NCLC Alleges Sub-Prime Fee Harvesting

A new report from the National Consumer Law Center examines the practice of “fee harvesting” and how it targets those consumers in the sub prime market. The report, “Fee-Harvesters: Low-Credit, High-Cost Cards Bleed Consumers,” opens a window on a shadowy submarket where savvy card companies extract hundreds of millions of dollars in fees and other revenue from the pockets of consumers in the so-called subprime market. One of the fee-harvester cards featured in the NCLC report comes with a credit limit of $250. However, the consumer who signs up for this card will automatically incur a $95 program fee, a $29 account set-up fee, a $6 monthly participation fee, and a $48 annual fee – an instant debt of $178 and buying power of only $72. Fee-harvesting is extremely lucrative for the industry. In 2006, Atlanta-based CompuCredit – one company featured in the NCLC report – collected $400 million in fees from a portfolio of fee-harvester cards that by mid-2007 had saddled cardholders with nearly $1 billion in debt. NCLC is a non-profit organization specializing in consumer issues on behalf of low-income people.

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BMO & PAYPASS

For its Mosiak MasterCards, the Bank of Montreal has implemented PayPass
technology, the first of Canadian banks to do so. This will allow
customers to
conduct purchases with no signature required and provides users much
less wait
time. This development has been implemented to provide speed, convenience
and piece of mind(citing that the payPass card never leaves the customer’s
possession) in the hopes to attract a new customer-base. Additionally,
PayPass
customers are protected with zero-liability for fraudulent transactions
and, for those
to whom it applies, rewards programs will function as usual. Using radio
frequency
to transmit payment details between the customer device and the
terminal, the
contactless payment solution currently has 19 million PayPass devices in
circulation
for acceptance at 73,000 merchant locations in nearly 20 countries.

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MasterCard Revamps its Executive Committee

MasterCard this morning announced an organizational realignment broadening some executive responsibilities, hiring a new senior executive and beginning the transition process for the retirement of its COO, Alan Heuer, at the end of 2008. Heuer has been named to the newly created position of Vice Chairman. Gary Flood, former President, Global Account Management, has been named to the newly created position of President, Products and Services which includes MasterCard Advisors, Marketing and Product. Walt Macnee, former President, Americas, who has been named President, Global Markets. Chris McWilton, who has served as CFO has been named President, Global Accounts. All of the above changes are effective today. Martina Hund-Mejean, formerly with Tyco International, will succeed McWilton as CFO effective November 15th. In addition to the above MasterCard’s Executive Committee will also include: W. Roy Dunbar, President, Global Technology & Operations; Noah Hanft, General Counsel and Corporate Secretary; and, Michael Michl, Chief Administrative Officer.

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CRYPTOMATHIC KMS

Cryptomathic security vendor has developed a GlobalPlatform-compliant Key
Management System(KMS) for distribution by the beginning of 2008. The new
solution allows cryptographic key management with a standard approach of
core
functional requirements set by the smart card specifications body. The
solution
provides for less chance of human error and investment returns by
eliminating the
need to manually install and manage the keys of ATMs, payment switches,
authorization and issuing systems. With the new KMS, installation and
management
can now be conducted from a satellite location. Cryptomathic provides
security systems for e-banking, PKI initiatives, card personalization,
ePassport,
card issuing, and key management with its software and services.

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Hypercom Revenues Soars 25% in 3Q/07

Hypercom posted a 25% increase in revenue and a 30% increase in gross profit for the third quarter compared to the year-ago quarter. The revenue surge was driven by strong demand for countertop and mobile payment terminals outside the U.S. Revenue for the third quarter was $70.8 million and gross profit was $21.2 million. North American product revenue was lower principally as a result of decreased revenue from one U.S. customer. Service revenues increased in all operating regions, with the largest increase of $4.9 million in the Asia-Pacific region as a result of the acquisition of ACG Group in early 2007. Hypercom recently announced the “Optimum T4200” global countertop platform; the “Optimum M4100 Blade” handheld mobile wireless terminal; and the “PV1310” handheld PIN Pad. For complete details on Hypercom’s third quarter results, visit CardData ([www.carddata.com][1]).

