NON-NFC

A new study has found that the value of mobile commerce transacted via non-NFC (non-Near Field Communication) methods will total $1.6 billion this year, while mobile commerce conducted via NFC will be minimal. ABI Research says that the development of the NFC market has not met early expectations. Demand for these services and related mobile money services, such as banking, domestic person-to-person payments, and international remittances is undeniable, although its drivers differ around the world. Industrialized regions’ customers are becoming comfortable with using their mobile phones for more than just traditional communications. In the developing world, mobile money services have promise as an alternative to scarce financial institutions for money transfers, and as ways to reach the previously “unbanked.”

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GLOBAL THREAT REPORT

SaaS web security provider ScanSafe has issued its “Annual Global
Threat Report” which reveals that there has been an explosive growth in malware
throughout 2008. ScanSafe noted that there has been an overwhelming 582%
growth between like quarters in 2007 and 2008 and a 300% volume ratio
increase from January 2008 through December 2008. Exploits and iframes
were up 1731% in 2008, while data-theft Trojans increased 1559%.
Other key findings from the report include: the Web is now a massive front for data harvesting; the credit crunch is fueling data theft;
trusted sites pose the greatest risk and the energy & oil sector has 400% elevated exposure to data theft Trojans
In April 2008 ScanSafe counted an excess of 780,000 malicious Web pages
from only five vertical interest sectors as a result of a single SQL
injection attack. As a result of the continuing mass compromise of
legitimate websites observed throughout 2008, the standard ‘safe
surfing’ advice of avoiding unknown or non-trusted websites no longer
applies. Today, it is the trusted sites that should be viewed as posing
the greatest risk to Web surfers. The report is based on an analysis of more than 240
billion Web requests processed in 2008 by the ScanSafe Threat Center on
behalf of the company’s corporate customers in more than 80 countries.
It represents the world’s largest security analysis of real-time traffic.

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M2 & ALTAIR

Online transaction processor M2 Global has partnered with prepaid card
provider
Altair designed to help each be a more formidable
competitor in the financial transaction processing, prepaid and debit
card operations business. M2 Global is widely regarded as an
experienced, stable and secure processing firm and will assume
management of Altair’s entire processing capability, including the
operation of its data centers. This move allows Altair to focus more
resources on expanding its innovative card products and building on the
client delivery strengths and positive customer experience it is known for.
Consolidating operations with a strong processor will create added
efficiency and ensure cost competitiveness for both organizations. M2
also brings its patented security and fraud mitigation capability to the
business, a strong value proposition for Altair’s clients. M2 Global is
an online transaction processing technology company
that develops, acquires, operates, holds and licenses software that
enables platform interoperability and in the initiation and settlement
of electronic payments.

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Hypercom Fourth Quarter Revenues Leap 36%

Leading payment terminal manufacturer Hypercom reported that net
revenue for the fourth quarter jumped 36% to $121.6 million. The growth
was largely driven by the 2008 acquisition of the Thales e-Transactions.
Gross profit for the quarter was $32.8 million versus $24.6 million for
4Q/07. During the fourth quarter Hypercom commenced the roll-out of its
“medCompact” healthcare terminal as part of the migration to the
government’s new “e-Health” card program in Germany; introduced
“HyperSafe Secure,” a solution that encrypts cardholder data at the POS
so that sensitive information is never exposed; entered into an
agreement with TASQ Technology under which TASQ will have exclusive
rights to distribute Hypercom’s new 32-bit “Optimum T4205” payment
terminal in Canada for one year; signed Intermarche, one of France’s
leading retailers with almost 1,500 retail outlets, installed and is
successfully using Hypercom’s “Wymix PIN Pad” with contactless reader as
part of the “Payez Mobile” trail for NFC payments in two test sales
outlets in Caen and Strasbourg; received APACS accreditation in the UK
for its “T4200” and “M4200” countertop and mobile payment terminals; and
entered Denmark’s retail card payment sector, commenced product sales
and was in receipt of initial purchase orders from Danish distributor
CTcoin.dk for its “Artema Hybrid” payment terminal. For complete details
on Hypercom’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

HYPERCOM REVENUE HISTORICAL
4Q/06: $64.8 million
1Q/07: $64.8 million
2Q/07: $67.5 million
3Q/07: $70.8 million
4Q/07: $89.5 million
1Q/08: $71.7 million
2Q/08: $125.4 million
3Q/08: $122.2 million
4Q/08: $121.6 million
Source: CardData (www.carddata.com)

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HI5& PAYMO

Social entertainment site hose hi5 and mobile payment network Paymo have
teamed to make “hi5 Coins” virtual currency available to 24
countries. The partnership extends hi5’s global reach, by providing the
ability to accept direct user payments from millions of consumers around
the world who do
not have or do not want to use credit cards. Over 75% of the online
community
worldwide does not have a credit card, but 3 billion consumers own a
mobile phone.
For consumers, Paymo provides an easy, fast and safe way to pay online.
You don’t need a credit card, or a bank account. You don’t need to
register. Simply by
entering your mobile phone number and replying to a text message you can
make a purchase. The charges are deducted from your pre-paid balance or
appear
on your monthly cell phone bill. For merchants, Paymo handles all the
user billing,
provides a simple electronic confirmation of the purchase and settles in
the
merchant’s chosen currency.

