JULY DEBT

Credit card outstandings were flat in July at GBP 54.1 billion, after adjustments of GBP 1.3 billion for net flows. Year-on-year credit card outstandings (not seasonally adjusted) were up slightly more than 1%. According to the The Bank of England, net credit card lending rose by GBP 300 million, below the increase in June. Net other loans and advances increased by GBP 800 million, above the June increase. The annual growth rate of consumer credit slowed by 0.1 percentage points to 6.8%; the three-month annualized growth rate rose by 0.1 percentage points to 6.1%. The increase in total net lending to individuals in July (GBP 4.3 billion) was above the increase in June, but below the
previous six-month average. The twelve-month growth rate slowed further, to 6.9%, and the three-month annualized growth rate fell by 0.8 percentage points to 3.8%. Within the total, the increase in net lending secured on dwellings (GBP 3.2 billion) was above the increase in June, but below the previous six-month average. The twelve-month growth rate slowed further, to 6.9%. The three month annualized growth rate fell by 1.0 percentage points to 3.4%.

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SQUIDCARD EMONEY

The Dundee City Council has partnered with sQuid electronic money
(eMoney) operator to introduce the “sQuidcard eMoney Smart Money”
service to the citizens of Dundee, Scotland. Launched in partnership
with the Scottish National Entitlement Card (NEC), the Dundee City
Council has 38,000 of the cards, while 140,000 have been issued across
the region, for use as a low value transaction card and as a pre-pay
transit card. ‘sQuid’ will be available through the NEC as well as
independently through retailers. sQuidcard is a subsidiary of Nucleus
Limited internet and venturing business while “sQuid eMoney” is the
alternative to the debit and credit card networks for sub GBP10 tap and
go transactions.

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HERTZ & CYBERSOURCE

Hertz Europe has deployed CyberSource’ “Payer Authentication Service”
electronic payment and risk management solution, providing the former
access to online payment verification through “Verified by Visa” and
“MasterCard SecureCode.” Patrons of the “Payer Authentication Service”
are to supply a separate password linked to their bank card during
checkout, providing maximum security. Hertz vehicle renting company
operates 8,100 locations in 145 countries worldwide and, with the
CyberSource solution fully integrated with the Hertz Europe website, can
provide secure online reservation solutions while CA-based CyberSource
provides over 238,000 businesses electronic payment and risk management
solutions.

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NETELLER CARDSAVE

Providing local merchants access to global clients, NETELLER independent
global online payments business has begun the implementation of online
payment services through its “NETELLER Payment Suite for Cardsave,”
which features the “NETBANX” international payments gateway, “NETELLER
e-wallet” and “Net+” cards. “NETBANX” allows for card payment and
non-card payment acceptance through multiple channels, “NETELLER
e-wallet” allows consumers to spend securely online while “Net+” cards
promote customer loyalty solutions. The hosted payment suite allows
merchants to receive payments online through payment cards of all kinds
through Cardsave independent credit and debit provider, which represents
over 28,000 members, while the NETELLER Group offers instant payment
solutions through its payment suite in more than 160 countries where
money transfer is difficult or risky.

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PBS & STRALFORS

In addition to its already established sales office in Sweden, PBS A/S
has expanded its reach in the Nordic region with its recent acquisition
of Stralfors Payments information logistics. With this expanded
presence, PBS is establishing itself as a card payments collector in the
market and is to deploy a re-designated payment module based on the
already existing “Postens Betalvaxel” (Swedish Post ePayment Services)
to address Internet payments. With the acquisition, the acquiring
company will be taking over customer agreements with merchants/banks and
will assume the management of Stralfors 110–120 million annual
transactions. PBS moves money between private individuals, companies,
public institutions and employs 850 staff throughout the Nordic European
region to provide processing services in more than 20 countries while
Stralfors is an IT-oriented B2B company providing information transfer
solutions.

