ECONOMICS JUNE

The Australian leading index decreased by .5% while the coincident held
steady for the month of June 2008, according to the Conference Board.
The leading index’ decline is consistent with a 1.3% decline since
January and trends witnessed in 5 of the 6 previous months in 2008.
These losses are a direct result of declining share prices, rural goods
exports and yield spread. Meanwhile, the coincident index figure, which
now stands at 145.1, is consistent with no change the month prior and
relative stability throughout the 1H/08. The little change seen in the
coincident index is reflective of the same seen in employment, household
gross disposable income, retail trade and industrial production
throughout Australia. Founded in 1916, The Conference Board is a
business membership and research network to help executives build
professional relationships, expand business knowledge and find solutions
to business challenges.

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UEPS & BSG

Net 1 UEPS Technologies has acquired an 80.1% majority in BGS Smartcard
Systems AG smart card-based payment systems in exchange for EUR71.5
million in cash and and an aggregate 40,134 shares of its own common
stock. Providing banks, enterprises and government authorities across
many global regions, BGS’ “Dual Universal Electronic Transactions”
(DUET) solution is perceived as a great benefactor to the acquiring
organization. Other advantages to the acquisition which Net1 management
believes will offer strategic benefits include increasing Net1 revenues,
an enhanced Net1 product offering through the acquired technology
platform/IT development resources, increased depth in its management
team and accelerated UEPS rollout in newly engaged markets. Sberban
Russian financial institution owns the remaining 19.9% of BGS Smartcard
Systems.

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AUGUST PMI

The August Bloomberg PMI drop to 47.7 reflects decline in Euro retail
sales thanks to an uncertain economic outlook and reduced consumer
purchasing power. Italian sales continued to decline, as it has over the
previous 18 months, however at a less critical rate of 44.8, up from
38.2 the month prior. The Germany rate of decline was stronger than that
of the Italian rate, with a rate of 44.1 while France posted growth at a
retail sales index of 53.7, maintaining the trend from the previous
month which posted a 51.3 on the index. Meanwhile, the Bloomberg prices
index posted 62.7 from 67.3 and retailer gross margins fell from 41.3 to
40.0 over the same period. This rather dismal news is apparently a cause
for concern among the retailers, whom collectively are manifesting a
sense of pessimism through a projected September sales index of 48.0,
down from 49.5 in August.

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VENEZUELA

Prepaid card specialist NovoPayment has launched a reloadable prepaid Visa card for one of the largest shopping centers in Latin America. The new “Sambil Visa” can be reloaded from a minimum initial load of 100 bolívares (US$50) to a maximum per-transaction load of 4,000 bolívares (US$2,000). The Card can be used for transactions via ATM, SMS, P2P and web transactions at the “Sambil Visa” web site. The card can be reloaded at any of Plata’s 250 reloading centers in any amount denomination, up to 4,000 bolívares (US$ 2,000). The new card can also be used at more than 150,000 points of sale around the country. The company projects issuing 35,000 to 45,000 Sambil GPR (General Purpose Reloadable) cards throughout Venezuela by year’s end. Sambil currently operates six shopping centers in the country and has another three under development. The “Sambil Visa GPR Card” is the fourth reloadable prepaid program launched by NovoPayment in Venezuela.

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Number of Data Breaches Rising Rapidly in 08

With 449 confirmed data breaches as of this month, the number of breaches on the Identity Theft Resource Center breach list is already greater than the 446 reported throughout the entire year of 2007. Although this reported figure is already greater than that of the year prior, the ITRC recognizes 449 breaches in less than a year is a small number when compared to the total number of business, governmental, health, banking and educational entities that have databases. However, the total count of records exposed reflects compromised records of more than 22 million individuals while the US Secret Service has reported tens of thousands of credit and debit card accounts have been recently hacked, amounting to losses of over $1 million. The ITRC non-profit organization was established to support victims in resolving identity theft cases and to broaden public education on identity theft.

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On Track Innovations Revenue Up 18% in 2Q/08

NJ-based contactless specialist On Track Innovations reported second quarter revenues of $11 million, an 18% increase over the prior year. Net loss on a GAAP basis for the second quarter decreased by 17% to $5.7 million. The company says the results are due to a shift in the revenue mix in the payment sector from components intended for the U.S. contactless card payments market to greater sales of readers, solutions for the mass transit market, “EasyPark” and more, as well as contactless payments in non-U.S. markets. For complete detail on OTI’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).

