ADS Discloses its Succession Strategy

Loyalty marketer Alliance Data Systems has named J.Michael Parks as
Chairman and Edward J. Heffernan as President and CEO
Parks, currently chairman and chief executive officer, will retain the
role of chairman, while Heffernan, currently
executive vice president and chief financial officer, has been appointed
president and chief executive officer, effective March 1.
Parks joined Alliance Data on March 1st, 1997 as chairman and chief
executive officer – a role he has filled for twelve years. Prior to
Alliance Data, he was president of First Data Resources, the credit card
processing arm of First Data Corporation. Prior to that, Parks served in
a number of roles at First Data during his expansive career spanning 18
years of service. He holds a B.A. from University of Kansas. Heffernan
joined Alliance Data in 1998 and spent two years focusing on
mergers and acquisitions and Alliance Data’s IPO. He was then named
chief financial officer in 2000, a position he has held for the past
eight years. Prior to Alliance Data, Heffernan worked primarily in
merger and acquisition roles at First Data Corporation and Citicorp as
well as in finance at Credit Suisse First Boston. He was a director and
served as chair of the audit committee of VALOR Communications Group
until its merger into Windstream Corporation in 2006. He holds a B.A.
from Wesleyan and an M.B.A. from Columbia.

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British Cardholders Close Wallets in December

While payment card volume soared in December the average transaction ticket fell in the U.K., and elsewhere. APACS reports that overall credit card volume fell nearly 5% in December to GBP 10.8 billion, but debit card volume edged-up by more than 3% to GBP 21.6 billion. Although spending in December was comparatively flat when compared to December 2007, spending on debit cards is currently growing at an annual rate of 9.5%, having increased from GBP 224.0 billion in 2007 to GBP 245.4 billion in 2008. Annual spending on credit cards is currently growing at 1.9%, having increased from GBP 123.9 billion in 2007 to GBP 126.3 billion in 2008. APACS says the fall in credit card spending follows the trend we’ve seen over the last four years with customers continually preferring to put most of their card spending on debit card.

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Underbanked U.S. Population Tops 24 Million

A new study has found that the underbanked population has hit 24 million U.S. consumers. The Center for Financial Services Innovation research was co-sponsored by four companies, including Citi, H&R Block, and MasterCard. CFSI says the following strategies for reaching the “Next Wave”: use transaction services to “up sell” into prepaid cards; offer links to small business services, financial advice and credit-building services; invest long-term, as this group has big plans for the future; and lenders trying to reach this group should provide small dollar, revolving credit and need to calibrate underwriting to new/infrequent borrowers. The findings are a result of a survey of 2,799 underbanked respondents.

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MC & STRATEGIC PAYMENTS

MasterCard has entered into an agreement to increase its stake to 52.5% and become majority partner in Strategic
Payments Services Pty Ltd. SPS has established itself as a key player in the
processing services market in Australia, offering a modern and flexible acquiring
processing platform. SPS has proven its stability and reliability, providing
services to clients including Australia’s largest independent ATM deployer and a
prominent Australian bank. MasterCard’s initial investment in the JV enabled it to
build upon its position as a payments industry leader by developing an innovative,
outsourced processing platform which provides clients with a viable alternative to
building or upgrading in-house or legacy systems.

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DEC LEI

The Conference Board Leading Economic
Index (LEI) for Germany declined 1.9% and The Conference Board
Coincident Economic Index (CEI) decreased 0.7% in December.
Three of the seven components in The Conference Board Leading Economic Index (LEI) for Germany increased in December.
The positive contributors are new residential construction orders,
inventory change series and gross enterprises and properties income.
Negative contributors are new orders in investment goods industries, consumer confidence, stock
prices, and yield spread. During the second half of 2008, the
LEI declined by 8.5% (about a -16.3% annual rate), faster
than the decline of 4.5 percent (about a -8.8% annual rate)
during the first half of 2008. However, the strengths among the leading
indicators have become roughly balanced in November and December as the
number of components that rose over the previous six months
approximately equaled the number that fell over the same period.
The LEI has been generally declining since July 2007 and the pace
of this decline has continued to accelerate in recent months as the
six-month growth rate for the LEI reached its lowest level since 1974.
The LEI now stands at 93.3 (2004=100).

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NEW THALES DIRECTOR

Security provider Thales has tapped Michelangelo Neri as Division
Country Director in the UAE and will
coordinate all marketing and sales activities, for
Thales’s Security Solutions and Services business in the UAE. He is also
Director of the Integration Center based in Dubai in charge of Thales’s
different security programs in the Dubai and Doha airports, as well as the
Dubai Metro project, and Abu Dhabi Oil & Gas projects.
Michelangelo Neri joined Thales in January 2007 and most recently became
Director of Thales’s Dubai Integration Center, the company’s second largest
Integration Center within its Gulf Cooperation Council (GCC) network.
Employing more than 200 people, it serves the UAE, Bahrain, Oman, Kuwait and
Qatar.

