NETS & PKK

Northern European Transaction Services (NETS) has acquired Pankade
Kaardikeskus AS (PKK) Estonian national card transaction processor. With
this, NETS embarks on the Baltic Regional market, is closer to becoming
a leading European card transaction processor and can now provide a
broader platform for processing of card transactions to card acquirers.
Providing card transaction processing through cost efficient solutions
to large merchants, NETS processes over 2.7 billion card transactions
annually. The NETS alliance European card transaction processor serves
primarily acquirers in the Nordic countries providing solutions
compliant with all international standards and requirements.

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TSYS to Approve ExaDigm Terminals

POS terminal provider ExaDigm and TSYS Acquiring Solutions have entered into an agreement to begin the Class A approval process for ExaDigm terminal payment solutions. TSYS will support the majority of ExaDigm’s North American terminal requirements including receiving, quality assurance testing, support and deployment. TSYS will also provide innovative and customized managed services, including help desk support to respond to ExaDigm customer calls, helping to resolve issues efficiently and providing superior customer service. ExaDigm’s PC-based, fully modular payment solutions provide technology innovations such as integrated RFID readers, interchangeable communication modules, and the ability to adapt to changing technologies easily and rapidly, making obsolescence and subsequent swap out programs a thing of the past.

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Visa Changes Rule on PIN Debit Cards

Visa has rescinded a rule that required merchants to treat Visa-branded debit cards differently when used as a PIN-debit card (and processed via non-Visa networks) from the same cards when used as signature debit cards and processed on the Visa network. The Department of Justice said an ongoing antitrust investigation prompted the Visa policy change. The DOJ was investigating whether the Visa rule adversely affected competition in the debit card industry by restricting certain PIN debit transactions, particularly small-value and Internet transactions, and by potentially interfering with the introduction of new types of PIN debit services. Visa has for some time allowed banks to permit some types of merchants to waive the signature requirement for certain signature debit transactions. While permitting signature waiver, the Visa operating regulation the DOJ was investigating had prohibited banks from allowing merchants to waive entry of a PIN for most non-Visa debit transactions initiated from Visa-branded debit cards, including “small ticket” transactions and almost all Internet transactions. Visa’s new regulations allow banks to provide merchants the option of waiving the entry of a PIN. Visa has also amended its operating regulations to require that banks notify their cardholders that transactions not authenticated by a PIN or a signature might be processed via a PIN-debit network and not by Visa.

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MC TRAVEL SURVEY

MasterCard Worldwide has launched the “MasterCard Travel Season.”
According to the recent “MasterCard Worldwide Consumer Lifestyles Survey”,
78% of consumers in the UAE plan to travel for pleasure and spend more
when abroad. The majority of UAE travelers own some sort of payment card:
71% hold a credit card, 78% are holders of a debit card and 48% use
prepaid cards.
According to the survey, respondents increasingly feel debit cards are
more secure than cash (76% vs. 49% in the last survey) and that debit
cards offer more control (71% vs. 44%)
and are widely accepted (65% vs. 38%) and convenient (67% vs. 33%).
The most popular reason for using a credit card is that it is more
secure than cash. Across ME&L, 63% thought
credit cards were widely accepted (against 52% in the last survey), 62%
said a credit card gave them better control over their spending (against
38% in the last survey) and 60% thought a credit card is more convenient
(as opposed to 46% in the last survey).

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U.K. Card Volume Rises 10% in 2007

The total value of plastic card payments received by British merchants, retailers and service providers increased slightly more than 10% last year to GBP 345 billion. Debit cards accounted for 62% or GBP 221 billion of total spend. Credit card spend reached GBP 133 billion during 2007. According to the UK payments association APACS, debit card spending was up 13% in 2007 while credit card spending rose 6%. This is the second year in a row that plastic spending topped cash spending. APACS noted that credit card spending up until the end of May increased by only 1.2% – below the rate of inflation, and the average value of a credit card purchase in a supermarket has actually fallen by GBP 1 to GBP 34.33. Last year total cash spending was GBP 265 billion. The trade group also noted that check payments last year totaled GBP 194 billion.

