Motorola Unveils New PCI PED Terminals

Motorola is set to launch a new line of PCI PED-approved interactive payment terminals with fully integrated debit, credit, smart card and contactless payment capabilities. The new “PD8750” series incorporates the industry’s only dual head magnetic stripe readers which reduces the need for re-swiping. The new terminals can also deliver real-time digital advertising. The “PD8750” terminals have also received Interac Association “Chip 2.0 PED Device Certification” for use within Canada’s “Interac Direct Payment” network. Motorola says the new terminals are ideal for multi-lane retailers. Besides a bi-directional, dual-head, 3-track reader, the new “PD8750” reader offers smart card (optional): EMV level-1; “ISO 7816;” non-captive; 3v and 5v cards; two 5v SAMs Contactless payment: Integrated (optional); and is compliant with “ISO 14443 A & B.” The “PD8750” is expected to be available in North America in the first quarter.

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U.S. Card Issuers Migrate to Fixed Rates

Credit card rates have been declining all year in tandem with short-term interest rate cuts by the Fed. As a result fixed rates are returning, as 39% of offers received by U.S. households in October promoted fixed APRs compared to just 29% during the third quarter. According to Synovate’s “Mail Monitor” the average Single/Go-to APR based on credit card solicitations during November was 12.51%, down from 12.94% during the summer. The tracking service notes that Discover introduced an 8.99% fixed rate offer in October while Chase and Bank of America mailings continued to promote fixed rates as low as 7.99%. The lowest fixed rate offers captured by “Mail Monitor” in October were from First National Bank of Omaha (5.99%) and RBS Citizens Bank (6.99%). According to CardTrak, offered rates for average credit scores for Bank of America dropped from 16.49% one-year ago to 14.99% for December; for Chase general offered rates dropped from 14.24% to 13.49%; while Citibank’s offered rates for average credit dropped from 16.24% to 14.74%.

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First Data to Expand AmEx Card Acceptance

First Data has inked a deal to offer American Express card acceptance as part of an integrated solution for small and medium-sized merchants. Under terms of the agreement, AmEx will retain the acceptance contract with participating merchants, establish merchant pricing, and receive the same transactional information it does today. FDC will provide payment processing services to merchants on behalf of AmEx for AmEx card transactions. This is the first time that AmEx has delegated some of its processing services. New merchants who sign up for the program will receive an all-in-one solution with a single source for statements, settlement and customer service for all major card brands. The program will be available to merchants that are new to AmEx card acceptance in the second quarter.

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CVT Prepaid Solutions Promotes Executive

CVT Prepaid Solutions has promoted Joseph Colacicco from Director of Quality Assurance to Vice President of Operations. Colacicco oversees CVT’s Quality program as well as the Company’s Customer Service and Network Operations Centers. Colacicco joined CVT’s forerunner, Orion Telecommunications Corporation, where he served as Chief Marketing Officer. Mr. Colacicco subsequently joined the POSA team at Prodigi, Inc. as a member of their senior management team before returning to CVT in June 2007 as Director of Quality Assurance. Prior to his tenure at CVT, Mr. Colacicco served as CEO and principal shareholder in Long Island Communication Systems for fifteen years. Colacicco received his Bachelor’s degree and MBA from St. John’s University, before becoming a faculty member in 2002 as a Strategic Management Professor and at Adelphi University serves as Adjunct Professor specializing in Entrepreneurship.

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Discover Lands discover.com Domain Name

Discover Financial Services has finally landed the discover.com domain name, formerly used by Discover magazine. Prior to the new domain name cardholders had to access discovercard.com. Discover Media sold the domain name to Discover Financial Services for $5 million. Reportedly the CEO of Discover Media was fired for the decision to sell the domain name. Discover has also beefed-up its Web site offering a more simplified and informative experience. New tools such as the “Help Me Choose” function help consumers choose a card that’s right for them, and simple disclosures and easy-to-understand rate information provide better overall clarity and transparency. Consumers also can experience what it’s like to be a cardholder through the new “Member Benefits” section and learn more about the various aspects of individual cards and products. Discover.com was developed in collaboration with interactive design firm Magnani Caruso Dutton. Throughout 2008, the site will also introduce additional interactive content and tools.

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NFC Forum Developers Summit Seeks Entries

The NFC Forum has issued a call for entries for “Touching the Future: NFC Forum Global Competition”. Near Field Communication (NFC) is a standards-based, short-range wireless connectivity technology that enables simple and safe two-way interactions among electronic devices. In the competition, developers in a commercial track vie for the honor of having their solutions named “The Best NFC Service of the Year 2008,” while a research track recognizes “The Most Innovative NFC Research Project of the Year 2008.” Commercial Track submissions require a business case and prototype; entries will be evaluated on how successfully and innovatively their solutions meet the needs of key vertical market segments. Research Track submissions require a prototype and will be judged on creativity and innovativeness. The NFC Forum was launched as a non-profit industry association by leading mobile communications, semiconductor and consumer electronics companies.

