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Jun 2, 2013 ... HSN Consultants Inc. 2013 THE NILSON REPORT Reproducing or allowing reproduction or dissemination of any portion of this newsletter in ...

For 42 years, the leading publication covering payment systems worldwide.

JUNE 2013

Issue 1,019

Europe’s Largest Merchant Acquirers The 40 largest acquirers of Visa, MasterCard, Maestro, American Express, JCB, Diners Club, and domestic credit, debit, and prepaid card transactions from merchants in Europe handled 35.76 billion ... turn to page 9

Discover Buys Diners Italy When Slovenia’s central bank ordered the local Diners Club franchise to cease operations on May 14, 2013 because merchants in the country were not being paid, local cardholders had ... turn to page 12

Citi Keeps American Airlines Co-Branded Contract

Store Cards in the U.S.

Purchase Volume (Bil.) in 2012

IN HOUSE

AMR Corp., the parent of American Airlines, filed for bankruptcy on Nov. 29, 2011. It expects to exit court protection in the third quarter of this year. Part of the company’s return to ... turn to page 8

HP Partners With First Data First Data purchased the VisionPLUS card account management system in 2001, and since then it has supported and upgraded the software even as its main intent was to migrate users from their ... turn to page 9

$143

PRIVATE LABEL

PRIVATE LABEL

IN HOUSE

$14

GE $54 Citi $41 CapOne $19 Alliance $13

Top Issuers:

Target $4 Nordstrom $2 Army & AF Exchange $2

$82 $47

Top Issuers:

vs.

2002

Top Issuers:

GE $48 Citi $12 HSBC $11 Alliance $5

Top Issuers:

Sears $13 May Co. $5 Target $4 Federated $4

©2013 The Nilson Report

Monitise/Blackhawk Mobile Prepaid Prepaid products provider Blackhawk Network, which completed a $230 million initial public offering (IPO) of common stock in April, has formed a partnership with mobile banking and payments ... turn to page 12

Third 50 U.S. Credit Card Issuers Turn to page 11 for the MasterCard and Visa consumer and commercial credit card issuers in the U.S. ranked 101-150 based on outstandings at year-end 2012. Prior issues: 1,015, 1,012 turn to page 11

Third 50 U.S. Debit Card Issuers Turn to page 11 for the MasterCard and Visa consumer and commercial debit card issuers in the U.S. ranked 101-150 by purchase volume at merchants in 2012. Prior issues: 1,018, 1,016 turn to page 11

Store Cards in the U.S. 2012 Retailers and third-party private label specialists owned $96.47 billion in credit card outstandings at year-end 2012, an increase of $4.35 billion or 4.7% versus 2011. By comparison, U.S. general purpose credit card issuers of Visa, MasterCard, Discover, and American Express cards saw their outstandings increase 0.1%. However, purchase volume on store cards increased only 5.1% to $154.20 billion, while U.S. general purpose card spending at merchants rose 8.4% last year. Store cards in circulation reached 335.3 million, ... turn to page 7

INSIDE:

Fast Facts P 2-4 | Handpoint p2pE Mobile Point-of-sale system P 5 | Verifone gateway adds cardspring P 5 patent litigation hits card issuers P 6 | Biometric/Contactless payments progress P 6 | Credit card debt sales in 2012 P 8

CHARTS:

u.s. store credit cards — 2012 P 7 | Top Buyers of Credit Card Debt — 2012 P 8 | Largest merchant acquirers in europe

P

9,10

© HSN Consultants Inc. 2013 THE NILSON REPORT Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for any purpose is a copyright violation subject to substantial fines. Yearly Subscription for 23 print and electronic issues is $1,295. ISSN 1087-8718 THE NILSON REPORT: 1110 Eugenia Place, Suite 100, Carpinteria, CA 93013 USA • PHONE (805) 684-8800 • FAX (805) 684-8825 • [email protected]

Fast Facts > > > > > > > > VISA U.S.A. has sued Walmart in Federal District Court, Eastern District of New York (Brooklyn). The litigation is tied to Walmart's opposition to a proposed settlement of a lawsuit alleging price fixing of interchange fees brought on behalf of merchants against Visa, MasterCard, and 12 U.S. banks. Visa's lawsuit is aimed at stopping Walmart from initiating new litigation on the price fixing claim.

ACCULYNK'S PaySecure software-only graphical PIN pad as well as

GREEN DOT BANK will acquire Walmart reloadable prepaid Visa/

XERO & STRIPE have formed a partnership. Stripe offers payment

MasterCard cards from GE Capital Retail Bank. Terms were not disclosed. The deal, which is expected to close late in the third quarter of 2013, includes transfer of all deposits underlying the card portfolio. Lewis Goodwin is CEO at Green Dot Bank, (626) 765-2416, [email protected], www.greendot.com. Josh Kellam is Senior Manager, Client Development at GE Capital Retail Bank, (479) 254-6061, [email protected], www.ge.com.

BAIN CAPITAL AND ADVENT INT'L, owners of 80% of WorldPay, the 6th largest acquirer of merchant card transactions in the world, have cancelled the auction of WorldPay U.S., which independently ranks as the 11th largest U.S. acquirer. Royal Bank of Scotland owns the remaining 20% of WorldPay. Tony Caltafano is CEO at WorldPay U.S., (770) 396-1616, [email protected], www.worldpay.us.

Conference links at www.nilsonreport.com

FEATURED CONFERENCE

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HEALTHCARE PAYMENTS INNOVATIONS SUMMIT 2013 Two-Day Conference July 30-31, 2013 The Le Méridien Cambridge-MIT Cambridge, Massachusetts

$300

its PayLeap payment gateway for Web merchants will be offered by Cox Business to its more than 300,000 small and midsized business customers. PaySecure is currently deployed by 6,000 merchants. Mike Pons is Executive Director, New Business & Partnerships at Cox Communications, (404) 269-0963, [email protected], www.cox.com. Nandan Sheth is President at Acculynk, (678) 894-7011, [email protected], www.acculynk.com. processing from websites and mobile devices. Xero offers online accounting software to small businesses. John Collison is Founder at Stripe, (650) 739-5207, [email protected], www.stripe.com. Jamie Sutherland is Pres. U.S. Operations at Xero, (415) 806-1107, [email protected], www.xero.com.

HEARTLAND SCHOOL SOLUTIONS, a division of Heartland Payment Systems, now offers parents of school-aged children a mobile phone payments application to handle school meal expenditures. MyLunchMoney is PCI-DSS and Visa CISP compliant for online prepayments. Michael Lawler is President, Strategic Markets Group, (334) 524-7728, [email protected], www.heartlandpaymentsystems.com.

INCOMM'S Cashtie API links cash payments at point-of-sale locations to e-commerce and bill payment software. The API lets billers reach consumers at nearly 400,000 locations in InComm's distribution network. Thomas Cornelius is SVP, (678) 713-2030, [email protected] incomm.com, www.incomm.com.

