SAMA & OPTELIO

The Saudi Arabian Monetary Agency has certified the Gemalto
“Optelio” bank card as compliant. The “Optelio” debit card hosts the
Saudi Payments Network (SPAN) application and is compatible with
GlobalPlatform specifications, the Visa Electron and the Debit
MasterCard and Maestro Card requirements. Gemalto will complete existing
Multos offers for the Saudi Arabian banking market, which has a total of
10 million debit cards in circulation, to support local financial
institutions in EMV migration and allowing Visa’s VSDC or MasterCard’s
M/Chip applications delivered on the same product. Gemalto digital
security had 2008 annual revenues of EUR1.68 billion, employs 10,000
with operatioins in 40 countries.

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ELAVON DCC

Elavon global card acquirer has enhanced its proprietary international
processing platform, which allows merchants to authorize in 89
currencies, settle in 16 and convert in up to 48, along with access to
cross-border and Dynamic Currency Conversion (DCC) capabilities. With
the enhancements, Elavon has announced its expansion into Germany where
the organization will offer DCC in more than 25 currencies. Managing the
entire conversion process from direct treasury exchange rates,
transaction processing, back-end reconciliation, settlement and funding,
Elavon ensures accurate, market-driven, currency transactions which are
updated daily. Elavon’s Global Acquiring Solutions, subsidiary of U.S.
Bancorp, provides end-to-end payment processing services such as credit
and debit card processing, electronic cheque services, gift cards,
dynamic currency conversion, multi-currency support, and cross-border
acquiring to meet the needs of merchants.

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SINO R&D

Sino Payments is slated to open its Macau Business Support Center before
the end of June 2009 to establish its R&D unit and host the Sino Pay
Global Payment Processing system for international credit and debit card
transactions. The Macau office will provide Sino Payments government
liaison and advice free of charge to encourage its expansion. NV-based
Sino Payments offers IP transaction processing through its “SinoPay GPP”
to convert transaction processing systems from dial up point-of-sale to
an IP transaction process for reduced transaction times while the Macau
Government Business Support Center is focused on strengthening Macao’s
role as a regional service center and to reduce start-up costs for
foreign investors.

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LCL & GEMALTO

Le Credit Lyonnais (LCL) has partnered with Gemalto digital security to
provide its customers a personalized bank card complete with the user’s
photo. LCL is a subsidiary of Credit Agricole banking group, which
serves 26 million customers, for which Gemalto will provide a web-based
solution enabling users to easily upload their identity photograph onto
the bank’s website. The LCL cardholders can make purchases worldwide
with coupons from ISIC through 8,000 partners in France and 40,000 in
120 other countries. Gemalto digital security has 2008 annual revenues
of EUR1.68 billion and employs 10,000 in 40 different countries.

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CUP & MERCHANT SOLUTIONS

Merchant Solutions and China UnionPay (CUP) have partnered to allow
thousands of merchants outside China to accept CUP payment cards. This
initiative is in response to research demonstrating more than 40 million
Chinese traveled abroad in 2007, 46 million are predicted to have in
2008 and it is estimated over 50 million will in 2009. To facilitate
these travelers, Merchant Solutions plans to equip its business
merchants with POS terminals and equipment for card payment acceptance
through the CUP bankcard association and its member banks. The member
banks have issued more than 1.8 billion cards across China.

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APR DEBT

Growth in credit card outstandings has been in a holding pattern for the past seven months fluctuating slightly from GBP 53 billion. Year-on-year, credit card loan growth is down 30 basis points (seasonally adjusted). According to the The Bank of England, net credit card was GBP 53.1 billion in April. However, the amount outstanding of credit card lending increased by GBP 400 million following the de-securitisation of a credit card portfolios from a U.K. bank to associated non-resident companies. Overall, the increase in total net lending to individuals in April (GBP 1.3 billion) was higher than the March increase (GBP 0.7 billion), but below the previous six-month average. The twelve-month growth rate continued to fall, by 0.3 percentage points to 1.8%, but the three-month annualized growth rate increased by 0.1 percentage points to 1.0%. Total consumer credit increased by a net GBP 0.3 billion, below the previous six-month average. The annual growth rate of consumer credit continued to fall, to 2.9%; but the three-month annualized growth rate increased by 0.4 percentage points to 0.8%.

NOTE: Chart does not include about GBP10 billion from specialist lenders, retailers, and insurance companies. SOURCE: Bank of England

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Facebook Pilots a New Payment System

Facebook is testing applications to introduce a new payment system to its roughly 200 million users. The new service will enable the social networking site to act as a go-between payment platform for customers and merchants, creating scrip for dollars. Current the payment system can be used for purchasing applications such “GroupCard”, “PackRat” and “Birthday Calendar” and for use in its own icon gift shop. By applying “Facebook Credits”, users create a virtual wallet with their own payment card to establish their account, in which 10 credits is equal to one U.S. dollar, and will only be charged a small transaction fee. The user simply selects the “Pay with Facebook” option on Facebook’s site, rather than directly using a credit card, to purchase the gift shop items typically ranging from $4.99 to $24.99 each. If a user deactivates their account, they will lose any accumulated credits, which do not expire before used and cannot be applied in the ‘real world’. Additionally, Facebook uses SSL technology to securely transmit credit card information and protects all credit card account numbers through 24/7 security monitoring. Facebook will continue as a free service.

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SMART STICKER

Initially for a pilot in the city of Bursa, the Turkey-based E-Kent
automatic fare collection has chosen On Track Innovations contactless
microprocessor-based smart card solutions to provide its transportation
payment solution using the Company’s “Smart Sticker” and the “Saturn
6000” contactless reader. The OTI payment solution, for example, will
equip public buses with the OTI “Saturn 6000” contactless reader to
allow bus riders to use their OTI contactless “Smart Sticker”
self-contained, contactless payment device for both transit and payment.
The “Saturn 6000” offers built in encryption and is certified for EMV
and ISO 14443 PayPass version 1.1.

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ARM Collections Improve in First Quarter

A new survey has found that 46% of accounts receivable management firms reported “strong” or “very strong” collections – an increase from the 29.7% reporting the same level of performance in 4Q/08. According to a new report from Kaulkin Ginsberg, improvement is still below levels reported earlier in 2008, and in the first month of second quarter, 38.6% of ARM firms reported this level of performance. However, over 63% of ARM firms surveyed reported “moderate” to
“significant” increases in new business, or “placements,” in first
quarter as consumers in the current market have very little cash to
settle debts. Additionally, growing unemployment in the U.S. is impacting collectors’ ability to recover debt, and the ARM industry is not immune to job cuts. Overall, more than 28% of companies reported layoffs in the first quarter of 2009, representing a higher rate than was anticipated in the fourth quarter survey. In the fourth quarter, 26.6% of ARM companies anticipated that they would need to lay off workers at the start of the year.

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Cap One Expands Card Lab for Affinity Cards

Capital One has introduced a new service for credit card affinity programs of all sizes to create their cards and access free marketing tools to stimulate fundraising. The new “Card Lab Connect,”
has already been through a successful pilot phase, which allowed a select number of community-based nonprofit organizations to test the program. Nonprofits can register for “Card Lab Connect,” create a series of up to three uniquely designed credit cards for their organization, and use online tools to encourage their supporters to apply for the affinity card. All rewards earned on these cards, including one percent of net purchases and an additional $25 with the first purchase, go directly to support the affiliated nonprofit organization. There are no complicated contract negotiations, no member quotas and no exchange of membership/mailing lists as is the case with most other affinity programs.

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