CONTACTLESS BARCLAYCARD

Barclays has become the first bank in the U.K to offer contactless debit cards. Barclays expects to issue upwards of three million of the new contactless Visa debit cards. The majority of
Barclays debit card customers will have contactless cards by 2011. The cards will permit contactless transactions up to GBP 10. About 8,000 retailers already accept contactless payments including many outlets of Pret A Manger, Coffee Republic, EAT, Books etc, Krispy Kreme, Threshers and thousands of independent retailers. Barclaycard introduced contactless technology on credit cards in September 2007 with the launch of “Barclaycard OnePulse,” the three in one “oyster,” credit and contactless card. All “Barclaycard Platinum” cards now include contactless technology, and over 1.5 million “Barclaycards” in
issue are now contactless-enabled.

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Inner Fence and Merchant Focus Team

Software developer Inner Fence and Merchant Focus Processing have
partnered to offer “Credit Card Terminal”, a credit card processing
application for iPhone. Credit Card Terminal is an iPhone virtual
terminal that performs
merchant credit card processing using Authorize.Net technology.
The solution includes a
merchant account from Merchant Focus Processing, a payment gateway from
Authorize.Net, and Inner Fence’s industry leading Credit Card Terminal
for iPhone as a bundled package. The iPhone Virtual Terminal and
merchant account bundled solution is
popular with photographers, computer technicians, limo drivers, home
party sales associates, merchants at fairs and farmers’ markets, and
many more small businesses.
Merchant Focus Processing has been a leading merchant account provider
and an Authorize.Net Preferred Reseller since 2002, successfully serving
the processing needs of thousands of merchants.

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Monthly Payment Rates Continue to Oscillate

Monthly payment rates, the amount that cardholders pay on their credit card debt, continued to oscillate, but reflecting a downward trend in January. In November the MPR posted its largest one-month drop ever, descending 251 basis points. Rising in December, the MPR collapsed 178 basis points. In January 2008, the MPR declined 140 basis points from the prior month. Historically, the MPR declines slightly in January, but this has not been the case since the start of the current recession. Among managed credit card outstandings, the MPR declined to 16.78% in January after rising to 18.56% in December. According to CardData, the MPR one-year ago stood at 17.82%.

MONTHLY PAYMENT RATES
Aug 08: 19.39%
Sep 08: 18.69%
Oct 08: 18.53%
Nov 08: 16.05%
Dec 08: 18.56%
Jan 09: 16.78%
Source: CardData (www.carddata.com)

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One-Third of ABS Goes Under Fitch Analysis

More than one-third of the 645 classes of Fitch-rated U.S. credit card ABS transactions totaling $301.98 billion are under analysis. Last month, 177 classes of Fitch rated U.S. credit card ABS transactions had under analysis status, 135 of which are issued by Bank of America and have since been reviewed. Following its monthly surveillance review, Fitch Ratings has placed an additional 176 classes of U.S. credit card ABS transactions under analysis. Forty-two classes have extended their under analysis status from the previous month, awaiting additional analysis or information. Fitch will be issuing a rating action within 30 days.

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VeriFone’s Quarterly Losses Widen to $182MM

VeriFone posted a 15% increase in fourth quarter revenues of $214
million, driven by a 24% increase in the Company’s North American
business. However, the terminal manufacturer’s net loss for the quarter
widened from $33.5 million for 4Q/07 to $182.0 million for 4Q/08.
VeriFone says the decline was related to its sagging stock price and the
softening of the market. The Company expects its markets will remain
very challenging and is focusing on inventory management, engineering
cost redesign, expense management and pricing discipline. VeriFone
expects to report net revenues of between $205 and $215 million for the
second quarter. The Company recently signed a $10 million contract to be
a premier payment solutions supplier to Moneris Solutions. Moneris
selected EMV- and PCI-approved wireless, countertop and integrated
payment solutions from VeriFone’s “Vx Solutions” line. For complete
details on VeriFone’s latest results visit CardData ([www.carddata.com](http://www.carddata.com)).

REVENUE HISTORICAL
4Q/05: $134.6 million
1Q/06: $142.2 million
2Q/06: $147.6 million
3Q/06: $156.6 million
4Q/06: $216.6 million
1Q/07: $217.2 million
2Q/07: $231.7 million
3Q/07: $237.9 million
4Q/07: $216.4 million
1Q/08: $185.5 million
2Q/08: $258.7 million
3Q/08: $244.7 million
4Q/08: $214.0 million
Source: CardData (www.carddata.com)

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Reseller Tracking Service is Launched

Market researcher NPD Group has launched the “Reseller Weekly Tracking
Service” for POS data. NPD’s Reseller Weekly Tracking Service collects
POS data from the
leading Direct Market Resellers (DMRs) and Contract Stationer retailers.
Information is available at the category, brand, and item level from the
information technology, consumer electronics, and enterprise systems
industries. NPD’s “Reseller Weekly Tracking Service”
provides users with a unique view into a $23.4 billion a year technology
product sales channel, and is the only industry source to do so with a
weekly sales view.