PCI SECURITY STANDARDS COUNCIL has published a stanSubscribers to The Nilson Report will receive a $300 discount. (Use code NILSON.)

Topics include: 2013 WEDI report, what you absolutely must know about the future of ERAs and EFTs, payer and provider partnering for change, how will payments go through the exchanges and other emerging organizations, easing the pain of patient collections, how to adapt the top 10 payment solutions from banking & other industries to the unique needs of healthcare, getting to critical mass: national mandate to transform administrative data exchange, the role of BCBS organizations in the changing healthcare payments space, Speakers represent: Citibank, Blue Cross/Blue Shield, Jopari, CAQH, America’s Health Insurance Plans, BNY Mellon, Fiserv, Systemware, Revenue Management Solutions, F&M Bank & Trust Company, Panacea Healthcare Solutions, Apgar & Associates, EHNAC, The Marblehead Group, UnitedHealthcare, Aetna, MediStreams, and more. Cost for the two-day conference ranges from $995 to $2,095. Contact Kathleen Daffner at Strategic Solutions, (203) 209-0520, [email protected] Register at www.hcpaymentsinnovations.com.

dard for secure payment card production. Security requirements are available for download at https://www.pcisecuritystandards.org/ security_standards/documents.php.

SIGNATURE CARD SERVICES is offering free Ingenicomanufactured EMV-enabled terminals to its merchants in the U.S. Anthony Urquidez is VP of Operations at SCS, (323) 966-0050, [email protected], www.signaturecard.com. Rhonda Boardman is VP, U.S. Acquiring Sales at Ingenico No. America, (678) 456-4544, [email protected], www.ingenico.com.

GLOBAL RETAIL INSIGHTS NETWORK (GRIN) has been formed by payment service provider GlobalCollect. GRIN aims to make it simpler for retailers to sell on a worldwide basis. Companies that have joined the coalition include E4X, Kount, Pitney Bowes, and Edgar Dunn. For more information visit www.gringrowth.com.

VANTIV AND NCR have formed a partnership to bring mobile payments and commerce services to smaller merchants. Their first offer is Vantiv Mobile Checkout powered by NCR Silver. The package includes payment processing services, mobile payments capabilities, marketing, social media functions, and cloud-based back-office functions, as well as hardware that transforms an iPad into a POS system including printer, card reader, and cash drawer. Donald Boeding is Pres. of Merchant Services at Vantiv, (513) 534-3355, do[email protected], www.vantiv.com. Christian Nahas is VP/GM, Small and Medium Business at NCR, (770) 576-6454, [email protected], www.ncr.com.

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report THE 2013 NILSON REPORT JUNE ISSUE 1,019 THE NILSON REPORT - 1 - Your obtaining an unauthorized copy may violate the intellectual property rights of immediately. NUMBER 1019 June 2013 HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber.

> > > > > > > > Fast Facts REVEL SYSTEMS now offers the 1,000 merchant locations that

use its iPad-based POS system the ability to enroll cardholders' photos as an added security feature. Consumers register by creating a Revel account on the company's website and transferring a photo from a social media account or uploading one from their computer. Chris Ciabarra is CTO, (415) 754-5355, [email protected] revelsystems.com, www.revelsystems.com.

IPAYMENT, a provider of payment card processing services to 165,000 U.S. merchants, will use Roam's mobile commerce platform to deliver a suite of mobile point-of-sale products and services including the G4X Secure Mobile Card Reader, ROAMpay X4 Mobile POS Application, and the myROAM management portal. Carl Grimstad is CEO at iPayment, (212) 802-7200, [email protected], www.ipaymentinc.com. Ken Paull is CEO at Roam, (857) 254-2352, [email protected] roamdata.com, www.roamdata.com. EPAYMENTAMERICA, a wholesale merchant services provider, now offers Yapyzal, a social commerce tool that lets businesses design, post, and share product offers on social media sites. Yapyzal completes the sale through credit and debit card processing without the customer leaving the site. Christopher Reckert is CEO, (901) 385-5395, [email protected], www.epaymentamerica.com.

CARDSERVICE INTERNATIONAL has been doing business as First Data Independent Sales. The company's new name is Ignite Payments, LLC. It remains a wholly owned subsidiary of First Data. Noel Fundora is Senior VP at Ignite Payments, (954) 845-4207, [email protected], www.ignitepaymentsks.com.

STERLING PAYMENT TECHNOLOGIES, a provider of credit, debit, prepaid, EBT, and fleet card processing services in addition to rewards and loyalty programs, and check authorization and conversion services, has integrated with Tri-Technical System's accounting and inventory management software application. Gary Staub is Chief Sales and Marketing Officer at Sterling, (813) 371-8294, [email protected], www.sterlingpayment.com.

ANTI-PHISHING WORKING GROUP has produced a white paper called "Mobile Threats and the Underground Marketplace." Download for free at http://docs.apwg.org/reports/mobile/apwg_ mobile_report_suppplement_april_2013.pdf.

INTUIT'S MINT personal finance management software, as well as the company's mobile banking apps and online banking software, will be offered for integration with online and mobile banking on a white-label basis to U.S. banks in early 2014. Greg Wright is VP, Product Management at Intuit Financial Services, (650) 944-3612, [email protected], www.intuit.com.

CSR'S PCI ToolKit and Breach Reporting ToolKit products will be offered to merchant customers of Omega Processing Solutions. Scott Anderson is CEO at Omega, (859) 442-8100 x361, [email protected] omegap.com, www.omegap.com. Darrel Anderson is EVP at CSR, (772) 225-0007, [email protected], www.csrcorporate.com.

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GROUPE AUCHAN, CREDIT MUTUEL-CIC & INGENICO

have deployed universal payment application software built on SEPA standards at one of the food retailer's stores in France. The solutions will be extended to other European countries. Arnaud Crouzet is Head of Group Global Payments Development at Groupe Auchan, 32 (6) 9789-689, [email protected], www.auchan.com. Claude Brun is Managing Director at BECM/ Credit Mutuel-CIC Group, 33 (3) 8814-7001, [email protected], www.creditmutuel.fr. Pierre-Antoine Vacheron is Managing Director Europe-SEPA at Ingenico, 33 (1) 5801-9150, [email protected], www.ingenico.com.

PAYLANE, a Poland-based payment service provider to e-commerce merchants, has received a Payment Institution License to operate as a financial institution in the European Union and European Economic Area. Karol Zielinski is Managing Director at PayLane, 48 (664) 967-819, [email protected], www.paylane.com.

CONTIS FINANCIAL SERVICES has launched a Visa prepaid product called the airBaltic Payment Card in partnership with airBaltic, a Latvia-based carrier. The airBaltic Payment Card is available in Euro and Latvian denominations. Contis is a Principal member of Visa Europe. Peter Cox is Executive Chairman at Contis Group, 44 (1) 7566-93245, [email protected], www.contisgroup.com.

