North American Smart Payment Card Shipments Double

Shipments of payment smart cards to North America doubled last year. Also, open-platform is gaining ground and now represents 15% of
all global shipments, a 72% increase compared to 2007. The Smart Payment Association’s “2008 Global Payment Card Market Survey” reports that more than 580 million payment smart cards were delivered by its members last year, a 39% growth rate over the prior year driven by EMV deployments. The SPA members are Gemalto, Giesecke & Devrient, Oberthur Technologies and Sagem Orga. Both dual interface and pure contactless cards confirm SPA’s expectations, outperforming the market with year-on-year growth rates of 140% and 66% respectively. DDA technology is continuing to gain importance, with 69% growth year-on-year, representing 25% of SPA members’ shipments in 2008. Migration to DDA has started worldwide and both Visa and MasterCard mandate that all cards should support DDA by 2011 in Europe.

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Only 4% of Americans Say Card Issuers are Honest

A new survey reveals that 58% of Americans would not believe a statement by someone who works for a top financial institution and insurance company. Only 25% of U.S. consumers say banks are honest and trustworthy while 14% say the same of accounting firms and 13% say both life insurance companies and financial planning firms are honest and trustworthy. According to the Harris Poll conducted in mid-May, only 12% say health insurance companies are honest and trustworthy, while 7% say the same about investment firms, mortgage companies (6%), Wall Street (4%) and credit card companies (4%). The poll discovered that 64% of “Gen Xers” (those aged 33-44) and 61% of “Baby Boomers” (those aged 45-63) say they do not consider financial services firms to be honest and trustworthy compared to 52% of “Echo Boomers” (those aged 18-32) and 53% of “Matures” (those aged 64 and older). Additionally, 30% of “Echo Boomers” say banks are honest and trustworthy compared to just 18% of “Gen Xers.”

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NCB & MONEYGRAM

Tapping the more than 6 million Saudi Arabian expatriates as the largest kingdom-wide money transfer network, MoneyGram International
has partnered with National Commercial Bank (NCB) to offer its
international money transfer service through the Bank’s 1,400 ATM
locations. Offering consumers convenience and access to money transfer
services through its network, MoneyGram transfers will be sent using
NCB’s “Quickpay” platform and initially only providing a sending option.
Thanks to the 27% foreign born Saudi Arabian population, remittances
grew to more than $17 billion in 2006. MoneyGram International has been
operating in Saudi Arabia since 1998 and is comprised of 180,000 agent
locations in 190 countries while NCB was established as Saudi Arabia’s
first in 1953.

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Major Calling Card Settles a FTC Lawsuit

A major prepaid calling card provider has agreed to pay $1.3 million to settle with the FTC for cards that did not deliver on the minutes advertised. The settlement resolves a lawsuit the FTC filed against Clifton Telecard Alliance One in April, 2008 which charged that the company misrepresented the number of calling minutes consumers would get with its calling cards, charged hidden fees, and failed to disclose that consumers’ cards will be charged whether or not the calls are connected. As part of the settlement, the court entered a judgment of $24.4 million against CTA, suspending all but $1.3 million. CTA marketed cards under a variety of brand names, including “African Dream” and “CTA Mexico,” primarily to immigrants who rely on the cards to call friends and family in other countries. The cards were sold through a large network of retailers, gas stations, and other outlets. The cards were offered in denominations ranging from $2 to $20.

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SUMMER SPECTACULAR

In response to the effect the economic downturn has had on consumers,
Visa is launching its “Hong Kong Summer Spectacular” from June 29 to
August 31, 2009, in conjunction with its “Go Discover Hong Kong” Lucky
Draw. Where the U.S. dollar is very strong, the summer sale season is
under way, making for a great opportunity for US consumers to save on
events, activities, retail shopping and dining. Additionally, to help
shoppers plan their daily shopping sprees, the “Hong Kong Summer
Spectacular” is making available its “Hip Hot Guide” magazine featuring
shops, restaurants and hotels with the best deals and is listing on its
website hotel discounts available all over Hong Kong for
three-day/two-night packages of US$65 to US$430. Meanwhile, the Visa “Go
Discover Hong Kong” Lucky Draw offers participants a chance to win
prizes, who are entitled to one entry for every HK$300 spent (under
US$39). See www.visa.com.hk for registration and details.

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Heartland Completes Phase One of its E3 AES Pilot

NJ-based Heartland Payment Systems has completed the first phase of its “E3” end-to-end encryption pilot project, having transmitted live AES (“Advanced Encryption Standard”)-encrypted card transactions from a merchant to its own processing platform. AES is the highest level of encryption and is currently on track to replace DES (Data Encryption Standard) and Triple DES as the desired standard for sensitive data. Composed of five payment zones for transaction encryption of card reads through the Heartland network, four of which were confirmed with the completion of the first phase, “E3” focuses on protecting data in transit. The five payment zones include; Zone 1- from data entry/card read at the merchant to the authorization network of the processor; Zone 2-from the entry into the authorization network of the processor and through all points in which data is in motion within the network(s) of the processor and its sub-contractors; Zone 3- while the data resides in a central processing unit (CPU) or a host security module (HSM); Zone 4-in a direct access storage device (DASD) or archival storage; and Zone 5- from the processor to the authorization and settlement centers of the card brand or issuer.

