Internet PIN Debit Set to Take-Off by 2013

With U.S. Internet retail commerce having reached approximately 3.5% of
retail purchases in 2008, totaling $148 billion, and projected to
account for 5.8% of retail purchases by 2013, internet payment is
increasingly conducted using “pay now” debit-based payments, according
to the latest Javelin Strategy & Research White Paper. Thanks to high
cost, fraud potential, charge-backs, and consumers’ fear of debt
associated with card-based payments, merchants are increasingly seeking
alternatives to reduce the cost of payment acceptance such as Internet
PIN debit. Internet PIN debit implements bank-issued debit cards and
PINs and is targeting the demographic which accounts for the 20%
decrease seen in online retail card purchases over the past 2 years,
along with the projected 13% increase by 2013 in ACH-based alternative
payments. The Javelin Strategy & Research whitepaper disclosed merchants
and financial institutions discloses Internet PIN debit is likely to
align with consumer preferences and interests as a “cash-based” payment
method.

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BARCLAY & WELCOME

Barclaycard has signed an agreement with Welcome Real-time to introduce a retailer rewards
scheme. Welcome Real-time will work with Barclaycard to develop the software
that will enable Barclaycard customers to benefit from a retailer
rewards scheme that is expected to encompass retailers ranging from sole
traders to major high street names. Welcome Real-time is the global loyalty solutions provider for banks and
retailers of all sizes and is headquartered in France.

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DYETRON & OBERTHUR

Smart card provider Dyetron S.A,has partnered with Oberthur Technologies
to provide EMV cards in Colombia. Dyetron will utilize Oberthur’s end-to-end common personalization system
and will be fully integrated in the worldwide Oberthur network of over
30 services centers. This will allow local banks to migrate seamlessly
to EMV and international banks to easily deploy their EMV strategy in
Colombia. The Superintendencia Financiera has imposed a January 1, 2010
deadline for issuers and merchants to migrate to EMV payment because of
rising fraud rates from standard magnetic stripe debit cards. After this
deadline, the liability over fraudulent transaction will then rest solely on the
party that hasn’t upgraded to EMV.

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Heartland Smart Ops/STARS is Introduced

Heartland Payment Systems has partnered with Training Masters to offer
“Heartland Smart Ops” powered by STARS,” a
web-based, integrated school management system that handles financial,
admissions and education management, as well as financial aid payments.
Integrated into Smart Ops are Heartland’s core payments solutions for
card processing, online payments, check management and payroll and the
“Campus OneCard System”, a robust and flexible
campus card program that can be used for access and security; attendance
tracking; financial aid and work-study funds disbursement; and more.
“Heartland’s OneCard” and “Give Something Back Network”, a nationwide
network that powers the OneCard and helps institutions and nonprofit
organizations capitalize on everyday purchases, allow schools to offer
convenience to students, reduce their operating expenses and even
generate revenue. Smart Ops also has a student portal feature
which allows students to easily pay for tuition and other school-related
expenses.

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APRIL LEI

The Conference Board Leading Economic Index (LEI) for Japan has again fallen by 2.9% while The Conference Board Coincident Economic Index (CEI) increased .4% in April. With the 2.9% decrease in April, the sixth straight month of decline for a total 25.9% loss, The Conference Board LEI for Japan now stands at 66.6 (2004=100), which declined 3.7% in March, while the CEI now stands at 92.2 (2004=100), which increased 1.6% in March after having decreased 2.4% in February. Contributing Japan LEI factors include; a decline in operating profits, stock prices, the six-month growth rate of labor productivity, and real money supply.

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Americans’ Economic Enthusiasm is Short-Lived

While several monthly barometers are pointing to glimmers of optimism
among U.S. consumers, one poll has discovered that Americans’ economic
enthusiasm has faded over the past month. The reversal is being
attributed to a 26-year high in unemployment, gas pump prices climbing
almost daily to about $3 per gallon and the waning of the initial fervor
for the government’s economic remedies. The “RBC CASH Index” for June
was 34.3, an 8.7 point decline from May’s 43.0 reading, but nearly 33
points above the all-time low of 1.6 observed in February 2009. Despite
current financial woes, the RBC report found that increasing numbers of
Americans are starting to believe the worst is behind them. Expectations
regarding personal economic security have held steady since May and
consumer pessimism also remains fairly low with only 14% of Americans
saying they expect their personal financial situation to weaken over the
next six months. The “Index” is composed of four sub-indices: “RBC
Current Conditions Index”; “RBC Expectations Index”; “RBC Investment
Index”; and the “RBC Jobs Index.”

