Visa Sets PCI DSS Compliance Deadlines

Visa has issued global mandates for “PCI DSS” compliance that sets
September 30, 2009 as the deadline for “Prohibited Data Storage” and
September 30, 2010 as the deadline for “Compliance Validation.” Visa
will require confirmation from acquirers by September 30, 2009 that
their “Level 1” and “Level 2” merchants do not retain sensitive payment
card data such as full magnetic stripe (also known as track data),
security codes or PIN data after transaction authorization. Furthermore,
Visa will require acquirers to provide an “Attestation of Compliance”
for each of their Level 1 merchants demonstrating that each has
validated full “PCI DSS” compliance by September 30, 2010. After that
date, Visa will impose appropriate risk controls, up to and including
acquirer fines for failure to provide an attestation form to Visa
confirming that each of its “Level 1” merchants has validated full “PCI
DSS” compliance. Effective February 1, 2009, Visa will only require
submission of an executed Attestation of Compliance Form and the
“Executive Summary” section of the service provider’s Report on
Compliance (ROC) to demonstrate full PCI DSS compliance as a Level 1
service provider. Level 2 service providers will submit version D of
the Self-Assessment Questionnaire (SAQ). Issuers and acquirers are
responsible for reviewing the accuracy of the SAQ.

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CompuCredit Navigates Rocky Sub-Prime Market

Atlanta-based sub-prime credit card specialist CompuCredit reported a
net GAAP loss for the third quarter of $32.3 million compared to a $44.9
million net GAAP loss in the prior quarter, and a net GAAP loss of $53.2
million one-year ago. Total managed receivables dipped by 16%
year-on-year for the third quarter ending at $3,465,928,000. The issuer
says it is in a capital preservation mode and has been focusing on
account management and cost control actions aimed at generating cash and
deleveraging its balance sheet. At the end of the third quarter, the
60-plus day delinquency rate stood at 13.1%, compared to 12.6% in the
prior quarter and 14.6% for 3Q/07. The adjusted charge-off rate was
14.2% in the second quarter, down from 19.2% for the second quarter and
up from 10.0% in the previous year quarter. At the end of the quarter,
CompuCredit had 4,342,000 accounts, compared to 4,590,000 in 2Q/08. For
complete details on CompuCredit’s third quarter performance, visit
CardData ([www.carddata.com](http://www.carddata.com)).

COMPUCREDIT NET INCOME (GAAP)
3Q/06: $38.8 million
4Q/06: $ 9.7 million
1Q/07: (-$ 2.5 million)
2Q/07: (-$11.0 million)
3Q/07: (-$53.2 million)
4Q/07: $15.8 million)
1Q/08: ( -$2.5 million)
2Q/08: (-$44.9 million)
3Q/08: (-$32.3 million)
*GAAP
Source: CardData (www.carddata.com)

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DEXIA & OPTEVA

Diebold has been awarded a two-year branch transformation project the
retail banking group Dexia for 1,000 “Opteva 328 EF/D” recycling units,
customized to meet Dexia’s key requirements for cash recycling and
dispenser functionality. Fully compliant with European Central Bank
Article 6 requirements, it allows a customer to make a bulk cash deposit
of up to 200 notes directly into the machine without an envelope to be
instantly credited. The ATM also has a secure escrow area where the
deposited notes remain
until the customer accepts the transaction, allowing them to cancel the
transaction and have the notes returned if necessary. The deposit
mechanism from the ATM is equipped with many sensors for
fraud detection enabling the bank to safely operate the ATM in an
unattended environment. The algorithms for counterfeit detection are
updated on regular basis to optimize discrimination of new versions from
counterfeit banknotes.

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Moody’s Analytics Unveils CreditCycle

Moody’s Analytics has launched “CreditCycle”, a new service for forecasting
and stress testing the performance of consumer loan portfolios. Moody’s
CreditCycle identifies and quantifies the effects of external
and internal factors that comprise the key building blocks of consumer
credit performance: quality at origination (vintage quality), lifecycle
component, and the prevailing economic conditions faced by existing
account holders. The software platform is highly flexible and
customizable, allowing users to edit model coefficients and variables. A
fully documented methodology provides complete transparency for consumer
lenders, helping them understand their consumer credit exposure and
underlying drivers of performance. Lenders can also tailor the analysis
to fit with their particular client segmentation needs and economic
outlook. Portfolio
performance forecasts under alternative economic scenarios can be used
to facilitate compliance with risk management and regulatory
requirements such as Basel II.

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SCA/ETA Smart Payments Cards Webinar Slated

The Smart Card Alliance and Electronic Transactions
Association will present the “Fundamentals of Smart Cards for Payment,”
webinar on Tuesday, November 18th and will focus on new ways in which to
pay with smart card-based chip cards, contactless cards and
mobile phones. Speakers scheduled include: Randy Vanderhoof, executive
director of the Smart Card Alliance; Rori Ferensic, director of
education and professional development, ETA; Gilles Lisimaque, partner,
Identification Technology Partners; and Roger Musfeldt, director,
mobile commerce solutions, First Data Corporation. The webinar
presentations will answer these questions that include: How are smart
cards used in payment in the United States and Canada; what standards do
smart cards follow for payment applications and what security do smart
cards bring to payment transactions; how do smart card payment
transactions work, from the card to the point-of-sale terminal to the
processing infrastructure and how do they differ from magnetic stripe
transactions; what changes need to be made in the back-end and at the
merchant to process smart card transactions; what other business
applications are enabled by the use of smart card technology?

