Largest Retailers Increase Sales 5.5% in 2009

Despite the recession, which now seems to be waning, the world’s largest retailers were able to increase sales 5.5% in fiscal year 2008 ending June 2009 with total retail sales of nearly $3.8 trillion. Profitability at the largest 250 retailers in the world, however, fell from 3.7 percent in fiscal 2007 to 2.4 percent in 2008 and two-thirds of retailers disclosed their bottom-line results saw their net profit margin decline in 2008. These findings, according to Deloitte Touche Tohmatsu and STORES Media’s latest report, “2010 Global Powers of Retailing,” also shows retailers in Europe saw their profitability fall from 4.1% in 2007 to 2.7% in 2008 while those in North America fell from 3.6% to 2.4%; hardlines and leisure goods retailers saw their profit margin fall to 3.1% from 6.8%; fashion retailers fell into negative territory and profits were cut in half to 4.1%; and food retailers saw profits fall from 3% to 2.2%.

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VeriFone MX 870 Meets PCI PTS 2.1

The “VeriFone MX 870” multi-media payment system has achieved certification for PCI PIN
Transaction Security (PTS) 2.1 requirements. In addition to secure payment processing, the “VeriFone MX 800” Series
devices offer unrivaled power and flexibility and can be set up for
virtually any interactive customer transaction. MX 800 devices can be
integrated with electronic cash registers and for use such as price
checkers, credit authorization, multimedia presentations and more.
MX 800 devices operate on one software platform, providing easy
integration and a single point of control, making it simple to create
and customize customer touchpoints with multiple uses. Along with a
common user interface, devices are modular, easily upgradeable, and
interchangeable to give retailers maximum flexibility for multiple uses
anywhere in the store. In meeting the latest PIN entry device security requirements set for
newly introduced products by the PCI Security Standards Council (PCI
SSC), the MX 870 is in compliance for sales through 2017. Systems
certified to PCI PTS 1.3 may be sold through 2014.

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Ingenico Beefs-Up PCI Assistance

Payment solution provide Ingenico has rolled out a PCI-DSS compliant
payment transaction process strategy. The strategy addresses the entire
payment transaction process including: “data in flight”, an advanced
technology enhancement at the point of card acceptance encrypts data in
flight and is offered with no per terminal or per transaction fees;
“data at rest”, in which card and transaction-based tokenization
provides unique data proxy to the point of sale eliminating the storage
of sensitive card data and reducing the PCI footprint for merchants.
Ingenico’s unique international PCI-DSS payment
infrastructure offers security monitoring, estate management, and value
added services to merchants and supports POS deployment from
manufacturing to merchant operational environment. Ingenico’s “On-Guard
Card Acceptance” encryption technology
will be embedded within the entire line of new Ingenico payment devices
deployed in North America as standard security functionality to provide
secure data capture and transmission at the point of card acceptance.
The company will offer this standard technology to all merchants without
charging transaction fees.

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Credit Card Penalty Fees Hit a New Record in 09

U.S. credit card issuers produced $166.5 billion in total pre-tax income last year, a 1.5% decrease over 2008. Interest income of $87.6 billion was down 13.2% as fee income of $78.9 billion rose 16.7%, compared to the prior year. Penalty fee income is expected to hit $22.9 billion, while the largest category of fee income, interchange income, should come in around $41 billion. According to R.K. Hammer, other fee income for 2009 will include cash advance fee income of $8 billion, annual fees income of $6 billion, and fee income from enhancements of $1 billion. Approximately 85% of this $22.9 billion in total penalty fees in the Hammer model is for late fees (the remaining 15% is for over limit fees, NSF fees, currency conversion, etc.). As in prior years, this figure again does not include higher APR’s charged to cardholders who go delinquent (thus incurring “penalty pricing” to be imposed), as this greater interest rate would appear in an “Interest Income” category, not fee income. As any industry has to do with rising costs, credit card issuers must charge higher fees to offset for accounts with increasingly higher risk. For example, typically 50% of all credit card loan losses are attributable to delinquency in the Hammer model, rotating through the consecutive monthly various billing cycles to charge off, typically at 4-5 cycles, 120-150 days past due. And charge-offs last year were $89.2 billion (9.8% of outstanding loans), up sharply from $55.9 Billion in 2008. R.K. Hammer is a global credit card consultancy, specializing in card portfolio sales and valuation.

PENALTY FEES HISTORICAL
2003: $11.7 billion
2004: $14.8 billion
2005: $16.4 billion
2006: $17.1 billion
2007: $18.1 billion
2008: $19.0 billion
2009: $22.9 billion
Source: R.K. Hammer

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INGENICO iSC350

Ingenico secure payment solutions has introduced its “Ingenico iSC350”
versatile multimedia payment terminal at the 99th Annual National Retail
Federation’s (NRF) Big Show. The “iSC350” features full motion video
over a crisp VGA monitor complete with stereo sound for up-selling,
cross-selling and strengthening brand loyalty. Built on Ingenico’s
“Telium 2” platform for fast transaction speed on a 400 MHz processor,
the terminal offers a variety of payment choices, including contactless
payment and signature capture, and has a top faceplate which can be
customized with a retailer-unique color. It is also designed to be PCI
PED 2.1 compliant; provides secure “On-Guard Card Swipe” encryption
technology; has a memory upgrade to 32 GB using uSD slot; offers 10%
faster software downloading; and an enterprise document management system.

