USAA FSB to Deploy MasterCard Debit Card IPS

USAA Federal Savings Bank will implement the “MasterCard
Integrated Processing Solutions” debit processing platform. USAA will employ the full capabilities of the platform’s branded network and issuer processing services in support of signature and PIN debit, and ATM driving. “MasterCard IPS” is designed to help financial institutions create differentiated products and services and expand their payment portfolios across multiple business channels with efficient administration and minimal infrastructure investment. Issuers will be able to save considerable time and resources when designing and deploying new products and services by simply providing data for the platform’s pre-determined parameters. With its proprietary “Portfolio Viewer” tool, “IPS” delivers a 360-degree view of aggregated cardholder intelligence across debit and prepaid products that can help issuers customize their offerings. USAA Federal Savings Bank is the 23rd largest bank in the nation with more than $31 billion in deposits.

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GLOBAL UNBANKED

Research shows 2.5 billion adults worldwide do not have a savings or
credit account with either a traditional (regulated bank) or alternative
financial institution (such as a microfinance institution), 90% of which
live in Asia, Africa, the Middle East and Latin America. This, published
in The Financial Access Initiative’s (FAI) “Half the World is Unbanked,”
has determined countries can improve levels of financial inclusion by
creating effective policy and regulatory environments by enabling
actions of individual financial service providers. More than 800 million
of those using financial services live on less than $5 per day, proving
these services can be provided to very low-income communities, but there
are still nearly 2 billion to reach.

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Jack Henry Acquires CU Specialist Pemco Tech

Jack Henry & Associates has acquired WA-based credit union payment technology provider Pemco Technologies for an undisclosed amount. Pemco products and services include credit signature processing; debit signature processing; PIN-based processing; ATM services; cardholder awards programs; fraud management, detection, and prevention solutions; personalized cards; and prepaid card programs. These payment-related products and services are currently supporting approximately 235 financial institution customers. PEMCO Corporation elected to divest this business line in order to strategically focus on its primary insurance business which encompasses life, home, auto, and boat insurance offerings. Jack Henry & Associates is a provider of
computer systems and ATM/debit card/ACH transaction processing services
primarily for financial services organizations.

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SUPERMERCADOS ATMS

Cardtronics has signed five year agreements to place ATMs in nine
Supermercados Grande supermarkets across Puerto Rico. As one of the
largest supermarket chains based in Puerto Rico, Supermercados Grande
serves a substantial group of customers. The agreements ensure customers
have ready access to cash when and where they need it and deployment is
planned for 4Q/09. This comes roughly 90 days after Cardtronics first
embarked on the Puerto Rican ATM market with To Go Stores, having
installed ATMs in 11 of the 26 store locations across the Island
commonwealth. Cardtronics expects to place ATMs in the remaining 15 To
Go Stores before 2011. TX-based Cardtronics non-bank ATM operator has
over 33,000 ATMs in the United States, the United Kingdom, and
Mexico (CardFlash International 8/28/2009)

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New Report Calls for Paperless Banking

A new report from Aite Group focuses on the advantages of a paperless banking channel.
U.S. banks have been heavily focused on removing paper checks from
branches over the past few years. While check imaging is a step in the
right direction, paper processes are still being used throughout the
branch channel. The benefits of going paperless include
mitigating fraud, assisting with compliance, preparing banks for the
audit process, achieving cost reductions, cutting down or eliminating
misplaced and lost data and files, and increased internal efficiencies.
Ample opportunities exist for banks seeking to realize the benefits of
electronic processes, such as deploying additional processes like
automated workflow, electronic document audit trails, and electronic
tracking of internal processes.

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VISA A/P Q2

Visa reported Asia Pacific was its only region that posted positive growth in gross dollar volume for the second quarter, on both a nominal and constant U.S. dollar basis. The U.S. and Canada regions both showed overall negative growth driven by a severe drop-off in credit card volume. (Visa, Inc. does not include Visa Europe, a separate entity which will report it results in late November.) In the A/P region GDV was up 10.3% on a constant dollar basis and up 3.7% on a nominal dollar basis. Total GDV was $259 billion, compared to $229 billion for the second quarter and $250 billion for 2Q/08. A/P purchase dollar volume was 2% and cash dollar volume rose 7% for the second quarter. Visa has 512 million payment cards in circulation in the region and 424 million accounts as of September 30, 2009. Visa reports performance data on a one quarter delay. For complete details on Visa’s latest performance visit CardData (www.carddata.com).

