GPN 4Q/08

Atlanta-based Global Payments reports that revenues for the quarter ending November 30th were up 30%, compared to the year ago quarter. The Company noted that fourth calendar quarter revenues were affected by unfavorable foreign currency exchange rates, but have improved significantly in the current quarter to warrant a more optimistic revenue guidance. For the second fiscal quarter ending November 30th GPN posted revenues of $401.1 million, compared to $405.8 million in the prior quarter and $308.8 million in the year ago quarter. The recent U.K. acquisition and strong results in its North America segment drove the revenue increase. During the quarter GPN announced an agreement to acquire ZAO United Card Service and Global Payments Asia-Pacific, its JV with HSBC, completed an agreement to expand into the Philippines. GPN also signed nine new U.S. casinos in October and in November promoted Joseph Hyde to President/International and David Mangum, formerly with CheckFree, to EVP/CFO. The Company updated its annual revenue guidance to be in the range of $1,550 million to $1,580 million, or 22% to 24% over fiscal 2008. For complete details on GPN’s latest performance visit CardData (www.carddata.com). (CF Library 10/02/08; 11/04/08)

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PLANET PAYMENT Q4

Payment processor Planet Payment has released an update on its trading
for the fourth quarter and year ended 31 December 2008. Revenue for the full year 2008 increased
by more than 90% to over $35m compared to $18m for 2007. This growth was led by new merchant deployments
with processors and banking customers in the United States, Greater China, Malaysia, and
Taiwan and the acquisition of the iPAY business, which facilitates payment for Internet
transactions. Revenue from core multi-currency processing services increased by more than 60%
to over $23m versus $14m for 2007. Total revenue for the fourth quarter 2008
increased by more than 57% to approximately $11m versus $7m for 2007 and by more than 8.5% compared to the
third quarter 2008. Revenue from core multi-currency processing services for the fourth
quarter 2008 increased by approximately 44% to over $7m from $5m in 2007 and by more than 23% compared
to the third quarter 2008. The Company effected a number of cost saving measures in the fourth
quarter, to align the Company’s cash operating expenses with its current and near-term
projected revenue, with the objective of accelerating the achievement of positive EBITDA and
profitability in 2009. These measures are projected to produce over $3m in 2009 cost savings compared
to the annualized cash operating expenses of $20.5 million prior to this initiative, a 17%
reduction. On 19 November 2008, Planet Payment’s common stock began trading in the
US on the OTCQX market, operated by Pink OTC Markets Inc.

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FNDS3000 Names a New Chairman

Raymond Goldsmith has joined transaction processor FNDS3000 as Chairman
of the Board of
Directors. Goldsmith will assist Chief
Executive Officer, John Hancock and the management team on corporate
positioning strategies to take advantage of numerous avenues to grow the
company and increase shareholder value. Goldsmith is Chairman and CEO of
Sherington Holdings LLC which is a
private investment company. In October and December 2008, Sherington
Holdings LLC provided
total financing of $1 million in the form of a secured convertible note.

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New Rules to Clip $11B in Card Profits

A new analysis projects that the new credit card industry rules that
take effect in July, 2010 will lower card issuer industry profit by $5.5
billion in 2010 and by more than $11 billion in 2011 and every year
thereafter. Card industry analyst R.K. Hammer says that fee income is
expected to rise as a result (as issuers seek to lower risk and raise
penalty fees), as well as a curtailment of new credit to those with less
than good credit history. Hammer notes that in the entire history of the
prime credit card industry, fee income has never exceeded interest
income. However, that will be changing in the coming years as
downward regulatory pressure on interest charges and a rising fee income
graph will ultimately intersect. The only way Hammer sees this being
mitigated at all is for a card issuer to “outrun” the problem, by
growing receivables and earnings at a faster rate than the declining
interest earned due to the new rules.