MANAGEMENT

> CHANGES

Elizabeth Buse has been appointed Global Executive, Solutions at Visa, (650) 432-2990, [email protected] Gaylon Jowers has been appointed Senior Executive Vice President at TSYS, (706) 649-5092, [email protected] Jurgen Verstraete has been appointed Managing Director at Ogone, 32 (2) 286-9611, [email protected] Mike Passilla, formerly at Elavon, has been appointed CEO of Merchant Services at JPMorgan Chase, (212) 270-7733, [email protected] Robert Keenan has been appointed Region Leader, Asia/Pacific, Middle East and Africa at MasterCard, (65) 6390-6944, [email protected] mastercard.com. John Smith has been appointed Fraud and Payments Specialist at Alaric, 44 (207) 593-2200, [email protected] Kathy Herziger-Snider has been appointed VP of Channel Mgmt for Card Services Div. at Fiserv, (920) 467-2110, [email protected] com. Fadi Cotran, formerly at Ultra Electronics–AEP Networks, has been appointed VP and Chief Solutions Architect at Futurex, (408) 868-8030, [email protected] com. Karen Postma has been appointed Director of Client Services at The Members Group, (515) 457-2050, [email protected] Kevin McInturff has been appointed VP Product Management at BitPay, (404) 410-7957, [email protected] bitpay.com. Ross Haider has been appointed Senior VP, Canadian Sales at Pivotal Payments, (514) 313-1190, [email protected]

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report ISSUE 1,019 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber.

> > > > > > > > Fast Facts EMERGING MARKETS PAYMENTS has launched a new domestic market debit card in Jordan in partnership with Cairo Amman Bank and the Military Credit Fund. Jonet Card will be offered exclusively to armed forces and security services personnel. Hassan Mayassi is CEO at EMP in Jordan, (962) 6565-6361, [email protected], www.emp-middleeast.com. Kamal Al Bakri is General Manager at CAB, (962) 6500-6000, [email protected], www.cab.jo.

PERATECH'S QTC product is a very thin pressure-sensitive switch for contactless payment cards. It allows cards to be carried in the off position until the cardholder presses the switch to activate the device for a few seconds at the point of sale. The QTC switch is thinner than the RFID chip embedded in the card. David Lussey is CTO, 44 (870) 072-7272, [email protected], www.peratech.com.

CARD TESTING INTERNATIONAL is the largest provider of ISO/IEC 17025 independent card quality assurance testing for issuers and manufacturers. CTI now provides the first full suite of tests supporting the ISO/IEC 24789 Card Service Life Standard for Magnetic Stripe, Contact/Proximity IC Chip cards. Ron DeDera is CEO, 64 (4) 903-4990, [email protected], www.cardtest.com.

FIRST ATLANTIC COMMERCE, a Bermuda-based provider of a payment card gateway service to e-commerce merchants, has deployed Kount's risk management and fraud protection service. Chris Burns is CEO at FAC, (441) 294-4622, [email protected], www.firstatlanticcommerce.com. Brad Wiskeirchen is CEO at Kount, (208) 489-3389, [email protected], www.kount.com.

BARCLAYCARD GLOBAL PAYMENT ACCEPTANCE will offer it 89,000 merchants the ability to accept Discover, Diners Club, and Discover Network partner cards starting in 2015. Discover Network partners include UnionPay, BC Card, and JCB. Paulette Rowe is Managing Director at Barclaycard Global Payment Acceptance, 44 (203) 555-5844, [email protected], www.barclaycard.com. Gerry Wagner is VP of Global Acceptance at Discover Financial Services, (224) 405-2955, [email protected] discover.com, www.discoverfinancial.com.

MASAPAY, a payment processor serving e-commerce merchants in China, will white-label Computop's Paygate platform, which offers multicurrency processing and 60+ international and domestic payment methods. Guosheng Chen is Founder at Masapay, 86 (216) 100-1361, [email protected], www.masapay.com. Ralf Gladis is CEO at Computop, 49 (9) 519-8009, [email protected], www.computop.com.

FIME AMERICA is the first laboratory in North America to achieve test bench qualification for EMVCo Contactless Card Level 1. The laboratory has customers in the U.S., Canada, and Latin America. Xavier Giandominici is Director, (514) 935-1331 x219, [email protected], www.fime.com.

BELL ID now offers Secure Element in the Cloud software to manage keys, certificates, and NFC credentials in a secure remote location rather than in the mobile device. Application issuers can manage their credentials without the need for any third-party involvement. David Orme is CEO, 31 (10) 885-1010, [email protected], www.bellid.com.

TINKOFF CREDIT SYSTEMS BANK is issuing MasterCard PayPass credit and debit cards for NFC-based mobile wallets embedded in Philips W336, HTC One, and HTC One SV smartphones in Russia and CIS countries. The wallet and Trusted Service Manager platform is being provided by i-Free. Pavel Sokolov is Project Leader at iFree, 7 (812) 438-1678, [email protected], www.i-free.com, www.nfc.i-free.com. Anatoli Makeshin is Payment Systems Director at Tinkoff Credit Systems Bank, 7 (495) 648-1000, [email protected] tcsbank.ru, www.tcsbank.ru. Dmitry Tartyshev is VP, Mobile Business Development, Russia at MasterCard, 7 (495) 937-7710, [email protected], www.mastercard.com.

NATIONWIDE BUILDING SOCIETY in the U.K. has renewed its contract with TSYS for processing of its consumer card portfolio as well as support of its call centre operations. Adam Slater is Sr. Mgr., Credit Card at Nationwide Building Society, 44 (160) 485-2602, [email protected], www.nationwide.co.uk. Kelley Knutson is EVP at TSYS International, 44 (190) 456-2001, [email protected], www.tsys.com.

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CONFERENCES & SEMINARS

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MPOS WORLD 2013: June 24-25, 2013. The Frankfurt Marriott Hotel, Frankfurt, Germany. Estimated attendance: 120+. Cost for the two-day conference is $1,500. Subscribers to The Nilson Report will receive a 20% discount. Contact David Vesely at Empiria Group, 421 (245) 248-931, [email protected] empiriagroup.eu. Register at www.mpos-world.com.

PAYMENT METHODS LATAM SUMMIT 2013: (Medios De Pago Latam Summit 2013) July 23-25, 2013. The Eden Roc Renaissance Miami Beach, Miami Beach, Florida. Estimated attendance: 140. Cost for the three-day conference is $2,790. Subscribers to The Nilson Report will receive a 15% discount. Contact Laura Paganini at WBR, 55 (11) 3463-5630, [email protected] Register at www.wbresearch.com/mediosdepagolatam.

