TransCard and Fishback Financial Partner

Stored value card provider Transcard has partnered with SD-based
Fishback Financial to offer bank sponsorship, card issuing, transaction
settlement and
many other fundamental services for TransCard’s prepaid card programs.
Fishback Financial Corporation has assets totaling more than $1.5 billion.
TransCard handles $1.4 billion in electronic transactions annually and
is a provider of prepaid debit card solutions branded
with Discover Network, MasterCard® and STAR associations.

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NCR SelfServ ATMs Certified by Major Nets

NCR has completed certification testing for
its new NCR SelfServ family of automated teller machines (ATMs) with
strategic ATM networks which include First Data, Elan, Metavante, Visa, Jack Henry,
Shazam, NETS, CSFI, ACI Worldwide, Inc., Postilion, Fifth Third
Processing System (FTPS), Fiserv and Fidelity National Information
Systems, formerly EFD (eFunds). The unique self-healing technology in NCR SelfServ allows the ATM to
automatically and quickly recover from “soft” failures with no need for
service intervention. In addition to increased consumer availability,
several NCR SelfServ enhancements make servicing faster and simpler,
especially for branch or cash-in-transit staff performing first-line
tasks. For example, NCR’s Self-Service Assistant, a robust graphic
operator panel with video and other unique capabilities, is an important
differentiating factor. It facilitates easier training of personnel who
can then manage any basic issues that may arise. This is another
important element of the overall efficiency built into this
first-of-its-kind technology.

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Sinking Economy Heightens Buyer’s Remorse

Besides sagging sales, retailers are reporting that consumers are
experiencing more buyer’s remorse this season as a result of the down
economy, as they return more unworn and unused merchandise to stores. The
NRF found that return rates this will likely reach 8.7% of sales, up
from 7.3% one year ago. The amount of merchandise returned to stores
this year is estimated to reach $219.1 billion, with $47.1 billion of
those returns coming from holiday purchases. The NRF’s third annual
“Return Fraud Survey” also found that the number of retailers who said
their holiday return policy will loosen compared to last holiday season
will triple, from 3.4% to 11.0%. About 17.1% of retailers said their
return policy will tighten this holiday season, up slightly from 15.3%
last year. According to the survey, return fraud continues to plague the
industry and will cost retailers an estimated $3.54 billion this holiday
season, down slightly from $3.6 billion last year.

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OCC Shoots Down FSR/CFA Concessions Pilot

The OCC this week responded to a proposal by The Financial Services
Roundtable and the Consumer Federation of America calling for
a pilot project that allows major credit card companies to dramatically
reduce the amount of money owed by heavily indebted borrowers who do not
qualify for currently-available repayment plans. The OCC says that while
it strongly encourages national banks to work with distressed borrowers,
the agency cannot approve a plan that defers the timely recognition of
losses, since that would compromise the transparency and integrity of a
bank’s financial reports and could lead to a loss of public confidence
in the banking system. The OCC said that the major lenders and credit
counseling firms interested in the FSR/CFA proposed pilot are failing to
differentiate between working with distressed borrowers and a desire to
simply acquire forbearance on loss recognition. Under the FSR/CFA
proposal lenders would forgive up to 40% of the amount consumers owe and
allow borrowers to pay back the remainder over time. (CF Library 11/03/08)

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Alternative Payments – Payment Piranhas?

New research shows that alternative payments may capture nearly $8
billion of this year’s $35 billion online holiday shopping. The study
suggests that a new wave of alternative payments firms will continue to
emerge, further eroding traditional credit card usage online, but
preserving the role of financial institutions in payment transactions.
Javelin Strategy & Research says three emerging alternative payment
methods— eBillme, NACHA SVP and Moneta Value — leverage familiar
consumer processes and provide value to financial institutions by
enabling FI control over the transaction. Also, credit card issuers can
supplement slowing credit card volume with prepaid products and
store-branded and private-label credit cards are projected to have solid
growth, based on consumers migrating purchases from in-store to online.
Javelin noted that the overall projected growth for online payments is
expected to reach $148 billion in 2008, climbing to $268 billion by 2013.

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NCO Group Q3 Revenues Up – But Loss Widens

NCO Group reported that third quarter revenue rose 18% to $381.1
million. However, the collection specialist’s net loss for the quarter soared to $26.5 million, compared to a net loss of $4.6 million for 3Q/07. NCO says the results included an allowance for impairment of
purchased accounts receivable of $32.4 million and $3.4 million of
restructuring charges primarily related to the acquisitions of Systems &
Services Technologies and Outsourcing Solutions. The Company also noted
that the third quarter represented a further transition for its business
as it began the process of managing through meaningful additional
deterioration in consumer payment patterns. All three of NCO’s operating
divisions: Accounts Receivable Management, Customer Relationship
Management and Portfolio Management posted lower revenues for the
quarter than anticipated. For complete details on NCO Group’s latest
performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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The Buckle Renews ADS Private Label Deal

