Gemalto Poised for EMV DDA Card Upgrades

Smart payment card specialist Gemalto reports that fourth revenue was up slightly over 4Q/07, at constant exchange rates, to $615.0 million. The three main business segments together are up more than 8% for the full year. Secure Transactions growth was driven in the fourth quarter by contactless EMV rollouts in Europe and a 23% improvement in personalization services revenue. Gemalto says the recent decision by Visa and MasterCard to require all EMV payment cards in Europe to be upgraded with the latest DDA security technology by 2011 will boost future revenue. POS Terminals revenue was up 4% for the fourth quarter. Mobile Communication revenue was essentially flat in the fourth quarter at historical exchange rates and decreased by 5% at constant rates, because of shortfalls in specific accounts in the Americas and Asia. Security revenue contracted by 4% in the fourth quarter on the back of the anticipated reduction of patent licensing revenue. For complete detals on Gemalto’s latest results visit CardData ([www.carddata.com](http://www.carddata.com)).

GEMALTO REVENUE HISTORICAL
4Q/07: $612.5 million
1Q/08: $506.9 million
2Q/08: $486.0 million
3Q/08: $545.8 million
4Q/08: $615.0 million
Source: CardData (www.carddata.com)

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CITADEL & UKASH

Citadel Commerce will now offer its “Instant Internet Banking” service to online
cash payment provider Ukash. Ukash has announced its prepaid vouchers will be available for purchase
over the internet through secure bank transfers, allowing customers to get
Ukash any time of the day from virtually anywhere. Customers visit the Ukash website and access a secure interface from
which they can transfer money from their bank account and turn it into a
unique 19-digit Ukash voucher, at no additional charge. The voucher can then
be used to shop, pay and play online – a completely safe and convenient
electronic transaction with cash. By using the leading Instant Internet Banking issuing method, this
agreement will take Ukash into 13 new countries. This rapid expansion will
continue in both physical and virtual networks throughout 2009. Ukash is
currently available in 275,000 physical stores across more than 20 countries
in Europe, South Africa and via Vodafone mobiles in the UK.

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NEW CARD CHAIR

Karl Eglof Hartel is the new Chair of the Card Committee at Global
Platform. He leads the Card Committee as it enters a significant year
of new
initiatives to align with market developments in the smart card
industry. Hartel came to G&D in 2000 after working in the field of
military communication
and information systems and is currently Project Manager for New
Technologies in G&D’s Telecom Division, where he lead G&D’s first Near
Field Communication (NFC)
projects. He has been involved in standardization for several years,
with one particular focus being the European Telecommunications
Standardisation Institute
(ETSI) which specifies the smart card platform for telecommunications.
On the basis of this experience, Hartel has contributed to
GlobalPlatform’s Mobile Task Force and Card Specification Working Group.

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Shaken by 2008 CEOs Pessimistic About 2009

It is not a consumer mirage as top business executives also are
pessimistic about prospects for 2009. An “Annual Global CEO Survey”
found that confidence has plunged to its lowest level since 2003. Nearly
70% of CEOs said their companies will be affected by the credit crisis.
Of those, nearly 80% said they faced higher financing costs, and nearly
70% said they would delay planned investments as a result. Only 15% of
CEOs in North America and 15% in Western Europe expressed confidence
about growth prospects for the next 12 months. This compared with 21% in
the emerging economies of Central and Eastern Europe, 31% in Asia
Pacific, and 21% in Latin America. The impact of the recession in the
world’s major economies, cited by 85% of survey respondents worldwide,
continued to dominate concerns of CEOs and was the only risk factor to
increase among CEOs’ concerns. Other major risk factors included
disruption in the capital markets, cited by 72%, over-regulation,
55%, energy costs, 50%, and availability of key talent, 46%.

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EURO-ZONE INDEX

The Bloomberg Euro-Zone Retail Purchasing Managers’ Index
for November indicates that Euro-Zone retail sales continued to fall sharply in January, dropping
for the eighth month running. At 44.0, compared to 41.4 in December.
The Retail PMI is based on a mid-month survey of more than 1,000
executives in the euro area retail sector and provides data one month
ahead of government-issued figures. Sales fell at a slightly increased rate in Germany. The
month-on-month index dipped from 42.3 to 41.7, a reading marginally
above November’s record low of 41.3. Sales in Germany have now fallen
for eight successive months, with retailers often reporting that
consumer confidence had remained subdued due to concerns regarding the
wider economy.

