For 42 years, the leading publication covering payment systems worldwide. JULY 2013 Issue 1,021

Another Interchange Opt-OUt LawSuit More than 25 retailers including Amazon and 7-Eleven have filed litigation in federal court against Visa, MasterCard, and top U.S. banks regarding interchange fees paid between January

... turn to page 5 Kalixa GROUP Issuing and Acquiring Kalixa Group is the new name for CQR Payment Group and Vincento Payment Solutions. CQR operated as a merchant acquirer and payment gateway and Vincento as a prepaid card program

... turn to page 6 Chip Card Manufacturers JING KING TECHNOLOGY HOLDINGS Shipments of microchip cards reached 8.11 billion last year, a 7.9% increase over 2011. The top manufacturer was Gemalto, a position it has held since it was formed in 2006. The company

... turn to page 12 Capital One’s New Cash Back Cards The fifth largest U.S. credit card issuer based on spending by CARD MANUFACTURER Shipments its cardholders now offers Quicksilver Rewards Visa Signature Shipments of high-security-type payment cards and QuicksilverOne Rewards Platinum MasterCard cash back — Visa, MasterCard, American Express, JCB, ... turn to page 5 Discover, Diners Club, UnionPay, and Maestro — Chicago Transit Dual Account Contactless Cards as well as bank and retailer issued ATM/PIN debit cards, and retailer, gasoline, and other private Cubic Transportation Systems is the prime contractor for the new label payment cards totaled 5.07 billion in 2012, fare system to be launched in September in metro and suburban down 2.9% from the prior year. Payment cards Chicago that will convert magnetic-stripe cards to contactless chip accounted for 16.4% of all cards shipped in 2012, ... turn to page 6 down from 17.1% in 2011. GE Buys Phillips/Conoco/76 Portfolio The Visa and MasterCard brands were printed The fifth largest private label credit card portfolio among U.S. on 3.17 billion payment cards shipped last year, gasoline retailers has been sold by Citibank to GE Capital. Terms down 1.3%. American Express, Diners Club, were not disclosed. The portfolio includes private label consumer Discover, Maestro, UnionPay, JCB, ATM, and PIN-based debit shipments totaled 0.79 billion, ... turn to page 7 up 15.7%. Retailer, gasoline, airline, ticketing, Foregenix Information Security transportation, fleet, and other private label Acquirers, Payment Service Providers (PSPs), and Independent payment cards totaled 1.14 billion, down 16.4%. Sales Organizations (ISOs) worldwide will soon have a new tool Gemalto, Giesecke & Devrient, and Oberthur to help small and midsized merchants protect e-commerce sites shipments reported here in the Visa and ... turn to page 5 ... turn to page 7

INSIDE: Fast Facts P 2-4

Payment Card shares P 7 | Telephone, Prepaid & NonPayment Card Shipments P 8 | Payment Card Shipments by Mfg. & Type P 9 CHARTS: Total Chip Card Shipments and Shipments by Type of Card P 10,11 | Payment Cards with ChipS vs. Stripe P 12

© 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] FastThe Nilson Report #1,021 • 8th draft • JulyFacts 12, 2013 • 3:30 PM • car >>>>>>>>> ALLIANCE DATA has paid the Zale jewelry store chain $38 mil- BRAINTREE, provider of a global payment platform that is on pace lion to take over the company's private label credit card program to process more than $10 billion over the next 12 months, includ- from Citi when the current agreement expires in September ing $2 billion initiated by mobile devices, will offer its Venmo Touch one-click mobile wallet technology to customers of Simple, provider 2015. Zale will pay lower fees to Alliance Data under the new of online and mobile banking technology. Josh Reich is CEO at seven-year agreement, which will expire in October 2022. Simple, (201) 500-8192, [email protected], www.simple.com. Six companies including Citi bid on the new Zale contract. Bill Ready is CEO at Braintree, (312) 343-1261, bill@ David Kratoville is VP Bus. Devel. at Alliance Data, braintreepayments.com, www.braintreepayments.com. (614) 729-4170, [email protected], MYFICO.COM now offers consumers their FICO score available www.alliancedata.com. from each of the three major U.S. credit bureaus – Experian, Equifax, and TransUnion. Geoff Smith is VP at myFICO.com, 408-535-1677, H&R BLOCK BANK will sell assets to Republic Bank and Trust [email protected], www.myfico.com. based in Louiville, Kentucky including its Emerald Prepaid Master- Card business, which is the 5th largest prepaid card portfolio in the MERCHANT CUSTOMER EXCHANGE (MCX) will use FIS to U.S. Cardholders generated more than $9 billion in spending at provide MCX payment authorization, routing and settlement for merchants last year. Angela Melka is Products Operations Manager, mobile payment transactions. Nancy Langer, EVP Money Card Programs at H&R Block, (816) 854-5790, angela.melka@ Movement at FIS, (414) 357-3561, [email protected], hrblock.com, www.hrblock.com. www.fisglobal.com. Dodd Roberts is member of the executive team at MCX, (469) 312-2108, [email protected], www.mcx.com. TSYS' MERCHANT SERVICES has received EMV payment processing certification from Visa, MasterCard, American Express, ID ANALYTICS has released an updated version of its ID Score Ac- and Discover. Eric Barth is Group Executive, Product Management at count Takeover software, which helps organizations assess account TSYS' Merchant Services, (480) 333-7612, [email protected], takeover risk by scrutinizing consumer-initiated account activity www.tsys.com. across all channels, products lines and industries. Garient Evans is Director of Identity Risk Solutions, (858) 312-6200, gevans@ idalalytics.com, www.idanalytics.com. FEATURED CONFERENCE 20% MERCURY, a provider of payment processing services to 500+ independent software vendors and 2,500 POS value-added resellers, has certified Ingenico's iSC Touch 250/350 POS terminals, iPP350 PIN C4 CONGRESS 2013 Subscribers to Pad, and the iSMP, a mobile payment device. All fixed and mobile The Nilson Report devices will be integrated to support MercuryShield’s End-to-End Two-Day Conference will receive a 20% encryption. Baird Kleinsmith is Director, Partnership Development at September 4-5, 2013 discount. (Use code Mercury, (970) 335-3478, [email protected], The Frei Caneca Convention Center TNR_1320_C4.) São Paulo, Brazil www.mercurypay.com. Scott Tubbs is SVP, Retail Sales at Ingenico, (678)456-1274, [email protected], www.ingenico.us. Topics include: how to protect profitability, global trends, means of payment in retail, payment methods to boost GLOBAL eTELECOM'S electronic check processing service will sales and reduce churn, emerging products and new be available to merchants linked to Phoenix Managed Networks' technologies, credit in Brazil, payment methods in PhoeniXGate payment gateway. John Laurell is VP, Technical e-commerce and mobile prepaid, strategies to combat Operations at Global eTelecom, (850) 344-4338, jlaurell@ delinquency, loyalty strategies, payment means for globaletelecom.com, www.globaletelecom.com. Trever Fall is EVP unbanked consumers, relationship trends between banks at Phoenix, (623) 209-7776, [email protected], and retailers, prepaid products in Brazil, innovations in card www.phoenixmanagednetworks.com. security and more. Speakers represent: Serasa Experian, Fidelity Processadora, Buscapé, CNDL, ACSP, Witbusiness, HEARTLAND PAYMENT SYSTEMS' SmartLink cloud-based, Citi Brazil, Maxipago, Camara-E.Net, Interplay E , Aserc, MFS PCI-compliant managed network service will be deployed by Riiser (Zuum), Telefonica Vivo, GSPP, Renner, Szprinc Consultores, Energy, which operates 28 C-stores in Wisconsin. SmartLink has Acrefi, Edenred, Visa, Roadcard, UOL, E-Safetransfer, more than 16,000 installations in the U.S. Michael Youngkin American Express, Pagpop, Netpoints, MasterCard, is Senior Director, Network Solutions at HPS, (972) 295-8730 GFT, Riachuelo, Incomm, Walmart, Itau, Morpho, Goon x8730, [email protected], Consultoria, Boanerges & Cia. Consultoria, Way Up Group, www.heartlandpaymentsystems.com. Blackhawk Network, FIS Latin America, Paypal, Data Popular, Conference links at www.nilsonreport.com Zurich Brasil, Ipiranga, Maquina De Vendas, Banco Pan, ADIL CONSULTING has produced a white paper called "Introduc- Ibevar, Medida Certa, Sicredi, Altitude Software, and more. tion to Small U.S. Merchants – Including an Analysis of their POS Cost is $1,945. Contact Rafael Rinaldi at Next Business Usage." The paper is based on a survey of 817 merchants conducted Media, 55 (11) 3173-4410, [email protected]. in March and April of this year. Adil Moussa is Principal, Register at www.congressoc4.com.br. (402) 714-1045, [email protected], www.adilconsulting.com.

