Kiosks and Enhanced ATMs Produce a 9% CAGR

ABI’s NextGen Research forecasts global markets for financial kiosks and
enhanced ATMs will grow at a compound annual rate of 9% and will include
more than 186,000 financial kiosks and nearly 2.5 million ATMs by 2013.
The report “Next Generation Financial Kiosks: No Bank, No Card, No
Envelope Required” provides detail on the market and its outlook,
including market drivers and inhibitors; detailed descriptions of
self-service financial services applications and services; an
examination of the regulatory and business challenges within
this market and profiles of leading- and cutting-edge financial kiosk
manufacturers and deployers. NextGen Research is the emerging technology
arm of ABI Research.

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NY’s Community Bank Renews NYCE Contract

NJ-based NYCE Payment Network has renewed its Network participation with
NY-based Community Bank. NYCE Payments Network is a U.S. electronic
payments network and a Metavante company, a provider of banking and
payments technology. Community Bank has $5.3 billion in assets and 148
branches across upstate New York and northeastern Pennsylvania, where it
operates as First Liberty Bank & Trust and contributes 135,000 cards
and 132 ATMs to the NYCE Network.

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V/MC 1Q/09

Transactions processed worldwide on the Visa and MasterCard networks during the first quarter grew at the slowest pace in the history of the payment card industry. Both networks had a year-on-year increase of only 6% in the number of transactions processed globally. The increase in the number of transactions processed has been generally declining since the start of the recession in the fourth quarter of 2007. MasterCard’s annual transaction growth rate was 19.4% in the first quarter of 2007, declining to 15.6% in the first quarter of 2008 and then collapsing to 5.8% in the first quarter of 2009. Visa’s annual transaction growth rate was 12% in the first quarter of 2007, rising to 15% in the first quarter of 2008 and then sliding to 6% in the first quarter of 2009. Visa processed 9.3 billion transactions in 1Q/09 for Visa, Visa Electron, Interlink and PLUS cards. MasterCard processed 5.1 billion transactions in the first quarter for MasterCard, Maestro and Cirrus cards. For complete details on Visa and MasterCard first quarter and prior performance visit CardData (www.carddata.com).

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Private-Label Credit Cards Up 3.5% in 2008

A new report estimates growth in private-label credit cards at 3.3% in
2007, bringing the market to nearly $114 billion in receivables.
However, receivables for private-label credit cards are expected to
decline by 3.5%, or $4 billion, for a total of $109.7 billion in 2008
receivables. Packaged Facts’ new report “Private-Label Credit Cards in
the U.S., 6th Edition,” found that more retailers than ever have signed
on to offer store cards that can also be used elsewhere. Co-branded
cards do not generate the kind of loyalty to a specific retailer that
traditional private-label cards do, and the retailer inevitably loses
some sales to competitors. However, the bundled-in rewards programs
require cardholders to return to the sponsoring retailer to claim their
free merchandise. Packaged Facts concludes that the forecast for private
label is more bleak than sunny, but online shopping, rewards programs,
improved customer service, stimulating usage by under-targeted consumer
groups can all contribute to growth. Issuers willing to take on more
accounts can also expand their businesses by courting smaller retailers
that don’t currently offer store cards.

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United Heritage CU Offers a Customized Visa

United Heritage CU has teamed with Dynamic Card Solutions and OH-based
card customizer DimpleDough to offer the “SmartDesign Visa Debit Card”.
The personalized unembossed cards are made possible with DCS’ patented
CardWizard instant issue software and new FCP 20/20 flat card printers,
integrated with DimpleDough’s card management platform. Located at each
branch, the technology combination instantly issues a personalized
unembossed debit card to United Heritage’s members at the time of their
visit. DCS’ CardWizard software transfers all
personalization data to the FCP 20/20 where the highly personalized card
is securely and immediately printed in brilliant, high-definition color
onto both sides of white blank card stock. United Heritage holds $595.3
million in assets, over 52,000 members and 11 locations.

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Bango Intros a New Mobile Payment Product

Mobile payment provider Bango has launched the “Bango Credit Card
Payment” product. With Bango, anyone can offer credit card payment to
their mobile visitors and refine their product offer, pricing and
consumer experience, with the flexibility to upgrade to operator billing
through Bango when they are ready. Using a network of credit card
processors, Bango collects payments worldwide in multiple currencies and
languages, from all handsets, networks and mobile internet connections.
To add credit card payments to their mobile site, users go online at
www.bango.com/creditcard and set up “Bango Credit Card
Payment” in minutes. It can be upgraded to include operator billing for
suitable services.

