Fiserv Hits the 25 Year Milestone

Fiserv marks its 25th year as a provider of financial service
technologies.
FL-based Sunshine State Systems and First Data Processing based in
Milwaukee, Wis.,
combined to form Fiserv, the first national financial services company.
The regional data processors combined to serve small banks and thrifts,
growing organically and through more than 150 acquisitions, from a $21
million business, with 350 employees in 1984, to a $4.7 billion Fortune
500 company, with 20,000 employees and the No. 1 ranking on the FinTech
100 list of technology partners serving the financial services industry.
Fiserv went public, trading on NASDAQ under the symbol “FISV” in 1986,
as a $70 million data processor. In 1991, Fiserv entered the commercial
bank, international, and credit
union core account processing markets for the first time, doubling the
number of clients with the acquisition of Citicorp Information
Resources, a subsidiary of Citicorp. In 1995, Fiserv acquired
Information Technology, Inc., (ITI), in
Lincoln, Nebraska, expanding the number of account processing clients
for Fiserv, and gaining the most widely implemented account processing
platform in the United States, Premier. In 2007, Fiserv made its
largest acquisition of its first 25 years,
buying CheckFree Corporation, a world leader in financial electronic
commerce, and the leading provider of online banking, online bill pay
and electronic bills. Since this acquisition a primary focus of Fiserv
has been to lead digital innovation and provide integrated solutions for
the company’s 16,000 clients. In February of this year, Fiserv announced
a new go-to-market strategy in which all business units were branded
Fiserv, bringing one name to the market and optimizing access to the
company’s considerable strengths, technology solutions and expertise for
its clients.

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Debit Card Rewards Webinar This Week

The TowerGroup will present “Just Rewards: Adapting the Credit Card
Loyalty Feature to a Debit Card World” webinar on August 6, 2009.
The TowerGroup Live presentation will discuss the reasons that debit
card transactions now dominate the US
payments market; illustrate the difference in business models between
debit and credit
cards; explain how loyalty programs that work in the credit card environment
need to be adjusted to fit the revenue economics of the debit card
business model and show how rewards can impact the industry and position
issuers for
emerging products such as mobile payments and prepaid cards.
TowerGroup is the leading research and advisory services firm focused
exclusively on the financial services industry.

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Credit Card ABS Metrics Begin to Brighten in June

There appears to be stabilization in delinquency rates and a
deceleration in charge-off increases based on the latest performance for
credit card-backed securities. Delinquency has leveled off over the past
five months, hovering between 4.3% and 4.5%. Charge-offs, which soared
more than 100 basis points in February, increased 35 basis points in
June, the smallest increase in five months. According to Fitch,
charge-offs among prime credit card ABS hit a record 10.79% in June,
compared to 10.44% in the prior month, but up 64% higher than
year-earlier measures. Credit card delinquencies (60+ days) declined 14
basis points in June to 4.31%, but up about 40% over June 2008.
Pricing initiatives and discount options continue to generate
incremental yield, as evidenced by a 36 basis point rise in June’s yield
to 17.95%, representing the highest level in 15 months. Since the
increase in yield completely offset the increase in charge-offs this
month, one-month excess spread improved slightly although the
three-month average excess spread remains compressed at 4.35%.

ABS METRICS
Delinquency Charge-Offs
Jan 09: 4.04% 7.40%
Feb 09: 4.33% 8.41%
Mar 09: 4.44% 8.89%
Apr 09: 4.37% 9.66%
May 09: 4.45% 10.44%
Jun 09: 4.31% 10.79%
Source: Fitch

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PPP Unveils the First Contactless Foil Cards

Following more than one year in development, the industry’s first
full-face foil PVC card certified by Visa for contactless payment
transactions has been introduced. IL-based Perfect Plastic Printing says
its new card enables issuers to provide contactless payment cards with
the same high aesthetic appeal of foil as their traditional cards. The
card is based on INSIDE Contactless’ “MicroPass 4003.” MicroPass 4003
provides support for “Visa payWave,” including “Visa MSD 1.4.2” and
“Visa 2.0.2 Streamline Online qVSDC” standards for global
interoperability. Foil cards have attractive metalized foil applied
across the entire face of the card, offering a mirror-like reflection
unattainable with printing ink alone.

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Small Business Index Hits a Six-Year Low

A July survey has found that small business owners’ optimism dropped to its lowest level in at least six years. The Wells Fargo/Gallup “Small Business Index” stands at -21, down 20 points from the previous survey in April, and 135 points lower than the Index high of 114 (November, 2006). This is the third consecutive quarter with a negative “Index” score. About 37% said they have “poor” cash flow issues, compared to 30% in the prior quarter. Nearly 58% said revenues were decreasing, compared to 51% in the previous quarter. The “Index” consists of two dimensions: 1) Owners’ ratings of the current situation of their businesses and, 2) Owners’ ratings of how they expect their businesses to perform over the next 12 months.

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MASTERCARD 2Q/09

MasterCard reported adjusted net income of $349 million for the second quarter, a 26.4% gain over 2Q/08. Net revenue for the quarter was $1.3 billion, a 2.7% increase over the year ago period. The network says the higher revenues were driven by pricing changes, an increase in the number of transactions processed and a decrease in rebates and incentives. On a local currency basis, MasterCard’s gross dollar volume was down by 0.6% and worldwide purchase volume was down by 0.7%. The Company noted that 35.8% decrease in advertising and marketing expenses versus the year-ago period, primarily related to continued cost containment initiatives in response to market realities. For complete details on MasterCard’s second quarter performance visit CardData (www.carddata.com).

Note: All MasterCard Credit, Charge and Debit Programs processed on MasterCard’s
networks. Source: CardData (www.carddata.com)

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MAY LEI

The Conference Board Leading Economic Index (LEI) for Mexico increased
for the second month in a row by 2.4% while The Conference Board
Coincident Economic Index (CEI) decreased 0.9% in May. With the May
increase, The Conference Board LEI for Mexico now stands at with 106.5
(2004=100), which increased 3% in April and increased 1.4 percent in
March, while the CEI now stands at 104.6 (2004=100), which decreased
0.3% in April and decreased 0.7% in March. These figures come after an
LEI 1.5% 6-month increase while the CEI saw a six-month decrease of
5.8%. Mexico LEI indicators include; US refiners’ acquisition cost of
domestic and imported crude oil, net insufficient inventories, stock
prices, the (inverted) real exchange rate, and the (inverted) federal
funds rate.

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The Home Depot Accepts Discover Zip

Home improvement retailer is now accepting the “Discover Zip payment”
device at its 1,974 stores. Discover’s new mini-adhesive card can be
attached to personal items that are always at hand, such as a mobile
phone, PDA or MP3 player, in addition to the traditional bank card or
key chain fob. Purchases are made with a quick tap of these devices on
a Zip reader found at the checkout. The
Home Depot had sales of $71.3 billion and earnings from continuing
operations of $2.3 billion.

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