Shielded Contactless Card Mailers Unveiled

NY-based National Envelope Corporation has unveiled card sleeves and mailing envelopes to help shield contactless payment cards in transit. The new “Smart Card Guard” uses a thin protective metallic barrier that is incorporated into a specially produced, easy-to-print substrate. The new product was developed late last year and tested early this year by InfoGard Laboratories. The Company said the new product was developed in response to a 2006 study by researchers at the University of Massachusetts-Amherst. The test of 20 smart cards showed encryption levels were not nearly strict enough to prevent easy interception of personal information. National Envelope manufactures approximately 50 billion envelopes a year via 21 manufacturing facilities in the U.S. and Canada. A report released last week by Packaged Facts projects that total contactless credit and debit cards in the U.S. will reach 109 million by 2011 from the current 27 million. (CF Library 5/2/07)

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CSG Launches the Care Express Retail Kiosk

The “CSG Care Express” solution provides an automated, alternative means to the traditional manual processes carried out by customer service representatives when taking orders and upgrading services. Care Express offers convenience for the consumer and saves expense for the operator as these customers do not have to contact the call center for routine business such as billing and account inquiries. The solution gives consumers the ability to access statement summaries, make payments via credit card, debit card, checks, and cash as well as order new services, manage bundles and configure personal preferences and services. More than 5 million consumers have registered to manage their accounts, view and pay bills from cable and DBS providers nationwide, powered by CSG Care Express. CSG Systems International is a provider of outsourced billing, customer care and print and mail solutions and services supporting the North American cable and direct broadcast satellite markets.

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Aruba Networks Intros Secure Enterprise Mesh

CA-based Aruba Networks has launched “Secure Enterprise Mesh” PCI-compliant technology that can be overlaid on any legacy network, defend against network breaches, and provides retailers with client-to-core secure networking of point-of-sale devices. With Aruba’s solution, security policies are centrally managed from Aruba Mobility Controllers in data centers, allowing central IT staff to manage large and widely dispersed enterprises. The controller features a built-in, ICSA-certified firewall for tight policy control and enforcement and a centralized cryptographic architecture to ensure that encryption and authentication keys are securely managed and never stored in access points. Aruba Networks provides an enterprise mobility solution that enables secure access to data, voice and video applications across wireless and wireline enterprise networks.

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Reward Credit Cards Issuance Rises 23%

There has been a 23% increase over the past five years in the number of credit cardholders who use cards that accumulate points for merchandise and/or airline tickets. The new study also shows that debit card usage has decreased from 55% in 2003 to 44% in 2007. The research by Maryland-based Vertis found that the use of general-purpose credit cards containing no benefits has decreased from 38% to 31% since 2003. Other findings: credit cards issuing “cash back” incentives were among the most commonly used in 2007 by 30% of all credit card holders; store or gas credit cards are used by 25% of all credit card holders; only 11% use charge cards that require a balance paid in full each month; and specially endorsed cards from a university or other organization are only appealing to a mere 7% of all credit card holders. Vertis also noted that 16% of total adults use three or more credit cards each month, compared to 10% of total adults surveyed in 2003.

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Mass Bank Launches a Debit Rewards Program

MA-based Salem Five Bank has introduced “Cash-Back Debit Rewards” program offering 0.25% back for PIN debit transactions and 0.50% back for signature debit transactions. For each debit card transaction, Salem awards customers a percentage of their monthly debit card purchases. The percentage paid is doubled for signature-based transactions when the customer chooses “credit” at the point of sale. The cash rewards appear automatically on customers’ monthly statements. The “Salem Five Cash-Back Debit Rewards” program requires either a Star Checking or Gold Star Checking account. New accounts and existing Star Checking and Gold Star Checking customers are automatically enrolled. The Bank has also enhanced its ATM Reimbursement offering. Through the Bank’s new Unlimited ATM Reimbursement program, customers can use any ATM in the world and Salem Five will reimburse the fees charged by the bank that owns the ATM. There is no limit to the amount or the number of ATM reimbursements. Salem Five operates 17 branches in Massachusetts with $2.4 billion in assets.

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World of Warcraft VISA Cards Introduced

Irvine, CA-based Blizzard Entertainment and First National Bank Omaha have teamed to launch a series of VISA credit cards for the very popular “World of Warcraft” online game. The thirteen cards will be marketed to the more than 8.5 million players worldwide including 2 million players in North America. The “World of Warcraft VISA” cards each feature a different character from the game. Cardholders earn a 1% credit on each $1 in spend volume towards the monthly $15 subscription fee. New cardholders receive 1500 bonus points, enough to redeem for one month of gametime. There is no limit to the amount of points cardholders can earn and points expire five years from the date on which they were posted to the account. First National is offering a 0% intro APR on all purchases and balance transfers for the first twelve billing cycles and variable rates thereafter starting at 9.99%. Blizzard Entertainment is a division of Vivendi Games. “World of Warcraft” debuted in November 2004 and has become the most popular MMORPG around the world. In addition to North America, there are more than 1.5 million players in Europe, and more than 3.5 million players in China.

