Payment Rates Hold Steady Despite Economy

Monthly payment rates continued to remain healthy despite a challenged economy. MPR, or the amount that cardholders pay on their credit card debt each month, rose to 19.21% in October, the second highest level this year. However, one-year ago the ratio stood at 20.01%. The higher payment rates are largely driven by new minimum payment standards that require higher APR accounts to make higher minimum payments. According to CardData, the MPR bottomed to 18.30% in July, compared to 19.88% for January. Among asset-backed credit card securities the MPR increased 10 basis points in September to 20.99% compared to 20.46% in July and 20.88% in August. FitchRatings says the MPR trended upward throughout the third quarter and is currently 64 bps above last year’s level.

MONTHLY PAYMENT RATES
Nov 06: 20.01%
Dec 06: 19.70%
Jan 07: 19.88%
Feb 07: 18.79%
Mar 07: 18.21%
Apr 07: 18.04%
May 07: 19.01%
Jun 07: 18.40%
Jul 07: 18.30%
Aug 07: 18.99%
Sep 07: 18.86%
Oct 07: 19.21%
Source: CardData (www.carddata.com)

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RAHAXI ACQUISITION

FreeStar card processor is prospecting for a third party acquisition
of its processing subsidiary, Rahaxi Processing Oy. FreeStar has
met with third parties to establish potential transaction terms for full
or partial sale of assets and potential funding transactions. Whichever
transaction proposal considered will be brought before the Board of
Directors for review, consideration and provision of reactionary
definitive terms. These terms will be determined by total consideration,
whether it will be a cash or stock transaction and the financial strength
of the potential acquirers’ business plan. FreeStar Technology provides
financial solutions to merchants and acquirers in over 20 countries
around the world.

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NetConnect to Deploy Systech’s IPG-7501

San Diego-based Systech Computer reports that its “IPG-7501” payment gateway device will be used by Chase Paymentech’s “NetConnect” for “Retail Pro” customers. Transactions are now wrapped into an SSL format for enhanced security, converted from serial to IP, and sent through the customer’s high speed/broadband connection, saving time at the point of purchase for customers. Systech Computer Corporation is a provider in the design and manufacture of Serial-to-IP and Dial-to-IP network conversion devices for enabling IP communications.

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INTERAC & OPTIMUM L4150

Interac has certified Hypercom’s 32-bit “Optimum L4150” wireless global
payment terminal with its Chip 2.0 PED Device. This will allow Hypercom
to deploy the PCI PED approved device for use in a multi-lane, retail
environment over the Interac Direct Payment (IDP) network for both U.S.
and Canadian merchants. This PCI PED approval ensures secure PIN entry
in addition to the terminal’s contactless smart card capability.
Furthermore,
the Hypercom “HyperSafe32” security architecture allows screen changes
of the L4150 Terminal’s 64K color, customer-interactive, touch screen glass
sans manufacturer intervention. Hypercom delivers electronic payment
products and services to organizations in over 100 countries.

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Continental Launches Two World MasterCards

Continental Airlines and Chase have expanded and enhanced their co-branded credit card program by enabling its frequent flyer members the opportunity to earn/redeem both miles and dollar-based travel credits. The new “Continental Airlines TravelBank World MasterCard” offers travel credits, instead of “OnePass” miles, providing more flexibility for all or part of any flight purchased on continental.com. Cardholders earn 3% on purchases made using the card on eligible cable, telecommunications and wireless purchases. In addition, cardholders earn one percent for all other card purchases. A $50 travel credit bonus is awarded after the first card purchase. Additionally, each year on the card anniversary, cardholders who spend more than $10,000 in qualifying purchases, receive $25 in travel credits deposited directly into their “TravelBank” account, as well as five “Continental Currency” coupons. Chase and Continental Airlines recently introduced the “Continental Airlines Presidential Plus World MasterCard.” The new card offers special benefits such as a “Presidents Club” airport lounge membership, “Elite Access” priority airport services, complimentary car upgrades, automatic “Elite” hotel status and double “OnePass” miles for all hotel, car and Continental flight purchases made with the card.

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BANK ACCOUNT SECURITY

The APACS forum has released research, conducted online by YouGov,
regarding the recent loss of 25 million personal records. The research,
collected from 435 adults toward the end of November of 2007, shows
that 62% of adults who were informed of this checked their bank
statements,
30% took no action after learning of the breach, 10% changed their
passwords and 6% changed their PINs. The APACS trade body provides
a payments industry forum on non-competitive issues while YouGov research
collects data for various markets and provides consultancy service.

