ZERO LIABILITY

Visa has expanded its “Zero Liability”
program to include Visa Business cards issued by Canadian
financial institutions. Visa’s “Zero Liability” policy protects business
cardholders against fraud exactly the same way as it protects personal
cardholders. “Zero Liability” means that business cardholders who have
been victims of credit card
fraud, including unauthorized transactions made via telephone or on the
internet, do not pay for fraudulent transactions. “Zero Liability” does
not apply to transactions with Visa Corporate or Visa Purchasing cards.
Personal Visa cardholders, including those who have been issued a Visa
chip and PIN card, from Canadian-issued financial institutions will
continue to be protected by the “Zero Liability” policy.

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MasterCard Aims to Dispel Interchange Myths

MasterCard has released a paper entitled “Benefits of Open Payment Systems and the Role of Interchange.” The network says few people ever stop to consider the complex and sophisticated
system that allows transactions to occur within seconds, almost anywhere in the world. If electronic payments came to a sudden halt, many
facets of commerce would face dire consequences. The MasterCard paper is aimed at dispelling misperceptions about payment systems and explains the tremendous economic value that electronic payments bring to the
economy as a whole and their role in advancing commerce. Available online MasterCard also offers documents such as “Interchange Backgrounder”; “Interchange Facts and Myths;”; “Interchange Rates”; plus much more.

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HYPERCOM EXEC

Hypercom has appointed Ulf Honick as Vice President, Healthcare. He will be
responsible for driving sales and extending globally the Company’s
footprint in the fast growing healthcare sector. Honick has more than 10 years of international experience in the
healthcare and IT sectors and joins Hypercom from Siemens AG’s Healthcare Sector, where he
served for the past four years as Director of Business Management and
Sales. Honick developed and implemented country specific solution
strategies and sales within the company’s Medical Solutions and other
Siemens divisions and Siemens affiliates and served as Executive Director for global Key Account
Management with Guardeonic Solutions AG and Steering Board Member with
MediaSec Technologies. Honick holds a Master of Engineering in Computer Science from the
University of Paderborn in Germany.

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CardPartner Offers the Hale House Visa

Affinity card marketer CardPartner has teamed with NY-based Hale House
to offer the “Hale House Visa” that earns $50 each time a card is
activated. Hale House also receives an ongoing share of the monthly
charge volume. Funds help Hale House operate an early childhood learning
center and a transitional housing program. The launch of the Hale House
card follows the recent New York debut of
the Gilda’s Club NYC Visa card. More than 115 other nonprofits and small
groups have launched a CardPartner Visa credit card program since early
2008. Nonprofit Hale House Center delivers child-centered,
family-focused programs, including a learning center for children ages
six weeks to five years and a transitional housing program for single
parent families. New York-based CardPartner is a unit of the privately
held Serverside Group. CardPartner affinity credit cards are issued by
UMB Financial Corporation.

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Retail Cards Stagnate and Face Higher Losses

A new study has found that the U.S. private-label credit card market
contracted by four percent last year and is likely to grow outstandings
a mere 50 basis points in 2009. At the same time, issuers of store and
gas credit cards are facing rapidly deteriorating cardholder performance
as charge-offs have soared by more than 40% and delinquency by nearly
24%. An annual report issued by market researcher Packaged Facts
estimates that receivables for the private-label credit card market
declined to $109 billion in 2008, compared to $114 billion for 2007. In
2007, only 11 private-label credit card issuers had receivables greater
than $100 million, down from 17 in 2004 and 27 in 2001. Further, only
three banks had receivables of more than $10 billion in 2007. Packaged
Facts says this massive concentration at the top of the list is the
result of years of ongoing acquisitions and consolidation in the
industry, leaving the top three private-label credit card issuers in
control of roughly three-quarters of total private-label receivables.
Meanwhile, the latest ABS “Credit Card Index” results from Fitch Ratings
shows 60+ day delinquencies hit 4.5% and charge-offs hit 9.1% at
mid-year 2008 for retail or private label credit cards. Fitch expects
charge-offs to exceed 12% in first half 2009. Contributing to the
performance erosion is that private-label portfolios have a greater
proportion of lower quality borrowers and higher base interest rates.
(CF Library 12/12/08)

RETAIL CARDS OUTSTANDINGS
2005: $104 billion
2006: $111 billion
2007: $114 billion
2008: $109 billion
2009: $110 billion
Source: Packaged Facts & CardData.com

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Card Acceptance Spreads to Boston Taxis

Credit card acceptance among U.S. taxi companies is gaining traction.
Creative Mobile Technologies has signed a deal with Boston Cab Dispatch to
install a self-swipe credit card payment system as well as
multi-channel, interactive media screens and additional technologies.
Boston Cab Dispatch has about 500 member taxis comprising over 25% of
the Boston taxi industry. The City of Boston has mandated rear-seat
credit card acceptance by April. This is the second major American taxi
company in less than three months to announce the implementation of
CMT’s state-of-the-art taxi technology. In October 2008, CMT struck a
similar deal with Chicago’s “Yellow,” “Checker” and “Blue Diamond”
family of 2,600 taxicabs. CMT is currently operating in more than 5,500
New York City taxicabs.

