Debit and Charge Cards to Drive 2010 GDV Growth

Driven by debit cards and charge cards, gross dollar volume is expected to grow 3.9% during 2010, but remain slightly below the record volume set in 2008. Despite the “CARD Act,” credit cards will likely remain out-of-favor with consumers next year while new overdraft rules will likely drive more debit card usage. Charge cards have been gaining traction this year and this trend will likely continue in 2010 as consumers remain debt and rate sensitive. According to CardData.com, gross dollar volume for 2009 in the U.S. should post at $3.447 trillion, compared to $3.582 trillion for 2008. Based on current trends in the payment card market and the general direction of the economy, 2010 should produce gross dollar volume of $3.580 trillion. For the third quarter, total charge volume (purchases and cash advances), for credit and debit cards in the U.S. is down year-on-year by 5.3%, compared to 6.9% in the prior quarter. Gross dollar volume for Visa, MasterCard, Discover and American Express logged in at $869 billion for the third quarter, compared to $858 billion in the second quarter and $918 billion in 3Q/08. (Visa will report third quarter performance data February 3rd, but it is estimated the network’s 3Q/09 GDV is about $514 billion). CardData.com expects fourth quarter GDV to be $912 billion, up 3.9% over the fourth quarter of last year. The fourth quarter of 2008 was the beginning of the “Credit Crunch” wherein GDV fell below the third quarter for the first time in the industry’s history. This aberration will likely produce the industry’s first Y/Y gain in GDV since then. For more details on the performance of the payment card networks visit CardData (www.carddata.com).

Gross Dollar Volume Forecast
1Q/08: $864 billion
2Q/08: $922 billion
3Q/08: $918 billion
4Q/08: $878 billion
1Q/09: $808 billion
2Q/09: $858 billion
3Q/09: $869 billion
4Q/09: $912 billion
1Q/10: $838 billion
2Q/10: $896 billion
3Q/10: $901 billion
4Q/10: $945 billion
Source: CardData (www.carddata.com)

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CAPITAL Card Deploys KXEN Data Mining

SD-based portfolio management and card outsourcer CAPITAL Card Services
has successfully adopted KXEN’s advanced data mining automation solution.
Before deploying the KXEN solution, CAPITAL relied on a previous
generation alternative, but found it too time consuming in use. CAPITAL
is a leading servicer of MasterCard and Visa accounts for
financial and non-financial institutions, nationwide. CAPITAL provides
turnkey account acquisition services, underwriting strategies,
marketing, customer service, collections, and portfolio management
services for its clients. KXEN delivers next-generation
Customer Lifecycle Analytics to enterprises that depend on analytics as
a competitive advantage. KXEN’s Data Mining Automation Solution drives
significant improvements in customer acquisition, retention, cross-sell
and risk applications. The solution integrates predictive analytics into
strategic business processes, allowing our customers to drive greater
value into their business.

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PCI SSC

The PCI Security Standards Council (PCI SSC) open industry standards
body providing management of the Payment Card Industry Data Security
Standard (PCI DSS), PIN Transaction Security (PTS) Security Requirements
and the Payment Application Data Security Standard (PA-DSS), has
launched its new PCI SSC micro site to provide resources to secure
payment card data in eight languages. Available at
https://www.pcisecuritystandards.org, the site is now posted in French,
French (Canadian), German, Italian, Japanese, Portuguese, Spanish, and
Traditional Chinese. This coincides with a significant increase in
international participation, including a 26% increase in Participating
Organizations based outside of the United States; an 8% increase in
attendance in the European Community Meeting; new PCI SSC Standards
Training sessions conducted in Australia, Czech Republic, United Kingdom
and Canada; and media interviews and speaking engagements in 14 countries.

