Advanta ABS Problems Freezes Biz Cards

Advanta shed more light on the deterioration of its business credit card portfolio and its decision to shut down all credit card accounts for future use on June 10th. The Company’s securitization trust will go into early amortization on June 10th based on May’s performance.
Advanta is also going to use up to $1.4 billion to buy the “Class A” senior notes at a discount of 25% to 35% of their face value in a modified “Dutch Auction.” In filings with the SEC, the “Advanta Business Card Master Trust” had a receivables balance of $4.5 billion as of April 30th. The default rate for April was 20.15%, compared to 17.31% for March. The aggregate outstanding balance of the accounts which were delinquent 90 days or greater as of the end of April was 5.97% of total Receivables as compared to 5.96% as of the end of March. The aggregate outstanding balance of the accounts which were delinquent 30 days or greater as of the end of April was 11.54% of total receivables, as compared to 11.92% as of the end of March. Overall, Advanta reported a first quarter net loss of $75.9 million, a 62% sequential increase. Managed charge-offs soared to 16% from 12% in the prior quarter and compared to 6% one-year ago. For complete details on Advanta’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

MANAGED CHARGE-OFFS
1Q/08: 6%
2Q/08: 8%
3Q/08: 10%
4Q/08: 12%
1Q/09: 16%
2Q/09: 20%
Source: CardData (www.carddata.com)

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DEBT AVERSION

A new study reveals that British consumers are less likely to have credit card debt than they were before the credit crunch. By the end of 2008, consumers users were 21% less likely to be burdened by credit card
debt than they were at the beginning of the year. According to Auriemma Consulting Group 63% of British consumers carried balances in the first quarter of 2008 on their credit cards. By the end of
2008, the incidence of revolving debt on credit cards fell to just 50%.
As interest rates increased during 2008, consumers began taking steps to
reduce their debt exposure. In addition to a reduction in the number of
credit card users carrying a balance, the balances also decreased. In Q1
2008, the average balance held by consumers with credit card debt was
GBP 1,651, nearly GBP 200 more than the amount reported in Q4 2008.
During the same period, average interest rates on credit cards increased
10% to an all-time high of 15.7%.

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EnXnet Beefs-Up MultiMedia Gift Cards

Card producer EnXnet has purchased down stream manufacturing equipment
and is set to increase production of its “MultiMedia” giftcards. At
full capacity, the equipment is rated to handle
around 5,000,000 MultiMedia Gift Cards per month. EXNT’s partners will
now have the ability to accept larger orders. This will allow EnXnet’s manufacturing partners to simplify production by
combining the down stream process which includes
printing, mag stripe, encoding the mag stripe, bar coding, serialization
and scratch offs into one location and manufacturing line.

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TNB Lands Communication FCU Processing

TNB Card Services has become the card processing partner for OK-based
Communication Federal Credit Union. Among Communication’s plans are
consolidation of its card products into gold and
platinum offerings only, with risk-based pricing and rewards for
platinum cardholders, increased promotions, and use of TNB’s management
tools, particularly
“VIP CardStation” and “VIP Portfolio Pro”. Communication FCU has 49,000
members and $574 million in total assets.

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NFC Forum Releases New Specifications

The NFC Forum has released two specifications that further the integration, implementation and standards interpretation of NFC technology. The new “NFC Digital Protocol” and the “NFC Logical Link Control Protocol” specifications are available for free download. The “NFC Digital Protocol” defines the common feature set that can be used consistently and without further modification for major NFC applications in areas such as financial services and public transport. More specifically, the specification covers the digital interface and the half-duplex transmission protocol of the NFC-enabled device in its four roles as Initiator, Target, Reader/Writer and Card Emulator. The “NFC Logical Link Control Protocol” defines an OSI layer-2 protocol to support peer-to-peer communication between two NFC-enabled devices. The “LLCP” defines two service types, connectionless and connection-oriented, organized into three link service classes: connectionless service only; connection-oriented service only; and both connectionless and connection-oriented service.

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PLANET PAYMENT & JCB

Multi-currency processor Planet Payment will provide processing
support to global payment brand JCB International, the wholly owned subsidiary of JCB Co.
The agreement expands the relationship between Planet
Payment and JCB International, which involves Planet Payment providing
processing support to several JCB acquirers in Hong Kong. As part of the
solution announced today, Planet Payment will now be providing back-end
settlement and clearing processing for all merchants acquired directly
by JCB in Hong Kong. Planet Payment expects the solution to be live on
or before June 1, 2009. Planet Payment enables processors, acquiring banks and their merchants
to accept process and reconcile credit card transactions in multiple
currencies, allowing cardholders to view prices and settle transactions
in their native currency.

