GEMALTO AWARDS

Gemalto has won the “Best Software” Sesames award at this year’s Cartes
& IDentification tradeshow and is demonstrating “Smart Card Web Mashups” at its booth. “Smart Card Web Mashups”
is the first implementation of the Java Card 3.0 specifications through
a technological solution that combines content
and applications from various Web server. One of the servers is embedded
in a USB device and provides personal data and services to the USB key
holder, such as a contact book, notes, passwords, videos or images. The
information is directly managed in a Web browser via applications like
YouTube or a Personal Information Manager (PIM) portal embedded in the
USB key. The mashup technology allows enriching the services stored in
the device with online content, or personalizing Web applications with
personal data.

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G&D AWARD

Giesecke & Devrient’s “Touch&Travel” ProxSIM NFC-enabled SIM card
project was a winner of this year’s Sesames Awards. A joint program with Deutsche Bahn, Vodafone and
T-Mobile, the Touch&Travel project enables travelers to use their mobile
phone in place of a conventional ticket for public transportation.
Before boarding, users register for their trip by passing their
NFC-enabled cellphone in front of a reader integrated in a so-called
Touchpoint. The end of the trip is registered in the same way. A
background processor calculates the price of the journey on the basis of
the registration data, and displays it on the cellphone. Touch&Travel has been
operating successfully as a pilot project since February 2008. The
operators intend to recruit up to 2,500 test customers for the second
stage of the pilot project.

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CARDS 3Q/08

Payment card volume in the U.K. increased 8% year-on-year in the third
quarter hitting GBP 93.7 billion with a total of 1.9 billion
transactions. Debit cards accounted for 73.8% of all plastic card
purchases compared with 72.0% in 3Q/07. According to data collected by
APACS, credit card outstandings at the end of the third quarter were GBP
54.1 billion, compared to GBP 55.9 billion at the end of the third
quarter 2007. This is a 3.3% year-on-year increase. Bacs volumes and
values grew by 3.2% and 7.4% respectively over the 12 months through
September. Over the same period, the volume of total CHAPS payments fell
by 11.7% with a 22.6% fall in values, primarily due to the closure of
CHAPS Euro in May. CHAPS sterling volumes remained stable and values
rose by 10% over the year. The UK “Faster Payments Service” was launched
on May 27th. During September, 11.7 million payments had been processed
for a value of GBP 4.9 billion. Cheque and credit clearing volumes
declined by 10.6%, total values declined by 6.3%.

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RYANAIR CARD

Ryanair, Europe’s largest airline, has teamed with M-Cube to mass market a multi-branded prepaid card across the U.K. and Ireland.
The new “Ryanair MasterCard Prepaid Card” offers cash-back, rewards, discounts, sweepstakes, free air tickets and is denominated in GBP or euros. The new card offers up to 20% cash-back on all money spent on the card from purchases from brands including Miss Selfridge, SKY Digital, PC World, Laura Ashley and Dixons. Extra savings can be made from discounted shopping such as up to 50% off tickets with TicketMaster when shopping via the member’s portal as well as earning monetary rewards from every purchase made. Also, with every purchase made or ATM transaction on the cardholder earns 10 points. Once users reach their first 1000 points, a reward of GBP 10 will be credited to the card.
The GBO 60 annual card membership fee also entitles cardholders to four free flights on Ryanair.

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SEPT PULSE

The Conference Board announced that the leading index for Korea declined
0.7% and the coincident index declined 0.4% in September.
The leading index fell again in September, its fourth decline
in the past five months. The value of machinery orders, private
construction orders, the stock price index, and the yield of government
public bonds contributed negatively to the index this month, more than
offsetting the large increase in the letters of credit arrivals component. Since
March, the leading index has declined by 4.6% (about a -9.1% annual growth rate), well below the 0.1%
increase between September 2007 and March 2008. The leading index continued its downward trend after a brief
increase in July. It has declined by almost 7 percent from its most recent
high in October 2007, the largest decrease since the 1997-98 decline. However, three of the seven components that make up the
leading index increased in September. The positive contributors – from the
largest positive contributor to the smallest – were letter of credit
arrivals, the (inverted) index of inventories to shipments, and real
exports FOB. Negative contributors – from the largest negative contributor
to the smallest – were value of machinery orders, private construction
orders, stock prices, and the (inverted) yield of government public bonds.
The coincident index has also fallen slightly since the beginning of this year. The decline and widespread
weakness in the leading index over the past six months suggest that economic
activity is likely to remain sluggish in the near term, and the
risks for further economic weakness remain elevated.