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ACCEL/Exchange Offers Online PIN Debit

Fiserv financial services technology solutions announced its
“ACCEL/Exchange Network” will begin processing and offering secure
Internet PIN debit transactions in November 2009. The result of a
partnership with Acculynk PIN debit software-only service,
“ACCEL/Exchange” payments network delivers anytime, anywhere funds and
payments access to its 2,500-plus members and their cardholders. Having
recently completed a joint pilot program with Acculynk and its PaySecure
product, which began in March 2009 to conclude over 50% of consumers
will use Internet PIN debit when presented as a payment option, the new
solution is validated for accurate processing of secure Internet PIN
debit transaction activity.

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Triton Dynamic Language Coming in Jan

MS-based ATM provider Triton Systems will be releasing Triton Dynamic
Language in January 2010. “TDL” will supersede the “Triton Standard Communications Protocol and
Message Format” that is used by the majority of ATM manufacturers and processors to operate
off-premise ATMs. TDL is more flexible, gives processors more control
over the ATM and can be used to easily create custom applications.
TDL is a superset of Triton Standard with additional functionality. TDL is
backwards compatible with Triton Standard version 5.41 so that
processors that currently support Triton Standard will be able to support TDL-equipped
ATMs. However, to support the flexible new interface and many new features
included in TDL, processors will need to make extensions to their device handlers.
Similarly, Triton ATMs in the field can continue to run their existing software or
they can be updated with new software to take advantage of the additional features
provided by the organization.

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Low & Moderate-Income Families Not Recovering

While the recent rise in the gross domestic product indicates that
economic recovery may be on the horizon, that recovery may be slow in
coming as low- to moderate-income consumers are still in recession mode,
closely watching what they spend on goods and services and spending more
on groceries versus on dining out. Year-over-year spending trends saw
the largest gains in the Groceries (+8.39%), Personal and Professional
Services (+5.81%) and Travel/Entertainment (+3.01%) categories,
demonstrating people are eating at home more often instead of dining
out, further reinforced with 3.03% decrease in the dining out category.
The largest declines were seen in Auto/Gas/Transportation (-5.32%) and
Food. This, according to the NetSpend “National Spending & Savings
Index,” also indicates an average balance of NetSpend savings accounts
rose from an average of $25.71 in September 2008 to $27.30 in September
to demonstrate people are still worried about their finances and are
looking for ways to save more and earn interest on their money.

SEPT SPEND
Auto/Transportation: -5.32%
Finance: -2.01%
Food: -3.03%
Utilities -0.35%
Home: -0.85%
Travel: +3.01%
Professional Services:+5.81%
Groceries +8.39%
Source: NetSpend

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Billing Revolution and PayPal Partner

Mobile payment provider Billing Revolution has become a “Mobile Commerce Partner” with
PayPal. Under the agreement, Billing Revolution will become a reseller of the PayPal Payflow Pro gateway service, while
PayPal may promote the Billing Revolution service to their merchant base.This partnership enables PayPal merchants to immediately begin conducting mobile credit card
transactions using their existing PayPal Payflow Pro gateway accounts.
PayPal has roughly 45,000 merchants that process transactions via their
Payflow gateway, and these merchants now have the ability to sell digital and
physical goods to any consumer on a mobile phone.

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CARD Act Pushes Card Mail Down 7% from 2Q/09

The “CARD Act” regulations, which partially went in effect during the third quarter, has put downward pressure on the volume of direct mail credit card offers. In the third quarter the number of solicitations dropped 70% year-over-year and 7% sequentially. According Mintel Comperemedia the estimated number of credit card solicitations for the third quarter was 391 million, compared to 419 million for the second quarter and 1337 million for 3Q/08. The research group says of the mailings made in the third quarter most offered variable interest rates and shortened introductory rate periods. In the third quarter, 12.53% was the average rate promoted, up more than a full percentage point from 1Q/09. During the quarter, only 6% of offers disclosed a fixed rate, down from 27% one-year ago. Nearly 16% of offers disclosed a balance transfer fee of 4% or 5%, rates that were almost unseen in direct mail one year ago. For offers with an introductory purchase APR, the period for use is shrinking. In 3Q/08, half of direct mail offers gave new cardholders 13 months or more to use the introductory APR. In 3Q/09, just 5% did,
while 21% disclosed introductory periods of less than six months.

CREDIT CARD SOLICITATIONS
3Q/07: 1.856 billion
4Q/07: 1.780 billion
1Q/08: 1.658 billion
2Q/08: 1.534 billion
3Q/08: 1.337 billion
4Q/08: 0.891 billion
1Q/09: 0.458 billion
2Q/09: 0.419 billion
3Q/09: 0.391 billion
Source: Mintel Comperemedia

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