SEPT ABS

The UK aggregate credit card charge off index increased to 11.8% in
September 2009, almost doubling from the levels observed in Q1 2008,
thanks to the MBNA I and MBNA II master trusts. Following months of
continuous deterioration, the sector is beginning to show some
preliminary signs of stabilisation, with delinquency rates flat or
decreasing across most trusts for the past three to four months. The
pace of increase of charge offs appears to be reducing across most
trusts, according to Moody’s, which also cautions Christmas spending
could lead to a post-Christmas rise in arrears for a mid-2010 increase
in charge-offs. Meanwhile 3Q/09 figures released by the Insolvency
Service revealed personal insolvencies had reached their highest level
since records began in 1960, up 28% on the same period last year.
Moody’s continues to have a negative outlook for the UK credit card
sector and is pegged for possible downgrade.

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Nigel Morris Joins Prosper Board

Peer to peer lending marketplace Prosper has named Capital One
co-founder Nigel Morris to its Board of Directors.
Morris co-founded Capital One in 1994, and during his ten-year tenure,
Capital One’s customer base grew to 45 million,
managed loans increased to more than $70 billion and the company emerged
as one of the top seven issuers of MasterCard and Visa credit cards in
the world. He is currently the managing partner of QED Investors, a
direct investment fund focused on high-growth companies that leverage
the power of data strategies. In addition, he works in an advisory
capacity with General Atlantic Partners, Columbia Capital, and Oliver
Wyman. He also serves on the board of The Economist Group, London
Business School, and Venture Philanthropy Partners. People and
institutional
investors register on Prosper as lenders, then set their minimum
interest rates, and bid in increments of $25 to $25,000 on loan listings
they select. In addition to criteria commonly used by institutional
lenders, such as credit scores and histories, Prosper lenders can
consider borrowers’ personal stories, endorsements from friends, and
community affiliations. People and institutions list and bid on loans
using Prosper’s online
auction platform. Borrowers can list loan requests between $1,000 and
$25,000 on Prosper and set the maximum rate they are willing to pay an
investor for the loan, and tell their story. Once the auction ends,
Prosper takes the bids with the lowest rates and
combines them to facilitate the funding of one simple loan to the
borrower, and then issues what are called “Notes” to all the winning
bidders.

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First Data to Deploy Interceptas

First Data and online fraud prevention provider Accertify have entered into an agreement to integrate Accertify’s “Interceptas”
fraud prevention platform with First Data’s eCommerce processing gateways and platforms.
The agreement with Accertify, in conjunction with the tokenization and
encryption solution developed by First Data and RSA, called the “First Data Secure
Transaction Management” service, redefines how merchants manage and
protect their customer payment data. The integration of Accertify’s platform will provide First
Data with a comprehensive, end-to-end fraud deterrence solution. This solution will
equip First Data’s customers with tools to help mitigate risk and reduce losses
associated with fraud. The solution also eliminates the need for merchants to deploy
separate payment and risk platforms. First Data will offer this combined solution
to its 300,000 merchants around the world that sell goods or services over the
Internet and in a card-not-present environment.

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UATP Teams with NxSystems

Corporate travel provider Universal Air Travel Plan has partnered with global payment solution NxSystems.
NxSystems product line includes domestic and international
prepaid cards that are processed through a proprietary multi-currency payment platform
gateway that allows worldwide access to e-banking, e-payments and e-commerce.
NxSystems brings to the UATP partnership the unique ability for
split-tender payments, domestically and internationally.
Split tender will enable consumers to use the voucher prepaid debit card in a multitude of currencies with
combined payment options, for use around the globe. NxSystems’ proprietary
“NxPay Payment Platform Gateway” software provides consumers with a global payment
solution that links prepaid debit cards to its multi-currency payment platform,
creating an innovative and comprehensive web-enabled solution. Real-time transactional
information can be managed globally.

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SYBASE & MOPAY

Sybase 365, a subsidiary of Sybase mobile messaging and commerce, is
working with MoPay independent mobile banking services to provide mobile
access commerce in South African communities. To improve access to
financial services for the under-serviced and un-banked communities of
South Africa, the partnership is targeting primarily the lower to middle
social groupings dependent on services provided in municipalities.
Sybase 365 is managing all of the messaging interconnection for the
service using a dedicated SMS short-code that functions across all South
African operator networks and providing the mobile payments platform to
process all financial transactions. With MoPay, the companies aim to
enhance efficiency of payment collection for government bodies,
utilities providers and education organizations.

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Wells Cash Back Card Adds Options

Wells Fargo & Company has expanded its “Cash Back Card” program to give eligible customers the ability to pay
down their home equity principal, automatically apply cash rewards to their eligible Wells Fargo checking
and savings accounts, pay down their personal lines and loans or request cash rewards.
Customers can also pay down their Wells Fargo Home Mortgage with the Wells Fargo Home Rebate Card.
Since 2007, when the company introduced its “Wells Fargo Home Rebate Card”, a special
credit card only for its mortgage customers, nearly $10.5 million has
been applied to the principal on Wells Fargo Home Mortgage loans.
Virtually every purchase (minus returns/credits) customers make with
their “Wells Fargo Cash Back Card” or “Wells Fargo Home Rebate Card”
counts toward a 1% rebate. The rebate is applied automatically to
the selected account in $25 increments, and there is no cap on the
amount of rebate customers can earn.

