Sub-Primer CompuCredit Charge-Offs Top 13%

Atlanta-based sub-prime card specialist CompuCredit reported net GAAP income for the fourth quarter of $15.8 million compared to a $53.2 million net GAAP loss in the prior quarter, and net GAAP income of $9.7 million one-year ago. Total managed receivables soared by 47% year-on-year for the fourth quarter ending at $4,142,638,000. During the fourth quarter the Company discontinued 105 of its retail micro-loan branches in six states, its stored value card operations, and its Internet-based installment loan operations. At year-end, CompuCredit had 5,313,000 accounts, compared to 3,851,000 in 4Q/06. The adjusted charge-off rate was 13.4% in the fourth quarter, up from 10.9% for the fourth quarter and 10.1% in the previous quarter. As of December 31st, the 60-plus day delinquency rate was 18.4%, up from 14.1% for 4Q/06 and 14.6% for 3Q/07. For complete details on CompuCredit’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

COMPUCREDIT NET INCOME* SNAPSHOT
4Q/06: $ 9.7 million
1Q/07: (-$ 2.5 million)
2Q/07: (-$11.0 million)
3Q/07: (-$53.2 million)
4Q/07: $15.8 million
*GAAP
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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SEPA

SEPA’s progress in the migration of payment cards has been slowed in
recent weeks, creating an atmosphere of uncertainty for banks, card
issuers and consumers, according to recent research compiled by the
Mercator Advisory Group. This uncertainty is mostly in card scheme
confusion, multilateral interchange fees, clarity in the SEPA Cards
Framework (SCF) and standardization issues, which are collectively
preventing the completion of the migration. Furthermore, card scheme
uncertainty is hindering efforts, with most national schemes not
settling on
1 of the 3 names (MasterCard, Visa Europe or EAPS) until more clarity
is provided to the payment cards industry and regulatory legislation is in
place ensuring SEPA’s progress. Mercator Advisory Group provides
independent research and advisory services across the payments industry
to provide revenue growth and contain costs for clients in the payments
industry around the world.

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Moneris Solutions Introduces eSELECTplus

Moneris Solutions has introduced a multi-functional Internet-based application that uses a PC and Web browser to process card payments. The new “eSELECTplus” enables merchants to process credit cards, signature and PIN-based debit cards, and ACH transactions without the need to install any special software. In addition, “eSELECTplus” offers an easy to use API for integration into business management software applications. Merchants can also set-up recurring and automatic payment plans. “eSELECTplus” offers a variety of modules tailored to different types of businesses, and can work in both customer-present and customer-not-present environments.

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HOLIDAY SPENDING

According to APACS December 2007 spending figures, British
spent GBP32.2 billion with their credit cards, of which GBP5.4 billion
was used to conduct Internet purchases, 4% over the prior year.
This marks the slowest rate of growth in 4 years for credit card
spending, thanks in part to a 6.8% increase in debit card spending of
GBP20.9 billion. This is in conjunction with a 2.8% decrease in the
volume of credit card transactions from 197 million transactions in
Dec.’06 to 192 million in Dec.’07. Overall, plastic card purchases
accounted for 64% of all December purchases with 690 million
transactions up 3.2% from the year prior.

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VISA & AEG EUROPE

VISA Europe and AEG Europe have signed 5-year agreements designating
the payment organization as an “Official Payment Partner” of “The O2”.
“The O2” is a European international arena serving as a popular venue with
a positive track record for attracting many across the Continent, which
VISA sees as a good opportunity to gain exposure and to serve as a solid
platform for the introduction of payment innovations. VISA Europe has over
348 million debit, credit and commercial cards in circulation throughout the
continent, which account for 11.4% of all consumer spending and is
operated by 4,600 European member banks. AEG sports and entertainment
presenters’ “O2” opened in June 2007, seats 20,000 and will have hosted
over
150 events by June of 2008.

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VERSAPAY & POSITIVE

The VersaPay Corporation has acquired control of Positive POS
wireless terminals while Positive Inc. will maintain separate
operations. Positive Inc. is a credit and debit card processor currently
with 1,500 wireless POS terminals deployed to taxi companies across
Canada. VersaPay provides hardware, technology and support
services for credit and debit card acceptance, operating out of
offices in Vancouver, Montreal and Calgary.

