FOMC Stuck Between Rock & Hard Place

Yesterday’s decision to hold the line on interest rates demonstrates
how much the Fed is caught between a rock and hard place.
The Federal Open Market Committee noted that tight credit conditions,
the ongoing housing contraction, and elevated energy prices are likely
to weigh on economic growth over the next few quarters. However, some
economists see rate hikes next year as the economy improves. According
to CardTrak credit card interest rates continue to nudge down. With the
current 5% prime rate, variable rate cards averaged 15.08% and fixed
rate cards 14.78% last month.

PRIME RATE & CREDIT CARD RATES
Prime Fixed Variable
Jul 07 8.25% 14.96% 16.69%
Aug 07 8.25% 14.97% 16.70%
Sep 07: 7.75% 14.98% 16.58%
Oct 07: 7.75% 14.99% 16.39%
Nov 07: 7.50% 15.00% 16.29%
Dec 07: 7.25% 15.02% 16.02%
Jan 08: 6.50% 14.97% 15.79%
Feb 08: 6.00% 14.95% 15.64%
Mar 08: 6.00% 14.93% 15.60%
Apr 08: 5.25% 14.89% 15.35%
May 08: 5.00% 14.88% 15.11%
Jun 08: 5.00% 14.85% 15.08%
Jul 08: 5.00% 14.78% 15.01%
Source: CardTrak (www.cardtrak.com)

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WU ACQUISITION

To meet its commitment to expand its margins of profitability while
reducing distribution and operating costs, Western Union has acquired
its Panama-based money transfer and bill payments agent to create the
Transfer Express de Panama business entity. A direct result of the
acquisition, Transfer Express de Panama is to directly operate its own
15 locations and manage relationships with sub-Agents of 100 sites
throughout Panama, in which WU has had presence since 1991. Western
Union and its affiliates, Orlandi Valuta and Vigo, provides global
money-transfer services for sending money, paying bills and purchasing
money orders through more than 355,000 Agent locations in over 200
countries around the world.

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Simon Malls Offers Olympic Giftcards

A limited edition “Olympic Giftcard” is now available at 185 Simon
Malls coast-to-coast. Only 100,000 cards will be available that also
contain a unique GWP CD-ROM that gives consumers access to bonus
Olympics footage, music, and ringtones. The new card is the creation of
VISA, Coca-Cola and Simon Malls. One dollar from each of the giftcards
sold will support the U.S. Olympic Committee. Additionally, the GWP
CD-ROM offers access to a variety of Sega Games. The “Gift That Takes
The Gold” campaign includes new and innovative Coca-Cola Olympic
Games-themed vending machines, which trigger additional game activation.
The limited-edition Visa Olympic Games-themed giftcard is a prepaid Visa
product and will be sold in denominations of $20 to $500 at the Guest
Services Center at the malls or online.

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KIC Cleaning Card Uses Waffletechnology

Designed to extend the life of the scanner, KICTeam has deployed its
check scanner cleaning card using “Waffletechnology” for use with
Epson’s “CaptureOne” check scanning solution. The KICTeam ‘Cleaning
Card’ has been specially designed in conjunction with the Epson team to
clean all parts of the desktop scanner, including the transport, track,
MICR head and scanner glass, using flexible cleaning card waffles with
raised platforms while the “CaptureOne” scanner check capture device is
useful for both back office capture and remote deposit capture
applications. Epson printers, precision printing
mechanisms and digital image scanners was founded in 1975 in Long Beach,
CA while KICTeam provides cost efficient patented cleaning cards to
organizations throughout the country.

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OTI to Supply EGR Contactless Readers

Smart card provider On Track Innovations
will supply its contactless readers to the ERG Group for Utah Transit
Authority’s contactless credit card bus payment solution. The contract
for the full rollout of the system in the Salt Lake City
metropolitan area follows the recently reported successful pilot project
completed by ERG and UTA. Buses serving Salt Lake City area
ski resorts were equipped with the new system which allowed customers to
use contactless credit cards and other smart cards for both transit
payment and ski resort access. UTA will allow a variety of cards to be
used for fare payment including UTA-issued, employer-provided transit
smart cards, local university passes,
ski resort passes and contactless credit cards. At full system roll-out,
the system will feature a unique to ERG onboard, rapid authorization of
contactless credit cards to minimize any risk of credit card fraud.

