Fitch Expects Proposed Interchange Regulation to Be Neutral to First Data

Sampling of First Data Customers

NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects that proposed limits on debit card interchange fees, as contained in a Senate Amendment passed May 13, should be neutral to First Data Corp.'s (FDC) expected financial performance going forward. The proposed regulation, if passed into law, would limit Visa and Mastercard's ability to determine interchange fees for all card issuers with assets over $10 billion (which the senate estimates at 1% of total card issuers). Instead, interchange fees will be determined by each bank with maximum limits set by the Federal Reserve. The amendment is intended only for debit cards and does not include credit cards.

Fitch does not believe that the proposed regulation directly impacts FDC's Retail and Alliance Services business. Specifically, FDC prices its service to merchants either as a flat fee inclusive of interchange or as a set fee with interchange as a pass through (i.e. interchange plus 20 basis points). In the scenario where FDC prices its service inclusive of interchange, the company would only be negatively impacted if interchange were to increase. In all other scenarios, interchange is effectively a pass through expense.

It is possible that FDC's Star Network (debit card processing) could be negatively affected by the proposed regulation. However, Fitch believes that Star is a relatively minor contributor to FDC's overall cash flow and that the proposed regulation primarily impacts signature debit card transactions which are processed outside of the Star Network.

Furthermore, any negative implications for FDC's Financial Services segment (which includes Star) would likely be offset by potential positive impacts of the proposed regulation. Specifically, the limit on interchange fees could cause more retailers to begin accepting debit/credit cards for purchases which could boost the secular shift to card based transactions. Additionally, a decrease in debit card interchange could incentivize issuing banks to focus marketing efforts on credit cards in lieu of debit cards, by scaling back debit card reward programs for instance. This would positively impact FDC's Retail and Alliance Services business as it typically earns a higher fee on credit card transactions versus PIN debit.

As a final note, FDC's first quarter results were in-line with Fitch's expectations inherent in its May 3, 2010 rating affirmation and press release. As stated in the release and considered in the rating, Fitch does not expect FDC to be positioned for an initial public offering for several years. The company's current debt maturation schedule would likely necessitate an equity offering sometime in the 2013 timeframe but not before, based on Fitch's assumption that free cash flow will increase sufficiently to manage higher cash interest expense beginning in 2012 when the first cash payment is due on the company's senior unsecured 10.55% PIK notes.

Fitch currently rates FDC as follows:

--Long-term Issuer Default Rating (IDR) 'B';

--$2 billion senior secured revolving credit facility (RCF) due 2013 'BB-/RR2';

--$13 billion senior secured term loan B due 2014 'BB-/RR2';

--$3.75 billion 9.875% senior unsecured notes due 2015 'CCC/RR6';

--$3 billion 10.55% senior unsecured notes with four-year mandatory paid-in-kind (PIK) interest due 2015 'CCC/RR6';

--$2.5 billion 11.25% senior subordinated notes due 2016 'CC/RR6'.

The Rating Outlook is Stable.

Total liquidity as of March 31, 2010 was solid and consisted of $731 million in cash and $1.4 billion available under a $2 billion senior secured RCF that expires September 2013. The reduced availability under the RCF reflects approximately $230 million which was provided by an affiliate of Lehman Brothers and is no longer available to be borrowed upon as well as letters of credit and borrowings currently outstanding. Fitch expects approximately $230 million of the existing cash balances to be used for the 5% Rockmount put option on the company's Bank of America joint venture in June 2010.

Total debt as of March 31, 2010 was approximately $23 billion and consisted primarily of the following: i) $12.5 billion outstanding under a secured term loan B maturing September 2014; ii) $293 million drawn on the company's $2 billion RCF which expires September 2013; iii) $3.75 billion in 9.875% senior unsecured notes maturing September 2015; iv) $3.5 billion in 10.55% notes maturing September 2015 with mandatory PIK interest through September 2011 and cash interest thereafter; and v) $2.5 billion of 11.25% senior subordinated notes maturing September 2016. In addition, the parent company of FDC, First Data Holdings, Inc., has outstanding approximately $1 billion original value senior unsecured PIK notes due 2016.

