M-BANKING

A new report from Pyramid Research, “Mobile Financial Services in
Africa: The Business Case for Operators and Banks” reviews and analyzes mobile financial services offerings in African markets, looks at drivers and obstacles to mobile financial services, breaks down business models to assess their true bottom-line impact, and provides market projections based on intrinsic market dynamics. Historically, mobile financial services in Africa have been driven by banks providing additional services and convenience to their client base, which tend to be urban and with a certain income level. This leaves a significant opportunity to provide financial services to the “unbanked” across the continent, which typically make up between 75% and 95% of the population, and mobile operators have the infrastructure and distribution networks to reach such segments efficiently. The report includes analysis and forecasts for the three primary segments within mobile finance which include payments, transfers, and banking services.

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Wells Fargo Charge-Offs and Delinquency Up

Driven by its recent Wachovia acquisition, Wells Fargo credit card outstandings rose 26% to $23.56 billion, compared to the year ago quarter. Wells Fargo also reports that credit card charge-offs increased $90 million in the fourth quarter to $451 million. Card fees income was flat year-on-year at $589 million and down from Q3’s $601 million. Fourth quarter credit card charge-offs, as a percentage of average credit card loans card, hit 8.69%, compared to 7.20% for 4Q/07. Delinquency (90+days), based on average credit card loans, rose to 3.3% for 4Q/08, compared to 2.5% in the prior quarter and 2.3% for 4Q/07. Wells says the increases in delinquency and loss levels in the consumer unsecured loan portfolios were directly impacted by employment levels. At the end of the fourth quarter outstandings were $23.56 billion, compared to $20.36 billion in the third quarter and $18.76 billion in the year ago fourth quarter. For complete details on Wells Fargo’s latest performance visit CardData [www.carddata.com](http://www.carddata.com).

WELLS FARGO CARD LOANS
4Q/07: $18,762,000,000
1Q/08: $18,677,000,000
2Q/08: $19,429,000,000
3Q/08: $20,358,000,000
4Q/08: $23,555,000,000
Source: CardData (www.carddata.com)

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Heartland Payment Enlists Elefant for Security

Following a recent security breach, NJ-based Heartland Payment Systems
has formed an internal department dedicated exclusively to the
development of end-to-end encryption to protect merchant and consumer
data used in financial transactions. The new department will be headed
by Steven Elefant, co-founder and former chief executive officer of
ICVerify and a member of the US Secret Service Electronic Crimes Task
Force and Infragard. Last week, Heartland confirmed it was the victim of
a security breach within its processing system last year. The intrusion
was discovered this month, but the processor believes it is contained.
No merchant data or cardholder SSNs, unencrypted PIN, addresses or
telephone numbers were involved in the breach. Nor were any of
Heartland’s check management systems; Canadian, payroll, campus
solutions or micropayments operations; “Give Something Back Network”; or
the recently acquired Network Services and Chockstone processing
platforms. (CF Library 1/21/09)

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NACHA Board Names a New Chairperson

The Board of Directors of NACHA — The Electronic
Payments Association has elected Marcie J. Haitema, currently EVP of
correspondent services at U.S. Central, as the chairperson of NACHA’s
Board of Directors; Steve Ellis, EVP at Wells Fargo as vice chairperson
and Michael A. Bilski, EVP, North American Banking Company as
secretary/treasurer. With 22 years of diverse financial services
experience, Haitema’s credentials
include service on numerous NACHA committees, including the finance and
strategy committees. At U.S. Central, Haitema oversees the
correspondent services division, which includes payment and technology
services, member support and related
operations and manages several key areas, including ACH,
securities safekeeping, automated settlement, international services and
core financial data processing. Ellis is executive vice president and
head of the wholesale services group at Wells Fargo with
responsibility for enterprise payment strategies, health benefit
services, technology services, and treasury management products and
services. Bilski is a founder, director and president of N.A.
Corporation, a bank holding company, and
serves as director and executive vice president of North American
Banking Company, a Minnesota-based community bank.

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Consumer Confidence Remains at Historic Lows

The Conference Board “Consumer Confidence Index” inched lower in
January and continues to be at a historic low. The “Index” now stands at
37.7, down from 38.6 in December. It appears that consumers have begun
2009 with the same degree of pessimism that they exhibited in the
fourth quarter. Consumers saying business conditions are “bad” increased
to 47.9% from 45.8%, while those saying business conditions are “good”
declined to 6.4% from 7.7% last month. Those expecting business
conditions to worsen over the next six months decreased slightly to
31.1% from 32.9%. Consumers’ assessment of the labor market, however,
was slightly more positive. Those claiming jobs are “hard to get” edged
down to 41.1% from 41.5% in December, while those stating jobs are
“plentiful” edged up to 7.2% from 6.5%.

