Debit Card Direct Mail Takes-Off in Q1

A new consumer survey reveals 43% of adults say they’re using debit
cards more and credit cards less because of the recession. Another fifth
of Americans told Mintel they’re relying less on both debit and credit
cards as they reduce spending. Overall, 83% of survey respondents report
having changed their spending habits due to the economy. In the first
quarter, credit card issuers cut solicitations in half, reducing mail
volume 49% from the fourth quarter. Mintel Comperemedia estimates U.S.
card issuers sent fewer than 500 million offers in the first quarter,
the lowest quarterly total recorded since 2000. But, the number of debit
card mail offers nearly doubled from the fourth quarter, while checking
account solicitations grew by 29%.

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Pace of Deterioration Begins to Slow

U.S. consumers fell past due and defaulted on their credit cards at
record rates again last month, although the pace of deterioration showed
signs of slowing. Fitch’s “Prime Credit Card Chargeoff Index” increased
48 basis points to 8.89%, the second consecutive record high. Chargeoffs
have risen 18% since the beginning of this year and are now 44% above
year earlier levels. Fitch’s “Delinquency Index,” which tracks
receivables greater than 60 days past due, posted its fourth consecutive
record level rising to 4.44%. This reflects a increase of 11 basis
points, the smallest monthly increase in the last five months, during
which time delinquencies have risen 35%. Fitch’s “Monthly Payment Rate
Index” improved to 17.79% from 16.83%, primarily as a result of seasonal
normalization.

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VENDOR MATRIX

Smart Communications has been ranked at the top of the
latest Vendor Matrix released by ABI Research.
The Vendor Matrix is an analytical tool developed by ABI Research to
provide a clear understanding of vendors’ positions in specific markets.
Vendors are assessed on the important parameters of “innovation” and
“implementation” across several criteria unique to each vendor matrix.
For this particular matrix, under “innovation,” ABI Research examined
the functionality and security of each vendor’s SMS and mobile Internet
downloadable applications. Under “implementation,” ABI Research scrutinized the vendors’
relationships with banks, MNOs, money transfer organizations and card
payment companies, as well as the breadth of their solutions, the
complementary products they offer, their partnerships, and their overall
financial and organizational health. Fundamo Pty. Ltd. and Obopay claimed the second and third spots in the
company’s new worldwide evaluation of mobile person-to-person payment
services vendors.

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BLUESTAR & ADC NORDIC

POS technology provider BlueStar has acquired ADC Nordic, a distributor
of Automatic Identification,
Point-of-Sale, Mobile Data Management, and RFID electronic products. The
organization is a comprehensive resource of hardware, repair services,
software solutions and marketing support for dealers, system
integrators, and IT consultants. Offering reseller support and service
both before and after sales, it is one of the largest, local and
diversified Nordic barcode and RFID Companies.
ADC Nordic provides niche
electronic products to Value Added Resellers in Sweden, Denmark, Norway,
Finland and the Baltics.

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Global Cash Access Rises 26% in 1Q/09

Global Cash Access reported that revenues rose 26% to $182 million in the first quarter. EBITDA increased to $24.0 million from $21.5 million in the same quarter last year, an 11.6% increase. The Company’s results for the quarter include the operations of Certegy Gaming Services, which was acquired in April of 2008, and Cash Systems, which was acquired in August of 2008. The Board of Directors recently authorized a $25 million share repurchase program. The Company reiterates its expectations for 2009 revenue to be between $700 and $730 million and EBITDA to be between $95 and $101 million. For complete details on GCA’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

GCA REVENUE HISTORICAL
1Q/08: $143.5 million
2Q/08: $151.5 million
4Q/08: $176.3 million
1Q/09: $181.7 million
3Q/08: $185.1 million
Source: CardData (www.carddata.com)

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RBC CASH Index Begins a Turnaround

The latest RBC “CASH Index” stands at 43.0 for May 2009, up from 38.3
in April and from 1.6 in February, its all-time low. This is the first
three-month rally for the Index since the last quarter of 2005. RBC says
the “Index” was driven by reduced concern about current economic
conditions and diminishing fears of job loss. The RBC “Jobs Index” saw a
rise of 9.2 points in May to 54.4, compared to 45.2 last month, the
second consecutive increase in the “Jobs Index” following six straight
months of declines. The RBC “Expectations Index” showed little change in
May, holding at 34.0, up 1.6 points from the 32.4 observed in April. The
RBC “Investment Index” currently stands at 49.6, up 4.8 points from
April’s 44.8. The RBC “Current Conditions Index” currently stands at
45.0, up 9.2 points from last month’s 35.8.