For additional information, please see Fitch's press release 'Fitch Affirms First Data's IDR at 'B'; Outlook Stable' dated May 3, 2010 at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Contacts

Fitch Ratings, New York

Jason Paraschac, CFA, +1-212-908-0746

Jamie Rizzo, CFA, +1-212-908-0548

Media Relations:

Cindy Stoller, +1-212-908-0526

cindy.stoller@fitchratings.com

Permalink: http://www.businesswire.com/news/home/20100524006563/en/Fitch-Expects-Proposed-Interchange-Regulation-Neutral-Data

Fitch Expects Proposed Interchange Regulation to Be Neutral to First Data

Sampling of First Data Customers

NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects that proposed limits on debit card interchange fees, as contained in a Senate Amendment passed May 13, should be neutral to First Data Corp.'s (FDC) expected financial performance going forward. The proposed regulation, if passed into law, would limit Visa and Mastercard's ability to determine interchange fees for all card issuers with assets over $10 billion (which the senate estimates at 1% of total card issuers). Instead, interchange fees will be determined by each bank with maximum limits set by the Federal Reserve. The amendment is intended only for debit cards and does not include credit cards.

Fitch does not believe that the proposed regulation directly impacts FDC's Retail and Alliance Services business. Specifically, FDC prices its service to merchants either as a flat fee inclusive of interchange or as a set fee with interchange as a pass through (i.e. interchange plus 20 basis points). In the scenario where FDC prices its service inclusive of interchange, the company would only be negatively impacted if interchange were to increase. In all other scenarios, interchange is effectively a pass through expense.

It is possible that FDC's Star Network (debit card processing) could be negatively affected by the proposed regulation. However, Fitch believes that Star is a relatively minor contributor to FDC's overall cash flow and that the proposed regulation primarily impacts signature debit card transactions which are processed outside of the Star Network.

Furthermore, any negative implications for FDC's Financial Services segment (which includes Star) would likely be offset by potential positive impacts of the proposed regulation. Specifically, the limit on interchange fees could cause more retailers to begin accepting debit/credit cards for purchases which could boost the secular shift to card based transactions. Additionally, a decrease in debit card interchange could incentivize issuing banks to focus marketing efforts on credit cards in lieu of debit cards, by scaling back debit card reward programs for instance. This would positively impact FDC's Retail and Alliance Services business as it typically earns a higher fee on credit card transactions versus PIN debit.

As a final note, FDC's first quarter results were in-line with Fitch's expectations inherent in its May 3, 2010 rating affirmation and press release. As stated in the release and considered in the rating, Fitch does not expect FDC to be positioned for an initial public offering for several years. The company's current debt maturation schedule would likely necessitate an equity offering sometime in the 2013 timeframe but not before, based on Fitch's assumption that free cash flow will increase sufficiently to manage higher cash interest expense beginning in 2012 when the first cash payment is due on the company's senior unsecured 10.55% PIK notes.

Fitch currently rates FDC as follows:

--Long-term Issuer Default Rating (IDR) 'B';

--$2 billion senior secured revolving credit facility (RCF) due 2013 'BB-/RR2';

--$13 billion senior secured term loan B due 2014 'BB-/RR2';

--$3.75 billion 9.875% senior unsecured notes due 2015 'CCC/RR6';

--$3 billion 10.55% senior unsecured notes with four-year mandatory paid-in-kind (PIK) interest due 2015 'CCC/RR6';

--$2.5 billion 11.25% senior subordinated notes due 2016 'CC/RR6'.

The Rating Outlook is Stable.

Total liquidity as of March 31, 2010 was solid and consisted of $731 million in cash and $1.4 billion available under a $2 billion senior secured RCF that expires September 2013. The reduced availability under the RCF reflects approximately $230 million which was provided by an affiliate of Lehman Brothers and is no longer available to be borrowed upon as well as letters of credit and borrowings currently outstanding. Fitch expects approximately $230 million of the existing cash balances to be used for the 5% Rockmount put option on the company's Bank of America joint venture in June 2010.

Total debt as of March 31, 2010 was approximately $23 billion and consisted primarily of the following: i) $12.5 billion outstanding under a secured term loan B maturing September 2014; ii) $293 million drawn on the company's $2 billion RCF which expires September 2013; iii) $3.75 billion in 9.875% senior unsecured notes maturing September 2015; iv) $3.5 billion in 10.55% notes maturing September 2015 with mandatory PIK interest through September 2011 and cash interest thereafter; and v) $2.5 billion of 11.25% senior subordinated notes maturing September 2016. In addition, the parent company of FDC, First Data Holdings, Inc., has outstanding approximately $1 billion original value senior unsecured PIK notes due 2016.

