TRANSFORMERS CARD

JCB and China Construction Bank have teamed to offer the CCB “Transformers Credit Card.” The new card features the
robot toy design popular around the world. For CCB, partnering JCBI and
adding the major international credit card payment brand JCB that
originated in Japan will strengthen CCB’s product line, enhance customer
service, and further increase customer base. Since 1982, JCB and JCBI
have been expanding JCB card acceptance in China to increase convenience
for JCB cardmembers, now through alliances with eleven partner banks and
financial institutions for merchant acquiring for acceptance at nearly
80,000 merchants.

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RAM Research/CardWeb Co-Founder Dies Unexpectedly

Anita McKinley, co-founder of RAM Research in 1986 and a pioneer in the
information business of the payments industry, died unexpectedly
December 30th in Washington, DC. She was the wife of payments card
expert Robert McKinley for 36 years, the mother of six children and a
grandmother to eight. Anita, 55, was the “A” in “RAM,” an acronym for
“Robert and Anita McKinley”. After RAM became a viable entity in 1989,
she returned to being a full-time mother. The firm has since grown into
CardWeb, CardTrak and other related entities spanning six continents and
serving thousands of payment card executives worldwide. She battled
rheumatoid arthritis for many years. A memorial service was held in
Frederick, Maryland on Saturday, January 2nd. A second memorial service
is slated for tomorrow Saturday, January 9th in Estero, Florida. The
McKinley’s have homes in Frederick, MD, Bedford, PA and Estero, FL.
Details can be found in the obits carried by the Frederick, MD
News-Post; Hagerstown, MD Herald Mail; Johnstown, PA Tribune Democrat;
and the Fort Myers, FL News-Press. Arrangements are by Stauffer Funeral
Home, Frederick, Maryland. Online condolences may be expressed to the
family at www.staufferfuneralhome.com.

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Card Industry P/L Nose Dives Under Pressure in 09

Dollar amounts for the 2009 P/L revenue and expense streams for the
credit card issuing industry show $166.5 billion total for 2009, coupled
with an 18.30% ROA yield over the prior year. Interest income hit $87.6
billion (53% of total revenue), down from $101.4 billion in 2008 while
fee income hit $78.9 billion for 2009 (47% of total revenue), up from
$67.6 billion in 2008. CA-based R.K. Hammer says its data show expense
streams of $152.9 billion total for 2009 vs. $129.4 billion in 2008.
Operating expense was $46.4 billion (30.3% of total expense), up from
$45.3 billion in 2008. “Blended Cost of Funds” was $17.3 billion (11.3%
of total expense), down from $28.2 billion in 2008. Net charge-offs were
$89.2 billion (58.4% of total expense), up from $55.9 billion last year.
Hammer says we have “tri-variate” economy, where consumer spending
represents two-thirds of the U.S. economy, plus business, especially
small business, which does most of the new hiring when given legitimate
incentives to do so, and finally the federal government, which has
provided a very large yet artificial and unsustainable temporary
stimulus, compared to organic growth. Hammer concludes, arguably, it
will take a very complicated and successful set of financial and
marketing mechanics by issuers to reverse or at least mitigate what we
see as an all out attack on credit card industry profits in such an
economic state. We look for much of the same in 2010, however improving
starting in 2011.

U.S. Bank Credit Card Profitability Historical
(VISA, MasterCard, and Discover)
ROA
1989 4.10%
1990 3.70%
1991 3.40%
1992 3.10%
1993 3.30%
1994 3.90%
1995 3.60%
1996 3.30%
1997 2.60%
1998 2.50%
1999 3.10%
2000 3.60%
2001 4.00%
2002 4.20%
2003 4.40%
2004 4.50%
2005 4.30%
2006 4.60%
2007 4.65%
2008: 4.24%
2009: 1.50%
ROA-net pre-tax return-on-assets
Source: R.K. Hammer

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Heartland and Visa Reach Settlement for Data Breach

Heartland Payment Systems payments processor and Visa have reached a settlement agreement under Visa-branded payment resulting from a 2008 criminal breach for card issuers. Heartland will pay up to $60 million to fund the settlement program, based on the specified level of participation by U.S. Visa issuers, details of which will soon be disclosed. The settlement agreement is contingent upon acceptance by financial institutions representing 80 percent of the eligible issuers’ U.S. accounts that Visa considered to have been placed at risk of compromise during the Heartland intrusion.