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Key Bank Offers World Debit MasterCard

OH-based Key Bank has become the the first issuer of the “World Debit
MasterCard”. The “World Debit MasterCard” is designed to maximize the
benefits realized by affluent consumers who choose debit as their method
of payment. Like other financial demographics, these consumers are
increasingly turning to debit cards for
their everyday purchases to help manage their spending. “World Debit
MasterCard” cardholders gain premium-level access to “MasterCard
Savings”, which provides Debit MasterCard cardholders with
merchant-funded discounts and special offers from thousands of
merchants. Premium-level access enables World Debit MasterCard
cardholders to take advantage of
enhanced savings, as well as limited-time
offers and special events. “MasterCard Savings Plus” offers statement
rebates, a MasterCard feature made available by KeyBank.

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S1 Corporation Revenues Rise 10% in 4Q/08

S1 Corporation reported a 10% increase in fourth quarter revenue to $58.6 million. Net income dropped from $6.4 million in 4Q/07 to $5.3
million. During the quarter, Postilion licensed its payments processing
and card management software to its fifth top 10 retailer in the U.K.
and to Arab National Bank, one of the top banks in the Middle East.
Total revenue from international operations for the fourth quarter
increased three percent to $15.5 million. S1 Corporation also tapped
Paul Parrish, previously with Infor Global Solutions, to serve as CFO.
Parrish served as Senior Vice President, Controller and Principal
Accounting Officer at Infor Global Solutions, a global enterprise
software company. For complete details on S1 Corp’s latest results visit
CardData ([www.carddata.com](http://www.carddata.com)). (CF Library 12/18/08)

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CardXX is Awarded Smart Card Patents

Card producer CardXX has been awarded patents for its advanced smart
cards and has stayed its litigation against Innovatier. The awarded
patents in Singapore and Mexico are for CardXX’s encapsulation
technology for the production of
advanced smart cards, active RFID tags and other devices, and currently
has over 30 patent applications pending in a number of other countries.
CardXX’s counterclaims against Innovatier, who filed for bankruptcy
involve breach of contract, misappropriation of trade secrets, and
unenforceability of Innovatier patent and patent applications.
CardXX is exploring various alternatives to proceed with its claims
against Innovatier and
to protect against the misappropriation of its technology by Innovatier
and its partners, customers, affiliates and successors.

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Acculynk is Set to Launch PaySecure

GA-based software provider Acculynk is set to launch “PaySecure”
Internet PIN debit program with the ACCEL/Exchange EFT network.
The network will bring several million cards to the pilot. “PaySecure”
utilizes a consumer’s debit card and the PIN for online
payments, requires no redirection or enrollment, and offers consumers a
simple and familiar checkout experience and provides an extra layer of
security for online card transactions and reduces fraud and charge-backs
by as much
as 75% for issuers, while offering attractive margins and no-cost
adoption. The ACCEL/Exchange network is
currently enabled at more than 200,000 ATMS in North America and most
major merchant locations throughout the United States.

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JAN DEBT

For the first time ever credit card outstandings for January increased over December, rising by GBP 296 million. However, year-on-year growth for credit card outstandings has been slowing, from an 8.6% rate in November to 7.8% for December to 7.5% for January. According to the The Bank of England, net credit card lending edged up to GBP 53.0 billion in January from GBP 52.8 billion in the prior month and compared to GBP 49.3 billion one-year ago. BOE noted that the GBP 300 million increase in January was boosted by a GBP 200 million desecuritization. The increase in total net lending to individuals in January (GBP 1.1 billion) was lower than the December increase and the previous six-month average. The twelve-month growth rate continued to fall, by 0.5 percentage points to 3.1%, and the three-month annualized growth rate slowed by 0.1 percentage points to 1.3%. The increase in net consumer credit in January (GBP 0.4 billion) was above the increase in December but below the previous six-month average. The annual growth rate of consumer credit continued to slow, to 4.6%; the three-month annualized growth rate fell by 0.4 percentage points, to 2.4%.

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

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Credit Card ABS Charge-Offs Hit a New High

Performance among credit card-backed securities deteriorated across all
key metrics in January. The charge-off rate increased to its highest
level ever and delinquency hit a 17-year high. According to “Moody’s
Credit Card Index” charge-offs for January hit 7.74%, compared to 5.48%
one-year ago. Delinquency rose to 5.94% compared to 4.51% for January
2008. Moody’s expects the charge-off rate index to hit double digits by
year end. Most analysts are predicting 9% charge-offs by December, but
it largely depends on the unemployment rate. Cardholder payments also
dropped in January by 16.39%, compared to 19.06% for January 2008.
Yield dropped to 16.58% from 18.54% one-year ago. The one-month excess
spread also declined to 5.81% in January, compared to 6.94% for January
2008.

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