ECONOMICS JUNE

The German leading index decreased by 1.1% while the coincident declined
.1% for the month of June 2008, according to the Conference Board. The
leading index’ decline is consistent with a 5.2% decline since December
and is a direct result of a decline in retail sales. Meanwhile, the
coincident index results are inconsistent with a .6% increase throughout
1H/08 and were prevented from declining anymore thanks to large
manufacturing sales. In contrast, the national GDP grew at a 1.5%
average annual rate for the first two quarters of 2008, which is still
below the 1.9% average annual rate during 2H/07, however. 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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Merchant Warehouse to Market ExaDigm XD2000

ExaDigm wireless/wired POS terminal solutions innovator has partnered
with Merchant Warehouse merchant account and credit card processing
solutions provider for the distribution of the ExaDigm “XD2000” mobile
payment terminal. With theses agreements, Merchant Warehouse will
directly provide the “XD2000” terminal for purchase, which it chose to
add to its product offering due to the provision of mobile wireless
payments, an easily upgradeable platform and a connectivity-change
feature. The mobile wireless solution will be made available to
customers immediately through Merchant Warehouse, which was founded in
1998 to provide credit card processing software and equipment to its
more than 40,000 merchant customers while ExaDigm modular IP-based wired
and wireless POS terminals provide organizations innovative
technology-focused solutions.

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CU Card Portfolio Q2 Sales Sink to $20MM

Five credit unions with credit card portfolios of over $1 million in
outstanding balances sold their portfolios in the second quarter. Total
balances sold during the quarter were approximately $20 million. On
average, the size of the portfolios sold was $4.1 million, according to
NH-based Brookwood Capital. This marks a decline in portfolio sales
levels from prior years, and leaves year to date total sales numbers at
15 portfolios with total receivables of $83 million.

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Gemalto Revenues Climb 10% in 1H/2008

Smart payment card specialist Gemalto reports that revenue grew 10% for
the first half of this year, at constant exchange rates, with all major
segments posting double digit growth. The Secure Transactions unit
returned to operating profit, posting a positive operating margin of
8.5% for the first six months of 2008. The growth was driven by the
continuing roll out of EMV and contactless payment systems mainly in
Europe, Asia and Latin America. This good performance more than
compensated for lower Pay TV and Transport revenue, a consequence of
Gemalto’s selective approach to tenders. Personalization services also
reported a strong growth of 34%, driven by EMV deployments and
associated services in existing and emerging markets. In France, the
Pegasus group of five major banks (BNP-Paribas, Crédit Agricole-LCL,
Crédit Mutuel-CIC, Caisse d’Epargne, and La Banque Postale Group)
renewed their collaboration contract with Gemalto in the “Payez Mobile”
program, aimed at developing a set of cohesive contactless mobile
payment services. For complete details on Gemalto’s latest performance
visit CardData ([www.carddata.com](http://www.carddata.com)).

GEMALTO REVENUE HISTORICAL
2Q/07: $544.8 million
3Q/07: $588.0 million
4Q/07: $742.0 million
1Q/08: $611.0 million
2Q/08: $556.2 million
Source: CardData (www.carddata.com).

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GEMALTO 1H/08

Smart payment card specialist Gemalto reports that revenue grew 10% for the first half of this year, at constant exchange rates, with all major
segments posting double digit growth. The Secure Transactions unit
returned to operating profit, posting a positive operating margin of
8.5% for the first six months of 2008. The growth was driven by
continuing roll out of EMV and contactless payment systems mainly in
Europe, Asia and Latin America. This good performance more than
compensated for lower Pay TV and Transport revenue, a consequence of
Gemalto selective approach to tenders. Personalization services also
reported a strong growth of 34%, driven by EMV deployments and
associated services in existing and emerging markets. In France, the
Pegasus group of five major banks (BNP-Paribas, Crédit Agricole-LCL,
Crédit Mutuel-CIC, Caisse d’Epargne, and La Banque Postale Group)
renewed their collaboration contract with Gemalto in the “Payez Mobile”
program, aimed at developing a set of cohesive contactless mobile
payment services. For complete details on Gemalto’s latest performance
visit CardData (www.carddata.com).

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Low-Limit Credit Cards Boost Credit Scores

Citizens for Equal Access to Credit nonprofit coalition has released its survey of 360,000 low limit credit card users in the United States and an analysis, in partnership with TransUnion, of “graduation rates” of cardholders to prime cards over a 24-month period. The survey demonstrates nearly 35% of consumers with low limit cards improved their credit scores, over 60% whom increased the score by 40 or points or more “graduated” to higher limit cards over a two-year period, demonstrating low limit credit cards do help consumers re-establish good credit. Additional findings show 35% of the low limit card consumers improved their credit score over a 24 month period, of whom 20%-24% opened prime credit cards with at least a $1,000 credit limit. Citizens for Equal Access to Credit seeks to create a positive dialogue between leading national organizations representing minorities and other key stakeholders to promote positive change in the credit market.