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GiftCards.com Introduces BillPay Service

GiftCards.com has launched its “BillPay” service. The BillPay service allows customers to pay their bills with unwanted gift cards. The service is extremely flexible and allows the payment of any bill – from utility bills to cell phone bills to car payments. The BillPay Service was created to allow customers to liquidate their unwanted gift cards. This one-of-a-kind service expands the current GiftCards.com model allowing people to receive cash for their gift cards. GiftCards.com is a leading provider of gift cards to consumers and corporations to expend as gifts, rewards, or incentives.

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Global Axcess Inks 16-month, $16K/MO Contract

FL-based self-service kiosk provider Global Axcess Corp has signed a new, 16-month contract valued at $16,000 per month, with a southeastern-based grocery store chain that will cover 72 ATM locations. The contract includes upgrades for the customer from an in-house processing system to a full-turnkey Global Axcess program. The Company expects to begin generating revenues from these services in the first quarter of 2010. Global Axcess Corp currently owns, manages or operates more than 4,500 ATMs and other self-service kiosks in its national network spanning 43 states.

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Oberthur Technologies Says German Cards Okay

Following a problem encountered by certain cardholders in Germany at the beginning of this year, Oberthur specifies that banking cards produced by Oberthur Technologies and issued in Germany or
elsewhere are not impacted and function normally. Oberthur Technologies is a leader in the field of secure technologies. Innovation and high quality services. The Compasny had sales of 882 million Euros in 2008.

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JCB and China Construction Offer a Robot Visa

JCB and China Construction Bank have teamed to offer the CCB “Transformers Credit Card,” according to CardFlash International. The new card features the robot toy design popular around the world. For CCB, partnering with JCBI and adding the major international credit card payment brand JCB that
originated in Japan will strengthen CCB’s product line, enhance customer
service and further increase its customer base. Since 1982, JCB and JCBI
have been expanding JCB card acceptance in China to increase convenience
for JCB cardmembers, now through alliances with eleven partner banks and
financial institutions for merchant acquiring for acceptance at nearly
80,000 merchants.

Details

Enterprise Payment Measure Payment Hub Adoption

Enterprise payment solution provider has launched a survey to measure
the adoption of Enterprise Payments Hubs by banks and billers.
The survey will help financial institutions, businesses, government entities and other organizations benchmark the efficiency and effectiveness of their operations in managing multiple payment processing and clearing channels. Data is being collected in several key areas, including the rate of growth of electronic payment channels, average transaction costs by channel, technology acquisition and deployment strategies and anticipated ROI. US Dataworks will lead the data collection and analysis for the project while Brousseau & Associates will provide additional analysis and guidance.

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Diebold Names New EVP North America Operations

Diebold has named Charles E. Ducey to EVP, North America operations.
Ducey will lead the company’s financial self-service and security
operations in the region, including all related sales, customer support
and services infrastructure. He will also lead Diebold’s growing
Integrated Services business and will continue to oversee global
software development, product management and marketing. Ducey joined Diebold in 1978 and has held various field and home office
positions, including the position of vice president, service operations
and finance for the North American Sales and Service division. He has
held other numerous leadership positions for Diebold in the areas of
software, services and finance before being named to his most recent
role as senior vice president, global development and services. Ducey
received a bachelor’s degree in accounting from The University of Akron
in Ohio and a master’s degree in business administration from
Baldwin-Wallace College, Berea, Ohio.

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Global Payments Revenue Rises 12% in Q4 to $409MM

Global Payments reported its fiscal second quarter ended November 30th. For the second quarter, revenues grew 12% to $409.0 million compared to $365.9 million in the prior year. Diluted earnings per share from continuing operations grew 25% to $0.71 compared to $0.57 in the prior year. GPN says based on its current outlook for continuing operations, it expects fiscal 2010 annual revenue of $1,580 million to $1,615 million, or 8% to 10% growth over fiscal 2009 and increasing its fiscal 2010 diluted EPS expectations to $2.35 to $2.46, reflecting 12% to 17% growth over fiscal 2009 EPS. For complete details on GPN’s performance visit CardData (www.carddata.com).

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OBERTHUR

Oberthur has been working with its German customers on investigating and fixing issues surrounding cardholders’ inability to conduct payment transactions at ATMs and POS terminals following the onset of 2010. In doing so, Oberthur and the German banks have collectively determined are no longer impacted and now functioning normally. At this stage, according to Zentraler Kreditausschuss – the German Central Credit Committee –acceptance of the concerned cards by the ATMs and POS terminals is completely re-established. Oberthur Technologies had 2008 annual revenues of EUR882MM.

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