Retail Store Sales Decline in June

According to government data, sales at U.S. retailers rose in June by 0.6%, driven by car dealer incentives and higher gasoline prices.
However, NRF data (which exclude automobiles, gas stations, and restaurants) shows retail sales posted another contraction in June with a 3.8% unadjusted decline over last year. However, sporting goods, hobby, book and music stores sales as well as electronics and appliance stores posted a 0.9% increase in June sales. According to the National Retail Federation, health and personal care stores sales decreased 0.3% adjusted from last month but increased a solid 3.7% unadjusted year-over-year. Clothing and clothing accessories stores sales were flat adjusted month-to-month and decreased 6.2% unadjusted year-over-year.
The U.S. Commerce Department reported today that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 0.6% seasonally adjusted from the previous month and decreased 7.8% unadjusted year-over-year.

UNADJUSTED RETAIL SALES
Jan 09: -2.1%
Feb 09: +1.4%
Mar 09: -3.7%
Apr 09: -1.7%
May 09: -4.7%
Jun 09: -3.8%
Source: National Retail Federation

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Hypercom Artema Modular in German Pilot

IBM Germany has selected Hypercom’s “Artema Modular” as part of its self checkout system in five test sales outlets in Bavaria. The test is for one of Germany’s top retailers with more than 10,000 retail outlets. The first phase of deployment comprises of 20 self checkout systems, after which the IBM/”Artema Modular” solution will be rolled out to several larger stores in Southern Bavaria. “Artema Modular” unattended card payment solution was first introduced at the end of 2005 and can now be found in self-service machines across Europe, the Middle East, Asia Pacific and North America.

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Urban Trust Success Visa is Introduced

FL-based Urban Trust Bank and Visa have signed a multi-year agreement to offer the Urban Trust Success prepaid
debit card. The Urban Trust Success prepaid debit card provides flexibility,
security and a low cost alternative for consumers who now rely on cash or those who face
challenges with obtaining traditional bank or credit products. Additionally, Urban
Trust Bank will offer an optional “Elastic” line of credit to this product offering.
“Elastic”, offered through “ThinkCash” allows customers to use small
lines of credit for emergency cash or to increase their buying power. Cardholders will be able to add funds to their “Urban Trust
Successcards” through Visa ReadyLink prepaid load network at nearly
50,000 participating merchant locations nationwide. Urban Trust Bank is
successfully executing an innovative business model that provides
value-oriented, common-sense banking and mortgage services.

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OPENCARD & CARDSWITCH

Bogata-based OpenCard and London-based CardSwitch Technology have teamed to fight payment card fraud. The CardSwitch technology enables cardholders to put an electronic lock and key on their card accounts, making it futile for hackers and fraudsters to skim cards. When a cardholder decides that his card will not be used for any ATM transaction abroad, he can lock his card account, making it impossible for fraudulent out of country ATM transactions to occur. The same control can be applied to card-not-present transactions, out of country card payments and local ATM transactions. OpenCard’s solutions control 58% of the total active cards in Columbia. The Company has customers in Colombia, Costa Rica, Puerto Rico, Venezuela, Panama and the U.S.

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POSTFINANCE CARDS

Swiss Post awarded its international RFP for manufacturing, developing
chip technology, card personalization, the lettershop process and
sending PIN numbers to customers of PostFinance EMV debit cards to Trub.
As the Country’s leading EMV credit card manufacturer, Trub demonstrates
Swiss technology prevails in a globalized, competitive market and, with
this RFP, is on track to be the number one debit card vendor. The Trub
Group was founded in 1859, providing bank, customer, access, personal
ID, driver’s licenses, and passport data cards for UBS, Cornèr Bank, the
Switzerland cantonal banks, Landesbank Baden-Wurttemberg, Deutscher
Sparkassenverlag and numerous banks in the United Arab Emirates, earned
consolidated revenue of CHF 135 million 2008 and had approximately 500
employees.

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moneyStrands Expands to Smaller Banks/CU

CA-based online personal finance service moneyStrands has launched a
manual upload to enable users to import financial data through .QIF,
.QFX, or .CSV data formats.
The new functionality will enable moneyStrands to support consumers who
bank
with smaller community banks, credit unions and other financial services
providers not already supported through its network of nearly 7,000
financial institutions.Ten new global currencies, in addition to the
U.S. dollar, will also be
supported with the new manual capability including the Mexican Peso,
British Pound, European Euro, Chinese Yuan, Indian Rupee, Australian
Dollar, Canadian Dollar, Japanese Yen and Swiss Frank. This enables
users from across the globe to also take advantage of moneyStrands’
comprehensive set of money management features. Manual uploading also
appeals to many consumers who prefer not to store
account access information required to use the automated aggregation
features.

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U.S. Bank Renews PULSE PIN Debit Contract

PULSE has extended its relationship with U.S. Bank in a long-term
agreement to provide customers with PIN debit point-of-sale (POS) and
ATM services. PULSE ATM/debit network serves over 4,500 banks, credit
unions and savings institutions across the country, is owned by Discover
Financial Services and links cardholders with more than 289,000 ATM/POS
terminals at retail locations nationwide. U.S. Bancorp has $264 billion
in assets, operates 2,847 banking offices and 5,183 ATMs in 24 states
and provides a comprehensive banking, brokerage, insurance, investment,
mortgage, trust and payment services products to consumers, businesses
and institutions.

