MATICA AMERICAS

Card issuance machine designer and manufacturer, Matica, has formed
Matica Americas as a 50-50 joint venture between the organization
and its U.S. partner, scheduled to open this month. In doing so, Matica
will provide sales, service, parts, supplies and customer support from
its new Minnesota location and, along with its venture partner, has
committed to capital contributions of up to $1,500,000 payable in
monthly installments over three years. In 2007, of the 19.4 billion
cards manufactured globally, the U.S.represents 47% of the total card
personalization industry and, as far as Matica is concerned, is
subsequently a critical market in which to establish a physical
presence. Matica provides its card personalization and card mailing
systems in approximately 100 countries for numerous types of cards and
is based in Milan, Italy.

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Chase Credit Card Profits Sink 67% in 2Q/08

J.P. Morgan Chase reported that second quarter credit card profits
declined 67% year-on-year to $250 million, and collapsed by 59% from the
prior quarter. End-of-period managed loans of $155 billion increased by
5% year-on-year, but declined 3% from the first quarter. Charge volume
of $93.6 billion increased by 6% from 2Q/07. Net accounts opened during
the quarter were more than 3.6 million. Merchant processing volume of
$199.3 billion increased 11% compared to the year-ago quarter. Managed
net revenue was $3.8 billion, an increase of 2% from the prior year but
down 3% from 1Q/08. Net interest income was $3.0 billion, up 2% from
2Q/07. Chase says the increase in net interest income was driven by
higher average managed loan balances, an increased level of fees and
wider loan spreads. However, these benefits were offset largely by the
effect of higher revenue reversals associated with higher charge-offs.
The managed net charge-off rate for the quarter was 4.98%, up from 3.62%
in the prior year and 4.37% in the prior quarter. The 30-day managed
delinquency rate was 3.46%, up from 3.00% in the prior year and down
from 3.66% in the prior quarter, reflecting seasonal patterning. For
complete details on Chase’s second quarter performance, visit CardData
([www.carddata.com](http://www.carddata.com)).

JPM CHASE HISTORICAL ($billions)
2Q/07 3Q/07 4Q/07 1Q/08 2Q/08
EOP Outstandings: $148.0 149.1 157.1 150.9 155.4
Charge Volume: $ 88.0 89.8 95.5 85.4 93.6

Source: CardData ([www.carddata.com](http://www.carddata.com))

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CONTACTLESS RECEPTION

Despite having cost millions in development and marketing, contactless
payment solutions are not being met with warm reception by the majority
of consumers. According to the latest market research report
conducted by Auriemma Consulting Group, consumers need
additional encouragement to acquire a new card with only 3% of the
population being familiar with contactless technology and 23% of
consumers not showing comfort with contactless cards due to the risk of
identity theft. Additional findings show consumers were 7 times more
likely to want a contactless card after having read the product
description while 63% of consumers more likely to use it because of its
“cool new technology” and 67% more likely to use it because of its “ease
of use.” These findings were compiled by ACG Research through data
generated from a survey of 508 credit card users in 1Q/08.

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Alliance Data Systems Q2 Revenues Rise 5%

Dallas-based Alliance Data Systems reported that second quarter revenue
increased 5% to $507.2 million and income from continuing operations
increased 20% to $61.9 million for the second quarter. Loyalty Services
achieved the strongest quarter in its history, delivering $53.5 million
in adjusted EBITDA, an increase of 66% from the prior year period.
Driving this performance was a 31% increase in revenue to $200.0 million
in the second quarter due to strong double-digit growth in both “AIR
MILES” reward miles issued and “AIR MILES” reward miles redeemed. For
the second quarter, Epsilon
Marketing Services posted year-over-year adjusted EBITDA growth to
$26.4 million, highlighted by a continued double-digit organic growth
rate. Revenue grew by just over 5% for the second quarter to $115.4
million. For the second quarter, Private Label Services revenue
increased year-over-year approximately 5% to $95.8 million. For the
second quarter, Private Label Credit revenue declined year-over-year 9%
to $187.6 million due exclusively to the loss of Lane Bryant. For
complete details on ADS’ latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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EQUENS SE

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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Mercury Payment Systems Receives Awards

Mercury Payment Systems’ reseller partner Delaware Business Systems has
received the first annual Innovative Solution Award by Retail Solutions
Providers Association and Vertical Systems Reseller magazine.
Bill Fultz, Operations Manager of DBS, received the honor in the
credit/processing category for his
application of “MercuryAlerts” e-notification technology.
After just one week of using “MercuryAlerts”, Fultz corrected 10
merchant payment processing issues, saved merchants thousands in
processing fees, and deposited over $70,000 in unclaimed funds. Fultz
also followed a trail of unusual activity flagged early on by
“MercuryAlerts” to uncover two fraud cases of managers abusing their POS
system access to issue credits to their personal debit cards.

