Wells Announces Plans to Adjust Overdraft Fees

Wells Fargo has jumped on the overdraft change bandwagon by altering
some of its practices. The bank will eliminate overdraft fees for
customers when they overdraw their accounts by $5 or less and will
charge no more than four overdraft fees per day. In addition, Wells
Fargo and Wachovia customers will be able to opt out of overdraft
coverage. Wells Fargo noted it also offers ways to link savings, lines
of credit or credit card accounts to a customer’s checking account when
there are not enough funds to cover a transaction. Yesterday, Chase
announced it will eliminate overdrafts for debit cards unless the
customer opts in to overdraft services; modifying the posting order to
recognize debit-card transactions and ATM withdrawals as they occur;
eliminating overdraft fees if a customer’s account is $5 or less
overdrawn and reducing the maximum number of overdraft fees per day to
three from six. (CF Library 9/23/09)

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Less than 10% of Teens Pay-Off Credit Card Debt

A new survey find that 62% of young adults surveyed (ages 14-19) report saving their money to pay for all or part of college or higher education programs, compared to just 40% of adults surveyed (ages 20-59) who saved for higher education during their adolescent years. Also, about 19% of adults surveyed were responsible for paying off their entire credit card balances on their own when they were teens, compared to 7% of young adults surveyed today. The survey released by TD AMERITRADE finds 36% of adults surveyed recalled that they were responsible for all expenses associated with a car or motorcycle when they were teens, compared to 9% of young adults surveyed today.
Nearly 26% of adults surveyed recalled that someone else was responsible for all clothing-related expenses when they were teens, compared to 39% of young adults surveyed today.

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ACT & INSIDE

INSIDE Contactless announced that Didier Serra, GM/EVP of sales for North America, has been reelected by the members of Advanced Card Technologies Canada to serve a second term on the organization’s board of directors. A founding member of INSIDE Contactless, Didier has held several executive positions at INSIDE Contactless, and is currently heading all sales initiatives for North America. With ACT, Serra will work with the other board members to help govern this stakeholder association, which is internationally recognized as a reliable source of information on secure payment, secure identity management and advanced card technologies and applications, and is the authority on the Canadian marketplace.

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CC ABS Performance Metrics Deteriorate in August

Performance metrics for U.S. credit card issuers deteriorated in
August, however it may only be a seasonal inflexion. The latest figures
for credit card-backed securities shows delinquency nudged up six basis
points and charge-offs jumped 97 basis points from July. According to
Moody’s “Credit Card Index” for U.S. ABS, the overall delinquency rate
increased to 5.79% in August from 5.73% in July, and compared to the
March peak of 6.40%. Charge-offs increased to 11.49% in August from
10.52% in July. The charge-off rate was a record-high 10.76% in June.
The Moody’s index also shows payment rates dipped to below 17% in
August. Additionally, the index yield surged ahead to 20.48% in August,
a 66 basis points improvement over the prior month, and its highest
level since December of 2007. Much of the improvement in yield Moody’s
attributes to issuer discounting. The effect could further push up
yields by as much another 100 basis points by early next year. Moody’s
continues to call for a recovery in the credit card sector to begin once
charge-offs peak in mid-2010 at between 12% and 13%. Macroeconomic
indicators will strongly influence the actual figure, in particular the
unemployment rate, which Moody’s expects to peak in the 10%-10.5% range,
also in mid-2010.

U.S. ABS 2009 CREDIT CARD INDEX
DELINQUENCY CHARGE-OFFS
Jan: 5.94% 7.74%
Feb: 6.14% 8.82%
Mar: 6.40% 9.30%
Apr: 6.34% 9.97%
May: 5.97% 10.62%
Jun: 5.81% 10.76%
Jul: 5.73% 10.52%
Aug: 5.79% 11.49%
Source: Moody’s

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Billing Revolution and Authorize.Net Team

Mobile payment provider Billing Revolution has partnered with
Authorize.Net’s to enable its 250,000 merchants to sell goods and services on a mobile phone.
Billing
Revolution manages the entire mobile purchase experience: rendering the
mobile purchase pages, collecting credit card data, integrating with the
Authorize.Net Payment Gateway, and providing a complete CRM solution for
mobile merchants. Now all of Authorize.Net merchants can safely and confidently use
Billing Revolution to begin processing their mobile commerce
transactions as the Seattle-based mobile commerce provider met the rigid
requirements of Authorize.Net’s performance and security standards.
CyberSource’s Authorize.Net provides services to Internet merchants who encompass a wide variety of business
industries: information, communication, government, sports, religion,
education, gourmet foods and many others. In 2006 CyberSource processed
approximately 1.1 billion transactions, representing $65 billion of
e-commerce.

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GEMALTO PLANT

Gemalto digital security is set to open its personalization center in
Indonesia before the end of the year, offering end-to-end, local support
to financial institutions for EMV migration. Gemalto will additionally
provide the banks inventory management and express card personalization
with same day shipment. Its global infrastructure will provide local
banks with a one-stop shop for their EMV migration program. The Gemalto
facility will develop applications for mobile contactless payment and
online banking and faster, more cost-effective ways of delivering its
world-renowned smart payment solutions and services. With over 20 years’
Indonesian presence, Gemalto has been integral to the country’s
financial industry.