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Survey Says Card Theft Worries Consumers

Pittsburgh-based BitArmor Systems conducted a survey over the “Black Friday” shopping weekend and found that three of four shoppers are concerned about companies losing their credit card information to hackers and other criminals this holiday season. The issue of identity theft also proved to be of strong concern as more than 40% of respondents said either they or someone they know has had their identity stolen. Almost 80% said they were likely to stop shopping at a store where retailers are not taking adequate measure to protect their personal data, with 68% saying they are “extremely” likely to take their business elsewhere. Survey respondents also said they are in favor of a national law which would require companies to publicly report any data breach that affects their customers. By a margin of greater than 11 to one, they said they would prefer comprehensive national legislation to existing state laws. BitArmor helps companies protect valuable data assets, achieve regulatory compliance, and manage data throughout its functional lifecycle.

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INTREPID & VERSACARD

Intrepid Global Imaging 3D has completed its acquisition of the First
Versailles Smartcard Solutions Corporation (Versacard) from the
MacKay Group. Versacard provides an electronic card payment
system for the 91 million Filipino customers and, with this acquisition,
will be the only smartcard provider for transit ticket and highway tolls
throughout the country. The Versacard will also be available for use
at retail outlets with various merchants and is projected to issue nearly
14 million new cards over the next 5 years. Furthermore, over the same,
5-year period, the organization is expected to generate revenue of
$120,651,449 based on the success of the organization’s counterparts
in Hong Kong and Singapore .Versacard is currently worth
approximately $569 Million.

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ATM Prepaid Card Dispensing Gets Traction

San Diego-based ATM processor and ISO ANI Advanced Network has teamed with AZ-based Better ATM Services to offer prepaid dispensing capabilities via ATMs. ATMs can dispense Better ATM’s specified media cards using existing equipment with no add-on devices. This means that the new technology enables existing ATM machines to dispense prepaid cards to their customers through offered cash trays. Better ATM Services’ technology offers one-stop shop convenience for the purchase of sporting and other event tickets, transit and amusement park passes, and a host of associated branded incentives and cross-marketing opportunities. ANI offers cost effective ATM driving and transaction switching, including PINless HTML web generated transactions.

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NFC TRIAL

A consortium of seven companies has launched a major consumer trial of near field communications technology for bus, tram and tube travel. About 500 London customers of mobile-network operator O2 will test the pros and cons of rolling out NFC technology commercially. Each participant will be given a “Nokia 6131” NFC handset and “O2 Wallet.” Barclaycard will credit GBP 200 to 225 of the participants. Transport for London, AEG, Barclaycard, Nokia, O2, TranSys and VISA are involved in the six-month test. If successful, a full scale roll-out will likely occur by the end of 2008.

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Insurance Agents to Market SmartChoice VISA

NC-based Worldwide Insurance Network and First USA have partnered to offer a rewards VISA card via 2,500 independent insurance agencies nationwide. The new “SmartChoice VISA Card with Flexible Rewards” will be offered by agents in 29 states enrolled in the “Smart Choice” program. Worldwide Insurance Network’s “Smart Choice” program provides agents with access to national insurance carriers’ products, as well as training, education, recognition and support. First USA, the agent banking division of Chase Bank USA, has been issuing credit cards on behalf of other financial institutions since 1987 and has a partner-branch network with more than 3,000 retail touch points.

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EUROZONE RETAIL PMI

The Bloomberg Eurozone Retail PMI has reported that retail sales
performance has declined in Germany, France and Italy for the
month of November. Namely, Germany’s retail sales fell from 48.6
to 43.6 on the PMI index, Italy’s index fell for the ninth consecutive
month from 48.0 to 45.3 while the French PMI index saw the smallest
rate of PMI decline from 47.3 to 48.8. The Bloomberg Eurozone
Retail PMI provides data for the European retail sector, compiled by
Bloomberg and NTC Economics. This compilation is composed of
figures on retail sales, performance against targets, inventories, prices
and employment using information from over 1,000 retail organizations
in Germany, France and Italy which represents 75% of the countries’
sales. Overall, the sales against targets index fell from 38.3 to 37.2,
prices and margins rose from 66.1 to 68.5, employment fell from 51.0
to 50.7 on the index while retailers’ buying and stock trends registered
a 19-month high surging from 53.9 to 55.8 on the PMI. Bloomberg’s
media services provide economic statistics to over 2,300 professionals
in over 130 bureaus worldwide.

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