Young U.S. Consumers are On-The-Edge

A new report reveals that 75% of young people report say they are only paying their minimum monthly amount on their credit card. One in three young people who owe money on a credit card owe more than $10,000 overall and 15% have had their credit card cancelled due to non-payment. The poll by WA-based online advocate Qvisory also found that more than half of all young people have gone without health insurance at some point in the past five years including 75% of those who are now carrying medical debt. The “Young People: Living on the Edge,” report details the severe impact of the current economic crisis on 18 to 34 year-olds.

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AmEx Q2 U.S. Card Profits Collapse

American Express reported that its U.S. Card Services division posted second quarter net income of $21 million, compared to $580 million for 2Q/07. Total revenues of $3.6 billion were flat when compared to the prior quarter, and down sequentially by more than $100 million. Total U.S. card loans rose 10% to $64.7 billion. Charge-offs on total U.S. card loans rose to 6.5%, compared to 5.3% for 1Q/08 and 3.7% for 2Q/07. Delinquency on U.S. card loans (30+ days) was steady at 3.7% versus the prior quarter, but up from 2.6% for 2Q/07. Card volume in the U.S. hit $123.5 billion, up 7% from the year-ago quarter. The total number of domestic cards-in-force grew to 53.5 million cards, compared to 50.5 million for 2Q/07. International Card Services reported second-quarter net income of $115 million, down 2% year-on-year. For complete details on American Express’ second quarter results, visit CardData ([www.carddata.com](http://www.carddata.com)).

American Express U.S. Card Portfolio Snapshot
2Q/08 1Q/08 4Q/07 3Q/07 2Q/07
Volume $123.5B 114.6 123.0 115.2 115.7
Cards 53.5MM 52.9 52.3 51.7 50.5
Source: CardData (www.carddata.com)

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Comdata Names a Financial Services SVP

Comdata has promoted Keela Wofford to Senior VP of its Financial
Services division. In her new role, Wofford will be responsible for
managing all sales and operations aspects of the receivables financing
portfolio at the organization, of which she has been a part since 1993
having served in marketing, sales and customer relations positions.
Prior to 1993, Keela was director of sales at Tom Jackson and
Associates publishing company. She holds a Bachelor of Science in
marketing from Western Kentucky University and is a member of the
National Funding Association and the International Factoring
Association. Comdata’s platforms support proprietary branded card
networks, is headquartered in Tennessee and employs over 1,100 people.

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CashLINQ Group Renews its GPN Contract

Global Payments electronic transaction processing services and The
CashLINQ Group merchant services provider have renewed their payment
processing services agreements. The terms of the agreements stipulate
Global Payments will continue to provide The CashLINQ Group market base
with its line of payment card authorization, settlement services and
customized merchant support services. The WA-based CashLINQ Group
provides payment processing to large and small non-profit organizations
in the United States and Canada while Global Payments Inc provides
electronic transaction processing services around the world to
organizations in a range of sectors.

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Navy Federal CU Joins NACHA E-Pay

VA-based Navy Federal Credit Union has joined NACHA—The Electronic
Payments Association. The Navy FCU is the world’s largest credit union
with more than 3 million members and $35 billion in assets and recently
announced it has expanded its membership base to include all branches of
the armed forces. NACHA is a not-for-profit association that
oversees the Automated Clearing House (ACH) Network, one of the largest
electronic payment networks in the world. More than 18 billion ACH
payments were exchanged in 2007. NACHA is responsible for the
administration, development, and enforcement of
the NACHA Operating Rules and sound risk management practices for the
ACH Network and represents more than 11,000 financial
institutions through direct membership and 19 regional payments
associations.

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Matica Americas Begins Operations the USA

Italian-based card personalizer Matica has
announced the opening of MN-based Matica Americas. Matica designs,
manufactures and markets card personalization systems and card mailing
systems for customers in a range of industries and offers a broad
range of complementary products, together with industry expertise,
resulting in the ability to distribute around the world one of the most
complete ranges of card personalization systems. The systems are used in
a wide range of plastic card personalization and metal plate embossing
markets such as financial, retail, service bureau, healthcare,
membership, insurance, corporate and government identity markets and
more. Steve Blake will serve as the President and CEO of Matica Americas.

