CREDIT AGRICOLE & EQUENS

Credit Agricole and Equens have signed exclusive agreements for possible
alignment of their respective payment platforms. Intending to become a
major payment services provider in Europe, the partnership has a
combined volume of over 15 billion transactions and would be based on a
common vision of strategic developments in the European card and payment
processing sector. Additionally, the partnership would be a major
regional payment service provider leader in combining volumes and
developing synergies to lower unit processing costs, fostering growth
dynamics from a unique position as a European leader offering technical
and commercial expertise and broad regional coverage, and sharing
expertise that benefits the entire product chain.

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WU Survey Reveals Black Friday is a Non-Event

A survey by Western Union reveals that 65% of Americans will skip the “Black Friday” shopping ritual. Those polled cited crowded stores as a major reason. The survey also found that 51% of Americans said cash is the gift they’d most like to receive this year, with respondents preferring $100 in cash instead of a present or a retail store gift card valued at the same amount. The preference for cash gifts also reflects the intention of gift givers, with nearly 69% planning to give cash, a check, or a gift card this holiday season.
To facilitate hassle-free gift giving this holiday season, Western Union is offering gift givers “$50 for $5,” its new U.S. holiday promotion. Through December 26, 2009 consumers can send up to $50 to loved ones in the U.S. for a $5 fee. In addition to “$50 for $5,” Western Union also is offering consumers the ability to send cash on a Western Union branded prepaid gift card.

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FRB Goes Out on a Limb with Instant Credit Rules

The National Retail Federation has asked the Federal Reserve to reconsider proposed new rules that threaten retailers’ ability to offer customers instant credit. NRF believes that the proposed regulations go beyond what was required under the legislation, and asked the Fed to accept the use of credit scores as an acceptable means of considering a customer’s ability to pay. Retailers currently use computerized systems that rely on a customer’s credit score and other credit-related information to assess individuals’ payment history on existing and/or previous credit and provide a yes-or-no decision within a manner of seconds. But the Credit CARD Act would bar credit from being granted unless the issuer “considers the ability of the customer” to pay under the terms of the account. The Fed has interpreted that as meaning retailers must review the credit applicant’s income or assets along with their current obligations. Income and asset information is not readily available in a central database, so the Fed proposal would turn “instant” credit into a process that could take days to gather the required information.

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GE Money Ramps Up Renewal Contracts

GE Money, Sales Finance has added a number of new programs and announced renewed or expanded relationships
with many long-term partners, representing more than 30,000 business
locations nationwide. Over the past month, Sales Finance announced new agreements including
Edwin Watts Golf, The Tile Shop, Oreck, 1-800-Mattress and Fender Musical Instruments Corporation.
Extensions have also been completed with a number of partners including:
Husqvarna, Bassett Furniture, KTM Power Sports, Steinhafel’s Furniture, Bernina and Pep Boys. OH-based
GE Money’s Sales Finance unit is a part of General Electric Company’s GE Capital division, which has
extended more than $146 billion of credit to some 50 million consumers
in the U.S. since January 2008.

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Despite Skewing Charge-Offs are Set to Explode

Credit card delinquency soared in October crossing the 7% level for the first time. Based on all the major rating firms, charge-offs will likely hit 13% by mid-summer 2010. According to CardData (www.carddata.com), charge-offs are modeled to exceed 11.5% by year end.
Moody’s latest “Credit Card Index” expects charge-offs to peak at
between 12% and 13% in mid-2010. Moody’s notes that in October the charge-off rate benefited from a large but technically driven improvement in Citibank’s charge-off rate, after a change in its bank policy increased the amount of time between an account holder going bankrupt and the time when the account is deemed to be a charge-off.
The charge-off rate measures those credit card account balances written
off as uncollectible as an annualized percentage of total outstanding
principal balance. But, Moody’s delinquency rate index increased for the third consecutive month in October, with increases driven by the rates for 60-day and 90-day delinquencies. Early-stage delinquencies were essentially unchanged in aggregate from September. The early-stage delinquency rate for the past three months is running 14% higher than levels from the same period last year. Moody’s continues to expect the early-stage delinquency rates to creep higher over the next several months, leading to higher a charge-off rate in the first half of
2010.

