SEPT DEBT

Credit card outstandings edged up slightly September to GBP 55.7
billion, after adjustments of GBP 1.0 billion for net flows.
Year-on-year credit card outstandings (not seasonally adjusted) were up
slightly more than 3%. According to the The Bank of England, net credit
card lending rose by GBP 300 million in September, below the increase in
August. The increase of GBP 2.4 billion in total net lending to
individuals in September was above the increase in August, but below the
previous six-month average. The twelve-month growth rate slowed further,
to 5.4%, and the three-month annualized growth rate fell by 40 basis
points to 1.9%. The increase of GBP 300 million in net consumer credit
in September was also below that in August and below the previous
sixâ‘month average. Net other loans and advances fell slightly in
September. The annual growth rate of consumer credit slowed by 70 basis
points, to 6.0%; the three-month annualized growth rate fell by 150
basis points to 3.9%.

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

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Young, Travelers and Males Adopt M-Banking

A new survey reveals that 7.2% of mobile phone users that
are 18 or older and employed use mobile banking. The poll of 20,000 consumers by Compass Intelligence found that adoption tends to be higher among certain subgroups including young adults (age 18-24) and frequent travelers (those that travel 5 times or more per month). As age increases, or frequency of travel decreases, adoption rates decline. Male users are also somewhat more likely to adopt mobile banking services. Adoption rates increase as size of business increases, with enterprises having the highest adoption rate (7.7%). Additionally, Finance, Health Care and Transportation & Distribution industrial verticals have higher than average percentage of mobile banking users.
Push-to-talk service users are more likely to use mobile banking than
average mobile phone users.

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VISA & HSBC

Visa and HSBC have expanded their global
relationship to include new debit card programs throughout Asia Pacific
and the Middle East. Under terms of the agreement for Asia Pacific,
Visa will become HSBC’s exclusive partner for new consumer debit
products, with HSBC issuing more than 10 million Visa debit cards in
Australia, Brunei, India, Indonesia, Malaysia, Mauritius, Philippines,
Singapore, Sri Lanka, Taiwan, Thailand and Vietnam. HSBC Middle East
Limited will begin issuing new Visa-branded debit
cards by early 2009 in eight countries including United Arab Emirates,
Qatar, Bahrain, Oman, Egypt, Jordan, Lebanon and Pakistan. Some of these
approximately one million new cards will also be Visa payWave-enabled,
allowing cardholders to make contactless payment transactions quickly
and securely at the point of sale and will also be able to support
services such as loyalty programs for cardholders, bringing more
convenience and added value to debit transactions.

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Diebold Profits Soar by 65% in Third Quarter

OH-based Diebold reported third quarter revenue increased 20% to $890 million and net income leaped 65% to $46.5 million, compared to 3Q/07. ATM-related revenue increased 18% percent over the prior period while total security revenue decreased 6%. During the quarter, election systems revenue in Brazil was $59 million, representing more than 85% of the increase in total election systems revenue. The Company also benefited from a large order in China, in which revenue was
expected to be recognized during the fourth quarter but occurred during the third quarter due to customer acceptance occurring sooner than planned. Including this order, Diebold anticipates revenue in China will increase more than 20% in the full-year 2008. For more details on Diebold’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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Online Resources’ 3Q/08 Revenue Climbs 11%

VA-based Online Resources posted third quarter of $38.1 million, an 11%
increase over the third quarter 2007. The net loss for the quarter was
$1.5 million, compared to net income of $1.1 million for 3Q/07. During
the quarter transactions increased 41% over last year. However, bill
payment transactions declined 7% to 39.1 million. Banking billpay
transactions expanded over the prior year, increasing 18% on a
normalized basis. The Company also signed two major credit card issuers
during the third quarter for its web-based collection service. The card
issuers will implement ORCC’s “Virtual Collection Agent” for domestic
credit card portfolios, providing account holders a private way to
resolve delinquency 24×7. ORCC serves over 10 million end-users and
processes $100 billion in bill payments annually. For more details on
ORCC’s third quarter performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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Advanta Takes it On The Chin with Q3 $18MM Loss

Business card specialist Advanta reported a third quarter net loss of
$17.6 million compared to net income of $4.0 million in the prior
quarter, and $19.5 million for the prior year quarter. The issuer says
the drop in profits was related to a significant increase in provisions
for credit losses as business owners faced limited options for funding
business inventories and other obligations. The managed net credit loss
rate for its business cards was 10.00% for 3Q/08, compared to 8.38% in
the second quarter and 3.87% for 3Q/07. The 30-day delinquency rate
jumped to 6.55%, compared to 5.67% in the prior quarter and 3.15%
one-year ago. At the end of the quarter, managed outstandings were $5.6
billion, compared to $6.1 billion for 2Q/08 and $6.2 billion one-year
ago. Gross volume for the quarter dropped 9% year-on-year to $3.3
billion while the number of accounts dipped 7% to 1.2 million. For
complete details on Advanta’s third quarter performance, visit CardData
([www.carddata.com](http://www.carddata.com)).

ADVANTA’S CARD PORTFOLIO SNAPSHOT
Period Card Loans
2Q/07: $5.99 billion
3Q/07: $6.21 billion
4Q/07: $6.35 billion
1Q/08: $6.35 billion
2Q/08: $6.08 billion
3Q/08: $5.59 billion
Source: CardData (www.carddata.com)

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MasterCard’s PayPass to be OTA Enabled in U.S.