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Phishing Attacks Snagged 3.6MM Consumers

A new survey has found that 3.6 million adults lost money in phishing attacks in the 12 months ending in August, as compared with the 2.3 million who did so in 2006. The research by Gartner determined that $3.2 billion was lost to these attacks. The average dollar loss per incident declined to $886 from $1,244 lost on average in 2006 (with a median loss of $200 in 2007). However, some 1.6 million adults recovered about 64% of their losses in 2007, up from the 54% that 1.5 million adults recovered in 2006. Gartner says that PayPal and eBay continue to be the most-spoofed brands. About 47% said a debit or check card had been the payment method used when they lost money or had unauthorized charges made on their accounts. This was followed by 32% of respondents who listed a credit card as the payment method, and 24% who listed a bank account as the method. Phishing and malware attacks will continue to increase through 2009 because it’s still a lucrative business for the perpetrators, and advertising networks will be used to deliver up to 30% of malware that lands on consumer desktops.

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Brookwood Capital Facilitates a CU Sale

BROOKWOOD CAPITAL has brokered a credit card partnership between NY-based Adirondack Regional Credit Union and TNB Card Services. Under this agreement, TNB has purchased Adirondack Territory’s existing credit card portfolio and will issue credit cards for the credit union under the credit union name. Based on NCUA reporting, the existing portfolio included more than 1,000 credit card accounts and over $1 million in receivables among Adirondack Regional’s 8,200 members. The credit union has approximately $35 million in total assets. BROOKWOOD CAPITAL is an advisor to credit unions related to the credit card industry.

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CARD USAGE

Debit card usage is falling due to the widespread use of credit cards, especially for small transactions. A new report has found that debit card volume in Japan declined 3% last year to approximately US$6.8 billion. However, credit card usage is not that popular in Japan despite the number of issued credit cards, for each credit card will only have US$1,195 purchased on average, which is relatively low compared to other countries in Asia such as Hong Kong – US$3,027 per credit card, Singapore – US$2,329, and South Korea – US$7,866. The study by Boston-based Celent found that debit card usage per year remains small
compared to credit cards and is limited in terms of both transactions and payment amount. In fact, debit card volume adds up to just under 2% of credit card volume. Also, according to research done in 2000 by the Japan Debit Card Promotion Association, the number of people who have used debit cards were two out of 500, or 0.4%. The situation has not changed much in 2007, and with the help of credit cards,
debit cards are becoming less appealing to consumers.

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FIS Adopts mFoundry’s Spotlight Platform

Fidelity National Information Services has signed a deal with mFoundry for its “Spotlight Financial Platform.”mFoundry’s Spotlight Financial Platform” is the only mobile banking solution available that provides financial institutions with the flexibility to create well-branded, unique applications for their consumers. In addition to offering full mobile functionality, Spotlight Financial Platform can accommodate virtually any payment transaction type, as well as coupons, loyalty and other services. mFoundry’s Spotlight Financial Platform offers a comprehensive, secure solution for the entire mobile financial ecosystem. Fidelity National Information Services is a provider of core processing for financial institutions, card issuer and transaction processing services.

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VISA Expects a Last-Minute Shopping Rush

VISA has tracked the ups and downs of the 2007 holiday season but has determined overall retail sales in the United States will recover as last-minute discounts and extended store hours attract value-conscious consumers. Compared with this point in the season last year, consumers are behind in checking off their holiday shopping lists, but an extra shopping day this year combined with an increasingly savvy consumer creates more opportunity for a last-minute holiday sales push. Given the success of Black Friday promotions, retailers are looking for additional incentives to bring shoppers into stores for the final shopping days.

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ADS Reconfirms its Revenue Guidance

Alliance Data Systems has reconfirmed its full-year guidance of at least $2.1 billion in revenues, at least $575 million in adjusted EBITDA and at least $3.50 in cash earnings per share for 2007. As a result of the previously announced acquisition of Alliance Data by an affiliate of The Blackstone Group, Alliance Data continues to be in a blackout phase with regard to participating at investor conferences and meetings. Therefore, the Company today is reiterating to its stockholders the 2007 full-year guidance previously given by the Company on October 17, 2007, and providing insight into the general trends of its businesses, all of which suggest no change in the Company’s long term stated growth rates.

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