Hypercom Makes Aggressive Changes

Hypercom is outsourcing its manufacturing and is consolidating its assembly, software, repair and maintenance functions globally. The Company also announced a reconfiguration of the Company’s global sales and marketing functions and a major manufacturing deal with Singapore-based Venture Group. Among changes thus far: printed circuit board assembly operations formerly in Shenzhen have already been outsourced to the Company’s manufacturing partner’s facility in Johor Bahru, Malaysia; relocating U.S. service and repair operations from Phoenix, Arizona to Hermosillo, Mexico, and selling the Phoenix facility and adjacent land to a smaller facility. Hypercom also expects to wind-down its direct product manufacturing operations in Brazil by September. The Company also announced a partnership with Venture Corporation to transition Hypercom’s entire manufacturing operations in Shenzhen, China to Venture locations during 2007 and 2008. Additionally, Hypercom announced a reconfiguration of the Company’s global sales and marketing functions to create a focused platform for revenue growth, streamline the organization, and further strengthen accountability for client relationships and anticipated market share growth globally.

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I2c Releases Sales Channel Pro & Matrix

I2c has released its “Sales Channel Pro and Sales Channel Matrix” commission tracking solutions. “Sales Channel Pro” allows program managers to design, manage and automate the calculation of variable payment and commission plans. Stakeholders, services and rates are identified in a tree hierarchy and this information becomes the sales policy for the program. Once defined, each stakeholder is given secure access to sales information and commission details based on their user role. “Sales Channel Matrix” is a simpler but less flexible option than Sales Channel Pro. Matrix has two dimensions; a level in the chain and a stakeholder category. At the intersection of these two values, the commission for any service provided is defined. The size of the matrix and the number of levels are configurable. The Matrix is only defined once for the entire program. However, a card program that uses Sales Channel Matrix can have only one matrix attached to it. i2c is a global technology provider of electronic payment processing solutions.

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Discover Begins Public Trading Monday

Discover will officially become a independent company tomorrow and will begin regular trading Monday, July 2. This morning CEO David Nelms and other top Discover executives rang the New York Stock Exchange Opening Bell. The new public company will trade next week on the NYSE under the symbol “DFS” and will become part of the “S&P 500.” Earlier this month, Discover Financial Services reported net income of $209 million for the quarter ended May 31st, compared with record net income of $343 million for the second quarter of 2006. The second quarter of 2007 included approximately $20 million of pretax costs related to the spin-off from Morgan Stanley. Philip Purcell, Morgan Stanley’s last CEO, first announced in early 2005 that he wanted to spin-off the Discover unit which the Board approved in April 2005. After Purcell was forced into retirement a few months later, his successor, John Mack, shelved the spin-off plan only to revise it in December 2006. (CF Library 12/19/06; 3/26/07; 6/20/07)

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Bankruptcy Filings Neared 200,000 in Q1

Total bankruptcy filings soared by 66% in the first quarter compared to the year ago period, and jumped 9% sequentially. During the first quarter total filings hit 193,461 compared to 177,599 for the fourth quarter and 116,771 one-year ago. However, according to the Administrative Office of the U.S. Courts filings in the 12-month period ending March 31st, 2006, when bankruptcy cases totaled 1,794,795, the latest figures represented a 61% drop in filings. The 12-month period ending March 31, 2006, included the surge in filings that occurred prior to the October 17, 2005, implementation date of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” Based on the latest official figures bankruptcy filings were running about 15,000 per week during the first quarter. However, other tracking firms are suggesting the weekly figures are moving to about 20,000 per week in the second quarter.

QUARTERLY BANKRUPTCY FILINGS
1Q/06: 116,771
2Q/06: 155,833
3Q/06: 171,146
4Q/06: 177,599
1Q/07: 193,461
Source: Administrative Office of the U.S. Courts

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Reg E Lifts Small Ticket Debit Receipts

The Federal Reserve has modified the receipt requirement of “Regulation E” permitting merchants to no longer make a required receipt available for debit card purchases of $15 or less. Previously, “Reg E” required that a paper receipt be made available to consumers for all debit card transactions conducted in physical environments, including those unattended areas where consumers may not expect a receipt. In many of these environments, the cost and operational challenges of receipt printing has limited the deployment of card acceptance terminals. The Fed’s decision will help increase payment card acceptance in unattended cash and coin-heavy merchant segments. VISA says its research indicates that consumers want the option to use their payment cards at more traditionally cash-heavy locations, including environments where the card terminal is not attended, such as: parking (23%), public transit (21%), vending machines (18%) and laundry (16%).