Loyalty marketing Alliance Data Systems has signed a multi-year contract
renewal with NE-based fashion retailer The Buckle, with more than 380
retail stores in 39 states and sales of approximately $620 million to
continue providing private label credit card services. Under terms of
the renewal agreement, Alliance Data will continue providing private
label credit card services including account acquisition and activation;
receivables funding; card authorization; private label credit card issuance;
statement generation; remittance processing; customer service functions; and
marketing services to Buckle. The private label card solution also
includes support of Buckle’s
points-based rewards program, called B-Rewards, where cardholders earn
one point for
every dollar spent, and receive dollars-off certificates redeemable at
Buckle.

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First Data Q3 Revenues Inch Up by 4.6%

First Data reported third quarter revenue of $2.164 billion, an increase of 4.6% over the year ago quarter. However, the net loss for the quarter was $164.4 million, compared to a net profit of $28.0 million for 3Q/07. The loss included $270 million of incremental interest expense and $124 million of incremental depreciation and amortization primarily attributable to the KKR transaction. Merchant Services produced revenues of $1.026 billion, up 9% from 3Q/07. Even though Merchant Services had 9% growth in transactions it was offset by the slowing U.S. economy, which reduced transaction growth for smaller merchants and shifted transactions to some nationwide discounters and wholesalers. Financial Services generated third quarter revenue of $699.8 million, down 5% from the year ago quarter. There was modest growth in the card issuing business offset by lost business and check volume declines in the TeleCheck business. International posted 3Q/08 revenue of $487.0 million, up 19% from 3Q/07. Revenue benefited from 21% transaction growth which was in part driven by acquisitions in prior quarters. During the quarter, First Data named Robert DeRodes as its CTO; mutually agreed to terminate its plans to merge InComm into First Data; and successfully terminated its joint venture, Chase Paymentech Solutions, with JPMorgan Chase. For complete details on First Data’s third quarter performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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VIVOTECH & SESAMES

ViVOtech announced that its ViVOnfc mobile
application “ViVOnfc” was named as a finalist for its advanced mobile
marketing features, some of which are already in use in pilot programs all over the globe in the best loyalty category for the prestigious SESAMES Award to be presented at CARTES 2008. Last month ViVOtech announced the deployment of the first
real-time coupon redemption system along with SingTel and NETS that
allows consumers to receive a coupon on their NFC-enabled phones and
flash it onto “ViVOpay” contactless readers for automatic redemption.
Earlier this month, ViVOtech revealed the successful results from the
transit and retail NFC mobile payment trial in San Francisco with BART,
Jack in the Box and First Data Corporation. “ViVOnfc” lets card issuers
and retailers personalize their services and
deliver consumers location-based coupons, offers, promotions and rewards
programs through a SPAM-free and fully authenticated mobile network.
Consumers control the content and opt-in to receive promotions and other
contents from trusted sources by just waving their NFC phone on smart
posters and kiosks, or by just pressing a button on their phones.

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INFINEON & SESAMES

Infineon Technologies AG’s 16-bit security microcontroller family “SLE 78” is the winner of the 2008
Sesames Award in the category of “Best Hardware.
Infineon’s “SLE 78” family of security microcontrollers integrate
self-checking security mechanisms
called “Integrity Guard” specifically developed for chip card and security
applications. “Integrity Guard” offers security microcontrollers
equipped with full on-chip encryption and full error-detection
capabilities over the core architecture with a dual CPU approach that
uses hardware-encrypted
calculation with different secret keys allows detecting whether a
calculation was performed without errors. This is the fifth time
Infineon has received a Sesame Award for Best Hardware Innovation; and
this year, two out of the three Best Hardware finalists were Infineon
products. The other Infineon nominated product is the “SLM 76” security
microcontroller family targeted at the growing market of
machine-to-machine (M2M) communication.

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RETAIL SHRINK

A new study shows that global retail theft or retail shrink will top $104 billion this year amounting to a cost of nearly $230 per household in the 36 countries surveyed. The second annual “Global Retail Theft Barometer” from Checkpoint Systems also found that stolen merchandise accounted for 38% of internal fraud, while 24% of internal losses were in the form of stolen cash, coupons, vouchers or gift cards. Employee theft is the largest source of shrinkage for retailers in North America and Latin America (46% and 42% respectively), while customer theft is the leader in the Asia-Pacific region and Europe (54% and 47% respectively). North America reported the highest average dollar amount stolen by customers, at $747 per incident. The high average in North America is thought to reflect the impact of organized retail crime. Refund frauds and false markdowns rose substantially, comprising 20% of internal fraud, an increase of 34% since last year. Collusion represented 10% of losses. Large financial frauds, also on the rise, accounted for 8% of internal fraud.

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