THE NILSON REPORT If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 2 NUMBERJULY 2013 1021 ISS U EJuly 1,021 2013 THE NILSON REPORT immediately.- 1 - 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. >>>>>>>>>FastFifth Edition Facts UNISTRUM BANK in Russia will deploy BPC Banking Technolo- gies' Smart Vista suite of card management products to offer new payment cards, expand customer services, deliver online banking New for 2013 services, operate its ATM and payment kiosk network, and more. Susanna Uzunyan is Head of Retail Product Design and Development at Unistrum Bank, 7 (495) 744-0404, chernysheva@ 85 pages uniastrum.com, www.uniastrum.ru. Vasily Grigoriev is CEO at BPC Banking Technologies, 7 (495) 780-3165, [email protected], Figures include www.bpcbt.com. cards in circulation and Largest SAFETYPAY, a payment service available to over 300 million con- spending for sumers worlwide to make payments to Web merchants in real time from their bank accounts in their local currency, will be integrated more than Payment Card Issuers into GlobalCollect's payment services provider platform. 870 credit and Merchant Acquirers GlobalCollect processes more than $14 billion in international e-commerce payments annually. Mike Goodenough is VP, Payment & debit Worldwide Partnerships at GlobalCollect, 31 (6) 3015-8185, mike.goodenough@ globalcollect.com, www.globalcollect.com. Sandra Feinberg is VP, card issuers a 2013 Nilson Report Publication Sales at SafetyPay, (786) 294-6411 x233, [email protected], from 115 countries in www.safetypay.com. all world regions © HSN Consultants Inc. 2013 THE NILSON REPORT, www.nilsonreport.com/largest issuers. Reproduc- ing or allowing reproductioncopyright or dissemination violation subject of any toportion substantial of this fines. document in any manner is a PEACH PAYMENTS, which provides payment processing support Asia/Pacifi c, to online and mobile businesses in Africa and the BRIC markets, Canada, Europe, has signed a 5-year contract to use ReD's online fraud prevention service. Ranui Jain is COO at Peach, 27 (84) 9696-933, rahul.jain@ Latin America, United States, peachpayments.com, www.peachpayments.com. Manish Patel is and Middle East/Africa Regional President EMEA & LATAM at ReD, 44 (148) 372-8700, Also lists [email protected], www.redworldwide.com. 250 Merchant Acquirers from 64 countries in all world regions MANAGEMENT Order Today > CHANGES www.nilsonreport.com/largestissuers Richard Hartzell, formerly President Latin America and Caribbean business, has been appointed Head of Merchants and Acquirers International Markets at MasterCard, (305) 539-2300, richard_hartzell@ , a top payment services provider for card-not- GLOBALCOLLECT mastercard.com. Gilberto Caldart has been appointed present transactions, will add UATP card acceptance to its platform. President Latin America and Caribbean at MasterCard, UATP is the payment network owned by airlines. Mike Carlo is (305) 539-2300, [email protected]. Global Market Leader for Travel at GlobalCollect, (323) 810-8216, Guy Chiarello, formerly with JPMorgan Chase, has been [email protected], www.globalcollect.com. appointed President at First Data Corp., (404) 890-2020, Tom Cunningham is VP, Business Development at UATP, [email protected]. Dennis Jones has been (202) 626-4148, [email protected], www.uatp.com. appointed Executive Vice President Business Operations, International Services at TSYS, KBC BANK IRELAND will launch a debit card program later this 44 (207) 160- 9420, [email protected]. year. The portfolio will be processed on TS2, TSYS' outsourced David Wood has been appointed Executive Vice processing platform, TSYS Managed Services EMEA will provide President Business Operations, Merchant Services at customer service support. Edward Dillion is Head of Retail Products TSYS, (480) 333-7044, [email protected]. Kurt Weiss has at KBC Bank Ireland, 353 (1) 664-6000, [email protected], been appointed Managing Director of Global Financial www.kbc.com. Kelley Knutson is EVP, TSYS, 44 (190) 456-2001, Institutions at C-SAM, (630) 928-0890, kurt.weiss@ [email protected], www.tsys.com. c-sam.com. Ferhan Patel has been appointed PREPAID FINANCIAL SERVICES now offers its Apple iPhone Chief Compliance Officer at Payza, (514) 748-1441 customers in the U.K. Pocket to Pocket, a mobile application that x313, [email protected]. Gokhan Inonu has been appointed puts their prepaid cards into a wallet controlled by their smart- President at Cardtek USA, (847) 586-0329, phone. The app also identifies the nearest ATM and account top-up [email protected]. Brian Hadaway has been location. Noel Moran is CEO, 44 (207) 534-8040, noel.moran@ appointed Director of Sales at BPC Banking Technologies, prepaidfinancialservices.com, www.prepaidfinancialservices.com. US, (510) 339-0897, [email protected].

