moneyStrands Expands to Smaller Banks/CU

CA-based online personal finance service moneyStrands has launched a
manual upload to enable users to import financial data through .QIF,
.QFX, or .CSV data formats.
The new functionality will enable moneyStrands to support consumers who
bank
with smaller community banks, credit unions and other financial services
providers not already supported through its network of nearly 7,000
financial institutions.Ten new global currencies, in addition to the
U.S. dollar, will also be
supported with the new manual capability including the Mexican Peso,
British Pound, European Euro, Chinese Yuan, Indian Rupee, Australian
Dollar, Canadian Dollar, Japanese Yen and Swiss Frank. This enables
users from across the globe to also take advantage of moneyStrands’
comprehensive set of money management features. Manual uploading also
appeals to many consumers who prefer not to store
account access information required to use the automated aggregation
features.

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U.S. Bank Renews PULSE PIN Debit Contract

PULSE has extended its relationship with U.S. Bank in a long-term
agreement to provide customers with PIN debit point-of-sale (POS) and
ATM services. PULSE ATM/debit network serves over 4,500 banks, credit
unions and savings institutions across the country, is owned by Discover
Financial Services and links cardholders with more than 289,000 ATM/POS
terminals at retail locations nationwide. U.S. Bancorp has $264 billion
in assets, operates 2,847 banking offices and 5,183 ATMs in 24 states
and provides a comprehensive banking, brokerage, insurance, investment,
mortgage, trust and payment services products to consumers, businesses
and institutions.

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AKBANK & OTI

Akbank of Turkey is deploying the On Track Innovations “Saturn
6000” reader for its MasterCard “PayPass” contactless program, initially
for 3,500 terminals at selected locations. Holders of the bank’s
“AxessExi26” and “Axess cards” will enjoy the convenience of using
contactless technology for all purchases under 35 Turkish Lira through
the “Saturn 6000,” which is available in multiple colors with a large
LCD display, allows for configurable images, and programmable lines of
characters in multiple languages. The OTI reader can be placed on a
countertop, be wall-mounted or lie flat and supports major financial
contactless programs including ISO 14443 Payment Implementation (EMVCo),
MasterCard PayPass Mag Stripe and M/Chip (EMV), Visa “PayWave MSD”, Visa
“qVSDC (EMV)”, American Express “ExpressPay”, Discover “Zip”, MIFARE,
NFC and other proprietary systems. OTI was established in 1990 to
provide contactless microprocessor-based smart card solutions for
homeland security, payments, petroleum payments and other applications
while Akbank has over 860 branches and 15,000 employees throughout the
Country.

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RDM RDC

RDM software and hardware products for electronic payment processing has
announced ACH Payment Solutions (APS) is offering its Remote Deposit
Capture (RDC) capabilities, reselling the RDM Image and Transaction
Management System (ITMS) and “Simply Deposit” hardware through its own
national distribution channel. The RDM RDC products are designed to save
end users the trouble of physically depositing checks at the bank and
provide faster funds availability. ITMS processing solution targets
environments with many remote or distributed capture locations with
large central processing centers while “Simply Deposit” is designed for
ease of use and minimal end user training requirements. ACH Payment
Solutions (APS) are designed for smaller businesses and regional
merchants with 100 locations or more
while the RDM Corporation is headquartered in Waterloo, Ontario and
specializes in electronic payment processing.

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ARM M&A Deal Activity Plummets in 2009

Mergers and acquisition activity in the debt collection and accounts receivable management industry collapsed in the first half of this year. In the prior three years overall ARM M&A deal volume during the first six months of each year averaged more than $1 billion. For 2009, total deal value nose-dived to slightly more than $100 million. According to MD-based Kaulkin Ginsberg, in the first half of 2009, there were 21 announced transactions with a total deal value of $103 million, compared with 15 deals valued at $1.43 billion at this point last year.
The major discrepancy in deal value is due to three large transactions that closed in the first half of 2008: NCO and Outsourcing Solutions for $325 million; Investor AB purchased 50% of Lindorff Group for $558 million; and Exponent Private Equity acquired Lowell Holdings for $394 million. So far, deal activity for 2009 has been almost completely driven by larger ARM companies acquiring smaller ones, whereas 2008 deal activity in the first half of the year also included first-time strategic and financial buyers making initial platform acquisitions. Of the 21 transactions completed in 2009, only two involved a financial or strategic buyer – the rest were industry buyers, defined as larger ARM companies, former owners, or current/former executives.

ARM M&A DEAL ACTIVITY
(first six months of each year)
2006: $790 million
2007: $910 million
2008: $1430 million
2009: $103 million
Source: Kaulkin Ginsberg

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Managed Charge-Offs May Near 11% by 2010

The momentum in job losses for June could push the unemployment rate to nearly 11% by year-end and drive average credit card charge-offs well above 10%. Losses among credit card-backed securities passed the 10% milestone in May and could realistically near 12% by 2010. According to CardData (www.carddata.com), average charge-offs for the first quarter were 8.7% with an unemployment rate of 9.0%. With a 9.7% unemployment rate for June, second quarter managed charge-offs are expected to hover around 9.5%. If unemployment tops 10% by September then credit card charge-offs will likely cross the unprecedented 10% line too. Among the nation’s top issuers with at least $50 billion in outstandings, the average charge-off rate for 1Q/09 was 8.12%, compared to 6.51% in the fourth quarter and 4.84% for 1Q/08. For credit card backed securities in May, S&P reports a 10.00% charge-off ratio while Moody’s reports a 10.62% rate and Fitch a 10.44% ratio. (CF Library 6/10/09; 7/10/09)