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Wal-Mart Finally Eases Predatory Card Fees

The world’s giant retailer Wal-Mart has given up on fees for its “Walmart MoneyCard.” Starting this week, U.S. consumers will be able to get the reloadable, pre-paid Visa debit card, for $3.00. Wal-Mart says its card will save customers $50 million annually compared to similar cards. In addition, Wal-Mart says the card has no overdraft fees (no joke). Wal-Mart was the lead plaintiff in a watershed lawsuit over debit card fees and has a long history of profiting from underbanked and non-banked consumers. The retailer notes that its new Visa program offers a $3.00 charge for reloads and a $3.00 monthly fee, both well below industry averages. However, if customers reload with direct deposit or after cashing their paychecks at Walmart, there is no reload fee. If customers load at least $1,000 per month, the $3.00 monthly fee is waived. If customers access cash back at the register instead of ATM’s, there is no withdrawal fee. The “Walmart MoneyCard” can be reloaded at tens of thousands of Green Dot retailer locations.

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PAYZONE & CO-OPERATIVE BANK

Payment and cash distribution network Payzone has joined forces with The
Co-operative Bank with a five year agreement to enable
Local Authority, Housing Association and other business partners that
wish their consumers to
benefit from the convenience of paying bills at local Payzone outlets.
Around 650 local authorities,
housing associations and credit unions will be able to access the
Payzone network through an agreement for payment services with The
Co-operative Bank. This will allow consumers to pay their council tax,
housing rents and other sundry payments at around 18,000 Payzone outlets
across the UK. Payzone UK Ltd processes over £20m per week across a
wide range of
utility and other bill types, as well as E top-ups, international call
time and gift cards. Covering the length and breadth of the UK, over 95%
of consumers living in urban areas are only 1 mile from their nearest
Payzone outlet and 5 miles for those living in rural areas.

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VISA & GSMA

GSMA has selected Visa as a provider for mobile money transfer
solutions globally, and is working to execute an agreement to formalize
participation terms. Visa is already a leading provider of money
transfer solutions with active programs in 14 countries in Europe, the
Middle East and Asia. A key aspect of the collaboration between Visa and GSMA will be the
creation of standards for mobile money transfer, mobile payments and
related services. This collaboration will allow carriers and financial
institutions to deploy mobile payments more rapidly and limit market
fragmentation. Standardization also benefits consumers by promoting
interoperability among carriers and institutions, ensuring a consistent
and reliable experience and promoting faster adoption of the technology.
Recently, as part of the GSMA “Pay-Buy-Mobile” initiative, Visa and several GSM mobile network operators
launched mobile payment trials in Canada, Switzerland, France and the
UK, and completed successful trials in Australia, Malaysia and Taiwan,
which are all designed to advance the development of mobile payments at
the point of sale. Importantly, many of these trials embed the Visa
payment application into the SIM card enabling Visa account holders to
easily switch the application from one handset to another.

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ProPay Launches Encrypted ProtectPay

ProPay announced the formal launch of “ProtectPay,” a fully encrypted payment card processing, transmission and repository service. ProtectPay enables merchants with a complete end-to-end secure option for processing credit card payments in real time and/or the secure storage and use of encrypted credit card data for future transactions including repeat billing. ProPay is fully PCI compliant and meets the stringent requirements of a Level 1 Payment Card Industry Data Security Standard (PCI DSS) Service Provider. Visa has outlined the Level 1 requirements in a document the company has posted at www.visa.com/cisp.
ProPay is holding a Data Security Summit in Salt Lake City, March 18-19.

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QSR Annual Payment Card Volume Gains 11%

U.S. consumers racked-up $70 billion worth of fast food on their personal credit and debit cards this year, compared to $63 billion one-year ago. The 11% year-on-year increase in quick service restaurant volume is driven by expanded merchant acceptance, promotion of card usage and new contactless payment options, according to CardData (www.carddata.com). The current economic turmoil has given new energy to “dollar” menus which has been driving payment card growth. Americans spend about $190 billion per year at quick service restaurants.

QSR ON PLASTIC HISTORICAL
2000: $ 1.7 billion
2001: $ 3.7 billion
2002: $ 6.1 billion
2003: $12.9 billion
2004: $22.5 billion
2005: $33.2 billion
2006: $51.3 billion
2007: $62.8 billion
2008: $70.4 billion
Source: CardData (www.carddata.com)

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Q-Card Laboratories Expands Services

PA-based Q-Card Laboratories will now offer three new services to test
and analyze card products. With the addition of a “Gauge R & R”
certified flat bed bar code analyzer, Q-Card Laboratories will now be
able to test optical bar
codes of all types utilizing high resolution cameras coupled with
easy-to-use analyzing software. Customers may purchase the analyzer for
their own use or utilize Q-Card Laboratories’ third party testing
services. This new equipment inspects all nine of the ISO (ANSI) bar
code parameters plus added features of determining blemishes, opacity
and human readable validation. The analysis is color coded to show exact
problem areas within the bar code. Q-Card has also invested in a new
“Tenney Environmental
Chamber” to test a wider range of environmental effects on various
products. The chamber, which can test products at temperatures as low as
-70 degrees Fahrenheit, allows Q-Card Laboratories the ability to
determine the durability of cards, tickets and readers against various
conditions.

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