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BofA Card Profits Fall; Charge-Offs Rise

Bank of America reported that its Card Services division net revenue
fell 55% to $402 million as credit costs rose by $1.21 billion.
Managed U.S. consumer and business credit card loans at the end of the
second quarter rose slightly to $163.3 billion, compared to $161.4
billion in 1Q/08 and $148.7 billion for 2Q/07. Second quarter U.S. Card
Services charge-offs rose sharply to 6.65%, compared to 5.67% in the
prior quarter and 5.21% one-year ago. However, the managed 30+ day
delinquency declined to 5.88%, compared to 5.93% in the first quarter
and 5.29% for 2Q/07. Purchase volume for U.S. consumer and business cards of $61.0 billion for 2Q/08, compared to $56.8 billion for 1Q/08 and $61.3 for 2Q/07. BofA noted that debit card purchase volume
increased 15% during the second quarter. BofA also reported that mobile
banking reached more than one million active customers in Q2.
Additionally, Card Services opened 2,212,000 accounts during the
quarter, compared to 2,042,000 accounts in the prior quarter. For
complete details on Bank of America’s 2Q/08 performance, visit CardData
([www.carddata.com](http://www.carddata.com)).

BOFA EOP CARD LOAN HISTORICAL
(U.S Consumer & Business Credit Cards)
2Q/07: $148.7 billion
3Q/07: $153.0 billion
4Q/07: $161.4 billion
1Q/08: $161.4 billion
2Q/08: $163.3 billion
Source: CardData (www.carddata.com)

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VDC Acquires an ATM Display Concern

Video Display Corporation has acquired WI-based ATM monitor supplier
Display Concepts. The Display Concepts product line features the
“SunView 2000” line of sunlight-viewable displays originally designed and
manufactured by Palomar Displays, Inc. These unique high-brightness LCD
monitors replace standard-brightness LCDs and older CRT monitors in ATMs
from Diebold, NCR, Fujitsu and Wincor-Nixdorf. Unlike regular displays,
which “wash out” in bright sunlight, Display Concepts displays provide
bright, full-color images in direct sunlight. The displays are brighter,
sharper and longer-lasting than the original CRT technology.VDC will
retain the Display Concepts brand and its existing sales and support
office in Wisconsin, with product design and production being
incorporated into its Z-AXIS’ manufacturing center in Phelps, NY.

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VDC to Help Expand Affinion Direct Response

Affinion Direct Response has signed multi-year agreements with Venture Development Center data service management for the development of its distribution channels and Information Services products. VDC will provide to the company sourcing of new partners, the creation of analytical products, and the identification of new vertical markets for ADRG, which provides businesses marketing services such as marketing strategy consulting, creative development, database analysis and predictive modeling. ADRG global affinity marketer executes over 15,000 campaign versions annually while Venture Development Center (VDC) is a focused practice to assist companies in creating, developing and commercializing Information Services properties.

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Shariah Compliant Credit Cards to Soar

Global wealth redistribution, electronic commerce, and population
development are driving the requirement for a credit card
model that serves the Islamic population. A new study predicts that the
number of credit cards that fit the Islamic banking model will soar from
its current base of less 1 million accounts to as many as 6 million
accounts by 2012. According to the new TowerGroup report, Islamic credit
cards are similar to traditional cards as payment instruments, but as
lending instruments they must not violate “Shariah” – the written and
interpreted code of Islam, which among other tenets rejects levying
interest earned on debt, prohibits speculation, and excludes certain
activities. Therefore, Islamic credit cards require a pricing
alternative to interest and require scrutiny of transactions to
ensure purchases are not prohibited. Three types of credit card issuers
now operate in the Islamic card space: major global banks that set up
separate Islamic banking companies; traditional banks converting to the
Islamic model; and Islamic startups.

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New PIN Pay Steering Product is Introduced

Card processing solution provider Merchant Warehouse has introduced
“BINsmart Interchange Manager” to help small and mid-sized merchants
reduce their overall payment processing costs. “BINsmart helps
merchants process transactions at the lowest possible
cost by automatically identifying the card type being used in the
transaction, and prompting debit card users to enter their PIN. This
sophisticated, yet simple solution evades interchange rates and fees by
opting for PIN-debit transactions over credit whenever possible.
The “BINsmart Interchange Manager” also detects corporate card
transactions, making it simpler for merchants who need to submit tax
amounts and customer codes to receive the best rates.

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