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ECONOMICS JUNE

The Australian leading index decreased by .5% while the coincident held
steady for the month of June 2008, according to the Conference Board.
The leading index’ decline is consistent with a 1.3% decline since
January and trends witnessed in 5 of the 6 previous months in 2008.
These losses are a direct result of declining share prices, rural goods
exports and yield spread. Meanwhile, the coincident index figure, which
now stands at 145.1, is consistent with no change the month prior and
relative stability throughout the 1H/08. The little change seen in the
coincident index is reflective of the same seen in employment, household
gross disposable income, retail trade and industrial production
throughout Australia. Founded in 1916, The Conference Board is a
business membership and research network to help executives build
professional relationships, expand business knowledge and find solutions
to business challenges.

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UEPS & BSG

Net 1 UEPS Technologies has acquired an 80.1% majority in BGS Smartcard
Systems AG smart card-based payment systems in exchange for EUR71.5
million in cash and and an aggregate 40,134 shares of its own common
stock. Providing banks, enterprises and government authorities across
many global regions, BGS’ “Dual Universal Electronic Transactions”
(DUET) solution is perceived as a great benefactor to the acquiring
organization. Other advantages to the acquisition which Net1 management
believes will offer strategic benefits include increasing Net1 revenues,
an enhanced Net1 product offering through the acquired technology
platform/IT development resources, increased depth in its management
team and accelerated UEPS rollout in newly engaged markets. Sberban
Russian financial institution owns the remaining 19.9% of BGS Smartcard
Systems.

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AUGUST PMI

The August Bloomberg PMI drop to 47.7 reflects decline in Euro retail
sales thanks to an uncertain economic outlook and reduced consumer
purchasing power. Italian sales continued to decline, as it has over the
previous 18 months, however at a less critical rate of 44.8, up from
38.2 the month prior. The Germany rate of decline was stronger than that
of the Italian rate, with a rate of 44.1 while France posted growth at a
retail sales index of 53.7, maintaining the trend from the previous
month which posted a 51.3 on the index. Meanwhile, the Bloomberg prices
index posted 62.7 from 67.3 and retailer gross margins fell from 41.3 to
40.0 over the same period. This rather dismal news is apparently a cause
for concern among the retailers, whom collectively are manifesting a
sense of pessimism through a projected September sales index of 48.0,
down from 49.5 in August.

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VENEZUELA

Prepaid card specialist NovoPayment has launched a reloadable prepaid Visa card for one of the largest shopping centers in Latin America. The new “Sambil Visa” can be reloaded from a minimum initial load of 100 bolívares (US$50) to a maximum per-transaction load of 4,000 bolívares (US$2,000). The Card can be used for transactions via ATM, SMS, P2P and web transactions at the “Sambil Visa” web site. The card can be reloaded at any of Plata’s 250 reloading centers in any amount denomination, up to 4,000 bolívares (US$ 2,000). The new card can also be used at more than 150,000 points of sale around the country. The company projects issuing 35,000 to 45,000 Sambil GPR (General Purpose Reloadable) cards throughout Venezuela by year’s end. Sambil currently operates six shopping centers in the country and has another three under development. The “Sambil Visa GPR Card” is the fourth reloadable prepaid program launched by NovoPayment in Venezuela.

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Number of Data Breaches Rising Rapidly in 08

With 449 confirmed data breaches as of this month, the number of breaches on the Identity Theft Resource Center breach list is already greater than the 446 reported throughout the entire year of 2007. Although this reported figure is already greater than that of the year prior, the ITRC recognizes 449 breaches in less than a year is a small number when compared to the total number of business, governmental, health, banking and educational entities that have databases. However, the total count of records exposed reflects compromised records of more than 22 million individuals while the US Secret Service has reported tens of thousands of credit and debit card accounts have been recently hacked, amounting to losses of over $1 million. The ITRC non-profit organization was established to support victims in resolving identity theft cases and to broaden public education on identity theft.

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On Track Innovations Revenue Up 18% in 2Q/08

NJ-based contactless specialist On Track Innovations reported second quarter revenues of $11 million, an 18% increase over the prior year. Net loss on a GAAP basis for the second quarter decreased by 17% to $5.7 million. The company says the results are due to a shift in the revenue mix in the payment sector from components intended for the U.S. contactless card payments market to greater sales of readers, solutions for the mass transit market, “EasyPark” and more, as well as contactless payments in non-U.S. markets. For complete detail on OTI’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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