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Card Activation Files More Lawsuits

Payment technology provider Card Activation Technologies has filed five
new lawsuits to obtain royalties for the use of its patented technology
for debit and gift cards. The lawsuits were filed in the U.S.
Federal District Court in Chicago on January 21, 2009 against Casual
Male Retail Group Inc., BeBe Stores, Whole Food
Markets, Barneys of New York, Inc. and Panda Restaurant Group.
These lawsuits bring the total to 12 filed by the company in the past
two years. Card Activation Technologies has settled most of the previous
lawsuits. Lawsuits are still pending in U.S. Federal District Court in
Chicago against Barnes & Noble and Aeropostale, Inc. In addition, over
600 letters have been sent to other companies advising them of the patent.

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FRAUD TRENDS

The number of fraud cases in the U.K. rose 16% last year to 214,342. Account takeover fraud soared by a record 207% with more than 19,000 cases reported in 2008. Frauds of this kind are enabled
through phishing, telephone scams, or by the interception of
credit cards and statements in order to take over an account, divert or fraudulently order goods or facilitate fraudulent transactions. CIFAS, the U.K.’s “Fraud Prevention Service” also reported that misuse of facility fraud rose 69% in 2008. Bank account products are the most commonly misused with plastic cards, communications and mail order accounts also proving to be popular with fraudsters. CIFAS also says the overall increase in successful identity frauds (i.e. identity frauds spotted after the granting of an account, card or policy), with CIFAS Members posted a 5.7% increase during 2008. However, there was a decline in the numbers of victims of impersonation seen over the past two years has continued, with a further 3.7% decrease in 2008 from 2007 figures.

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NFC ACADEMY

Wise Media has created the NFC Academy, a year-long initiative that will
go live in 2009 with a series of events featuring both a conference and
a Technology Village.
Throughout the year, the NFC Academy will gather researchers, pioneer
developers and advanced practitioners in the areas of mobile applications,
short-range communication and contactless security to educate the market and
foster the adoption of NFC technology. Each event will host a conference and
live demonstrations that promote an open exchange of ideas on the deployment
and growth of NFC technology in the field of contactless applications ­
including access control, ticketing and mobile payments. The NFC Academy
will provide an opportunity for high-caliber, interactive
networking, supported by activities and panel discussions on important
topics. A selection of experts will moderate each key subject on the agenda,
followed by moments for one-on-one push and pull discussions. The
Technology Village will exhibit what some of the leading NFC technology
suppliers are currently offering in terms of stable, established solutions
for the creation of future intelligent environments, mobile payment
applications and advanced information systems. Live demonstrations of NFC
technology will showcase real-world applications, ideal use of current
payment technologies and new ways to integrate NFC technologies in existing
applications.

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TSYS & TARJETAS

Outsourced payment provider TSYS announced that it has signed
a payments processing agreement with Tarjetas Unisoluciones S.A. DE
C.V., a wholly owned subsidiary of Unibanco Brasil, for the launch of
its Unicard Mexico consumer card portfolio. The portfolio will be the
first to utilize TSYS’ industry leading TS2 platform in Mexico.
Financial terms of the agreement were not disclosed. YSYS says it has spent more than 15 years establishing itself as the processor of choice in Mexico.

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USDS Seeks to Buy Debt Management Concerns

Los Angeles-based U.S. Debt Settlement says it is in acquisition
mode for consumer debt reduction and management services companies. The
firm recently acquired the assets of TX-based Compass Credit Services.
Compass Credit’s offerings included a transfer of 600 current clients
and more than 6,700 prospects. USDS also says it has signed a letter of
intent to acquire another company that has 5,000
clients and does eight million a year. The Company says it plans to
go public this year on the Frankfort Exchange during the first quarter.

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CREDANT STUDY

Data security experts Credant Technologies have released the results of a recent survey that reveals
9000 USB sticks have been forgotten in people’s pockets at the dry cleaners.
The survey was carried out to gauge the frequency and ease
with which mobile devices such as USB and memory sticks are lost or
forgotten in strange places such as dry cleaners and also as a warning
to people across the globe to be vigilant when downloading information
to carry around with them as it does frequently get lost.
Dry cleaners in the suburbs, on the commuter belt or based in city
centres find the most USB or memory sticks. One dry cleaner in the heart
of the City of London said he is getting an average of 1 USB stick every
2 weeks, another said he had found at least 80 in the past year.
A similar survey was conducted by Credant Technologies last September amongst taxi
drivers in London and New York, which showed that over 12,500 handheld
devices such as laptops, iPods and memory sticks are forgotten at the
back of taxis every 6 months.

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TouchSuite Salon POS System Introduced

Financial technology provider Invenstar has introduced the “TouchSuite
Salon” POS system for small to mid-size salon and spas. TouchSuite
Salon is an all-in-one, touch screen retail management POS
system offering a full suite of business solutions, including client
management, inventory, marketing, and merchant services like cash
advance, credit card and check processing, and support. It has
everything a small business salon and spa owner needs in a POS system,
such as 3-touch booking, total management, advanced reporting, a cash
drawer, receipt printer, laser report printer, barcode scanner, battery
backup, keyboard, data backup drive and TouchSuite Salon software
already installed, helping salon and spa owners automate sales,
bookings, and marketing processes for maximum revenue and business growth.

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