OCT DEBT

Credit card outstandings rose during October by GBP 191 million to GBP 54.1 billion. This is the second consecutive month of growth following six straight monthly declines, but remains well below the December 2005 peak of GBP 59.0 billion. Year-on-year credit card outstandings (not seasonally adjusted) are running about 2.5% lower than one-year ago. According to the The Bank of England, the increase in net consumer credit in October was GBP 1.4 billion below the increase in September. Net other loans and advances rose by GBP 1.2 billion, higher than the prior month. The annual growth rate of consumer credit increased to 5.8% while the three-month annualized growth rate of consumer credit increased by 0.5 percentage points to 7.3%.

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Top Card Issuer Q3 Outstandings Rise 3.5%

The nation’s top three general purpose credit card issuers posted a 3.5% gain in managed U.S. outstandings and a 3.4% increase in volume during the third quarter, compared to 3Q/06. According to CardData ([www.carddata.com][1]), #1 ranked Bank of America posted a 6% gain in outstandings and a 1% increase in volume compared to a 4% gain in outstandings and a 3% increase in volume by #2 Chase and no gain in outstandings and a 6% increase in volume by #3 Citibank. BofA’s managed U.S. credit card loans at the end of the third quarter were $154.7 billion. BofA purchase volume for U.S. cards cards was $61.4 billion for 3Q/07. Chase end-of-period managed loans were $149.1 billion and charge volume was $89.8 billion in 3Q/07. Citi’s bank credit card outstandings for the U.S. were flat at $110.1 billion compared to one-year ago. However, private label card outstandings increased 4% to $31.8 billion. Citi’s purchase volume for the third quarter was $81.6 billion. For complete details on U.S. issuer performance visit CardData ([www.carddata.com][2]). (CF Library 10/15/07: 10/17/07; 10/18/07)

BIG THREE U.S. ISSUERS
Outstandings Volume
BofA $154.7B $61.4B
Chase $149.1B $89.8B
Citi $110.1B $81.6B
Source: CardData (www.carddata.com)

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

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CONSUMER PINS

Those who have changed their ATM PINs has risen by 50% in the 3
days following recent HMRC data loss announcement, according to the
LINK UK ATM network. Although no PIN information was lost during
this security breach, experts speculate many consumers were wary of
continued use of their easy-to-guess PINs, such as a birth date. The
ATM network also recommends that consumers change PINs if
someone else might know it, shielding ATM screens when in use and not
to enter the PIN on websites.

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TJX Offers a Settlement to VISA Issuers

MA-based TJX Companies has reached a “Settlement Agreement” with VISA in regard to its security breach disclosed earlier this year. Under terms of the deal, an alternative recovery offer will be made to VISA’s U.S. issuers that issued payment cards potentially affected by TJX’s security breach and VISA will recommend the offer. TJX will fund up to a maximum of $40.9 million pre-tax in alternative recovery payments. The settlement is contingent on the acceptance of the offer by December 19th by the issuers of at least 80% of the eligible VISA payment card accounts. Once the settlement is final, accepting issuers will be paid by December 27th. The agreement contains a number of other provisions including VISA’s suspension and rescission of specified fines; TJX’s agreement to serve as a spokesperson in support of the goals of the PCI/DSS and the security of payment card information; and VISA’s agreement to provide TJX the opportunity to pilot any new payment card security technology. Additionally, the agreement provides for certain releases by TJX, Fifth Third and VISA.

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SMART PARKING METERS

Parcxmart Technologies and J.J. MacKay Parking Meters have signed
collaborative agreements to integrate parking meters with a smart-card
payment solution. Namely, MacKay’s Guardian XL and XLE Series
Parking Meter Mechanisms, Guardian Multi and MacKay’s Black Box
are to be integrated with the Parcxmart electronic smartcard payment
system providing convenience for parking customers. Additionally, the
platform generates, collects and processes revenue collected from the
meters. Parcxmart smart cards are loadable up to $500 through POS
terminals over a network of local merchants. Parcxmart Technologies
provides smart card payment programs over its payment network
while J.J. MacKay Canada Limited/MacKay Meters manufactures
electronic parking meter mechanisms and management software.

