Credit Card ABS Performance Improves in July

As expected performance metrics for U.S. credit card issuers improved in July, however it may only be a seasonal inflexion. The latest figures for credit card-backed securities shows delinquency nudged down eight basis points and charge-offs dropped 24 basis points from June. According to Moody’s “Credit Card Index” for U.S. ABS, the overall delinquency rate declined to 5.73% in July from 5.81% in June and compared to the March peak of 6.40%. It is at the lowest level of 2009.
Charge-offs dropped to 10.52% in July, marking the first month over month improvement in the charge-off rate index since September. The charge-off rate was a record-high 10.76% in June. The Moody’s index also shows payment rates rising sharply for the second consecutive month, reaching 17.43%, its highest point since October 2008. Additionally, the index yield surged ahead to 19.82% in July, a one hundred thirty
basis point improvement over the prior month, and its highest level since December of 2007.

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%
Source: Moody’s

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AmEx Business Travel Launches eXpert insights

American Express Business Travel has launched “eXpert insights”
to help companies cut the costs of business trips. eXpert
insights will assist by identifying creative strategies within T&E
programs and will offer best practices for implementing new strategies.
“eXpert insights” offers access
to insights and advice backed by the industry’s largest database of
travel and expense data, representing more than $100 billion in T&E
spending, the collective knowledge of hundreds of consultants, and
decades of travel experience. The resource is offered through an annual
subscription available to companies of all sizes globally. The offering
also includes access to travel management consulting provided in hourly
increments for ad hoc needs, known as “eXpert on demand.”
Also announced today were savings opportunities identified in the
inaugural Best Practice Roadmap report “Creative Cost Savings in Air,” a
key deliverable of the eXpert insights subscription offerings. In addition to the monthly “Best Practices Roadmap” reports, subscribers
to eXpert insights will also receive eXpert industry insights, a monthly newsletter featuring supply
base analysis and managed travel program impact advice on the air,
hotel, car and meetings industries; The Business Travel Monitor and The annual Business Travel Forecast.

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ALI Preemptive Risk Management Gets Traction

Event-based analytic decision solution provider ALI has seven on-time
deployments of its preemptive risk management and collection solutions
by top lenders. A Top 5 US consumer bank and a residential mortgage servicer purchased
ALI’s “Intelligent Contact Suite” solutions for
automating and centralizing collections campaign management and
determining the best time to contact customers. A Top 5 US bank and a large international automotive finance company
licensed ALI’s “ActionOptimizer for Treatment Management”for determining the optimal actions or treatments for
each at-risk or delinquent customer. These organizations will use
ActionSelect to improve their collection rates and increase revenue.
ALI was chosen by three additional leading financial services companies
to develop analytic solutions that enable each company to identify risk
earlier, understand at-risk customers, and execute appropriate
risk-mitigating strategies. The three companies include a US-based
credit card issuer, an auto finance company, and one of the UK’s largest
retail banks.

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MasterCard to Offer CyberShift’s EMA Solution

MasterCard and CyberShift management software have partnered to provide
the latter’s “Expense Management Automation.” Offering MasterCard
issuers a travel and expense management solution and appealing to
corporate card customers, the partnership provides a flexible expense
management solution, open integration to travel booking systems of
choice, spend analytics, BlackBerry smartphone support, digital receipts
filing, hotel folio data and much more on the Software-as-a-Service
model. Automated data entry and the elimination of duplicate entry
achieves back-office time savings averaging 61% and cost savings
averaging 68%, according to a recent MasterCard study. CyberShift
“Expense” end-to-end solution allows for management of all business
travel and expense reporting.

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Discover Debuts the New Get Back Ad Campaign

Discover today launched a major new ad campaign to promote the rewards benefits of its credit card programs. The new “Get Back” TV spots will air on “Good Morning America,” the “Today” show, “Medium” and “Lost.” Discover’s campaign includes one 30-second and three 15-second “Get Back” TV spots that will air interchangeably over the next four weeks. Seven print executions will run in Newsweek, Better Homes and Gardens and Family Circle. Discover says the new ads were inspired by actual cardholder testimonials. A new brand element will be introduced in the opening and closing of the ads – a visual of a Discover card. The card rotates forward revealing the orange core, which then opens widely to showcase the first vignette. The closing brand cue provides another shot of the card as it rotates around and wipes the screen clear to reveal a distinctively recognizable tagline “It Pays to Discover.” The new advertising was developed in collaboration with The Martin Agency.

