BUSINESS MONITOR

Most Canadian small business owners are unprepared to deal with common
disruptions that impact their daily business with 20% having experienced
a “significant” disruption. Of the small businesses having experienced
this disruption, 46% said the impact lasted more than a month; 80%
disclosed preparing is not a priority; 20% said preparing is a top
priority; 49% don’t have fire and flood insurance; while only 7% are
“very prepared”. Promising findings, however, show 57% ave initiated a
Data back-up plan; 34% have Emergency cash reserves; 31% have Back-up
power systems and 20% hold Catastrophic illness insurance. Additionally,
50% of small business owners in Canada are hopeful their business’s
future financial position is poised to get better while 29 % remain
worried their financial position is about to get worse.

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ALTERNET

Alternet Systems representatives are joining a Kenyan Trade Mission
focus on mobile payment opportunities across the East African market in
developing economic regions. Alternet has announced partnerships to
penetrate markets in Asia and Africa through the Greenfield program, in
addition to its current base of sales in Central and South America.
Alternet began participating in the Greenfield program earlier this
year, started by NewMarket Technology, to accelerate the introduction of
new technologies into emerging markets around the world where technology
buying is on the rise, while improving return on investment (ROI)
potential.

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New White Paper Out on Smart Cards & Fraud

A new report from the Smart Card Alliance details the reduction of fraud with contactless card implementation.
Much of the fraud on debit and credit cards in the United States results
from activities like counterfeiting and card skimming. Credit and debit
card fraud is possible because magnetic stripe cards use static data
that can be copied and reproduced on fraudulent cards or used in an
Internet purchase transaction. The Alliance does not see protection of
data or better fraud detection techniques as the solution to the fraud
problem. Rather, the solution is to replace this static data with
dynamic data, because it renders stolen account or transaction
information useless. To achieve this goal, the Smart Card Alliance recommends contactless
chip cards, already implemented throughout the United States. Current
contactless payment devices generate dynamic cryptograms (encrypted
codes), similar to those generated by EMV payment cards, so certain data
on the card and the terminal change with every transaction. The
authentication of the cryptogram assures the issuer that the card
presented is authentic. If data is copied or intercepted at the reader,
the data is already obsolete for future transaction attempts, and cannot
be used successfully to counterfeit cards or replay transactions.
Importantly, the current U.S. payments infrastructure can already handle
the contactless payment dynamic cryptograms. The white paper, “Fraud in the U.S. Payments
Industry: Fraud Mitigation and Prevention Measures in Use and Chip Card
Technology Impact on Fraud,” developed by the Contactless and Mobile
Payments Council, is available on the Smart Card Alliance Web site.

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ENCRYPTION PROJECTS

With 52% of organizations planning encryption projects to comply with
PCI DSS, while 53% of U.S. organizations are planning an encryption
project to comply with HIPAA, data-specific regulations to safeguard
consumer privacy is having an increasingly broad impact. Only 43% of
organizations using database encryption and 41% using tape encryption,
however, are at continued risk. This, according to the “2009 Encryption
and Key Management Benchmark Survey” conducted by Trust Catalyst on
behalf of Thales, also shows 34% have now spent one year or more
planning for key management issues; 49% must be able to recover an
encrypted database in one hour or less; payment processing must be
available in less than one hour for 54% of all surveyed; 8% of
organizations have experienced problems with a lost encryption key over
the last two years; and 39% of organizations have lost data permanently
or disrupted business operations. However, 52% are most concerned with
data security; 47% would not move to the cloud unless data was encrypted
and 43% have no plans to move to cloud computing.

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Fifth Third Bank to Issue Revolution Money

OH_based Fifth Third Bank has joined the Revolution Money network as an
issuing bank. With no interchange fees, RevolutionCard creates substantial cost
savings for merchants – savings they today are passing back to consumers
in the form of loyalty programs and incentives. As the first PIN-based
credit card, RevolutionCard provides cardholders peace-of-mind knowing
that if they lose their card an unauthorized person cannot use it
without their PIN. Additionally, RevolutionCard reduces the chance of
identity theft as the card does not display a cardholder’s name or
signature. These consumer-oriented security features benefit merchants
by helping to reduce chargeback and fraud risk.
The combination of Fifth Third Bank’s card-issuing
capabilities with Revolution Money’s marketing and customer servicing
and communication capabilities will provide a robust platform for
expanded adoption of RevolutionCard.