Unemployment Charge-Offs
Mar/08: 5.2% 4.6%
Jun/08: 5.7% 5.3%
Sep/08: 6.0% 5.5%
Dec/08: 7.1% 6.0%
Mar/09: 9.0% 8.7%
Jun/09: 9.7% 9.5%
Sep/09: 10.4% 10.1%
Dec/09: 10.9% 10.6%
Source: CardData (www.carddata.com)

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PAYMENT METHODS

A new survey has found that cash remains king in Germany with a 57.9% share of all purchases, compared to 25.5% for giro cards and 3.6% for credit cards. In terms of the number of transactions, cash
accounts for a share of 82.5%, with giro cards and credit cards
accounting for 11.9% and 1.4% respectively. The research by Bundesbank in Frankfurt am Main also found that, on average, consumers carried cash to the value of 118 euros with them and 6.70 euros of which were coins. Furthermore, 91% of those surveyed own at least one giro card and 27% possess a credit card. Bundesbank says that use for online payments and when traveling abroad, or discount and bonus schemes are less relevant for the users, however. With regard to the criterion of protection against loss, the giro card (previously “EC cash card”) holds the leading position, while credit cards are the most popular means of payment online.

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NO1 CURRENCY

No1 Currency chain of Bureau de Change outlets has opened 47 new
branches across the UK since January of 2009, bringing its number of
locations to 320. The rapid growth is in great part thanks to
word-of-mouth recommendation for consistently offering the best rates on
the high street and 0% commission. This is in conjunction with the
Bureau’s latest findings showing Britons used payment cards for GBP27.8
billion in overseas transactions throughout 2008, GBP19.9 billion of
which was spent on purchases while GBP7.9 billion was withdrawn from
cash machines, for a 10% year-over-year increase. With these
transactions come fees, typically ranging from 2.75% on overseas
purchases and 3% for ATM cash withdrawals, equating to GBP784million
spent on card charges in 2008. Many credit cards accrue higher rates of
interest for spending abroad and it’s applied immediately, while debit
card usually charge a flat fee.

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U.K. Card Issuers to Return to Annual Fees

A research firm predicts that U.K. issuers will soon aggressively market fee-based cards to customers. While credit card companies will continue to offer no-fee cards, the rewards aspect of these cards will be greatly reduced or removed altogether. Auriemma Consulting Group says that rewards cards, including cards with premium services or benefits, will certainly feature a fee in the near future. Credit card issuers that currently offer cards with annual fees will most likely increase those fees. Additionally, card issuers will develop new card offerings, with tiered rewards and benefits. Auriemma found that the percentage of consumers carrying balances on their credit cards has decreased 40% in the past year. Additionally, since the end of 2008, the percentage of credit card accounts written off by lenders has exceeded 10%. These two factors have resulted in card issuers being forced to seek out alternate commercial models and income streams.

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Pre-Delinquency Management Software Tested

New software that predicts potential credit card delinquency has produced a 15% reduction in the default value during a recent U.K. trial. Portrait Software has introduced “Pre-Delinquency Management” to identify ‘at risk’ customers at an early stage, selecting and monitor appropriate treatment strategies. Using its analytics software the study identified a group of 100,000 customers likely to have difficulty meeting their credit card payments in the next three to six months. Identification criteria included increased credit limits, balances reaching the credit limit and changes in spending patterns. In the three-month analysis, Portrait demonstrated a 2% reduction in the number of defaults, a 2.5% reduction in default rates and a 15% reduction in the default value. Among Portrait clients: Lloyds Banking, U.S. Bank. Nationwide Building Society, Bank of Ireland and Bank of Tokyo.

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CARD FEES

A research firm predicts that U.K. issuers will soon aggressively market fee-based cards to customers. While credit card companies will continue to offer no-fee cards, the rewards aspect of these cards will be greatly reduced or removed altogether. Auriemma Consulting Group says that rewards cards, including cards with premium services or benefits, will certainly feature a fee in the near future. Credit card issuers that currently offer cards with annual fees will most likely increase those fees. Additionally, card issuers will develop new card offerings, with tiered rewards and benefits. Auriemma found that the percentage of consumers carrying balances on their credit cards has decreased 40% in the past year. Additionally, since the end of 2008, the percentage of credit card accounts written off by lenders has exceeded 10%. These two factors have resulted in card issuers being forced to seek out alternate commercial models and income streams.

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DEBIT CARDS

Merchant sales paid for by debit card are increasing dramatically across
Australia with 28.9% of merchant sales conducted using the method. This
marks an 18.6% increase since December of 2008 thanks to the means
consumers have to substitute credit cards for debit cards in most
situations and is consistent with the April 2009 findings showing a
moderation in credit card transaction volumes with a strong growth in
Scheme Debit payments. The research, based on interviews with 2,277
Australian merchants during June of 2009 and made available from East &
Partners’ six-monthly Merchant Acquiring and Cards Markets research
program, also shows 60% of merchants are from the retail sector. East &
Partners’ Australian Merchant Acquiring and Cards Markets program is an
ongoing six-monthly research service which delivers accurate market
intelligence on Australia’s merchant acquiring and cards markets.

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