If you are being forwarded a copy of this report, you are not an authorized userTHE and NILSON must delete REPORT the report 3 JULY 2013 ISSUE 1,021 THE NILSON REPORT immediately.- 2 - Your obtaining an unauthorized copy may violate theNUMBER intellectual 1021 property July rights 2013 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 SIBS, manager of the largest network of POS and ATM terminals in MYANMAR PAYMENT UNION, the national payment network Portugal, has deployed dynamic currency conversion technology of the Republic of the Union of Myanmar, has signed a master from Monex Financial Services to give international cardholders license agreement to support JCB card acceptance in the country starting later this year. Mya Than is Deputy Chairman at MPU, the opportunity to pay for currency conversion services when (951) 246-224, [email protected], www.grgbanking.com. they receive cash from ATMs in the Multibanco network. Yusuke Matsui is Senior Vice President at JCBI, yusuke.matsui@ Luis Flores is Executive Director at SIBS, (351)217-813-080, jcb.co.jp, 81 (3) 5778-8373, www.jcbcorporate.com. [email protected], www.sibs-sgps.pt. Greg Kane is Commercial Director at Monex, 353 (87) 126-0847, gkane@ NBS TECHNOLOGIES now offers the MLX dual milling machine for use by manufacturers to carve a cavity in the plastic body of a monexfs.com, www.monexfs.com. card before adding a microchip. ML dual offers options not available on the MLX 5000 model. Francois Maurel is NBS SAS General PAYLEVEN now offers its chip & PIN technology for mobile devices Manager, 33 (4) 4229-1027, [email protected], in Austria. Alston Zecha is COO, 44 (786) 736-1792, alston.zecha@ www.nbstech.com. payleven.co.uk, www.payleven.co.uk. VOCALINK, operator in the U.K. of the BACS and Direct Debit real FIME KOREA has achieved test bench qualification for EMVCo Con- time payments networks as well as the Link ATM network, has tactless Card Level 1 in Korea. The company's NFC Mobile Test Cen- formed Zapp, a mobile payment system that will give consumers ter can now verify that locally developed and manufactured Near real time access to funds in their bank accounts. Zapp will launch in Field Communication-enabled handsets meet mobile payments 2014. David Yates is CEO at VocaLink, 44 (870)165 0019, industry requirements before market launch. Myung-Hwa Calais is [email protected], www.vocalink.com. Operation Director at FIME Korea, 33 (1) 6453-9626, mhcalais@ fime.com, www.fime.com. Pascal Le Ray is General Manager at FIME, INGENICO is offering an encrypting card reader and payment 33 (1) 6453 3680, [email protected], www.fime.com. processing application for smartphone and tablet devices to Nets, which provides merchant and cardholder processing support to CANADIAN PAYMENT FORECAST - 2013, is a 150-page merchants and financial institution customers primarily in Northern report available from Technology Strategies International. The Europe. Jose Luis Arias is Managing Director, Ingenico Northern report provides a review, analysis and forecast of consumer Europe and Iberia, 34 (91) 312-7438, [email protected], payments in Canada. For more information visit: www.ingenico.com. Heikki Kapanen is EVP at Nets, (358) 969-641, http://www.tsiglobalnet.com/research.html. [email protected], www.nets.eu.

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If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 4 THEJULY 2013NILSON ISS REPORTUE 1,021 THE NILSON REPORT immediately.- 3 - Your obtaining an unauthorized copy may violate the intellectual property rights of NUMBER 1021 July 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. Capital One’s New Cash Back Cards (from page 1)... products. The new cash back rewards cards join cardholders can accrue and no expiration date. Capital One’s existing Cash Quicksilver Rewards is a no-annual-fee card Rewards for Newcomers that offers cardholders a one-time $100 bonus MasterCard card and if they spend $500 within the first three months. Journey Student Quicksilver One is a $39 annual fee card that offers Rewards Visa credit no preset spending limit. cards. Both Quicksilver cards let consumers Quicksilver rewards can be redeemed via check, earn 1.5% cash back on statement credit, private label prepaid card, or every purchase. As is the charitable donation. Shane Holdaway is Managing case with the other cash VP, US Card at Capital One in Richmond, Virginia, back cards from Capital (804) 284-2335, [email protected], One, there is no ceiling on the amount of rewards www.capitalone.com.

Foregenix Information Security (from page 1)... from hackers looking to steal will be marketed to merchants as physical stores would likely cut cardholder data. Foregenix a means to protect against data a merchant’s PCI compliance- Threat Alert (FTA) software compromises and intrusions, it related costs significantly provides real-time analysis also gives acquirers, PSPs, and because on-site visits would not of Web traffic and log data to ISOs a risk assessment of online necessarily be required. merchants before Two Foregenix clients, signing them to a Handpoint and Logica Group, are processing contract. the first hardware manufacturers Foregenix is both a Qualified worldwide to receive P2PE ensure that the integrity of the Security Assessor and a PCI certification for their devices. merchant’s system is maintained. Forensic Investigator. It is also Andrew Henwood is Director of FTA can also determine if card 1 of 19 companies worldwide Operations at Foregenix Ltd. in data is being inadvertently certified by the PCI Security Leatherhead, U.K., 44 (845) 309- stored and that there is real- Standards Council as a point-to- 6232, [email protected], time compliance with PCI DSS point encryption (P2PE) assessor. www.foregenix.com. Prior issues: technical controls. While FTA Installation of P2PE hardware at 1,014, 964

A nother Interchange Opt-OUt LawSuit (from page 1)... 1, 2004 and November 27, 2012. These retailers funds in a $6.05 billion settlement account. The are among nearly 8,000, including about half of amount of money in the settlement account will be the 100 largest in the U.S., who have reduced by an amount prorated for the opted out of a preliminarily approved half of the payment card purchase volume handled damages settlement to be paid to U.S. 100 largest by those merchants who opted out. merchants related to interchange fees retailers (There is a separate fund equivalent to a paid to acquirers during the nearly nine- portion of interchange fees attributable year timeframe mentioned here. A final have opted to certain merchants that accept Visa approval hearing for the settlement is out. and MasterCard credit cards for an scheduled for September 12. eight-month period to start July 29, 2013. That fund has been estimated at Merchants who opted out of the settlement by the $1.20 billion.) May 28 deadline gave up their rights to any money to be paid out by the claims administrator handling turn to page 6

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 5 JULY 2013 ISSUE 1,021 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. A nother Interchange Opt-OUt LawSuit (from page 5) To receive compensation for alleged damages, Large retailers who have opted out but haven’t yet merchants who opt out must sue. Several sued independently or as part of a group include merchants including CVS have sued independently. Walmart, Home Depot, and several large U.S. Amazon, 7-Eleven, et al. is the second large group airlines. Not all 8,000 opt-outs will file litigation. to file litigation. The first group included Target Many small merchants won’t because they did not and Macy’s. Groups are formed when they share realize they would have to file their own litigation. attorneys who file suit on their behalf.