HYPERCOM REVENUE HISTORICAL
3Q/05: $66.5 million
4Q/05: $68.1 million
1Q/06: $61.0 million
2Q/06: $66.1 million
3Q/06: $56.7 million
4Q/06: $64.8 million
1Q/07: $64.8 million
2Q/07: $67.5 million
3Q/07: $70.8 million
Source: CardData (www.carddata.com)

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

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GCA & ABSA BANK

Global Cash Access(GCA) and Absa Bank has signed sponsorship
agreements allowing GCA to process cash advances in casinos
throughout South Africa. Internationally, GCA provides its cash access
solutions in over 1,000 casinos and, with the country’s gaming revenue
up 17% in 2006, South Africa is seen as a lucrative market to ensure
economic gains for the company. Furthermore, projections reveal that
the gaming market in the country will reach $2.7 billion in revenue by
2011. For Absa bank and the South African gamings market, GCA
will provide its patron-activated QuikCash terminals and kiosks for debit
card and credit card cash advance transactions and will offer its
“QuikCash Plus Web” to help administration speed transactions. Global
Cash Access serves nearly 1,000 casinos in the U.S., Canada, Europe, the
Caribbean and Asia.

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FDC & CHECK FORTE

First Data has completed its acquisition of Check Forte Processamento
de Dados Ltda. Forte payment transaction processing specializes in data
capture, switching, POS terminal management and network processing
services to banks for bill payment and provides check verification services
for merchants. First Data provides support to Brazilian financial
institutions
using its “VisionPLUS” transaction processing solution and has an extensive
reach across the Latin American Region. First Data Corp provides
electronic commerce with its operations in 38 countries, 5 million merchant-
customers and 1,900 card issuers. First Data’s “STAR Network”
provides debit acceptance at 2 million ATM and retail locations around the
world.

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Shell Begins Testing Pay By Touch

Shell becomes the first gasoline retailer in the world to adopt Pay By Touch biometric payment technology at its pumps and C-stores and is testing attendant hand-held wireless card scanners abroad. The Pay By Touch biometric technology Shell has installed at select Chicagoland stations verifies personal identity using biometrics, the measurement of unique physical and behavioral characteristics. In this case, a simple finger scan is used to pay for a fuel purchase from an existing financial account of the driver’s choice: eCheck (a direct debit from his or her checking account), Shell Card or Shell MasterCard.

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RBC & VISA MOBILE

The Royal Bank of Canada has teamed up with VISA to launch its
multi-phase, mobile payment service pilot to allow users to conduct small
transactions using their mobile phone. The pilot is slated for
completion in
2008 and will consist of lab-testing, a staff pilot and a consumer trial.
Furthermore, the “payWave contactless” pilot will test delivery, account
information storage to the mobile device, retail payments, coupon
solutions and account management. Aside from the contactless solution
being available on mobile phones, RBC will provide “payWave on
consumers’ chip cards as well. RBC has processed over 11 million chip
transactions to date worldwide.

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TD Banknorth Intros Flat-Panel VISA

A flat-panel VISA debit card has been launched in the USA. TD Banknorth has become the first bank to utilize the new technology that enables instant digital printing of non-embossed debit cards in the bank branch. The cards are permanent and is also available to existing customers who need to replace a lost or stolen debit card. TD Banknorth is partnering with CO-based Dynamic Card Solutions to pilot the debit card technology in 46 branches across the New England and Mid-Atlantic regions. TD Banknorth plans to expand the program to its current network of nearly 600 branches in eight Northeastern states by end of summer 2008.

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ACI & WESTPHERE

Westphere Systems has signed agreements allowing it to evolve into an
ATM/POS acquirer. With these agreements, signed with ACI Worldwide,
Westphere will implement “BASE24” and “ACI Worldwide” ACI solutions
to operate in an ACI “On Demand” environment. In doing so, ACI will
configure and host its software to meet Westsphere’s needs with the
“BASE24” payment engine to provide services through ATMs and kiosks.
Meanwhile, the ACI “On Demand” solution is operated at remote data
centers to support business continuity. Westsphere Asset Corporation,
traditionally specializing in traditional banking, has recently begun
expanding
its services in automated and self banking solutions throughout Canada. ACI
Worldwide solutions process payments, risk management and automation
for banking, retail and cross-industry systems serving over 800
customers in 84
countries.

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