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VENDOR MATRIX

Smart Communications has been ranked at the top of the
latest Vendor Matrix released by ABI Research.
The Vendor Matrix is an analytical tool developed by ABI Research to
provide a clear understanding of vendors’ positions in specific markets.
Vendors are assessed on the important parameters of “innovation” and
“implementation” across several criteria unique to each vendor matrix.
For this particular matrix, under “innovation,” ABI Research examined
the functionality and security of each vendor’s SMS and mobile Internet
downloadable applications. Under “implementation,” ABI Research scrutinized the vendors’
relationships with banks, MNOs, money transfer organizations and card
payment companies, as well as the breadth of their solutions, the
complementary products they offer, their partnerships, and their overall
financial and organizational health. Fundamo Pty. Ltd. and Obopay claimed the second and third spots in the
company’s new worldwide evaluation of mobile person-to-person payment
services vendors.

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CashStar Introduces O’Charley’s Card

Gift card provider CashStar has rolled out a card program for TN-based O’Charley’s 372 multi-concept restaurant
company. CashStar offers the only interactive gift card solution available today
with extensive personalization and promotion capabilities. The virtual gift cards will be available on each of the company’s Web
sites and can be purchased the same way plastic gift cards are ordered,
only the virtual gift card can be personalized with different images and
text and is delivered via an e-mail with a link to activate the gift.
With
CashStar’s platform, O’Charley’s Inc. offers a number of gift card
designs for guests to choose from, including Mother’s Day gift card
designs – something the restaurant group cannot do cost-effectively with
plastic cards. In addition, consumers can upload their own image to be
featured on the gift card to add another layer of personalization.
O’Charley’s, Ninety Nine Restaurants and Stoney River Legendary Steaks
can also add personalized promotions and incentives to every card,
delivering on their mission of convenience and value.

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Aite Explores Private Label Prepaid

A new impact report from Aite looks at five trends for private label
prepaid cards.
The private label prepaid card market has grown tremendously over the
past several years. Because of the recession and heavy competition from
branded prepaid cards, however, Aite Group believes that total volume
loaded on private label prepaid cards will remain flat at around US$39
billion for the three years to come. While the card processor space has
been dominated by two players – First Data and SVS – in recent years,
the game is changing. New strategies that address the latest trends in
the private label prepaid card space mean that smaller players offering
innovative solutions to the evolving marketplace will be able to grow
their business tremendously.

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Heartland Payment Systems Posts Q1 Loss

Heartland Payment Systems reports first quarter net loss of $2.5
million due to a pre-tax loss of $12.6 million attributable to its
recent processing system intrusion. However, transaction processing
volume rose 17.4% to $15.5 billion. Net revenues in the first quarter
were $98.5 million, an increase of 23.4% over 1Q/08. The Company just
received its “PCI DSS” recertification. In addition, Heartland returned
to Visa’s and MasterCard’s Lists of “PCI DSS Validated Service
Providers.” Further, the Company expects to introduce its fully
encrypted end-to-end terminal solution in the third quarter, offering
merchants what a high level of data security in the market. HPY’s
American Express “One Point” and Discover “MAP” programs are also both
rolling out. For complete details on Heartland Payment Systems’ first
quarter results visit CardData ([www.carddata.com](http://www.carddata.com)).

HEARTLAND PAYMENT SYSTEMS REVENUES
1Q/08: $340 million
2Q/08: $395 million
3Q/08: $425 million
4Q/08: $386 million
1Q/09: $372 million
Source: CardData (http://www.carddata.com)

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