Chig ca o Transit Dual Account Contactless Cards (from page 1)... cards. Most days between 1.6 prepaid account available on the account payments can be million and 1.8 million passenger same card for any transit rider either PayPass contactless type interested in making payments or mag-stripe swipes. John at merchants that accept Satterfield is Regional VP at MasterCard cards. Ventra cards Cubic Transportation Systems in are being manufactured and Chicago, Illinois, (312) 265-3200, personalized by CPI Card Group. [email protected], www.cubic.com. Transit account management will be handled by Cubic. MasterCard When rollout is completed, account management will be Ventra cards will be sold at more handled by the Money Network than 2,500 retail stores as well unit of First Data. Funds can as from more than 400 vending be added to the transit account machines operated by Cubic. online or over the Money Network counter at retailers will provide the that sell Ventra cards. ... will use MasterCard MasterCard accounts MasterCard’s account with other can be funded over the trips are taken in Chicago and its PayPass services including counter and also by suburbs. contactless bill payment. direct deposit or bank protocol. MetaBank will All contactless chip cards, which transfer. issue the Ventra will be called Ventra cards, will All transactions card’s MasterCard be printed with the MasterCard on buses and trains payable account. Mark Putman is brand on the front and the Star from the transit account will Senior VP at First Data brand on the back. All will be use MasterCard’s PayPass Prepaid Solutions in Memphis, tied to a dedicated prepaid contactless protocol. This Tennessee, (901) 381-5414, account for transit payments. includes one-time tickets [email protected], In addition, there will be an purchased for cash from www.firstdata.com. optional reloadable MasterCard vending machines. MasterCard

K alixa GROUP Issuing and Acquiring (from page 1)... manager and issuer. Kalixa operates in Europe and across Europe. Kalixa Accept is the company’s is 100% owned by bwin.party, the world’s largest e-commerce acquiring service. Its payment gateway online gaming company. provides over 200 local and international payment options to merchants in Europe. Because Kalixa is a registered electronic money regulated institution in the U.K., it can acquire Nearly two-thirds of Kalixa’s annual revenues are merchant card transactions and issue prepaid cards generated by its acquiring and gateway services,

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 6 JULY 2013 ISSUE 1,021 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. with prepaid issuing accounting for the remainder. Kalixa Pro is the company’s upcoming smartphone Kalixa leverages its history as the in-house and tablet-based mobile payment service for small payment processing provider to bwin.party to bring businesses. With the card reader merchants will proprietary fraud receive for their mobile device, Kalixa will also fighting tools to its send a prepaid MasterCard card they can use to current list of 300 make purchases. Kalixa plans to acquire an agent merchant customers bank license so it can offer its merchants direct across Europe. debit services for bill payments.

Kalixa PayCard, an e-wallet linked to By year-end the company will expand its a prepaid MasterCard card product, 150,000 merchant acquiring and gateway business has been issued to consumers in the reloadable to the U.S. and its prepaid card issuing U.K., Austria, and Italy. Currently business to Brazil, initially working with prepaid 150,000 of those reloadable local partners. MasterCard cards are active, meaning cards are Kalixa has operations centers in Austria, at least one purchase has been made active. Bulgaria, and Romania. Edward Chandler during the last three months. Kalixa is CEO at Kalixa in London, U.K., will begin selling prepaid MasterCard 44 (207) 255-6389, [email protected], cards in Ireland and Poland by year-end. www.kalixa.com.

GE Buys Phillips/Conoco/76 Portfolio (from page 1)... and commercial cards that than 8,000 locations in the U.S. fleet card portfolios of Shell, carry the Phillips 66 (including The commercial cards offer the consumer and commercial revolving credit. portfolios of ExxonMobil and Sunoco, and the consumer Co-branded Conoco, 76, and portfolio of Citgo. GE also owns Phillips 66 MasterCard cards the consumer and commercial were discontinued by Citi in gasoline card portfolio of August 2011. Greg Pellegrino Chevron, which includes Texaco. is Director, Payment Systems Curtis Howse is Senior VP and Enterprise at Phillips66 in General Manager, Diversified Bartlesville, Oklahoma, (918) Client Group at GE Capital 977-4415, greg.p.pellegrino@p66. Retail Finance in Stamford, com, www.p66.com. Aviation), Conoco, and 76 brand Connecticut, (203) 585-6334, names. Over 700,000 cards are Citi continues to own the [email protected], accepted for payment at more consumer, commercial, and www.gecapital.com.

Shipments of Payment Cards CARD MANUFACTURER Shipments Market Shares in 2012 (from page 1)... MasterCard category include all cards shipped to Brand Share their bank clients, including other high-security Gemalto 12.1% cards as well as some ATM-only or PIN-based debit Perfect 11.9% cards that don’t carry global bank card brands. G&D 10.5% Gemalto was the largest manufacturer of payment CPI 10.5% cards, with an increase in shipments of 3.5%. 5.07 Bil. Oberthur 9.1% Perfect Plastic shipments grew 20.8%, making it Valid 4.7% the second largest. Oberthur shipments grew 0.4%, Morpho 2.7% Morpho shipments grew 11.6%, and Jing King Exceet 2.7% shipments grew 3.0%. Giesecke & Devrient, CPI IntelCav 2.0% Card Group, and IntelCav experienced declines in payment card shipments. the rest 33.8% ©2013 The Nilson Report turn to page 8

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 7 JULY 2013 ISSUE 1,021 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. CARD MANUFACTURER Shipments (from page 7) Cards that are not part of the payment card cards for gaming, e-commerce/digital certifications, category include prepaid private label, prepaid and promotions. transport, prepaid phone, SIM, and other Prepaid phone card shipments totaled 11.36 billion, telephone. Also excluded are nonpayment down 8.1%. They accounted for 36.8% of all cards cards, such as driver’s licenses, healthcare manufactured in 2012, down from 40.5% in 2011. cards, identification cards, access control cards, membership/loyalty cards, pay TV cards as well as turn to page 12 Telephone, Prepaid & Nonpayment Card Shipments 2012

