CardWizard Perso-to-Go Platform Unveiled

A new contactless personalization platform has been introduced that
enables financial institutions to instantly personalize mobile devices,
fobs and contactless stickers at the branch level for NFC payments.
CO-based Dynamic Card Solutions has unveiled the “CardWizard
“Perso-to-Go” platform. Utilizing the DCS “Perso-to-Go” platform, branch
personnel can personalize any contactless form factor — whether it is
an embedded NFC chip on a mobile device or provided as a contactless
sticker from manufacturers such as First Data’s “GO-Tag” solution or
Oberthur Technologies’ “FlyBuy” sticker, that can be attached to a
mobile phone, MP3 Player, PDA or key ring. No over-the-air
personalization is required, and because “Perso-to-Go” also supports
instant activation, the personalized device can be immediately used for
contactless POS purchases. Current “CardWizard” customers can now
upgrade their existing card issuance system to support “Perso-to-Go.”

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Obama Set to Sign New Credit CARD Act

Congress yesterday passed the “Credit Cardholders’ Bill of Rights Act of 2009” and it is on its way to President Obama for his signature by Memorial Day. The U.S. House voted 361 to 64 to send Obama
the stronger Senate version of the legislation. The U.S. Senate voted 90 to 5 on Tuesday to pass “H.R. 627.” Once Obama signs the bill, it will take nine months to go into effect. Speaker Nancy Pelosi said the “Credit Cardholders’ Bill of Rights” is historic legislation that protects American consumers against sky-high interest rates, excessive fees and other unfair practices of some credit card companies. U.S. Senator Mary Landrieu (D-LA) says that unfortunately, the “Credit CARD Act” does not apply protections to small business owners who have fallen victim to predatory credit card practices. The California-based Consumer Education Foundation noted that the legislation will not protect consumers against outrageous interest rates or other egregious practices and represents an astounding victory for the banking and credit card industry. The CEF says that under the Senate bill: There is no cap on credit card interest rates; companies can raise interest rates on future purchases at any time; issuers can unilaterally changes the terms of the credit card contract; and can still use fine print “arbitration” clauses to prevent consumers from suing them in court. To view the complete bill visit CardFlash Online (www.cardflash.com). (CF Library 5/20/09)

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Secure M-Payments Require Collaboration Model

A new white paper looks at security for mobile phone transactions. The
paper, “Security of Proximity Mobile Payments,” focuses on a
“collaboration model,” where financial institutions, MNOs, trusted third
parties and other stakeholders in the mobile payments ecosystem
cooperate in the management and deployment of mobile applications. The
Smart Card Alliance white paper introduces the players, their roles, and
their responsibilities in assuring the security of sensitive data. It
explains how the payment application, consumer credentials, and consumer
account information (such as a credit card number) are securely
delivered to, loaded on, and stored in a mobile device. It also
identifies risks present during the lifecycle of the payment information
stored on the mobile device and suggests appropriate countermeasures.
Participants involved in the development of the report included: Booz
Allen Hamilton, Collis America, Cubic, Discover, Giesecke & Devrient,
IBM, IfD Consulting, Infineon Technologies, Keypoint Consulting,
MasterCard, VeriFone, Visa, and ViVOtech.

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WW Card Transactions Growth Sets a New Low

Transactions processed worldwide on the Visa and MasterCard networks
during the first quarter grew at the slowest pace in the history of the
payment card industry. Both networks had a year-on-year increase of only
6% in the number of transactions processed globally. The increase in the
number of transactions processed has been generally declining since the
start of the recession in the fourth quarter of 2007. MasterCard’s
annual transaction growth rate was 19.4% in the first quarter of 2007,
declining to 15.6% in the first quarter of 2008 and then collapsing to
5.8% in the first quarter of 2009. Visa’s annual transaction growth rate
was 12% in the first quarter of 2007, rising to 15% in the first quarter
of 2008 and then sliding to 6% in the first quarter of 2009. Visa
processed 9.3 billion transactions in 1Q/09 for Visa, Visa Electron,
Interlink and PLUS cards. MasterCard processed 5.1 billion transactions
in the first quarter for MasterCard, Maestro and Cirrus cards. For
complete details on Visa and MasterCard first quarter and prior
performance visit CardData (www.carddata.com).

GLOBAL TRANSACTION GROWTH
MasterCard Visa
1Q/07: 19.4% 12.0%
2Q/07: 15.2% 13.0%
3Q/07: 13.3% 12.0%
4Q/07: 17.2% 13.0%
1Q/08: 15.6% 15.0%
2Q/08: 13.6% 13.0%
3Q/08: 13.0% 11.0%
4Q/08: 6.0% 8.0%
1Q/09: 5.8% 6.0%
Source: CardData (www.carddata.com)

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LML DIRECTOR

Payment processor LML Payment Systems has appointed David C. Cooke to
the Board of Directors. Cooke served as the Executive Director of the
newly-created Resolution Trust
Corporation (“RTC”) from 1989 to 1992, where he was responsible for the
RTC’s organization, staffing and operation. While with the RTC, Cooke
oversaw the takeover of nearly 700 failing institutions and the
development of innovative sales
initiatives for managing and disposing of their assets. After leaving
the RTC in 1992, Cooke spent eleven years as a
senior-level consultant in the private sector, where he managed groups
advising banks on emerging capital market developments and foreign
governments and multi-lateral
financial institutions on financial sector issues. In 2003, he was
recruited by the FDIC to serve as its first Chief Learning Officer in
charge of its new Corporate University. Cooke retired from the FDIC in
2006 and works part time as a consultant and teaches graduate level finance.

