Phishing Attacks Snagged 3.6MM Consumers

A new survey has found that 3.6 million adults lost money in phishing attacks in the 12 months ending in August, as compared with the 2.3 million who did so in 2006. The research by Gartner determined that $3.2 billion was lost to these attacks. The average dollar loss per incident declined to $886 from $1,244 lost on average in 2006 (with a median loss of $200 in 2007). However, some 1.6 million adults recovered about 64% of their losses in 2007, up from the 54% that 1.5 million adults recovered in 2006. Gartner says that PayPal and eBay continue to be the most-spoofed brands. About 47% said a debit or check card had been the payment method used when they lost money or had unauthorized charges made on their accounts. This was followed by 32% of respondents who listed a credit card as the payment method, and 24% who listed a bank account as the method. Phishing and malware attacks will continue to increase through 2009 because it’s still a lucrative business for the perpetrators, and advertising networks will be used to deliver up to 30% of malware that lands on consumer desktops.

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Brookwood Capital Facilitates a CU Sale

BROOKWOOD CAPITAL has brokered a credit card partnership between NY-based Adirondack Regional Credit Union and TNB Card Services. Under this agreement, TNB has purchased Adirondack Territory’s existing credit card portfolio and will issue credit cards for the credit union under the credit union name. Based on NCUA reporting, the existing portfolio included more than 1,000 credit card accounts and over $1 million in receivables among Adirondack Regional’s 8,200 members. The credit union has approximately $35 million in total assets. BROOKWOOD CAPITAL is an advisor to credit unions related to the credit card industry.

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CARD USAGE

Debit card usage is falling due to the widespread use of credit cards, especially for small transactions. A new report has found that debit card volume in Japan declined 3% last year to approximately US$6.8 billion. However, credit card usage is not that popular in Japan despite the number of issued credit cards, for each credit card will only have US$1,195 purchased on average, which is relatively low compared to other countries in Asia such as Hong Kong – US$3,027 per credit card, Singapore – US$2,329, and South Korea – US$7,866. The study by Boston-based Celent found that debit card usage per year remains small
compared to credit cards and is limited in terms of both transactions and payment amount. In fact, debit card volume adds up to just under 2% of credit card volume. Also, according to research done in 2000 by the Japan Debit Card Promotion Association, the number of people who have used debit cards were two out of 500, or 0.4%. The situation has not changed much in 2007, and with the help of credit cards,
debit cards are becoming less appealing to consumers.

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FIS Adopts mFoundry’s Spotlight Platform

Fidelity National Information Services has signed a deal with mFoundry for its “Spotlight Financial Platform.”mFoundry’s Spotlight Financial Platform” is the only mobile banking solution available that provides financial institutions with the flexibility to create well-branded, unique applications for their consumers. In addition to offering full mobile functionality, Spotlight Financial Platform can accommodate virtually any payment transaction type, as well as coupons, loyalty and other services. mFoundry’s Spotlight Financial Platform offers a comprehensive, secure solution for the entire mobile financial ecosystem. Fidelity National Information Services is a provider of core processing for financial institutions, card issuer and transaction processing services.

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VISA Expects a Last-Minute Shopping Rush

VISA has tracked the ups and downs of the 2007 holiday season but has determined overall retail sales in the United States will recover as last-minute discounts and extended store hours attract value-conscious consumers. Compared with this point in the season last year, consumers are behind in checking off their holiday shopping lists, but an extra shopping day this year combined with an increasingly savvy consumer creates more opportunity for a last-minute holiday sales push. Given the success of Black Friday promotions, retailers are looking for additional incentives to bring shoppers into stores for the final shopping days.

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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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