VISA 2Q/09

Visa reported that second calendar quarter adjusted net income, excluding its recent sale of VisaNet do Brasil, increased 11% to $507 million and net operating revenue increased 2% to $1.6 billion, compared to the same quarter in 2008. Sequentially, net operating revenue was flat and adjusted net income was down 8%. However, global transaction growth for the quarter ended June 30th picked up to an annual rate of 8%, compared to 6% in the prior quarter and 13% in the year ago quarter. For the second calendar quarter there were 10.3 billion transactions processed via VisaNet. Visa released first calendar quarter performance data which showed that payments volume growth, on a nominal basis, was a negative 5% over the prior year at $617 billion; total volume, on a nominal basis and inclusive of cash volume, was $969 billion, a 7% decline over the prior year; and the total cards carrying the Visa brands rose 6% worldwide over the prior year to over 1.7 billion. Visa predicts annual net revenue growth of high single digits in 2009 and at the lower end of the 11% to 15% range in 2010. For complete details on Visa’s latest performance visit CardData (www.carddata.com).

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JUNE DEBT

Growth in credit card outstandings remained stagnant in June, stuck around GBP 53-54 billion for 2009. However, year-on-year growth was down 2% in June, compared to 5% in May. According to the The Bank of England, net credit card was GBP 54.5 billion in June. But, the amount outstanding of credit card lending increased by GBP 1.5 billion following the de-securitisation of credit card portfolios to several UK
banks from associated non-resident companies. Overall, the
increase in total net lending to individuals in June (GBP 400 million)
was lower than the May increase (GBP 500 million) and below the
previous six-month average. The twelve-month growth rate continued to
fall, by 0.2 percentage points to 1.2% and the three-month annualized
growth rate decreased by 0.1 percentage points to 0.5%. Total consumer
credit increased by a net GBP 100 million, in line with the previous
six-month average. The annual growth rate of consumer credit continued
to fall, to 1.9%; but the three-month annualized growth rate increased
by 0.1 percentage points to 0.6%.

NOTE: Chart does not include about GBP10 billion from specialist
lenders, retailers, and insurance companies. SOURCE: Bank of England

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Americans Exhibit Cautious Optimism in 09

Consumers’ current money mindset is “cautious optimism,” and more are
effectively managing their spending with 75% cutting back, while financial confidence has jumped 10% to 56% since 1Q/09. The same research shows 59% of consumers are shopping more at discount stores; 31% are shopping more at second-hand stores; financial stress dropped 13% since 1Q/09 to 48%; 62% have been adhering to a budget; and those expecting their financial situation to improve has jumped 8% to 36%. These findings are according to the latest Western Union “Payment Services Money Mindset Index,” for which Javelin Research surveyed more than 3,000 consumers on their current behaviors and emotional mindset regarding debt and personal finance issues. Among those cutting back, 79% said dining out was the first to go; 67% stopped buying new clothing; 56% are prepared to create a budget with their knowledge of personal finances; and 41% are canceling bills or services deemed non-essential. Regarding their credit scores, 63% believe they are accurate; 56% believe they are biased/unfair; 23% haven’t seen their credit score; 49% of those between the ages of 18-24 have never seen their score and 29% do not believe they are in control of their credit scores.

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US Dataworks Names a New CFO

Payment processing solution provider US Dataworks, has hired Randall J. Frapart,
previously with Plumgood Foods, as its CFO. Frapart served
as Chief Financial and Chief Operating Officer of Plumgood Food, LLC, an
online grocer. From January 2006 to December 2007 he served as
Executive Vice President and Chief
Financial Officer of ForeFront Holdings Inc, a publicly traded global golf
accessory company. Previously, Frapart served as Senior Vice
President and Chief Financial Officer of HyperFeed Technologies, Inc., a
publicly traded provider of software, which provides ticker plant and
smart order
routing technologies and managed services to exchanges, hedge funds and
other
financial institutions. Frapart began his career
at KPMG in Chicago, where he held various positions in the Information,
Communication and Entertainment Assurance practice for over 12 years.
He received his B.S. in Accounting from Washington University in St. Louis,
has his MBA in Management from the University of Texas and is a
certified public
accountant.

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Portfolio Recovery Associates Up 12% in Q2

VA-based debt collector Portfolio Recovery Associates reported net income of $11.7 million, a 3% gain over 2Q/08. Total revenue in the second quarter increased 12% to $71.1 million. The Company purchased $3.38 billion of face-value debt during the quarter for $84.7 million. This debt was acquired in 119 portfolios from 15 different sellers.
Cash collections rose 6% to $90.5 million in the second quarter. Call center and other collections increased 7%, external legal collections decreased 26%, internal legal collections grew 119%, and purchased bankruptcy collections gained 43% when compared with the year-earlier period. PRAA notes that productivity, as measured by cash collections per hour paid, the Company’s key measure of collector performance, finished at $145.20 for the first six months of 2009 vs. $131.29 for all of 2008. For complete details on Portfolio Recovery Associates’ second quarter performance visit CardData (www.carddata.com).

