Bankruptcy Filings Neared 200,000 in Q1

Total bankruptcy filings soared by 66% in the first quarter compared to the year ago period, and jumped 9% sequentially. During the first quarter total filings hit 193,461 compared to 177,599 for the fourth quarter and 116,771 one-year ago. However, according to the Administrative Office of the U.S. Courts filings in the 12-month period ending March 31st, 2006, when bankruptcy cases totaled 1,794,795, the latest figures represented a 61% drop in filings. The 12-month period ending March 31, 2006, included the surge in filings that occurred prior to the October 17, 2005, implementation date of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” Based on the latest official figures bankruptcy filings were running about 15,000 per week during the first quarter. However, other tracking firms are suggesting the weekly figures are moving to about 20,000 per week in the second quarter.

QUARTERLY BANKRUPTCY FILINGS
1Q/06: 116,771
2Q/06: 155,833
3Q/06: 171,146
4Q/06: 177,599
1Q/07: 193,461
Source: Administrative Office of the U.S. Courts

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Reg E Lifts Small Ticket Debit Receipts

The Federal Reserve has modified the receipt requirement of “Regulation E” permitting merchants to no longer make a required receipt available for debit card purchases of $15 or less. Previously, “Reg E” required that a paper receipt be made available to consumers for all debit card transactions conducted in physical environments, including those unattended areas where consumers may not expect a receipt. In many of these environments, the cost and operational challenges of receipt printing has limited the deployment of card acceptance terminals. The Fed’s decision will help increase payment card acceptance in unattended cash and coin-heavy merchant segments. VISA says its research indicates that consumers want the option to use their payment cards at more traditionally cash-heavy locations, including environments where the card terminal is not attended, such as: parking (23%), public transit (21%), vending machines (18%) and laundry (16%).

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Key U.S. Business Spending Trends Released

VISA USA has released a detailed analysis revealing key insights into how U.S. businesses large and small are spending their money based on its “Commercial Consumption Expenditure Index.” The “CCE Index” reveals that the top five individual spending categories, representing 54% of total spending for all businesses in 2006 were: raw materials and manufactured goods ($2.58 trillion, up 2.3%); information technology-related spending ($2.12 trillion, up 8.8%); professional services/consulting ($1.67 trillion, up 5.4%); personnel supply services ($1.57 trillion, up 6.5%); and rent ($1.38 trillion, up 13.8%). VISA says the data show an increase in personnel supply services, which indicates that more companies of all sizes are relying on temporary workers as the labor market continues to tighten. Moreover, robust IT of more than $2 trillion points to the fact that more U.S. companies are looking to harness technology to streamline their operations and improve efficiencies. Lastly, a sharp increase in rent year-over-year points to the continued demand for space to expand their businesses even as the economy slows in other areas.

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VCs Pump More in a Prepaid Card Specialist

Card marketer AccountNow has closed on $12.75 million in a third round of venture funding and added two new board members.Trident Capital led the round and all current investors and board investors participated. Investors include INVESCO Private Capital, Oak Hill Investment, VSP Capital, Grayhawk Venture Partners, Granite Hill Capital Ventures and CEO Tim Coltrell. Stephen B. Galasso, Strategic Advisor, and Christopher P. (Woody) Marshall, Managing Director, both from Trident Capital have joined AccountNow’s board, while all other board members will continue to serve. AccountNow is a provider of financial solutions for the 40 million US consumers who do not have established credit or traditional banking relationships. Trident Capital is a leading venture capital and private equity firm with over $1.6 billion of capital under management. The firm has invested in over 120 companies since its founding.

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Jack Henry Names Internet Banking Channel Head

Jack Henry & Associates, has named director of software development Vernon E. “Pete” Hopkins, Jr. to GM of Internet solutions and Ron Moses will move into the director’s role. Hopkins will join the company’s senior management team that currently encompasses 13 functionally aligned general managers. He will provide executive oversight of the development, quality assurance, support, installation, operations, communications, and education departments that support the company’s Internet banking channels. Moses has extensive industry and software development experience, including more than 18 years with Jack Henry & Associates. He most recently served as development manager for the company’s “Core Director” core banking platform. Jack Henry & Associates is a leading provider of integrated computer systems and processor of ATM/debit card/ACH transactions for banks and credit unions.