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JUNIPER NFC

Forecasts concerning NFC mobile payments project the gross transaction
value of payments made using the contactless technology will exceed
$75billion globally by 2013, according to Juniper Research. The
organization also found global annual gross transaction value will grow
over 5 times between 2011 and 2013, concluded 2009 will see limited
numbers of NFC devices shipped, 20% of cell phones will have NFC
capability by 2013 and the combination of the Far East, North America
and W. Europe markets will represent nearly 90% of the $75billion p.a.
market. The research analyzed six year regional forecasts of NFC mobile
payments using data on device shipments, subscriber take-up, transaction
sizes and case studies within the markets while Juniper Research
provides research and analytical services to the global hi-tech
communications sector.

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HealthTransaction Network Picks Hypercom

Hypercom’s “HBNet” transaction transport service and its “Optimum T4220”
card payment terminals have been selected by NY-based healthcare
service HealthTransaction Network. HealthTransaction Network connects
providers and consumers via HBNet’s electronic transaction transport
service that quickly, securely and efficiently processes transactions
between the parties. The Network uses a shared processing
infrastructure, stored value cards and Hypercom’s “Optimum T4220
Ethernet and Dial” back-up card payment terminals.

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MAY DEBT

Credit card debt continued its rebound in May, hitting a record A$44.2 billion, after stagnating for most of this year. Credit card volume also gained momentum again in May increasing to A$18.3 billion. Year-on-year credit card debt has increased 10%, compared to May 2007, while card volume is up 6% year-on-year. However, credit card volume has been slowing over the past year due to merchant surcharges imposed on consumer card transactions. Last month credit card volume was up 16% year-on-year. Credit card limits reached a new high at A$118.8 billion, marking the 21st consecutive month of A$100+ billion. According to the Reserve Bank of Australia there are currently 14.2 million credit card and charge card accounts in Australia, compared to 13.5 million one-year ago.

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CPI Card Group Names Two Sales Managers

CO-based CPI Card Group has hired two new sales representatives. Ed Prisby, Southeast Regional Sales Manager – Commercial Cards and Services, comes to CPI with a 15-year track record with several Fortune 500 corporations. Mark Costello, Western Regional Sales Manager – Commercial Cards and Services, comes to CPI Card Group with thirteen years’ experience selling printed labels and packaging in the California area. CPI offers a single source for plastic cards from foil cards and holograms, to translucent and smart cards.

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AmEx Gold Card and Starwood Offer a Bonus Credit

American Express and Starwood Hotels announced they will
provide a $75 food and beverage credit whenever “AmEx Gold Card” members
book a stay of two or more consecutive nights at over 500 properties
around the world across four Starwood brands. Other “AmEx Gold Card”
benefits include: access to amenities valued at $100-$150 on virtually
any trip from select “AmEx Gold Tour” and “Gold Cruise” partners; $100
credit towards lift tickets on qualifying vacations from Ski.com; a $100
AmEx gift check with any qualifying Smithsonian Journeys Southern
Arizona Focus on Astronomy tour, a two nights’ stay at Caesars Palace in
Las Vegas and two tickets to see Cher perform live in concert.

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CKE Restaurants Selects FSV’s ePayroll

FSV Payment Systems paperless payroll solutions has deployed its
“ePayroll” program at CKE Restaurants, which include Hardee’s and Carl’s
Jr. restaurant chains. This provides 90% of the employees with either
the benefits of electronic deposit for those with bank accounts or
MetaBank’s “PaychekPLUS” payroll cards for those without accounts, a
reduction in paper checks for subsequent cost reduction and decreased
environmental footprint. Prior to this, CKE issued 86% of employees
paper checks, only 14% direct deposit for payroll and now has the
resources to reduce over 1 million paper checks issued per year thanks
to the FSV Payment Systems paperless payroll Solution. With this, the
organization can save 28,000 pounds of paper, stop over 267,000 gallons
of wastewater, save over 10,000 gallons of gasoline and preserve nearly
70,000 trees to stop the emission of nearly a half million pounds of
greenhouse gases.

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