will eliminate overdraft fees for debit card and ATM
transactions when clients overdraw their accounts by less than $5, and
will charge no more than four overdraft fees per day. BB&T also will
begin to alert clients at BB&T ATMs when they are making a withdrawal
that would overdraw their account. Last week Wells Fargo announced it
will eliminate overdraft fees for customers when they overdraw their
accounts by $5 or less and will charge no more than four overdraft fees
per day. Chase announced it will eliminate overdrafts for debit cards
unless the customer opts in to overdraft services; modifying the posting
order to recognize debit-card transactions and ATM withdrawals as they
occur; eliminating overdraft fees if a customer’s account is $5 or less
overdrawn and reducing the maximum number of overdraft fees per day to
three from six. U.S. Bank will eliminate overdraft fees when a
customer’??s account is overdrawn by less than $10, regardless of the
number of overdraft transactions that may have occurred; limit the
number of overdraft fees to no more than three per day; and offer the
“opt out” ability to any customer who would prefer that we decline or
return any transaction on their account, whenever possible, when they
are presented against insufficient funds. Despite the changes, the Center for Responsible Lending says Americans are fed up with bank overdraft practices. Media scrutiny and proposed legislation in Congress prompted three of the nation’s largest banks to unveil changes to their overdraft policies this week. But the changes are far from enough and, in fact, underscore the need for comprehensive overdraft reform as quickly as possible. (CF Library 9/23/09; 9/24/09)

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VIRGIN ZOOMPASS

The 2Q/09 Canadian credit card debt performance continued to deteriorate
with charge-off rates reaching a new record level of 4.8%. This is in
conjunction with projections placing unemployment at a peak of 9.6% in
2Q/10, when charge-offs are also expected to peak. Blaming a surge in
the number of personal bankruptcies and an unemployment rate of 8.7% in
August, Moody’s Investors Service discloses this underscores the
persistent weakness in the economy and rising unemployment rate. These
findings, according to Moody’s latest Credit Card Indices for Canada,
also found a rise to 4.8% in charge-offs for 2Q/09, which is up nearly
60% from the year-ago mark of 3.07%, and the proportion of account
balances for which monthly payment is more than 30 days past due was
2.82% in the second quarter, up from 2.29% a year earlier.

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DCS and Threshold Financial Partner

Instant card issuer Dynamic Card Solutions has partnered with Threshold
Financial Technologies to offer financial institutions a comprehensive
EMV PIN change and card issuance solution. Threshold provides payment processing, fully managed ATM and card
issuing solutions to over 65 financial institutions throughout Canada.
The partnership between Threshold and DCS means Threshold’s card issuing
clients can transition from magnetic stripe cards to Chip and PIN cards,
offering their cardholders convenient in-branch PIN selection, PIN
change and instantly personalized chip cards. This is the first major
in-branch EMV card issuance and PIN management initiative of its kind in
Canada, potentially reaching several hundred branch locations.
DCS’ CardWizard is a modular software application used by hundreds of
banks, credit unions and retailers to instantly issue Visa and
MasterCard products in thousands of locations worldwide.

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USAT Expands its ePort Cashless

USA Technologies has released enhanced ePort Cashless transaction
offerings for vending that include interoperability capability, and
real-time DEX machine alerts. USAT is now offering solutions that conform to the
vending industry’s Vending Data Interchange (VDI) standard for cashless
data interoperability between diverse machines. The enhanced offerings
also include DEX alerts that notify vending operators and bottlers of
maintenance, repair and restocking needs to ensure machines are fully
operational all of the time. USALive online reporting is part of the ePort Connect Service that
provides card processing services, wireless connectivity, online sales
reporting, consumer reporting, settlement services, level 1
PCI-compliant data security, over-the-air updates and now, machine
health alerts.

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Economic Confidence Wanes Among Small Business

Economic confidence among small business owners paused in September after three consecutive months of gains. Nearly half of small business owners are expecting Q4 to be worse than their 2008 fourth quarter, with 21% expecting year-over-year improvement, and 30% expecting the same results. The latest “Discover Small Business Watch” index fell to 87.7 in September, down 2.1 points from August. When asked whether they agree or disagree that the recession is over for their businesses, 69% of small business owners disagreed, only 13% agreed and another 18% couldn’t be sure. Discover found that 50% of small business owners say they plan to decrease spending on business development activities such as advertising, inventory and capital expenditures, a jump from 43% in August. Similarly, those who plan to increase spending fell to 25% from 27% in August, and 22% are planning no changes.

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AUGUST LEI

The Conference Board Leading Economic Index (LEI) for the Euro Area
increased 1.8% while The Conference Board Coincident Economic Index
(CEI) decreased 0.1% in August. With the 1.8% increase in AUGUST, the
Conference Board LEI for France now stands at 99.1(2004=100), which
increased 1.3% in July and increased 1.3% in June. Throughout the 8
months in 2009 up to August, the LEI increased 8.0%. Meanwhile, the CEI
decreased by 0.2% in both July and June and has been trending downward
since its peak in February 2008. LEI results for the month were
attributed to positive gains in 6 of the 8 components.

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