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TCM and ICBA Deploy Cypress Card Software

TCM Bank and the Independent Community Bankers of America (ICBA), the
organization for which the former is a subsidiary, has decided to deploy
Cypress Software Systems’ “Mark IV” for the automated credit card
application process. Providing a centralized application processing
solution, Cypress “Mark IV” hosted application software platform charges
no upfront hardware costs, provides bank management and full systems
control. The solutions will provide TCM automated consumer loan
application decisions through quickly retrieved credit reports,
efficient reviews of employment/income and discloses the chosen lending
institution’s loan policies. ICBA represents nearly 5,000 community
banks across the United States while ICBA Bancard payment services
provides over 2,000 community banks credit, debit and merchant
processing products.

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OBERTHUR 2Q/08

Diebold has signed distribution agreements with Banco do Brasil to
provide the organization 5,400 of its ATMs and check dispensers, 3,500
of which will be its “CD 4500” ATM model while 1,900 will consist of the
ATM deployer’s checkbook printing terminals. The new Diebold ATM service
will provide Banco do Brasil such security features as encrypted PIN pad
technology, electronic access control for maintenance access,
safe-locking capabilities, all ATMs protected with a 12-month warranty
and its own operating software platform. This units are in addition to
the 40,000 ATMs Banco do Brasil currently has in service across Brazil.
Banco do Brasil offers financial services to 24.4 million clients in
more than 3,000 cities and 22 countries.

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Trustwave Acquired ControlPath

Chicago-based data security provider Trustwave has acquired ControlPath,
a compliance software platform for managing and automating enterprise
Governance, Risk Management and Compliance. The integration of the
ControlPath GRC technology into Trustwave’s suite
of on-demand compliance management solutions will streamline multiple
compliance mandates for enterprise customers, reducing their expenses
and risk. The combined Compliance Suite manages and automates the entire
compliance lifecycle, from risk assessment and work flow, to remediation
planning and tracking and verification control testing for all security
compliance frameworks. The Compliance Suite can be deployed by companies
in the financial services, retail, manufacturing, energy, entertainment
and healthcare industries.Trustwave is the leading provider of on-demand
and subscription-based
information security and payment card industry compliance management
solutions to businesses and government entities.

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The Clearing House Names a New CEO

The Clearing House Board of Directors
announced that James D. Aramanda, previously with ADP, will serve as
CEO. Aramanda’s experience includes serving as Group President and
Executive Vice President of Automatic Data Processing, Inc. responsible
for brokerage, claims and dealer services businesses in 50 countries. He
also was Vice Chairman of Mellon Financial Corporation (now Bank of New
York Mellon) and CEO of processing businesses that operated around the
globe. During his 18-year tenure at Mellon, he successfully led and
enhanced the company’s benefits processing, pension administration,
shareholder administration, pension and HR consulting, cash management
and brokerage services.

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NAUTILUS & TRITON

Representatives of the South Korea-based Nautilus Hyosung have met with
Triton System management and staff at the Delaware Long Beach and
Memphis facilities of the latter. Having recently signed agreements to
acquire Triton from the Dover Corporation, Nautilus is hoping to close
the deal before 4Q08, pending regulatory approval. During the visit,
H.S. Cho, Executive VP of Corporate Strategy with the Hyosung Group, and
P.K. Ryou, CEO of Nautilus Hyosung, addresses Triton employees, Triton’s
management team and senior staff, answering questions and sharing a
vision for the future. Ultimately, Nautilus reps assured workers
security in their livelihoods with plans to establish a global R & D
center in the United States, expansion, and plans to invest in the
people, facilities and the communities of Long Beach and Memphis. Triton
provides ATMs and ATM management software at 180,000 locations in over
24 countries.

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Q2 Bankruptcy Filings Jump 12.5% Sequentially

Total bankruptcy filings jumped 31% in the second quarter compared to
the year ago period, and increased 12.5% sequentially. The number of
filings is the highest in more than two years. During the second quarter
total filings hit 276,510 compared to 245,695 for the first quarter and
210,449 one-year ago. Compared to two years ago bankruptcy filings
nearly doubled from 155,833. According to the Administrative Office of
the U.S. Courts filings in the 12-month period ending June 30th, neared
the one million mark. The 967,831 bankruptcy cases filed represent a 29%
increase over the prior 12-month period. Of the total filings 64% were
Chapter 7 filings. Consumer filings for the same 12-month period,
totaled 934,009, up 28% from the 727,167 bankruptcies filed in the
12-month period ending June 30, 2007.

QUARTERLY BANKRUPTCY FILINGS
2Q/06: 155,833
3Q/06: 171,146
4Q/06: 177,599
1Q/07: 193,461
2Q/07: 210,449
3Q/07: 218,909
4Q/07: 226,413
1Q/08: 245,695
2Q/08: 276,510
Source: Administrative Office of the U.S. Courts

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