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Credit Card ACT Produces a Strong Reaction

The passage of the “Credit Card Act” brought swift reaction from
industry and consumer groups. The American Bankers Association said
the while the legislation is tough, but workable, it also,
unfortunately, contains some provisions that will undermine the
availability of credit. The ABA says it is concerned that the Senate
bill will have a dramatic impact on the ability of consumers, students,
and small businesses to obtain and use credit cards. The Center for
Responsible Lending said H.R. 627 includes provisions that would go a
long way toward restoring fairness and responsibility to the credit card
market. The Senate version provides even stronger protections than a
similar bill the House passed in April and than rules adopted by the
Federal Reserve in December. DNC Chairman Tim Kaine said the legislation
stops unfair practices that for too long have preyed on American credit
card holders while requiring fairness and transparency.

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Target’s Q1 Credit Card Profits Slip by 78%

Target reported that pre-tax profit for its credit card segment declined 78% in the
first quarter to $39 million. Charge-offs soared to 11.9% in the first quarter, compared
to 11.1% in the prior quarter and 6.6% one-year ago. Quarter-end receivables increased
$37 million to $8.5 billion, or 0.4%, from the same period a year ago. Total revenues
declined 0.6% to $472 million for 1Q/09. Delinquency (60 day) held steady at 6.1% in the
first quarter compared to the fourth quarter but is way up from 4.2% one-year ago.
Delinquency (90 day) edged up to 4.4% from 4.3% in 4Q/08 and compared to 2.9% for 1Q/08.
For complete details on Target’s latest performance, visit CardData (www.carddata.com).

TARGET CARD LOAN HISTORICAL
1Q/08: $8.420 billion
2Q/08: $10.22 billion
3Q/08: $8.745 billion
4Q/08: $8.764 billion
1Q/09: $8.457 billion
Source: CardData (www.carddata.com)

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ExaDigm Names a New Head of Sales

Wireless payment provider ExaDigm has hired Trevor Fall, previously with
TNS, as SVP of Sales. Fall will have primary
responsibility for ExaDigm’s field sales initiatives across the
Processor, ISO/MSP and Banking channels throughout North America.
Previously, Fall served as SVP of North
American Sales at TNS with responsibility for sales and account
management for the POS,FusionPoint, and ATMLink products. Prior to TNS,
he served as National Account Sales Manager with EDS Corporation’s
Consumer Network Services Division(now FiServ). ExaDigm’s current SVP
of Sales and Marketing, Scott Holt, is
taking on a new expanded role within the company as SVP of Business
Development.

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U.S. Senate Votes to Shackle Card Issuers

The U.S. Senate yesterday voted 90 to 5 to change the rules under which
the U.S. credit card industry operates. The new terms and conditions
that will likely be imposed on the credit card business will handcuff
issuers forcing them to limit credit lines and lower approval rates
based on risk, and will surely resurrect annual fees and other
maintenance fees that disappeared in the early 1990s. But, the new
restrictions will bring much needed relief to cardholders struggling
with debt in the “Great Recession” and those who have been tortured with
interest rates of 30% or more plus the nuisance of late fees and
over-limit fees. Under H.R. 627 practices such as “universal default,”
fees for delayed posting of payments, early-morning deadlines for
credit-card payments are banned. Card issuers will be prohibited from
charging over-limit fees unless the cardholder agrees to permit
over-limit transactions. Interest rates cannot be raised in the first
year and promotional rates must last at least six billing cycles. Card
issuers will also be required to apply payments over the minimum to the
portion of the balance that carries the higher interest rate. The
legislation also requires consumers under 21 to have a co-signer.
Additionally, statements must be mailed 21 days before the bill is due
and a 45 day notice is required for any fee, rate, or penalty increases.
President Obama has indicated he wants to sign the “Credit Card
Accountability, Responsibility and Disclosure Act” by Memorial Day. To
view the complete bill visit CardFlash Online (www.cardflash.com).

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NCO Group Q1 Revenues Up 10%; Loss Narrows

Debt collector NCO Group reported first quarter revenues of $402.1
million, a 10% increase from the year ago quarter. Also, the net loss
narrowed from $9.2 million for 1Q/08 to $2.1 million for 1Q/09.
The loss for the first quarter of 2008 included a non-cash allowance for
impairment of purchased accounts receivable of $6.2 million and $5.5
million of restructuring and other nonrecurring charges primarily
related to the acquisition of OSI and Systems & Services Technologies.
NCO noted that during the quarter the Accounts Receivable Management
division operated above its revenue target and principally at its
profitability target, driven by a rising delinquency environment. The
Customer Relationship Management division operated above its revenue and
profitability targets primarily as a result of better than expected
volumes from existing clients, as well as increased workforce
efficiencies. The Portfolio Management division operated below revenue
target and slightly above its profitability target, due to less than
expected purchases during the first quarter. For complete details on
NCO’s first quarter performance visit CardData (www.carddata.com).

NCO GROUP REVENUES
1Q/08: $364.6 million
2Q/08: $405.0 million
3Q/08: $381.1 million
4Q/08: $362.5 million
1Q/09: $402.1 million
Source: CardData (www.carddata.com)

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