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Debt Resolve Unveils the iSettleNow Service

NY-based Debt Resolve has rolled out “iSettleNow,” a consumer debt
settlement site and has established an Online Debt
Resolution Alliance and will hold a conference for creditors on
September 26, 2008 in New
York City to discuss the potential of the technology and establish industry
standards to maximize the effectiveness of iSettleNow. Debt Resolve is
launching iSettleNow.com in response to
consumer demand, the increased costs of collection, impaired settlement
rates and with the knowledge of a dramatic increase in online banking
and general Internet usage. According to the Federal
Reserve, Americans carry $13.825 trillion in debt.

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CU Card Portfolios Rise 14% Since 2Q/07

Credit union credit card assets grew 14% over the past year to $30.1
billion, more than twice the growth rate of total credit
union assets. Also, the percentage of portfolios that grew more than
the rate of inflation during the previous 12 months increased from 71%
in June 2007 to 76% in June 2008. According to OR-based AssetExchange,
the average balance per account increased 10% from June 2007 to
June 2008 to $2,509. Additionally, five credit unions with portfolios
greater than $1 million sold their portfolios in 2Q/08 with about $20.5
million in combined balances. In the 2nd quarter of 2007, 21 credit
unions sold their portfolios representing $132 million in balances.

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Consumers Pull-Back on Discretionary Spending

CreditCards.com has released the results of its “Second Annual Taking
Charge” national survey demonstrating American consumers are adjusting
their spending behavior to meet market conditions by cutting back on
credit card spending, paying down debt and monitoring interest rates.
The survey investigates America’s relationship with credit cards
demonstrating a profound pull-back on discretionary spending and a
general avoidance of the credit crunch. In doing so, 25% of U.S.
cardholders spent less on household living expenses in June than usual,
33% ended the month with less debt than the month prior, 34% spent less
on discretionary expenses, the number of current cardholders has dropped
4% since the same period last year, 7% of Americans are very worried
about paying credit card bills while 63% are not at all worried. Among
those worried about credit card bills are those with incomes below
$75,000, those with four or more credit cards and those older than the
age of 40.

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Spirit Airlines to Deploy GuestLogix Solution

Airline retailer GuestLogix has partnered with low cost Spirit Airlines
to deploy GuestLogix’ “Mobile Virtual Store” on its domestic and
international flights. The GuestLogix Mobile Virtual Store(TM) enables
airlines to become smart
and profitable on-board retailers by optimizes planning and forecasting,
facilitates on-board sales transactions and provides rapid intelligence
to on-board retail trends to support merchandising, promotions, and
logistics. The solution takes all forms of payment, including cash (in
multiple currencies), credit cards, loyalty cards, stored value cards,
vouchers and coupon sales.The Spirit deal potentially adds another five
million passenger trips annually to GuestLogix’ industry leading
on-board retail platform, which includes wireless handheld POS devices
and integrated software services. Airline operators simply pay for the
platform access on a per transaction fee basis. The selection was made
following Spirit’s recent aggressive move to remain focused on growing
non-ticket revenue and adding customer value in the face of escalating
fuel prices.

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GiftCertificates.com Names a New CEO

e-commerce provider GiftCertificates.com has tapped Gary Krow,
previously with Comdata, to serve as CEO. As president of Comdata from
1999 to 2007, Krow led the transformation
of the company from a diesel fuel transactions processing company to a
full service electronic payment processing company specializing in
credit, debit and stored value. Krow’s tenure there was characterized by
numerous significant accomplishments. He greatly increased Comdata’s
market capitalization, accelerated its growth rate, and increased
revenues and operating margins. GiftCertificates.com offers an extensive
product
portfolio including the SuperCertificate Reward which is redeemable for
hundreds of original merchant gift cards. GiftCertificates.com also
features a variety of Specialty SuperCertificate , Merchant, MasterCard
and American Express -branded Gift and Reward Cards.

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Fifth Third Bank Embraces Visa Signature

OH-based Fifth Third Bank is now offering “Visa Signature” cards to
customers through its more than 1,300 banking centers.The Visa Signature
card is designed for affluent customers and benefits include round-the
clock “Visa Signature Concierge” services
to assist with everything from travel reservations and entertainment
plans to business meeting arrangements, special shopping requests;
customized dining recommendations through “Visa Signature
Dining”, as well complimentary access to the latest Zagat Survey
restaurant ratings and reviews online; access to advance ticket sales
and premier seating at popular music, film, theatre, gourmet dining and
sporting events through “Visa Signature Access”, as well as VIP access
to once-in-a-lifetime
experiences like the Super Bowl, Tony Awards, and the Olympic Games; and
unique merchant upgrades, offers and savings through “Visa
Signature Privileges”. Fifth Third holds $115
billion in assets.

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