PREPAID/GIFT CARDS 39 Permalith Plastics <0.1 7 AB Card Group 201.8 18 Jing King Tech. 45.7 Rank Manufacturer Mil. 40 Grafocard <0.1 8 Jing King Tech. 123.4 19 Giesecke & Devrient 41.5 1 Jet 466.6 9 COS Software Co. 120.0 20 Travel Tags 38.0 PREPAID PHONE CARDS 2 Travel Tags 465.0 10 DZ Card 80.0 21 Beautiful Card 35.8 Rank Manufacturer Mil. 3 American Banknote 375.2 11 Valid 65.9 22 Toppan Forms H.K. 33.7 1 MCT Cards & Tech. 3,952.7 4 CPI Card Group 293.9 12 NovaCard 29.3 23 DZ Card 30.0 2 Oberthur 1,500.0 5 Valid 170.4 13 Exceet Card Group 8.0 24 PGP Group 21.0 3 AB Card Group 1,023.8 6 Exceet Card Group 135.0 14 FutureCard 7.9 25 Plastek Cards 21.0 4 Valid 306.9 7 Plastek Cards 96.0 15 IntelCav Cartoes 3.2 26 Thai British Sec. Print. 20.6 5 DZ Card 300.0 8 Shenzhen Takcere 79.2 16 Toshiba 2.0 27 FutureCard 19.2 6 Hogier Gartner 280.0 9 Teraco 64.0 OTHER TELEPHONE CARDS 28 A Card Company 16.0 7 CPI Card Group 225.1 10 Perfect Plastic 60.8 Rank Manufacturer Mil. 29 Taiwan Name Plate 15.5 8 Beautiful Card 203.5 11 Thames Card Tech. 35.8 1 FutureCard 380.0 30 FNMT 12.7 9 NovaCard 157.4 12 DZ Card 31.0 2 Morpho 124.7 31 Toshiba 12.0 10 Plastic Cards Mfg. 100.0 13 Signature Card 26.0 3 Valid 46.3 32 NOVO 11.6 11 Gemalto 60.0 14 IntelCav Cartoes 21.8 4 Plastek Cards 17.0 33 SAETIC 11.0 12 Logikard 54.8 15 Swiss Post Solutions 12.5 5 Thames Card Tech. 7.5 34 RG Technology Card 9.3 13 Giesecke & Devrient 41.9 16 PGP Group 10.5 6 Exceet Card Group 3.5 35 Austria Card 8.2 14 Swiss Post Solutions 20.0 17 Jing King Tech. 8.8 7 Jing King Tech. 3.5 36 Siepmann’s Card Sys. 7.7 15 Exceet Card Group 15.0 18 NOVO 8.5 8 MCT Cards & Tech. 0.3 37 Kyodo Printing 7.7 16 Toppan Forms H.K. 12.2 19 Able Card 8.0 9 CPI Card Group <0.1 38 Hogier Gartner 6.4 17 imCARD 6.4 20 SAETIC 5.0 39 TAG Systems 5.3 18 Shenzhen Takcere 5.0 NONPAYMENT CARDS 21 FutureCard 4.8 40 Masria Card 3.5 19 Jing King Tech. 2.8 Rank Manufacturer Mil. 22 Plastic Cards Mfg. 4.5 41 Undurraga TI 3.5 20 FutureCard 2.5 1 Valid 477.2 23 Thomas Greg & Sons 4.4 42 Imprensa 3.4 21 M-Tech Innovations 2.0 2 CPI Card Group 432.8 24 RG Technology Card 4.3 43 ICK Co. 3.1 22 RG Technology Card 1.5 3 American Banknote 397.3 25 MCT Cards & Tech. 3.8 44 FoongTone Tech. 3.0 23 Morpho 1.4 4 AB Card Group 298.5 26 Logikard 3.5 45 Shenzhen Takcere 1.8 24 NOVO 0.9 5 Exceet Card Group 256.0 27 ICK Co. 3.0 46 Logikard 1.5 25 Thai British Sec. Print. 0.5 6 HID Global 100.0 28 Hogier Gartner 2.5 47 Thomas Greg & Sons 1.3 26 Kyodo Printing 0.3 7 Teraco 96.0 29 Beautiful Card 1.9 48 Rosan Finance 1.0 27 Permalith Plastics <0.1 8 Swiss Post Solutions 93.4 30 Silone 1.5 9 Gemalto 93.0 49 COS Software Co. 1.0 31 Rosan Finance 1.1 SIM TELEPHONE CARDS 10 Oberthur 86.0 50 Silone 1.0 32 Thai British Sec. Print. 1.0 Rank Manufacturer Mil. 11 Able Card 80.0 51 MCT Cards & Tech. 0.9 33 A Card Company 1.0 1 Gemalto 1,510.0 12 Thames Card Tech. 77.6 52 BG Ingenierie 0.8 34 Undurraga TI 0.6 2 Oberthur 645.0 13 DVRG Plastic Cards 65.0 53 M-Tech Innovations 0.8 35 Dataform 0.5 3 Morpho 545.0 14 Plastic Cards Mfg. 64.0 54 NovaCard 0.2 36 TAG Systems 0.4 4 Giesecke & Devrient 510.6 15 Morpho 61.2 55 Grafocard 0.2 37 FoongTone Tech. 0.3 5 Watchdata 495.5 16 Watchdata 55.0 56 Permalith Plastics <0.1 38 Toppan Forms H.K. 0.2 6 Beautiful Card 220.2 17 PAV Card 51.1 © 2013 The Nilson Report

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 8 JULY 2013 ISSUE 1,021 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. Total Payment Card Shipments by Manufacturer 2012 Rank Manufacturer/Headquarters mil. Rank Manufacturer/Headquarters mil. Rank Manufacturer/Headquarters mil. 1 Gemalto Netherlands 615.0 18 PGP Group Hong Kong 36.8 35 Thai British Sec. Print. Thailand 8.2 2 Perfect Plastic U.S. 604.2 19 FutureCard U.A.E. 34.1 36 SAETIC Spain 7.7 3 Giesecke & Devrient Germany 533.4 20 Plastic Cards Mfg. Saudi Arabia 33.0 37 Taiwan Name Plate Taiwan 7.5 4 CPI Card Group U.S. 533.0 21 Austria Card Austria 30.3 38 Beautiful Card Taiwan 6.7 5 Oberthur France 462.0 22 ICK Co. South Korea 29.8 39 Toppan Forms Hong Kong 6.4 6 Valid Brazil 237.5 23 DZ Card Thailand 28.0 40 Swiss Post Solutions Germany 6.2 7 Morpho Germany 135.3 24 Alioth Russia 22.5 41 Siepmann’s Card Systems India 6.1 8 Exceet Card Group Germany 135.0 25 TAG Systems Andorra 19.7 42 RG Technology Card Mexico 3.5 9 IntelCav Cartoes Brazil 103.8 26 Hogier Gartner Colombia 19.3 43 Imprensa Portugal 3.0 10 Jing King Tech. Hong Kong 83.3 27 Watchdata China/Singapore 15.4 44 Logikard Ecuador 2.9 11 Thomas Greg & Sons Colombia 81.5 28 M-Tech Innovations India 14.0 45 Undurraga TI Chile 1.7 12 NovaCard Russia 63.0 29 Silone China 11.5 46 Grafocard Serbia 1.2 13 Shenzhen Takcere China 62.2 30 FoongTone Tech. Taiwan 11.3 47 A Card Company Hong Kong 1.0 14 American Banknote U.S. 57.2 31 Thames Card Tech. U.K. 10.8 48 FNMT Spain 0.4 15 ASK France 54.0 32 Teraco United States 10.0 49 DVRG United States 0.2 16 MCT Cards & Tech. India 52.1 33 Masria Card Egypt 8.7 50 Shanghai COS Software China <0.1 17 Rosan Finance Russia 49.4 34 Kyodo Printing Japan 8.6 Many companies have plants in multiple countries. Payment Card Shipments by Type of Card 2012