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AKBANK & OTI

Akbank of Turkey is deploying the On Track Innovations “Saturn
6000” reader for its MasterCard “PayPass” contactless program, initially
for 3,500 terminals at selected locations. Holders of the bank’s
“AxessExi26” and “Axess cards” will enjoy the convenience of using
contactless technology for all purchases under 35 Turkish Lira through
the “Saturn 6000,” which is available in multiple colors with a large
LCD display, allows for configurable images, and programmable lines of
characters in multiple languages. The OTI reader can be placed on a
countertop, be wall-mounted or lie flat and supports major financial
contactless programs including ISO 14443 Payment Implementation (EMVCo),
MasterCard PayPass Mag Stripe and M/Chip (EMV), Visa “PayWave MSD”, Visa
“qVSDC (EMV)”, American Express “ExpressPay”, Discover “Zip”, MIFARE,
NFC and other proprietary systems. OTI was established in 1990 to
provide contactless microprocessor-based smart card solutions for
homeland security, payments, petroleum payments and other applications
while Akbank has over 860 branches and 15,000 employees throughout the
Country.

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RDM RDC

RDM software and hardware products for electronic payment processing has
announced ACH Payment Solutions (APS) is offering its Remote Deposit
Capture (RDC) capabilities, reselling the RDM Image and Transaction
Management System (ITMS) and “Simply Deposit” hardware through its own
national distribution channel. The RDM RDC products are designed to save
end users the trouble of physically depositing checks at the bank and
provide faster funds availability. ITMS processing solution targets
environments with many remote or distributed capture locations with
large central processing centers while “Simply Deposit” is designed for
ease of use and minimal end user training requirements. ACH Payment
Solutions (APS) are designed for smaller businesses and regional
merchants with 100 locations or more
while the RDM Corporation is headquartered in Waterloo, Ontario and
specializes in electronic payment processing.

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ARM M&A Deal Activity Plummets in 2009

Mergers and acquisition activity in the debt collection and accounts receivable management industry collapsed in the first half of this year. In the prior three years overall ARM M&A deal volume during the first six months of each year averaged more than $1 billion. For 2009, total deal value nose-dived to slightly more than $100 million. According to MD-based Kaulkin Ginsberg, in the first half of 2009, there were 21 announced transactions with a total deal value of $103 million, compared with 15 deals valued at $1.43 billion at this point last year.
The major discrepancy in deal value is due to three large transactions that closed in the first half of 2008: NCO and Outsourcing Solutions for $325 million; Investor AB purchased 50% of Lindorff Group for $558 million; and Exponent Private Equity acquired Lowell Holdings for $394 million. So far, deal activity for 2009 has been almost completely driven by larger ARM companies acquiring smaller ones, whereas 2008 deal activity in the first half of the year also included first-time strategic and financial buyers making initial platform acquisitions. Of the 21 transactions completed in 2009, only two involved a financial or strategic buyer – the rest were industry buyers, defined as larger ARM companies, former owners, or current/former executives.

ARM M&A DEAL ACTIVITY
(first six months of each year)
2006: $790 million
2007: $910 million
2008: $1430 million
2009: $103 million
Source: Kaulkin Ginsberg

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Managed Charge-Offs May Near 11% by 2010

The momentum in job losses for June could push the unemployment rate to nearly 11% by year-end and drive average credit card charge-offs well above 10%. Losses among credit card-backed securities passed the 10% milestone in May and could realistically near 12% by 2010. According to CardData (www.carddata.com), average charge-offs for the first quarter were 8.7% with an unemployment rate of 9.0%. With a 9.7% unemployment rate for June, second quarter managed charge-offs are expected to hover around 9.5%. If unemployment tops 10% by September then credit card charge-offs will likely cross the unprecedented 10% line too. Among the nation’s top issuers with at least $50 billion in outstandings, the average charge-off rate for 1Q/09 was 8.12%, compared to 6.51% in the fourth quarter and 4.84% for 1Q/08. For credit card backed securities in May, S&P reports a 10.00% charge-off ratio while Moody’s reports a 10.62% rate and Fitch a 10.44% ratio. (CF Library 6/10/09; 7/10/09)

Unemployment Charge-Offs
Mar/08: 5.2% 4.6%
Jun/08: 5.7% 5.3%
Sep/08: 6.0% 5.5%
Dec/08: 7.1% 6.0%
Mar/09: 9.0% 8.7%
Jun/09: 9.7% 9.5%
Sep/09: 10.4% 10.1%
Dec/09: 10.9% 10.6%
Source: CardData (www.carddata.com)

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PAYMENT METHODS

A new survey has found that cash remains king in Germany with a 57.9% share of all purchases, compared to 25.5% for giro cards and 3.6% for credit cards. In terms of the number of transactions, cash
accounts for a share of 82.5%, with giro cards and credit cards
accounting for 11.9% and 1.4% respectively. The research by Bundesbank in Frankfurt am Main also found that, on average, consumers carried cash to the value of 118 euros with them and 6.70 euros of which were coins. Furthermore, 91% of those surveyed own at least one giro card and 27% possess a credit card. Bundesbank says that use for online payments and when traveling abroad, or discount and bonus schemes are less relevant for the users, however. With regard to the criterion of protection against loss, the giro card (previously “EC cash card”) holds the leading position, while credit cards are the most popular means of payment online.

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