Bill Authorizes IRS to Collect Card Data

The U.S. House Ways and Means Committee has voted favorably for a bill that includes a provision requiring credit card companies to report credit and debit card transactions to the IRS. “H.R. 6275” is predicted to produce an additional $9.8 billion in tax revenue over the next 10 years. The IRS says the the additional information would reduce underreporting of income by businesses and allow the government to identify possible cases of underreporting when determining who to audit. According the Wall Street Journal, business groups oppose the new reporting requirement, saying it would burden businesses with paperwork.

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Bank Freedom MasterCard Goes Spanish

Bank Freedom has launched its Spanish Website as part of the “Bank Freedom” prepaid MasterCard card program. To help new Spanish-speaking customers better understand the benefits of the product, this will allow visitors to order a “Bank Freedom” Prepaid MasterCard from a website entirely in Spanish, in addition to the company’s bilingual account access through customer service and its website. Radio campaigns for the new offering are set to run through the month on several Spanish radio stations located in the USA and through its established Internet marketing network.

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MULTICARD & DCS EUROPE

Swiss Multicard has acquired DCS Europe ID Solutions ID systems
solutions company. Providing smartcard solutions for identification
programs, ID systems architecture and engineering services, the DCS
Europe is being acquired by Multicard AG identification technology, for
undisclosed terms, within the next 60 days. DCS will provide a value
chain of core system designs, card programming and issuance to
Multicard, which in turn will provide DCS with technical depth, back-up
and customer flexibility. Furthermore, Soon after the completion of this
acquisition, Multicard itself is poised for acquisition by Bluehill ID AG.

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Meta Payment Systems iAdvance Gathers Speed

SD-based Meta Payment Systems has signed an agreement with Fiserv and TransUnion for its “iAdvance” product. “iAdvance” offers a line of credit to cardholders possessing certain general use and payroll prepaid cards issued by MetaBank. Expected to be launched in the fall of 2008, the next generation of “iAdvance” will offer a credit graduation process to the core product, whereby a significant percentage of consumers will find themselves graduating to increasingly lower borrowing costs and the opportunity to payoff over time. “iAdvance” is a registered service mark of Meta Payment Systems with patents pending.

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SMART CARDS

The Smart Payment Association (SPA) has released the results of its
“2007 Global Payment Cards Market Survey,” highlighting a continued
growth in the smart card market, a surge in contactless adoption and
advanced technology for increased security. Over 420 million payment
smart cards were delivered by SPA members throughout 2007 for a 24% y/y
growth, dual interface and pure contactless solutions posted a 64%
growth year on year and Dynamic Data Authentication (DDA) technology is
growing twice as fast as SDA technology. These survey results reflect
movement towards more secure DDA EMV cards while SPA members include
Gemalto, Giesecke & Devrient, Oberthur Technologies and Sagem Orga.

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CARTES 2008

CARTES & IDentification 2008 Digital Security and Smart Technologies is
set to host its trade show from November 4th-6th, likely to welcome over
20,000 visitors with 520 exhibitors and 1,700 conference delegates. This
year’s focus will be on e-transactions, iD management and the United
States (as a pioneer for transportation, payment, information exchange
and loyalty-building applications). Regarding iD management, exhibitors
will present solutions to address modern security needs for topical
debate and provide information on the development of the various
technologies which ensure ID management. Additionally, CARTES &
IDentification 2008 will address Congress’ role as an undisputed world
leader in the sector, will hear presentations from international ‘top
captains’ of industry and will present the SESAMES Awards for peer
recognition within the profession.

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APR DEBT

Credit card debt rebounded in April, hitting a record A$43.6 billion after stagnating the prior three months. Credit card volume also gained momentum in April increasing to A$17.7 billion. Year-on-year credit card debt has increased 10%, compared to April 2007, while card volume is up 16% year-on-year. Credit card limits reached a new high at A$118.0 billion, marking the 20th consecutive month of A$100+ billion. According to the Reserve Bank of Australia there are currently 14.1 million credit card and charge card accounts in Australia, compared to 13.4 million one-year ago.

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U.S. Economic Contraction May Not Happen

Despite higher utility and fuel bills, a leading consumer index shows a slight improvement from the prior month. The latest data suggest the economy has not fallen into a contraction and may not undergo one in the second half of the year. In fact, the economy might even begin to turn a corner early next year. The Conference Board’s “Composite Index of Leading Economic Indicators” increased 0.1% in May, following a 0.1% increase in April, and no change in March. Four of the ten indicators that make up the leading index increased in May. The positive contributors — beginning with the largest positive contributor — were the interest rate spread, stock prices, manufacturers’ new orders for consumer goods and materials, and manufacturers’ new orders for nondefense capital goods. The negative contributors — beginning with the largest negative contributor — were real money supply, index of consumer expectations, building permits, index of supplier deliveries (vendor performance), and average weekly initial claims for unemployment insurance (inverted).

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CONSUMER TRENDS

Research and Markets has released its “Australian Credit Card Customers
2008” report to provide insight into how customers behave and what
consumers value in a credit card. The report, for example, demonstrates
41% of Australian credit card customers aged 35-44 would like to
establish online access to their card account information while only
26%, however, have already done so according to a survey of 2,000
Australian adults conducted in December 2007 by Datamonitor. Additional
findings show 20% of consumers aged 45-54 arranged their credit card
online while 32% would like to do so and 50% of consumers with a credit
card through a credit union, as oppose to bank, are very satisfied.

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PartnersFirst Signs TSYS to Process Cards

TSYS has signed an agreement with PartnersFirst Affinity Services to process its consumer credit card portfolio. PartnersFirst, a division of Torrey Pines Bank, offers a partner-centric model serving affinity groups across a wide range of special interests and affiliations, including colleges and universities, professional associations, sports, outdoor sporting and wildlife conservation organizations, and many more. PartnersFirst brings a full spectrum of credit card services to the small and mid-sized affinity partner market, incorporating the major network associations, world-class processing platforms, and state-of-the-art targeted marketing capabilities. TSYS) is one of the world’s largest companies for outsourced payment services, offering acquirer-processing technologies that support consumer-finance, credit,debit, debt management, healthcare, loyalty and prepaid services for financial institutions and retail companies in the Americas, EMEA and Asia-Pacific regions.

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APRIL BIZ PULSE

The Conference Board of Germany has released business cycle indicators
for April 2008 with the leading index having decreased 0.2% and the
coincident index having increased 0.1% for the month. Additional
findings show the leading index fell 3.4% between October 2007 to April
2008, down from a growth of 2.4% in June of 2007 and the coincident
index rose .9% between October 2007 and April 2008. Meanwhile, Germany’s
real GDP growth picked up to a 3.6% average annual growth rate for the
last two quarters, up from a 1.7% average annual growth rate for the
second and third quarters of 2007. 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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