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VISA PRESIDENT

Visa announced that its President, Hans Morris, will be stepping down and a streamlined executive management team has been formed. Morris joined Visa in September 2007 and played a key role in planning the 2008 IPO. In the new structure, Visa’s global sales, client service, marketing, product development and innovation functions will be consolidated under COO John Partridge. CEO/Chairman Joe Saunders says Morris will remain with the company until the end of the year in a different capacity, helping to ensure a seamless transition to the new structure. Prior to Visa, Morris was CFO of Citi Markets & Banking, a post he assumed in November 2002. Citi Markets & Banking encompasses the global capital markets, investment banking, corporate banking and corporate transaction services businesses. His Citi responsibilities included managing a multibillion-dollar annual budget and a staff of 14,000 in more than 100 countries. During his career with Citi he held numerous leadership positions, including Vice Chairman, Chief Operating Officer and Head of Client Management at the Investment Banking division of Salomon Smith Barney. (CF Library 7/26/07)

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Brinkman Financial Launches NextPay

Online payment services Brinkman Financial has launched NextPay merchant
card processing and tapped Lynn Varnell, previously with Chase
Paymentech as CEO.
NextPay is a Level One Payment Card Industry (PCI) compliant processor.
Varnell will head NextPay as chief operating officer. A 13-year veteran
of the banking, financial and ecommerce services and merchant credit
card processing industries, Varnell most recently served Chase
Paymentech as director of strategic partnerships. From its NextPay
Gateway and Virtual Terminal to its recurring and
online billing applications, NextPay gives all merchants confidence that
its one-provider platform delivers the stringent security they need.
NextPay also launched a suite of processing tools designed to improve a
merchant’s business performance, revenue recognition and information
security.

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JUN CHARGE-OFFS

Credit card charge-offs exceeded the 10% mark in June, a new record. Compared to one-year ago, charge-offs are up 46.5%. Moody’s Investors Service says that assuming charge-offs increase in line with
unemployment, an increase of 25% by the end of next year from today’s
10.12% level should be expected, resulting in charge-offs exceeding 12.5% by mid-year 2010. Moody’s also notes that 30+ day delinquencies have largely stabilized over the past quarter for numerous trusts. Other key credit card indices such as the payment rate and yields remain
broadly stable. Credit card excess spreads remain positive at present but are under pressure due to increasing defaults.

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TSYS and CMC Team for TSYS FlexCollect

Payment solution outsourcer TSYS has teamed with Collections Marketing
Center to offer “TSYS FLEXCollect” integrated collections service.
TSYS FlexCollect is available directly to
existing TSYS customers. By intelligently optimizing collections
channels based on demonstrated individual account holder behavior and
preferences, TSYS FlexCollect can maximize agent productivity and
improve the customer experience while shortening collections cycles and
mitigating charge-off risks. CMC FlexCollect, the industry’s first
completely virtual collections
service, complements the TSYS platform with its ease of use and
adaptability geared towards a wide variety of account holders. The
enterprise solutions span credit cards, mortgage and home equity loans,
student loans, auto/RV/marine loans, healthcare, phone and utility bill
payments.

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GE Capital Assists AccessOne MedCard

GE Capital, Healthcare Financial
Services was an administrative agent on a $25 million
revolving line of credit for NC-based AccessOne MedCard. AccessOne provides alternative
programs that allow hospitals to more efficiently serve their self-pay
patient consumers. This is accomplished by creating a private label, low
interest medical credit card for individual hospital clients, the
“AccessOne MedCard.” The program also includes a 12-month interest free
and hardship option and is offered to all patients without
credit scoring or credit reporting. The loan will be
used to refinance existing debt and to support growth initiatives. GE
Capital Markets served as sole lead arranger and sole bookrunner.

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Data Show a Second Quarter Spending Uptick

A new survey finds that total spend across eight key categories
increased an average of 3% per person between Q1 and Q2. Mint.com
analyzed the spending by its million-plus user base and says the uptick
is the first in eighteen months. The study found that “Shopping” and
“Travel” spend are both up 17% while “Entertainment” is up 6%. Spending
on “Food and Dining,” “Travel,”; and “Gifts and Donations” are back
within 10% of 2Q/08 levels. However, “Home”; “Entertainment”;
“Shopping”; and “Bills and Utilities” remain at 10-20% of 2Q/08 levels.
Spending on “Gas and Fuel” is down nearly 40% versus the year ago
quarter. For the first year of the “Index,” Mint.com users consistently
cut spending, reducing quarterly spending by 15% ($2,000) in 1Q/09 from
2Q/08. Mint tracks over $175 billion in transactions and $47 billion in
assets.

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Maverick Powers Bluegreen Visa Card

DE-based payment solution provider Maverick Network Solutions has
integrated a Visa Reward card program for resort management company
Bluegreen Corporation.
Using a customized software system provided by Maverick Network
Solutions, Bluegreen Corporation has successfully integrated a Visa
Reward Card in 16 of its resorts, to use as a premium for prospective
timeshare purchasers. By tailoring its technical platform to integrate
with the system used by
Bluegreen to register people for resort tours, Maverick was able to meet
Bluegreen’s need to consolidate its incentive program, while reducing
costs and increasing efficiencies.

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