VISA & MASTERCARD CARDS 31 Toppan Forms H.K. 5.0 20 Toppan Forms H.K. 1.4 12 Plastic Cards Mfg. 18.0 Rank Manufacturer mil. 32 SAETIC 2.8 21 Alioth 1.4 13 ICK Co. 14.1 1 Gemalto (1) 609.5 33 Swiss Post Solutions 2.3 22 Hogier Gartner 1.4 14 Watchdata 12.0 2 Giesecke & Dev. (1) 486.3 34 Shenzhen Takcere 2.2 23 TAG Systems 1.0 15 Teraco 10.0 3 Oberthur (1) 462.0 35 Imprensa 1.9 24 DZ Card 1.0 16 FutureCard 9.4 4 Perfect Plastic 294.5 36 Kyodo Printing 1.9 25 Beautiful Card 0.9 17 DZ Card 7.0 5 CPI Card Group 273.3 37 Watchdata 1.4 26 SAETIC 0.9 18 Kyodo Printing 6.6 6 Morpho 134.2 38 Undurraga TI 1.2 27 Masria Card 0.7 19 Siepmann’s Card Sys. 6.1 7 Valid 106.7 39 Grafocard 0.4 28 Grafocard 0.6 20 Gemalto 5.5 8 NovaCard 54.1 (1) Includes all cards for bank clients. 29 M-Tech Innovations 0.5 21 Silone 4.5 30 FNMT 0.4 22 SAETIC 4.1 9 Thomas Greg & Sons 53.0 OTHER HIGH-SECURITY & 31 Taiwan Name Plate 0.4 23 Alioth 4.0 10 Exceet Card Group 47.0 ATM & PIN DEBIT CARDS 32 Thames Card Tech. 0.3 24 Swiss Post Solutions 3.9 11 MCT Cards & Tech. 40.9 Rank Manufacturer mil. 33 Kyodo Printing 0.1 25 M-Tech Innovations 3.5 12 IntelCav Cartoes 40.5 1 Perfect Plastic 212.6 34 Imprensa <0.1 26 RG Technology Card 3.5 13 Rosan Finance 34.8 2 Jing King Tech. 68.1 35 Shanghai COS Soft. <0.1 27 Logikard 2.9 14 FutureCard 22.7 3 CPI Card Group 56.4 Includes American Express, 28 MCT Cards & Tech. 2.5 15 Austria Card 21.7 4 Exceet Card Group 36.0 Diners Club, Discover, Maestro, JCB, 29 NovaCard 2.4 16 DZ Card 20.0 5 Shenzhen Takcere 32.6 UnionPay, ATM and PIN debit cards. 30 Masria Card 2.4 17 TAG Systems 18.3 6 Valid 27.4 OTHER PAYMENT CARDS 31 Jing King Tech. 2.2 18 Hogier Gartner 18.0 7 PGP Group 18.8 Rank Manufacturer mil. 32 Thai British Sec. Print. 1.9 19 Alioth 17.2 8 Rosan Finance 14.1 33 FoongTone Tech. 1.7 20 Jing King Tech. 13.0 9 MCT Cards & Tech. 8.7 1 CPI Card Group 203.3 34 Morpho 1.1 21 ICK Co. 12.9 10 Austria Card 8.6 2 Valid 103.5 35 Imprensa 1.0 22 American Banknote 10.6 11 Plastic Cards Mfg. 8.0 3 Perfect Plastic 97.0 36 A Card Company 1.0 23 M-Tech Innovations 10.0 12 Silone 7.0 4 IntelCav Cartoes 58.5 37 Thames Card Tech. 0.8 24 Thames Card Tech. 9.8 13 NovaCard 6.6 5 ASK 54.0 38 Rosan Finance 0.5 25 Plastic Cards Mfg. 7.0 14 American Banknote 5.5 6 Exceet Card Group 52.0 39 Undurraga TI 0.5 26 Taiwan Name Plate 7.0 15 IntelCav Cartoes 4.8 7 Giesecke & Devrient 47.1 40 TAG Systems 0.4 27 FoongTone Tech. 6.3 16 FoongTone 3.2 8 American Banknote 41.1 Includes retail, oil, airline, transpor- 28 Thai British Sec. Print. 6.3 17 ICK Co. 2.8 9 Thomas Greg & Sons 28.5 10 Shenzhen Takcere 27.4 tation, ticketing, fleet, etc. Less than 29 Beautiful Card 5.8 18 FutureCard 2.1 0.2 million: DVRG, Taiwan Name Plate, 30 Masria Card 5.7 19 Watchdata 2.0 11 PGP Group 18.0 Grafocard. © 2013 The Nilson Report

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Total Chip Card Shipments 2012 Chip Card Shipments by Type of Card 2012 (subset of figures on pages 8 & 9) (Subset of figures on pages 8 & 9) 4 G&D 22.3 2 FutureCard 2.5 Payment Cards (1) DUAL CARDS Rank Manufacturer/Headquarters Millions MICROPROCESSOR CARDS 9 Austria Card 19.0 Rank Manufacturer Mil. 10 Exceet Card Group 17.5 5 Plastek Cards 13.0 3 Swiss Post Solutions 2.1 Rank Manufacturer Mil. 1 Gemalto Netherlands 2,128.0 1 Exceet Card Group 55.0 6 Toshiba 9.0 4 Morpho 1.4 1 COS Software Co. 121.0 2 Oberthur France 885.0 1 Gemalto 1,908.5 11 TAG Systems 15.3 2 ASK 50.0 7 FNMT 6.6 5 G&D 0.9 2 Gemalto 120.0 3 Giesecke & Devrient (G&D) Germany 809.8 2 Oberthur 836.0 12 ICK Co. 15.2 3 G&D 33.3 3 Exceet Card Group 113.0 4 Morpho Germany 695.2 3 G&D 698.6 13 Jing King Tech. 13.8 8 PAV Card 5.5 SIM Phone Cards 4 CPI Card Group 15.1 4 G&D 55.4 5 Watchdata System China/Singapore 565.9 4 Morpho 667.5 14 Plastic Cards Mfg. 13.0 9 FutureCard 3.4 1 Exceet Card Group 8.0 5 Shenzhen Takcere 12.1 Under 3 mil.: FoongTone, Imprensa, 6 PGP Group 9.8 5 Oberthur 42.0 6 Exceet Card Group Germany 408.0 5 Watchdata 541.3 15 Alioth 10.4 Nonpayment Cards 7 Beautiful Card Taiwan 227.1 6 Beautiful Card 227.0 16 Rosan Finance 7.1 Beautiful Card, Plastic Cards Mfg., 7 Watchdata 9.0 6 Morpho 12.1 Austria Card, M-Tech, ICK, CPI, Ho- 1 Exceet Card Group 75.0 8 AB Card Group Turkey 201.8 7 AB Card Group 201.8 17 FutureCard 6.7 8 ICK Co. 7.0 7 Austria Card 8.6 gier Gartner, Swiss Post, Jing King, 2 PAV Card 16.3 9 Jing King Technology Hong Kong 138.1 8 Jing King Tech. 137.4 18 Hogier Gartner 6.3 Kyodo Printing, TNP, BG Ingenierie, 9 Kyodo Printing 6.4 8 ICK Co. 7.7 3 Swiss Post Solutions 4.9 10 COS Software Co. China 121.0 9 Valid 86.3 19 Beautiful Card 5.6 Valid, Masria Card, Rosan Finance. 10 Oberthur 6.0 9 Watchdata 5.6 4 Morpho 3.3 11 HID Global United States 100.0 10 DZ Card 85.0 20 DZ Card 5.0 11 Siepmann’s Card 5.9 10 DZ Card 5.0 MEMORY CARDS 5 Thames Card Tech. 3.2 12 DZ Card Thailand 95.0 11 IntelCav Cartoes 61.2 21 Masria Card 4.8 12 Valid 4.6 11 FoongTone Tech. 4.4 Rank Manufacturer Mil. Under 3 mil.: FutureCard, G&D, 13 Valid Brazil 91.9 12 NovaCard 54.9 22 FoongTone Tech. 4.7 13 Gemalto 4.5 12 ASK 4.0 14 IntelCav Cartoes Brazil 68.5 1 Exceet Card Group 157.5 Plastic Cards Mfg., PGP, Austria Card, 13 Thomas Greg & Sons 24.4 23 Toppan Forms H.K. 4.5 14 Rosan Finance 4.0 Under 4 mil.: TNP, CPI, Thames, TAG, 15 NovaCard Russia 56.5 2 Gemalto 88.0 CPI, TNP, Shenzhen Takcere, BG Silone, NovaCard, FutureCard, Shen- 14 Austria Card 19.9 24 SAETIC 2.8 Ingenierie, FNMT, TAG, Toppan 15 Perfect Plastic 3.6 16 ASK France 54.0 3 PAV Card 16.3 zhen Takcere, FNMT, Rosan, Kyodo Forms H.K., Grafocard. 16 FutureCard 3.3 Printing, Jing King, BG, Valid. 17 PAV Card Germany 32.8 15 FutureCard 18.0 25 Thai British Sec. Print. 2.6 4 Shenzhen Takcere 12.4 17 Morpho 3.0 (1) 18 CPI Card Group United States 31.5 16 Exceet Card Group 17.5 26 Watchdata 2.3 5 G&D 7.6 CONTACTLESS CARDS Payment Cards 18 Thomas Greg & Sons 2.5 19 ICK Co. South Korea 31.5 17 ICK Co. 15.8 27 Swiss Post Solutions 2.3 6 Swiss Post Solutions 7.0 Rank Manufacturer Mil. 1 Gemalto 104.0 19 DZ Card 2.0 20 Austria Card Austria 30.0 18 TAG Systems 15.3 28 MCT Cards & Tech. 1.8 7 FutureCard 6.2 1 Exceet Card Group 120.0 2 G&D 54.1 19 Plastic Cards Mfg. 14.0 29 Kyodo Printing 1.5 Under 2 mil.: FoongTone, M-Tech, 21 FutureCard United Arab Emirates 28.3 8 CPI Card Group 5.1 2 HID Global 100.0 Silone, SAETIC, NovaCard, Masria 3 Oberthur 42.0