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TNB Signs Three More CUs for Processing

Dallas-based TNB has signed Service First FCU of South Dakota, First Alliance CU of Minnesota, and Employees CU of Texas as processing clients. Service First Federal Credit Union has 17,800 members and assets of $127 million. First Alliance Credit Union has 11,444 members and assets of $84.5 million. Employees Credit Union has 8,247 members and assets of $50 million. TNB Card Services provides electronic payments processing, as well as an agent issuing solution to more 475 financial institutions and manages more than 1.6 million cards.

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Coinstar First Quarter Revenues Rise by 4.8%

WA-based Coinstar reported that first quarter revenues increased by 4.8% to $132.3 million. However, net income dropped 38% compared to 1Q/06 to $2.6 million. At the end of the first quarter, Coinstar had approximately $61.6 million in cumulative net operating loss carryforwards. The Company reported that its coin-to-card, e-payment or e-certificate-enabled base expanded to 8,500 from 6,100 one-year ago. However, POSA terminals dropped from 19,500 for 1Q/06 to 14,000 for the first quarter of 2007. During the first quarter, Coinstar repurchased 120,800 shares of common stock at an average price of $28.94 per share. Management estimates that revenue for the second quarter will range from $130 million to $140 million. For complete details on Coinstar’s first quarter performance visit CardData ([www.carddata.com][1])

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

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MasterCard PayPass Pilot Logs 40K Transactions

The first two trials of contactless payments, which began in June 2006, has racked-up more than 40,000 transactions to-date and is gearing-up for a national launch in the fourth quarter. The Royal Bank of Scotland Group and MasterCard launched the pilots at RBS’s
headquarters in Edinburgh and at the staff restaurant at one of its
London offices. The RBS headquarter test involves 11 retailers located in the Bank’s flagship site including coffee shops, pharmacy, florist and a hairdressers. The second trial includes some 1,500 staff who
volunteered use their “Maestro/PayPass” debit and “MasterCard/PayPass” credit cards. Feedback from RBS employees has been extremely positive thus far. RBS is now working with MasterCard and the UK card payments industry towards the first phase of the public roll-out in London in the autumn. RBS, NatWest, MINT and Ulster Bank will issue several hundred thousand contactless payment cards, both debit and credit, during the London launch of the roll-out to those customers who live in the roll-out zone. These cards will retain the existing chip and pin and magnetic stripe functionality.

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MasterCard to Launch a Travel Dashboard

MasterCard has teamed with TRX to develop a Web-based business intelligence tool that will enable companies to evaluate, analyze and optimize travel programs. The new “MasterCard Travel Dashboard” will leverage detailed information from MasterCard’s corporate card program and TRX’s advanced travel data reporting tools to provide greater visibility into the performance and compliance of travel programs. The new proprietary tool will enable travel managers to review performance and trends; drill-down on reports to analyze major travel spend categories, including spend-to-vendor agreement reporting; compare spend data with corporate policy to highlight out-of-compliance departments and travelers and benchmark the performance of their programs.

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Payment Rates Sink But Yield Remains Stable

Monthly payment rates, the amount that cardholders pay on their credit card debt, collapsed in March to its lowest level in nearly eighteen months. While the dip historically has been seasonal, it appears that many borrowers are increasingly pressured by current economic factors. Among credit card-backed securities, payment rates reached nearly 22% last year driven by increased minimum payments and a robust economy. According to FitchRatings, the gross yield on credit card ABS increased 51 basis points in March to 18.21%, and is 30 basis points above year-ago levels. Fitch expects gross yield to remain stable as payment rates decline.

ABS METRICS
YIELD MPR
Apr 06: 18.81% 21.74%
May 06: 17.61% 19.14%
Jun 06: 17.97% 21.00%
Jul 06: 17.63% 20.71%
Aug 06: 17.86% 20.24%
Sep 06: 17.96% 21.06%
Oct 06: 17.58% 19.30%
Nov 06: 17.96% 19.82%
Dec 06: 17.78% 19.32%
Jan 07: 18.28% 19.27%
Feb 07: 17.70% 20.80%
Mar 07: 18.21% 18.76%
Source: FitchRatings

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Encore Capital Names a New Board Chairman

Encore Capital Group has appointed Carl C. Gregory, III, previously Vice Chairman, as Chairman of the Board. Gregory has served as a director of Encore Capital since May 2000 and served as Vice Chairman from October 2004 to May 2006. From October 2004 until September 2005, Mr. Gregory also served as Vice Chairman and Chief Executive Officer and previously served as President and Chief Executive Officer from May 2000 to October 2004. Encore Capital Group is a purchaser and manager of charged-off consumer receivables portfolios.

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