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Credit + Debit GDV Slowly Improves in Q3

Overall charge volume for credit and debit cards in the U.S. is down year-on-year by 5.3% in the third quarter, compared to 6.9% in the prior quarter. Gross dollar volume for Visa, MasterCard, Discover and American Express logged in at $869 billion for the third quarter, compared to $858 billion in the second quarter and $918 billion in 3Q/08. (Visa will report third quarter performance data February 3rd, but it is estimated the network’s Q3 GDV is about $514 billion). For the third quarter Mastercard reported $246 billion in U.S. GDV. American Express posted $85 billion and Discover reported $24 billion, according to CardData.com. Visa reported that U.S. debit card GDV grew 5.8% in the second quarter to $296 billion while credit card GDV declined 15% to $209 billion. MasterCard reported its U.S. debit card GDV grew 4.1% in the second quarter to $112 billion while credit card GDV declined 18.7% to $133 billion. (CF Library 10/29/09)

GROSS DOLLAR VOLUME
(Debit + Credit)
3Q/07: $887 billion
4Q/07: $932 billion
1Q/08: $864 billion
2Q/08: $922 billion
3Q/08: $918 billion
4Q/08: $878 billion
1Q/09: $808 billion
2Q/09: $858 billion
3Q/09: $869 billion
Source: CardData.com

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Cardtronics Names a New Chief Exec

Cardtronics has tapped Steven Rathgaber, previously President/COO of NYCE Payments Network, as its CEO.
During Rathgaber’s 18 years at NYCE, he served in a number of sales
and operating roles within that organization, including most recently
the position of President and Chief Operating Officer, which he assumed
in 2004 concurrent with the acquisition of NYCE by Metavante. During his
tenure at NYCE, Rathgaber was responsible for developing and leading
NYCE’s payment product expansion strategy, which included, among other
things, the launching of internet and mobile banking and payment-related
services. He was also responsible for NYCE’s domestic and international
expansion efforts, and oversaw the acquisition and integration of
numerous debit networks and transaction processing platforms. Prior to
joining NYCE, Rathgaber served in a number of operational management
roles with Automatic Data Processing, Inc. and Citibank. He
holds a Bachelor of Science degree in Accounting from St. John’s University.
In connection with the appointment of Rathgaber as the Company’s new
Chief Executive Officer, he was also elected to the Company’s board of
directors. Both the appointment and the election will become effective
February 1, 2010.

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Kiplinger’s Cites U.S. Bank FlexPerks

The U.S. Bank “FlexPerks Travel Rewards
Visa Signature” credit card has been named the “Best Credit Card if You
Want Travel Perks” by Kiplinger’s Personal Finance. “FlexPerks” was
chosen for its travel rewards that allow
customers to earn points toward free flights – which can be redeemed
with as few as 20,000 “FlexPoints” for airline tickets valued up to $400
on over 150 airlines with no blackout dates, capacity controls or award
e-ticket redemption fees, plus baggage allowances. Cardholders earn one
“FlexPoint” for each dollar spent, simply by using their “FlexPerks Travel
Rewards” card. “Double FlexPoints” can be earned automatically for gas,
groceries or airline purchases – whichever is highest for the customer
during the month. Customers have the flexibility to choose the rewards
they want with
“FlexPerks”‘. In addition to travel, customers can earn cash back,
merchandise or gift cards when they use their “FlexPerks” cards.
Cardholders also enjoy the universal acceptance that is available to
Visa card customers.

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Debit Cards Can Capture Mystery Spending

A new survey shows Americans lose track of about $21 in cash
spending each week, while young adults indicate they cannot account for
about $50 per week. Overall, debit cards ranked as Americans’ primary
payment method for personal and household expenses (37%),
considerably more than cash (22%). The survey for Visa also found 68%
of debit card users prefer to use their debit card instead of cash
whenever possible. About 75% of U.S. consumers using debit cards agree
the cards provide an easy way to track spending. Three in five U.S.
consumers who use a debit card say that using their debit card helps
keep their mystery spending to a minimum. Also, 63% of U.S. debit card
users find tracking their debit card spending helpful in sticking
to a budget. The Visa survey also reveals that Australians reported the
largest cash disappearance, both in terms of actual amount lost ($59)
and also percentage of total spend (34%). While adults in India reported
only $8 missing weekly, this is actually 31% of their total weekly cash
spend. Shopping for food or other groceries (43%), leisure shopping
and/or shopping for nonessentials (33%) and out for the night or
socializing (32%) were the top spending categories around the world
where consumers feel they lose track of spending.

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Microfinance Relaunches MIX Market

The Microfinance Information Exchange has re-launched the “MIX Market”
global platform for micro-finance data, analytics and business
information through a partnership with The MasterCard Foundation. Developed to help improve transparency in the rapidly growing but diverse
microfinance industry, MIX Market is an online marketplace for data,
analytics and
benchmarks on the institutions that provide financial services to the
world’s poor. The data base is the deepest in the industry, with financial,
operational and social performance data on more than 1400 microfinance institutions (MFIs)
throughout the developing world.
The website was redesigned and the underlying database rebuilt to allow for
the rapidly expanding network of microfinance institutions and their broader array
of products, services and metrics. The new platform also provides increased
functionality and tools for all users. MIX Market now includes the
availability of all content in English, Spanish, French and Russian, with Arabic content
coming online in early 2010.

