INSIDE & CRI

INSIDE Contactless has signed agreements with Cryptography Research
(CRI) for the use of CRI’s patents covering countermeasures to
Differential Power Analysis (DPA) and related attacks. CRI’s solution
will protect INSIDE’s secure semiconductor products, which may use the
CRI patents for its contactless semiconductor security on contactless
cards, key fobs, mobile payment bridge products, and NFC secure elements
for mobile phones. INSIDE has delivered more than 100million “MicroPass”
chips containing operating system and application software for major
brands in the financial services industry. Cryptography Research has
been awarded a portfolio of approximately 50 patents covering
countermeasures to DPA attacks in banking, pay television, mass transit,
secure ID, and wireless telecommunications.

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New Report Details Range of Prepaid Card Fees

A new report suggests prepaid card are loaded with consumer
“gotchas.” The Consumers Union study found that activation fees ranged
from a low of $3 for the “Walmart Money Card” to a $99.95 to apply for
and initiate the “Millennium Advantage” card. Monthly fees ranged from
$2.95 for the FinanSe card to $10 per month for the “Rush Card”. Fees
for withdrawing cash from ATMs ranged from $1.50 per withdrawal for the
FinanSe, SVC Revel, and Espree cards to $2.50 per withdrawal for the
“NetSpend Visa.” Most prepaid card issuers provide free customer
service, but consumers using the “Millennium Advantage” card will be
charged $1 per minute when they call customer service, while users of
the “Espree” card will pay $3 for each customer service call. CU also
found that dormancy fees ranged from $1.95 per month for the “Rush Card”
(after 90 days of inactivity) to $9.95 per month for the “Exact” card.
Additionally, overdraft or “shortage” fees ranged from $24.90 charged by
“Espree” for overdrafts to $29 charged by “Eufora” and “AccountNow”.

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British Airways and AmEx Expand Card Program

British Airways and American Express have renewed their credit card partnership. Managed by British Airways’ rewards subsidiary The Mileage Company, the partnership includes three consumer co-brand cards, a corporate co-brand card and merchant acceptance agreements. The “American Express Membership Rewards” agreement, launched in August 2008, is for the first time extended into the U.S., allowing British Airways American Express consumer and corporate cardholders in the U.K. to continue to collect “BA Miles” and “On Business Points,” respectively. This also allows U.S. American Express cardholders to transfer “Membership Reward” points into British Airways’ “Executive Club Frequent Flyer” program for travel on British Airways and “Oneworld” partners. The Mileage Company UK-based reward program currently serves four million in 2008 through its 200 brands.

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Elavon Signs Alliance Deal with FNC

Card acquirer Elavon signed a three-year agreement with FNC, a technology company
offering tailored solutions for the real-estate and mortgage industry to
streamline industry processes, regulations and compliance.
The agreement provides credit and debit processing services via a new
dashboard functionality offered by FNC in support of the Home Valuation
Code of Conduct (HVCC) – a regulatory requirement impacting the mortgage
industry’s appraiser selection process. FNC’s Collateral Management
System® and Collateral HQ™ technology platform provide real-estate and
mortgage banking professionals with a single source for managing
multiple vendor relationships throughout the entire lending process.
Elavon’s solution enables FNC’s lender clients to deliver a credit/debit
payment feature on their dashboard, enabling them to more efficiently
collect and pay vendor fees.

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TODOS & OATH

Todos has become a member of the OATH (Open Authentication) industry
initiative to combat online fraud globally. To provide open
specification for strong authentication, OATH with Todos’ “eCode”
back-end architecture, which is an open, flexible authentication
platform to support smart card reader, token, PKI and mobile
identification. “eCode” joins the more than 80 device, platform and
application vendors and end-user customers with this development and can
now retain its ability to provide uniquely flexible compatibility with
authentication protocols. Todos AB helps banks and other businesses
create secure relationships with their customers, having delivered
20million products to over 100 financial institutions in more than 30
countries.

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Debit Card Strategies Needed for Consumer Shift

A new report predicts debit card transaction volume and card spend will continue to grow through 2015. Since credit cards are fading in popularity due to the current recession and regulatory environment, the study recommends financial institutions implement debit card strategies such as cross-selling credit cards, investments and mortgages to their debit card customer pool. The TowerGroup research notes that in less than 15 years, debit card transactions in the USA grew from 1% of non-cash transactions to more than 50%. According to CardData, U.S. debit card “Purchase Dollar Volume” (PDV) for Visa and MasterCard is now rising by about 5% as the number of purchase transactions are increasing by more than 10%. However, Visa and MasterCard posted $281 billion in first quarter PDV versus $268 billion in 1Q/08 PDV, representing a decline of 4.9%. (CF Library 7/31/09)