MasterCard has introduced an innovative program that enables issuers to
perform over-the-air personalization of their cardholders’ mobile
devices in a one-step process. The new “MasterCard Over-the-Air
Provisioning Service” which allows issuers to implement “PayPass” on
mobile programs in a reduced time frame. To utilize the service
account holders need to have a mobile phone equipped with NFC and a
mobile data subscription. First, the “PayPass” application is securely
transferred onto a secure area of the consumer’s mobile phone via the
mobile network. Next the “PayPass” application is personalized with the
consumers’ individual payment account details. The service
will be made available to consumers through their issuing banks’
websites. In June, MasterCard announced an agreement with Obopay to
offer a fully-integrated on-demand person-to-person mobile payment
service in the USA.

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AUGUST PULSE

The Conference Board announced that the leading index
increased 0.4% and the coincident index increased 0.1% in August.
The leading index increased for the sixth consecutive month in
August. Money supply (adjusted for inflation), rural goods exports and stock
prices contributed positively to the index this month, more than
offsetting the large negative contributions from building approvals and
the yield spread. The six-month change in the index has increased to 3.5%
(about a 7.0% annual rate), up from 2.1% (about a
4.2% annual rate) in the previous six-month period ending
February. However, the strengths among the leading indicators have only
been slightly more widespread than the weaknesses over the past six
months. Five of the seven components in the leading index
increased in August. The positive contributors to the index — in order
from the largest positive contributor to the smallest — are the sales to
inventories ratio, gross operating surplus, money supply, rural goods
exports and share prices. Building approvals and the yield spread
declined.

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Blackhawk Net CEO Joins ViVOtech Board

NFC platform provider ViVOtech has named Don Kingsborough, CEO and founder of Blackhawk
Network, to its Board of Directors. Kingsborough founded Blackhawk Network in 2001. Since that time,
he has established Blackhawk Network as the definitive leader in sales of
third-party prepaid card products. Prior to establishing Blackhawk Network, he
founded and served as chief executive officer of toy manufacturer Worlds
of Wonder, Inc., where he created a multi-million-dollar new industry category and
propelled this start-up business to one of the nation’s fastest growing companies
in just two years achieving more than $320 million revenue in the company’s second year.
ViVOtech NFC mobile and contactless infrastructure software technologies
span across the entire mobile payment ecosystem, from banks, merchants,
mobile operators and service providers to their customers.

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NFC PAYMENTS

A new report, “Mobile Payments Markets: Strategies & Forecasts
2008-2013” released from Juniper Research indicates
that contactless NFC will enable 50% of the mobile payment market by
2013. The top 3 regions for this sector will be the Far East & China,
Western
Europe and North America). Together these will account for over 70% of
mobile money payments on a gross transaction basis by 2013. However,
there will be hurdles to be addressed for the market to reach its
tipping point, including NFC handset availability, workable business
models and financial legislation. The Juniper Research study provides
an analysis of the “big picture,”
exploring how the overall mobile payments market will develop. The
report provides forecasts for digital and physical goods purchases,
contactless NFC and national and international money transfers and
remittances, providing regional forecasts of gross transaction values.

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Visa Posts Q3 Loss Due to Discover Settlement

Visa reported that third calender quarter adjusted net income more than doubled to $448 million and net operating revenue rose 17% to $1.7 billion, compared to the same quarter in 2007. However, on a GAAP basis, the payment card network posted a net loss of $356 million due to the litigation reserve of $1.1 billion related to the recently announced Discover settlement. Total processed transactions were 9.6 billion during the third calendar quarter, an 11% increase over the prior year, compared to a 13% increase in the prior quarter. Visa also released its second calendar quarter operational statistics which shows that its global gross dollar volume increased 19% to $1.1 trillion; purchase dollar volume rose 15% to $699 billion; cash dollar volume increased 26% to $414 billion; the number of accounts jumped 16% to 1.3 billion; and the number of cards-in-force rose 12% to 1.6 billion, compared to the year ago quarter. In the U.S. market, gross dollar volume increased 9% to $526 billion; purchase dollar volume rose 10% to $423 billion; cash dollar volume increased 5% to $103 billion; the number of accounts gained 12% to 469 million; and the number of cards-in-force rose 5% to 646 million, compared to the same quarter in 2007. Visa projects that net revenue growth over the next twelve months will be at the lower end of the 11% to 15% range, due to the current economic environment in the U.S. and around the globe. For complete details on Visa’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

VISA-NET TRANSACTIONS (millions)
Sep 30, 2008 9,590
Jun 30, 2008 9,473
Mar 31, 2008 8,800
Dec 31, 2007 9,094
Sep 30, 2007 8,645
Jun 30, 2007 8,411
Mar 31, 2007 7,645
Dec 31, 2006 8,018
Sep 30, 2006 7,722
Jun 30, 2006 7,441
Note: Visa, Visa Electron, Interlink and PLUS
cards processed on Visa’s networks.
Source: CardData ([www.carddata.com](http://www.carddata.com))

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J/SMART & J/SPEEDY

JCB and Collis announced that JCB has qualified
“JCB J/Smart and J/speedy” personalization validation tool exclusively developed by
Collis. Collis is the leading competence centre in the design and testing of
smart card based electronic transaction systems. Collis has provided testing tools and expert
consultancy & training to the Payment/EMV, e-Identification & 3G/GSM markets for over a decade. An
official Visa Chip Migration Partner, Collis is also a member of the MasterCard Vendor Program, Visa Partner
Network, GlobalPlatform, NFC forum, Smart Card Alliance and ACT Canada. Collis enjoys official
recognition of credit card payment associations and
is an ISO 9001:2000 certified company.

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