3Q/08 Credit Card Direct Mail Drops 28% Y/Y

The number credit card direct mail offers is tapering off to new lows
as third quarter volume dropped 28% year-on-year and 13% sequentially.
So far this year, credit card solicitations, via snail mail, are
averaging about 1.5 billion per quarter, compared to slightly more than
2.0 billion per quarter in 2007. According to Chicago-based Mintel
Comperemedia total estimated volume for credit card acquisition offers
dipped to 1.34 billion in 3Q/08, compared to 1.54 billion in the prior
quarter and 1.86 billion during 3Q/07. During the third quarter the top
three card mailers were Chase, Capital One, and American Express. During
the second quarter, Discover and Citibank both cut credit card mail by
18% and 31%, respectively. Bank of America held steady on credit card
mailings and boosted its mortgage and loan promotions by 26%. However,
Capital One and Chase maintained credit card mail volume, but each cut
lending offers (by 26% and 33%, respectively) while increasing banking
direct mail (by 80% and 60%). HSBC reduced credit card, banking and loan
mail volume across the board, sending 52% less offers overall in 2Q/08.
(CF Library 8/19/08)

CREDIT CARD DIRECT MAIL
3Q/07: 1.86 billion
4Q/07: 1.82 billion
1Q/08: 1.67 billion
2Q/08: 1.54 billion
3Q/08: 1.34 billion
Source: CardData (www.carddata.com)

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CITI PREMIERMILES & NWA

Electronic payment systems software provider ACI Worldwide reported revenue of $108.6 million in the third quarter, a 28% gain over the prior-year period. Net income for the quarter was $1.7 million compared to net loss of $1.3 million during 3Q/07. At the end of the third quarter, there was an estimated 60-month backlog of $1.4 billion compared to $1.3 billion one-year ago. During the quarter, ACI signed two new “BASE24-eps” sales in Korea and in Malaysia; landed sales in Poland, Hungary, France, Dubai, United Kingdom and Nigeria for “BASE24-eps,” “BASE24-atm,” “ACI Proactive Risk Manager,” and “ACI Smart Chip Manager”; and added 23 new applications to existing customer relationships ranging from “ACI Retail Commerce Server” to “ACI
Proactive Risk Manager for Enterprise Risk to Smart Chip Manager.”
ACI contiues to expect full year 2008 sales between $430 million and $440 million. For complete details on ACI’s latest performance visit CardData (www.carddata.com).

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nFinanSe to Power Paychecks Plus Pay Cards

FL-based nFinanSe will now provide its “Pay Card Program” to NY-based
Paychecks Plus. Paychecks Plus is offering the “nFinanSe Pay Card” to
participating employees who will have their payroll electronically
deposited onto their instantly issued “nFinanSe Discover Network Pay
Card”. The Pay Card can be used to make purchases at millions of merchant
locations nationwide – including online and over the telephone – and to
access cash at ATMs. A tool now available with an
nFinanSe Pay Card is the ability to receive an email or text message
with purchase and balance information after each purchase or
transaction, and on pay day, receive summary pay stub information.

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COLLIS & GPN

Global Payments has selected Netherlands-based Collis/B2 Processing
Solutions Inc. to provide EMV Chip testing and certification tools for
its POS solutions. Collis’ testing platform provides Global Payments
with the ability to validate the functionality and
performance of Canadian card payment networks’ contact and contactless
cards on its solutions. Utilizing the Collis platform, Global Payments
is also able to test International cards that may circulate with the
expansion of EMV Chip in Canada. Global Payments offers a comprehensive
line of processing solutions for credit and debit cards,
business-to-business purchasing cards, gift cards,
electronic check conversion and check guarantee, verification and
recovery including electronic check services, as well as terminal
management. Collis provides design and testing of smart card based
electronic transaction systems.

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MasterCard Kicks-Off the Overjoy of Giving

MasterCard has launched the “Overjoy of Giving” holiday promotion that
gives cardholders the chance to win two identical prizes, one to keep
and one to give. Nine winners will be selected each week of the
promotion and will each choose from a pool of four prizes: 2 cars, 2
trips, 2 shopping sprees or 2 home makeovers from The
Home Depot®. Consumers will receive double entries into the sweepstakes
every time they use their MasterCard cards at the approximately 2,200
participating The Home Depot stores or online. In addition to the
“Overjoy of Giving” Sweepstakes, consumers can also participate
in the Instant Win Game on priceless.com. Consumers can play up to 10
times per day, every day, for a chance to win two, $500 The Home Depot
or MasterCard Gift Cards. There will be one instant winner each day of
the promotion.

