U.S. Bank Launches Mobile Banking Nationwide

U.S. Bank has launched its mobile bank account access solution for its
internet banking customers. Targeting the 220 million Americans who
currently subscribe to wireless services, the m-banking solution allows
users to check balances, obtain transaction history and transfer money
using any major mobile phone carrier that provides mobile internet
access. The Bank will eventually enhance the solution to allow customers
to pay bills through its Internet Bill Pay and provide text
message-based alerts/services. U.S. Bancorp has $247 billion in assets,
operates 2,542 banking offices and operates 4,895 ATMs throughout the
Unites States.

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CONSUMER PULSE

France’s leading index decreased .5% while the coincident index was
unchanged for the month of May 2008 according to the Conference Board.
The leading index’s decline for the seventh consecutive month is
consistent with a 2.1% decline over the past 6 months. Meanwhile, the
coincident index having not changed for the month is inconsistent with a
.9% increase over the previous 6 months and is a direct result of
negative contribution from industrial production that was offset by
positive contributions from personal consumption of manufactured goods,
employment and wages. 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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ID DATA MGR

ID Data Group has appointed Alan Jordan as Managing Director of the
Company’s core operating business focused on card solutions. Jordan
joins ID Data with a strong background in the card related industry
and was prior to this appointment the CEO of Oakhill Group, now renamed
Prime Active Capital. ID Data is a fully accredited Visa and MasterCard
card producer and card processor with its high security bank
card capabilities based in Petersfield, England.

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Comdata Launches a Dexter + Chaney MasterCard

Dexter + Chaney construction-specific ERP systems has signed co-branded
MasterCard agreements with Comdata payment solutions. The new “Comdata
MasterCard” enables enhanced purchasing controls, integrating costs
faster than traditional non-card payment methods, to focus on
integrating systems for fuel and purchasing transactions in the
construction Industry. Dexter + Chaney provides its “Spectrum
Construction” software to more than 1,000 customers in the construction
industry. Comdata’s platforms support both its proprietary and branded
card networks.

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PAYZONE TERMINALS

Petrol Retailers Association, part of the Retail Motor Industry
Federation, has teamed with Payzone UK consumer payments and cash
distribution network to enable its retailers to offer Payzone’s range of
services. They include mobile top
up, utility bill payment, gift cards highly competitive commission rates
and fewer cash collection points per week.
The total annual gross value of mobile top up is worth close to seven
billion euros in the UK alone while gift cards will account for close to
GBP13 billion over the next five years. Moreover, 30,000 UK retailers
host Payzone terminals in-store and 170,000 retailers host the terminals
across 21 European countries, conducting 630 million transactions annually.

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MPC Honks it Horn Again; Forgets Card Net Impact

The House Judiciary Committee’s passage of the H.R. 5546 “Credit Card
Fair Fee Act” of 2008 is getting a positive reception from merchants.
The Credit Card Fair Fee Act will allow merchants for the first time to
be included in the negotiating process with Visa and MasterCard,
separately with their banks, to come up with a voluntary agreement on
interchange rates and terms. Interchange fees amount to approximately
$2 of every $100 spent using credit cards. Credit card interchange fees
cost Americans $42 billion last year and inflate the cost of virtually
all retail goods, but especially skyrocketing food and gasoline prices.
Currently, credit card interchange rates are set in secret, hidden from
view, and exclude merchants from the negotiating process.

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RMB DEBIT CARDS

Citibank (China) has passed inspections by the People’s Bank
of China and been granted approval to issue Renminbi debit cards in China. In doing so, Citi has partnered with China Union
Pay’s subsidiary, China Union Pay Data Services, bankcard third-party processor for transaction processing onshore. The final preparations for the debit card launch are currently underway and
soon expected for deployment.

