CAIXA GALICIA & DIGIPASS

VASCO Data Security International announced that the sixth largest
Spanish savings bank Caixa Galicia is securing its corporate customers
with VASCO’s “DIGIPASS” strong authentication solution together with the
“VACMAN Controller” core authentication platform. “VACMAN Controller” is
integrated in the online
platform of CECA, the Spanish Confederation of Savings Banks. Caixa
Galicia is the first Spanish savings bank
that made the use of “DIGIPASS” 2-factor authentication obligatory for its corporate clients. Caixa Galicia
offers financial products and services to corporate customers through
their online banking application: Caixa Gestión and the savings bank
currently has 55,000 corporate customers who use Caixa Gestión for
advanced payments of invoices, financial transactions and credit card &
investment information.

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IBM and NCR Still Dominate POS Market

An annual survey has found that top retailers are now utilizing POS
hardware with an average age of 4.75 years, compared to 5.8 years in
2007. On the software side, this year’s survey indicates the average age
of POS software is down slightly from last year’s 7.5 years to 7.11
years this year. The research by Cleveland-based LakeWest Group says the
remaining useful life for POS hardware is now 4.16 years which has
remained relatively constant from last year’s 4.2 years of useful life.
The firm notes that the POS hardware market continues to be dominated by
IBM and NCR. LakeWest says on the software side the remaining useful
life has risen slightly with 3.82 years this year, compared to 3.4 years
last year. IBM has a strong presence on the software side, as do SAP,
Oracle, and NCR with 11% shares each. Epicor, with its acquisition of
NSB Retail Systems in 2008, has jumped into the top spot with a 12%
share of the market.

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Intel Unveils a POS POC Kiosk

Intel has rolled out a prototype POS proof-of-concept kiosk system that
could lower a store’s total cost of ownership while improving customer
satisfaction. The kiosk demonstration includes features that match the
perks of Internet shopping, such as suggestive selling real-time inventory
access, as well as showing promotions, product details and customer
reviews. These features, in turn, facilitate sales associate up-selling
and cross-selling opportunities, which will increase a retailer’s bottom
line and customer loyalty. The POS demo is based on the very popular and
energy-efficient 45nm
Intel® Core™2 Duo mobile processor that is inside hundreds of millions
of today’s laptops and PCs.

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Alliance Data to Issue HSN Credit Cards

Loyalty marketer Alliance Data Systems has signed a multi-year
agreement to provide both co-brand and private label credit card services to multi-channel retailer
HSN. Alliance Data will provide a comprehensive set of
private-label and co-brand credit card services for HSN, including account
acquisition and activation; receivables funding; card authorization;
private label credit card issuance; statement generation; remittance processing;
customer service functions; and marketing services.
Alliance Data will partner with HSN to develop cardholder loyalty
programs designed to incent and reward both private label and co-brand cardholders.
Additionally, Alliance Data will provide advanced analytics services geared toward
helping HSN identify, target and acquire high-value customers. Specific services
will include customer segmentation, product affinity, and response modeling designed to target and better engage customers with the HSN brand. The
accounts purchased by Alliance Data generate a portfolio between $100 and $200
million in receivables. with a modest level of
delinquencies and, as such, Alliance Data believes that its performance will be consistent with
traditional expectations. Additionally, all new co-brand and private
label accounts will be consistent with Alliance Data’s traditional credit quality
standards. Conversion of the file is scheduled for the first quarter of 2009.
HSN is an operating segment of HSN, Inc., a company with approximately $3 billion in annual revenues.

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CUP 3Q

Reportlinker.com has released the “China Financial POS Machine Market Report 2008”. According to
China UnionPay, by the end of June 2008, China had 152
card-issuing institutions with the total issue of over 1.6 billion
cards; and 930,000 merchants accepted Unionpay cards, 1.45 million
financial POS machines and 140,000 ATMs and by the end of Sep 2008, China had over 1.6 million financial POS
machines, about 150,000 ATMs and over 1 million merchants accepted
Unionpay cards.

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BofA Posts Q4 $204MM Loss as PDV Drops 17%

Bank of America global credit cards posted a $204 million loss in the fourth quarter compared to a $498 million profit on credit cards for 4Q/07. However, total fourth quarter credit card revenue of $7.4 billion was up 11% year-on-year. Fourth quarter charge-offs rose sharply to 7.16%, compared to 6.40% in the prior quarter and 4.75% one-year ago. The managed 30+ day delinquency ratio also increased to 6.68%, compared to 5.89% in the third quarter and 5.45% for 4Q/07. Managed global credit cards, excluding business credit cards, at the end of the fourth quarter
declined about 1% to $182.2 billion, compared to $183.4 billion in 3Q/08 and $183.7 billion for 4Q/07. Purchase volume for global credit cards was $56.6 billion for 4Q/08, compared to $62.7 billion for 3Q/08 and $68.4 billion for 4Q/07. BofA noted that debit card purchase volume declined slightly during the fourth quarter to $52.9 billion. Additionally, Card Services opened 1,432,000 accounts during the quarter, compared to 1,766,000 accounts in the prior quarter. For complete details on Bank of America’s 4Q/08 performance, visit CardData ([www.carddata.com](http://www.carddata.com)).