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WINCOR NIXDORF 2007

Wincor Nixdorf AG has closed fiscal 2007/2008 at the end of September
2008 with an 8% increase in net sales, or 11% adjusted for exchange rate
effects. EBITA increased by 11%, matching the forecast the Company
issued at the beginning of the fiscal year despite a sharp deterioration
in general conditions since then. The growth rates achieved in fiscal
2007/2008 were again above Wincor Nixdorf’s long-term targets of an
average of 6% for net sales and 8% growth in EBITA per year. Wincor
Nixdorf has further improved its basis for business with retail
banks and retailers by expanding its activities during the past twelve
months. Global expansion was continued systematically, reducing
dependence on individual customers or singular economies and the company
was able to enlarge its portfolio of solutions by adding further
innovations that enable banks and retail companies to achieve
significant cost advantages and additional customer service in their
business processes.

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JAPAN INDEX

The Conference Board reports that the leading index for Japan decreased
1% and the coincident index decreased 0.1% in September. The leading
index declined sharply in September, and the weaknesses
among its components continued to be widespread. Stock prices made the
largest negative contribution to the leading index in September, while
business failures (inverted), the Tankan business conditions survey,
dwelling units started and the six-month growth rate of labor
productivity all made substantial negative contributions. The six-month
rate of change for the leading index fell to -3.2% from March 2008 to
September 2008, down from the -2.5% decline
during the previous six-month period from September 2007 to March 2008.
In addition, the weaknesses among the leading indicators have been very
widespread in recent months. Five of the ten components that make up
the leading index increased in September. The positive contributors to
the index — in order from the largest positive contributor to the
smallest — include the new orders for machinery and construction
component, interest rate spread, the index of overtime worked, real
operating profits, and real money supply. The negative contributors —
in order from the largest negative contributor to the smallest —
include stock prices, the (inverted) business failures*, the Tankan
business conditions survey, the six month growth rate of labor
productivity, and dwelling units started. With the decrease of 1% in
September, the leading index now
stands at 80.5 (1990=100).

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WU & PAGO DE SERVICIOS

The Western Union Company has launched “Pago De
Servicios”, a walk-in cash bill payment service that will provide
consumers with a quick and convenient way to pay for services
such as mobile phone service, utilities and other recurring household
bills. The introduction of “Pago De Servicios” expands the
international footprint of Western Union’s consumer-to-business segment.
While
consumer-to-business revenues comprise just 13% of Western
Union’s total revenue, annual transactions have grown from 145 million
in 2002 to 404 million in 2007. Earlier this year, Western Union
announced its intention to further develop this important segment
through active global expansion.

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Price is the Deciding Factor with Processors

A new survey found that 72% of businesses rated “Price” as either the “Most Important” or “Important” factor in choosing a credit card processor. The research by Transparent Financial Services also found that 40% would require less than $50 per month savings to switch to another processor/merchant account provider and that 60% rated promotional offers, such as free terminals, as “Least Important” or “Unimportant.” Additionally, the reputation of the processor was most frequently cited as the second most important factor and existing relationships with the salesperson or broker was rated as the second least important factor. Transparent Financial Services suggests the industry should consider changing the sales model to better reflect the needs of customers: aggressive pricing and top-notch customer service.

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MASTERCARD CAP

MasterCard announced that recent launches of a secure online credit card
payment solution by KBC and Fortis in Belgium; Nordea in Sweden; and Bank Koper
in Slovenia , alongside 70 other banks, using a personal card
reader based on the “MasterCard Chip Authentication Program” to
authenticate themselves during online banking for over 2 million European cardholders
have now extended this service from e-banking to e-commerce.
The MasterCard Chip Authentication Program is a two-factor
authentication solution, available to all banks, based on something you
own (a bank card), and something you know (the PIN).
By making online bank card payments convenient and as easy as online
banking, â˜Chip & PIN’ credit cards have the potential to give internet
sales a real boost. The added confidence that the “Chip Authentication Program” and “MasterCard
SecureCode” bring to online payments will also give European consumers
even greater peace of mind and help promote the growth of e-commerce in
Europe. With this new solution banks can now meet
their customers’ requirement: no need to register or create a new
password, no need to set up an account with a third party.

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GLOBAL GDV

The Visa and MasterCard global gross dollar volume (GDV) year-on-year growth rate has declined for three consecutive quarters.
MasterCard’s GDV annual growth rate has declined to 15% while Visa’s GDV annual growth rate has slipped to 16%, during 2008. MasterCard’s GDV growth fell sequentially in all of its six regions during the third quarter, falling from an annual GDV growth rate of 20% in the first quarter and 18% in the second quarter to 15% in the third quarter. Visa’s GDV growth declined sequentially in all of its five regions during the third quarter, falling from an annual GDV growth rate of 22% in the first quarter and 19% in the second quarter to an estimated 16% in the third quarter. (Visa’s statistical information lags by one quarter). However, Visa reported that growth in “VisaNet” transactions has slowed from 15% in the first quarter to 13% in the second quarter to 11% in the third quarter. For more details on Visa and MasterCard third calendar quarter performance visit CardData (www.carddata.com).

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