For additional information, please see Fitch's press release 'Fitch Affirms First Data's IDR at 'B'; Outlook Stable' dated May 3, 2010 at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Contacts

Fitch Ratings, New York

Jason Paraschac, CFA, +1-212-908-0746

Jamie Rizzo, CFA, +1-212-908-0548

Media Relations:

Cindy Stoller, +1-212-908-0526

cindy.stoller@fitchratings.com

Permalink: http://www.businesswire.com/news/home/20100524006563/en/Fitch-Expects-Proposed-Interchange-Regulation-Neutral-Data

Visa and MasterCard's Loss Won't Be Your Gain

Dan Caplinger of Motley Fool writes that consumers aren't very likely to benefit at all if interchange fees are regulated/reduced.  The money will simply go from profit in the pockets of the banks to savings for the pockets of the retailers.

"When new laws decrease fees, you'd think most people would end up better off. Yet the much-ballyhooed new regulation on credit card interchange fees may end up doing ordinary consumers more harm than good."

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Visa and MasterCard's Loss Won't Be Your Gain

Dan Caplinger of Motley Fool writes that consumers aren't very likely to benefit at all if interchange fees are regulated/reduced.  The money will simply go from profit in the pockets of the banks to savings for the pockets of the retailers.

"When new laws decrease fees, you'd think most people would end up better off. Yet the much-ballyhooed new regulation on credit card interchange fees may end up doing ordinary consumers more harm than good."

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Mobile Payments in the U.S. at Retail POS: Current Market and Future Prospects

Mobile Payments in the United States at Retail Point of Sale: Current Market and Future Prospects Public Policy Discussion Paper No. 10-2 by Marianne Crowe, Marc Rysman, and Joanna Stavins CircleSwipe Although mobile payments are increasingly used in some countries, they have not been adopted widely in the United States so far, despite their potential to add value for consumers and streamline the payments system. After describing a few countries’ experiences, we analyze the prospects for the U.S. market for mobile payments in retail payments, particularly the use of contactless and near-field communication technologies. We identify conditions that have facilitated some success in other countries and barriers to the adoption of mobile payments in the United States. On the demand side, consumers and merchants are well served by the current card system, and face a low expected benefit-cost ratio, at least in the short run. On the supply side, low market concentration and strong competitive forces of banks and mobile carriers make coordination of standards difficult. Furthermore, mobile payments are characterized by a network effects problem: consumers will not demand them until they know that enough merchants accept them, and merchants will not implement the technology until a critical mass of consumers justifies the cost of doing so. We present some policy recommendations that the Federal Reserve should consider. JEL Classifications: G21, L15, O33 Full-text paper

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Mobile Payments in the U.S. at Retail POS: Current Market and Future Prospects

Mobile Payments in the United States at Retail Point of Sale: Current Market and Future Prospects Public Policy Discussion Paper No. 10-2 by Marianne Crowe, Marc Rysman, and Joanna Stavins CircleSwipe Although mobile payments are increasingly used in some countries, they have not been adopted widely in the United States so far, despite their potential to add value for consumers and streamline the payments system. After describing a few countries’ experiences, we analyze the prospects for the U.S. market for mobile payments in retail payments, particularly the use of contactless and near-field communication technologies. We identify conditions that have facilitated some success in other countries and barriers to the adoption of mobile payments in the United States. On the demand side, consumers and merchants are well served by the current card system, and face a low expected benefit-cost ratio, at least in the short run. On the supply side, low market concentration and strong competitive forces of banks and mobile carriers make coordination of standards difficult. Furthermore, mobile payments are characterized by a network effects problem: consumers will not demand them until they know that enough merchants accept them, and merchants will not implement the technology until a critical mass of consumers justifies the cost of doing so. We present some policy recommendations that the Federal Reserve should consider. JEL Classifications: G21, L15, O33 Full-text paper

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Global Payments Recognized as Merchant Acquirer of the Year 2010 by Cards International Magazine

ATLANTA, May 24, 2010 /PRNewswire-FirstCall/ -- Global Payments Inc. (NYSE: GPN), a leading provider of electronic transaction processing solutions, announced today that it has been recognized as the winner of Cards International's 'Merchant Acquirer of the Year' for the 2010 awards. The awards provide recognition for the outstanding achievements and contributions made by organizations throughout the year.  Cards International is a leading international payments industry publication.  According to the publication, this year's awards have been among the most hotly-contested in their history, with a record number of nominations.

