Global Non-Cash Payments Growing 9% Per Annum

A new report reveals the global volume of payments made using non-cash instruments, such as direct debits, credit transfers, cards and checks, is growing about 9% per year. Payment cards remain the single strongest driver of volumes rising more than 14% annually. The ten largest markets account for 92% of all non-cash payments transactions in
with the global market dominated by the U.S. and the Eurozone with a 61% share. According to the “World Payments Report 2009” from Capgemini, RBS and Efma, the U.S. accounted for 39% of global payments in 2007, with volumes having grown steadily at about 5% a year since 2001. While
cash-in-circulation fell 7.4%, debit card volumes jumped 16.2%, credit card transactions increased by 5.6%, credit transfers increased by 7% and direct debits grew by 18%. U.S. check volume did decline 7.4% in 2007. The report also noted that U.S. general purpose card transactions grew 7.7% in 2008, with the number by debit card up 12.1% and by
credit card up 1.7%. ??Debit cards accounted for 57.5% of total non-cash
purchase transactions in 2008, up from 22.9% just ten years earlier. Debit cards first overtook credit cards as the preferred means of U.S. consumer payments in 2004, and their rise has been notable ever since. Still, the economic downturn made credit cards even less popular in 2008, and the debit cards’ share of transactions grew by 5% points from 2007.

NON-CASH PAYMENTS
U.S. 39%
Eurozone 22%
China 9%
UK 6%
Canada 3%
Brazil 3%
Japan 3%
Rest 15%
Source: World Payments Report

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BARNES GCCPVR

Barnes International’s “Global Chip Card Personalization Validation
Requirements” (GCCPVR) test module and scripts have been confirmed by
Visa International Services Association. Offering improvement as part of
an ongoing development program for Visa’s “CAT3000v3” and “CPT3000v3”
CPV Tools, Barnes’ GCCPVR module meets Visa’s latest “Version 1.1”
GCCPVR standards with its comprehensive card validation. Visa-validated
tools for Card Personalisation are the best selling and are employed by
banks, card manufacturers, personalisation bureaux and test labs
worldwide. Barnes International develops and supplies Chip Card Test
Tools and Magnetic Stripe Analysers, offers EMV Consultancy and Card
Testing.

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Encore and CompuCredit Settle a 2005 Dispute

San Diego-based debt collector Encore Capital Group has settled a pending legal dispute with Jefferson Capital Systems and its
parent, CompuCredit. Under the terms of the settlement, all of the parties’ obligations relating to the purchase and delivery of accounts under a 2005 deal were satisfied through Encore’s purchase of a large
portfolio of charged-off credit card accounts on commercially reasonable terms and the resumption of the balance transfer program with Jefferson Capital. Encore last month reported $78.0 million in revenues and $6.6 million in net income for the second quarter, a year-on-year gain of 11.4% and 6.5%, respectively. Investment in receivable portfolios was $82.0 million, to purchase $1.9 billion in face value of debt, compared to $52.5 million, to purchase $1.8 billion in face value of debt in the same period of the prior year. For complete details on Encore Capital Group’s second quarter performance visit CardData (www.carddata.com). (CF Library 7/31/09)

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Vault Cash Drives WSFS ATM Growth

DE-based WSFS Financial Corporation is now servicing over 10,000 ATMs nationwide through “Cash Connect”.
Cash Connect provides vault cash to non-bank ATM companies across the
U.S., Puerto Rico, and the U.S. Virgin Islands to fund their ATM
networks. Funds are wired to a correspondent bank, picked up by an
armored car company, and loaded into the ATM. When funds are withdrawn,
they then electronically settle directly back to WSFS Bank. A daily fee
is charged on the cash outstanding. Cash Connect handles the funding,
tracking, and reconciling of each cash order for the 10,000-plus ATMs it
now serves. In 2008, Cash Connect funded its network with over $5.4 billion.

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Fifth Third Processing Inks Two

MA-based Mutual FSB and Bay State Savings Bank have signed contracts
with Fifth Third Processing Solutions for electronic funds transfer
services.
Fifth Third will also provide gateway access, ATM and debit card
processing and ATM terminal driving. There are nine Mutual Bank
locations and 10 ATMs in Southeastern Massachusetts,
Bay State Savings Bank holds $300 million in assets, has eight offices
and 7 ATMs.

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U.S. Consumers are Hopping Mad Over Re-Pricing

A payment card consulting firm has discovered that U.S. consumers are highly dissatisfied with credit card re-pricing experiences over the past year. As a result, 80% of these consumers reacted to the re-pricing by reducing their usage on the affected credit card, using some type of cash equivalent as an alternative form of payment. Auriemma Consulting Group says it also found that about 50% consumers claimed they were re-priced by their credit card company, while 20% reported a credit line decrease. Although one-quarter of consumers admitted that the increased interest rate was a result of some action on their part, the remaining three-quarters said they had no idea why or felt they were not the cause of the change to their credit card account.