June 2013

Toronto, Ontario, Canada. Estimated attendance: 50-60. Cost for the two-day conference starts at $2,695. Subscribers to The Nilson Report will receive a $200 discount. Contact Robin Yegelwel at MarcusEvans, (312) 540-3000 x6483, [email protected] marcusevansch.com. Register at www.marcusevansch.com/ LCDN2013_TNR.

NFC BOOTCAMP SYDNEY 2013: July 24-25, 2013. Sydney, Australia. Estimated attendance: 30. Cost for the two-day conference is $1,318. Subscribers to The Nilson Report will receive a 20% discount. (Use code NILSON.) Contact Tracee Lee Beebe at OTA, (972) 386-9655, ext. 9972, [email protected] nfcbootcamp.com. Register at www.nfcbootcamp.com/eventregistration/.

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JUNE NILSON 2013 ISSUE 1,019 THE NILSON REPORT THE REPORT NUMBER 1019

LOYALTY CANADA 2013: July 24-25, 2013. The Hilton

Handpoint P2PE Mobile Point-of-Sale System Companies including First Data, Heartland, and VeriFone

offer end-to-end or pointto-point encryption (P2PE). However, their technologies are not yet certified by the PCI Security Standards Council. Only two payment companies in the world have received PCI

P2PE certification for payment apps — The Logic Group and Handpoint, which offers the world’s only mobile application to receive the certification. Both are headquartered in the U.K., as is Foregenix, the information security specialist, which guided both companies through accreditation.

large merchants. It is ready for operation as soon as its terminal master key is activated by way of over-the-air provisioning.

As long as merchants use Handpoint’s payment gateway they don’t need to wait to be certified by a payment processor. Large merchants with integrated point-of-sale systems realize cost savings Handpoint’s PCI-certified from reduced PCI compliance. P2PE application resides in the Because they never touch card company’s EMV I and II, PCIdata they won’t need to submit PTS v.3x accredited card reader, to external audits or purchase which connects via Bluetooth updating software to a smartphone or new monitoring or tablet and can software. David be integrated into ...THE ONLY Gudjonsson is existing PC-based MOBILE APP TO CEO at Handpoint checkout systems. RECEIVE P2PE in Cambridge, The card reader, CERTIFICATION. United Kingdom, which is available 44 (1223) 597-909, in three colors, sells [email protected] for $164 (£99) to com, www.handpoint.com. Prior micromerchants and is priced issue: 982 on a subscription model for

VeriFone Gateway Adds Cardspring VeriFone is best known as the POS terminal manufacturer with the most installed devices in

deducted in the gateway before the transaction is sent to the acquiring processor. David Talach is VP, Strategic Partner Development at VeriFone in Rocklin, California, (916) 625-1829, [email protected] verifone.com, www.verifone.com.

Retailers and third-party developers use the the U.S. The company also operates a payment CardSpring Web service API to support cardgateway for brick-and-mortar merchants that is linked services they create to replace paper linked to every major card, check, and private coupons, prepaid cards, loyalty label prepaid authorization network programs, or paper receipts with fully in the country. That Payware any discount online services. CardSpring has no direct Connect gateway will integrate with connection to consumers or merchants. will be deCardSpring’s card-linked service APIs It passes transaction data between ducted in the enable publishers to easily create merchants and third-party developers. gateway. merchant offers that directly connect Other partners of CardSpring include to individual cardholders in real time First Data, which used the company’s without the need for a mobile wallet. APIs as a component in its OfferWise Service. When cardholders make a purchase from a Eckart Walther is CEO at CardSpring in Palo Alto, participating merchant, Payware Connect will California, (650) 868-6565, [email protected] reach out to CardSpring to see if there is a com, https://cardspring.com. standing offer. If there is one, any discount will be

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Patent Litigation Hits Card Issuers Patent portfolio company Intellectual Ventures has

sued JPMorgan Chase, First National Bank of Omaha, Fifth Third Bank, and PNC in federal district courts in New York, Nebraska, Ohio, and Pennsylvania, citing infringement of more than a handful of patents related to consumer and commercial debit cards, PCI data security, and online banking and bill payment. Among the patents allegedly violated are: U.S. Patent 6,182,894: “Systems and Methods for Authorizing a Transaction Card,” granted February 6, 2001; U.S. Patent 8,038,137: “Administration of Financial Accounts,” granted

according to information filed December 27, 2011; U.S. in the complaint against PNC. It Patent 7,757,298: “Method and has used that investment to earn Apparatus for Identifying and more than $3 billion in licensing Characterizing Errant Electronic fees. The document also states Files,” granted July 13, 2010; that IV creates intellectual U.S. Patent 5,745,574: “Security property in a broad range Infrastructure for Electronic of fields. However, financial Transactions,” granted April services was not named as an 28, 1998; U.S. Patent 6,314,409: industry in which it employs “System for Controlling Access scientists and and Distribution of engineers. Digital Property,” granted November CHASE, pnc, Prior litigation has 6, 2001; and U.S. fifth thirD, been aimed at AT&T, Patent 6,715,084: Toshiba, Canon, and first of “Firewall System and Symantec. omaha are and Method Via Litigation against defendants. Feedback from the four banks is its Broad-Scope first against financial Monitoring for services companies. Derek Intrusion Detection,” granted Leonard is Director, Market March 30, 2004. Intelligence at Intellectual Ventures in Bellevue, Intellectual Ventures, founded Washington, (425) 283-4787, by a former Microsoft CTO, has [email protected], purchased more than 70,000 www.intellectualventures.com. intellectual property assets, paying individual inventors several hundred million dollars

Biometric/Contactless Payments Progress Technology from Natural Security delivers They have decided to put fingerprint or finger vein authentication at the the technology on the point of sale to support EMV-compliant contactless market, offering it as an payments without the use of a PIN. The company’s biometric sensor reader integrates authentication with contactless technology that has a read distance of up to two meters. Because of the range of the contactless technology, cardholders can open keep cards in their wallets and still standard. The have account details transmitted to test in France showed that fingerprint TESTING WAS the reader when they apply a finger authentication speeds checkout time CONDUCTED to the sensor. when PINs are not used. And because UNDER A there are no new data messages, A pilot test at two shopping malls transactions are compatible with existing WAIVER FROM in France has just been completed. merchant acquiring processing systems. MASTERCARD. Banque Accord, BNP Paribas, Credit They look like any other EMV payment. Agricole, Credit Mutuel Arkea, and Leroy Merlin participated. These Cardholders initiate their authentication companies, who have collectively invested about to a payment application stored in their card (or in $20 million, are also owners of Natural Security. the secure element in the phone) when they touch

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a biometric sensor. This also triggers transmission of the transaction over a secure channel to the merchant’s card reader. The test in France was conducted under a waiver from MasterCard. Natural Security expects that MasterCard and Visa will review results to

determine if the system can receive certification from those networks. Pierre Antonio is Business Development Manager at Natural Security in Lille, France, 33 (3) 8255-8422, [email protected] naturalsecurity.com, www.naturalsecurity.com.