22 Thomas Greg & Sons Colombia 27.0 20 Plastek Cards 13.0 30 Imprensa 1.5 9 Morpho 5.1 3 ASK 50.0 Card, Alioth. 4 Exceet Card Group 38.0 23 Shenzhen Takcere Credit Card Mfg. China 25.9 21 Toshiba 11.0 31 CPI Card Group 1.1 10 Thames Card Tech. 3.3 4 G&D 48.1 Prepaid/Gift Cards 5 Morpho 10.5 24 Plastek Cards United States 22.0 22 Alioth 10.4 32 M-Tech Innovations 1.0 11 Silone 2.0 5 CPI Card Group 23.0 1 Exceet Card Group 50.0 6 Austria Card 8.0 25 TAG Systems Andorra 16.9 23 Rosan Finance 7.1 Under 1 mil.: TNP, Shenzhen Takcere, 12 PGP Group 2.0 6 Watchdata 19.0 7 ICK Co. 6.0 26 PGP Group Hong Kong 16.4 SIlone, Perfect Plastic, FNMT. 2 Plastek Cards 9.0 24 FoongTone Tech. 6.7 13 Valid 1.1 7 PGP Group 14.4 8 FoongTone Tech. 4.4 27 Plastic Cards Manufacturing Saudi Arabia 15.0 3 IntelCav Cartoes 7.3 25 FNMT 6.7 14 Plastic Cards Mfg. 1.0 8 Shenzhen Takcere 12.5 9 Watchdata 4.1 28 Toshiba Japan 14.0 Prepaid/Gift, Prepaid Phone 4 PGP Group 1.2 26 Hogier Gartner 6.7 15 Oberthur 1.0 9 Gemalto 11.5 10 DZ Card 4.0 29 FoongTone Technology Co. Taiwan 13.5 1 IntelCav Cartoes 12.3 5 Rosan Finance 1.1 27 imCARD 6.4 16 DZ Card 1.0 10 PAV Card 11.0 30 Rosan Finance Russia 13.2 2 imCARD 6.4 11 ASK 4.0 28 PAV Card 5.5 6 Thai British Sec. Print. 1.0 31 Alioth LLC Russia 10.5 3 NOVO 0.6 Under 1 mil.: Austria Card, Grafocard, 11 Morpho 10.5 12 Taiwan Name Plate 3.4 29 Masria Card 4.8 TNP, BG Ingenierie, FNMT, TAG, 7 DZ Card 1.0 32 Kyodo Printing Japan 9.7 12 Plastek Cards 9.0 Under 2 mil.: CPI, Thames, Silone, Toppan Forms H.K. Under 1 mil.: Jing King, Dataform, TAG, NovaCard, FutureCard, Shen- 33 Swiss Post Solutions Germany 9.7 30 Toppan Forms H.K. 4.5 SIM Telephone Cards 13 ICK Co. 8.0 ICK, FoongTone, Toppan Forms H.K., Payment Cards (1) zhen Takcere, FNMT, Rosan, Kyodo 34 Hogier Gartner & Cia Colombia 7.2 31 Imprensa 3.4 1 Gemalto 1,510.0 14 Kyodo Printing 7.7 FutureCard. Printing, Jing King, COS, Valid. 32 SAETIC 2.8 1 Gemalto 28.0 15 IntelCav Cartoes 7.3 35 Fabrica Nac’l de Moneda y Timbre (FNMT) Spain 7.1 2 Oberthur 645.0 Nonpayment Cards Prepaid/Gift Cards 36 imCARD El Salvador 6.4 33 Thai British Sec. Print. 2.6 3 Morpho 545.0 2 Exceet Card Group 24.5 16 Oberthur 6.0 1 HID Global 100.0 1 Exceet Card Group 35.0 37 Siepmann’s Card Systems India 5.9 34 Swiss Post Solutions 2.6 4 G&D 510.6 3 G&D 5.4 17 Siepmann’s Card 5.9 2 Exceet Card Group 15.0 2 ICK Co. 1.4 38 Thames Card Technology United Kingdom 5.9 35 Kyodo Printing 1.8 5 Watchdata 494.0 4 CPI Card Group 4.3 18 Rosan Finance 5.8 3 G&D 14.8 39 Taiwan Name Plate (TNP) Taiwan 5.9 19 Valid 4.6 SIM Phone Cards 36 M-Tech Innovations 1.8 6 Beautiful Card 220.2 5 Silone 2.0 4 PAV Card 11.0 40 Silone China 5.5 20 DZ Card 4.0 37 MCT Cards & Tech. 1.8 7 AB Card Group 201.8 6 FutureCard 1.2 5 Watchdata 10.0 1 COS Software Co. 120.0 41 Toppan Forms Card Tech. Hong Kong 5.4 38 CPI Card Group 1.5 8 Jing King Tech. 123.3 7 Valid 1.1 21 Future Card 3.7 2 Watchdata 1.5 42 Masria Card Egypt 5.1 6 CPI Card Group 7.9 Under 1 mil.: TNP, Shenzhen Takcere, 9 DZ Card 80.0 8 Oberthur 1.0 22 Perfect Plastic 3.6 43 SAETIC Spain 4.1 7 Morpho 7.5 Nonpayment Cards NOVO, SIlone, Perfect, BG Ingenierie. 10 Valid 65.9 9 DZ Card 1.0 23 American Banknote 3.1 44 Perfect Plastic Printing United States 3.7 8 Gemalto 7.0 1 Exceet Card Group 40.0 (1) Under 1 mil.: Morpho, Grafocard, 24 Toshiba 3.0 Payment Cards 11 NovaCard 29.3 9 PGP Group 3.4 2 Gemalto 16.0 45 Thai British Security Printing (TBSP) Thailand 3.6 Thames Card Tech., PGP, TNP. 25 Thomas Greg & Sons 2.6 46 Imprensa Nacional-Casa da Moeda Portugal 3.5 1 Gemalto 328.5 12 FutureCard 7.9 10 American Banknote 3.1 Under 2 mil.: Morpho, G&D, DZ, 26 FoongTone Tech. 2.3 47 M-Tech Innovations India 3.3 2 Oberthur 191.0 13 IntelCav Cartoes 3.2 Prepaid/Gift Cards 11 Toshiba 3.0 COS Software, Austria Card, TNP, TAG, ICK, Jing King, Kyodo Printing, 14 Toshiba 2.0 1 Exceet Card Group 50.0 Under 2 mil.: M-Tech, Silone, SAETIC, Under 2 mil.: Kyodo Printing, DZ 48 American Banknote United States 3.1 3 G&D 165.8 TBSP, TNP, NovaCard, Toppan Forms FoongTone, NovaCard, BG, CPI. 49 MCT Cards & Technology India 1.8 4 Morpho 73.7 2 Shenzhen Takcere 12.2 Card, TNP, Thames, Rosan, ICK, Top- Nonpayment Cards H.K., Thames Card Tech., Austria pan Forms H.K., Austria Card, Hogier (1) Payment Cards includes Visa, 50 BG Ingenierie France 0.6 5 IntelCav Cartoes 45.8 3 PGP Group 0.9 Card, Jing King, Hogier Gartner, Gartner, BG Ingenierie, Shenzhen MasterCard, American Express, 1 Gemalto 70.0 Dataform, BG Ingenierie, Masria 51 NOVO Germany 0.6 6 NovaCard 25.6 4 FutureCard 0.5 Takcere, FutureCard, NovaCard, JCB, Diners Club, Discover, Mae- 2 Morpho 48.8 Card, Imprensa, Swiss Post, TAG, 52 Dataform International Turkey 0.5 7 Thomas Greg & Sons 24.4 FoongTone, Imprensa, Swiss Post, stro, UnionPay, EFT debit, store, Prepaid Phone Cards Beautiful Card, Alioth, FNMT, TAG, Beautiful Card, Thomas Greg & 53 Grafocard Serbia 0.4 3 Watchdata 45.0 Grafocard. oil company, and transportation 8 Valid 20.3 1 Gemalto 60.0 Sons, FNMT, Grafocard, Masria Card. cards. © 2013 The Nilson Report © 2013 The Nilson Report