A statement made by the award judges provides the reason for the prestigious acknowledgement, "Global Payments completed two acquisitions in 2009 that dramatically extended the company's merchant acquiring operations in the U.S.,Canada, and Asia Pacific region into the global transaction processing marketplace.  In April 2009, it completed the acquisition of ZAO United Card Service (UCS), the largest non-bank direct merchant processor in Russia. In June 2009, it acquired 100 percent ownership of its merchant services joint venture with HSBC Bank.  The deal was concluded just 12 months after the initial joint venture and created the largest arrangement of its kind in Europe."

Will Cain, editor of VRL Financial News publication Cards International, and chair of the judging panel, said, "The impact of these two acquisitions and the expanded benefits and services they bring to a widening base of international merchants and card payment customers solidifies Global Payments' position as arguably the world's only truly global merchant acquirer."

Cards International is part of VRL's portfolio of information services, providing analysis, insight and intelligence on cards and payments to senior executives within the industry. Reporting on the latest industry news, debates and product innovation, along with comprehensive profiles and interviews with the key industry players, Cards International has become an established global brand for cards and payments news. www.cardsinternational.com

Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Europe, and the Asia-Pacific region.  Global Payments offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management.  Visit www.globalpaymentsinc.com for more information about the company and its services.

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Global Payments Recognized as Merchant Acquirer of the Year 2010 by Cards International Magazine

ATLANTA, May 24, 2010 /PRNewswire-FirstCall/ -- Global Payments Inc. (NYSE: GPN), a leading provider of electronic transaction processing solutions, announced today that it has been recognized as the winner of Cards International's 'Merchant Acquirer of the Year' for the 2010 awards. The awards provide recognition for the outstanding achievements and contributions made by organizations throughout the year.  Cards International is a leading international payments industry publication.  According to the publication, this year's awards have been among the most hotly-contested in their history, with a record number of nominations.

A statement made by the award judges provides the reason for the prestigious acknowledgement, "Global Payments completed two acquisitions in 2009 that dramatically extended the company's merchant acquiring operations in the U.S.,Canada, and Asia Pacific region into the global transaction processing marketplace.  In April 2009, it completed the acquisition of ZAO United Card Service (UCS), the largest non-bank direct merchant processor in Russia. In June 2009, it acquired 100 percent ownership of its merchant services joint venture with HSBC Bank.  The deal was concluded just 12 months after the initial joint venture and created the largest arrangement of its kind in Europe."

Will Cain, editor of VRL Financial News publication Cards International, and chair of the judging panel, said, "The impact of these two acquisitions and the expanded benefits and services they bring to a widening base of international merchants and card payment customers solidifies Global Payments' position as arguably the world's only truly global merchant acquirer."

Cards International is part of VRL's portfolio of information services, providing analysis, insight and intelligence on cards and payments to senior executives within the industry. Reporting on the latest industry news, debates and product innovation, along with comprehensive profiles and interviews with the key industry players, Cards International has become an established global brand for cards and payments news. www.cardsinternational.com

Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located throughout the United States, Canada, Europe, and the Asia-Pacific region.  Global Payments offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management.  Visit www.globalpaymentsinc.com for more information about the company and its services.

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PlainsCapital Settlement with Hillary Machinery Stirs Debate

PlainsCapital Settlement Stirs Debate

Observers Still Expect Legislation to Address Fraud, Security

by Linda McGlasson - Bank Info Security

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PlainsCapital Settlement with Hillary Machinery Stirs Debate

PlainsCapital Settlement Stirs Debate

Observers Still Expect Legislation to Address Fraud, Security

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comScore Reports Q1 2010 U.S. E-Commerce Spending Accelerates to a 10 Percent Growth vs. Year Ago

comScore Chairman Gian Fulgoni to Present Update on Q1 2010 E-Commerce Trends in Upcoming Webinar

RESTON, VA, May 21, 2010 – comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released its Q1 2010 U.S. retail e-commerce sales estimates, which showed that online retail spending neared $34 billion for the quarter, up 10 percent versus year ago. The strong acceleration represented the first time growth rates reached double-digits since the second quarter of 2008.

Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc.
Quarter	E-Commerce Spending ($ Millions)	Y/Y Percent Change
Q1 2007	$27,970	17%
Q2 2007	$27,176	23%
Q3 2007	$28,441	23%
Q4 2007	$39,132	19%
Q1 2008	$31,178	11%
Q2 2008	$30,581	13%
Q3 2008	$30,274	6%
Q4 2008	$38,071	-3%
Q1 2009	$31,031	0%
Q2 2009	$30,169	-1%
Q3 2009	$29,552	-2%
Q4 2009	$39,045	3%
Q1 2010	$33,984	10%

“The first quarter returned the U.S. retail e-commerce market to healthy double-digit growth rates,” said comScore chairman Gian Fulgoni. “While these spending gains provide reason for optimism, we should note that upper-income households are currently shouldering much of the growth. Should the economy falter in the second half of the year and upper-income consumers return to a savings mode, we could still see growth decelerate. But for the time being, this momentum is encouraging.”

