SEPT CARD DEBT

Credit card outstandings remained sluggish in September and fell
slightly below year-ago levels by GBP 100 million. The Bank of England
also reports that the annual growth rate of overall consumer credit
continued to fall to 10.9% in September. Also, the Bank of England is
likely to keep its benchmark interest rate unchanged for a third month
at 4.5% when it meets this week. The increase in total net lending to
individuals in September (GBP 9.0 billion) was broadly in line with the
increase in August and the previous six month average. Within the total, the increase in net lending secured on dwellings (GBP 7.7 billion) was also broadly in line with the increase in August and slightly stronger than the previous six month average. The twelve-month growth rate fell to 10.2% in September from 10.3% in August. The number of loans approved for house purchase was 1,000 higher than in August, and those for remortgaging and for other purposes were also higher (by 5,000 and
2,000 respectively). The increases in consumer credit (GBP 1.2 billion)
and its components credit card lending with other loans and advances were broadly in line with August’s outturn and the previous six month
averages, according to the Bank of England.

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Credit Card Debt Climbs 14% in Australia

Australian credit card volume soared in August, topping US$11.2 billion, driven partly by higher gasoline prices. Also, after two months of stagnant growth, credit card debt neared the $23.9 billion milestone in August. One-year ago credit card debt stood at $20.8 billion. Gross dollar volume on credit card and charge cards in August was $11.4 billion. Based on data from the Reserve Bank of Australia, consumers charged $10.7 billion in purchases on credit/charge cards during August, compared to $9.6 billion one-year ago. Card credit limits reached $65.9 billion at the end of August, compared to $58.4 billion for August 2004. There are currently 12.2 million credit card and charge card accounts in Australia, compared to 11.4 million one-year ago.

CREDIT CARD HISTORICAL
(A$ billions)
MONTH BALANCES VOLUME
Aug 04: 27.8 13.7
Sep 04: 28.0 13.7
Oct 04: 28.1 12.8
Nov 04: 28.7 14.0
Dec 04: 30.2 16.2
Jan 05: 29.4 12.3
Feb 05: 30.3 12.9
Mar 05: 30.3 13.8
Apr 05: 30.6 13.0
May 05: 30.8 14.2
Jun 05: 31.4 14.2
Jul 05: 31.4 13.5
Aug 05: 31.8 15.3
Source: Reserve Bank of Australia

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Affluent Get Shaky on the Economic Future

The U.S. affluent market, which represents about half of all consumer income and spending and a third of the total US economy, have a somewhat positive view of current business conditions but their outlook for future economic conditions is now neutral. According to the a recent American Affluence Research Center study, the affluent also indicated modest declines in their plans for major purchases and their expected changes in spending for 17 different products and services. Their projected $57 billion in expenditures for December holiday gifts (25% of the estimated total holiday gift market) is 1.6% below 2004 spending levels. There is some indication of a reduction in major expenditures in the next 12 months, with 44% of respondents reporting no such plans. Plans for home remodeling, cruises and acquisition of vacation residences declined from their Spring 2005 record highs. The AARC says there are 11 million affluent households in the USA.

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Government MFIs and No Borders STV Card Link

The Mexican government has signed an agreement with No Borders to provide
deployment of the No Borders stored value card platform in support of the $300
million PRONAFIM Endowment Fund. Up to 150 of Mexico’s micro-financial
institutions (MFI) make unsecured loans to over 1,500,000 individuals and small
businesses. The MFIs are to make the No Borders stored value cards available
to each of the loan recipients to receive loan proceeds from the MFIs, to
withdraw funds from the cards at the MFI sites, and to transfer funds from card
to other cards held by loan recipients. No Borders offers lower cost money
transfers and long distance telephone services.

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GreenZap Online Store Hits 500 Merchants

San Diego-based GreenZap reports it has added 100 new merchants to its online store this week, raising the total number of participating merchants to 500. New merchants include Better Homes & Garden, Steve Madden LTD, Cooking.com, PetSmart, American Blinds, Austad’s Golf, and Buy.com. GreenZap Storez is a value-add service for its account holders giving them access to discounts at some of the top retail merchants around the world while driving transactional volume for the company. GreenZap account holders use their online account to send and receive money online transacting in an auction environment or with online retail merchants.

