MAY DEBT

Credit card gross dollar volume continues to remain soft rising slightly sequentially, but off nearly 3% from one-year ago. Growth in credit card debt continued to slow dropping to an annual growth rate 2.1% in May, compared to an annual gain of 2.3% for April and 4.4% for March. According to the Reserve Bank of Australia credit card balances
posted A$44.3 billion for May versus A$43.4 billion one-year ago.
Credit card volume came in at A$17.8 billion, compared to $18.3 billion
for May 2008. Credit limits now stand at A$124.2 billion, compared to
A$118.3 billion in May 2008. According to the RBA there are currently
14.3 million credit card and charge card accounts in Australia, compared
to 14.0 million one-year ago.

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Euronet Rebrands its Prepaid Division as epay

KS-based secure payment processor Euronet Worldwide has renamed its global prepay division “epay”.
Euronet’s Prepaid Division is one of the largest
international distributors of prepaid mobile airtime. The establishment
of a single brand signifies the division’s transformation from a prepaid
mobile top-up distributor to a leading provider of payment services and
technology. The credibility and success of Euronet’s individual brands
provide a strong platform for the newly created global brand to ensure
the Division remains an exciting and rewarding partner for service
providers and retailers worldwide. Several Euronet prepaid subsidiaries already carry the epay name. The
remaining companies: PaySpot, Telerecarga, Movilcarga, Brodos and
Transact will now adopt the new branding.

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AirTran Implements Acculynk’s PaySecure

AirTran Airways is now offering customers Acculynk’s alternative
payment system “PaySecure.”
PaySecure offers consumers a simple checkout experience while providing
merchants lower fees, reduced fraud and charge-backs, and incremental
volume from security conscious consumers, those who prefer PIN debit and
those with PIN-only debit cards. Consumers who use PaySecure for their
debit card purchase simply enter
their PIN on PaySecure’s graphical PIN-pad, and the transaction is
processed as PIN debit, leveraging AirTran’s existing infrastructure and
processing relationship with Elavon, a leading global provider of
payment processing solutions and the first processor in the industry to
support PaySecure.

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INTERAC & INSIDE

The INTERAC payment network has teamed with INSIDE to bring contactless
debit to Canada. INSIDE Contactless provides open-standard contactless
chip technologies to develop chips containing the
specifications for INTERAC’s contactless payment service, allowing its
members to offer their debit card users a “next generation” retail
payments solution. Interac Association selected INSIDE for its expertise
in contactless payments and the leadership position they have on a
global basis. INSIDE Contactless open-standard contactless payment and
NFC power next generation payment, transit, identity and access control
applications through its headquarters in France and branch offices in
Shanghai, Singapore, Warsaw, Seoul and Silicon Valley while the Interac
Association was founded in 1984 and is comprised of banks, trust
companies, credit unions, caisses populaires, merchants and technology
and payment related companies.

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PAYTER CONTACTLESS

Following its successful trial with mobile payments in The Netherlands,
Payter is introducing its “P10” desktop model and “P25” build-in model
versatile contactless readers for M-commerce services and payments.
Combining serial, USB and TCP/IP connection into one device, the readers
support a broad variety of payment, loyalty, ticketing and can be used
as a transparent contactless reader. The “P25” build-in model is easily
integrated in a wide variety of devices, such as turnstiles, parking
terminals and vending machines, while both readers are based on an ARM
processor for multiple applications and come with a provision for SAM
module(s) and GPRS interface for secure, advanced connections.

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APS to Offer ControlScan PCI Services

Card processor American Payment Systems has partnered with GA-based PCI
compliance solution provider ControlScan to offer services to small- to
medium-sized merchants. American Payment Systems merchants will now have
access to ControlScan’s
PCI 1-2-3 compliance solution, available online via a Web-based merchant
portal called
myControlScan.com, which provides merchants with the leading tools and
support necessary to analyze, remediate and validate PCI compliance,
including PCI 1-2-3 Self Assessment Questionnaire;
PCI 1-2-3 Vulnerability Scanning; PCI 1-2-3 Security Policy Builder; PCI
1-2-3 Security Awareness Training and Personal Touch Support.