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Cap One and OneCause Empower PTA Credit Cards

Capital One and OneCause have teamed to enhance PTA fundraising. Under the partnership when local PTAs register for Capital One’s “Card Lab Connect” credit card affinity program for nonprofits, they can design a series of up to three credit cards for their organization. All rewards earned on these cards, including one percent of net purchases and an additional contribution of $25 for the first purchase made on every card, go directly to the national, state and local PTAs. PTA members’ daily purchases can also augment their contributions when card users shop through the OneCause.com site. The site features more than 750 top merchants and service providers, who contribute between 0.5% and 40% of online purchases to the cause of their choice. Users also receive coupons and special deals when they shop online through OneCause. To date, OneCause has helped more than 30,000 causes and schools nationwide receive more than $200 million in contributions.

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Former Discover Card Head Joins BofA Board

Bank of America has tapped Robert Scully, previously with Morgan Stanley, to serve as on the Board of Directors.
Scully, 59, served as a member of the office of the chairman of Morgan
Stanley focusing on the firm’s key clients.
While co-president at Morgan Stanley, Scully was responsible for asset
management, the Discover card business and merchant banking activities.
Prior to that, he served as chairman of global capital markets and was
vice chairman of investment banking where he was responsible for talent
development, senior client relationships and strategic initiatives.
Before joining Morgan Stanley in 1996, Scully served as a managing
director at Lehman Brothers and at Salomon Brothers.
He received a bachelor’s degree from Princeton University in 1972 and an
MBA from Harvard Business School in 1977.

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UIC & PCI

The UIC “PP795” has been formally PCI approved on August 19th. As the first signature capture device to achieve approval under the newly strengthened ‘PCI 2.1’ requirements, the “PP795” implements MSR security to protect card data in the terminal. Features of the capture device include affordability; programmability; high quality signature capture; OPOS/JavaPOS compliance; secure remote key management; PCI 2.1 approved and EMV certification; six languages versatility; ergonomics; Micro SD card options; and contactless payment options. UIC (Uniform Industrial Corporation) offers Electronic Commerce/Data Collection in various industries and will be shipping in Q3 2009.

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BLUE BAMBOO & REDFIN

The Secured Financial Network subsidiary, RedFin Network, has renewed and expanded agreements with Blue Bamboo. The “Strategic Distribution Partnership” will deliver Blue Bamboo’s payment solutions and mobile POS devices to the North American market, offering a consistent, low price option to ISO’s, Reseller’s, and unique application developers. The Blue Bamboo “H50” all-in-one wireless terminal and its “P25-M” blue-tooth printer/card reader provide the user flexibility and competitive payment hardware configurations. Blue Bamboo designs and markets feature-rich products for the POS terminal and peripherals industry while The RedFin Network payment gateway specializes in providing (PCI) Certified Payment Technology for business and resellers in need of card and ACH processing services.

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HACKER ARRESTS

The U.S. DOJ has been able to put a face on the massive breach of Heartland Payment Systems committed early this year. It is the largest alleged credit and debit card data breach ever charged in the U.S. Following an investigation by U.S. Secret Service, a Miami man, along with two Russian co-conspirators were indicted for conspiring to hack into computer networks supporting major American retail and financial organizations, and stealing data relating to more than 130 million credit and debit cards. Among the corporate victims named in the indictment are Heartland Payment Systems, 7-Eleven, and the Hannaford Brothers supermarket chain. The DOJ says alleges that beginning in October 2006, Albert Gonzales and his unnamed co-conspirators researched the credit and debit card systems used by their victims; devised a “SQL Injection Attack” to penetrate their networks and steal credit and debit card data; and then sent that data to computer servers they operated in California, Illinois, Latvia, the Netherlands and Ukraine. In May 2008, the U.S. Attorney’s Office charged Gonzales for his alleged role in the hacking of a computer network run by a national restaurant chain. In August of 2008, the Justice Department announced an additional series of indictments against Gonzales and others for a number of retail hacks affecting eight major retailers and involving the theft of data related to 40 million credit cards.

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