AmEx & VISA Gain U.S. Credit Card Share

VISA and American Express continued to gain market share in the credit card arena during 2006 at the expense of MasterCard and Discover. American Express added 100 basis points to its share after producing over $400 billion in annual credit/charge card volume. AmEx now has a 20% share of U.S. credit card volume, its highest share since 1992. VISA, which has not released fourth quarter results, added an estimated 50 basis points to its share of the credit card segment to end with a 44.5% share. U.S. credit card volume last year was $2039.6 billion compared to $1837.7 billion in 2005, according to CardData ([www.carddata.com][1]).

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

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MS 1Q/07

Morgan Stanley reported that credit card outstandings for its British
MasterCards during the quarter ended February 28th declined by 1% from
the prior quarter to $4.58 billion. Morgan Stanley also reported that
its Discover unit posted overall pre-tax profits of $372 million for
1Q/07, a 22% decline over the year ago quarter, but nearly double
sequentially. Additionally, Morgan Stanley says it is on track to
spin-off Discover by the third quarter of this year. In the U.K. the
number of accounts for its “Classic,” “Gold,” “Platinum,” “buy & fly!”
and “Goldfish” credit cards remained flat at 3.0 million from the prior
quarter but is up by 400,000 or 15% since the acquisition last year of
1 million “Goldfish” credit card accounts. International managed card
loans were up 9% year-on-year. MS introduced its first credit card in
the U.K. in 1999. For complete details on Morgan Stanley’s latest
performance, visit CardData (www.carddata.com).

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Index Shows the Economy to Expand by 3%

The Conference Board’s “U.S. Leading Economic Index and Consumer Confidence” says it sees a pick-up in the U.S. economy this year. CB expects the economy to grow about 3%. Growth has moderated but inflation appears under reasonable control and seems to have shaken off the burdens of cyclical dynamics says the firm. CB expects corporate profitability to peak this year and that overall profit gains should remain solid for the foreseeable future. However, as compensation costs rise and productivity gains wane, job growth picks up. This can put upward pressure on compensation when the unemployment rate is low. CB says the tensions created by trying to cover rising costs with higher prices have put businesses and the Fed on a collision course that suggests higher interest rates and lower profits lie ahead.

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CBRC Approves Citi as a Locally Incorporated Bank

Among the first to do so, Citibank has been given approval by the China
Banking Regulatory Commission to operate as a locally incorporated
foreign bank. Citibank will be able to operate under the same
regulatory beneficial framework with which local banks abide, provide money
management consultation and provide unrestricted local currency in the
retail banking market. This development will expand Citibank’s existing
operations and create new ones in the country.

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Credit Card ABS Off to a Sluggish Start

After several years of improvement, credit-card payment performance declined in January as personal bankruptcy filings edge upward. Moody’s Investors Service reports that three of the five metrics it tracks for $410 billion of U.S. bank credit-card loans backed securities, posted declines in January. The delinquency rate rose to 3.91% in January from 3.40% a year earlier, the third month that the delinquency rate increased from its year-earlier level. In January, cardholders paid back 20.03% of their credit card debts on average, relatively flat compared with last year’s January rate of 20.00%. The payment rate declined in December after posting a record of 42 consecutive months of year-over-year improvement. Moody’s says for the same period, the payment rate and yield were relatively flat.

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Chicago Transit Adds More Farecard Machines

The Chicago Transit Board approved the purchase of 15 additional state-of-the-art farecard vending machines that accept credit and debit cards from Charlotte-based GFI Genfare. In addition, the new machines provide audio and visual instructions in English and Spanish, and have instructions in Braille and raised lettering for people with disabilities. Funding for the new machine purchase will come from CTA capital funds provided by the Regional Transportation Authority.

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BitArmor Systems Joins the PCI Alliance

Pittsburgh-based BitArmor Systems has joined the Payment Card Industry Security Vendor Alliance. BitArmor’s flagship product is a distributed enterprise encryption software solution that helps organizations protect sensitive data assets through advanced encryption technology that secures data in flight over both wired and wireless networks and stored on personal computers, removable media, servers, and storage devices. The “BitArmor Security Suite” provides data lifecycle management functionality to address PCI DSS requirements for retailers, financial institutions and other organizations with automatic data classification, retention policies and programmatic data destruction for any data under protection. The PCI Security Vendor Alliance (SVA) was formed by leading security vendors to help members of the payment card industry achieve compliance with the PCI Data Security Standard, a global benchmark that guides organizations in protecting sensitive data and reducing the risk associated with security breaches.

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Trycera Financial Revenues Soar in March

CA-based prepaid card specialist Trycera Financial reports that gross revenues for February increased 196% and that monthly GDV for the first 10 days of March has already exceeded the $3.2 million in full month GDV recently reported for February. Gross revenues for February 2007 increased from $96K in January 2007 to $283K. Stored value revenues for February 2007 increased $76K to $264K. Quarter-to-date stored value card fee revenues have increased from $70K in 4 QTR 2006 to $700K. Trycera Financial is a financial services company specializing in the delivery of prepaid card programs, prepaid card program management and private label catalog shopping cards.

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ID Protection Software Could Drive E-Banking

A new study has found that more than 88 million online banking customers would switch banks or reduce online banking usage if news reports exposed their individual institution as compromised. The TriCipher “Consumer Online Banking Study,” conducted by Javelin Strategy & Research, also reveals that the industry could realize a gain of $8.3 billion per year through customer adoption and increased loyalty by offering strong identity protection software to their customers. When asked if they would download identity protection software from their financial institution, 62% of consumers said that they would be likely to do so. Consumers’ willingness to download security software to protect financial information was further confirmed when 69% of respondents reported having downloaded some form of security software in the last six months.

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FTC Plans a Debt Collection Workshop

The FTC is planning a debt collection workshop in October to learn about changes in the debt collection industry and to examine how those changes have affected consumers and businesses. To aid preparation for the workshop, FTC staff welcomes original research, surveys, and academic papers regarding consumer debt collection issues. The Federal Trade Commission works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

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UATP Names a Manager for China

UATP travel payment network has added a commercial manager in China
expanding operations in the area. Steven Luan will be promoting the company’s corporate payment network services with
airline issuers throughout the region. Luan brings to UATP talents as a
consultant and ten years experience in sales that have generated
important relationships with airlines. His education includes an
undergraduate degree from the Beijing Institute of Business and an MBA
from the University of Queensland, Australia.

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Exclusive Deal Signed for Carmen Electra Card

Commerce Planet’s subsidiary Legacy Media has signed an exclusive marketing agreement with Payment Data Systems for the “Carmen Electra Prepaid MasterCard” and “Carmen Electra Gift MasterCard”. Legacy will assist with market development and has exclusive online distribution through its affiliate network, www.legacynetwork.com. Both the “Carmen Electra Prepaid MasterCard” and “Carmen Electra Gift MasterCard” offer an opportunity to win a $1,000 gift card each quarter and are issued by Iowa-based MetaBank. Commerce Planet offers online media products, lead generation services and direct marketing tools to its client partners. Payment Data Systems is an integrated payment solutions provider to merchants and billers.

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