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American Affluent Stay Upbeat and Spending

A new study reveals that the American affluent feel the economy is
bottoming out and that they are upbeat about improvements in business
conditions. Of the 17 categories of products and services included in
the survey, at least two-thirds said they would spend the same or more
as they did during the prior 12 months. The American Affluence Research
Center says its composite “Affluent Consumer Expectations 12-Month
Economic Outlook Index” of 113 rose 11 points from the Spring survey.
The survey participants have an average income of $304,000, an average
net worth of $3.1 million, and average investable assets of $1.6
million. The AARC says the survey is representative of the wealthiest
10% of U.S. households, which, according to the Federal Reserve Board’s
latest research, account for almost 70% of the total net worth of all US
households and 36% of total U.S. household income, thus representing
over a third of gross domestic product.

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ACI Worldwide Q3 Profits Double Sequentially

Electronic payment systems software provider ACI Worldwide reported
revenue of $108.6 million in the third quarter, a 28% gain over the
prior-year period. Net income for the quarter was $1.7 million compared
to net loss of $1.3 million during 3Q/07. At the end of the third
quarter, there was an estimated 60-month backlog of $1.4 billion
compared to $1.3 billion one-year ago. During the quarter, ACI signed
two new “BASE24-eps” sales in Korea and in Malaysia; landed sales in
Poland, Hungary, France, Dubai, United Kingdom and Nigeria for
“BASE24-eps,” “BASE24-atm,” “ACI Proactive Risk Manager,” and “ACI Smart
Chip Manager”; and added 23 new applications to existing customer
relationships ranging from “ACI Retail Commerce Server” to “ACI
Proactive Risk Manager for Enterprise Risk to Smart Chip Manager.”
ACI continues to expect full year 2008 sales between $430 million and
$440 million. For complete details on ACI’s latest performance visit
CardData (www.carddata.com).

ACI REVENUES
3Q/07: $84.9 million
4Q/07: $101.3 million
1Q/08: $92.6 million
2Q/08: $109.2 million
3Q/08: $108.6 million
Source: CardData (www.carddata.com)

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More Online Holiday Shoppers Buying Green

According to a new PayPal 2008 Holiday Survey, 73% of online shoppers
plan to increase what they donate to charity, a 13% increase from 2007
and 27% of shoppers will “go green” in gift giving such as organic
foods, eco-conscious clothing and recycled housewares this holiday
season. Charitable giving is strongest among 83% of the 45 and older
online holiday shoppers and among the most affluent with 85% of
salaries of $100,000 per year or more. College graduates are the most
likely to receive alternative gifts including green items with 25%
receiving electronic gift cards and 20% to receive donations to charity
on their behalf.

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Worklife Rewards Visa Offers Deferred Payments

Office Depot and Chase Card Services have launched a promotion for
“Chase Worklife Rewards Visa” card holders a payment holiday until
January 2010 for purchases of $499 or more. This special offer includes
the most popular holiday gift items, such as notebook
computers, desktop computers, cameras and printers. The “Chase Worklife
Rewards Visa Credit Card” provides Office Depot
customers with a wide variety of valuable benefits, including 5% back in
rebates on all Office Depot purchases, with
no exclusions. Rebates are automatically applied as a statement credit
to cardmembers’ accounts each month, as long as an Office Depot purchase
is made that month. If an Office Depot purchase is not made that month,
the rebates continue to accrue until the next Office Depot purchase is
made; 1% back in rebates everywhere else Visa credit cards are
accepted; no interest introductory APR on purchases and balance
transfers;no caps, no limits and no expiration dates on earned rebates;
contactless payment functionality for fast and convenient check-out;
easy-to-use reporting tools for better cash flow management; and access
to entertainment and event packages, travel offers and
upgrades and 24/7 concierge services.

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A U.S. Economic Index Shows Relative Strength

While most indices point to record low economic confidence among
consumers and business owners, one monthly index is showing relative
strength. Decision Analyst’s “U.S. Economic Index” has held steady
during the month of October at 89, a level unchanged for seven months.
Decision Analyst says its survey data shows that October was a negative
month for business activity in the U.S., as consumers and businesses
were shell-shocked by the “Financial Panic of 2008.” However, the
average man on the street in the U.S. appears to see glimmers of hope
amidst the financial ruins and the media ‘crisis’ hype. If credit and
financial markets begin to function normally, it’s very possible that
the consumer could snap back relatively quickly. Among its survey
findings most consumers report that they have plenty of room to expand
credit card debt, if they wish. Decision Analyst says it also found
soaring optimism about cost-of-living reductions, related primarily to
the decline in gasoline prices.

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