MasterCard Joins the S&P 100/500

MasterCard has replaced General Motors on the Standard and Poor’s 100 Index. MasterCard shares immediately rose $9.80, or 3.9%, to $263 in after-hours trading following the S&P announcement. MasterCard also replaces insurer Ace Ltd. on the Standard & Poor’s 500. GM shares, meanwhile, have this year fallen to levels not seen since the 1950s. S&P did not in a statement explain why it dropped GM from the S&P 100.

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GE MONEY & SHINSEI

GE Money has signed an agreement to sell its Japanese consumer finance business, which includes the Lake personal loan business, wholly owned credit cards and mortgages to Shinsei Bank. The deal is valued US$5.4 billion. However, GE Money will continue to operate GE Nissen Credit, its credit card joint venture with Nissen, a shopping catalogue in Japan. GE Money and Nissen will continue to hold a 50% stake each in the company. Shinsei Bank says it plans to retain and work closely with GE employees in these businesses as part of its strategy to expand its position in the Japanese consumer credit marketplace. The deal is expected to close in the third quarter of 2008.

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ONLINE BANKING GROWTH

comScore has released it report demonstrating Canada is among the most
expansive market for online banking, with the Bank of Montreal laying
claim to fastest website visitor growth of 22% over the past 12-month
period. Furthermore, of the nearly 24 million Canadian Internet users,
15.5 million visited a banking site throughout the month of April, RBC
Financial group led the category with 4.6 million visitors, followed by
TD Bank Financial Group with 4.5 million visitors and Bank of Montreal
Sites with 3 million visitors. Additional findings show, among the 37
global markets individually-reported by comScore, Canadians bank online
the most, 67.1% of Canadians banked online in April 2008 (compared to
49.5% of British and 44.4% of Americans) and they lead online banking
frequency with 8 average daily visits for an average of 46 minutes spent
visiting the websites throughout the month.

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SENIORBUSTERS

Canadian seniors are increasingly becoming the victims to fraudulent
marketing and financial scams, having lost a total of $6 Million in
2007. In response, Capital One and SeniorBusters, the volunteer
component of PhoneBusters, have teamed to educate seniors on spotting
fraud before they are victimized. Fraudsters attack by mail, telephone
and Internet and most commonly committed identity theft in 2007 with a
$6,421,952 total loss. This crime was followed by the “Nigerian Letter”
scam which claimed $4,935,030, investment scams accounting for
$3,553,320 and scams offering phony prizes accounting for $3,506,289.
Additional findings show those aged 50-59 lost a total of $8,595,593.57,
followed by those aged 60-69 who lost $7,660,202.49, 70-79 lost
$6,928,425.82, those aged 80-89 lost $5,508,172.27 and those aged 90-99
lost $1,870,654.67. Capital One Canada is headquartered in Toronto,
providing Canadians with credit cards since 1996, and is a division of
Capital One Bank.

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GE Money Profits Slip 9% in 2Q/08

GE reported that profit for its GE Money unit declined 9% in the second quarter to $1.1 billion. However, revenues were up 6% to $6.6 billion, compared to one-year ago. In the prior quarter revenues rose 7% and profits declined 19%, year-on-year. Second quarter results included a $222 million increase in the loan loss provision and a decrease of $109 million of securitization. GE also announced today it has signed an agreement to sell its Japanese consumer finance business, which includes the Lake personal loan business, wholly owned credit cards and mortgages to Shinsei Bank. The deal is valued US$5.4 billion. However, GE Money will continue to operate GE Nissen Credit, its credit card joint venture with Nissen, a shopping catalogue in Japan. GE Money and Nissen will continue to hold a 50% stake each in the company. Shinsei Bank says it plans to retain and work closely with GE employees in these businesses as part of its strategy to expand its position in the Japanese consumer credit marketplace. The deal is expected to close in the third quarter of 2008. Earlier this year American Express and GE Money signed a deal for AmEx to purchase GE’s Corporate Payment Services for $1.1 billion in cash. Also, Banco Santander signed preliminary agreements for its takeover of GE Money in Germany, Finland and Austria and its Card and Auto Financing Businesses in the UK. For complete details on GE’s latest results visit CardData ([www.carddata.com][1]).

