VISA’s SEC Form S-4 is Now Effective

VISA announced that its S-4 filed in connection with its proposed restructuring was declared effective by the SEC on September 13th and they will now proceed with securing the required approval of member financial institutions for the restructuring. The restructuring contemplates a series of transactions by which VISA International, VISA USA and VISA Canada will become subsidiaries of a single stock corporation, VISA Inc. VISA Europe will remain a membership association and will become a licensee of, and own a minority interest in, VISA Inc.

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B2 PROCESSING

B2 Processing will be reselling SmartSoft EMV acquiring and issuing
systems, including the “EMV Analyzer”. The SmartSoft solution helps
issuers and acquirers with EMV system analysis and performs EMV
transactions with EMV cards and its banking host system connection. B2
will be introducing this, along with other EMV products from SmartSoft’s
line, to the Canadian card market. SmartSoft-IT serves financial
organizations in providing EMV solutions, including software products and
services, including quality assurance tools for EMV issuing, smart card
personalization, and an Authentication Server. B2 Processing develops and
customizes electronic transaction systems for customer application
requirements.

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SCA White Paper Says NFC is Here to Stay

The Smart Card Alliance has released a new white paper that concludes that proximity mobile payment based on Near Field Communication will become the mobile payment technology of choice for consumers using mobile phones for retail payment transactions in the US. The paper, entitled “Mobile Payments: Leveraging NFC and the Contactless Financial Payments Infrastructure, “discusses what is necessary to implement and deploy proximity mobile payment systems, the relevant technical and business issues from the perspective of the various stakeholders (for example, mobile operators, the financial industry, end-users, providers and vendors) and outlines the potential opportunities and barriers that may impact its market adoption. One forecast predicts that mobile phone-based contactless payments will account for over $36 billion of worldwide consumer spending by 2011, while another indicates that by 2012, some 292 million handsets-just over 20 percent of the global mobile handset market-will ship with built-in NFC capabilities.Participants involved in the development of this report include: CPI Card Group, Discover Financial Services, First Data Corporation, Giesecke & Devrient, Gotham Financial Services, Hypercom, IBM, IfD Consulting, INSIDE Contactless, MasterCard Worldwide, Mobile Candy Dish, NXP Semiconductors, Oberthur Card Systems, VeriFone, Visa USA, ViVOtech.

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GEMALTO 1H/07

Gemalto has released revenue reports for 1H07 reflecting a 10% drop
since the same period in the previous year. Other figures on the report
show a 10.2% decrease in net sales, 14.6% fall in gross profits, a 7.8%
fall in operating costs and a 15.3% decrease in adjusted basic earnings
per share. These figures do not include the company’s business relations
with Gemplus. Gemalto IFRS consolidated income statement shows
that a new range of products supported the revenue growth in 1H07,
during which time geographic areas with low pricing levels accounted for
the most decrease in gross profit, resulting in an operating loss of EUR 2.1
million. Projections for 1H07 are based on the favorable seasonal pattern
and are predicted to benefit from additional cost synergies from the
combination. Furthermore, projections foresee a sustained demand in key
markets citing that Gemalto as a company is determined to reach an
operating margin15 above 10% in 2009. Gemalto develops digital security
solutions and had pro forma 2006 annual revenues of EUR1.7 billion with
offices in over 85 countries. The company has nearly 10,000 employees
and R&D engineers.

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NACHA Establishes Fees for its SVP Pilot

NACHA released its fee structure for its “Secure Vault Payments” pilot scheduled to go live early next year. An authorization fee will be paid from the business’ sponsoring (receiving) financial institution to the authorizing (originating) financial institution in each SVP transaction. Authorization fees include: consumer purchases — the greater of 10 cents or 1.35% of the transaction value; consumer bill payments — 50 cents per transaction; and government transactions — 40 cents per transaction. eWise Systems will provide switching service infrastructure for SVP transactions. NACHA has negotiated a cap of 6 cents per transaction for sponsoring financial institutions and 6 cents per transaction for authorizing financial institutions that will be paid to eWise. NACHA will also collect a fee to support marketing and governing body costs. The sponsoring and authorizing financial institution will each pay 1 cent per SVP transaction. Pilot fee levels will serve as a five-year cap for early adopters in the SVP Network.

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CITI REMITTANCE

In response to the growing Polish population in the United Kingdom,
Citibank is offering free money transfers between UK and Polish
Citibank bank accounts with the “Citibank Easy Account”. With its
Polish subsidiary, Citi Handlowy, the “Citibank Easy Account” allows
customers to conduct online transfers to Poland with no monthly fees,
provides a VISA debit card, and access to over 35,000 ATMs with
no surcharge. According to 2006 figures, Polish immigrants sent
EUR 4.5 billion to Poland, which are greatest in numbers in the U.S. with
9 million, in Germany with 2 million and 1 million in the U.K. Countries
with smaller Polish immigrant populations include Canada with 0.5 million,
Italy with 0.1 million and Spain with 0.05 million. Citi has nearly 200
million customer accounts in over 100 countries.

