PAYEASE PCI-DSS

Beijing-based loyalty marketer PayEase has achieved compliance validation with
the Payment Card Industry Data Security Standard (PCI DSS).
To validate compliance with the PCI DSS, PayEase engaged Trustwave to
demonstrate compliance with 12 very stringent security requirements of
the credit card brands, submitting to a rigorous review of its IT
environment and information security policies and procedures. As a Level
1 processor, PayEase also enrolled in Trustwave’s “TrustKeeper”– an
on-demand compliance management tool that supports on-going compliance
including the required quarterly network vulnerability scans.
Trustwave is a provider of on-demand data security and payment card
industry compliance management solutions.

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Further Card ABS Deterioration Likely

Moody’s is predicting that the charge-off rate index for credit card
loans backing securities will likely rise to 8.5% in the fourth quarter,
well above the 7.1% post-recessionary peak in May 2003. The rating firm
say it continues to have a negative outlook on the credit card ABS
sector and believes that deterioration will continue into
and throughout 2009. Moody’s also notes that the sustained credit crunch
has constrained some issuers’ access to funding. Therefore, balance
sheet strength and liquidity will become an increasingly important
dimension to credit analysis, especially for those issuers with limited
alternative funding resources. Additionally, Moody’s notes that a
significant and sudden drop in excess spread comes at an exceptionally
challenging time for credit card trusts. For virtually all issuers,
excess spread has been steadily falling since January 2008 due mainly to
rising charge-offs and falling yield. The excess spread index, which at
6.12% in August, is still above the long-term mean of 5.8%.
Nevertheless, with the expectation of rising charge-off rates throughout
the coming year, excess spread will likely erode further.

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US Dataworks Expands a Fed Gov Deal

US Dataworks announced that a major U.S. Federal Government entity is
standardizing payment systems on the “Clearingworks 3.0” enterprise
payments platform to process all of its paper and electronic
checks, an estimated 300 million payments annually, with anticipated
peak volumes of more than 10 million payments a day.
US Dataworks was awarded the contract after a rigorous selection
process that included separate evaluations of the Company and its
technology by two independent consulting firms. Using “Clearingworks
3.0” the entity will consolidate all check and
electronic check payments received by its agencies, process the payments
through a single platform, prepare the payments for clearing and
deposit, generate electronic check presentment files, and handle all
paper or electronic payment returns. In addition, US Dataworks will
provide the entity with a range of professional services, including
project management, testing, coordination, reporting and tracking of
progress, and customization.

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SMB & ECONOMY

A new survey released by American Express Canada indicates that 77% of
Canadian small businesses are not taking drastic
action to change their business plans or operations in the wake of the current
economic turmoil. The survey findings reported that 60% of business owners
believe the Canadian economy will be affected but will ‘avoid serious damage,’
compared to 36% of business owners who speculate that the Canadian
economy will be ‘dragged down into a recession or worse.’
While the majority of Canadian small businesses are not making major
changes to their business, they are realistic about the economic
environment, with 64% saying they’re ‘wary and cautious’ and 20%
describing themselves as ‘unfazed and upbeat’. In fact, 66% are
feeling or expect to feel a negative impact from the current economic
environment in the near term and 41% are already feeling a negative
impact.

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EPN UPIC Payments Rise 61% in 3Q/08

Accelerating usage of UPICs, used for ACH payments by public
and private sector entities across the U.S. propelled UPIC payments to a
record $4 billion in the third quarter of 2008, up 61% compared to the
same period a year ago. A UPIC looks and acts like a
standard bank account number, and travels through the ACH network with
the Universal Routing and Transit number. The UPIC can be printed on
invoices, provided on matching gift forms and displayed on the Internet.
A UPIC becomes an organization’s permanent electronic payment address.
The portability of the UPIC reduces the effort required in changing
accounts due to bank mergers or changes in banking relationships,
including the cost of communicating new bank account information to
trading partners. UPIC is for credit payments only and lowers the
possibility of unauthorized debits, checks and demand drafts and was
developed by the Electronic Payments Network. A total of 20
institutions are now offering UPICs, which are unique account
identifiers issued by financial institutions to allow organizations to
receive electronic payments without divulging confidential banking
information.

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STUDENT PAYMENT HABITS

A recent survey from APACS reveals that the payment profiles of students
between 16 to 24 indicate that 73% have
have a debit card, which is below the national average of 84% , while
only 22% hold a credit card
compared to the national figure of 64% and of those who own a credit
card, 59% always repay the full
balance on all of their cards, higher than the national average of 55%.
Men aged 16 to 24 withdraw an average of GBP2,821 cash a year
through 86 cash machine visits, and women of the same age group withdraw
GBP2,625 a year through 70 cash machine visits. Men aged 16 to 24 make an
average of 63 payments in supermarkets
over the year, spend GBP400 in restaurants, cafes and snack bars per year,
spend GBP22 a year in shoe shops, GBP66 a year in electrical retailers and a
total of GBP99 online shopping in three transactions. By comparison,
women make an average of 77
payments in supermarkets over the year, spend GBP218 in restaurants, cafes
and snack bars per year, spend GBP83 a year in shoe shops, GBP90 a year in
electrical retailers and a total of GBP209 online shopping in nine
transactions, with 40% of men aged 16 to 24 use telephone or internet
banking compared to 34% of women compared with a national average of 49%
across the country.