CHARGE-OFFS
Jan 09: 6.95%
Feb 09: 7.11%
Mar 09: 8.67%
Apr 09: 8.78%
May 09: 9.51%
Jun 09: 9.71%
Jul 09; 9.59%
Aug 09: 10.49%
Sep 09: 9.39%
Oct 09: 10.27%
Nov 09: 10.83% (projected)
Dec 09: 11.55% (projected)
Source: CardData (www.carddata.com)

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Capital One and Network for Good Team

Capital One and partner Network for Good
is making holiday gift-giving easy with its “No Hassle Giving Site” which allows cardholders to research, select,
and donate to a range of causes. “The No Hassle Giving
Site” offers a comprehensive database of more than 1.8 million verified
U.S. charitable organizations as provided by GuideStar, the leading
source of information on U.S. nonprofit organizations. Cardholders can
search for a cause by topic, charity or zip code and make a donation in
their own name or in the name of someone else. Cardholders can use
accumulated rewards points for the donations, or pay outright, and even
earn rewards points on the transaction. Cardholders can set up online
donations the way they want—one-time only or a recurring donation. Capital One covers the online
transaction costs, ensuring that non-profits receive 100 percent of the
donation. Since its launch one year ago, the No Hassle Giving Site has
generated more than $1 million in charitable gifts from Capital One
cardholders.

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BMO & DINERS

BMO Financial Group is acquiring the “Diners Club” North American franchise from Citigroup. The portfolio will add net receivables of nearly US$1 billion and annual transaction volume of US$7.8 billion, and will double BMO’s overall “Corporate Card” business. The deal gives BMO exclusive rights to issue “Diners Club” cards to corporate and professional clients in the U.S. and Canada. More than 6,000 North American businesses and nearly 250,000 cardholders, use “Diners Club” to manage their “Travel and Entertainment” expenses. In addition, more than 100,000 individuals in Canada and the U.S. carry the “Diners Club Professional Card.” Under the agreement, Citigroup will continue to provide support until the “Diners Club” business is fully integrated within BMO. As part of the acquisition, BMO will retain key resources responsible for product delivery, sales and customer service. Included in the acquisition is the “Club Rewards” program. the deal is expected to close by the end of the first quarter.

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Consumer Confidence Continues its Yo-Yo Ride in Nov

Consumer confidence, which took a downward move in October after steadily growing over the summer, slowly rebounded in November. The uptick is the result of a decrease in the percent of consumers expecting business and labor market conditions to worsen, as opposed to an increase in the percent of consumers expecting conditions to improve. Income expectations remain very pessimistic and consumers are entering the holiday season in a very frugal mood. The Conference Board “Consumer Confidence Index” now stands at 49.5, up from 48.7 in October. The “Present Situation Index” was virtually unchanged at 21.0 versus 21.1 last month. The “Expectations Index” increased to 68.5 from 67.0 in October. Those claiming business conditions are “bad” decreased to 45.7% from 46.7%, while those claiming conditions are “good” increased to 8.1% from 7.8%. The percentage of consumers expecting an improvement in business conditions over the next six months decreased slightly to 20.0% from 20.8%, but those expecting conditions to worsen decreased to 15.1% from 18.2%.

Consumer Confidence Index
Jan 09: 37.4
Feb 09: 25.3
Mar 09: 26.9
Apr 09: 40.8
May 09: 54.9
Jun 09: 49.3
Jul 09: 47.4
Aug 09: 54.5
Sep 09: 53.1
Oct 09: 48.7
Nov 09: 49.5
Source: The Conference Board

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AmEx Launches a Holiday Membership Rewards Promo

American Express is launching a major “Membership Rewards” promotion to
run from “Black Friday” (November 27th) through “Cyber Monday” (November
30th) for eligible “Charge Card” users to receive triple “Membership
Rewards” points. In addition, American Express is offering a
limited-time promotion that allows “Platinum Card” holders to earn six
times the “Membership Rewards” points and American Express “Gold” and
“Green” cardholders the opportunity to earn five times the points when
they shop at a selection of 25 popular online retailers. Through the
“Bonus Points Mall” site, “Platinum” cardholders can also
continue to earn four times the “Membership Rewards” points, while
AmEx “Gold” and “Green” cardholders can continue to earn three times the
points on all purchases made at more than 250 participating online
stores. “Charge Card” holders continue to have the opportunity to enroll
to earn double points on gas and grocery purchases nationwide, up to
$1,000 each month, through March 15th.

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ADEPTRA RESEARCH

While 10% of British consumers admitted never checking their bank
statements, 67% stated they only check their statements monthly, while
11% of American consumers check their balance daily and 53% check every
week. With Black Friday right around the corner, the volume of retail
transactions jump to millions of credit cards processed every hour with
a corresponding peak of fraudulent activities. The study, according to
an Adeptra survey of 400 American and British consumers, concludes
Americans are more concerned than the British about being victims of
financial fraud. Additional findings show 54% of Americans and 72% of
Brits would like correspondence through their mobile phone in the event
of fraud, 20% of Americans and 1% of British preferring email, and 6% of
Americans and 12% of British preferring SMS communication.

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