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Intl Payments Corp Gears for Acquisitions

CA-based merchant service provider International Payments Corporation
has recieved over $150 million in private funding and is set to begin the acquisition of ISOs
and the merchant card processing portfolios of financial
institutions.IPC is directed by David McMackin, a 15-year merchant services
professional and President and CEO of AmericaOne Merchant Services,
Incorporated and is a national merchant services
company that delivers secure, scalable and reliable payment processing
solutions to small- and middle-market businesses, large corporations,
governments, financial institutions, and independent sales
organizations. IPC processes electronic payments between buyers and
sellers, utilizing virtually any payment device or form of electronic
payment, including credit and debit cards, checks, and gift cards.

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Fiserv Inks 5 CUs for Account Processing

Fiserv has signed five new credit union clients
to contracts for its “Portico”, “OnCU” and “CubicsPlus” account processing solutions. MO-based Conservation Employees Credit Union with $67 million in assets in
Jefferson City, Mo., selected the “Portico” account processing solution to
serve its 6,520 members and will implement the full
suite of “Portico” modules, including Contact Manager; Cross Sell and
Tracking. In addition, the credit union will be adding “Loancierge” loan
origination, “eFichency” document imaging, “Wisdom: ALM with Investments”;
“Wisdom: 5300 Call Report Assistant”; credit card processing; and “Virtual
Branch for Internet” banking and electronic statements. IN-based Firefighters Credit Union with $51 million in assets also chose the “Portico”
account processing system as well as “Virtual Branch” for Internet Banking
and bill payment; online ATM and debit card processing; “Cross Sell and
Tracking for Portico”; and “Statement Processing from Fiserv”.
FL-based Memorial Employees Federal Credit Union with $38 million in assets, also
selected “Portico”, “eFichency” document imaging; “Virtual
Branch for Internet” banking and electronic statements; and “Wisdom”.
CA-based Organized Labor Credit Union, with $19 million in assets chose the “CubicsPlus”
account processing solution. In addition to giving the credit union
capacity to process debit cards online, in real-time, the credit union’s
investment in Fiserv included “Virtual Branch Internet” banking and the
“Wisdom: ALM and 5300 Call Report Assistant” modules. CA-based Electric Federal Credit Union, with $11 million in assets, chose the “OnCU”
account processing system.

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USAT Signs Canteen for Cashless Vending

Cashless transaction provider USA Technologies has signed a supplier
agreement with NC-based Compass Group’s Canteen Vending Services.
USA Technologies is working closely to support Compass Group and
Canteen?s franchisees to ensure a seamless and successful transition to
card acceptance. The QuickStart Program is USAT?s custom leasing program
that eliminates upfront capital
investment in the ePort cashless solution, and makes the transition to
cashless vending quicker and easier by rolling hardware and services
into one low monthly fee. Its ePort EDGE? and ePort G8 devices offer
best-in-class hardware
supported by the ePort Connect full suite of services that includes PCI
level 1 compliant payment processing, merchant services, over-the-air
updates, online reporting through USALive, and wireless DEX data
transmission. USA Technologies is a global market leader in network and
financial
services for unattended point-of-sale terminals with more than 15 years
proven experience. The company has an installed base of 50,000 ePort
terminals processing in excess of two million cashless transactions per
month through magnetic-stripe and contactless cards. Compass Group North
America is a
foodservice and support services company with more than $9 billion in
revenues.

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Oberthur to Supply Opus Cards for Montreal Transit

Societe de Transport de Montreal has chosen Oberthur Technologies smart card solutions to supply “Opus” contactless cards for use throughout the Montreal public transport network. This will allow Oberthur Technologies to deliver e-ticketing smart cards over the next four years for use on buses, the subway and commuter trains throughout the area and Quebec City. With this, Oberthur will make available automated fare vending machines or points of sale at which the user can be recharge the smart cards. Fully compliant with the Calypso international e-ticketing standard for smart cards, providing a contact and contactless interface, the cards are made of highly durable “PET-F” plastic.

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Big Issuers Target Small Business Owners Again

Tracking data show credit card direct marketing to small business owners is picking up especially for top tier issuers like Chase. While the number of mailings received by small businesses has been flat this year, it contrasts sharply to the 82% decline observed from January 2008 to January 2009. During the second quarter, Chase accounted for 41% of offers received by Mintel Comperemedia’s small business panel, up from 26% in the second quarter of last year. American Express, on the other hand, reduced direct marketing, accounting for less than 7% of mailings, down from 23% in the year ago quarter. Other card issuers have also stepped up direct marketing for their small business cards recently. Barclays and Citibank, both of which were prominent small business card promoters in the past, each sent significantly more offers to Mintel Comperemedia panelists in July and August than in previous months.

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Sub-Primer DataX is PCI DSS Compliant

Subprime credit reporting agency DataX has
has achieved compliance with Payment Card
Industry Data Security Standards.
A PCI-approved quality security assessor evaluated DataX operations, and
compliance was validated in the third quarter of 2009. Selling Source’s
DataX provides real-time credit
reporting, consumer data verification and analytic services to the
business and financial services industry and operates a comprehensive
consumer credit reporting agency.

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