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TSYS Expands TransCash Visa Cards Abroad

TSYS and Tustin, CA-based TransCash have teamed to offer a prepaid international money transfer card. The first cards will be issued in France through Midi France Telecom this summer. The initial target markets include Morocco, Algeria and Tunisia. The Visa-branded card will be distributed in dual card packs through supermarkets, initially with the Auchan supermarket chain. The first card is loaded with value while the second card can be sent to relatives abroad. The TSYS platform will also be used for launching similar products across Europe and beyond. To coincide with the agreement, TSYS has opened a new office in Paris to support the company’s expansion into France. Midi France Telecom provides telephone call charge cards through retailers such as Auchan, Casino, Leclerc, Carrefour, Boulanger and several department Stores. Charles Cohen is the CEO of TransCash.

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Bling Nation Names a New Head of Sales

Payment network Bling Nation has hired Shannon Goldman, previously with
Harland Clarke, as its new head of sales. Goldman
will spearhead market expansion efforts for the company’s Community
Payments Service. Goldman spent more than a decade in multiple roles at
San Antonio-based
Harland Clarke, a provider of a broad range of marketing, integrated
payment and technology solutions. As group vice president of Sales,
Goldman represented the Liberty Sales Organization during its 2005
acquisition by John H. Harland Company. During the integration, Goldman
was named vice president of Sales and worked with a staff of 75 sales
personnel who successfully exceeded client retention, revenue and
profitability goals. She represented her organization again upon
Harland’s subsequent acquisition by Clarke American in 2007. Goldman has
a bachelor of science degree in Marketing from Pennsylvania State
University.

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CO-OP Launches Portfolio Optimization

CA-based CO-OP Financial Services has launched the “Usage Analytics
Plus” portfolio optimization product. “Usage Analytics Plus” further
leverages the breadth of member data by laying cardholder demographics over
transaction data. Credit unions can analyze usage patterns based on
this information combined with specific parameters, such as identifying
heavy PIN users at certain merchants or determining recent cards issued
that haven’t been activated. CO-OP is adding the product to
Revelation’s first
module, developed by Saylent Technologies, a payment intelligence
software provider that created the “Card360” card portfolio optimization
solution used in the CO-OP Revelation platform. Clients using the new
module find it beneficial to have data combined,
particularly for analyzing potential fraud impacts.

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TRANSCASH VISA

U.S.-based TSYS and TransCash have teamed to offer a prepaid international money transfer card. The first cards will be issued in
France through Midi France Telecom this summer. The initial target
markets include Morocco, Algeria and Tunisia. The Visa-branded card will
be distributed in dual card packs through supermarkets, initially with
the Auchan supermarket chain. The first card is loaded with value while
the second card can be sent to relatives abroad. The TSYS platform will
also be used for launching similar products across Europe and beyond. To
coincide with the agreement, TSYS has opened a new office in Paris to
support the company’s expansion into France. Midi France Telecom
provides telephone call charge cards through retailers such as Auchan,
Casino, Leclerc, Carrefour, Boulanger and several department Stores.
Charles Cohen is the CEO of TransCash.

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Q1 VOLUME

The number of purchases with credit cards and debit cards rose 4% in the first quarter, compared to the year ago quarter. Debit cards continue to dominate the U.K. payment system capturing nearly 75% of all plastic card purchases during the first three months of 2009, compared to 73% for 1Q/08. According to the APACS quarterly report, there were 1.9 billion plastic card purchases made in the U.K. totaling GBP 94.2 billion compared to 1.8 billion purchases totaling GBP 91.2 billion in the first quarter of 2008. Gross credit card lending to individuals during the first quarter of 2009 amounted to GBP 30.3 billion and repayments were GBP 29.6 billion. Gross lending was 9% lower and repayments were 8% lower than during 1Q/08 when the figures were GBP 33.2 billion and GBP 32.2 billion, respectively. For both 1Q/08 and 1Q/09 the repayment ratio averaged 97%. Bacs volumes and values grew by 1% and 5% respectively during the first quarter. Over the same period, CHAPS sterling volumes fell by 5% whilst values rose by 1.8%. The UK “Faster Payments Service” was launched in May 2008 and by the end of March had processed 142.9 million payments for a value of GBP 53.5 billion. Cheque and credit clearing volumes declined by 11%, total values declined by 9%.

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Vast Majority of Card ABS is Holding Up

A recent review has found that the vast majority of credit card ABS classes remain well insulated from loss. The robust credit card structures combined with bank efforts to actively manage risk and in some cases increase transaction level credit enhancement have resulted in Fitch affirming 467, or 98% of its credit card ABS ratings including all ‘AAAs’. However, Fitch has revised 76 ratings to Rating Outlook Negative and 10 ratings were placed on “Rating Watch Negative.” Fitch Ratings also placed all 29 classes of U.S. credit card ABS transactions issued by 1st Financial Bank ‘Under Analysis’. Last month, 206 classes of Fitch rated U.S. credit card ABS transactions had ‘Under Analysis’ status, which Fitch has since reviewed. In the most recent review, Fitch applied a custom charge-off forecast for each trust. This forecast was derived by applying delinquency roll rates observed over the last six months to current delinquencies and incorporating the effect of Fitch’s unemployment forecast of 10% by early 2010.

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