ADS Reconfirms its Revenue Guidance

Alliance Data Systems has reconfirmed its full-year guidance of at least $2.1 billion in revenues, at least $575 million in adjusted EBITDA and at least $3.50 in cash earnings per share for 2007. As a result of the previously announced acquisition of Alliance Data by an affiliate of The Blackstone Group, Alliance Data continues to be in a blackout phase with regard to participating at investor conferences and meetings. Therefore, the Company today is reiterating to its stockholders the 2007 full-year guidance previously given by the Company on October 17, 2007, and providing insight into the general trends of its businesses, all of which suggest no change in the Company’s long term stated growth rates.

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AmEx Offers Fee Free Mall Gift Cards

American Express has introduced a nationwide promotion with participating malls enabling shoppers to buy three or more mall-branded gift cards and pay no fee on the first three. American Express issues gift cards in partnership with many mall owners and operators, including CBL & Associates Properties, Inc., Caruso Affiliated, General Growth Properties, Inland, Jones Lang Lasalle, Lerner Enterprises, NorthPark Center, Pennsylvania Real Estate Investment Trust (PREIT), Pyramid Management, Taubman, and Westfield. The mall gift cards are for use only at merchants that accept American Express and are located within the shopping centers of the shopping mall whose logo appears on the card.

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Contactless Payments Takes-Off in Japan

After seven years of deployment, contactless payments in Japan are steadily increasing, with over 98.4 million payment devices currently in distribution and a projected market of nearly 180 million payment devices by 2010. A new report from Celent detailed in this week’s CardFlash International has concluded that the move has been supported by a number of drivers including Tokyo’s RFID train pass; the high number of mobile phone holders; the increasing use of online shops; and the fact that large retailers are issuing their own electronic money. The study also found that the most popular train passes are “Suica” and “PASMO,” which is currently available in Tokyo. Celent says that even though usage is expected to grow to nearly 180 million in 2010, the future of contactless payments in Japan is uncertain; it is difficult to determine whether they will expand enough to replace small cash payments. Currently, the market is small and will take time to take off unless some other trigger impacts consumer payment behavior.

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HPY to Offer Reasonable Merchant Loans

NJ-based Heartland Payment Systems has inked a deal with private lender Encore to offer qualified Heartland customers alternative working capital loans with guaranteed APR not to exceed 30%. Heartland says that merchant loan lenders routinely charged APRs of 80% to 100% or greater for such non-traditional loans and cash advances. Under terms of the deal Encore will be Heartland’s preferred provider, offering its products exclusively to Heartland’s small and mid-sized business customers. Heartland Payment Systems serves more than 162,000 small and mid-sized businesses nationwide with credit/debit/prepaid card processing, payroll and payment solutions. Encore specializes in loans to hospitality industry.

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ECHO’s Bankcard Volume Rises 6% in 3Q/07

Camarillo, CA-based Electronic Clearing House reported that third quarter revenue declined 4.5% to $18.5 million. However, bankcard and transaction processing revenue grew 6% to $15.5 million, while bankcard processing volume increased 7% to $484.5 million. ECHO also reported that ACH transactions processed decreased 42.5% to 5.7 million transactions. ECHO says volume growth was due primarily to additional credit card processing volume related to organic growth from existing merchants and the results of new marketing initiatives. This increase was offset by a decrease in check-related products revenue of 22.0%, which primarily reflects the elimination of Internet wallet merchants and the discontinuation of services to several merchant categories that management determined were carrying unacceptable levels of business or financial risk. ECHO currently expects total revenue for fiscal year 2008 will increase by 10% from total revenue of $76.9 million for fiscal year 2007. The Company currently plans to increase spending by approximately $1.6 million for product and IT enhancements during fiscal 2008. For complete details on ECHO’s latest performance, visit CardData ([www.carddata.com][1]).