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Premier Card Solutions Taps Thales

Premier Card Solutions has implemented the “Thales HSM 8000” and “BCSS” to take advantage
of the growing demand for open loop gift cards. Like many card manufacturers, PCS had no experience with security code
compliance issues as mandated by Visa, MasterCard, Discover and
American ExpressPCS purchased the BCSS software from Prime Factors to meet a customer
requirement to produce gift cards with security codes such as CVVs and
CVCs. PCS also required a Host Security Module (HSM) to be incorporated
into the secure card creation process. BCSS is a low cost alternative to the custom
programming ordinarily used to create card security codes and PINs and
implement key management. Prime Factors worked closely with PCS to
implement BCSS and the Thales HSM, positioning PCS to participate in the
growth in open loop prepaid cards.

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COM-GUARD & LIGHTSTORM

Com-Guard has signed an exclusive License Agreement for the sales of its
Transaction Processing Software with Lightstorm USA. In doing so it will
commence sales and marketing targeting Loyalty Card Programs; Online
Payments; Pay Day Advances; and Specialty Payment Programs. The sales
and marketing is leveraging its loyalty card programs on more costly
Credit Card payments and customer loyalty using “Transactional Cash
Engine Software” technology will allow merchants to combine their
loyalty programs with a combined payment technology. Additionally, the
software technology is focused on the increase in merchants looking to
offer online payment, to securely transfer money over the internet for
their payday advances and allowing personalized specialty payments at a
reduced rate.

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TNS CANADA

Transaction Network Services (TNS) is increasing focus on the Canadian
ATM marketplace through leveraged capabilities from Calypso Canada’s
global ATM processing business. Acquired earlier in the year by TNS,
Calypso has been a catalyst in the formation of Transaction Network
Services Canada (TNS Canada). Also a member of the Interac Association,
TNS Canada is now part of an organization providing ATM processing,
monitoring, management, settlement, and helpdesk services to over
115,000 ATMs in select markets around the world. TNS data communications
and interoperability solutions provide its services to customers in 28
countries across North America, Europe and the Asia Pacific region.

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Aug Conference Board ETI Down Slightly

The Conference Board Employment Trends Index (ETI) dropped 0.1%
from the revised July number. The improving
indicators were “Percentage of Respondents Who Say They Find Jobs Hard
to Get” from The Conference Board Consumer Confidence Survey, Percentage
of Firms With Positions Not Able to Fill Right Now, Industrial
Production and Real Manufacturing and Trade Sales.
The Employment Trends Index(TM) aggregates eight labor-market
indicators, each of which has proven accurate in its own area.
Aggregating individual indicators into a composite index filters out
so-called “noise” to show underlying trends more clearly. The index now stands at 88.1 and
is down 18.5% from a year ago.

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Robust Prepaid Cards Buck the Recession

Despite the nasty recession the prepaid industry is expanding or thriving. An annual study found the total load for all 33 prepaid segments last year, including open loop and closed loop, grew 12.4% to $247.7 billion. Mercator Advisory Group also found network-branded solutions had $60.42 billion loaded in 2008, an increase of
48.6% increase from the previous year and that open loop gift cards continue to penetrate the sale of closed loop gift cards with a 54.3% increase. Mercator says it is clear that no other payments market is riding out the current economic downturn as effectively as prepaid.
The “6th Annual Network Branded Prepaid Market Assessment” also includes a special section on the utilization of “Restricted Authorization Network” (RAN) technology. In conducting its surveys, Mercator discovered an increasing use of the technology to enhance card programs. “RAN” is typically used to create an infrastructure that lowers costs and delivers added revenue to prepaid programs by steering consumers
to specific merchants.

PREPAID CARDS
2004: $120.7 billion
2005: $160.3 billion
2006: $198.6 billion
2007: $220.3 billion
2008: $247.7 billion
Source: Mercator

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EZIO AUTHENTICATION

InterSwitch is deploying the “Ezio” strong authentication solution from
Gemalto digital security to secure e-payment services in Nigeria. Having
acted as server integration partner for the deployment, Gemalto is also
providing EMV card readers and unconnected tokens customized with the
InterSwitch visual corporate identity. “Ezio” enables InterSwitch member
banks to enhance security for e-commerce by replacing static passwords
with strong authentication, allowing users to pay their bills and taxes
or buy airline tickets in a more secure and convenient manner through a
One-Time-Password using the device.
InterSwitch offers secure electronic payment solutions to its 25 member
banks across the country.

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