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report immediately. 10 JULY 2013 ISSUE 1,021 THE NILSON REPORT 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. JULY 2013 ISSUE 1,021 THE NILSON REPORT 11 CARD MANUFACTURER Shipments (from page 8) Most of these cards do not have mag-stripes or 2011. They combined to account for 10.7% of all chips. MCT Cards & Technology in India, Oberthur, cards produced, up from 9.3% one year before. Jet, and AB Card Group in Turkey were Travel Tags, American Banknote, and CPI the largest manufacturers. Card Group were the largest. SIM CARDS SIM cards for mobile phones totaled ACCOUNTED Other telephone cards (not prepaid or SIM) 5.00 billion, down 0.5%. They totaled 0.98 billion. They accounted for accounted for 16.2% of all cards FOR 16.2% OF 3.2% of all cards produced, up from 0.8%. manufactured last year, down from THE TOTAL. FutureCard was the largest manufacturer, 16.5%. Gemalto remained the largest followed by Morpho and Valid. manufacturer, followed by Oberthur, Nonpayment cards, which totaled 5.16 billion, Morpho, Giesecke & Devrient, and Watchdata. increased by 6.4%. They accounted for 16.7% of all Shipments of prepaid private label and transport shipments last year, up from 15.9%. Valid, CPI Card cards totaled 3.29 billion last year, up 15.9% from Group, and American Banknote were the largest.

Chip Card Manufacturers (from page 1) held a 26.24% market share at billion last year. SIM cards Oberthur had a 13.33% share of the end of last year, down from accounted for 63.50% of all chip all payment cards with chips, 28.54% the year before. Oberthur cards manufactured in 2012. down from 13.42% one year (10.91% share), Giesecke & Payment cards accounted for before. Chip cards represented Devrient (9.98% share), Morpho 22.20% of the total. Nonpayment 51.9% of the 462.0 million (8.57% share), and Watchdata chip cards held a 10.81% share. payment cards Oberthur shipped (6.98% share) continued to round Private label prepaid chip cards in 2012. out the top five positions. accounted for a 2.29% share. Exceet Card Group had a 7.50% Prepaid phone cards with chips Chip cards for SIMs used in share of all payment cards with held a 1.20% share. mobile handsets totaled 5.15 chips. All of its payment cards Of the total 5.07 billion payment shipped in 2012 had chips. cards shipped last year, 35.5% Morpho had a 4.87% share of all Payment Cards with Chips had chips, up from 28.9% in payment cards with chips, down vs. Mag Stripes Only (Mil.) 2011. The other payment cards from 5.50% in 2011. Chip cards used only magnetic stripes. produced by Morpho accounted Chip Magnetic Stripe for 64.7% of the 135.3 million Gemalto had a 25.83% share of Gemalto 465/150 payment cards it shipped last all payment cards with chips 4/601 year. Perfect shipped in 2012, down from G&D 259/275 27.39% the prior year. Of the Microprocessor cards totaled CPI Card 22/511 615.0 million payment cards 81.05% of the chip cards shipped. Gemalto manufactured last year, Dual-interface cards held a Oberthur 240/222 75.6% had chips. 7.28% share. Contactless cards accounted for 7.18%. Memory Valid 26/212 Giesecke & Devrient had a cards held a 4.49% share. Prior Morpho 88/48 14.36% share of all payment issues: 1,004, 983, 981, 960, 959, cards with chips, down from Exceet 135 936, 935, 909 16.30% the prior year. G&D IntelCav 46/58 payment cards with chips Jing King 14/70 represented 48.5% of its 533.4 million payment card total in Note: Chip cards include Visa, MasterCard, American Express, JCB, and Maestro cards with mag-stripes as well as 2012. ATM-only and domestic-only debit cards, transportation cards, and other proprietary cards. © 2013 The Nilson Report David Robertson, Publisher Y JUL 15, 2013

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