Other highlights from Q1 include:

• Growth in the first quarter was predominantly driven by upper-income consumers, with spending among the $100,000+ household income segment up 14 percent.


• Pureplay (online-only) retailers continued to gain e-commerce spending market share from multichannel retailers.


• Larger online retailers continued to generate higher growth rates than smaller retailers, but the smaller retailers are finally beginning to see positive growth once again.

Webinar Series: State of the U.S. Online Retail Economy through Q1 2010

Join Mr. Fulgoni as he presents an update of the state of the U.S. online retail economy through Q1 2010 in a live webinar on Thursday, May 27 at 2 p.m. ET/1 p.m. CT.

The webinar presentation will include an overview of changes in consumers’ online spending patterns through Q1 2010, survey findings that highlight consumer sentiments regarding the economy, as well as an analysis of spending patterns across key product categories, retailer sectors and consumer demographic segments.

To register for the webinar, please visit:

https://www1.gotomeeting.com/register/872855664

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence. For more information, please visit www.comscore.com/companyinfo.

Contact:
Andrew Lipsman
Senior Director, Marketing Communications
comScore, Inc. 
+1 312 775 6510
press@comscore.com

comScore Reports Q1 2010 U.S. E-Commerce Spending Accelerates to a 10 Percent Growth vs. Year Ago

comScore Chairman Gian Fulgoni to Present Update on Q1 2010 E-Commerce Trends in Upcoming Webinar

RESTON, VA, May 21, 2010 – comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released its Q1 2010 U.S. retail e-commerce sales estimates, which showed that online retail spending neared $34 billion for the quarter, up 10 percent versus year ago. The strong acceleration represented the first time growth rates reached double-digits since the second quarter of 2008.

Retail E-Commerce (Non-Travel) Growth Rates Excludes Auctions, Autos and Large Corporate Purchases Total U.S. – Home/Work/University Locations Source: comScore, Inc.
Quarter	E-Commerce Spending ($ Millions)	Y/Y Percent Change
Q1 2007	$27,970	17%
Q2 2007	$27,176	23%
Q3 2007	$28,441	23%
Q4 2007	$39,132	19%
Q1 2008	$31,178	11%
Q2 2008	$30,581	13%
Q3 2008	$30,274	6%
Q4 2008	$38,071	-3%
Q1 2009	$31,031	0%
Q2 2009	$30,169	-1%
Q3 2009	$29,552	-2%
Q4 2009	$39,045	3%
Q1 2010	$33,984	10%

“The first quarter returned the U.S. retail e-commerce market to healthy double-digit growth rates,” said comScore chairman Gian Fulgoni. “While these spending gains provide reason for optimism, we should note that upper-income households are currently shouldering much of the growth. Should the economy falter in the second half of the year and upper-income consumers return to a savings mode, we could still see growth decelerate. But for the time being, this momentum is encouraging.”

Other highlights from Q1 include:

• Growth in the first quarter was predominantly driven by upper-income consumers, with spending among the $100,000+ household income segment up 14 percent.


• Pureplay (online-only) retailers continued to gain e-commerce spending market share from multichannel retailers.


• Larger online retailers continued to generate higher growth rates than smaller retailers, but the smaller retailers are finally beginning to see positive growth once again.

Webinar Series: State of the U.S. Online Retail Economy through Q1 2010

Join Mr. Fulgoni as he presents an update of the state of the U.S. online retail economy through Q1 2010 in a live webinar on Thursday, May 27 at 2 p.m. ET/1 p.m. CT.

The webinar presentation will include an overview of changes in consumers’ online spending patterns through Q1 2010, survey findings that highlight consumer sentiments regarding the economy, as well as an analysis of spending patterns across key product categories, retailer sectors and consumer demographic segments.

To register for the webinar, please visit:

https://www1.gotomeeting.com/register/872855664

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world and preferred source of digital marketing intelligence. For more information, please visit www.comscore.com/companyinfo.

Contact:
Andrew Lipsman
Senior Director, Marketing Communications
comScore, Inc. 
+1 312 775 6510
press@comscore.com