Sagging Retail Sales Shocks Stocks

The Commerce Department this morning reported that retail sales collapsed by 1.2% in September, a figure much larger than expected, forcing the stock market into a yet another tail-spin. The Dow sank nearly 400 points this morning. There is now a growing consensus that a U.S. recession is underway, that will likely spread globally. The Deloitte Research “Leading Index of Consumer Spending” also fell in September. The “Index,” comprising four components — tax burden, initial unemployment claims, real wages and real home prices — fell to 0.51%, from a revised gain of 0.94% a month ago. Unemployment claims are up 35% from a year ago and house prices fell by 11% in the most recent month.

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Discover and Visa/MasterCard Settle

MasterCard
Incorporated confirmed that it has reached an agreement in principle
to settle its outstanding litigation with Discover Financial Services Inc.
The parties are working on settlement documentation. Details of the terms
of the settlement will follow.

About MasterCard Incorporated

MasterCard Incorporated advances global commerce by providing a
critical economic link among financial institutions, businesses,
cardholders and merchants worldwide. As a franchisor, processor and
advisor, MasterCard develops and markets payment solutions, processes over
18 billion transactions each year, and provides industry-leading analysis
and consulting services to financial institution customers and merchants.
Through its family of brands, including MasterCard(R), Maestro(R) and
Cirrus(R), MasterCard serves consumers and businesses in more than 210
countries and territories. For more information go to
http://www.mastercard.com.

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FNIS & CERTEGY

Card processor and issuer Fidelity National Information Services has
completed the previously
announced sale of the operating assets of Certegy Australia to
Flexigroup Limited for $30 million in cash and other
consideration. Based on the current exchange rate and the collection of
accounts receivable which were not included in the sale of assets, FIS
expects to realize incremental net cash of approximately $110 million, with
the majority of the receivables expected to be collected within 18 months.

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AMEX & HYATT PROMO

The Hyatt Regency Vancouver is offering a two night “Family Fall Retreat
Promotion” between September and December 28, 2008. Cardmembers who
book and pay with any American Express card will receive a $50 US Dollar
credit. Global Hyatt Corporation, one of the world’s premier hotel companies,
offers today’s travelers more than 730 hotels and resorts around the
world in 45 countries.

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CONTACTLESS BRAZIL

INSIDE Contactless has teamed with American Banknote (ABnote) Brazil to produce a
MasterCard type-approved contactless payment card. INSIDE is supplying ABnote Brazil with its
“MicroPass 4003”, a contactless payment processor designed from the
ground up for “MasterCard PayPass” applications, and has worked closely
with them to obtain type approval, implement in-house
pre-personalization capabilities and ensure their products achieve
optimal performance. The “MicroPass”
intelligent payment platform has achieved its unprecedented success by
continuing to deliver superior performance and flexibility and is designed to power open standard
contactless and dual-interface bank card payments along with other
value-added applications in all global regions. Based upon a RISC
architecture and optimized to the demanding requirements of contactless
transactions, each of the “MicroPass” family of products is designed to
meet the demands of issuer organizations in the bank card payments,
transit and access control markets. American Banknote SA is a provider of solutions involving smart
cards, contactless cards, magstripe cards, phone cards, RFID, ID systems
and print management.

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Restaurant Gift Cards to be Popular

This could be the toughest holiday sales period since 2001, and
perhaps since the ‘Volcker recession’ of 1981. Archstone Consulting
predicts that holiday retail sales will nominally increase 0.5% to 1.0%;
lagging the core inflation rate of 2.6%. This represents a significant
contraction in real terms. Archstone also found in its “2008 Holiday
Gift Card Survey” that restaurant/fast food gift cards will be the most
purchased cards this season, followed by pre-paid bank cards that have
the flexibility to be used almost universally. The research firm noted
that consumers can no longer take on debt to pay for holiday spending. .
Typically, three quarters of the holiday season consumers use a credit
card during this period.