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REBATE CARD BATTLE

Citi’s new “Shell MasterCard” projects it can save U.K. drivers about GBP63 each, or a total of GBP27 million per year just for fuel purchases. Citi also calculates cardholders can save and additional
GBP72 per year for other purchases, for about GBP135 per year. The card offers 3% cash back on Shell fuel purchases in Great Britain and 1% on all other purchases. The card also offers other motoring benefits. Citi says the new card is the best in rebates in the U.K., comparring itself the similar cards. Other cards included “Barclaycard Cashback”; “Tesco ClubCard”; “M&S &More”; “Amex Platinum MoneyBack”; “Amex Nectar”; “Capital One Cashback Card”; and “MBNA Rewards Visa.”

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PRAA Acquires a Louisiana Tax Firm

Account management services Portfolio Recovery Associates has acquired
the assets of LA-based Broussard Partners & Associates which specializes
in providing audit services to local tax authorities. The purchase of
privately held Broussard Partners closed on August 1,
2008, and it is now operating as part of RDS. Lisa Broussard, the firm’s
President, has entered into a long-term employment agreement with RDS.
Financial terms of the cash transaction, which included substantially
all assets of Broussard & Partners, were not disclosed. Portfolio
Recovery Associates also provides a broad range of collection services,
including revenue administration for government entities through its RDS
and MuniServices businesses, collateral-location services for credit
originators via its IGS subsidiary and bankruptcy servicing through PRA
Receivables Management, LLC.

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Heartland Payment’s Q2 Volume Jumps 29%

NJ-based Heartland Payment Systems reported that second quarter revenues rose more than 18% to $395 million. Card processing volume for the quarter increased 29% to $17 billion. About $2 billion of the quarter’s volume came from acquisitions, including the Network Services business of Alliance Data. However, HPY noted that same store sales in the quarter declined 0.1%, the first such decline in the Company’s
history. HPY also noted that its card business is growing faster than the industry, and is preparing to add incremental volume, processing Discover and American Express transactions. Additionally, payroll, remote deposit, and the campus card markets are showing strong growth. The Company projects that net revenue this year will grow by 16% to 18% organically, and in excess of 35% including NWS. For complete details on Heartland’s second quarter performance visit CardData ([www.carddata.com](http://www.carddata.com)).

HEARTLAND PAYMENT SYSTEMS REVENUES
2Q/07: $333 million
3Q/07: $355 million
4Q/07: $342 million
1Q/08: $340 million
2Q/08: $395 million
Source: CardData (www.carddata.com)

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Wells Fargo Intros a Jewelry Retail Card

Wells Fargo Financial National Bank has launched a revolving credit
card for jewelry industry customers. The new “Jewelry Advantage” card
program offers jewelry retailers automated decisions,
online processing and reporting. The new card also provides a
no-interest plan with equal payments, low interest plans with longer
payment terms, no payment/no-interest option plans and a no-interest
option with minimum payment plans. This is the latest edition to
IA-based Wells Fargo Financial Retail Services’ already established card
programs, which include “Wells Fargo Health Advantage,” “Home Projects
Visa”, the “SplashCard” and many others.

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FOR STUDENTS ONLY

Desjardins has launched its “VISA Desjardins FOR STUDENTS ONLY” credit
card highlighted with its provision of cell phone insurance. This
product offering is in response to research concluding over 64% of
Canadians between the ages of 15 and 29 have a cell phone, many of whom
have misplaced or had one stolen. The “VISA Desjardins FOR STUDENTS
ONLY” credit card will replace the cell phone of the insured at no extra
fee in the event it is lost or stolen, the first financial institution
in Canada to offer such protection. Desjardins Group integrated
cooperative financial group has overall assets of nearly $150 billion,
providing financial service to 5.8 million clients through its 40,000
employees and 6,500 elected officers.

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Gift Card Plastic Tray Patent Granted

UT-based specialty gift card provider Seastone announced they have
been granted a new patent for a customized plastic tray designed to
carry a gift card within a gift card holder or package. Seastone also
holds the patent for gift card packaging made with tin,
which was found to be the most popular format for gift card packaging in
a 2008 gift card packaging study done by The Marketing Workshop, Inc.
Seastone pioneered
specialty gift card packaging and offers turnkey gift card promotional
programs through its “Give-A-Gift brand” and provides fully
customizable programs utilized by many of the nation’s largest
retailers, restaurants, banks and mall groups.

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VIRTUAL WALLET

Moneybookers has reported five million customers now use its “Virtual
Wallet” solution at an account opening-rate of nearly 5,000 accounts
daily in more than 40 countries. The Moneybookers ‘e-wallet’ solution
allows users to transfer money at very low cost on a transparent
fee structure to anyone in the world with an email address. The fee
structure simply requires the sender pay 1% of the transaction or 40
pence, whichever is cheaper. Moneybookers online payment
system offers domestic payment options in 12 languages and is among the
largest e-wallets worldwide.

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