EMERGING MARKETS INDEX

MasterCard Worldwide has released the “Worldwide Centers of Commerce: Emerging Markets Index”.
The Index evaluates 65 cities on eight dimensions related to their
business climate, political environment, economic growth, quality of life, and knowledge creation,
and explores the compelling global and regional economic trends that distinguish these
cities as future development hubs.
With four cities amongst the top 15, Europe holds a strong position
within the Emerging Markets Index and presents a host of interesting findings:
Budapest’s commercial heritage helped propel it to the #3 spot. The number
one city in the Index for dimensions covering quality of life and risk and security,
Budapest also scores among the top ten for its economic and commercial environment and its
business climate; Warsaw is ranked # 8 within the Index benefits from being
the capital of the largest national economy amongst the new admissions to the European
Union. Its particular strengths are the quality of life, and low levels of risk
coupled with high security, an area in which it ranks second among the cities on the Index;
Moscow, which placed #14 in the Index overall and first among Russian
cities, ranked among the top five cities in dimensions related to air passenger,
cargo volume and other measures of connectivity, as well as financial market volumes and Istanbul ranked
among the top ten in commercial connectivity, befitting a growing nation
with easy geographic access to many other growing markets, high rankings for its financial markets and quality of life.

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Loyalty Services Drives ADS Q3 Performance

Dallas-based Alliance Data Systems reported that third quarter revenue increased 4% to $511.2 million. The Canadian “AIR MILES” reward program was the key driver, achieving organic growth rates of 25% in revenue. The third quarter performance in its Epsilon Marketing Services business was driven by new deals with Commerce Bank, Beech-Nut Nutrition and others. But, Private Label’s results continue to be affected by
the loss of the Lane Bryant portfolio. Loyalty Services’ third quarter revenue was $187.7 million, up 25% from 3Q/07. Epsilon Marketing Services’ revenue performance grew 6% in the third quarter versus 5% in the second quarter. Private Label Services posted third quarter revenue of $94.7 million, a 2% gain over the year ago quarter. Private Label Credit revenue declined by 12% to $182.4 million for the third quarter, compared to the prior year. For complete details on ADS’ third quarter performance visit CardData ([www.carddata.com](http://www.carddata.com)).

ADS REVENUE HISTORICAL*
3Q/07: $575.5 million*
4Q/07: $602.7 million
1Q/08: $499.3 million
2Q/08: $507.2 million
3Q/08: $511.2 million
* as originally reported; now adjusted to $492.0 MM
Source: CardData.com

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CoreTrace Joins the PCI Security Council

Application whitelister CoreTrace has joined the PCI Security Standards Council as a new
participating organization. CoreTrace will now have access to the
latest payment card security standards from the council, be able to
provide feedback on the standards, and become part of a growing
community that now includes more than 500 organizations. In an era of
increasingly sophisticated attacks on systems, adhering to the PCI DSS
represents an entity’s best protection against data criminals. By
joining as a participating organization, CoreTrace is adding its voice
to the process. CoreTrace’s BOUNCER technology with “Trusted Change” capability
enables IT professionals to predefine multiple
sources from which users can safely install applications and have them
automatically added to the whitelist without any further IT
involvement required.

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Big Phish Hits BofA and AmEx in October

On October 16th, MessageLabs reports it intercepted 7,000 phishing
attacks exploiting Bank of America, in a large, short-lived spike
spanning two hours. The next day, the same phishing emails more than
doubled to 15,000 and continued through the weekend reaching 125,000
total emails. Then on Monday, October 20th a large American Express
phish run started at 5am and reached 35,000 emails for the day.
MessageLabs analysis of IP data determined that the Cutwail botnet,
currently the largest botnet controlling more than one million active
bots, is responsible for both scams. MessageLabs notes that as change
prevails in the global banking system, scammers are taking advantage of
the frenzy surrounding the mergers and bailouts by targeting Bank of
America, Wachovia, Chase Manhattan and Washington Mutual and large UK
banks like Lloyds, TSB and RBS.

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GDC4000

Smart card developer Giesecke & Devrient has introduced the “GDC4000”
display card
capable of being manufactured on a high-volume industrial
scale. The six-digit display is incorporated in the card during the
normal hot-lamination process, thereby augmenting its resistance to
mechanical wear. G&D’s can be used to display
one-time passwords (OTPs) for secure authentication during access to IT
networks, or transaction numbers (TANs) for online banking. The use of
a dynamically generated one-time password in conjunction with
static customer data such as account number, user password and personal
identification number (PIN) significantly enhances the security of
online authentication. The display card makes it possible to add a
supplementary, bi-directional identity check that protects users and
providers of online banking services against the theft and fraudulent
misuse of passwords and TANs.

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Q-Card Expands its Lab Testing Capabilities

PA-based Q-Card Laboratories’ has expanded its
capabilities to accommodate the third-party testing needs of its
customers, including the testing of green substrates and other new
industry innovations. The lab provides a comprehensive plastic card and paper ticket
testing facility to leading card manufacturers around the world. Through
the use of its Mag3 magnetic stripe analyzer, a programmable optical
card measurement system called Smart Scope, and a host of ISO-specified
testing equipment and procedures, Q-Card Laboratories provides physical
card testing, product test cards as well as consulting services onsite
and offsite at company facilities.

