Payments Expert Says Interchange Changes Costly

A new PYMNTS report indicates that the reform of interchange fees could result in higher costs to consumers. David Evans, author and Founder of Market Platform Dynamics new report, entitled “GAO to Congress on Interchange Fee Regulation: Yellow Light”, suggests that if interchange fees are reduced for merchants, consumers could pay higher fees for cards and their rewards could be slashed. Evans states, that “[t]here is nothing that suggests that consumers overall will benefit from interchange fee caps.” PYMNTS.com is a joint venture between Business Wire, a Berkshire Hathaway Company, and Market Platform Dynamics. It provides a platform for industry professionals to share content related to their latest company and product developments, to tap into the collective commentary and analysis from experts, bloggers and industry pundits, and to interact with industry thought leaders on topics of critical importance to the future of the sector.

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FRB Launches Holiday Credit Card Ed Campaign

The Federal Reserve has rolled out a public service ad campaign to
advise smart use of credit cards by consumers this holiday season.
The advertisements will appear before movie previews at 12 highly
attended theaters in major metropolitan areas from November 27 through
December 3. The ads provide tips for getting the most from credit cards,
including paying on time, staying below the card’s credit limit,
avoiding unnecessary fees, paying more than the minimum payment, and
watching for changes in account terms.

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Small Business Cards Are Returning Slowly

A new report from Aite Group examines the opportunity that exists for financial institutions
and the growth opportunities for small-business credit cards. The U.S. small-business segment, comprised of more than 20 million
businesses, represents a large opportunity for financial institutions.
While most banks recognize this, the main challenges for many
institutions are determining how to win business from this group, and
which products will result in the greatest return on investment. Aite
Group believes that small-business credit cards offer significant return
to financial institutions. In fact, if small-business credit card
spending increased from its current 4% market share to 14%, Aite Group
estimates that interchange revenues from small-business credit card
usage would increase more than 300%, or to more than US$10 billion.

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CREDIT CONSUMERS

With 40% of Irish consumers in possession of a credit card, they are the
most disgruntled when it comes to the state of their banks. As the
world’s third-highest spenders on their credit cards, behind only the
Americans and the South Koreans, 41% of the Irish wished they had spent
more frugally over the past few years while 5% considered the past few
years as a reason to completely distrust banks. This, according to
research from Mintel, also shows the main credit cards specific to
Ireland include the AIB (Allied Irish Banks), Bank Of Ireland and Ulster
Bank and a few global providers offer a variety of uniquely Irish credit
card, such as MBNA.

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FastTransact Powers Credit Card Donations

O Bee Credit Union and WA-based merchant account service provider
FastTransact have partnered to bring credit card processing of
charity donations to a financial institution’s web site.
Teaming up with FastTransact made it
possible for O Bee to set up a single point of collection for the
Thurston County and Tenino Food Banks and United Way of Thurston County.
What is unique about our website is that the monies collected are
deposited directly into the non-profit accounts, so donations can be tax
deductible. Contributors can use any institution’s Visa or MasterCard
credit cards or Visa debit cards. O Bee Credit Union (The Olympia Brewing Company Employees and Families
Credit Union) is a full-service, non-profit credit
union owned by its members is now open to all Washington residents.
FastTransact offers a unique collection
of merchant account services throughout the US and Canada, including
everything from retail equipment, to POS hardware/software, to
secure and high performance Internet gateways.

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Online Gift Cards Gaining Traction This Year

The survey data revealed that 68% of online shoppers agree that
buying a gift card online that can be sent via e-mail is more convenient
than having plastic cards shipped to the gift card recipient and 80%
of online shoppers indicated that if their favorite store or
restaurant offered a personalized online gift card on their website,
they would be more likely to purchase an online gift card from that
retailer. Half of all
respondents said they have decided against giving gift cards in the past
because they were not personal enough, however, 85% of
online shoppers who are planning to give gift cards this holiday season
expressed interest in purchasing personalized online cards that can be
sent via e-mail and 70% reported that the ability to
personalize a gift card is of importance to them and 88% of online shoppers indicated that they would
be more likely to purchase a gift card that has an incentive attached
(i.e. send a $50 gift card and get a $10 gift card for yourself).