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American Eagle Adds the PayPal Payment Option

Specialty retailer American Eagle has added “PayPal” as a payment
alternative on its website. , American Eagle customers join the 62
million “PayPal” account holders to pay for clothing and accessories
through debit cards, bank accounts,
stored balance or credit cards without sharing their financial
information. From July 31 through August 15, customers who make a
purchase on
ae.com using “PayPal” will receive 20% cash back into their PayPal
accounts. American Eagle Outfitters designs, markets and sells its own
brand of clothing targeting 15 to 25 year-olds, providing high-quality
merchandise at affordable prices.

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SMARTRAC RFID

SMARTRAC produced and shipped over 20 million RFID-Inlays from its
Ayutthaya, Thailand facility, surpassing a milestone and reaching an
all-time high. The Thailand manufacturing facilities produce standard
inlays for logistics, animal ID, mass transport and access control
implementing SMARTRAC wire-embedding technology. These locations are in
addition to the organization’s production locations in Brazil, the USA
and Germany, collectively contributing to the growth of the RFID market.
SMARTRAC was founded in 2000 and currently employs some 2,600 employees
around the globe.

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Europe’s Equens Becomes a Societas Europaea

Equens payment processor has been converted to a Societas Europaea and is now designated “Equens SE,” a direct result of the mergers of Equens Nederland B.V. and the German Equens Deutschland AG, reflecting the organization’s European payments market ambitions. With the SE title, a legal form under the laws of the European Union, Equens is permitted as an internationally operating company to transform into a European public limited-liability company governed by a uniform European body of law based on the EU directive. As the first significant operational SE in the Netherlands, Equens is to establish an SE Works Council to implement a stable, future-orientated international co-determination regime which will lead to cost savings at the operative level. Equens payment processor oversees an annual volume of 7.3 billion payments and 2.1 billion POS and ATM transactions for more than a 15% euro zone market share.

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INTEREST RATE CAPS

Thanks to the Turkish government, the maximum allowable monthly interest
rate on credit cards in the country has decreased from 5.72% in July
2006 to 4.39% in June 2008, with intentions to reduce this to 2.7%. In
response, Celent’s Banking group has published its report examining the
profitability of credit card issuers in Turkey and the strategies
undertaken to remain competitive. These strategies include cost
reduction in order to sustain credit cards’ profitability, customer
relationship management for the marketing of more profitable products,
strategic implications concerning credit card operations, fee
structures, costs, efficiency, approaches in banking, a customer-centric
approach and partnering with retailers. Celent research and advisory
firm helps financial institutions formulate comprehensive business and
technology strategies through its reports identifying trends and best
practices.

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Citi’s North American Card Profits Plummet 75%

Citigroup reported that 2Q/08 profits for its North American Cards unit
declined 75% year-on-year to $178 million due to soaring losses. Second
quarter revenues for North American cards also dropped 11% year-on-year
from $3.3 billion to $2.9 billion. Card profits declined 64% in the
EMEA region; 10% in Latin America; and 4% in Asia. In North America,
credit costs increased $345 million, driven by a 51% surge in net credit
losses, and a $111 million incremental net charge to increase loan loss
reserves. The managed net charge-off ratio increased 202 basis points to
6.53% for North American cards from 2Q/07 and jumped 72 basis points
from the prior quarter. The 90-day delinquency ratio for North American
cards increased 6 basis points from the prior quarter to 2.02%, and as
compared to 1.47% for 2Q/07. Citi also reported 146.9 million open
accounts at the end of the second quarter in North America, compared to
150.1 million one-year ago. Purchase volume for North American cards was
flat at $83.8 billion, compared to $83.5 billion for 2Q/07. North
American managed loans rose 6% year-on-year to $151.2 billion. In March,
Citi announced its new corporate organizational structure. It now
reports Global Cards in four geographical areas instead of just U.S.
Cards and International Cards. North America now includes the U.S.,
Canada and Puerto Rico. For complete details on Citigroup’s 2Q/08
performance, visit CardData ([www.carddata.com](http://www.carddata.com)).

CITIGROUP
North American Credit Card Net Income
2Q/07: $711 million
3Q/07: $808 million
4Q/07: $322 million
1Q/08: $537 million
2Q/08: $178 million
Source: CardData (www.carddata.com)

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