CARDS 3Q/07

During the third quarter payment cards in the UK were used to make purchases of GBP 86.6 billion. Debit card purchase volume increased 12.7% year-on-year while credit card purchase volume grew a mere 3.0% over the same period. According to APACS, there were 1.7 billion plastic card transactions in the third quarter, about the same as the prior quarter. Debit cards accounted for 71.7% of all plastic card purchases compared with 70.1% in the third quarter of 2006. Bank of England figures show that gross credit card lending to individuals in the third quarter topped GBP 32 billion. The sum of all monthly repayments to UK banks amounted to GBP 30.6 billion. During the 12 months to the end of September outstanding credit card balances have reduced by GBP 1.4 billion. Bacs volumes and values grew by 3.3% and 7.2% respectively over the 12 months ending September 30th. Over the same period, the volume of CHAPS payments increased by 9.1% with a 15.6% rise in values. Cheque and credit clearing volumes declined by 8.3%.

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Card Cancellations Continue to Decline

A new report has found that card cancellation has been steadily declining. According to Auriemma Consulting Group more than 75% of consumers have cancelled at least one general-purpose credit card at some point in their lives. In 2006, 15% of consumers reported that they had cancelled a card within the past year. ACG found that data show that just 11% of consumers think that it is likely that they will cancel a credit card within the next year. The primary reason consumers cancel their credit cards is because the card is going unused. More than half of cancelled credit cards are consumers♠secondary credit cards. Specifically, 17% of consumers say that they never activated the card that they cancelled most recently, while 26% had only used their most recently cancelled card very rarely.

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HYPERCOM & KEYCORP

Hypercom and Keycorp Limited have signed agreements for the distribution
of Hypercom’s “Optimum” payment solution for joint sales and marketing.
Keycorp provides the “Optimum” products with solutions through their
“Managed Payment Services Program” security for card payment terminals
and PIN Pads. Hypercom’s payment terminals have been granted
“Interac Association Device Certification” which includes PCI PED approval,
EMV Level 1 & 2 certifications and an enhanced platform with global
capabilities. Statistics show that across Canada point-of-sale
terminals total
over 600,000 and are growing at a rate of 6% annually. Hypercom delivers
secure payment products and services enabling businesses in more than
100 countries to expand while Keycorp Limited provides electronic
transactions
and is a founding member of the MULTOS consortium.

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More Consumers Expect to Spending to Rise

Spending confidence by consumers rose slightly in October after hitting a low point in mid-August. The data show a strong mid-month reversal in consumer confidence about personal finances and the economy. According to the “Discover U.S. Spending Monitor,” more than 35% of consumers expect to spend more in the next month. This was up more than six points from September’s “Monitor” and was the first spending increase since the “Monitor’s” May inception. The “Monitor” stood at 96.5 for October compared to the September level of 95.9. Discover says that last month and well into this one it saw stable readings on spending patterns, but this month it saw a remarkable turn in spending intentions nearly coincident with news of record oil prices and continued coverage of weakness in the housing and mortgage industries. Also, over 31% felt their personal finances were getting better in October, more than a point above September’s number.

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WU & EVERBRIGHT

China Everbright Bank and Western Union have partnered to provide
WU services at over 300 of the bank’s branches across China. WU
sees China as a strong market in which to provide remittance considering
consumers in the country receive $22.5 billion annually, the third largest
remittance volume in the world. Everbright provides services in 36 cities
throughout the country and with this agreement can provide money
transfers from the respective locations to over 200 countries. Thanks to
agreements with other banks, Western Union currently offers services at
a total of 25,000 Chinese locations. WU provide its services through
320,000 Agent locations in over 200 countries.

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Jack Henry and iPay Technologies Team

Jack Henry & Associates has formed a strategic alliance and remarketing relationship with iPay Technologies, a leading provider of electronic bill payment products and services. Based on the terms of this agreement, iPay will provide the gateway that delivers the electronic payments generated by “NetTeller PowerPay”, Jack Henry’s electronic bill payment solution. iPay’s transaction routing technology will optimize the delivery of the millions of electronic payments collectively generated each year by Jack Henry’s core clients. iPay Technologies is an independent provider of Internet bill payment services. Jack Henry & Associates is a provider of computer systems and ATM/debit card/ACH transaction processing services primarily for financial services organizations.

