Q3 Bankcard Borrower Debt Increases 6% Y/Y

Average bankcard borrower debt for the third quarter increased sequentially by 1.57% to $5,710, and 6.0% compared to the third quarter of 2007. TransUnion.com says the highest state average bankcard debt was in Alaska at $7,827, followed by Nevada at $6,636 and Tennessee at $6,568. The lowest average bankcard debt was found in Iowa($4,277), followed by North Dakota($4,403) and West Virginia($4,517). Bankcard
debt is the total balance of bank issued credit cards for an individual consumer. The steepest increases in average bankcard debt over the previous quarter occurred in Wyoming (4.96%), Delaware (4.12%) and Arizona (3.12%). Maine experienced the largest drop in its average credit card debt (-1.4%), followed by North Dakota (-1.12%) and Alaska (-0.57%). Trans Union also reported that nationally, the ratio of bankcard borrowers delinquent on one or more of their bankcards increased to 1.09% in the third quarter, up 4.8% over the previous quarter.

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COFFEE LOYALTY CARD

QSR franchise Coffee Republic is now offering a “Payment and Loyalty”
smartcard for its customers, using the sQuid
eMoney service. It combines contactless ‘pay as you go’ with a loyalty
scheme giving customers rewards for redemption in-store. The card will
be Coffee Republic branded with an open payments purse and
a Coffee Republic loyalty purse. Customers receive promotional funds
into this purse, which is then redeemable in-store. Customers can
register the card online, view transactions and top-up their open purse,
as well as view their loyalty purse or top-up in-store.
sQuid eMoney is the alternative to the debit and credit card networks
for sub £10 contactless transactions.

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Smart Payment Solutions Hires Sales Director

VA-based Smart Payment Solutions has tapped Corey Wright, previously
with CS Payments, as its new Director of Sales. Wright founded CS
Payments, where he helped merchant service companies develop and manage
sales teams and created training curriculum for merchant service
professionals . Wright honed his business acumen at AmericaOne Merchant
Services, serving in positions ranging from District Manager to National
Training Manager. Wright holds a BS degree from Southeast Missouri State
University.

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Pink All-Access Visa Prepaid Generates Funds

ACE Cash Express and prepaid card provider Netspend presented a check
for $369,063 to the National Breast Cancer Foundation. ACE Cash Express
and NetSpend donate a portion of every purchase of the “Pink All-Access
Visa Prepaid Card”, marketed by NetSpend and issued by MetaBank to NBCF.
ACE is the largest owner and operator of check cashing stores in the
United States. The NetSpend Prepaid Card Network includes leading
consumer brands and companies serving the un-banked and under-banked
markets, and its strategic relationships include card issuers, EFT
networks and payment card associations. ACE’s and NetSpend’s proceeds
from the pink card campaign have resulted in donations to the NBCF
totaling more than $415,000 since the program began in October 2006.

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Falcon Fraud Manager 6.0 Begins Deployment

Fair Isaac confirms it is releasing the “Falcon Fraud Manager 6.0”
scoring server to select customers. The product’s general availability
is spring 2009. The “Falcon 6.0” scoring server is the first to offer
adaptive analytics, which provide dynamic, real-time self-calibration of
fraud detection models, enabling institutions to identify and respond to
these new threats with unprecedented speed.
It expands Fair Isaac’s patented fraud detection and profiling
techniques to create intelligent profiles targeting high-risk ATMs,
merchants, risky geographical regions and other criteria. Extensive
testing with clients showed up to 44% improvement in detection model
performance, translating to increased fraud detection with fewer false
positives. Fair Issac notes that data from Fair Isaac customers,
combined with independent research, shows a measurable increase in
certain types of fraud, notably cross-border and concentrated “flash
fraud” attacks, as well as emerging patterns of fraud in
card-not-present (online or telephone) and debit card transactions.

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Vindicia Unveils a New Version of CashBox

Payment management software provider Vindicia has rolled out the newest
version of “CashBox” hosted billing solution. “CashBox” is a
“best-of-breed” billing system for creating and managing recurring and
real-time payments and helps merchants improve customer retention and
maximize profit. “CashBox’s” new features include integration with
payment processor “Global Collect” to provide merchants with access to
global payment methods; “CashBox” now enables online merchants to
support pricing plans based on usage, such as paying for specific
numbers of downloads of a movie service, as well as more complex
metering capabilities, such as auto refill of game tokens and increased
support for Chase Paymentech’s “Account Updater” which automatically
provides VISA and MasterCard cardholder account updates relating to
upgrades, card expirations and account closures, increasing
authorization approvals and customer retention.