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Target Mulls a Potential Credit Card Sale

Target yesterday confirmed it is reviewing potential ownership alternatives for its $7 billion credit card portfolio and will likely make a decision by the end of year. The company also announced that it will re-evaluate its use of debt in its capital structure. Goldman Sachs has been engaged to advise the company in this review. Target says that regardless of whether or not its review results in a receivables sale, the Company intends to maintain its core financial services operation and remain firmly committed to growing and developing its Financial Services team. Last month, Target reported that pre-tax credit card profits for the quarter ending August 4th increased 34% over the year-ago quarter. Credit card outstandings for the quarter increased 14% year-on-year. Target’s second calendar quarter pre-tax credit card profits were $163 million, compared to $143 million in the prior quarter and $122 million one-year ago. Total credit card receivables, which include its VISA and “Guest” cards, were $6.906 billion as of August 4th, compared to $6.510 billion for 1Q/07 and $6.041 billion one-year ago. For complete details on Target’s latest performance, visit CardData ([www.carddata.com][1]).

TARGET CARD LOAN HISTORICAL
2Q/06: $6.041 billion
3Q/06: $6.148 billion
4Q/06: $6.711 billion
1Q/07: $6.510 billion
2Q/07: $6.906 billion
Source: CardData (www.carddata.com)

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

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SMART DEBIT

The Interac Association reported the completion of the country’s first INTERAC debit card transaction at the point-of-sale terminal using chip technology. The transaction was processed by TD Merchant Services using a BMO Bank of Montreal chip debit card at Mercato Giovanni’s Fresh Food located in downtown Toronto. The chip debit card transaction was conducted in preparation for the Kitchener-Waterloo, Ontario market trial of chip technology which will begin in the fall. Beginning in the fall, merchants and cardholders will start to see the introduction of cards, Automated Banking Machines and merchant terminals that feature chip technology, and within three years, it is expected that the majority of Canadians will be able to fully benefit from this new technology.

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Stockholders Approve Ceridian Sale & Board

Ceridian Corporation has announced that its stockholders approved the adoption of the merger agreement with an affiliate of Thomas H. Lee Partners, L.P. and Fidelity National Financial and reelected all 7 directors The preliminary tabulation indicates that more than 99% of the shares voted were cast in favor of the transaction. The number of shares voted in favor of the transaction represented approximately 74% of the total shares outstanding and entitled to vote at the meeting. On May 30, 2007, Ceridian and affiliates of THL Partners and FNF entered into a definitive merger agreement, pursuant to which THL Partners and FNF would acquire all of the outstanding common stock of Ceridian for $36 per share in cash, subject to certain conditions, valuing the total transaction at approximately $5.3 billion. Ceridian is a human resources outsourcing company.

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SERVERSIDE & DATACARD NOMINATION

Serverside “Virtual Portfolio” and Datacard “Meritas” asset management
software have been jointly nominated for the “Cartes 2007 Sesames Awards” in the “Software” and “Banking/Finance/Retail” categories. “Virtual
Portfolio”
is an Internet card campaign management program for card issuers to issue
both stock and custom cards. The marketing platform also allows the issuer
to assess response rates and customize interface options from the grand
scheme down to minute details. Complimenting the “Virtual Portfolio” well,
“Meritas” provides issuers with inline digital card printing as needed.
This eliminates overhead storage costs, simplifies risk management,and
inventory surplus and deficits. Because this collaboration is
significant to the
process of card production and management, according to experts, they
are jointly worthy of category nomination for the DataCard awards.
DataCard serves customers in over 120 countries. In addition to DataCard,
ServerSide has business allegiance with VISA with offices in London,
Taipei, New York, Chicago and Aukland.

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Capital One Ties Rewards to Savings Account

Capital One has introduced “Capital One Rewards Money Market”, a money market account that offers consumer rewards miles every month based on a savings balance. The new “Capital One Rewards Money Market” account has a competitive interest rate currently at 4.65 percent Annual Percentage Yield (APY), and customers earn one mile for every $20 of average balance per month, including interest. Plus consumers can enjoy the same ‘no hassle’ rewards benefits Capital One has offered for years, including no blackout dates, no seat restrictions, no advance booking or Saturday night stay requirements, and flights on any airline.

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TSYS EUROPE EXEC

TSYS Europe has appointed Arnold Sneijers as European Sales
Director to work out of the Netherlands and oversee all European sales.
With 15 years of experience in the payments industry, Sneijers was
most recently director of commerce and business development at
SiNSYS, following his time as general manager of e-commerce services
for Interpay Nederland B.V. His education includes a bachelor’s degree
in information technology engineering and a master’s degree in business
administration, with a concentration in international management. TSYS
provides outsourced payment services for financial institutions and retail
companies around the world.

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