Store Cards in the U.S. 2012 (from page 1)...

up 4.1%. Active accounts grew by 5.2 million to 135.1 million, up 4.0%. The largest portfolio of store credit cards in the U.S. is owned by GE Capital Retail Finance. GE has been the largest issuer of store cards since 2004. Last year it accounted for 38.56% of store card outstandings, up from 37.56% in 2011. Only six general purpose card issuers have credit card portfolios larger than GE’s retail store card business. GE’s share of purchase volume of private label credit cards (excluding

gasoline cards) increased to 35.29% from 34.70%.

Alliance Data owned 4.75% of outstandings, up from 3.81%. Its purchase volume market share grew to 8.12% from 6.57%.

Citi Retail Services owned 14.43% of outstandings, down from 15.58%. Its purchase The number of retailers who volume market continue to own share fell to 26.86% and operate their capital one from 27.17%. businesses in-house owns more continued to shrink in Capital One, which 2012. Among the four than 10% of purchased HSBC’s largest who remain private label retail card portfolio in-house, Army & card debt. in 2012, owned Air Force Exchange 10.25% of store continued to be the card outstandings, largest. Target had the best up from 2.40%. Its purchase growth. Its receivables increased volume market share increased 30.1% last year. Prior issues: 996, to 12.42% from 4.81%. 969, 949, 933, 907, 885

U.S. Store Credit Cards 2012 Rank ‘12 ‘11 1 2 3 4 5 6

1 2 6 4 5 7

1 2 3 4

1 3 2 4

Issuer PRIVATE LABEL (1) GE Capital Retail Finance (2) Citi Retail Services Capital One Alliance Data Wells Fargo Retail Services TD Retail Card Services Other Private Label

Outstandings (mil.) Chg. $88,867.0 4% $37,200.3 8% $22,248.9 –3% $15,800.0 349% $7,326.3 31% $4,962.0 20% $680.0 21% $649.4 —

Charge Volume (mil.) Chg. $142,625.0 4% $54,410.0 7% $41,416.1 4% $19,147.8 172% $12,523.6 30% $5,568.0 15% $770.0 15% $2,842.5 —

Accounts (000) Cards Total Chg. Active Chg. (000) Chg. 282,212 4% 125,886 3% 309,928 4% 98,720 1% 40,300 1% 99,707 1% 55,123 –5% 31,256 –3% 62,840 –5% 53,200 152% 21,400 189% 59,840 145% 68,045 26% 29,435 20% 79,612 25% 3,972 9% 2,023 13% 4,430 9% 601 13% 373 24% 661 12% 2,552 — 1,099 — 2,838 —

IN-HOUSE Army & Air Force Exchange Target Signet/Sterling Jewelers Nordstrom Other In-House TOTAL STORE CARDS

$7,599.5 $3,041.5 $1,397.7 $1,280.6 $891.8 $987.9 $96,466.5

$11,572.6 $2,032.9 $3,737.0 $1,862.8 $2,248.8 $1,691.0 $154,197.6

19,251 2,098 5,063 1,783 2,835 7,472 301,463

8% 0% 30% 11% 12% 2% 5%

19% 3% 44% 9% 18% 6% 5%

9% 4% 16% 8% 19% 2% 4%

9,169 1,176 3,406 1,173 1,299 2,115 135,055

13% 25,357 1% 6,556 31% 5,727 6% 1,961 10% 2,863 2% 8,249 4% 335,286

8% 5% 15% 7% 18% 2% 4%

Some prior year figures have been restated. Use percent change to recalculate 2011 figures. Private label companies own receivables generated by credit cards they issue on behalf of clients whose name appears on the cards, which can only be used at outlets owned or controlled by the client, including large retailers such as Walmart, Sears, and Gap. Excludes Visa and MasterCard cards of private label issuers GE, Capital One, Citi, Alliance Data, and Wells Fargo, as well as in-house issuers Target and Nordstrom. For cards that have two separate lines of credit (both store and general purpose), only the volume from the proprietary store line of credit is included. (1) Includes 4 months of volume on cards issued by HSBC before sale to Capital One. (2) Private label credit cards only, does not include oil and gas. Does not include installment loans. Does not include liquidating portfolios. Cards figure is an estimate. © 2013 The Nilson Report

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JUNE 2013

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Citi Keeps American Airlines Co-BrandED Contract (from page 1)...

For its part, Citi agreed not to contest American’s bankruptcy reorganization plan.

normal business will include continuation of its decades long co-branded credit card relationship with Citi, the 4th largest U.S. credit card issuer.

Citi benefited from a 2009 U.S. Bankruptcy Court Judge decision to prepay Sean Lane signed an order $1 billion to American Airlines June 3 settling a for frequent flyer dispute between miles to be awarded to THEIR last the parties in favor credit card customers. co-branded of Citi, saying that That prepayment agreement American had agreed was structured was signed to waive its right predominantly as in 2008. to reject all of the a secured loan. bank’s agreements American used airport related to their gates, rights to routes, existing card contract. One of and operating slots as collateral. those agreements includes Citi’s Potential conflicts exist now exclusive rights to the American that American has agreed to a Airlines brand for credit cards.

merger with U.S. Airways, which has an existing co-branded credit card contract with Barclaycard US. The carriers have agreed to retain the American Airlines name for their new company. Citi last signed a co-branded card agreement with American in 2008. Barclaycard US is expected to maintain access to U.S. Airways’ frequent flyers for at least a year after the merger is finalized while the airlines operate separately, awaiting Federal Aviation Administration approval to operate as a single carrier.

Credit Card Debt Sales in 2012 Credit card debt sold after being charged off directly by issuers in the U.S. to third-party

buyers fell 31.5% to $35.33 billion in 2012. Debt sales declined compared to 2011 in large part because issuers experienced negative publicity triggered by collection practices of some firms that buy credit card chargeoffs. Debt buyers faced other problems Percent Change including the high cost of capital. They were also constrained by uncertainty tied –40.2% to pending examination and supervision of 58.1% their practices by the Consumer Financial –27.0% Protection Bureau. That agency’s first 0.0% action in the card debt-buying industry 7.3% occurred last year when it established a –31.0% complaint database for consumers. –7.5%

Top Buyers of Credit Card Debt – 2012 Rank

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Buyer

Sherman Financial Group Encore Capital Portfolio Recovery Square Two Financial Ophrys Asset Acceptance Unifund Fourscore eCast Asta Funding (3) JH Capital Group Atlantic Credit & Finance Absolute Resolutions Oliphant Financial Crown Asset Management Other (4) TOTAL

Direct (1) (mil.)