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MC Launches a Priceless Search Campaign

MasterCard announced a new “Priceless” advertising campaign that will instantly award consumers who find winning envelopes in select Condé Nast publications and Sotheby’s Preview magazine with one of three exceptional and one-of-a-kind experiences. The new “Priceless Search” campaign will award experiences in the categories of art, dining and travel. To encourage consumers to visit priceless.com/search to learn about the experiences, MasterCard will debut a new 60-second spot during the “80th Annual Academy Awards” broadcast on February 24th on ABC. Priceless Search is designed to engage consumers at priceless.com and build the brand’s connection with affluent consumers.

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CARDS 2007

Credit card outstandings increased 0.5% last year to GBP56.1 billion for the U.K.’s 31.5 million cardholders. However, during 2007 check and credit clearing volumes declined by 9.3%, coupled with a 1.3% decline in total values. Over the same period, Bacs volumes and values grew by 3.4% and 7.8% respectively and the volume of CHAPS payments increased by 7.0% with a 15.5% rise in values. In the fourth quarter there were 1.9 billion plastic card purchases made in the UK totaling GBP 91.5 billion. The number of purchases was 6.4% higher than in the fourth quarter, and spending was 7.7% higher. Debit cards accounted for 72.1% of all plastic card purchases compared with 70.5% in the fourth quarter of 2006.

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PAYPOINT

According to PayPoint, the company’s terminal sites have increased by 756
since 1/2 2007 from to 23,380, 3,899 of which were deployed in Romania.
Reflective of contemporary market conditions, transactions processed by
PayPoint in 4Q07 were 171 million, up from 152 million in 4Q06, and the
company reported a 27% jump in revenue to GBP72 million. Furthermore,
at the close of 4Q07, the organization reflected a net cash income of GBP20
million, up GBP4 million since the close of 3Q07. The PayPoint payments
company processed over GBP6 billion and more than 470 million transactions
annually for its 5,000 client customers with nearly 19,400 terminals
across the
the UK.

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Card Charge-Offs Rise 50BPS in January

Bank credit card charge-offs soared in January by 50 basis points hitting its highest level since January 2006. Charge-offs are now up 122 basis points, compared to one-year ago. According to CardData ([www.carddata.com][1]) charge-offs hit 5.55% in January, compared to 5.05% in the prior month and 4.33% one-year ago. Earlier this week Capital One reported that charge-offs for its U.S. Cards business hit 6.65% in January, compared to 5.74% in the prior month and 4.01% one-year ago. About 29% of Capital One’s portfolio is considered sub-prime, likely elevating its charge-off ratio. (CF Library 2/13/08)

CHARGE-OFFS
Jan 07: 4.33%
Feb 07: 4.39%
Mar 07: 4.44%
Apr 07: 4.60%
May 07: 4.65%
Jun 07: 4.60%
Jul 07: 4.62%
Aug 07: 4.77%
Sep 07: 4.81%
Oct 07: 4.89%
Nov 07: 4.96%
Dec 07: 5.05%
Jan 08: 5.55%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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Loyalty Credit Card Offers Rise 16%

The number of credit card direct mailings sent to non-customers dropped 11% while credit card offers sent only to current customers increased 16% last year. Mintel Comperemedia says that in 2005, 56% of credit card offers sent to current cardholders advertised balance transfers or convenience checks. But by 2007, these types of offers lost out to direct mail pieces promoting non-card products, such as bonus points or rewards. In 2007, 57% of direct mail sent to current customers advertised such non-card products.

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VISA & UAL Launch a Lucky 8 Promotion

In honor of the lucky number “8” and the “Beijing 2008 Olympic Games,” United Airlines and VISA have launched a promotion to award 8,888 fans an $88 “VISA Olympic Games”-themed gift card and eight fans a trip to the “Olympic Games.” The “Grand Prize” is four trips for two. For a chance on the “Grand Prize” consumers have to book a flight at united.com using their VISA card, submit their “Mileage Plus” number and complete their travel by March 31st. “Mileage Plus VISA” cardholders can also enter for a chance to win an $88 VISA gift card, when they book a flight online at United’s Website and complete their travel by March 31st. Both contests are part the “strength in numbers” promotion. The two promotions run through March 31st. United Airlines is the “Official Airline Sponsor” of the “2008 U.S. Olympic Team,” and VISA is the “Worldwide Partner Beijing 2008 Olympic Games.”

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