GE MONEY TRACK RECORD
Income Revenues
2Q/07: $1158 million $6276 million
3Q/07: $942 million $6207 million
4Q/07: $957 million $6578 million
1Q/08: $995 million $6377 million
2Q/08: $1056 million $6629 million
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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ONLINE SECURITY

With Internet fraud reaching over GBP 290 million in 2007, PayPoint.net has published its survey demonstrating British consumers are vigilant online shoppers with 98% conducting at least one security check on commerce websites while 90% examine at least 3 security features. Among those surveyed, 88% referred to the padlock icon in the web browser, 85%
ensured the presence of a UK contact address and phone number, 85%
scanned for a clear refund policy and 82% ensured the presence of
reputable payment providers logos. However, 69% admitted throwing all
trust issues out the window if website is well-designed while 79% could
fall for an easy-to-use site with clear payment instructions.

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AAA of Southern California Juices-Up Visa

AAA of Southern California has introduced the “AAA Visa Signature Card with World Points” that awards double points for one year on gasoline purchases. The has no annual fee and allows cardholders to earn one point for every dollar spent. Points can be redeemed for cash rewards, airline tickets, hotel rooms, or a wide variety of other goods and services. Current “AAA Visa or AAA Mastercard” customers have the option to keep their current card(s) and also request the “AAA Visa Signature” card with “WorldPoints Rewards,” or request to convert to the new credit card only. The Automobile Club of Southern California is the largest member of the AAA federation of motor clubs.

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HSBC BUSINESS DIRECT

HSBC has launched its fee free “Business Direct” direct banking solution
in Northern Ireland for Small and Medium sized Enterprises (SMEs). Using
the HSBC internet banking platform, “Business Direct” targets businesses
with turnover of less than GBP500,000, providing business banking access
online and over the telephone. Additional benefits of the account
include no fees, business specialists available in-branch to provide
support, free access to HSBC’s online business resource directory and
quarterly written statements. HSBC’s Internet platform has won “Best
Integrated Corporate Bank Site” 2007, “Best Information Security
Initiatives Europe” 2007 and “Hallmark of Innovation (Financial
Innovation Awards) Best Business Direct Channel – Internet” 2007.

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SCA to Address a FTC Contactless Town Hall

Smart Card Alliance Executive Director Randy Vanderhoof will participate in the FTC “Town Hall Meeting” focused on “Pay on the Go: Consumers and Contactless Payment,” July 24, 2008 in Seattle. Today nearly ten percent of Americans have used or own a contactless payment card, according to new research conducted for the Smart Card Alliance by Javelin Strategy and Research in April 2008. According to JupiterResearch, there are 35 million contactless payment cards in the United States. The Alliance study that 63% of contactless users believe contactless is faster than paying with traditional magnetic stripe cards, and 57% believe contactless payment is easier to use. Awareness of contactless payment has grown too, to 25% of the U.S. population in 2008, up from 15 percent just two years ago.

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Identita Technologies to Acquire CardXX

Smart card component manufacturer CardXX will have its capital stock acquired by Identica Technologies International SRL. Identita has agreed to acquire all of the outstanding capital stock of the Company, which will give Identita ownership rights to all patented and patent-pending intellectual property of CardXX relating to CardXX’s RAMP molding technology. CardXX provides secure encapsulation of advanced electronics with its proprietary, patented encapsulation process known as the “Reaction Assisted Molded Process” for the production of advanced powered smart cards.

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BofA Guarantees FSU $10MM for a Card Deal

A report released by The Consumer Warning Network reveals secret details of a secret credit card marketing agreement between Florida State University and Bank of America. The report alleges while Florida State University is warning students via video to avoid the “credit card monster,” the university forwards names and addresses to Bank of America which then uses that information to market credit cards to FSU students as part of an “exclusive” deal allowing the bank to use FSU’s official colors and symbols. Under the agreement, FSU receives a guarantee form BoA of more than $10 million over 7 years.

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Deloitte’s Monthly Index Declines Again

The Deloitte Research “Leading Index of Consumer Spending” fell in July, continuing the decline the “Index” has experienced since October 2007. The “Index,” comprising four components — tax burden, initial unemployment claims, real wages and real home prices — fell to 1.46%, from a revised gain of 1.64% a month ago. The tax burden fell sharply this month as the U.S. Treasury sent out the first round of rebate checks. The sharp rise in the savings rate to 5% shows that the bulk of the rebate money was not spent, but rather was put into savings or used to pay off debt. Unemployment claims continue to rise and are up more than 20% percent from a year ago. Real wage growth is being hit by a weak labor market and sharply higher prices for food and energy. Also, house prices fell by 10% in May compared with May of last year. Home mortgage refinancing has all but disappeared, reducing household cash flow.

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