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Givex Prepaid SAP Business One Certified

Closed loop giftcard provider Givex has been certified with “SAP
Business One” through Navigator. With this integration,
merchants using Navigator’s Retail One Solution for SAP Business One
will now have the ability to operate their own gift card programs using
Givex and run customer retention programs as well.
Designed specifically to integrate all aspects of customer and vendor
management for small and medium-sized businesses, SAP Business One is an
enterprise solution that benefits over 20,000 companies worldwide. In
addition to gift cards, Givex also provides other solutions for all
aspects of a merchant’s business including: loyalty cards, e-gift
certificates, frequency cards, returns cards, employee incentives,
expense accounts, promotional cards and coupons.

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U.S. Interchange Revenue Rises 18% in 2008

Interchange fee revenue for the U.S. general purpose credit card market
rose an estimated 18% in 2008 and 56% over the past five years. Since
2004 credit card volume has increased about 45% to nearly $2.3 trillion.
According to R.K. Hammer, estimated interchange revenue for 2008 is $39
billion, compared to $33 billion in 2007 and $31 billion in 2006. About
57% of the $169.0 billion in total revenue for U.S. credit card
issuers in 2008 is produced by interchange. Over the past three years
U.S. merchants have declared war on the card networks demanding lower
interchange and labeling interchange as a “hidden tax.” However, past
surveys from Javelin Strategy & Research found that 36% of merchants
indicated cash, and a nearly identical 35% indicated credit card as the
method of payment that has best helped them drive revenue or meet other
business goals. Only 4% cited PIN debit cards and 1% cited store-issued
or private label cards. Another Javelin study found that 56% of
Americans believe merchants would do nothing and that prices would
remain the same if card fees were lowered. In fact, only 19% of
Americans believe that merchants would actually lower prices overall.
(CF Library 5/9/07; 5/21/07)

INTERCHANGE REVENUE
2004: $25.4 billion
2005: $28.2 billion
2006: $31.3 billion
2007: $33.0 billion
2008: $39.1 billion
Source: CardData.com & R.K. Hammer

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New Alternative Payment System to Launch

Alternative payment provider Cred-Ex is launching its new payment
solution with identity theft protection. Cred-Ex will grant
instantaneous credit to consumers online on its
website or at its participating merchants’ shopping cart screens.
Merchants will feature the Cred-Ex icon next to Visa, MasterCard,
American Express and Discover. Security-conscious consumers that don’t
want to use their credit cards online will be able to make online
purchases with Cred-Ex. Cred-Ex’s
platform does not require consumers to input harmful personal data such
as their credit card, bank account or Social Security numbers. As a
result, Cred-Ex does not store consumers’ sensitive data on its servers.
This will protect the consumer’s identity. Cred-Ex typically approves a
new application in 5 to 10 seconds. Cred-Ex’s patent also applies to
its new m-Commerce solution. Consumers who have a Cred-Ex account will
be able to use their cell phones to make purchases at the point-of-sale
at participating merchants’ brick and mortar locations and has
satisfactorily concluded testing its m-commerce solution.

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Merchant Warehouse and pcAmerica Integrate

Merchant Warehouse and POS provider pcAmerica have partnered to offer
the integration of Merchant Warehouse’s “MerchantWARE”
solution with pcAmerica’s “Cash Register Express and Restaurant Express”
POS systems. The “MerchantWARE” solution contains two core components,
a secure card reader that instantly encrypts card data at the
point-of-swipe to ensure sensitive data is never exposed while
transmitted throughout private and public networks and the “MerchantWARE
Payment Gateway”, which enables merchants to process
credit cards, debit, and EBT cards, manage their account over a secure
Internet connection and store transaction information at the
MerchantWARE host. Additionally, the software provides extensive
reporting features with the capability to re-charge, refund or adjust
previously processed cards, all without decrypting confidential
cardholder data.

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U.S. NSF/ODP Fee Income Tops $37B Annually

New research reveals that the average U.S. household now has more than
12 overdraft transactions per year and pays $368 annually in fees.
GA-based bank consultancy Bretton Woods found that bank and credit union
income from NSF and overdraft program fees exceed $37 billion and that
the NSF/ODP fee income by state ranges from nearly $73 million in Alaska
to $4.07 billion in California. Woods noted that on average,
Californians paid $366 per household in NSF/ODP fees in 2008 or 0.6% of
their median household income on NSF/ODP fees. Also, active households
(defined as the 20.2 million households with bank or credit union
accounts who write the majority of NSF items) pay $1,472 in annual NSF
fees. Bank and credit union data used in Bretton Woods’ modeling
determined 1.28 billion separate check and electronic NSF items.

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Contactless Expands Among On-The-Go Shops

Contactless acceptance, a natural fit with hurried travelers, will be
spreading to more airports, train stations, interstate thruways and
major hotels. Faber, Coe & Gregg has inked a deal to deploy the “ViVOpay
4500m” integrated contactless and magnetic-stripe payment reader at all
of its food & retail store locations on the east coast.
The new ViVOtech unit also accepts NFC mobile phone payments.
Faber operates newsstands, and café shops such as Hugo Boss, Cubavera,
Diamond Fire, Taxco, L’Occitane, Faber News Now, Dunkin Donuts, Java
Moon, Cuban Coffee, Seattle’s Best Coffee, Wetzels Pretzels, Pizzeria
Uno Express, and Sandella’s Flatbread Café. ViVOtech has shipped over
450,000 contactless terminals to more than 33 countries worldwide.

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