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Shell Oil to Introduce a Direct Debit Card

The growing effort by gasoline retailers to steer customers away from
general purpose credit and debit cards will gain more traction next
year. Shell Oil Products US is rolling out a new payment card in January
that features a direct link to a consumer’s checking account and offers
a discount price on each gallon. Other gasoline retailers such as Sunoco
already offer discounted per gallon pricing for cash customers. The new
“Shell $aver Card” will offer a promotional savings of 5 cents per
gallon on Shell fuel purchases until June 1, 2009 and 2 cents per gallon
thereafter. The card can be used at participating Shell-branded stations
for any purchases except lottery tickets. However, the discount applies
only to gasoline and diesel purchases. Shell says the new card offers up
to a 50% merchant service fee savings per transaction over costs to
accept third-party credit cards. All “Shell $aver Card” transactions
will be routed through the Shell network by payment processor First
Data, and each transaction will be processed using First Data’s
“TeleCheck” check verification services.

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LML 3Q/08

Payment technology provider LML Payment Systems reports results for its second fiscal quarter and six
month period ended September 30, 2008. Revenue for the three months ended September 30, 2008 was approximately
$3,087,000, compared to $3,183,000 in revenue for the three months ended
September 30, 2007, however, revenue for the six months ended September 30, 2008 was approximately
$6,264,000, an increase of approximately 35%, from revenue of $4,638,000
for the six months ended September 30, 2007. Q2 Highlights include 595 new customers added and net income of $65,000 versus net loss of $181,000 — an
improvement of $247,000. Over the six month period, LML saw a revenue increase of 35% to $6.3 million with
net income of $19,000 versus net loss of $429,000, an improvement of $448,000.

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1,000 CO-OP CUs Embrace TNSLink for ATMs

CO-OP Financial Services reports that more than 1,000 CO-OP branded credit
unions sites across North America have signed up to use Transaction Network Solution “TNSLink” for ATMs.
Under the arrangement with CO-OP, TNS worked to test, create and
implement a variety of configurations of the “TNSLink” service in order to
be compatible with all of the credit unions. This includes secure
wireless as well as wired broadband solutions. The TNSLink solution is an end-to-end managed data
communications solution designed specifically for the ATM, Kiosk and POS
terminal markets. TNSLink, also branded as CO-OP Connect, allows
processors and terminal estate owners to utilize the latest
telecommunications technologies for high speed data delivery without the
need to replace existing legacy equipment.

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Average Debit Card Transactions Stay Level

The gap between the average credit card and debit card purchase
transactions has increased by more then $5.00 over the past five years.
Based on mid-year data from Visa and MasterCard, the average credit card
purchase transaction was $90.47, compared to $40.02 for debit cards.
According to CardData, the average debit card purchase transaction as of
June 30th, 2004 was $39.88, compared to $84.70 for credit cards. During
the past five years average debit card purchase transactions have
hovered around $40 while average credit card purchase transactions have
grown from $85 to $90. At mid-year 2008, Visa and MasterCard reported
$355 billion in credit card purchase dollar volume among 3924 million
transactions. At that same point debit card purchase dollar volume was
$289 billion with 7222 million transactions. For the latest data on Visa
and MasterCard visit CardData ([www.carddata.com](http://www.carddata.com)).

VISA & MASTERCARD PURCHASES
Debit Credit
2004: $39.88 $84.70
2005: $39.23 $84.54
2006: $40.58 $94.30
2007: $39.92 $89.06
2008: $40.02 $90.47
Source: CardData (www.carddata.com)

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HOLIDAY PULSE

A new survey by Coinstar reveals that 44% of Canadians
stretch their budget during the holidays. When looking for ways to save,
the first thing Canadians are likely to put on the chopping block is the
social activities they enjoy, with 41% forgoing certain
luxuries like going out with friends and 54% of Canadians feeling down after the
festivities are over. Of those Canadians who feel down, returning to the daily
grind leaves 30% of them feeling the post-holiday blues
the most. with 20% of men feel a rush of post-holiday depression when it’s time to return to
work, compared to 12% of women. “The Downer of Debt” impacts 23% of those who
feel most depressed when they receive credit card and
bank account statements tallying their holiday purchases.

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Consumer Confidence Trying to Find a Bottom

The growing credit crunch, escalating job crisis and prolonged
housing debacle continues to drive consumer confidence into the ground.
About one-third of consumers view their current financial situations as weak this month, up from 29% in October. The “RBC CASH Index” now stands at 34.7, compared to 37.0 in October and 69.2 for September. The composite “Index” also found that 71% of consumers report they are less confident in making a major purchase such as a home or car, compared to 69% last month. The “RBC Expectations Index” rebounded this month, increasing 18.2 points to 23.3, compared to 5.1 in October. The “RBC Jobs Index” for November stands at 74.0, compared to 78.8 last month. The “RBC Current Conditions Index” dropped 12.4 points to a 25.6 reading, compared to 38.0 in October. After dropping 12.2 points this month, the “RBC Investment Index” stands at 34.8, compared to 47.0 in October.

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