GOV PAYMENTS

As part of a government effort toward the modernization of payment methods,
The Vietnam Government has announced that it will no longer be paying
state employees in cash, rather through their bank accounts and cards.
Statistics show that cash payments have been reduced from 23.7% in 2001 to
18 percent in 2007. This figure is still declining in the hopes that 90%
of State
employees will be paid through their bank accounts. Furthermore, the goal
is to issue 45 million individual bank accounts with cash accounting for
no more
than 15% of payments until 2020. In addition, 6.5 million credit cards were
issued for salary payments, 92.5% of which are for users inside the
country,
reflecting the growing popularity in credit card payments.

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VISA Adds a FOB Device to Contactless payWave

VISA has expanded its contactless program with a key fob payment device embedded with “VISA payWave.” The new “VISA Micro Tag” enables issuers to offer cardholders a companion device to an existing credit, debit or prepaid account. The new fob displays the VISA brandmark and contactless indicator but a VISA account number is not required to be embossed or printed on the device. To celebrate the debut of “VISA Micro Tags”, VISA will distribute fobs loaded with $15 to the first 1,000 San Francisco Giants fans entering AT&T Park’s Field Club level tonight. SC-based First Citizen Bank and Barclays started to issue “VISA payWave” cards in August bringing the total number of “VISA payWave” issuers in the U.S. to thirteen. National merchants already accepting “VISA payWave” in the U.S. include BP, 7 Eleven, CVS Pharmacy, McDonalds, Taco Bell, and Jack in the Box. National merchants in the process of upgrading POS terminals to “payWave” include Einstein Noah Restaurant Group, BJ’s Wholesale Club, Circle K, Office Depot, and PETCO. (CF Library 9/20/07)

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FUNDSTECH CASH CARD

FundsTech has signed a co-branded card deal for The FundsTech
“Cash Card” with an undisclosed bank. This development will allow
FundsTech to penetrate the emerging South African card market composed
of a population with 13 million un-banked consumers. Furthermore, with
this agreement, FundsTech projects issuing over 1,100,000 prepaid cards
(with a $12 monthly fee assessed to each card) over the next 18 months in
the country. On a global scale, it is estimated that there are 1 Billion
in the
working population with no bank account, a market estimated at over $100
Billion annually. FundsTech’s “Cash Card” is a credit card-like solution
that
allows the employer to pay the un-banked workers with a domestic and
international money-transfer feature.

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Credit Card Delinquency Climbs North in Q2

Based on total dollars past-due, credit card delinquency rose in the second quarter to its highest level for a second quarter since 2004. However, based on the number of accounts, the figure of 4.41% was flat compared to one-year ago. According to the American Bankers Association credit card repayment rates led mortgage repayment rates during the quarter. The ABA says consumers’ priorities can shift, especially for borrowers who face a one-two punch: higher interest payments on their adjustable rate mortgages and declining equity as their home prices fall. The ABA also reported that home equity loan delinquencies decreased to 1.99% in 2Q/07 from 2.15% in 1Q/07.

2Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
1980: 3.25% 1990: 3.46% 2000: 3.54%
1981: 2.86% 1991: 4.48% 2001: 4.13%
1982: 3.03% 1992: 4.19% 2002: 4.08%
1983: 2.81% 1993: 3.86% 2003: 4.51%
1984: 2.80% 1994: 3.06% 2004: 4.33%
1985: 2.88% 1995: 3.58% 2005: 3.60%
1986: 3.83% 1996: 4.61% 2006: 3.34%
1987: 3.28% 1997: 5.24% 2007: 3.73%
1988: 3.44% 1998: 4.57%
1989: 3.06% 1999: 4.10%
Source: American Bankers Association

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G&D and ROUTE 1

Route 1 and Giesecke & Devrient (G&D) have signed a letter of intent for
the integration of the company’s suite of identity management subscription
with the other’s “StarSign” product, respectively. Integrating the Route 1
identity management solution, based on their own “MobiNET” security,
with “StarSign” will allow its disbursement on an e-identity token
platform.
This integration will target private sectors, public sectors and financial
institutions. G&D is a smart cards development and solutions provider in a
range of fields, employs close to 8,300 people and generated revenue of
nearly EUR 1.3 billion for 2006 while Route1 provides security and identity
management for companies in a range of sectors.