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GLOBAL CARDS

Shipments of payment smart cards to North America doubled last year. Also, open-platform is gaining ground and now represents 15% of
all global shipments, a 72% increase compared to 2007. The Smart Payment Association’s “2008 Global Payment Card Market Survey” reports that more than 580 million payment smart cards were delivered by its members last year a 39% growth rate over the prior year driven by EMV deployments. The SPA members are Gemalto, Giesecke & Devrient, Oberthur Technologies and Sagem Orga. Both dual interface and pure contactless cards confirm SPA’s expectations, outperforming the market with year-on-year growth rates of 140% and 66% respectively. DDA technology is continuing to gain importance, with 69% growth year-on-year, representing 25% of SPA members’ shipments in 2008. Migration to DDA has started worldwide, and both Visa and MasterCard mandate that all cards should support DDA by 2011 in Europe.

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PLS Prepaid Card Offers 5% Interest Rate

IL-based PLS Financial Services has introduced the “Gold Prepaid Card”
that offers a promo interest rate earning of 5%. “The PLS Gold Visa
Prepaid Card”, issued by Meta Bank, is unique because of the savings
account option. Our customers can earn a promotional 5.00% APY on their
savings–ten
times the national average–with no minimum deposit. The card is
offered through TX-based NetSpend and is
available at more than 120 PLS Check Cashers locations in the U.S.
PLS and NetSpend have also simplified the process of loading value onto
the PLS Gold Prepaid Card. Customers may choose direct deposit of their
paychecks onto their NetSpend card, which are then immediately available
for use. The NetSpend Prepaid Card Network includes leading consumer
brands and companies serving the un-banked and under-banked markets, and
its strategic relationships include card issuers, EFT networks and
payment card associations.

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MTN & GEMALTO

MTN Uganda multinational telecommunications has chosen Gemalto’s
comprehensive solution for the deployment of its nationwide mobile
payment program. Supplying MTN server integration services as a
technological partner, Gemalto is to provide accessibility to its server
to interconnect operators with banks and its SIM cards to execute the
m-payment application. The Gemalto solution provides secure, convenient
and affordable means for MTN Uganda subscribers to carry out
peer-to-peer fund transfer using their mobile phone, affording the
utility of a bank account and Internet access. Service deployment began
March of 2009, having hosted nearly 180,000 m-payment transactions, MTN
Uganda is part of the MTN Group operating in 21 countries in Africa and
the Middle East serving over 100 million subscribers and Gemalto digital
security had 2008 annual revenues of EUR1.68 billion, employing 10,000
through its 75 offices in 40 countries.

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Visa Inks and Invests in Montise Mobile Payments

Visa continues to rack up more partnerships to facilitate the expansion of global mobile payments with today’s announcement of a strategic alliance with Monitise. Under terms of the deal, Visa plans to make a minority equity investment in Monitise, a UK-based mobile payments specialist. Monitise says it can optimize the user experience
for Visa mobile payments and related services as its solution can detect phone make, model, screen size, browser type and multimedia capabilities. Visa says the partnership will produce mobile payments, mobile money transfer, mobile transaction alerts and mobile marketing offers. The two companies indicate they will focus on increasing the speed to market of unique payment and related services including mobile
user enrollment services, application development and channel management. Last week, Visa announced two major m-payment partnerships. The NeuStar alliance will combine Visa’s global payment network with NeuStar’s carrier grade infrastructure. VisaNet Peru and Telefonica announced they will launch the “Pago Móvil con Visa” service (Visa Mobile Pay) to enable cardholders in Peru to pay for products and services over a wireless network. In 2007 Monitise
plc and Metavante partnered to create Monitise
Americas. The mobile service is integrated with the NYCE Payments, which delivers the service to U.S. customers, and is available through mobile phone handsets over a secure network. CF International Library 11/28/07; CF Library 6/23/09)

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TOURIST OUTLOOK

According to Visa’s recently published “Tourist Outlook: Canada” report,
Canadians are still participating in international travel despite the
difficult economic environment, with over 68% planning multiple
international trips over the next 24 months. Additional findings show
the economy has not affected 52% of respondents’ travel habits while 62%
prefer to use a credit card while travelling abroad. In response, Visa
is making it known its payment card acceptance network reaches 130
countries and is protected by the “E-Promise” for shopping online, by
mail, or by phone. The card issuer is also recommending its traveling
cardholders inform financial institution before leaving the country;
memorize their PIN; review cardholder agreements to determine insurance
coverage; to take advantage of travel perks; maintain records; and to
keep contact info on issuing financial institutions handy.

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BluePay Launches a Green EBPP Solution

IL-based BluePay has introduced “View’n Pay” paperless billing
electronic invoicing solution. BluePay’s merchant
processing services gives customers more payment options while reducing
the amount of paper used on a daily basis. With BluePay’s View’n Pay solution, the bill payment and
processing procedure is streamlined and simplified. BluePay offers many
solutions for merchant credit card processing, and can assist clientele
in implementing credit card and ACH payment solutions. They can provide
everything from interactive voice response systems (IVR) for phone
payment options to developing a recurring or one-time billing and
payment solution. BluePay’s EBPP allows merchants to create and store
multiple payment sources and options as well as provides a daily report
to the merchant of all transactions. The merchant never hosts the
customer’s credit card, which reduces the liability for the merchant.

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