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Coalition for New Credit Models is Formed

The Coalition for New Credit Models is being launched today.
The Coalition is made up of non-profit, for-profit, and social enterprises using new technologies, products and business models to provide credit and information to millions of consumers and small and midsized businesses. The Coalition is asking Congress to:
Administration:
1. Adopt legislation classifying person-to-person lending as a consumer banking service, not a securities offering.
2. Create a liquidity fund to provide capital for companies making small consumer loans to underbanked individuals.
3. Establish a federal backstop for small and mid-sized businesses to provide access to working capital through electronic marketplaces.
4. Enable the emergence of a robust U.S.-based private company stock market to provide the exit path necessary to attract investment capital back to this country, bolstering domestic small businesses, innovation and job growth.
5. Create a Start Up Liaison at Treasury Department or within banking regulators to guide and fast-track the development of new financial products by start-up companies and organizations seeking to innovate the way consumers and businesses raise and access capital.

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AUG LEI

The Conference Board Leading Economic Index (LEI) for Germany increased
by 1.3% while The Conference Board Coincident Economic Index (CEI)
decreased 0.2% in August. With the 1.3% increase in August, the
Conference Board LEI for the Germany now stands at 90.1 (2004=100)
after having increased 0.9% in July and increased 1.1% in June.
Meanwhile, the CEI decrease for the month was preceded by no change in
either June or July to now stand at 101.6 (2004=100). LEI results for
the month were attributed to positive gains in 5 of the 7 components
increasing, which include stock prices, new orders in investment goods
industries, yield spread, consumer confidence and inventory change
series while negative contribution was seen in residential construction
orders and gross enterprises and properties income.

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TCF Joins the Overdraft Overhaul Bandwagon

MN-based TCF is among the latest banks to revise overdraft fee policies that impact debit card transactions. In the first quarter of next year TCF will introduce “TCF Convenience Checking” that will offer debit cards without annual fees. Rather than charge a per item NSF fee, accounts with a negative account balance of more than $5 will be assessed a single daily fee until the account returns to a positive balance; no fees will be charged for checks or other items that are returned due to insufficient funds; and accounts with balances below a required minimum will be charged a monthly tiered minimum balance fee.
Last month Wells Fargo said it will eliminate overdraft fees for customers when they overdraw their accounts by $5 or less and will charge no more than four overdraft fees per day. Chase also announced it will eliminate overdrafts for debit cards unless the customer opts in to overdraft services; modifying the posting order to recognize debit-card transactions and ATM withdrawals as they occur; eliminating overdraft fees if a customer’s account is $5 or less overdrawn and reducing the maximum number of overdraft fees per day to three from six. (CF Library 9/23/09; 9/24/09)

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NOKIA & TANLA

Tanla Solutions Mobile Payments has signed a five year frame agreement with
Nokia for License Management, mPayments and related professional
services. Already been installed on a hundred million Symbian based
devices, the Tanla “License Manager” integrates application rights
management and payments, enabling in-application billing, try before you
buy, subscription and many other business models on the handset.
Meanwhile, the Tanla “Mobile Payment” service is to enable on Nokia
device transactions, as it currently does in 160 countries through
“Mobile Operator” and “Credit Card billing” by a number of leading
Software Vendors, Application Developers and Content Providers for
secure transactions.

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Bill Me Later Inks eBay and PayPal

eBay and PayPal are now
offering Bill Me Later as a payment option during checkout.
On eBay, Bill Me Later will be available as a payment option for both
Buy It Now and approved auction purchases. Qualified customers can also
use Bill Me Later at tens of thousands of their favorite online
merchants that accept PayPal Express Checkout. When customers select the
PayPal checkout button, Bill Me Later will be available as a funding
choice along with their stored PayPal balance, bank accounts or credit
cards. Customers select Bill Me Later as their funding choice and follow
simple steps to take advantage of the payment flexibility, convenience
and security that Bill Me Later offers. Bill Me Later uses a real-time credit model to make
decisions about credit within seconds, so consumers don’t have to
complete a lengthy application prior to making a purchase. PayPal
customers will be able to access their Bill Me Later statements directly
from their PayPal accounts, with the option to pay their Bill Me Later
balances with PayPal.

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First Data and Yahoo! Small Business Partner

First Data has partnered with Yahoo! Small Business to provide
easy-to-implement eCommerce solutions for small and mid-size merchants
seeking to extend their businesses to the Internet.
First Data will provide merchants with point-of-sale terminals and payment processing
services to complement Yahoo! Merchant Solutions and Web Hosting
subscription-based products, which allow small businesses to set up
their online stores and catalog web sites with simple design tools and
tracking features.

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