Card ABS Metrics Validate Consumer Distress

Among credit card asset-backed securities the average monthly payment rate declined 12 basis points in January to 17.15%. Portfolio yields also sank 121 basis points from December to 16.00%. FitchRatings noted that more of the credit card trusts have started to trap excess spread, as the three-month average excess spread falls below a predetermined level, usually between 4.00% and 4.50%. On the other hand, some of the trusts or series, which had trapped excess spread account in the previous months due to the one-time LIBOR spike, saw their excess spread bounce back and release the cash back to the issuers. Also, the Federal Reserve Board launched the long-awaited “TALF” program on March 3, with the potential capacity up to $1 trillion of lending to consumers and businesses. Investors can request one or more three-year on-recourse loans backed by eligible ‘AAA’-rated asset-backed securities. Eligible credit card ABS are those issued to refinance existing credit card ABS maturing in 2009, and the limit is capped at the amount of the maturing ABS.

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Traveling Consumers Want More Self-Service Kiosks

A new survey by Buzzback Market Research on behalf of NCR indicates that
in addition to low costs and no-frills, travelers also want to be able
to access additional transaction via kiosks. Nearly one in three
respondents or 28%
indicate they’d like the flexibility to do more at the device, such as
upgrade, make seat changes and purchase in-flight meals with 35%
even greater number who would like to be able to check into
their hotel or secure their car rental. The research reveals a clear
connection between self-service and
passenger preference, with 82% of respondents indicating they are
more likely to choose a travel company that allows them to interact
easily via kiosk, online and mobile self-service channels. Greater use
of mobility, such as the use of mobile boarding passes, is
welcomed by consumers, 33% indicated they would like to
receive boarding passes on their mobile devices. Many airlines are
currently piloting this technology.

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Green Dot CEO Recognized for Industry Achievement

Prepaid provider Green Dot CEO and founder Steve Streit was honored with
an “Industry Achievement Award” from Paybefore. In 1999, Streit began
to sell prepaid debit cards targeted to the millions of Americans who
earn less
than $50,000 a year and who are underserved by the financial services
industry. In 2004, Green Dot launched the Green Dot Financial Network,
the first retail cash-acceptance reload network, which has quickly
become the leading reload network for open-loop cards in terms of its
national footprint, the number of card programs supported, and in terms
of consumer and merchant reload brand awareness. Today, Green Dot
provides consumers with financial empowerment through a suite of
products and services, including prepaid debit cards, gift cards, and
the Green Dot “MoneyPak”.

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BENTO & ALOHA

Sushi supplier Bento Nouveau has selected Radiant’s Systems “Aloha
Enterprise” solution for its new concept, Bento Zushi,
The Aloha Enterprise solution includes Radiant P1220 POS hardware
terminals with biometrics, Aloha Quick Service Point-of-Sale software,
Aloha Command Center and Aloha Insight. Utilizing the biometric
technology at the POS enables Bento Nouveau to more accurately control
labor by confirming that the correct employee is clocking in and out.
The addition of Aloha Command Center and Aloha Insight provides the
ability to monitor all store-level site systems for support and
compliance purposes with maximum security while giving Bento Nouveau the
visibility and control needed to efficiently analyze operational results
and quickly make decisions, enabling the restaurant operator to more
efficiently automate its
operations, manage to better results and effectively measure its
performance.

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First Data Q4 Revenue Rises 8% But Loss Widens

First Data reported fourth quarter revenue of $2.3 billion, an increase
of 8% over the year ago quarter. However, the net loss for the quarter
was $3.22 billion, compared to a year-earlier net loss of $273.2
million. Merchant Services reported revenue of $1.1 billion, up
18%. Financial Services revenue was $695 million, down 4%. International
generated revenue of $434 million, down 6%. During the quarter, First
Data announced the successful termination of its joint venture, Chase
Paymentech Solutions, with JPMorgan Chase and also extended its merchant
alliance joint venture, Wells Fargo Merchant Services for five years.
First Data also adopted a revised segment reporting structure on January
1st. The company’s segments will include Retail and Alliance
Services, Financial Services, International and Integrated Payment
Systems. For applicable prior year and quarterly periods, the company
will provide financials realigned to these segments in connection with
our first quarter 2009 Securities and Exchange Commission Form 10-Q
filing. For complete details on First Data’s fourth quarter performance
visit CardData ([www.carddata.com](http://www.carddata.com)).