Percent Change

$9,075.0 –45.0% $7,800.0 –25.9% $5,402.7 –31.0% $3,400.0 –2.9% $2,760.0 7.8% $2,052.2 –36.0% $1,055.0 8.9% $732.8 –41.0% $481.0 –39.1% $434.9 –24.0% $417.9 –1.0% $329.3 –7.0% $186.3 — $158.0 251.1% $98.7 85.5% $947.6 –36.0% $35,331.4 –31.5%

Total (2) (mil.)

$11,360.0 $18,500.0 $6,657.6 $4,000.0 $3,230.0 $3,682.0 $1,055.0 $1,556.8 $991.3 $975.3 $687.9 $482.3 $439.1 $361.0 $253.0 $1,588.0 $55,819.3

–38.0% –35.0% –17.0% 7.0% 1.0% — 607.8% 4.6% –21.0% –13.1%

(1) Debt bought directly from card issuers. (2) Total purchases of all types of debt. (3) Estimate. (4) Includes Accounts Retrievable, Asset Recovery Solutions, Precision Recovery Analytics, and © 2013 The Nilson Report Vion Receivable Investments.

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These factors contributed to more than a handful of companies exiting the business including B-Line, NCO, Arrow Financial, West Corp., and Zenith Acquisitions. Consolidation in the card debt-buying industry is also occurring, in part because companies see added value in greater scale as they anticipate higher operating costs tied to federal and state oversight. Publicly traded debt buyer Encore Capital finalized acquisition of Asset Acceptance this month. Prior issues: 992, 969, 946, 921, 914

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HP Partners With First Data (from page 1)...

ported to HP servers. Financial institutions can lower the total cost of ownership by up to 40% with the package deal.

in-house installations to thirdparty processing contracts at one of First Data’s regional data

it had enhanced VisionPLUS, creating a version suited to operate on midrange computer servers, in addition to the mainframes that are centers. Over the last two years, the product’s legacy. The events in some markets have new VisionPLUS Flex software necessitated a change in strategy. is aimed at multinationals and Countries including China, local issuers with portfolios of Indonesia, Taiwan, Thailand, and up to 10 million consumer loans Turkey have passed and credit, debit, and regulations requiring prepaid consumer They Will in-country card and commercial card joinTly proaccount processing, accounts. mote Visionwhile countries Now First Data including Brazil and plus card has announced Chile have instituted, management that VisionPLUS or continue to impose, software. Flex is available in high duty taxes or partnership with other burdens on HP’s Converged local businesses that process Infrastructure unit. The transactions outside the country. companies will jointly promote This past April, First Data the card account management responded by announcing system with the software already

Europe’s Largest Acquirers

The 10 largest ranked by consolidated general purpose card purchase volume accounted for $1.486 trillion (64.2%) from 21.47 billion transactions (60.0%). When ranked only by the Visa and MasterCard purchase transactions they processed, the 40 largest handled 31.78 billion transactions in 2012 valued at $2.056 trillion. WorldPay led the market with a 17.9% share. It is the only acquirer in Europe with a double digit market share of Visa and MasterCard transactions. The ranking of the five largest acquirers ... turn to page 10

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JUNE 2013

HP gives First Data a global partner for VisionPLUS Flex. The Converged Infrastructure unit can deliver servers, storage, networking, security, power, and cooling using a common management platform. Duncan Campbell is VP, Worldwide Marketing, Converged Infrastructure, Enterprise Group at HP in Palo Alto, California, (650) 857-5622, duncan. [email protected], www.hp.com.

Acquirers in Europe – 2012

(from page 1)...

total transactions from 6.7 million active merchants in 2012. Purchase volume was $2.316 trillion.

First Data-certified HP servers can be installed in days, significantly reducing time to market. Eva Hughes is VP, Product Management at First Data in Atlanta, Georgia, [email protected], www.firstdata.com.

Consolidated General Purpose Card Figures Rank

1 2 3 4 5 6 7 8 9 10

Company, Headquarters

WorldPay U.K. (1) Barclays U.K. Credit Mutuel CIC France (2) Teller A/S Norway/Denmark (3) Credit Agricole France (2) Global Payments U.K. Atos Worldline Belgium (4) Elavon Ireland (5) BPCE France (2) Societe Generale France (2)

Volume (bil.)

Transactions (mil.)

$377.83 $245.90 $156.56 $152.93 $127.61 $109.21 $93.76 $83.31 $73.73 $65.37

5,744.0 3,024.0 2,578.2 2,625.6 2,151.1 1,130.1 1,271.1 919.3 1,175.2 848.2

Figures are net (gross minus chargebacks) for Visa, MasterCard, Maestro, American Express, JCB, Diners Club, and domestic brands. (1) Includes Laser figures. (2) Includes Carte Bancaire figures. (3) Includes Bank Axept and Dankort figures. (4) Includes Bancontact/Mister Cash figures. (5) Includes Sistema 4B figures. Offices are in Ireland, the U.K., Germany, © 2013 The Nilson Report Norway, France, Spain, and Poland.

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Largest Merchant Acquirers in Europe 2012 Bank Cards (Visa & MasterCard) Company, Headquarters

Transactions (mil.) Chg.

WorldPay U.K. (1) Barclays U.K. (2) Groupe Credit Mutuel CIC France Groupe Credit Agricole France (3) Swedbank Group Sweden (4) Sberbank Russia Groupe BPCE France Global Payments U.K. Nets Oy Finland Elavon Ireland (5) BNP Paribas France Societe Generale France Garanti Bank Turkey Comercia Spain (6) Yapi Kredi Bank Turkey T. Isbank Turkey SIX Payment Services Switzerland Nordea Norway/Sweden First Data Polska Poland CartaSi Italy Teller A/S Norway/Denmark (7) Akbank Turkey Unicre Portugal La Banque Postale France Lloyds Banking Group U.K. PayLife Bank Austria B+S Card Service Germany (8) eService Poland Handelsbanken Sweden (9) AIBMS Ireland (10) Erste Bank Group Austria (11) Concardis Germany Banco Santander Spain BBVA Spain/Portugal Atos Worldline Belgium (12) Bankia Spain Bank Pekao Poland Raiffeisen Bank Austria (13) Grupo Banco Popular Spain (14) Banc Sabadell Spain

5,679.0 6% 3,023.9 5% 2,566.4 6% 2,143.5 12% 1,595.0 9% 1,335.8 100% 1,170.0 10% 1,127.4 7% 1,001.1 5% 910.1 13% 907.9 6% 848.2 7% 671.6 15% 636.0 7% 538.9 10% 472.1 12% 449.4 35% 432.3 8% 430.7 2% 418.6 6% 416.1 – 392.9 13% 364.3 –8% 347.7 9% 339.8 3% 307.0 –3% 290.8 –4% 279.8 53% 276.5 31% 263.7 24% 257.7 32% 248.6 18% 234.8 3% 233.3 5% 229.6 8% 227.3 –13% 219.6 19% 176.0 26% 158.9 10% 157.8 57%