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Barclays and US Airways Launch a Business Card

The fifth largest domestic airline has added a “Business MasterCard” to its fleet. US Airways and Barclays have introduced the new “US Airways Dividend Miles MasterCard BusinessCard” for small business customers. The rewards program includes: 15,000 “Dividend Miles” after the first purchase; the ability to earn up to 10,000 more “Dividend Miles” for balance transfers; two miles for every dollar spent on US Airways purchases; one mile for every dollar spent on all other purchases; extra miles for purchases made at US Airways’ select merchants; one complimentary “US Airways Club Day Pass” per year; $75 each year towards a “US Airways Club” annual membership fee; and the ability to convert up to 10,000 base miles into “Preferred” miles, which can be used to upgrade the cardholder’s elite status in US Airways’ frequent flyer program. The “Dividend Miles Business Card’ carries a $79 annual fee. The no-fee version of the “US Airways Dividend Miles BusinessCard” permits cardholders to earn “Dividend Miles” on all of their everyday business purchases. Benefits include: 5,000 “Dividend Miles” after the first purchase; the ability to earn up to 10,000 more “Dividend Miles” for balance transfers; one mile for every dollar spent on US Airways purchases; one mile for every two dollars spent on all other purchases; and extra miles for purchases made at US Airways’ select merchants.

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CHIP & PIN

The first chip and PIN transaction made with a Canadian MasterCard chip card was conducted at a Toronto-area spa and salon.
The transaction was made with a “BMO Mosaik MasterCard” at Tresses Spa and Salon on a Moneris POS terminal. Moneris Solutions has been providing merchants across the country with chip-compatible POS systems to accept chip cards with 75,000 chip-compatible payment devices in the
marketplace. A major market trial of chip cards will take place in Kitchener-Waterloo, Ontario in a few months time and is a precursor to the national roll-out of chip cards. As a card issuer, “BMO Mosaik
MasterCard” is the largest MasterCard issuer in Canada and is preparing for the phased introduction of chip cards to its cardholders. MasterCard notes that more than 70% of payment cards issued in Europe are chip-enabled.

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Credit Card Limit Utilization Spirals Upward

A NY-based research firm says that U.S. households now have access to an average of $26,317 of revolving credit on their cards while average incomes are around $60,000 and are increasingly turning to credit cards to bail them out of financial bumps. Synovate’s “Mail Monitor” service says the ratio of available credit to income has been steadily climbing, in line with inflation, over the past four years. However, in the last 12 months, it jumped from 50% to 56%. This 6% increase is more than double the annual rate of inflation and is a direct response to the current economic climate. U.S. households now own an average of 2.8 cards compared to 2.4 cards just four years ago. Synovate noted that revolving balances on credit cards are at an all time high with U.S. households now owing an average of $6,970 up from $5,084 just four years ago.

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Publicly-Traded Coinstar Hits 10 Year Mark

Coinstar celebrates its 10th anniversary as a publicly traded company. Coinstar pioneered self-service coin counting at retail in the early 1990s and to date the company has processed more than $15 billion in change in over 435 million consumer transactions. Building on this expertise, the company added three lines of business for the retail front-end and in the past decade has expanded its presence to more than 140 countries and grown from 3,200 retail locations to more than 60,000. Coinstar pioneered self-service coin counting at retail in the early 1990s and to date the company has processed more than $15 billion in change in over 435 million consumer transactions. Building on this expertise, the company added three lines of business for the retail front-end and in the past decade has expanded its presence to more than 140 countries and grown from 3,200 retail locations to more than 60,000. With the rapid growth and increasing demand for stored value products such as gift cards and prepaid debit cards, Coinstar seized the opportunity to include these services in its 4th Wall product portfolio. Coinstar’s various e-payment services are offered through more than 14,000 point-of-sale terminals, 400 stand-alone e-payment kiosks and 8,900 e-payment-enabled coin counting machines. As the program grew, Coinstar became the first provider to offer a gift card program to major retailers in the United Kingdom. In addition, with money transfer being one of the top services requested by retailers, Coinstar added money transfer to its e-payment offerings in 2006.

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Tennessee Bank Switches to Elan Financial

TN-based Citizens Bank of Blount County has selected Elan Financial Services to provide credit card issuing solutions. Citizens Bank of Blount County has 11 branches and more than $301 million in assets. Elan provides card management, fraud monitoring, reporting and marketing tools to more than 3,000 financial institutions and currently manages more than 1,600 agent credit card programs.

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UFJ NICOS AMEX CARD

Next spring, Mitsubishi UFJ NICOS will offer the American Express card to Japanese
consumers targeting the “young-executive” demographic providing
Mitsubishi UFJ NICOS’s card point program. Both gold and platinum
versions of the AmEx-branded card will be introduced and will be
designed based on research of consumers and the respective preferences
regarding design, benefits, and rewards. Mitsubishi UFJ NICOS has 25.8
million cardholders with a credit card transaction volume of 5.9
trillion yen while American Express has over 110 card issuing
partnerships in more than 120 different markets.

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