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GE Money to Issue BERNINA Card

GE Money and sewing machine manufacturer BERNINA have signed a multi-year extension of their consumer financing
agreement. The no annual fee BERNINA credit
card offers customers special financing options and additional savings
opportunities throughout the year. The BERNINA credit card can be used at over 500 authorized dealers to
purchase any of BERNINA’s complete line of state-of-the-art sewing and
embroidery machines, sergers and embroidery software. The card is managed by GE Money’s
Sales Finance unit. BERNINA dealers use GE Money’s Web-based finance management portal,
Business Center. Business Center provides business clients with an easy,
secure way to manage their credit programs and better serve their
customers. Thousands of small businesses use GE Money’s Business Center
to securely access all the sales, operational, marketing and training
tools they need at the click of a button.

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Spending & CARD Act are Keys to Profitability

Among credit card-backed securities, yield and the monthly payment rate declined in September. Charge-offs declined for the second time in three months, while delinquencies resumed their upward trend.
FitchRatings says that near-term profitability for U.S. credit card issuers will remain challenged by credit and spend volume, with longer-term earnings prospects dependent on each issuer’s ability to adapt to new legislation. Purchase volumes were relatively flat in the third quarter from the prior quarter but were down 13.7% annually on average at the top six card issuers. During September Fitch’s “Credit Card Charge-off Index” declined 77 basis points to 10.75%. Delinquency (60+ days) edged up to 4.2%. Yield declined 27 basis points to 10.39% and the monthly payment rate declined from 18.19% in August to 17.98% in September. Fitch notes that under the “CARD Act”, the inability to re-price existing balances will necessitate higher rates for all cardholders, credit availability will decline, with tighter underwriting criteria and reduced credit lines and competition in the prime market is likely to intensify.

ABS METRICS
YIELD MPR
Sep 08: 17.13% 18.57%
Oct 08: 17.05% 18.42%
Nov 08: 17.01% 15.96%
Dec 08: 17.21% 17.27%
Jan 09: 16.00% 17.15%
Feb 09: 16.83% 15.78%
Mar 09: 17.66% 16.48%
Apr 09: 18.01% 16.98%
May 09: 17.94% 17.16%
Jun 09: 17.95% 18.85%
Jul 09: 19.35% 18.56%
Aug 09: 19.66% 18.19%
Sep 09: 19.39% 17.98%
Source: FitchRatings

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FlexPerks Visa Card Expands Program

U.S. Bank expanding its “FlexPerks Visa card” rewards program to its
portfolio of credit and check card products. Consumers and small businesses can now enroll in “FlexPerks” to earn rewards and
cash back and combine rewards earned on their credit and
check cards. FlexPerks credit and check cards enable customers
to earn a number of cash back options. They can also choose to earn free
award travel, starting at only 20,000 FlexPoints (up to a $400 ticket
value) on more than 150 airlines, with no blackout dates, capacity
controls or e-ticket redemption fees. In addition to the cash back and
travel rewards, other reward options include merchandise, gift cards or
statement credits.

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nFinanSe Sets a New Standard in PPC Packaging

In the spirit of more transparency Tampa-based nFinanSe has developed
new packaging for its reloadable prepaid Visa debit card that details
pricing upfront. The new card is also competitively priced at $3 with a
$2.95 monthly maintenance fee for an unlimited number of purchase
transactions. Additional funds can be loaded for $2.95. The Company’s
“Visa Reloadable Prepaid Debit Card” will charge a customer $1.50 to
withdraw funds at an ATM but will offer free direct deposit of payroll
and free receipt of bank transfers. The card and packaging were designed
by Fifty Eight Advertising, an Atlanta-based advertising firm. The new
reloadable prepaid Visa debit card will launch next month in Winn-Dixie
Supermarkets. The card is issued by Palm Desert National Bank.

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Survey Finds Retailer Gift Cards with Fees

A new study shows that fees vary widely on major gift cards. Bankrate says consumers spent $24.9 billion on gift cards last year.
The survey found that three issuers charged a $2.50 monthly
maintenance fee after 12 months of inactivity on their gift cards.
All store gift cards don’t charge a fee for purchasing their card in-store (Starbucks charges a $1.50 handling fee for cards purchased online), however all credit issuer gift cards charge a $3.95 fee upon purchase. While most retailers do allow online purchasing, major
retailers such as CVS, T.J. Maxx, and Marshall’s do not allow their gift cards to be used online. A recent survey by Accenture found 59% of Americans want a gift card, compared to 56% for apparel and 44% for toys. Three-quarters of consumers will spend the same for a gift card as they would a gift for someone. Seven out of ten gift card recipients plan to spend their gift card within three months or less. Four out of five respondents say will be buying gift cards this holiday season.

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Capital Payments Acquires Two Firms

NY-based payment solution provider Capital Payments has acquired both
Chicago-based e-payment service Applied Merchant Systems and PayQuake.
AMS is an electronic payments services company specializing in credit
card and check processing, and other payment related services for
small and medium-sized businesses, corporate merchants, ecommerce
merchants, and trade associations. The acquisition of AMS supports
Capital Payments’ core strategy to grow
through both strategic acquisition and strong organic growth. AMS
services over 12,000 merchants throughout the United States and will
extend Capital Payments’ platform as the leading national provider of
payment solutions to the Trusted Advisor community and their small
business clients who rely on their advisory services.

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