Monthly Payment Rates Slide in December

Monthly payment rates, the amount that cardholders pay on their credit card debt, continued south in December. After topping 20% one-year ago, the MPR dropped 80 basis points between October and December. Among managed credit card outstandings, the MPR declined to 18.41% in December after rising to 19.21% in October. The MPR has remained fairly stable in the first three quarters of this year and remains consistent with historical levels since the new FFIEC minimum payment rules went in effect in 2005. According to CardData, the yield also decreased in December to 14.63% from 14.80% in November, but was flat compared to year-ago levels.

U.S. PORTFOLIO METRICS
YIELD MPR
Dec 06: 14.63% 19.70%
Jan 07: 14.77% 19.88%
Feb 07: 14.75% 19.81%
Mar 07: 15.01% 18.12%
Apr 07: 14.99% 18.04%
May 07: 14.87% 19.01%
Jun 07: 14.93% 18.40%
Jul 07: 14.77% 18.30%
Aug 07: 14.80% 18.99%
Sep 07: 14.71% 18.86%
Oct 07: 14.82% 19.21%
Nov 07: 14.80% 18.89%
Dec 07: 14.63% 18.41%
Source: CardData (www.carddata.com)

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PayPal Fourth Quarter Revenues Climb 35%

eBay reported that PayPal posted $563 million in fourth quarter revenue, an increase of 35% year-over-year. Net total payment volume for the quarter was $14 billion, an increase of 35% over 4Q/06. At the end of the year PayPal had 57.3 million active accounts, a 16% increase from one-year ago. During the fourth quarter, PayPal handled 203.9 million payments, an 18% increase over the prior quarter, and up 22% from 4Q/06. PayPal’s 4Q/07 transaction revenue rate decreased to 3.84% from 3.87% in the prior quarter. The processing expense rate for the fourth quarter was 1.18%, compared to 1.13% for 4Q/06. PayPal’s transaction loss rate came in at 27 basis points, down 16 basis points from one-year ago. During the fourth quarter PayPal signed top merchant service account deals with U.S. Airways, AirTran, drugstore.com and Shop NBC among others. The payments company also hired four seasoned executives with deep consumer, technology and international experience to help drive the company’s ongoing expansion. For complete details on eBay/PayPal’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
4Q/06: $10.4 billion 49.4 million
1Q/07: $10.8 billion 51.3 million
2Q/07: $11.1 billion 52.8 million
3Q/07: $11.6 billion 54.8 million
4Q/07: $14.0 billion 57.3 million
SOURCE: CardData (www.carddata.com)

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

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AmEx to Launch a Travel Auction in Feb

American Express has rolled out the “Going Once” website, an auction style site that features a limited selection of fixed price travel packages. One new destination will be posted each day and once the travel package goes on sale at noon, the price drops every twenty minutes until 8:00 pm ET or until the package sells out, whichever comes first. The site will also feature a limited amount of nine fixed price packages under $2,500 and more than 70 exclusive premium travel offers. Cardmembers have the opportunity to choose from top vacation destinations, each offered in a full travel package with varying quantities, ranging from 10 to 30. Cardmembers can keep track of the quantities remaining as the prices drop to ensure they snag the package they want before it’s gone.

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Online Chargeback Database Introduced

Chargeback File has launched an online chargeback history database. With the new solution, retailers and merchants are afforded the knowledge of historical charge-backs and the illegal activity of billers, websites and message forums complete with emails and usernames, for a monthly charge of $4.95. The database currently holds adverse records of nearly 5 million and has over 60 million data points. The chargeback history data includes email addresses, known spammers, third-party billers, phone numbers, credit card chargebacks, auction usernames, and message forum usernames.

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NCR Introduces Self-Healing ATMs

NCR has introduced NCR SelfServ, a family of innovative automated teller machines with first-of-its-kind, self-healing technology. Offered in both cash-dispensing and full-function lines, NCR SelfServ enables a proactive approach to service and network management. This “ATM with a heartbeat” uniquely features a service application to address the impact of bank staff and cash-in-transit turnover; the most flexible servicing footprint across any single ATM family; a highly accessible and consistent user interface and an increased capacity for consumables, helping to ensure receipt availability. Because these ATMs require less human intervention, staffs gain time for serving and satisfying the end customer. NCR helps consumers conduct more than 23 billion transactions a year through more than 600,000 NCR touch points.