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Key U.S. Business Spending Trends Released

VISA USA has released a detailed analysis revealing key insights into how U.S. businesses large and small are spending their money based on its “Commercial Consumption Expenditure Index.” The “CCE Index” reveals that the top five individual spending categories, representing 54% of total spending for all businesses in 2006 were: raw materials and manufactured goods ($2.58 trillion, up 2.3%); information technology-related spending ($2.12 trillion, up 8.8%); professional services/consulting ($1.67 trillion, up 5.4%); personnel supply services ($1.57 trillion, up 6.5%); and rent ($1.38 trillion, up 13.8%). VISA says the data show an increase in personnel supply services, which indicates that more companies of all sizes are relying on temporary workers as the labor market continues to tighten. Moreover, robust IT of more than $2 trillion points to the fact that more U.S. companies are looking to harness technology to streamline their operations and improve efficiencies. Lastly, a sharp increase in rent year-over-year points to the continued demand for space to expand their businesses even as the economy slows in other areas.

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VCs Pump More in a Prepaid Card Specialist

Card marketer AccountNow has closed on $12.75 million in a third round of venture funding and added two new board members.Trident Capital led the round and all current investors and board investors participated. Investors include INVESCO Private Capital, Oak Hill Investment, VSP Capital, Grayhawk Venture Partners, Granite Hill Capital Ventures and CEO Tim Coltrell. Stephen B. Galasso, Strategic Advisor, and Christopher P. (Woody) Marshall, Managing Director, both from Trident Capital have joined AccountNow’s board, while all other board members will continue to serve. AccountNow is a provider of financial solutions for the 40 million US consumers who do not have established credit or traditional banking relationships. Trident Capital is a leading venture capital and private equity firm with over $1.6 billion of capital under management. The firm has invested in over 120 companies since its founding.

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Jack Henry Names Internet Banking Channel Head

Jack Henry & Associates, has named director of software development Vernon E. “Pete” Hopkins, Jr. to GM of Internet solutions and Ron Moses will move into the director’s role. Hopkins will join the company’s senior management team that currently encompasses 13 functionally aligned general managers. He will provide executive oversight of the development, quality assurance, support, installation, operations, communications, and education departments that support the company’s Internet banking channels. Moses has extensive industry and software development experience, including more than 18 years with Jack Henry & Associates. He most recently served as development manager for the company’s “Core Director” core banking platform. Jack Henry & Associates is a leading provider of integrated computer systems and processor of ATM/debit card/ACH transactions for banks and credit unions.

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Pacific Merchant Services Offers Charity Option

1st Global Financial Corporation has implemented the “1st Global Charitable Give-Back Program”, targeted at Pacific Merchant Services credit processing clients. The “1st Global’s Give-Back Program” donates a portion of all their credit card transaction fees collected by the various merchants to Friends of Rollo â“ U.A., a non-profit organization focused on providing disabled and at-risk children with the opportunity to experience the joy of outdoor fishing. Pacific Merchant Services clientele are expected to collectively process between $10 million and $12 million annually through 1st Federal Financial. 1st Global’s business model is a three-pronged cause marketing program designed to help customers give-back to their local communities and support charitable organizations of their choosing.

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MasterCard PCI Vendor Promotion is Launched

MasterCard has launched a global PCI vendor promotion with Cybertrust. The new promotion is being made available for up to 2,000 merchants and includes a free one-year subscription to the Cybertrust online portal, access to the required PCI “Self Assessment Questionnaire,” and enables merchants to schedule their required quarterly network scans. The questionnaire and quarterly network scans are PCI compliance validation requirements for merchants that are classified as either level 2 or level 3. The offer is administered through MasterCard acquiring banks and is available to select merchants globally that process MasterCard transactions. Participating acquirers will have customer online portals with Cybertrust. MasterCard also provides online seminars, conferences, educational materials and other tools to help secure the payments system and promote commerce worldwide.

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CUP & H50

Credit card outstandings declined during May by GBP 278 million to GBP 53.8 billion. This is the fourth straight monthly drop and remains well below the December 2005 peak of GBP 59.0 billion. Year-on-year credit card outstandings (not seasonally adjusted) are running about 5% lower than one-year ago. According to the The Bank of England, the annual growth rate of overall consumer credit continued to fall in May, by 0.2 percentage points to 5.2%, and the three-month annualized growth rate also fell, by 0.3 percentage points to 3.8%.
However, the increase in net consumer credit in May of GBP 800 million was higher than the increase in April.

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Citi & GXI Expand Global Remittances using GCash

Venture Corporation and Hypercom Manufacturing Resources have
agreed to jointly manufacture payment transaction products by
combining the companies’ security and technology capabilities.
Requirements of reliability, flexibility and security for transaction
solutions
is what the new partnership will concentrate on and anticipates coverage
of the entire “value chain”. The “value chain” includes production and
testing
to order fulfilment and will be contributed to with resources from both
companies. The Venture Group provides electronics manufacturing services,
original design manufacturing and e-fulfillment services and comprises
about
40 companies in South-East Asia, North-East Asia, America and Europe.
The Group employs more than 17,000 people worldwide. Hypercom
provides end-to-end electronic payment products and works with over 100
different businesses.

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