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MCDONALD’S CARD

McDonald’s Canada has announced the launch of its prepaid, re-loadable
“McDonald’s Card”. The card is available at participating locations and
can be used at all Canadian locations, can be loaded with any dollar
increment of less the CAD$50 and has no expiry date. Additionally, the
“McDonald’s Card” keeps the user informed of their remaining balance with
every receipt disclosing the figure, is available in 4 different designs
and
can be purchased and re-loaded with cash, credit or debit cards. McDonald’s
Restaurants of Canada has over 1,400 restaurants and employs more than
77,000.

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GiftCards.com Names a New President

Pittsburgh-based GiftCards.com has named Jeff Lininger, previously VP at Jackson Hewitt, President. Lininger brings twenty years of extensive knowledge in business and corporate development, strategic planning, product and brand management, operations, marketing, and sales to GiftCards.com. While at Jackson Hewitt, Lininger created and implemented new strategies that enabled the company to achieve outstanding growth. GiftCards.com provides prepaid Visa debit cards to consumers and corporations to expend as gifts, rewards, or incentives.

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GiftCertificates.com Intros a MasterCard

Online gift card provider GiftCertificates.com is now offering a co-branded GiftCertificates.com “MasterCard Gift Card” issued by Marshall Bank. The GiftCertificates.com MasterCard Gift Card will be available in 13 themed designs including; birthday, thank you, graduation, new baby, wedding and more. Holiday specific themed designs will also be available for the 2007 Holiday shopping season. All cards are available in denominations of $25.00, $50.00 and $100.00. GiftCertificates.com(TM) is the leading provider of gift cards and gifting advice for both consumer and corporate audiences nationwide.

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PSCU Financial Services Joins PCI Council

PSCU Financial Services has joined the PCI Security Standards Council as a participating organization. As a participating organization, the cooperative will work with the Council to evolve the PCI Data Security Standard (DSS) and other payment card data protection standards. The PCI DSS, endorsed by American Express, Discover Financial Services, JCB, MasterCard Worldwide and Visa Inc., requires merchants and service providers that store, process or transmit customer payment card data to adhere to information security controls and processes that ensure data integrity. PSCU Financial Services is the nation’s largest credit union service organization and serves more than 1,100 financial institutions nationwide.

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PELORUS Stored Value Conference Slated

The PELORUS Group will host their seventh stored value conference, “Open vs. Closed Loop Stored Value: Ratcheting Up The Competition,” in December. Focused on assessing future directions and revenue potentials associated with the stored value phenomenon, the conference will focus on the choices consumers are making and what factors are influencing the selection of open loop vs. closed loop stored value solutions. Topics of the conference will include “what are the impacts of open loop stored value cards vs. closed loop solutions” on retailers, the financial industry, and companies that currently serve the unbanked and credit challenged; “what are the results of The PELORUS Group’s latest research into consumer adoption rates of open loop vs. closed loop stored value solutions”, “what are the benefits of open loop stored value cards compared to closed loop solutions, cash, checks, and other paper-based systems”; “how do the key demographics break out, and what are the criteria and motivations that govern each”; “how do the various open and closed loop stored value offerings compare to one another” and “who is leading the way, and how.”

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TRICIPHER ID TOOL

To potect against identity theft, TriCipher has launched the portable
“ID Tool ToGo” for banking, retail and healthcare sectors. TriCipher
has introduced the ID tool as a cost effective alternative to biometrics
and tokens. It is designed to plug into the users’ USB portal and prevents
hackers from “following” users with the use of Web browser that requires
a username and password to ensure a secure web application.
Additionally, the “ID Tool ToGo” can integrate with levels of
authentication
on the TriCipher Authentication Ladder. Projections show that 142.75
million USB devices will be sold by the end of 2007 and will potentially
allow
US banks a profitability of $8.3 billion. Additional projections
indicate that
the implementation of this solution will attract 31 million new online
banking
customers and will convince 39 million existing online users to use Internet
banking services more often.

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