Rank ‘12 ‘11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

1 2 3 4 5 12 6 7 8 10 9 11 14 13 15 17 23 18 16 20 21 22 19 25 24 26 27 37 33 32 35 34 29 30 31 28 36 39 38 42

Volume Merchant POS (mil.) Chg. Outlets Terminals

$373,302.8 10% $245,892.8 7% $155,841.5 7% $126,789.7 12% $60,154.1 6% $29,448.2 74% $73,428.1 8% $108,584.9 4% $43,779.4 5% $81,955.1 12% $63,633.2 4% $65,366.9 5% $36,694.0 20% $31,132.9 5% $37,301.3 19% $23,383.2 17% $41,216.6 21% $33,272.5 15% $13,819.8 0% $46,005.7 2% $22,579.9 – $28,944.0 22% $19,015.3 –6% $15,366.9 9% $23,523.7 5% $21,183.7 5% $27,759.7 0% $8,886.1 62% $15,740.0 14% $24,323.3 21% $12,082.5 22% $37,548.7 13% $14,898.9 2% $14,455.3 –16% $25,850.9 12% $14,110.3 –11% $6,703.9 12% $8,187.6 21% $12,722.3 7% $10,624.8 41%

422,085 1,364,610 197,022 161,555 229,883 314,124 360,139 326,916 101,000 160,000 228,000 290,000 321,000 282,000 166,933 463,112 103,144 148,199 270,806 284,954 110,128 134,640 123,892 186,573 417,817 509,284 178,605 192,422 321,829 445,783 312,246 390,871 117,172 185,535 49,159 74,614 73,915 96,143 830,914 1,088,503 92,741 151,342 190,931 300,029 47,833 75,951 24,198 57,439 60,651 87,348 90,000 69,000 225,383 169,574 47,000 69,000 33,000 44,051 46,132 51,328 21,090 72,997 150,000 251,000 119,479 134,164 121,902 172,070 141,026 199,556 87,157 82,837 49,183 54,739 39,960 78,000 83,069 168,710 81,062 112,795

Figures are net (gross minus chargebacks). Bank Cards = Visa and MasterCard credit, debit, & prepaid cards including Electron & Maestro. Change in volume is based on local currency. (1) Domestic debit Laser figures are not included (53.0 mil., $3.08 bil.). (2) POS terminals shown are bank-owned terminals only. (3) Includes Credit Lyonnais. (4) Also includes Norway, Denmark, Estonia, Latvia, and Lithuania. (5) Offices are in Ireland, the U.K., Germany, Norway, France, Spain, and Poland. (6) Joint venture between “la Caixa” and Global Payments Inc. (7) Subsidiary of Nets. Bank Axept and Dankort figures are not included (2,206.0 mil., $129.75 billion). Change in volume not calculated due to the difference in local currencies. (8) For 85% of German Savings Banks. Girocard figures are not included (417.6 mil., $29.57 billion). (9) Acquiring in Sweden, Norway, and Finland. (10) Joint venture between Allied Irish Bank and First Data Corp. Includes U.K. Domestic debit Laser figures are not included (75.4 mil., $5.27 bil.). (11) Includes Romania, Czech Republic, Croatia, Hungary, Austria, Serbia, Ukraine, and Slovakia. (12) All from banks and merchants in Belgium. Domestic debit Bancontact/Mister Cash figures are not included (1,041.5 mil., $67.91 bil.). (13) Includes Russia, Ukraine, Belarus, Romania, Bulgaria, Slovakia, Czech Republic, Poland, Croatia, Bosnia, Serbia, Kosovo, & Albania. (14) Domestic debit Sistema 4B, ServiRed, and Euro 6000 © 2013 The Nilson Report figures are not included (89.5 mil., $5.33 bil.).

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Europe’s Largest merchant Acquirers (from page 9)...

remained unchanged in 2012 versus the prior year. Sberbank moved ahead of six acquirers to claim 6th place. SIX Payment Services moved up six places to rank 17th. EService moved up nine places to rank 28th from 37th the prior year. Not shown on the top 40 table were another 45.0 million transactions generated by American Express, Diners Club, JCB, and UnionPay cards, valued at $9.74 billion. Garanti Bank handled 17% of that business, followed closely by WorldPay and Isbank with 15% and 14% respectively. Domestic debit transactions for brands including Carte Bancaire in France, Bancontact/Mister Cash in Belgium, Pago Bancomat in Italy, Laser in Ireland, Dankort in Denmark, Bank Axept in Norway, Sbercard in Russia, Girocard in Germany, and Sistema 4B, ServiRed, and Euro 6000 in Spain are also not shown on the top 40 table. These totaled 3.94 billion and generated $250.61 billion in purchase volume. Teller A/S, a top acquirer in the Nordic region, ranked fourth largest based on consolidated purchase volume, which was dominated by its Bank Axept and Dankort domestic debit businesses. Prior issues: 995, 973, 954, 928

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Top U.S. Credit Card Issuers Third 50 – 2012 Issuer, State of Charter

University FCU Texas BancorpSouth Mississippi First Arkansas B&T Arkansas Bellco CU Colorado Wings Financial FCU Minnesota Citizens Equity First CU Illinois Chartway FCU Virginia Redwood CU California Kinecta FCU California Travis CU California Nassau Educators FCU New York Spokane Teachers CU Washington Comerica Bank Texas Citadel FCU Pennsylvania Space Coast CU Florida Service CU New Hampshire South Carolina FCU South Carolina American Heritage FCU Penn. Royal CU Wisconsin Northwest FCU Virginia TDECU Texas Anheuser Busch CU Missouri Wright-Patt CU Ohio School Employees CU Washington OnPoint Community CU Oregon Summit CU Wisconsin Bank-Fund Staff FCU Wash., D.C. Andrews FCU Maryland NASA FCU Maryland Empower FCU New York Georgia’s Own CU Georgia Keesler FCU Mississippi Community First CU Florida FirstBank Colorado Hancock/Whitney Bank Louisiana Western FCU California Capital Communications FCU N.Y. Founders FCU South Carolina Coastal FCU North Carolina CommunityAmerica CU Kansas Sharonview FCU South Carolina SAFE CU California Sound CU Washington American Eagle FCU Connecticut Robins FCU Georgia Tyndall FCU Florida Apple FCU Virginia Educators CU Wisconsin United FCU Michigan Langley FCU Virginia

‘12 Rank

Outstand. (mil.)