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Bill My Parents Inks Another Contract

Socialwise and Offerpal Media have entered into a strategic
partnership with virtual currency monetization solution provider
Offerpal Media that will feature the “Bill My Parents” alternative payment solution
The two companies will work together to promote their existing payment
solutions, as well as develop new payment programs specifically for the
teen and tween market. Offerpal will feature BillMyParents on its
proprietary monetization platform as an alternate payment solution
alongside Visa, MasterCard, PayPal and others, providing teens and
tweens with an easy way to acquire virtual currency across Offerpal’s
network of 2,000+ publishers. The virtual currency will be spent on
items such as virtual gifts, subscriptions, game-play upgrades, and
other virtual goods. BillMyParents and Offerpal will also collaborate to launch innovative
programs that will expand their reach into the teen and tween online
payment solutions market.

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SAFEPLAY & TRINTECH

Trintech Group integrated financial governance, risk management and
compliance software solutions has signed a partnership agreement with
Sweden-based Safeplay consulting partnership. Specializing in finance
and business process management solutions for the banking, insurance,
energy, telecommunications, shipping, and manufacturing industries,
Safeplay helps companies be more efficient by improving operational
efficiency and to gain competitive advantage. Trintech’s Unity Financial
GRC Software suite is used by many global enterprises, including
Microsoft, Google, McKesson, eBay, OSM, Hewlett-Packard, Marriott,
Lockheed Martin, 7-Eleven, Verizon Wireless, Symantec, Allianz, Monster
and more.

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BofA Issues a Credit Card Clarity Commitment

Bank of America is mailing out a one-page summary of customers’ rates, fees, and payment information tomorrow to 40 million current cardholders. The “Credit Card Clarity Commitment” is part of a number of initiatives by BofA to simplify loan information for consumers. The bank recently launched the “BankAmericard Basic,” which has one rate for all transactions and no over limit fees. Earlier this year, BofA unveiled a “Clarity Commitment” with a simple one-page loan summary for mortgage and home equity customers; introduced new options for checking account customers to limit overdraft fees; and recently debuted an easy-to-navigate Web site, bankofamerica.com/solutions, that provides tools and resources to help consumers manage their finances.

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U.S. Business Owners Say Cash Spigot is Dry

Small business owners are quickly losing economic confidence as cash is not flowing. Overall, there is a glum outlook on the holiday season with a mere 11% expecting to see more business this year over last. The Discover “Small Business Watch” index declined from 88.5 in October to 76.5 in November. About 52% of owners say they have experienced cash flow issues in the past 90 days, up from 44% in October. Forty-one percent of owners say they have not experienced cash flow issues, which is the lowest response in this category since the Watch began. The remaining 6% said they weren’t sure. Discover also found that 24% of small business owners say that they extend credit to customers, and 73% of those that extend credit say that they have customers who have delayed or asked to delay a payment in the last three months. This is largely unchanged from December 2008 when 25% said they were extending credit, and 72% said that they had customers who delayed or asked to delay a payment. Finally, 53% of small business owners think the overall economy is getting worse, up from 44% in October but still significantly lower than the 69% of owners who felt that way in February 2009.

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TIO & GEORGIA POWER

TIO Networks multi-channel expedited bill payment processor and Georgia
Power electric utility have launched the self-service automated bill
payment program in select retail stores in metropolitan Atlanta. The
automated kiosks will enable Georgia Power customers to make bill
payments via TIO’s expedited bill payment processing system and are
expected to be fully operational this winter. Users will be able to
navigate through bill-pay applications in either English or Spanish, and
insert cash directly into self-serve automated kiosks to securely
complete transactions for payments posted immediately to the customers’
account. The customers will have the option to either print or forward
receipts to an email address of their choice and will pay a $2
convenience fee per transaction.

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