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eBillme Signs-Up Six More Websites

Online payment provider eBillme has signed on GiftCards.com, LuggagePoint.com, PCUniverse.com, ShoppersChoice.com, WirelessEmporium.com, and CellsWholesale.com to enable customers to pay with cash online. When shoppers choose eBillme at checkout, their order is confirmed with a bill sent to their e-mail address. Consumers simply pay the bill through their online checking or savings account. The transaction occurs securely, bank to bank, with no personal or financial information required, or transmitted over the Internet. New buyer protection features offered by eBillme retailers at no cost to the consumer provide enhanced security and assurance services typically associated with premium credit cards. Features include return guarantee and price, in-transit and fraud protection. Customers can shop with complete confidence knowing that every eBillme transaction is guaranteed and protected. eBillme can increase a retailer’s margins, because transaction fees are lower than those assessed by credit and debit card processors.

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PIF HAPTERS

The Prepaid International Forum (PIF) Australia/New Zealand will be
holding its inaugural meeting with the founding members in February of
2008. These founding members include the Australia Post, BP, FIS
Australasia, Deacons, e-pay and Cuscal to discuss issues concerning the
prepaid industry with information gathered through study groups. With
this forum, the industry representatives intend on alleviating the
challenges
that confront organizations when launching and managing prepaid program.
To overcome these challenges, the forum members will be given access
to a member helpdesk, a website and regular informative meetings. PIF
not-for-profit forum is designed to help all companies who have an interest
in the prepaid economy, providing research and thought leadership.

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ADS Says Blackstone is Not Renegotiating

Alliance Data Systems Corporation, a leading provider of loyalty and marketing solutions derived from transaction-rich data, is issuing a statement in response to rumors regarding acquiring agreements with “Blackstone Capital Partners V L.P. The definitive agreement stipulates that the company will be acquired by Blackstone Capital Partners V L.P., an affiliate of The Blackstone Group, in a transaction valued at approximately $7.8 billion, including the assumption of certain debt. Under the terms of the merger agreement, Blackstone will acquire all of the outstanding common stock of Alliance Data for $81.75 per share in cash.

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BIOMETRIC ATMS

Punjab has announced its initial biometric ATM deployment allowing
both literate and semi-literate customers access to banking. With this
deployment, these customers can verify identity with the use of their
fingerprints and voice guidance to withdraw money and make balance inquiries. By 2010, Punjab Bank hopes to have ATMs such as these available in nearly 30,000 villages to 15 million households and 75 million people.

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TCF & IL University Launch New I-Cards

The University of Illinois has rolled out its new “i-card” designs, linked to TCF Bank for use as an ATM or debit card. While each campus adopts the new i-card design, current i-cards will still be in circulation and will continue to be accepted as valid for University services. Only new Urbana and Chicago student i-cards may function as ATM and debit cards with TCF Bank checking accounts. The “i-card” Programs Office coordinates card programs on all three University of Illinois campuses supporting identity verification and card production at the campus ID Centers and Campus Recreation visitor card stations. “i-card” Programs also serves the University community by providing applications, services, badges, and data to qualifying University units.

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BHARTI AIRTEL & WESTERN UNION

Bharti Airtel & Western Union have signed collaborative agreements to
launch a “Mobile Money Transfer” service for Indian consumers. This
agreement was made possible with the recent agreement between WU
and the association for who Bharti Airtel chairs its Mobile Money
Transfer program committee, the GSM Association (GSMA). Statistics
show that consumers in India are global leaders in remittance volume
received and with this development can now receive funds with the use
of mobile handsets over 35 different networks. Western Union and
affiliates have over 320,000 agent locations in 200 countries, 45,000 of
which are in India across 5,000 towns and cities. GSMA represents over
700 GSM mobile phone operators while Bharti Airtel Limited has 50.9
million mobile customers.

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BMO & INTERAC

The BMO Bank of Montreal has added INTERAC Online payment
services, allowing consumers to make Internet purchases using direct
debt from his/her account(s). This new solution allows consumers to
make purchases with their accounts sans the need to share card
numbers nor other personal information over the Internet. Furthermore,
using this solution affords customers any applicable debit card rewards
program points for the purchases, namely the bank’s AIR MILES
rewards program, which represents nearly 9 million accounts. The
INTERAC solution has been implemented as part of the bank’s
objective to attract new customers. BMO Bank of Montreal has over
1,000 stand-alone and in-store branches with nearly 2,000 ATMs.

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