RBC CASH INDEX
Jun 08: 22.5
Jul 08: 14.6
Aug 08: 33.8
Sep 08: 69.2
Oct 08: 37.0
Nov 08: 34.7
Dec 08: 15.3
Jan 09: 13.3
Feb 09: 1.6
Mar 09: 8.2
Apr 09: 38.3
May 09: 43.0
Jun 09: 34.3
Source: RBC CASH

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CPP & CNP

Given card-not-present(CNP) fraud has risen since the introduction of
Chip and PIN by 13% between 2007 and 2008, CPP and The 3rd Man have
partnered to introduce “Card Fraud Alert” proactive online transaction
monitoring to help fight CNP fraud. Totalling over GBP328million,
accounting for over 50% of all reported card fraud, CNP fraud in 2008
accounted for 700,000 online transactions which the new card monitoring
solution hopes to combat with continuous scans of approximately 20,000
of the most popular consumer transaction fraud websites. Available for
GBP29.99, customers are allowed to register as many payment cards as
they wish and will receive an initial SMS and welcome pack upon
registration. Additional support to its subscribers includes SMS alerts
in the event of potential account fraud, a 24-hour fraud expert helpline
and instant issuer notification to offer the customer the option of
cancelling their card. Analyzing data not always available to banks,
“Card Fraud Alert” uses the IP address through which the transaction was
conducted to identify where purchases have been made to locate the
criminals.

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Accor Expands its Global Rewards to the USA

With intentions of providing U.S.-based incentive agencies and their
corporate clients a cost effective, localized incentive with employee
recognition programs, Accor Services North America has introduced its
latest program to the U.S. market.
The newly launched “Global Rewards” program takes on the challenge of globally
expanding U.S.-based corporations’ need to provide worldwide coverage
integrated into a single solution using local expertise in sourcing and
fulfillment. Through the convenience of centralized, U.S.-based account
management, the new program dispatches orders and information across its
global network, consolidates payables into a single invoice and provides
reward fulfillment services in 46 countries around the globe. Sourcing
and fulfilling orders locally and managing them centrally, Accor
Services relies on local experts in each country for reward sourcing and
offering customers a wide range of reward solutions such as retailer
gift vouchers, retailer gift cards, open loop gift cards, merchandise,
and more.

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WiredBenefits to Market InComm Cards

To offer prepaid healthcare payment methods through InComm’s network of
145,000 retail stores, the processing and POS distribution provider has
inked agreements with WiredBenefits healthcare to develop and market
prepaid healthcare cards. WiredBenefits’ reloadable prepaid cards
provide access to low-cost proprietary healthcare products and services
and can now offer healthcare spending options. WiredBenefits provides
processing technology and prepaid cards to deliver new platforms for
individualized care through end-to-end card issuance. GA-based InComm
was established in 1992 and had nearly $8 billion in retail sales
transactions processed in 2007.

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NIST MBGC & SAGEM

The National Institute of Standards and Technologies (NIST) has
published its Portal Challenge tests results from its Multiple Biometric
Grand Challenge (MBGC) showing Sagem Securite (SAFRAN Group) is at the
top of the biometric technology list. Mostly used for border control and
identity management, Sagem Securite identity solutions ranked No.1 in
face recognition, iris recognition and the combination of both. The NIST Portal Challenge report evaluated 7 companies and 5 universities and is
projected to bolster Sagem’s leadership role in personal, security, data
security and technological advances in the field. SAFRAN USA subsidiary,
MorphoTrak employs over 450 to provide biometric and identity management
solutions across the U.S. and Canada.

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Dodd Presses Fed to Adopt Opt-In for Overdrafts

Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, has asked the Federal Reserve to finalize a proposed rule that implement an “opt-in” approach to overdraft bank fees, rather than an “opt-out”. In a letter to Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, Dodd praised the Fed for limiting the ability of financial institutions to assess overdraft fees for ATM withdrawals and debit card transactions. However, he said he was concerned that some financial institutions may be increasing overdraft fees or creating new ones, which often take consumers by surprise and may bear little relation to the actual amount of overdraft. Dodd said the “opt-in” approach provides far greater consumer protection because the default then would be no overdraft service and no overdraft fees unless the consumers affirmatively consent, whereas the “opt-out” approach essentially represents a continuation of the status quo.

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