ECHO REVENUE HISTORICAL
2Q/05: $14.3 million
3Q/05: $15.2 million
4Q/05: $16.9 million
1Q/06: $19.2 million
2Q/06: $19.9 million
3Q/06: $19.4 million
4Q/06: $19.2 million
1Q/07: $20.0 million
2Q/07: $19.0 million
3Q/07: $18.5 million
Source: CardData (www.carddata.com)

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

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HSBC ATMS

HSBC bank has signed ATM agreements with both Seven Bank and Japan
Post Bank allowing its “Premier” customers access to a total of 39,000
additional machines across Japan. The ATMs customers will now
be able to use feature biometric security implementations and 24-7
availability.
Contracts are projected to be finalized by January of next year and in
addition to granting wider ATM access, will provide the HSBC “Premier”
customers with a “Premier International ATM Card”, which charges limited
withdrawal fees.

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Magnum Comm to Distribute FICO Expansion

Fair Isaac Corporation and Magnum Communications announced that Magnum will distribute Fair Isaac’s FICO “Expansion” credit risk score to financial institutions. Under the agreement, lenders will use Magnum’s robust credit data acquisition system, CREDICHECK IV, and a secure web interface to access the FICO Expansion score. The scoring data has been pre-mapped to Magnum’s RapUp data analysis tool enabling Magnum to bring the score online quickly for easy client implementation. FICO “Expansion” score aligns with Fair Isaac’s industry-standard for quicker adoption by l enders and combined coverage of nearly 50 million more American consumers over most credit risk models. Lenders nationwide are using FICO Expansion scores today to better control their risk when extending credit opportunities to new consumers while Magnum is a provider of credit data access, analysis and decision management.

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CONSUMER CONFIDENCE

According to a recent MasterCard Worldwide survey, overall
Australian consumer confidence has risen 51% since 2006. The
survey also gaged the positive increases with income optimism,
which has risen by 17%, the quality of life, more than doubling from
25.5 to 60.8 on the index since the year prior, employment optimism,
which increased by 54%, and impressions of economic performance,
up 71%. Overall, throughout the entire Asia-Pacific region, 10 of the
13 markets reflect increases in consumer confidence with the Vietnam
market reflecting a score of 94.3, Hong Kong scoring an 85.9, China
with 85.5 and Singapore with 83.6. The survey was completed using
data collected from 5,411 consumers throughout Asia-Pacific and has
been conducted over the past 14 years to project 6-month consumer
sentiments.

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Experian Interactive Media is Created

Experian Interactive has formed Experian Interactive Media to help consumers make critical decisions that impact their financial situations with free online services. Experian Interactive Media consists of the following brands: LowerMyBills.com, which connects interested consumers with service providers that can offer competitive rates and terms; ClassesUSA.com, one of the Web’s leading higher-education portals, connects prospective students with schools offering online and traditional degree and certificate programs; ExpertsOnCredit.com provides informational content regarding credit-related topics; InstantApprovals.com, which matches consumers with the credit cards that fit their lives and Affiliate Fuel which provides Experian brands, and other external advertisers, with pay-for-performance marketing services.

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Banks Ignore the Unbanked Prepaid Market

A new study has found that prepaid cards for the unbanked has been conspicuously absent among general purpose reloadable cards. NY-based Celent notes that payment network-branded prepaid cards are set to go big in areas such as healthcare, government benefits, and incentive card programs with an unbanked 36 million people and an aggregate income of $260 billion. Extrapolating out the current average load amounts on these cards, there is a $31 billion market to be captured. Should average load amounts rise as this population shifts from the early adoption stage to mainstream acceptance, the market size will be even more immense, with the potential for card spending at $192 billion. Celent says banks have left the door wide open for nontraditional and nonbank competitors to freely pursue this massive market. Rushing into this void are Wal-Mart and Home Depot, which harbor dreams of becoming banks, Capital One charging into the banking space, and H&R Block, which just recently actually acquired a bank license.

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