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QBS Offers a PCI Compliance Program

MN-based technology consultants QBS have transitioned a PCI Compliance
program with hair salon company Regis. QBS provided program management,
project management and strategic
leadership to Regis during the entire compliance program, from initial
strategic planning through implementation. The PCI Data Security
Standard (DSS), a set of comprehensive
requirements for enhancing payment card data security, is a multifaceted
security standard including requirements for security management,
policies, procedures, network architecture, software design and other
critical protective measures. The comprehensive PCI DSS standard is
intended to help organizations proactively protect customer account data
and other sensitive data via a set of prescriptive requirements.
Although many non-compliant lower volume retailers and organizations who
accept payment cards have gone unnoticed so far, that is beginning to
change. For most merchants, the deadlines for validating compliance with
the PCI DSS have already passed. Merchants can now expect to see card
brands become more aggressive with compliance deadlines.

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PRIME & THALES

Encryption specialist Prime Factors and technology provider Thales have
renewed their strategic relationship. Prime Factors develops the Bank
Card Security System (BCSS), which is
designed to work with the Thales HSM 8000 to meet stringent security
requirements established by Visa, MasterCard, Discover and American
Express. Leading secure personalization bureaus use BCSS and the Thales
HSM 8000 to create secure financial transaction cards. The agreement
with Thales gives Prime Factors the right to sell the
Thales HSM 8000 hardware encryption device in North America. The Thales
HSM 8000 is the only HSM that BCSS supports and is strategic to the
success of BCSS.

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PaySimple Offers a Business Resource

SaaS e-payment provider PaySimple has launched “The Small Business
Growth Center”. The Small Business Growth Center helps small
business owners find information and business tools effortlessly by
creating and compiling some of the best resources available on the web
which include “Small Business Tools”; a newsletter; Tip of the Week;
Small Business Dictionary and Electronic Payment Information. PaySimple
is releasing this Growth
Center to accompany their Learning and Support Center and blog—to
connect business owners with in-depth and valuable tools and tips.

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NCR GLOBAL SALES

NCR has hired Peter Leav, previous with Motorola, as its new VP of
Global Sales. Leav will be responsible for driving growth of NCR’s
assisted and self-service solutions across the financial services,
retail and hospitality, travel and gaming, entertainment, healthcare and
public sector, and software and technology services
industries in more than 100 countries. At Motorola he was most recently
corporate vice president and general manager and had responsibility for
sales in North America, Latin America, Europe, Middle East and Africa
where he led his team to top line revenue growth, successive market
share gains and improved operating earnings. Leav is a graduate of
Lehigh University

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FI’s Falcon v6.0 Coming in April 09

Predictive analytic technology provider Fair Isaac is set to release the
latest version of “Falcon Fraud Manager 6.0”. “Falcon 6.0” is the first
fraud management solution to offer adaptive
analytics, which provide dynamic, real-time self-calibration of fraud
detection models, enabling institutions to identify and respond to new
threats with unprecedented speed. It also expands Fair Isaac’s patented
fraud detection and profiling techniques by introducing global
intelligent profiles targeting high-risk ATMs, merchants, risky
geographic regions and other criteria. For the first time
Falcon will include detection and case management capabilities relevant
to retail banking lines of business such as demand deposit/current accounts.

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Advanta Charge-Offs Near 12%; Cuts 300 Jobs

Business card specialist Advanta reported a net loss of $46.9 million as charge-offs neared 12% during the fourth quarter. As a result Advanta is cutting 300 employees and expects to lower operating expenses between 20% and 25% below those reported for 2008. Business Cards ending managed receivables decreased to $5.0 billion and customer transaction volume declined to $2.9 billion for 4Q/08. The managed net credit loss rate for its business cards was 11.99% for 4Q/08, compared to 10.00% in the third quarter and 4.13% for 4Q/07. The 30-day delinquency rate jumped to 9.53%, compared to 6.55% in the prior quarter and 4.29% one-year ago. At the end of the quarter, managed outstandings were $5.02 billion, compared to $5.59 billion for 3Q/08 and $6.35 billion one-year ago. Gross volume for the quarter dropped 23% year-on-year to $2.9 billion while the number of accounts dipped 20% to 1.05 million. For complete details on Advanta’s fourth quarter performance, visit CardData ([www.carddata.com](http://www.carddata.com)).

ADVANTA’S CARD PORTFOLIO SNAPSHOT
Period Card Loans
4Q/07: $6.35 billion
1Q/08: $6.35 billion
2Q/08: $6.08 billion
3Q/08: $5.59 billion
4Q/08: $5.02 billion
Source: CardData (www.carddata.com)

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