60% to Cut Holiday Spending and Gift Cards

A new survey finds that 59% of consumers expect to reduce their spending this holiday season, with 11% saying that they are still paying off holiday debt from last year. Consumers who received a federal government stimulus check this summer said that on average, 20% of their check was still not spent – meaning those funds are available for holiday purchases, if needed. Deloitte’s “23rd Annual Holiday Survey” also found that 66% of consumers surveyed plan to buy gift cards this holiday season, just slightly below last year’s 69%. Holiday
shoppers are also planning to buy fewer cards on average: 5.3 cards this
year, compared with the 5.5 cards they planned to buy last year. Reversing last year’s trend, consumers are also spending less in total on gift cards and less per card: $28.43 per card on average compared with $36.18 last year. Gift cards for stores/products are less popular: only 47% of consumers plan to buy them, compared with 54% last year. On the other hand, gift cards for gasoline increased to 17% from 13%.

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BRS & MASTERCARD

The British Retail Consortium has lambasted MasterCard over its new “development” fee. The BRC says the new fee along with increases in existing fees could increase MasterCard membership charges by as much as 161%. The increased fees and new charge could add up to GBP 15 million a year in costs on all MasterCard transactions in the UK, says the BRC. The three MasterCard fees are: interchange fee paid by the retailer to the bank issuing the payment card; non-negotiable membership fees paid by the card issuer to MasterCard; and premium “Development” fees that have no explanation. The BRC calculates MasterCard’s membership fee increases will increase domestic fees by 161%; EU cross-border transactions within the Eurozone by 78%; and EU cross-border transactions outside the Eurozone by 25%. The BRC is calling on card companies to ensure any new charging system is transparent, only includes the actual costs of processing transactions and operates
on a fixed fee per transaction basis rather than percentage (ad valorem)
basis.

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Prepaid Card Holdings to Intro Fee-Free Card

Prepaid Card Holdings will offer through one of its subsidiaries
a branded prepaid debit card with no money loading fees, no monthly fee, no card
issuance fee and no card activation fee. Prepaid Card Holdings, through its wholly owned subsidiaries offers
prepaid card solutions that can act as a card account and payment
solution for those people who do not use banks or credit cards. For
the unbanked or underbanked, prepaid cards can replace their reliance on check cashing centers,
money orders, and the inability to buy certain products that require a major credit card.

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STM & SIM

Smart card provider STMicroelectronic has introduced the
“ST32” and “ST33”
cellular-phone SIM card product families that will allow mobile network
operators to enhance differentiation and
expand revenue growth by delivering richer services to subscribers.
The smart card processor families use the best-in-class
ARM Cortex-M3 32-bit processor architecture, and its SC300 secure version,
combined with large embedded-Flash memory capacities. All the new devices
use ST’s 90nm embedded Flash technology, delivering the combined benefits
of increased capabilities, lower power, competitive price, and smaller chip
dimensions. STMicroelectronics is a producer and developer of
semiconductor solutions across the spectrum of microelectronics
applications. In 2007, the Company’s net revenues were $10 billion.

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2,600 Chicago Taxis to Add Card Acceptance

The nation’s oldest and largest continually operating taxicab fleet is getting carded. Creative Mobile Technologies and Taxi Affiliation Services have signed a 10-year deal to install a credit card payment system in the rear seats of vehicles, as well as multi-channel, interactive media screens and numerous other technologies in 2,600 taxicabs in Chicago. This includes Yellow, Checker and Blue Diamond taxicabs. CMT’s “FREEdom Solution” is currently operating in over 5,500 New York City taxicabs. CMT’s “Passenger Information Monitors” allows passengers to swipe their own credit card and complete wireless transactions in seconds. The CMT “PIM” also features regularly updated news and media content, as well as GPS-powered passenger maps.

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ELAVON PROCESSING

Elavon, formerly known as NOVA Information
Systems, has successfully converted its merchant
services business onto one international processing platform.
With the successful systems migration of over 210,000 European
merchants, virtually all of Elavon’s international acquiring volume is now processed on a single
platform. Elavon utilized multiple IT processing platforms to support its cross-border and multi-currency
international business and its domestic businesses in Belgium, Germany, Ireland,
Norway, Poland, Spain and the United Kingdom. By replacing multiple processing platforms
obtained through acquisitions with one consolidated international processing
platform, Elavon is better able to provide seamless support to global retailers
and other customers with multi-jurisdiction businesses.