BOFA CREDIT CARD NET INCOME
(Global Cards; Excludes Business Cards)
4Q/07: $498 million
1Q/08: $670 million
2Q/08: $423 million
3Q/08: (-$373 million)
4Q/08: (-$204 million)
Source: CardData (www.carddata.com)

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More Consumers Denied Credit in December

A new report from market researcher SYNERGISTICS reveals that one in
six US households have been turned down for credit in the past six
months, including those with income over $75K. The study, “Financial
Insights: The Consumer Credit Crisis” featuring a national online
survey of 1,010 consumers age 18 or older. The study examines consumer
usage of various credit products and lenders, as well as their
decision-making process and future demand. In addition, the impact of
the current economic environment and consumer response are evaluated.

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Lawmakers Re-Introduce CCBOR Legislation

Rep. Carolyn Maloney and Sens. Charles Schumer and Mark Udall are
reintroducing credit card reform legislation. The “Credit Cardholders’
Bill of Rights Act of 2009” seeks to ban arbitrary interest rate
increases, due date “gimmicks,” “excessive” fees and other “misleading”
terms. The new bill also requires card companies to fairly credit and
allocate payments and enable cardholders to set limits on their credit.
Rep. Maloney notes that the new bill sets no rate caps, fees, or price
controls, nor does it dictate any business models to card companies.
Last September, the “CCBOR” (HR 5244) passed the House, 312-112 but died
in the Senate. It would have banned universal default, double-cycle
billing, and retroactive rate hikes. In December, the Federal Reserve
released final regulations that would ban many of these practices, but
the new rule does not take effect until July 2010. The CCBOR introduced
this week would take effect 90 days after the President signs it.

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SEAMILES

Delinquency among credit card-backed securities for November hit it highest level since April 2007, however charge-offs fell slightly. Following pressure from the government, credit card companies in the U.K. have recently agreed to not increase interest rates in the first 12 months of a card holder’s contract and also not to do so more frequently than every six months after this initial period. On January 8th, the Bank of England’s Monetary Policy Committee voted to cut the bank base rate to 1.5%; a 50 basis point fall from the previous base rate value of 2.0%, set on December 4th, and an all time low since the bank was founded. The “Fitch Delinquency Index” (60 to 180 days) increased 20 basis points for November to 4.1%. Only the Cumbernauld trust reported a month-on-month fall in delinquencies. Having increased by 30 basis points from August through October, the “Fitch Chargeoff Index” declined 20 basis points in November to 6.4%. However, three of the trusts included in the “Index” registered an uptick in charge-offs from October. Fitch noted that the increasing delinquencies are a reflection of the more difficult economic environment and expects this to filter through to increases in charge-offs through 2009.

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KEB & IBM

Korea Exchange Bank has completed a mainframe migration to IBM “System z10” for its credit card business. KEB Card installed three units of the “System z10 Enterprise Class” mainframe with the equivalent capacity of nearly 1,500 x86 servers, with an 85% smaller footprint, up to 85% lower energy costs. The new system creates an advanced and smarter IT environment to improve efficiency and customer service. KEB says that through the integrated service of IBM, it has optimized the main computer operations and cut down the total cost of ownership resulting from a reduction in operation and maintenance costs per million instructions per second.

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SMARTRIP & WMATA

Smart card provider Giesecke & Devrient has delivered
200,000 limited edition “SmarTrip” cards to the Washington Metropolitan
Area Transit Authority (WMATA) in order to commemorate the historic
occasion of President Obama’s inauguration with a permanent,
rechargeable farecard featuring an image of President Barack
Obama. “SmarTrip” is a contactless smart card that can be loaded with a value up
to $300 to pay for fares on Metrorail and Metrobus and for parking fees
at Metro-operated parking facilities. The commemorative Obama SmarTrip(R)
cards are available for purchase in two versions, for $10 each without
fare value, or for $20, which includes $10 fare value loaded onto the card. The cards can be purchased online from WMATA’s web site and at
specified locations across the metro area until supplies are exhausted.

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