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CardFlash Looks Back to October 2007

VISA Inc. announces the completion of its restructuring, having received broad member approval for the series of transactions by which VISA Canada, VISA U.S.A. and VISA International have become subsidiaries of VISA Inc. Discover Financial Services “PULSE” launches its new neural network based fraud detection system across its entire network, following a three-month beta development program involving several financial institutions. The J.D. Power and Associates “2007 Credit Card Satisfaction Study” finds that Citi, Chase and U.S. Bank top the rankings. Houston-based Paymetric releases “XiPayNet” that manages the payment card acceptance workflow. The Office of Thrift Supervision announces that it closed the Atlanta-based $2.5 billion NetBank and appointed the FDIC as receiver. TSYS and Discover Financial Services inked an issuer processor agreement. Chase Paymentech signs an expanded, multi-year contract to provide payment processing services for all Sears’ retail businesses, which include Sears, Kmart and Lands’ End. Fair Isaac introduces “Collection Scores.” Bank of America re-launches the original “BankAmericard” credit card. Chase, Continental Airlines, General Motors and MasterCard have teamed to launch “MasterCard World for Business” credit cards. First Data acquires Canada’s POSTNET. About 10,000 New York City taxi drivers strike over new rules that require then to install credit card readers and GPS technology in their medallion cabs by October 1st. GA-based Synovus’ Board of Directors approves an agreement and plan of distribution for a TSYS spin-off.

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Fair Isaac & IBM Team for Decision Management

Fair Isaac and IBM have entered into a strategic alliance to develop financial service solutions. The agreement includes joint development, marketing, and sales of service oriented architecture (SOA)-based financial services solutions. Fair Isaac will lead with IBM Global Business Services on systems integration for clients as part of its shared services delivery model. Additionally, Fair Isaac will embed and use IBM middleware including WebSphere, DB2, Rational tools and Lotus software as the foundation of its next generation “Enterprise Decision Management solutions. As a result, financial services clients using Fair Isaac’s new EDM suite, which also contains the industry-leading “Blaze Advisor” business rules management system and predictive modeling tool, Model Builder, will be able to take advantage of SOA and Information on Demand software. This will allow data sharing across multiple applications including account opening, customer management, account management, fraud, collections and recovery.

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TSYS Q4 Income Impacted by Spin-Off Costs

TSYS reported that fourth quarter profits declined 47% to $45.7 million due to spin-off related costs. The Company successfully completed its spin-off from Synovus on December 31st and is now a fully independent, publicly-traded company. Fourth quarter revenues of $458.5 million represented a 9% decline over 4Q/06. Total revenues in 2007 were $1.8 billion representing a 1% increase over 2006. Excluding the Bank of America termination fee of $65 million in 2006, revenues increased 5% in 2007. The Company expects total revenues will increase 7% to 9% this year. For complete details on TSYS fourth quarter performance, visit CardData ([www.carddata.com][1]).

TSYS REVENUE HISTORICAL
4Q/05: $420.7 million
1Q/06: $412.3 million
2Q/06: $429.2 million
3Q/06: $441.8 million
4Q/06: $503.9 million
1Q/07: $429.6 million
2Q/07: $460.2 million
3Q/07: $457.6 million
4Q/07: $458.5 million
Source: CardData (www.carddata.com)

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

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Convenience Drives Card Tax Payments

A new survey of 28,000 taypayers has found that more than 87% paid their taxes with a payment cards because it was convenient and easy to use and/or they were running out of time. About 3% indicated they ignored the advice of personal finance advisors, using the service for short term financing. The research from Metavante’s “LINK2GOV” payment service also found that 84% were likely to use the service again. LINK2GOV isn’t the longest tenured IRS payments partner, in 2007 it acquired more than half of all federal tax payments initiated with credit and debit cards. The service has generated additional electronic transactions for the IRS at a compounded annual transaction growth rate of nearly 65% since entering into its IRS relationship in 2003.

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CEO PERSPECTIVE

According to the most recent, 11th annual PricewaterhouseCoopers’
“Global CEO Survey”, U.S. CEOs have the least optimistic perspective
regarding revenue growth for 2008, but are most optimistic given a
long-term perspective. Citing a tumultuous credit market, poor financial
exchanges and recession fears, only 36% of U.S. CEOs are confident
in corporate performance for 2008, compared to a global average of
50%. Given a 3-year time-frame, however, 49% of U.S. CEOs are
“very confident” in revenue growth compared to, a much lower, 42%
global average. Additional findings of the “Global CEO Survey” show a
mere 52% of American companies value the importance of climate change
issues, compared with the 72% global average, and only 23% disclosed
investment of “significant resources” in climate change efforts, compared
to a 37% global average. Furthermore, 63% U.S. CEOs expressed the
need for government intervention in climate issues, compared to 82% of
CEOs worldwide. PricewaterhouseCoopers provides industry advisory
with over 146,000 executives in 150 countries across the world.

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