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NOV INDEX

The Conference Board leading economic index for Japan decreased 2.6% and The Conference Board
Coincident Economic Index decreased 0.9% in November.
Two of the ten components that make up the leading
economic index increased in November. The positive contributors to the
index include real money supply and interest rate spread. The negative
contributors include the index of overtime worked, the six-month growth
rate of labor productivity, real operating profits*, the Tankan business
conditions survey, the (inverted) business failures*, dwelling units
started, stock prices, and the new orders for machinery and construction
component. The leading economic index registered another sharp decline in
November, following an equally large decline in October. In November,
most of the leading indicators continued their downward trend. With
November’s large decline, the six-month growth rate for the leading
index fell to -10.4%, about a -19.8% annual rate from May
to November 2008, the weakest in more than 33 years. Moreover, during
the last six months, the weaknesses among the leading indicators
continued to be very widespread. The rate of decline in the leading economic index has accelerated
in recent months, and the coincident economic index has also been
falling since late 2007. In addition, the weaknesses in both composite
indexes have been very widespread during this period. The leading economic index now stands at 89.4 (2004=100)

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Mocapay Platform Integrates w/VeriFone

Mobile platform payment provider Mocapay and VeriFone will roll out a
mobile payment and marketing system at the National Retailing
Federations Annual Convention in New York.
Mocapay’s mobile payment solution can be integrated with any
point-of-sale system, however, it will be run on the VeriFone MX800
series in VeriFone’s booth at the NRF convention. The MX800 series is
designed to enhance the customer experience at the point of sale and
with more than 300,000 systems installed has become the de facto
standard in consumer-facing payment systems. Mocapay’s platform
provides merchants with the ability to mobile-enable
their existing gift and loyalty programs through payment at the
point-of-sale. Gift cardholders can transact at the point-of-sale,
access their account balance and transaction history, find the nearest
location, and reload their account, all from their mobile phone. In
addition, Mocapay gives retailers the tools to send targeted, one-to-one
marketing messages to their customers.

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Monthly Payments Rates Drop Like a Rock

Average monthly payment rates for credit cards posted the largest one month drop on record in November. Charge-offs are now hovering at 7.0% and based on new economic data it is a given that the charge-off rate will surpass the 8.0% level in 2009. The
Fitch Ratings’ “November Prime Index” for credit card-backed securities
shows that monthly payment rates dropped 246 basis points sequentially
to 15.96%. Fitch Ratings also says it has placed 12 of its U.S. credit
card ABS transactions ‘Under Analysis’, indicating that Fitch will be
issuing a rating action within 30 days. Retail or store card
charge-offs, meanwhile, surged to three-year highs as anticipated in
light of the recent run up in delinquencies. At 10.51%, Fitch’s “Retail
Card Charge-Off Index” is currently 49% above year-earlier levels and,
given the recent delinquency trends, Fitch expects the rate to surpass
12% by midyear. Balances more than 60 days past due have risen more than
34% since July, reaching 5.08% in the most recent period. Fitch notes
that despite the increase in both charge-offs and defaults, prime and
retail card three-month excess spread levels are holding steady at 5.51%
and 9.34%, respectively.

CREDIT CARD ABS METRICS
YIELD MPR
Nov 07: 19.44% 20.31%
Dec 07: 19.92% 19.09%
Jan 08: 19.11% 17.64%
Feb 08: 20.46% 18.00%
Mar 08: 18.61% 18.50%
Apr 08: 18.50% 18.61%
May 08: 17.27% 18.65%
Jun 08: 17.42% 19.54%
Jul 08: 17.05% 19.54%
Aug 08: 17.40% 19.21%
Sep 08: 17.13% 18.57%
Oct 08: 17.05% 18.42%
Nov 08: 17.01% 15.96%
Source: Fitch Ratings

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Q3 Delinquencies Hit a Five-Year High

Credit card delinquencies soared during the third quarter to its
highest level in five years driven by record job losses. In December, the number of unemployed persons increased by 632,000 to 11.1 million and the unemployment rate rose to 7.2%. Since the start of the recession in December 2007, the number of unemployed persons has grown by 3.6 million, and the unemployment rate has risen by 2.3 percentage points.
Credit card delinquencies, based on total dollars outstanding, for the July, August and September period were 4.74%, compared to 4.32% in the second quarter and 4.00% for the same months in 2007. According to the ABA’s “Consumer Credit Delinquency Bulletin” delinquency, based on the number of accounts past-due, dropped to 4.20% for 3Q/08, compared to 4.54% for 2Q/08, and 4.18% one-year ago. According to “Moody’s Credit Card Index” delinquency rose to 5.25% in November 2008, compared to 4.28% for November 2007.

3Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
1980: 3.40%
1985: 3.15%
1990: 4.01%
1995: 4.21%
2000: 3.93%
2005: 3.74%
2006: 3.50%
2007: 4.00%
2008: 4.74%
Source: ABA Delinquency Bulletin

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MONERIS 2008 HOLIDAY

Card processor Moneris Solutions released its 2008 holiday season data
that indicates department and apparel stores made
significant gains in December, while discount stores suffered the steepest
credit and debit card dollar volume decline of all merchant categories.
Nationally, department stores saw the amount of money charged to credit
and debit cards climb by 9%, compared to the same time last year.
Apparel stores came in second place, with a 6% in
credit and debit card sales behind department stores. Discount stores
failed to live up to the growth predicted by some retail analysts and
actually suffered a decline of 11% in credit and debit card dollar volume.
Their wholesale counterparts similarly weathered a substantial decline this
holiday of 9%. The average ticket size of each transaction across
all merchant categories decreased by 3%, which is attributed to
the discounts offered by retailers, lower gas prices and the overall
economic climate. Restaurants fared remarkably well with much narrower weekly
declines last month compared to December 2007 and prolonged their
mid-December spike with a healthy increase of 8% in the last
week of the month compared to the same week last year although they were down an
overall six per cent for the month compared to December 2007. Nationally, all
merchants pulled in 2% more in the month of December compared
to the same time last year, and 7% more in the final week alone, ending
what began as a pessimistic holiday season on a relatively bright note.
Across the country, December 22nd was the busiest shopping day for
credit cards, while debit cards were most used the next day as Canadians filled up
their gas tanks to visit their families.

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tekRETAIL Suite to Make a Debut

tekserve POS will roll out “tekRETAIL Suite POS software. tekservePOS
has designed
a software package for retailers looking to deploy POS and store office
applications that use the same architecture and business objects along
with kiosk, catalog and e-commerce. The framework manages the
integration between new and previously deployed functionality, and
allows retailers to build a customer facing application that fits
individual business needs. he suite consists of “tekRETAIL Store” and
“tekRETAIL Central Office”. “tekRETAIL Store” supports customer-friendly
functions such as pricing
events and customizable receipts that include warranty information
printing and points / rewards management. “tekRETAIL Central Office” is
a multi-purpose suite of applications
designed to help you manage business by providing views into sales
audit, customer awareness, loss prevention and more. In addition, sales
audit can act as a pre-processor to other enterprise applications
including General Ledger. And the i-Series tools will handle
configuration changes, software updates and report back on success rates.

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Advanta’s Ideablob Hits the Road

Advanta’s social networking site Ideablob has launched “bloblive 2009”
multi-city tour to provide
opportunities for entrepreneurs to participate in free, live brainstorms
with other entrepreneurs in their own communities and online at
www.bloblive.com. Ideablob is a vital online community where tens of
thousands of small
business owners and entrepreneurs actively share business ideas,
feedback, advice and support. In addition, experts from various
industries take part in weekly ideablob discussions, offering their
direct advice to site users for honing and implementing their business
concepts. Ideablob Corp. awards a monthly prize to the best eligible
idea, as voted on by members of the ideablob community.

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M-Banking Vendor Revenues Remain Robust

A new impact report released by Aite examines 14 mobile banking vendors
and the outlook for growth. It is estimated that
revenues will grow to $26 million in 2009, from $4.1 million in 2007.
Aite reports that financial institutions looking
for a competitive edge are well advised to continue the pursuit of
mobile banking technology. An understanding of the industry’s direction
and each vendor’s offerings and capabilities is vital to financial
institutions in selecting the most appropriate technology partner,
particularly in this economy, in which every dollar spent must count.
The mobile banking vendors evaluated in this report are Clairmail,
Clickatell, Firethorn, Fronde Anywhere, Fundamo, Harland Financial
Solutions, Jack Henry & Associates, M-Com, MFoundry, MShift, Paybox, S1,
Sybase 365 and Verisign.

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