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RevolutionCard Approaches 300K Merchants

Revolution Money has signed a deal for RBS WorldPay to offer its
“RevolutionCard” as a payment option to RBS merchant clients. The
agreement extends the “RevolutionCard” network to nearly 300,000 online
and physical merchant locations. In August, RBS WorldPay began
processing “RevolutionCard’s” PIN-based transactions for participating
merchants. Merchants will be charged absolutely no interchange fee and a
nominal 0.50% transaction fee. St. Petersburg, Florida-based Revolution
Money is part of the family of companies within Revolution LLC, which
was founded by AOL’s former CEO, Steve Case, to drive “transformative
change by shifting power to consumers.” Jason Hogg is Revolution Money’s
CEO. RBS WorldPay (formerly RBS Lynk) is the U.S. payment processing
division of the Royal Bank of Scotland Group.

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ID DATA LTD

Smart card provider ID Data Group’s ID Data Limited, has filed
at the High Court of Justice in London notification of its intention to
appoint an administrator to
protect ID Data Limited from creditor actions. ID Data has previously
announced that, in order to meet its short term
working capital and debt funding requirements, it has been seeking funds
from investors and, in parallel, pursuing the possible sale of its
operating businesses. In the light of current stock market conditions
and following weeks of economic turmoil, the Company has decided to
focus on the sale of its main operating subsidiary, ID Data Limited and
has received expressions of interest in this as well as other parts of
the Group. ID Data is a fully accredited Visa and MasterCard card
producer and card
processor with its high security bank card capabilities.

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XIRING 3Q/08

Security solution provider XIRING has announced a turnover for the 3rd
quarter of 2008 of 6.2
million euros in line with the company’s forecasts (XIRING had announced
an “exceptionally high” turnover of 8.7 million euros for Q3-2007). The
consolidated turnover for the first nine months of 2008 of 19.1 million
euros is up 13.5% compared with the same period in 2007 (16.8 million
euros). For the first nine months of the year, the Banking activity
posted a turnover of 9.7 million euros, in line with the company’s
forecasts (+5.7% compared with 2007), with a 3rd quarter’s contribution
of 3.7 million euros. The majority of this turnover was generated
abroad, with the continued deployment of the Xi-Sign solutions started
in 2007 in the United Kingdom. The development of the market for
securing online banking transactions continues and the “liability shift”
with respect to e-commerce payments made by credit/debit cards is being
established progressively throughout
the world, based on national schedules that should be finalized in 2010.
This went into effect in France on October 1, 2008 where liability for
fraud has been transferred to the bank that issued the card, and the
retailer is now guaranteed payment, as with face to face payments.

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VISA & MHLPA/NHL

Visa Canada has announced a new sponsorship of the National Hockey
League Players’ Association and the National Hockey League, making Visa
the official payment card of the NHLPA and NHL. The partnership
allows Visa to engage with Canadian hockey fans nationwide and develop
hockey-themed opportunities.s Visa’s partnership with the NHL and NHLPA
strengthens Visa’s commitment to sport in Canada. In addition to its
global sponsorships of the Olympic and
Paralympic Games and FIFA, Visa is a proud supporter of its Canadian
Team Visa athletes and is the title sponsor of Canada’s national men’s
and women’s bobsleigh and skeleton teams. The NHLPA and NHL partnership
is yet another way for Visa to create Visa cardholder opportunities or
compliment those of its financial institution clients.

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EFT PLUS

ST&J Retail has released
the first installations of EFT Plus, a payments solution designed to
address North American Electronic Funds Transfer (EFT) requirements and
deliver Chip & PIN compliance for merchants in Canada. This initial
release of EFT Plus is specifically
designed for retailers using IBM’s 4690 POS platform and addresses the
mandatory security standards introduced by Visa, MasterCard and Interac
standards designed to reduce fraud and administration costs for
merchants as well as protect cardholder information. EFT Plus was
developed based on focus group sessions with 4690 POS
retailers (approximately 20% of the POS installed base in North America
is 4690), and leverages their investment in 4690 technologies. The
solution delivers value to both merchants and consumers by addressing
Chip and PIN compliance standards including global interoperability and
streamlining the customer experience at the cash register.
EFT Plus has been certified in Canada with Global Payments.

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