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Credit Card Account Growth Slides 4% in 07

The number of general purpose credit card accounts has been slowly
deteriorating in 2007, declining from a peak of 573 million accounts at
the start of the year to 552 million at the end of the third quarter.
BofA and Chase reported a decline of 39% and 10%, respectively,
in the number of new credit card accounts opened during the third
quarter, compared to 3Q/07. According to CardData, Citi reported that
its credit card account base dropped 2.5% and Capital One posted a 7.8%
decrease in its U.S. credit card accounts of 7.8%, compared to the year-
ago quarter. BofA opened 1.77 million new credit card accounts globally
in 3Q/08, compared to 2.67 million in the prior quarter and 2.90 million
in the year-ago quarter. Chase opened 3.6 million credit card accounts
during the third quarter, the same as the prior quarter, but down from
4.0 million for 3Q/07. Citi’s North American credit card portfolio
shrank from 149.1 million accounts for 3Q/07 to 145.3 million for 3Q/08.
Capital One reports that its U.S. credit card account base declined from
41.1 million in the third quarter of last year to 37.9 million for the
third quarter of this year. For more details on third quarter credit
card performance visit CardData ([www.carddata.com](http://www.carddata.com)).

U.S. CREDIT CARD ACCOUNTS
(Visa, MasterCard, Discover & American Express)
3Q/07: 564 million
4Q/07: 573 million
1Q/08: 565 million
2Q/08: 561 million
3Q/08: 552 million
Source: CardData (www.carddata.com)

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OBERTHUR 3Q/08

Los Angeles and Paris-based Oberthur Technologies reported third quarter sales of $287.7 million, a 24% increase over 3Q/07. The Card Systems business, which became a completely separate division at the start of the quarter, posted a sharp 29% increase of $229.2 million in sales, compared to the year-ago quarter, driven by the integration of XPonCard. Payment card sales gained 18% in the third quarter to $46.8 million. Oberthur says the EMEA region and in particular Europe, suffered the joint effect of a drop in volumes, especially in the UK, and in the average sales price, with stability in the personalization services segment activity. In the USA, the magnetic stripe card market is depressed, affected by both the deterioration in economic conditions in the banking sector and price pressure. For complete details on Oberthur’s third quarter results visit CardData (www.carddata.com).

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CO-OP to Offer mFoundry’s Platform to CUs

CO-OP Financial Services has selected mobile banking solution provider mFoundry’s
financial services platform to deliver mobile banking offerings to credit unions.
The mFoundry platform will integrate into
CO-OP Shared Branching’s “Next Generation Network” switch to provide mobile
banking to members of all credit unions participating in its network to
allow credit union members to verify balances, view transaction history,
transfer funds among their accounts, and more—all through the use of their
cellular phones. CO-OP Financial Services is the nation’s largest credit union service
organization with 3,000 credit union members, 28,000 surcharge-free ATMs, 3,500
shared branch locations, over 120 million monthly transactions and 26 million
cardholders.

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Dynamic Card Solutions Cited by Deloitte

Dynamic Card Solutions has been named for a fourth year to Deloitte’s prestigious Technology Fast 50
Program for Colorado. The program is a ranking of the 50 fastest growing technology, media,
telecommunications and life sciences companies in the area by Deloitte LLP. Rankings are based on the
percentage revenue growth over five years from 2003–2007.
DCS is known for its innovation of instant issuance and PIN selection solutions
among financial institutions, has grown considerably over the last five years.
To qualify for the Technology Fast 50, companies must have had operating
revenues of at least $50,000 in 2003 and $5,000,000 in 2007, be headquartered in
North America, and be a company that owns proprietary technology or proprietary
intellectual property that contributes to a significant portion of the
company’s operating revenues; or devotes a significant proportion of revenues to
the research and development of technology.

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V/MC PIN Debit Settlement Notices Issued

NY-based Constantine Cannon, Lead Counsel for U.S. merchants in Visa Check/MasterMoney Antitrust Litigation, issued two letters this month regarding the settlement. The law firm says some merchants have been contacted by an entity or entities offering to purchase their rights to future distributions from the settlement fund. Constantine Cannon recommends merchants contact them first as they can provide a reasonable estimate of their share of any residual funds. Also this month, notices of estimated cash payment awards for PIN debit damages were mailed on October 15th. This applies to U.S. merchants that installed PIN pads and accepted PIN debit transactions at some time during the period of October 1992 through July 2003 and therefore are eligible to receive payment for PIN Debit overcharges.

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