Тhe global payments industry is undergoing a major shift from paper-based payments, such as cash and checks, to card-based and other electronic payments.

The global payments industry consists of all forms of payment and value transfer, including: paper-based payments: cash, personal checks, money orders, government checks, travelers cheques, official checks and other paper-based means of transferring value; card-based payments: credit cards, charge cards, debit cards, deferred debit cards, ATM cards, prepaid cards, private label cards and other types of general-purpose and limited-use cards; and other electronic payments: wire transfers, electronic benefits transfers, automated clearing house payments and other forms of electronic payment not typically tied to a payment card or similar access device.

According to The Nilson Report, global card purchase transactions grew at a CAGR of 14% over the period from 2000 to 2006. The Nilson Report forecasts global card purchase transactions to increase at a CAGR of 11% from 2006 to 2012, with particularly strong growth in Asia/Pacific, Latin America and the Middle East/Africa.

The most common card-based forms of payment are general-purpose cards, which are payment cards that permit widespread usage. General purpose cards are typically categorized as: “pay now” cards, such as debit cards, which enable the cardholder to purchase goods and services by an automatic debit to a checking, demand deposit or other current account; “pay later” cards, which typically permit a cardholder to carry a balance in a revolving credit account (a credit card or deferred debit card) or require payment of the full balance within a specified period (a charge card); and“pay before” cards, such as prepaid cards, which are prefunded up to a certain monetary value.

The Company’s core processing services involve the routing of payment information and related data to facilitate the authorization, clearing and settlement of transactions between the issuers, which are the financial institutions that issue the cards to cardholders, and acquirers, which are the financial institutions that offer the network connectivity and payments acceptance services to merchants.

The Company’s transactions can be authorized, cleared and settled either as dual-message transactions or as single-message transactions. The choice of processing method may vary depending upon the issuer, the type of card or the region in which the transaction takes place.

The Company offers a broad range of product platforms to enable its customers to build differentiated, competitive payment programs for their consumer, business, government and merchant clients. The Company’s principal payment platforms enable credit, charge, deferred debit, debit and prepaid payments, as well as cash access, for consumers, businesses and government entities.

The Company’s consumer credit product platforms allow the issuers to offer deferred payment and financing products that can be customized to meet the needs of all consumer segments.

The Company’s deposit access product platforms enable the issuers to offer consumer payment and cash access products that draw upon consumer deposit accounts, such as checking, demand deposit, asset or other pre-funded accounts.

The Company’s commercial product platforms enable multi-national, large, medium and small companies and government organizations to streamline payment processes, manage information and their supply chain, and reduce administrative costs.

Transactions processed increased by 13% during the first quarter of fiscal 2008 compared to the prior year comparable period.

Operating expenses increased by $22 million, or 3%, during the three months ended December 31, 2007 compared to pro forma operating expenses for the three months ended December 31, 2006.