V/MC DEBIT CARD GDV
2008 $1512.0b
2007 $1357.0b
2006 $1175.1b
2005 $ 950.6b
2004 $ 686.0b
2003 $ 576.6b
2002 $ 496.4b
2001 $ 420.7b
2000 $ 301.8b
1999 $ 232.0b
1998 $ 169.8b
1997 $ 110.5b
1996 $ 46.0b
1995 $ 36.2b
1994 $ 22.1b
1993 $ 13.1b
1992 $ 11.8b
1991 $ 9.5b
1990 $ 8.0b
Source: CardData (www.carddata.com)

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LML 2Q/09

LML has reported its first calendar quarter performance, posting a revenue of 2%
higher than the 2Q/08 figure to $3.2 million. Additional figures show GAAP
net income for the quarter was $90,000 compared to GAAP net loss of
$47,000 last year, cash provided by operating activities was $113,000
compared to $225,000 last year and on-GAAP net income was $556,000
compared to $610,000 last year. LML Payment Systems provides financial
payment processing solutions for e-commerce and traditional businesses.
The Company’s subsidiaries include Beanstream Internet Commerce.
Beanstream provides credit card processing, online debit, electronic
funds transfer, automated clearinghouse payment processing and
authentication services, along with routing of selected transactions to
third party processors and banks for authorization and settlement. For complete details on LML’s latest performance visit CardData (www.carddata.com).

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No Recovery Seen in the July Retail Sales Data

Retail industry sales for July declined 5% unadjusted year-over-year
and also declined 0.6% seasonally adjusted month-to-month. The figures
do not include automobiles, gas stations, and restaurants. According to
the National Retail Federation electronics and appliance store sales
decreased 1.4% seasonally adjusted month-to-month and decreased 14.3%
unadjusted year-over-year. Sales at general merchandise stores also
decreased 0.8% adjusted from the previous month and decreased 3.4%
unadjusted over last year. July retail sales released by the U.S.
Commerce Department show total retail sales (which include non-general
merchandise categories such as autos, gasoline stations and restaurants)
decreased 0.1% seasonally adjusted from the previous month and decreased
7.9% unadjusted year-over-year.

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AmEx Receives a Hotel Rate TRAX Patent

American Express has been awarded a patent for its “Hotel Rate TRAX”
audit tool.
Hotel Rate TRAX compares a
company’s negotiated hotel rates with those listed in the Global
Distribution System (GDS) to identify discrepancies and capture
potential lost savings due to inaccurately loaded rates.
Hotel Rate TRAX completes an audit of each program highlighting any
differences between the negotiated rate and the actual rate found in the
GDSs. Hotel Rate TRAX allows companies to share the data with hotels,
which are then able to make any necessary corrections and address
pricing inconsistencies.

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Xcellink Receives an EFT Patent

Payment platform developer Xcellink International has been awarded a
patent for its “Automated Electronic Funds Transfer System and Method”
which covers the automated data interchange to achieve transactions
between customers (buyers) and merchants
(sellers) over local wired or wireless links. Xcellink holds the rights
to a patented payment process with multiple
applications ranging from retail transactions to road tolling, utilities
billing and beyond. Xcellink has the capability to be used in every
transaction, big or small, as a low cost alternative to cash,
potentially replacing all credit, debit, charge and smart cards,
integrating warehousing, delivery, taxation and consumer protection.
Xcellink’s patented system has the potential to replace all credit,
debit, charge and smart cards, providing all functions of order,
warehousing, delivery and payment for all types of goods and services in
a customer-centric manner that is more efficient, economical, and secure
than systems operating today.

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Hilo Hattie Deploys MICROS-Retail POS

Hawaiian retailer of island apparel and merchandise
Hilo Hattie Fashion Centers has
completed its successful implementation of the new, end-to-end MICROS-Retail
point-of-sale and merchandising solution. Hilo Hattie uses the integrated system for everything from merchandise
planning and
OTB (Open-to-Buy) to completing the sale in the store. Hilo Hattie had
already installed the point-of-sale system. Interfacing with the new
merchandising system took only one day. The company undertook the challenge of the upgrade in the midst of its
peak season. MICROS-Retail
analytic solutions process data at a corporate level for an additional
60,000 stores.

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1200 to Attend Prepaid Press Expo 2009

The “Prepaid Press Expo 2009” opens August 18th in Las Vegas. Industry
leaders from all of the
segments of the prepaid calling card, wireless and gift and debit card
industries will converge and meet with retailers, distributors and
others who are involved in the fast growing prepaid industry.
On Tuesday, the first of three conference tracks, each representing a
distinct prepaid segment, will begin. “The Prepaid Long Distance” track
will run on Tuesday, the “Prepaid Wireless” track will run on Wednesday
and the “Payments” track on Thursday. The sessions are produced in
conjunction with The
PELORUS Group conference producer.

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