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JAN LEI

The Conference Board Leading Economic Index declined 0.5% and the
Coincident Economic Index decreased 0.8 % in January.
Two of the six components that make up the LEI for
Spain increased in January. The positive contributors are the Spanish
contribution to Euro M2, and the capital equipment component of
industrial production. The negative contributors are job placings, the
Spanish equity price index, the inverted long-term government bond yield
and order books survey. Between July 2008 and January 2009, the LEI
declined by 2.2% (about a -4.3% annual rate), about the
same rate of decline as that between January 2008 and July 2008. In
addition, the weaknesses among the leading indicators have been
widespread in recent months. During the
past six months, TCB CEI for Spain has fallen by 5.0% (about a
-9.8% annual rate), well below the 1.6% decline (about a
-3.2% annual rate) for the previous six months. Additionally, the
weaknesses among the coincident indicators have remained very widespread
in recent months, with none of the components increasing. At the same
time, real GDP contracted at a 2.5% average annual rate during
the third and fourth quarter of 2008 (including a -3.8% annual
rate during the fourth quarter), its lowest two quarter growth rate
since 1993. The LEI now stands at 107.5 (2004=100), the CEI now
stands at 104.5 (2004=100).

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CRYPTOMATHIC & BBS

Cryptomathic has initiated litigation against
BBS AS for patent infringement of its patent in BBS’ “BankID”
products related to digital signatures and user authentication using a
central server for key storage and signature generation.
In its complaint, Cryptomathic alleges that BBS has infringed and
continues to infringe, contributes to and induces the infringement of
Cryptomathic’s patent by making, using, offering for sale and selling
products and services without being licensed by Cryptomathic to do so.
BSS’s “BankID” solution is used by approximately 1.75 million end-users to
authenticate themselves by having messages or content signed centrally
on their behalf with individual private keys.

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Consumer Spending Slowly Rebounds in Feb

A monthly index has found that falling oil prices and reduced tax burdens are giving consumers the wherewithal to spend. The Deloitte “Consumer Spending Index” rose in February to 1.53%, from an upwardly revised gain of 1.27% a month ago. The tax burden continues to fall with the weakening of the economy. Unemployment claims rose again in the most recent month and are up 72% from a year ago. Real wage growth continues to post strong growth. Real wages are up 4.6% from a year ago and on an annualized basis are up 13.5% over the last six months as energy prices have given a big boost to consumer purchasing power. However, home prices continue to fall. Renewed efforts to forestall foreclosures coupled with a tax credit for home buyers may bring some stability to this market. The decline in home prices has made home buying much more affordable. What is lacking is mortgage financing. Deloitte says the rebound in the “Index” coupled with anticipated tax cuts point to a better selling environment for retailers this spring.

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Operating Expenses Top 7% for the First Time

Operating expenses for credit card issuers rose to an unprecedented 7.11% in January, about 121 basis points above one-year ago. The figure was up 24 basis points from the prior month, according to CardData (www.carddata.com). Operating expense is determined by dividing monthly gross operating expenses by the average managed card outstandings and then annualizing. Operating expense includes such items as credit processing, call center servicing, billing, collections, fraud management, and card issuance.

OPERATING EXPENSE
Aug 08: 6.25%
Sep 08: 6.49%
Oct 08: 6.55%
Nov 08: 6.61%
Dec 08: 6.87%
Jan 09: 7.11%
Source: CardData (www.carddata.com)

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Morgan Drexen Offers an EDAF

CA-based debt settlement service Morgan Drexen is
offering up to a $1000 cash advance as part of the “Emergency Direct
Assistance Fund” to assist cash-strapped American families
to reverse credit card debt. Morgan Drexen’s nationally-recognized
services to law firms include debt
settlement programs, including EDAF, with the supervision of local
attorneys. Legal counsel review all settlements and consumers cash is
held in a trust account pending settlements. Morgan Drexen works with
local and regional attorneys to
substantially lower credit card and other unsecured debt, to protect
clients from threats and harassment, and to help consumers build a
secure financial future.

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Unstrung/TechWeb Issues an M-Commerce Report

A new report, “Dial M for Commerce: Mobile Payment Market Gains
Traction”, reveals the U.S. is one of the fastest-growing markets for
m-commerce, despite
having a highly developed payment infrastructure and greater concern
over security issues.
The report from research firm Unstrung Insider and TechWeb’s Light
Reading analyzes the
m-commerce sector, providing an overview of the market – including how
m-commerce
works, how various solutions are developing, and the potential
applications for mobile
payments. It identifies vertical markets that various vendors are
tapping into and global areas of interest for the service and examines
what to expect for
the next 12 to 18 months in the m-commerce market, including challenges the
industry faces. Additionally, the funding, acquisitions, and
partnerships of vendors are
discussed and the report provides a comparative analysis of nine of the top
vendors in the m-commerce sector. Other findings include: Security
continues to be one of the biggest concerns plaguing m-commerce,
followed closely by a need for consumer education; need to define the
various components that constitute m-commerce remains a
challenge for the industry; several vendors have recently announced or
are developing m-banking
applications; the increasing value-added revenues beyond that of
ringtones is seen as
one of the many benefits provided by m-commerce and peer-to-peer
payments will be one of the hottest m-commerce
applications for the next 12 to 18 months.

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