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Kmart Cardholders to Receive Sears Cards

Most Kmart cardholders are getting a new Sears credit card and, effective yesterday, Kmart shoppers can apply for a Sears store credit card or MasterCard. Kmart and Sears merged earlier this year after announcing a deal one-year ago. The new company, Sears Holdings, announced in May that it had amended its agreement with Citibank and would be terminating Kmart’s relationship with Household Bank (now HSBC), which previously provided a private label credit card program for Kmart. Citigroup acquired the Sears Credit Card and Financial Products business from the former Sears Roebuck and Co in November 2003 for $31.8 billion. The portfolio had $28.6 billion in outstandings at that time. Sears Holding says most Kmart cardholders should receive their new cards, which can be used in either store, over the next few weeks. CF Library 11/4/03)

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AXALTO 3Q/05

Smart card specialist Axalto posted third quarter revenue of $227 million,
compared to $228 million for 3Q/04 and $261 million in the prior quarter. The
cards segment revenue amounted to $207 million compared to $212 million in
year-ago quarter and $243 million in the second quarter of this year. During
the third quarter, Axalto delivered more than 100 million microprocessor cards.
In financial cards, Axalto’s revenue rose 22% year-over-year to $49 million
with about 20 million cards delivered. Axalto says the growth was driven by the
EMV migration in Europe, Latin America and Asia as well as from initial
large-scale Paypass contactless cards deployments in North America. Revenue in
the point-of-sale terminals segment advanced by 9%, to $20 million. During the
third quarter Axalto opened a new advanced payment card personalization center
outside of Toronto and its “Palmera” product achieved the first EMV
certification issued in China. Also, JCB signed a deal to offer Axalto’s
“Dynamic Data Authentication”-enabled smart cards to JCB customers in Japan.
Additionally, Thales selected Axalto to provide the smart cards of its
e-ticketing solution for the Dutch national transport project managed by Trans
Link Systems. For complete details on Axalto’s third quarter performance, visit
CardData (www.carddata.com). (CFI Library 7/23/05; 8/18/05; 9/1/05; 9/22/05)

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Fantasy Entertainment Opts for TNS Synapse

New Hampshire-based Fantasy Entertainment has selected Transaction Network Services’ “Synapse” cashless vending solution to equip their photo booths with credit and debit cards payment options. “Synapse Vending” can be quickly installed in existing vending machines and comes with wireless connectivity that eliminates the need to hardwire machines. Fantasy Entertainment is the largest owner operator of electronic self-service photo imaging systems in North America. Transaction Network Services provides data communications services for transaction-oriented applications.

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Chase and Wawa to Launch a blink Cobrand

The Chase contactless push in the Mid-Atlantic region will be bolstered next month with the launch of the “Wawa Rewards VISA” card. The convenience store chain is one of the first companies in the nation to “blink”-enable its entire credit card program. Wawa will accept “blink” at all of its 540 stores in Delaware, Maryland, New Jersey, Pennsylvania and Virginia. The new card, to be launched in mid-November, will award four percent in rebates for every dollar spent on card purchases at Wawa and one percent in rebates for all other purchases. Also, during the first 90 days cardholders will earn 10% in rebates for every dollar spent at Wawa and two percent in rebates on all card purchases made elsewhere. Customers will also receive a coupon for a free “Shorti Hoagie” after the first purchase with their new card. In May, PA-based convenience store chain Sheetz, with 305 c-stores, became the first retailer to launch a cobranded contactless credit card with Chase. The “Sheetz MasterCard with blink” features the “Sheetz Rewards” program, and offers free Sheetz food, a 10% rebate on Sheetz purchases for the first 60 days and three percent thereafter. (CF Library 5/27/05)

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Wright Express 3Q/05 Revenues Rise 41%

Fleet card specialist Wright Express posted third quarter revenues of $67.4 million, a 41% increase. Excluding losses on its fuel-price derivatives and IPO costs, the Company’s net income for the quarter was $13.4 million, a 30% year-on-year increase. Total fuel transactions processed during 3Q/05 increased 14% to 60.9 million. Payment processing transactions increased 19% to 44.3 million and transaction processing transactions increased 4% to 16.5 million. Average expenditure per payment processing transaction grew to $50.72, an increase of 39% from the same period last year. Total MasterCard purchase volume grew to $252.4 million, an increase of 38%, compared to 3Q/04. For the fourth quarter of 2005, Wright Express expects revenue to be in the range of $63 million to $68 million. For complete details on Wright Express’ third quarter performance, visit CardData ([www.carddata.com][1]).

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

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Contactless Payment Council is Created

The Mobile Payment Promotion Council has been established with a mission of
promoting standardized mobile contactless payment systems and to promote JCB’s
“QUICPay.” The executive board of the council is composed of representatives
from Aeon Credit Service, Central Finance, Credit Saison, DC Card, JCB, JTB,
KDDI, OMC Card, Orient Corporation, Toyota Finance Corporation, UC Card, UFJ
Nicos, and Vodafone. The Mobile Payment Promotion Council believes that a
standardized payment infrastructure foundation for efficient payment system
operations and that an integrated environment is the key to providing the most
convenience to consumers and merchants. The Council has 39 members at present,
with 10 other corporations currently considering participation.

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