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American Express OPEN Launches AcceptPay

American Express OPEN has launched “AcceptPay” online invoicing and
payment solution. “AcceptPay” is a new online solution that allows
business owners to create, send and track invoices – all in one place.
Through “AcceptPay,” customers can pay the invoice through a variety of
methods, including major credit and debit cards, eChecks, cash, or
checks. Resulting payments are deposited directly into the business
owner’s bank account. “AcceptPay” features and benefits include faster
payments: customer payments are deposited directly into a linked bank
account designated by the “AcceptPay” user; a variety of payment types:
Customers can choose multiple online payment options including major
credit and debit cards, eChecks, cash or checks; improved efficiency:
Business owners can create and send invoices, as well as track and
organize invoices, payments and outstanding receivables online – through
a single web-based portal; added financial control: Business owners can
track and view invoices and receivables via automated or custom reports.
All of these records can be seamlessly integrated into QuickBooks
software; ease of use: “AcceptPay” does not require a software download
or customer website. Every business owner, whether or not they are an
American Express OPEN Cardmember, is eligible to apply for “AcceptPay”
from American Express OPEN. There is no set up fee, and the service is
priced at $20/month. Any business owner can also register for
“AcceptPay” Lite, which is a free invoicing-only solution that provides
the opportunity to test the product.

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Intrix Upgrades its TranScend Paper EBPP

Intrix Technology B2B electronic payment processing
has released a new version of their “TranScend Paper” Electronic Invoice
and Bill Presentment application. A web-based electronic payment
processing system allowing businesses to send their customers a link to
electronic invoices via email, and to receive and process payments
online, “TranScend Paper” makes true straight through processing
possible. Hosted by Intrix, the new solution also allow buyers to make a
partial payment on undisputed line items while any issues are being
resolved and includes a “single sign on” option, allowing billers to
leverage their customers’ existing intranet passwords to access their
invoices and pay online.

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Zong Cited for New Product Innovation

Mobile payment platform provider Zong is the recipient of the ‘2009 Best
Practices Award for New Product Innovation-Mobile Payments” from Frost &
Sullivan.The award recognizes the Zong+ next-generation mobile payments
platform. Zong+, launched in October 2009, is the first online mobile
payment
platform to combine the convenience of carrier-based payments with the
flexibility of card payments. The new service allows merchants to
significantly increase revenue by reducing transaction fees and enabling
higher average purchase prices, while allowing consumers to make more
convenient and secure payments using their mobile phones. In addition,
Zong+ allows Zong to address new market segments, win additional
merchants and accelerate its end-user adoption rate benefiting all
value-chain participants. In order to determine the recipients of these
awards, Frost & Sullivan
analysts conduct a rigorous selection process, which includes evaluating
industry challenges and rating companies’ abilities to address them by
innovating elements of the product, leveraging leading edge
technologies, adding value for key stakeholders, and increasing customer
value while further penetrating the market. This industry accolade is
awarded by a company that has been dedicated to the analysis and
forecasting of high-tech markets since its inception in 1961.

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Consumers Establish Overall Spending Limits

With 36% planning on “saving more” with the New Year, American
consumers are reflecting more optimism, tempered with realism, after two
years of recession. Additional findings show 63% think stock prices will
go up in 2010 while 51% are expecting improvements in the housing
market, consumer confidence, consumer spending and unemployment.
However, 57% are expecting consumers to still spend less next year than
they did this year while only 40% are expecting a “much healthier”
economy in 2010. These findings, according to an online survey of 1,000
American conducted by Insight Express for Putnam Investments in
November, also shows 42% have established an overall spending limit for
the holiday season; 36% will pay for gifts only with cash; and 33% will
limit the number of people for whom they will buy gifts, 26% of which
are men vs 40% of women. Additional findings show 33% would pay down
personal debt if they received cash for a holiday gift this year; 17%
would use the cash to pay for daily living expenses; and 13% would save
it in an “emergency” fund.

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