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TeacherDollars Program Wins a Prepaid Award

Information provider Paybefore has selected CT-based Evolution Benefits’
“TeacherDollars” Program as the Best in
Category winner for the Best Corporate-Funded Prepaid Card of the 2009
Paybefore Awards. The TeacherDollars Program was set up in
partnership with the Hartford, Connecticut System of Schools and
provides special-purpose debit cards with donated funds to teachers at
schools that have demonstrated marked improvement in the academic
achievement of their students. The cards are used to buy instructional
supplies for the classrooms. Paybefore is the leading information
provider to prepaid and stored value card industry professionals,
offering the latest news, commentary and analysis.

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CPI Names a New Southwest Regional Sales Manager

CPI Card Group has tapped Tim McKearney as Southwest
Regional Sales Manager, Commercial Cards and Services.
McKearney has 4 years of card manufacturing experience, primarily in the
areas
of commercial production, service bureau and fulfillment. He also has 15
years of commercial litho, offset and digital print experience. His
previous roles include project manager, production/mailing fulfillment
and customer service management. CPI offers a single source for plastic
cards, from foil
cards and holograms to translucent and smart cards, and personalization
and fulfillment services.

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Small Business Index Drops to Zero in Feb

Small business owners’ optimism dropped to its lowest level in the six
years that the Wells Fargo/Gallup “Small Business Index” has been
conducted. The score now stands at negative four (-4), down 14 points
from November and 118 points lower than the “Index” high of 114 set in
November, 2006. It is the first time the index has dropped below zero. A
score of zero indicates that small business owners, as a group, are
neutral — neither optimistic nor pessimistic — about their companies’
situations. The “Index” is the sum of “present situation” and “future
expectations” of small business owners for six key measures, including
financial situation, cash flow, revenues, capital allocation spending,
job hiring and credit availability. The “present situation” score
dropped eight points to negative five, and “future expectations” dropped
six points to one.

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Identity Theft Victims Largely in the Dark

A survey of more than 1500 identity theft victims shows that approximately three out of four, or 72%, do not know the source of the crime, according to the Identity Theft Assistance Center. Twenty-eight percent of the 1530 victims helped by ITAC said they knew the source of the crime. Most cases (26.5%) stem from friends, relatives and in-home employees who have access to personal information, followed by computer-related identity crime (21.6%). Lost/stolen wallet, checkbook or credit card accounts for 15.1%, followed by stolen and fraudulent use of the mail (11.6%) and corrupt businesses or employees (11.6%). Breaches of consumer data accounted for 4.7% of the cases.

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Diebold Executives Receive Wells Notices

Diebold’s EVP/CFO has received a “Wells notice” from the SEC. Diebold is
also aware that its prior chief financial officer and other former
employees in the company’s finance organization have also
received Wells notices. To the company’s knowledge, the Wells notices
relate to items addressed in the company’s previously filed restated
financial statements. A “Wells Notice” indicates that the SEC staff
plans to recommend that the SEC bring a civil injunction for possible
violation of securities laws. Krakora has stepped down from the CFO
position and will continue to serve the company in a non-financial
reporting capacity pending resolution of this matter. Leslie Pierce,
vice president and corporate controller, is fulfilling the role of
interim CFO.

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HSA Payment Card Balances Grew in 2008

A new study as found that consumers who select HSAs to manage their
health care spending are not simply using these accounts to pay for
their immediate health care needs. They are also funding their HSAs
above and beyond their employer contributions and using them as long
term savings and investment vehicles. Canopy Financial also found that
HSA account balances grew in 2008, despite the economic downturn, and
employee contributions to HSAs significantly outpaced employer
contributions. Moreover, transfers into health investment accounts were
double and triple transfers out of HIAs throughout the year.
Additionally, card payments consistently lagged behind every other spend
category, with the majority of spend out of HSAs being derived from bill
payments and reimbursements.

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RCC COALITION

The “Stop Sticking It To Us” Coalition,
representing over 200,000 Canadian businesses, small, mid and large, is
gathering in Ottawa this week to combat overcharging by VISA and MasterCard.
In the past year, skyrocketing credit card fees and VISA/MasterCard
domination of the debit card business have emerged as major issues in the
United States, Australia and the U.K. The U.S.-based credit card companies have been pushing worldwide to take
over the debit card business and increase service charges on credit card
transactions. In the United States, for example, Visa and MasterCard now
control over 75% of the debit card market. U.S. merchants and customers pay
heavily for the card company’s dominance of that market. A large
retailer with stores in the U.S. reports it pays 70 cents on an average U.S.
transaction. In contrast, the smallest retailer in RCC’s Canadian program pays 7 cents – a
differential of 900%.

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