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Aite Hosts a Credit Crisis Webinar

Aite is hosting “The Credit Crisis: How We Got Here and Where We’re Going” webinar.
Aite senior analyst John Jay and other members of Aite Group’s Securities & Investments team will share
insights and answer questions on the current credit crisis. Topics discussed will include the mortgage market,
credit default swaps, the impact of structured products, CDSs and leverage on the
financial system and the current and expected impact of the credit crisis.

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GE MONEY 3Q/08

GE reported that profit for its GE Money unit declined 16% in the third quarter to $791 million while revenues rose 6% to $6.54 billion. In the prior quarter profit for GE Money declined 9% but, revenues were up 6%, compared to one-year ago. During the quarter, GE Money introduced the “Chevron and Texaco Visa” credit card and renewed a multi-year agreement for clothing retailer Brooks Brothers private label card and “Dual Card” credit programs. Internationally, GE Money concluded the $5.4 billion sale of its Japanese consumer finance business to Shinsei Bank and proposed a 30% stake in a credit card venture with Life Insurance Corporation. For complete details on GE’s latest results visit CardData (www.carddata.com). (CF Library 7/29/08; 8/25/08) (CFI Library 7/29/08; 9/23/08)

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Arthur Blank Unveils its 3rd Green Card

Boston-based Arthur Blank and American Banknote have introduced a new card into its “GreenLine” suite of environmentally friendly products. The new “AB BiodegradableCard” joins the “AB RecycledCard” and the “CornCard USA” as part of green program. In addition to being biodegradable, the new “AB BiodegradableCard” is made from plants such as alfalfa, beets, corn, potato skins, switch grass and wheat. The new material is industrial compostable according to ASTM International standards and meets the “D6400” standard for compostable plastics. The material composts in a period of 180 days or less. Arthur Blank introduced its “CornCard USA” in 2006 . The corn-based plastic card is manufactured from NatureWorks PLA. The Company has the capacity to print up to 1.5 billion cards per year.(CF Library 1/17/06)

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Springbok Intros Personalized Messaging

Market researcher Phoenix Marketing International’s “Virtual Mailbox”
has been adopted by two major domestic credit card companies.
“Virtual Mailbox”, a component of Phoenix’s Target Marketing product
suite, predicts the likelihood of success of direct mail offers through
on-line research conducted prior to mail-out. During the test, consumers
open a digital mailbox, remove contents, and take actions based on
real-time responses to the mail received. “Virtual Mailbox” can
determine the estimated take rate for each new offer
and compares it with current offers. It also pinpoints the likes and
dislikes of each new concept’s features and benefits, and identifies the
features and benefits that drive the most interest. “Virtual Mailbox” can
provide relevant, critical research at any point in
the development cycle, from rough concepts to post-launch monitoring. It
can evaluate both pre-launch concepts and offers and competitive clutter
mail. Clients can also use “Virtual Mailbox “to test ‘out-of-the-box’
concepts deemed too costly or risky to put into the actual marketplace
without prior research.

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Renesas and OTI Team for Contactless

Semiconductor provider Renesas Technology and On Track Innovations have
partnered to develop a secure contactless microcontroller payment certified by “MasterCard PayPass” and Visa. The solution was developed to support the large volume orders expected for the US contactless payments market. The new secure payment solution has been certified by
“MasterCard PayPass” for their 3.3 specifications and “Visa 2.0.2 A&C V3.0” specifications to comply with contactless card standards. Renesas is one of the largest contactless chip providers in the world. Applications developed by OTI include product solutions for petroleum payment systems, homeland security solutions, electronic passports and IDs, payments, mass transit ticketing, parking, loyalty programs and secure campuses.

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POINTS MILLIONAIRE

M&S Money customers
who hold a credit card with the financial services company will
automatically be entered into a drawing to become an “M&S Points Millionaire”.
M&S Money are also offering five runners up prices of 100,000 points
worth GBP 1,000 to be spent in store. Customers can be entered into the drawing by either buying one or more
selected products from M&S Money, registering to manage their account
online, and/or opting to stop receiving paper statements. Customers who
purchase insurance, travel money, personal loans or make an investment
with M&S Money are also eligible.

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