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SAMSUNG & INSIDE

NFC chipset provider INSIDE Contactless has added Samsung
Ventures America to its active investor community that includes Nokia
Growth Partners,
Motorola Ventures, HID Global, Sofinnova Partners, Vertex Management,
Vertex Ventures,
Siparex, GIMV, EuroUS
Venture, Granite Global Ventures and Visa Ventures who have provided a total
of nearly 28 million euros to allow the company to accelerate
its international presence and broaden its product portfolio.

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Discover Offers a Military Bonus

Discover Financial Services will be giving “Double Cashback Bonus” or “Double Miles” to all Discover Cardmembers who make purchases at U.S. military bases from July 4th through Labor Day. The program will include more than 175 military bases nationwide and includes everyday purchases like gas, groceries, lodging, telecommunications and other categories of merchants found on-base. Discover is also proud to welcome “Operation Homefront” as a Cashback Bonus Partner from July 13 through Labor Day. Operation Homefront is a non-profit organization that provides emergency assistance and morale to our troops, their families and to wounded warriors when they return home, and has provided critical assistance to more than 45,000 military families in need. Discover will provide an additional 20% match to the Cashback Bonus donated by cardmembers to Operation Homefront.

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PAYEZ MOBILE

The Pegasus group has renewed its service contract with Gemalto for its mobile NFC ecosystem. Five banks currently use Gemalto’s “Allynis” service offer as part of the “Payez Mobile” trial for contactless mobile payments. The banks include: the BNP Paribas, Crédit
Agricole-LCL, Crédit Mutuel-CIC, Caisse d’Epargne and La Banque Postale
Groups. The Pegasus group, which consists of seven major banks and four
mobile operators in France, launched the program in November 2007 with
1,000 user clients and 200 merchants in Caen and Strasbourg.

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Q1 Delinquency Hits a Four-Year High

Credit card delinquencies, based on total dollars outstanding, rose to its highest level in four years for a first quarter. Sequentially, delinquent dollars increased nine basis points and based on the number of past-due credit card accounts rose 13 basis points According to the American Bankers Association’s “Consumer Credit Delinquency Bulletin,” delinquencies based on total dollars outstanding for 1Q/08 were 4.59%, compared to 4.50% in the fourth quarter and 3.46% for 1Q/07. Based on the number of accounts past-due, the figures were 4.51% for 1Q/08, 4.38% for 4Q/07, and 4.41% one-year ago. The ABA also reported that the percentage of HELOC accounts that were more than 30 days past due rose 14 basis points to 1.10% during the first quarter (seasonally adjusted). This was the highest recorded rate for this category since 1997.

1Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
2000: 3.94%
2001: 4.13%
2002: 4.50%
2003: 4.51%
2004: 4.65%
2005: 3.76%
2006: 3.44%
2007: 3.46%
2008: 4.59%
Source: ABA Delinquency Bulletin

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DISCOVER & DINERS

Discover Financial Services has completed its acquisition of Diners Club
International from Citi for $165 million. Included in the acquisition
are the Diners Club brand and trademarks, employees and agreements with
44 network licensees who issue Diners Club cards. Diners Club
International handles over $30 billion in transactions per annum outside
of North America with an acceptance network in 185 countries around the
world while Discover Financial Services credit card issuer/electronic
payment services company for acceptance at millions of merchant and cash
access locations.

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Visa Contactless 2.0 Spec is Unveiled

Visa announced it is currently migrating to an enhanced global specification, “Visa Contactless 2.0” which is based on the international EMV chip standards. The new framework for “Visa payWave” is compatible with existing Visa contactless card programs in the market and in development. The specification also supports all payment platforms – credit, debit and prepaid, and can also be embedded in mobile devices. Visa first published a contactless specification in 2002, primarily to focus on local market implementations and requirements. In the United States: US Bank launched a “Visa payWave” debit program to cardholders in CA, CO, MO and UT. In the greater Washington DC region, National Capital FCU is adding the “Visa payWave” feature to its current portfolio of Visa credit cards. In the Los Angeles and San Francisco metropolitan regions, Visa and Coca-Cola are working together to install “Visa payWave” enabled vending machines. “Visa payWave” roll-outs and trials have been announced in Australia, Canada, China, Brazil, France, Guatemala, Hong Kong, Indonesia, Italy, Korea, Malaysia, Poland, Singapore, Spain, Switzerland, Taiwan, Thailand, Turkey, and the United Kingdom.

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