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Visa payWave, Coca Cola and Vancouver Come Together

In conjunction with the “Vancouver 2010 Olympic and Paralympic Winter Games,” Visa announced it will be equipping 550 Coca-Cola vending machines with its “payWave” contactless payment terminals in Canada, most of which will be located in official Olympic venues. According to CardFlash International, these venues include the Olympic and Paralympic Villages in Whistler and Vancouver and two Vancouver training centers. This solution allows customers to “wave and go” when buying a Coca-Cola product from the vending machines, which is closely aligned with Visa Canada’s migration to chip card technology. Both the Visa “payWave” card and the Visa “payWave” terminal have built-in security measures.

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ACI Releases its Retail Systems Research Report

ACI Worldwide electronic payments software and solutions has released
its “Retail Systems Research” report examining the future of retail
payments, highlighting the need for retailers to review and upgrade
their payment systems. The report suggests retailers are not doing
enough to keep pace with consumers’ willing and swift adoption of
technology while 69% of retailers indicated maintaining or improving the
customer experience is the main driver of their in-store technology
investments. In response, the ACI “Retail Commerce Server” offers
retailers a solution to create and execute a payment acceptance strategy
and is available on multiple operating and hardware platforms. The
server provides payment acceptance authorization, switching, rewards and
loyalty management, gift and stored value card management and enhanced
loss prevention with refund and check authorization tools.

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GIANTSTONE & LONGTOP

Longtop Financial Technologies software developer has signed agreements
to acquire for cash 100% of Giantstone Information & Technology, a core
banking solution provider in China. Expected to close prior to March 31,
earnings from the acquisition will be accretive for the fiscal year
ended March 31, 2011. Giantstone primarily provides implementation,
customization, consulting as well as maintenance services to national
joint stock commercial banks to replace its existing core banking
systems with a global software company’s core banking system and various
applications being developed by domestic vendors. Giantstone also has
its own proprietary core banking product that in future will be targeted
at smaller banks in China. Giantstone has over 300 employees.

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Invenstar Launches Updated TouchSuite POS

Financial technology solution provider Invenstar has released an updated version of the TouchSuite POS system for salons.
“TouchSuite Pro” is designed to be an all-inclusive POS system for managing retail. The software and
hardware feature a simple touch screen, simple cash register ring up,
product scanning, split payments, gift cards, client/vendor management,
multi-operator merchant accounts, superior inventory tracking and
receiving management, SKU generation and barcode labeling technology all
built in and TouchSuite Pro’s retail management software
and hardware come pre-loaded and ready for data import. Invenstar’s partnership with
American Bancard, enables the company to offer low-cost,
high-value financial solutions to small and medium business retail
markets with “TouchSuite Point of Sale” and “QuickBancard” credit card
processing solutions.

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EUROSMART

Eurosmart international association representing the Smart Card industry
is following the issue related to the German payment cards usage that
occurred since January 1st, 2010. Effecting cards in Germany only, the
malfunction concerned verification procedure on the date, performed
prior to any critical transaction with the smart card, no security
standards or technologies used by the Payment industry are at stake.
Smart Cards are part of more complex systems and it is fundamentally
important that such technology demonstrates strong security behavior
while confronted to a potential system level issue. Eurosmart
international non-profit association located in Brussels was founded in
1995 to represent the Smart Security Industry for multi-sector
applications.

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INGENICO SECURITY

Ingenico payment solutions will now be providing secure end-to-end
solutions to assist merchants in the U.S. to comply with the PCI Data
Security Standards. These standards will concern Data in flight at the
point of card acceptance using encrypted data with no per terminal or
per transaction fees; Data at rest using unique data proxy to the POS
for eliminating the storage of sensitive card data; and Architecture
modeled on international PCI-DSS payment infrastructure with security
monitoring, estate management, and value added services to merchants to
support POS deployment from manufacturing to merchant operational
environment. Benefits retailers can expect from Ingenico’s end-to-end
secure payment transaction solution include a non-intrusive encryption
option; compliance with Visa’s best practices and no per terminal or per
transaction fees for data encrypting/decrypting, among many others.

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IMTS & VERIFONE

VeriFone Holdings signed a licensing agreement with iMobilise
Transportation Systems (iMTS) for the deployment of its taxi payment and
media solutions. iMTS anticipates installation of the VeriFone systems
in 1,500 taxis in the urban centers of Johannesburg, Durban and Cape
Town. Deployments will begin this spring and provide passengers
passenger information technology and credit cards, Chip and PIN-based
debit, and contactless payment options. VeriFone transportation systems
support both EMV and non-EMV bank-issued cards as well as closed-loop
cards while providing advertisers a compelling new venue for digital
content.

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