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BMO & ADS

Effective August 3rd, BMO Bank of Montreal is enhancing its AIR
MILES credit card program for the “Canadian BMO MasterCard” cardholders
and AIR MILES Collectors to increase miles issued on the Alliance Data
Systems Corporation loyalty and marketing platform. With these
enhancements, BMO AIR MILES MasterCard cardholders will now earn 1
reward mile for every $20(CDN) spent vs. previously every $40 spent;
cardholders will earn 1.5 reward miles for every $20 spent when they
shop at AIR MILES Sponsors(where they will continue to earn 2 times the
reward miles); BMO Bank of Montreal is eliminating the $35 annual fee
assessed to some of its MasterCard cardholders and BMO Gold AIR MILES
MasterCard cardholders will receive a 25% discount on flight
redemptions. BMO Financial Group has total assets of CDN$375 billion and
employs 37,000 while TX-based Alliance Data offers its loyalty and
marketing solutions derived from transaction-rich data and employs
approximately 7,000 at 50 locations worldwide.

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Chase Card Posts $672MM Loss; Charge-Offs Top 10%

Chase’s Card Services unit posted a net loss of $672 million in the
second quarter as charge-offs topped 10%. However, 30+ day delinquency,
the precursor of future charge-offs, eased during the quarter dipping
below the 6% level. Within the WaMu portfolio, charge-offs hit 19.17%,
compared to 14.57% in the first quarter and 12.09% at year-end 2008.
End-of-period managed loans were $171.5 billion, an increase of 10% from
the prior year, but down 3% from the prior quarter. Charge volume was
$82.8 billion, a decrease of 12% from the prior year. Excluding
Washington Mutual, charge volume was
$78.3 billion, a decrease of 16%. The managed net charge-off rate for
the quarter was 10.03%, up from 4.98% in the prior year and 7.72% in the
prior quarter. The 30-day managed delinquency rate was 5.86%, up from
3.46% in the prior year and down from 6.16% in the prior quarter.
Excluding Washington Mutual, the managed net charge-off rate
for the second quarter was 8.97% and the 30-day delinquency rate was
5.27%. Merchant processing volume was $101.4 billion, on 4.5 billion
total transactions processed. Chase also noted that ROE was negative
18%, down from positive 7% in the prior year and that ROO was negative
2.46%, compared with positive 1.04% in the prior year and negative 1.92%
in the prior quarter. For complete details on Chase’s second quarter
performance visit CardData (www.carddata.com).

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The Receivables Exchange Grows Exponentially

A/R traders The Receivables Exchange has seen greater than 300% quarter-over-quarter
growth in client growth. The Receivables Exchange is the world’s first online auction marketplace for real-time trading of
accounts receivable. It has seen an exponential increase in
quarter-over-quarter trading volume as more businesses adopt receivables
financing as a new standard in working capital management.
The Receivables Exchange Q2 Cash Flow Index includes: Quarter-Over-Quarter Growth in Receivables Sold=300%;
Average Auction Size=$65K; Average Length of Auction=1 day; Shortest Auction = Less than 1 minute;
Percent Selling at Buyout Price=85%; Percent Repeat Customers=86%; Average Revenue of Sellers=$30 million;
A/R Inventory for Sale=$9 billion; A/R Buying Power=$20 billion and Industries Represented=37

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MN AG Tackles Mandatory Arbitration Issues

The Minnesota Attorney General has sued the National
Arbitration Forum of Minnesota, alleging that it misrepresented its
independence and hid from consumers and the public its extensive ties to
the collection industry. AG Lori Swanson notes that credit card
companies are among the most prolific users of mandatory arbitration
clauses. The lawsuit alleges that the Forum pays commissions
to executives whose job it is to convince creditors to put mandatory
arbitration clauses in their customer agreements. The suit alleges that
the Forum does this to generate arbitration filings in the Forum and
therefore, revenue for itself.
The lawsuit further alleges that beginning in
2006 and through 2007, Accretive engineered two transactions. In the
first transaction, Accretive formed several equity funds under the name
“Agora”, which invested $42 million in the Forum. In the second
transaction, three of the country’s largest debt collection law firms —
Mann Bracken of Georgia, Wolpoff & Abramson of Maryland, and Eskanos &
Adler of California — merged into one large national law firm called
Mann Bracken. Accretive then acquired the majority interest in a debt
collection agency called Axiant, which acquired the collections
operations of Mann Bracken. Through these transactions, Accretive took
control of one of the country’s largest debt collection enterprises and
became affiliated with the Forum, the country’s largest consumer
collection arbitration company. The lawsuit alleges that Accretive
principals remain actively involved with the Forum.

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