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Discover Card Introduces a Green Option

The “Discover Card” is now available in a biodegradable form, the first
such consumer card available in the U.S. marketplace. It is made of
biodegradable PVC and will fully degrade within five years. The new card
can be identified by the biodegradable symbol that will be visible on
the back of the card. The new bio card joins Discover’s other green
initiatives such as paperless statements. In 2008, Discover says it sent
nearly 14 million paperless statements, which has helped save more than
an estimated 4.6 million pounds of paper. In October U.S. Bank
teamed with CPI Card Group to offer a “bioPVC” card to its “Voyager”
commercial fleet card customers. Arthur Blank introduced the “AB
HybridCard” in October that is part recycled and part virgin PVC. Arthur
Blank also offers the “AB BiodegradableCard,” “AB RecycledCard,” and the
“CornCard USA” as part of its green program. (CF Library 10/14/08; 10/28/08)

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GLOBAL PAYMENTS/UCS

Global Payments Acquisition 4 has acquired all shares of United Card
Services. UCS is the largest credit and debit card processing company
in Russia and acts as the processing agent and servicer for Rosbank.
Following completion of the proposed sale of shares, Global Payments
will continue to provide the shares of UCS as
security to secure the repayment obligations of Rosbank under a secured
loan until the final maturity of the transaction.

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Veritec Names a New President/CEO

Data encoder Veritec has hired Jeffrey Hattara, previously with Datacard
Group, as its new President/CEO. Before Datacard, he was the Senior VP
and CFO for Datacard, VP and CFO for BMC Industries in
Minneapolis, Minnesota, and before that had a long management career at
USG Corporation in Chicago. There he held numerous corporate and
operating finance positions, including serving as Director of Corporate
Finance during an extensive period of capital market restructurings.
While at USG, he also served as Head of Finance for USG International,
the company’s international component. Hattara earned his undergraduate
degree in Accounting and Finance from the University of Illinois in
Chicago and his MBA from Northwestern University, J.L. Kellogg Graduate
School of Management.

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BIOMETRIC SURVEY

A recent survey conducted by Unisys indicates that 67% of consumers
surveyed around the world trust fingerprint scans to verify their
identities with banks, government agencies and other organizations.
Fingerprint scans rank higher in consumer trust than lesser known
biometric solutions such as facial scans, of which 44% of respondents
said they are comfortable with this method and 38% who accept scan of
blood vessels in the hand. Consumers in Malaysia, Australia and the U.K.
are the most
accepting of all biometric methods studied in the research and are also
more accepting of identification methods
that are generally unpopular in other parts of the world. Hong Kong
residents distrust many methods of authentication,
including PINs and personal passwords, but are most accepting of
fingerprints as an authentication method.

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Fidelity Intros AmEx Invest First Visa Signature

The competition among brokerage firms to offer credit cards with
investment incentives ramped up this week with the launch yesterday of
the “Schwab Bank Invest First Visa Signature” and tomorrow’s launch of
the “Fidelity Retirement Rewards American Express” card. The new
Fidelity card offers a 2% earn rate on retail purchases when cardholders
redeem their cash rewards as a current year contribution into their
Fidelity IRA (Traditional IRAs, Roth IRAs and SEP IRA) accounts. Once a
cardholder reaches a minimum of 5,000 points, or $2,500 in purchases,
points can be automatically swept as a $50 current year contribution
into the user’s designated Fidelity IRA. If the cardholder has maxed out
their IRA contribution for that year, they can continue to accrue points
and restart automatic deposits to their IRA the next year. Cardholders
can also automatically redeem their rewards as cash into other Fidelity
accounts or redeem them for various rewards. The new “Schwab Bank Invest
First Visa Signature” credit card offers an unlimited 2% cash-back on
purchases that is automatically deposited into a Schwab One brokerage
account each month. The Fidelity and the Schwab new credit card programs
are issued and administered by BofA’s FIA Card Services. (CF Library
12/8/08)

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SMB PERSPECTIVES

A new study on Latin American micro, small and medium business has found that that 40% of those surveyed continue to use their personal credit card for business purposes. According to the research, in the last year, there has also been an increased diversification in the types of financing sources that SMBs rely on. Their primary sources of financing identified by respondents are bank loans (54%), followed by credit cards (31%), provider credit (25%) and family and friends (6%). The study, commissioned by Visa and developed by The Nielsen Company, found 76% of SMBs surveyed still pay for their expenses with inefficient payment methods such as cash or checks. The majority of SMBs surveyed are registered as individuals and not as legal entities reflecting a key characteristic of this segment: the lack of separation between the owner as an individual and the company, and the tendency to take a personal approach to business matters. Additionally, half of the SMB owners surveyed reported growth from the previous year.

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