Chg. vs. ‘11

101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150

$104.8 $104.5 $103.8 $102.7 $102.6 $101.5 $100.5 $100.5 $98.0 $97.8 $97.2 $96.7 $96.2 $96.0 $95.8 $95.5 $93.5 $93.2 $93.0 $91.3 $91.2 $90.8 $90.4 $89.4 $88.7 $86.0 $85.9 $85.7 $84.9 $84.7 $84.1 $82.9 $82.1 $81.8 $81.6 $81.2 $81.0 $80.7 $80.7 $79.0 $77.7 $77.5 $76.1 $75.8 $75.8 $74.8 $74.1 $73.9 $73.6 $71.7

16% –2% –13% –3% –2% 0% –4% 5% –2% –2% 9% 8% 17% 5% –6% 3% –10% 8% 11% 1% 25% 7% 26% 7% 16% 9% –2% 0% 17% 8% 1% 3% –4% –2% –1% –8% 9% 2% 0% 4% 13% –7% –1% 0% 3% 14% 17% 15% 0% 7%

Includes consumer and commercial cards. © 2013 The Nilson Report

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Top U.S. Debit Card Issuers Third 50 – 2012 Issuer, Brands Issued

Bremer Bank V Arrowhead CU V Rabobank V/MC First Interstate Bank V Kern Schools FCU V Eastern Bank MC ViewPoint Bank V ADP FCU V State Employees CU (Md.) V Bellco CU V Bethpage FCU V Astoria Federal Savings V Intrust Bank V First Bank (Mo.) MC Coastal FCU V WSFS Bank V DFCU Financial MC Rockland Trust MC City Nat’l Bank (W. Va.) MC Capitol Federal Savings V V/MC First Community CU 1st Source Bank MC SAFE CU V Hudson Valley FCU V MB Financial MC Tower FCU MC AA CU V Safe FCU (S.C.) V Kinecta FCU V Citadel FCU MC Ascend FCU V Digital FCU V Tinker FCU V Michigan State Univ. FCU V Gov’t Employ. CU (GECU) MC Comdata V United FCU V Robins FCU V Simmons First Nat’l V Chartway FCU V Baxter CU V First California Bank V/MC/D Founders FCU V Dollar Bank V Logix FCU V Pentagon FCU V Fairwinds CU V Affinity Plus FCU V Sunrise Banks V/MC The Provident Bank (N.J.) V

‘12 Rank

101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150

Purchase Vol. (mil.) Chg.

$894.4 $870.9 $843.4 $837.6 $810.0 $806.0 $793.8 $753.0 $728.6 $714.9 $711.6 $704.8 $695.7 $693.0 $692.4 $683.9 $682.9 $678.2 $670.0 $654.3 $638.4 $631.0 $617.8 $599.2 $597.2 $586.8 $585.0 $576.5 $572.3 $560.1 $559.4 $547.5 $538.0 $533.2 $528.9 $520.0 $514.1 $495.8 $489.5 $486.0 $485.5 $449.0 $444.0 $437.4 $436.6 $435.6 $435.0 $416.2 $414.4 $409.6

5% 0% 3% 2% 1% 3% 1% 88% –6% 1% 40% 6% 1% 4% 7% 1% 1% 15% 2% 1% 2% 2% 13% 14% 11% 2% 14% 2% 7% 12% 15% 2% 2% 27% 2% 47% 15% 1% 9% 1% 16% 2% 2% 1% 15% 1% 2% 1% — 1%

Trans. (mil.)

Cards (000)

23.5 150 22.4 204 19.1 234 21.3 114 20.9 173 20.3 333 20.2 194 27.0 192 18.8 198 19.3 112 16.7 143 14.8 151 19.8 105 16.8 152 21.1 103 16.4 71 16.6 130 17.2 134 14.8 96 14.7 94 18.4 94 16.9 108 15.3 238 19.4 170 14.5 157 13.5 108 16.3 86 16.7 95 14.0 138 14.0 90 16.8 73 13.6 133 12.8 124 16.1 162 12.0 123 19.2 975 13.6 82 12.1 76 9.9 99 10.9 111 12.6 137 14.7 1,059 11.4 91 10.2 107 11.0 75 10.3 126 9.9 100 10.4 95 11.8 4,772 9.5 82

Includes consumer and business and prepaid cards. © 2013 The Nilson Report

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Discover Buys Diners Italy (from page 1)...

their accounts shut down. However, some local merchants continue to accept payments from Diners Club cards issued anywhere else in the world.

Diners Club franchise in Italy has issued more than 140,000 cards.

When the transaction closes, the purchase will represent the first credit card issuing business Diners Club outside the U.S. owned directly by Discover Slovenia is Financial Services. The Diners Club franchise in owned by Findale Ecuador had issued 39,000 Discover cards at yearInvestments end 2012. Those accounts are owned by Banco headquartered in the Virgin Islands. Pichincha. Russian Standard Bank Since 2008 that company has also acquired the Diners Club franchise in ... discover’s owned Diners Club Italy and Dinit Russia last year. It plans to begin issuing first card Card Services, which manages Discover brand cards by the end of this issuing busiinformation systems for the Italy and year. ness outside Slovenia franchises. Discover is looking for a local buyer the U.S. Discover Financial Services, for the Slovenia franchise. Eduardo which owns the Diners Club brand Tobon is Senior VP and Head of Diners and the international switch that Club International at Discover Payment facilitates global interoperability for all Diners Services in Riverwoods, Illinois, (224) 405-3126, card transactions, purchased Diners Club Italy [email protected], www.dinersclub.com. on May 21, 2013. Terms were not disclosed. The

Monitise/Blackhawk Mobile Prepaid (from page 1)...

software provider Monitise to sell private label prepaid cards at mobile banking sites. Blackhawk’s GiftCardMall, which offers private label prepaid cards from more than 500 retailers, will be integrated into the Monitise mobile banking

and payments platform used by financial institutions with 10 million U.S. customers. Those banks will be able create their own branded service using Blackhawk’s digital APIs to facilitate their customers’ purchase of prepaid products in a smartphone app. Payments can be made directly from deposit accounts or through credit or debit cards. Monitise and Blackhawk will

12

JUNE 2013

also work together in Europe. Frank D’Angelo is President at Monitise Americas in San Rafael, California, (415) 526-7070, frank.d’[email protected], www.monitisegroup.com. Prior issues: 1,010, 993, 991, 986, 983, 979, 977, 976, 973, 969, 968, 965, 958, 952, 950, 929, 897, 876

can be redeemed online or at the point of sale via barcode scan or key entry. Fulfillment of plastic cards can occur in as little as one day. Tim Attinger is Head of Strategy and Digital Innovation at Blackhawk Network banks can in Pleasanton, Blackhawk had California, (925) 226create their revenue of $959.1 9561, [email protected] own brandmillion last year, up bhnetwork.com, ed service. 28%. Safeway owned www.bhnetwork.com. all of Blackhawk Prior issues: 1,008, before selling 19% in 956, 936, 899, 871, the IPO. It plans to hold on to 866, 863, 854 the remaining 81% to preserve its ability to conduct a tax-free spinoff of the remaining shares at some later date. Blackhawk’s platform supports the sale of plastic cards or digital-only prepaid products in 18 countries. Digital products

David Robertson, Publisher JUNE 17, 2013

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