Elan Financial Signs Peoples Bank

Peoples Bank has signed a joint marketing agreement with Elan Financial Services
to serve the credit card needs of Peoples Bank clients. As of January 1,
that date, all credit card products and promotions will be offered through Peoples Bank
branded credit cards and serviced by Elan. Since 2004, Peoples Bank has accessed credit card providers through
joint marketing agreements to make available competitive credit card offerings to
Peoples Bank clients. Elan offers enhancements such as traditional low rate credit cards,
rewards cards, and cards for building or re-establishing credit. Elan is a single
source for a wide range of credit card products for consumer and business customers.
Peoples Bancorp Inc. is a diversified financial products and services
company with $2.0 billion in assets, 47 locations and 39 ATMs in Ohio, West Virginia and
Kentucky.

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ADS and KeyCorp Extend Epsilon Deal

ADS’ Epsilon subsidiary has signed an extension agreement with
OH-based KeyCorp to continue providing direct marketing services to
KeyCorp’s KeyBank, through Epsilon’s agency,
“Purple@Epsilon”. Under the terms of the extension agreement,
“Purple@Epsilon” will remain
KeyBank’s direct marketing agency-of-record, providing services that
include integrated direct marketing strategy, direct mail production and
analytic support. Epsilon’s team will focus on approximately 14 KeyBank
lines of business, including consumer, small business, large corporate,
wealth management, and more. The goals of the direct marketing efforts
are to retain and cross-sell existing KeyBank customers, as well as
acquire new KeyBank customers. In addition to assisting KeyBank with
strategic planning and development
of its direct marketing programs, Epsilon will design the direct mailers
that promote KeyBank’s products and services, which range from checking
accounts and lines of credit to treasury management products and
investment services. Beyond creative design, Epsilon will print and
personalize the mail kits. Epsilon will also provide data and analytic
services, such as data modeling, prospect list procurement and data file
cleansing to help KeyBank target the right audience, maximize postal
discounts, reduce the amount of undeliverable direct mail, and optimize
overall marketing spend on campaigns.

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U.S. QSR Card Volume to Drop Slightly in 2009

Payment card volume for U.S. fast food sales is set to fall by two percentage points this year. Consumers will likely rack-up $69 billion worth of fast food on their personal credit and debit cards this year, compared to $70 billion one-year ago. The 40% CAGR in quick service restaurant volume between 2004 and 2008 was driven by expanded merchant acceptance, promotion of card usage and new contactless payment options, according to CardData (www.carddata.com). The current economic turmoil has given new energy to “dollar” menus which has been driving payment card growth. Americans spend about $195 billion per year at quick service restaurants.

QSR ON PLASTIC HISTORICAL
2000: $ 1.7 billion
2001: $ 3.7 billion
2002: $ 6.1 billion
2003: $12.9 billion
2004: $22.5 billion
2005: $33.2 billion
2006: $51.3 billion
2007: $62.8 billion
2008: $70.4 billion
2009: $68.9 billion
Source: CardData (www.carddata.com)

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SMALL BUSINESS STRUGGLE

Among Canadian small business owners, 25% are not taking a raise; 23%
are refusing a bonus and 16% are taking a pay cut in order to recognize
employees and clients. Nevertheless, 12% fewer small business owners
will be giving their employees bonuses this holiday season Y/Y to 33%;
7% fewer intend to give to charity (33%); 5% less will give employee
gifts (37%) and 4% less will give client gifts (31%). This, according to
the American Express Small Business Holiday Monitor, are showing many
business owners are making up for it with 50% planning to treat their
employees to a party or dinner while 43% are planning to give employees
extra time off. Cost savings has become a priority, with 75% having
introduced some form of cost reduction policies in the last year; 48% of
whom having instituted longer working hours, 47% instituting pay
freezes, 45% reducing spending allowances and 23% having introduced pay
cuts in the past year. Additionally, 67% are “optimistic” for
improvement in the coming year.

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Unbanked and Underbanked Households Expand

Currently 25.6% of all U.S. households are unbanked or underbanked with disproportionately low-income. With nine million households unbanked-17 million adults-and 21 million households underbanked-43 million adults,- 21.7% of black households are unbanked; as are 19.3% of Hispanics and 15.6% of American Indian/Alaskans. Only 3.5% Asians and 3.3% of whites were unbanked. These findings, according to the FDIC “National Survey of Unbanked and Underbanked Households,” also show among the underbanked- those who rely on alternative financial services such as non-bank money orders and the like- 31.6% of black households partook, as did 28.9% American Indian/Alaskans, 24% of Hispanics 7.2% of Asian households and 14.9% of white households. Additional findings show households with income under $30,000 account for at least 71% of unbanked households; nearly 20% of lower-income U.S. households do not have a bank account; and 4.2% of households with annual income between $30,000 and $50,000 are unbanked.

HOUSEHOLDS & UNBANKED (%)
Black: 21.7
Hispanic: 19.3
Native American: 15.6
Asian: 3.5
White: 3.3
Source: FDIC

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U.S. Credit Card ROAA Rebounds for 3rd Month

The “Return on Average Assets” for the U.S. credit card industry rebounded again in October for the third month after a year of steady decline. The record low was reached in June at a negative ten basis points. For October, the figure returned to positive territory at a positive 42 basis points. According to CardData, the ROAA for Visa and MasterCard portfolios peaked in February 2007 at 263 basis points. ROAA is determined by dividing the after-tax return by the average managed card outstandings and then annualizing. According to R.K. Hammer Investment Bankers, pre-tax profit for the U.S. credit card industry declined 2.7% in 2008 to $39.6 billion driven by rising expense streams, especially charge-offs. For the latest portfolio metrics, visit CardData (www.carddata.com).