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AmEx International Card Profits Drop 52%

American Express reports that net income for its International Card
Services business plummeted 52% for the third quarter of this year
compared to the same quarter in 2007. The decline was primarily
attributed to revenues net of interest expense increasing 11% due to
spending and loan growth. Total expenses rose by 13% reflecting higher
volumes and business-building investments and provisions for losses
increased 60%, primarily driven by higher lending reserve levels in
Mexico. Marketing, promotion, rewards and cardholders services expenses
increased 10% reflecting greater marketing and promotion expenses and
higher volume related rewards costs. Both revenue and expense growth
rates were also inflated by the translation of foreign currency.
American Express had 16.4 million cards-in-force at the end of the
quarter, up 4% from 3Q/07. Card billed business for the quarter
increased 11% to $27.5 billion. For complete details on AmEx’s
International card performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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CardTrak’s CardSmarts Gives Away More Dough

The holiday season will be a little more special for the 45 winners in the latest CardSmarts pre-holiday sweepstakes, which ended September 30th. More than $12,000 in prepaid cards and cash have been awarded this year by CardTrak.com. The latest “Grand Prize” winner is J. Warren of Texas, who won $1,000. The $500 “Second Place Prizes” went to: T. Golynker (OREGON); B. Burt (IDAHO); F. Harri (GEORGIA); J. LeVeque (ALABAMA) and K. Schymanski (MICHIGAN). Daily Prize winners all received their choice of a $10 gift card from either Starbucks®, Best Buy®, Target® or Wal-Mart®. The prior sweepstakes, which ended in April, awarded the $5,000 Grand Prize to Patricia Rudek of Jacksonville, Florida. In the prior contest nearly 400 “Daily Winners” and “Monthly Winners” received prizes ranging from $10 prepaid store cards to $100 network-branded gift cards. For a list of current winners visit: [www.cardtrak.com/smarts/winners](http://www.cardtrak.com/smarts/winners)

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INSIDE SALES EXECS

INSIDE Contactless has appointed Andy Germano as VP of sales and business development, and
Bob Locascio, as Director, product marketing and
business development. Germano joins INSIDE from AuthenTec, a leading provider of
fingerprint sensors and solutions, where he participated in the
company’s recent initial public offering. Prior to AuthenTec,
Germano led sales and marketing teams for several start-up companies,
including WiDeFi, Tantivy, and BEC Technologies. He also held numerous
marketing positions at Verizon (GTE), Nortel, and Qualcomm. Germano
earned a bachelor’s degree from Saint Vincent College, a second
bachelor’s degree in electrical engineering from Pennsylvania State
University and an MBA from Duke University. Locascio’s experience included leading the
creation and execution of new business and solution strategies for
Agilent Technologies’ $1 billion wireless test equipment business. As
president and executive director of the Telematics Suppliers Consortium,
Locascio planned, formed and led this organization to establish and
promote an industry-standard architecture for the wireless in-vehicle
information and entertainment market. Locascio also held a number of
engineering and management positions at Motorola. Locascio holds a
bachelor of science degree in electrical engineering from the University
of Illinois, Urbana-Champaign.

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BELL ID & ANDiS4EMV

Bell ID has contracted with a top U.S. bank for the provision of its ANDiS4EMV smart card and
application management system. Bell ID will implement and support its ANDiS solution, enabling the bank
to migrate its base of approximately 20 million credit and debit cards
from magnetic stripe to EMV chip cards. The ANDiS4EMV solution is a
powerful life cycle management tool, enabling the bank to track every
step in the life of the EMV cards and the keys, certificates and
applications stored in the chip. Bell ID provides card, application and key
management. Bell ID’s ANDiS range includes solutions for the management of payment and other applications
on mobile phones.

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AMEX INTL 3Q/08

American Express reports that net income for its International Card Services business plummeted 52% for the third quarter of this year compared to the same quarter in 2007. The decline was primarily attributed to revenues net of interest expense increasing 11% due to spending and loan growth. Total expenses rose by 13% reflecting higher volumes and business-building investments and provisions for losses increased 60%, primarily driven by higher lending reserve levels in Mexico. Marketing, promotion, rewards and cardholders services expenses increased 10% reflecting greater marketing and promotion expenses and higher volume related rewards costs. Both revenue and expense growth rates were also inflated by the translation of foreign currency. American Express had 16.4 million cards-in-force at the end of the quarter, up 4% from 3Q/07. Card billed business for the quarter increased 11% to $27.5 billion. For complete details on AmEx’s International card performance visit CardData (www.carddata.com.)

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DIGIPASS CERTI-ID

VASCO Data Security International has launched PKI-based “Digipass CertiID”,
a client-based software suite offering digital
signature capabilities. It provides a solution for strong authentication and
digital signature when using PKI certificates and keys. The solution uses a
smart card or a USB token. The certificates and keys are generated on the
device when the user requests a certificate for the first time. The
certificates and keys are managed on the smartcard or USB token and the
private key can never be exported. Whenever a document or e-mail requires
signing, a PIN code will be asked in order to access the certificates on
the smartcard or USB token. “Digipass CertiID” supports multiple Certificate
Authorities and several logins can be managed on a single device.

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