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Pacific Merchant Services Offers Charity Option

1st Global Financial Corporation has implemented the “1st Global Charitable Give-Back Program”, targeted at Pacific Merchant Services credit processing clients. The “1st Global’s Give-Back Program” donates a portion of all their credit card transaction fees collected by the various merchants to Friends of Rollo â“ U.A., a non-profit organization focused on providing disabled and at-risk children with the opportunity to experience the joy of outdoor fishing. Pacific Merchant Services clientele are expected to collectively process between $10 million and $12 million annually through 1st Federal Financial. 1st Global’s business model is a three-pronged cause marketing program designed to help customers give-back to their local communities and support charitable organizations of their choosing.

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MasterCard PCI Vendor Promotion is Launched

MasterCard has launched a global PCI vendor promotion with Cybertrust. The new promotion is being made available for up to 2,000 merchants and includes a free one-year subscription to the Cybertrust online portal, access to the required PCI “Self Assessment Questionnaire,” and enables merchants to schedule their required quarterly network scans. The questionnaire and quarterly network scans are PCI compliance validation requirements for merchants that are classified as either level 2 or level 3. The offer is administered through MasterCard acquiring banks and is available to select merchants globally that process MasterCard transactions. Participating acquirers will have customer online portals with Cybertrust. MasterCard also provides online seminars, conferences, educational materials and other tools to help secure the payments system and promote commerce worldwide.

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CUP & H50

Credit card outstandings declined during May by GBP 278 million to GBP 53.8 billion. This is the fourth straight monthly drop and remains well below the December 2005 peak of GBP 59.0 billion. Year-on-year credit card outstandings (not seasonally adjusted) are running about 5% lower than one-year ago. According to the The Bank of England, the annual growth rate of overall consumer credit continued to fall in May, by 0.2 percentage points to 5.2%, and the three-month annualized growth rate also fell, by 0.3 percentage points to 3.8%.
However, the increase in net consumer credit in May of GBP 800 million was higher than the increase in April.

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Citi & GXI Expand Global Remittances using GCash

Venture Corporation and Hypercom Manufacturing Resources have
agreed to jointly manufacture payment transaction products by
combining the companies’ security and technology capabilities.
Requirements of reliability, flexibility and security for transaction
solutions
is what the new partnership will concentrate on and anticipates coverage
of the entire “value chain”. The “value chain” includes production and
testing
to order fulfilment and will be contributed to with resources from both
companies. The Venture Group provides electronics manufacturing services,
original design manufacturing and e-fulfillment services and comprises
about
40 companies in South-East Asia, North-East Asia, America and Europe.
The Group employs more than 17,000 people worldwide. Hypercom
provides end-to-end electronic payment products and works with over 100
different businesses.

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PCI Security Council Names Advisors

To promote financial discipline among credit card users, Bank Negara
Malaysia has implemented a tiered pricing structure. Based on findings,
including one-third of credit cardholders use their credit cards as a
payment instrument and that over half of cardholders pay only the
minimum amount due, the bank has implemented this structure to be
effective July 1, 2008. For cardholders whom pay credit card balances
with every cycle for 12 consecutive months, the finance charge will be
15% per annum. The ceiling rate of 18%, however, will apply to others.
Also, as part of the promotion of good spending habits, the bank is
encouraging the use of debit/ATM cards by enabling their 15.4 million
ATM cardholders to use their ATM cards to eventually make purchases
at participating merchants. This development should be complete by
2008.

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INSIDE AWARD

Frost & Sullivan has awarded Inside Contactless with the 2007 Global
Award for Industry Innovation and Advancement in the field of contactless
technologies. The decision was made citing Inside Contactless’ strong
NFC products and service, advancement of the industry through research,
strategy development and the ability to conceptualize industry activities.
A few of INSIDE contactless’ products include ‘PicoRead’ and ‘MicroRead’
designed to offer integration of contactless chips into devices and meet
international standard protocols. Inside Contactless is a leader of
contactless
payment market with over 20 million chip platforms and more than 12 leading
bank card issuers. The Frost & Sullivan Award for Industry Innovation and
Advancement is awarded annually to industry leaders whom demonstrate
business strategy, technological innovation and research.

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Orlandi Valuta & Vigo Implement Remittance

Diebold Inc will be expanding manufacturing, services support, software
development and sales and marketing activities. This is marked by the
recent introduction of the company’s new security solutions including the
“Diebold 450” compact ATM, ergonomics, branch transformation, check
truncation, check imaging and end-to-end payment solutions. This
expansion of operations also includes Diebold’s 24-hour customer support
center to service the India region. The company employs over 15,000
and is represented in 90 countries. Diebold reported a revenue of $2.9
billion in 2006.

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