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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BOC & TRUSTWAVE

BOC Credit Card has selected Trustwave as
their preferred partner to provide Payment Card Industry Data Security
Standard (PCI DSS) compliance validation services. Trustwave is the
leading provider of on-demand data security and payment card industry
compliance management solutions to businesses and organizations
throughout the world. BOC Credit Card is a wholly-owned subsidiary of BOCHK. All credit cards issued by
BOCI are collectively called BOC Credit Cards. BOCI has issued various
international credit cards and revolving loan cards, and is now the card
issuing and acquiring processing centre for BOCHK and its subsidiary
banks (Nanyang Commercial Bank Ltd and Chiyu Banking Corporation Ltd),
as well as other institutions and organizations. BOCI plays an important
role in the credit card business in the Mainland of China, Hong Kong and
Macau.

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Encore Capital Group’s Q3 Revenues Grow by 5%

San Diego-based Encore Capital Group reported that revenues from
receivable portfolios for the third quarter rose 5% to $62.6 million.
However, net income was $3.8 million compared to net income of $5.4
million in 3Q/07. Gross collections during the quarter increased by 14%
to $97.8 million. Investments in receivable portfolios were $66.1
million, to purchase $1.8 billion in face value of debt, compared to
$47.9 million, to purchase $1.3 billion in face value of debt in the
same period of the prior year. During the quarter ECG named George Lund,
a current member of the Board and its Audit Committee, to the
Chairmanship of the Board. For complete details on Encore Capital
Group’s third quarter results visit CardData ([www.carddata.com](http://www.carddata.com)). (CF
Library 8/28/08)

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VERSATILE & SONY

Sony Corporation has signed an agreement with card manufacture
Versatile Card Technology to be the North American manufacturer for FeliCa contactless cards
based on the ISO 18092 standard (NFC). FeliCa is the contactless IC card with secure RFID
communication that has been extensively deployed by public transport
operators and enhanced to offer a range of value-added applications
including e-cash and loyalty. Sony believes the best way to ensure the success of FeliCa is to
accelerate collaboration with established suppliers capable of flexibly
supplying FeliCa products that meet various demands. With more than 330 million contactless
cards and FeliCa enabled wallet mobile phones issued.
FeliCa contactless cards have quickly become the de facto standard in
Asia’s largest transit systems — already having been extensively
deployed in Hong Kong, Shenzhen, Singapore, Japan, Thailand, and others.
Also, as the new NFC standard gains acceptance, Sony has seen FeliCa
making major inroads into the mobile phone market where it is being
embedded into handsets to conduct financial transactions.

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