RETURN ON AVERAGE ASSETS
Oct 08: 1.04%
Nov 08: 0.95%
Dec 08: 0.88%
Jan 09: 0.79%
Feb 09: 0.68%
Mar 09: 0.61%
Apr 09: 0.31%
May 09: 0.27%
Jun 09: -0.10%
Jul 09: -0.02%
Aug 09: 0.06%
Sep 09: 0.31%
Oct 09: 0.42%
Source: CardData (www.carddata.com)

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Economy Impacts Financial Planning Big Time

With women accounting for the majority, 62% of Americans are planning to alter their financial plans due to economic uncertainty in the months ahead. Among these, 66% were women while 58% were men; 66% of those 18-54 are taking a closer look at their financial plans versus only 54% of those 55 and over; and 83% are planning to save more in the months and year ahead, with only 7% planning to do so using investment risks. This, according to the new Coinstar “Currency Poll” on economic trends, shows 87% of women vs 79% of men intend to save more rather than investing or spending and 93% of Americans ages 18-44 plan to save and invest more, compared to 87% of those over 45.

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pcKeyboard Offers a New POS Solution

AVE Investments has released “pcKeyboard”. By manufacturing together the mobile, low voltage
Intel® Atom™ processor and the top selling “Cherry SPOS Point of Sale”
keyboard, a new level of reduced size, low cost and enhanced mobility
is achieved for the POS system industry. By combining the POS system and the POS keyboard in one component,
the pcKeyboard joins AVE’s mobile POS products as new choice for
sidewalk sales or seasonal registers. AVE Investments
manufactures, installs, and services innovative and practical POS
platforms.

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JDS POS Solution Powers Shoe Palace

POS system provider JDS reports that CA-based Shoe Palace will open its
24th store
as it experiences growth during the difficult economic climate.
JDS Solutions develops retail software for mid-size retailers. JDS’
WinRetail Merchandising Software and Point of Sale (POS) System provide
greater visibility into the entire retail cycle with powerful reporting
features, merchandise planning and time saving wizards and alerts giving
retailers more control over their business. Founded in 1990, JDS serves
retailers in North America, Hawaii, Asia Pacific and the Caribbean.
Shoe Palace was established in 1993 by a husband and wife team along
with their children. The company has grown from a small brick and mortar
retailer to a major chain of retail stores in Northern and Southern
California.

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Electronic Arts Intros DebitSmart Visa

Interactive software designer Electronic Arts has launched the “EA SPORTS DebitSmart Visa Prepaid Card” to enable users to receive a percent back from every purchase. The Visa-branded EA SPORTS prepaid card is reloadable and funds can be allocated from a payroll direct deposit, checking account, another prepaid card or at thousands of GreenDot and Western Union retail locations nationwide including Wal-Mart, CVS/Pharmacy, Walgreens, Rite Aid, 7-Eleven, and Radio Shack. EA SPORTS prepaid cardholders can earn “EA SPORTS Reward Points” at over 26,000 community brick-and-mortar retailers including Macy’s, Barnes and Noble, Sunglass Hut, Office Max, Papa John’s and Coldstone, more than 700 online retailers including Wal-Mart, Target, Netflix, Apple iTunes, Gap, and Toys ‘R’ Us and at select grocery and convenience stores. Cardholders can then redeem their “Game Cash” at the EA SPORTS store by visiting www.EASPORTSrewards.com. The “EA SPORTS DebitSmart Visa Prepaid Card” was created in partnership with FL-based StorValue Card Solutions and is issued by MetaBank.

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M-Financial Service Adoption Rate to Explode

Banks offering mobile financial services can increase new customer acquisition by as much as 60%, with nearly one-third of consumers using or considering using mobile financial services in the next year and consumer mobile financial service adoption exceeding the use of online banking by 2015. This, according to a recent survey by Mercatus financial services strategy consulting and investment firm, also shows customer acquisition promotional offers including mobile financial services out-performed those that did not include mobile financial services by nearly 30%; a decrease in cost of acquiring a new customer by as much as 20% based on the increased effectiveness of mobile-related; and, most importantly, customer acquisition marketing mobile financial service capabilities were more impactful in a consumer’s decision to select a bank than availability of online banking, access to ATMs, or nearby branches. Additional findings show mobile financial service users are mostly between 18 and 39; have higher incomes; can be serviced at a 20% lower cost than traditional bank customers; and display lower rates of attrition as compared to traditional customers.

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NEOVIA NET+

NEOVIA Financial global online payments business has announced the first
anniversary of its “Net+” Prepaid MasterCard, the first prepaid
MasterCard made available to NETELLER’s e-wallet customers as a physical
and virtual, online-only, prepaid card. The “Net+” card synchronises
automatically in real time with the funds in the NETELLER customer’s
e-wallet, avoiding the need for a separate pre-load transaction of the
prepaid card. Issued by Conister Bank Limited, its incorporates chip and
PIN technology and allows cardholders access to their e-wallet account
at over 29 million retail POS locations and more than 1 million ATMs
worldwide.

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