Boston, MA
November 2006

Mercator Advisory Group
Payments Industry M&A Report – Q3 2006

Third quarter 2006 M&A activity accelerated with 49 M&A transactions and 7 Venture Capital financing deals in the payments industry. The number of payments industry M&A deals tracked by Mercator Advisory Group increased by 75% in Q3 of 2006 from a year earlier.

“The vendor community continues to drive the increased M&A activity”, comments George Peabody, Research Manager, Mercator Advisory Group’s International Payments Advisory Service (IPAS). “Vendors as well as issuers continue to acquire products that compliment product mix in an effort to better serve their customers and to expand into new segments.”

The breakdown of the 49 deals announced in the third quarter is as follows (Exhibit 3 & 4):

* Vendors – 28 deals

* Card Issuers – 8 deals

* Processors and Acquirers – 12 deals

* Remittance Companies and Check Cashers – 1 deal

* Venture Capital financing – 7 deals

The Payments Industry M&A Report – Q3 2006 assembles into a single resource a summary of M&A and VC activity along with information on each of the payments industry related M&A deals, contact person(s) related to each deal, and an M&A activity table that summarizes the highlights of the quarter.

This report contains 67 pages and 7 exhibits.

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