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Mobile Transaction Initiatives Examined

Aite Group releases a new report that examines mobile transaction
initiatives. The impact report is based on quantitative and qualitative
research of 69 mobile transaction initiatives internationally and
explores the current range of services in development and the
underlying technologies powering each initiative. Following an initial
growth spurt at the turn of the century, developers are once again
active in bringing mobile transaction services to
market. The technological evolution of the mobile device and mobile
networks,coupled with increased end-user savvy, has led to an increase
in mobile transaction initiatives over the past five years. By
understanding the various initiatives
around the globe, and what failed and what succeeded, financial
institutions and other players can better tailor their own solutions.

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MAR DEBT

Growth in credit card debt moderated in March, dipping slightly by A$300 million. However, credit card volume remained robust, rising 9.3% over year ago figures to A$18.7 billion. Year-on-year credit card debt growth has slowed to 4.4%, compared to 4.8% in the prior month and 7.8% one-year ago. According to the Reserve Bank of Australia credit card balances hit A$44.4 billion in March versus A$42.5 billion one-year ago. The RBA also revised the figures for credit card balances for the past twelve months. Most of the revisions lowered previously reported figures by about A$600 million. Credit limits now stand at A$123.6 billion, compared to A$116.4 billion in March 2008. According to the Reserve Bank of Australia there are currently 14.2 million credit card and charge card accounts in Australia, compared to 13.8 million one-year ago.

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Rewards the Deal Clincher for Biz Cards

A new report has found that reward programs are key drivers in the
selection of a small business credit card. Atlanta-based SYNERGISTICS
Research discovered that more than four in ten small business identified
special rewards such as frequent flyer miles as the biggest attraction
to a particular card. This is closely followed by having no annual fee,
also cited by four in ten. Three in
ten report that the card allows them to separate business and personal
expenses. Special discounts, rebates or cash back programs come in
fourth, being indicated by one-quarter of the small business credit card
users. Online account management is cited by a similar number.
One-fifth chose the card because it had the best interest rate or
because it was offered by their primary financial institution. Having
the largest credit line is mentioned by one in six.

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AMEX CUTBACKS

American Express is gearing up for another round of cutbacks that includes the elimination of 4,000 jobs or about 6% of the company’s current worldwide workforce. This second round of reductions will produce an estimated $800 million in savings. It follows the first round of cutbacks announced in October that were aimed at saving $1.8 billion. The latest round of staff is expected to save about $175 million. AmEx expects to save about $500 million in reduced investment spending on marketing and business development. A further reduction in operating costs by cutting expenses for consulting and other professional services, travel, and general overhead is expected to save $125 million. In October AmEx announced is planned to cut 7,000 jobs or about 10% of its workforce. The Company also cut $125 million in consulting and other professional services, travel and entertainment and general overhead. AmEx also was looking to save $1.0 billion by scaling-back investment spending on technology, marketing and business development and streamlining costs associated with some rewards programs. (CF Library 10/31/08)

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RBS WorldPay Returns to V/MC PCI DSS List

After discovering a data breach in November, RBS WorldPay has
returned to both Visa’s and MasterCard’s list of “PCI DSS Validated
Service Providers.” RBS WorldPay is now certified on “PCI DSS version
1.2.” The compliance was validated by Verizon Business/Cybertrust.
RBS WorldPay (formerly RBS Lynk), the U.S. payment processing arm of The
Royal Bank of Scotland Group, acknowledged that its computer system had
been improperly accessed by an unauthorized party during the holiday
season. The breach affected U.S. pre-paid cards include payroll cards
and open-loop gift cards. Actual fraud was committed on approximately
100 cards. Certain personal information of approximately 1.5 million
cardholders and other individuals may have been affected and, of this
group, Social Security numbers of 1.1 million people may have been
accessed. RBS says the breach was identified on November 10th. (CF
Library 1/5/09)

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Multi-City NFC Pilot Gets Promising Results

ME-based fleet card provider Wright Express, c-store Sheetz and ViVOtech
have successfully completed its multi-city NFC pilot. During the
trial, drivers used their Sheetz Fleet Business Advantage card loaded
into their specially enabled Near Field Communication (NFC) mobile
phones to make fuel and convenience store purchases at hundreds of
Sheetz locations by just waving their NFC mobile phones at
contactless-enabled readers. Wright Express was able to authorize and
process the mobile transactions as easily as those done by drivers using
plastic cards. One important feature of the pilot program was the
ability to make
mobile phone purchases both inside the store and at the pump. Sheetz
stepped up for the industry to show that using a mobile phone for
purchases at the pump is both safe and convenient. Sheetz has enabled
all of its locations with contactless payment technology at the pumps
and inside the store at the cash
register.

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