Credit Cardholder Switching Grinds to a Halt

As issuers lower credit lines, tighten underwriting and focus on existing accounts the number of consumers switching to other cards has nose-dived. According to CardData, voluntary attrition for the month of May slipped to an all-time low of 4.98%, compared to 6.80% one-year ago and 9.35% five years ago. Direct mail credit card offers declined 67% year-on-year during the first quarter. The Q1 sharp drop follows a 55% decrease in the fourth quarter and a 20% decline in the third quarter. For the full year of 2008 there were 3.8 billion solicitations mailed, compared to 5.2 billion in 2007. According to Synovate’s “Mail Monitor,” U.S. households received 372.4 million offers during the first quarter, compared to 1131.6 million offers received during 1Q/08. According to CardWatch the average number of paid credit card offers appearing on the top card marketing sites in May was 38, compared to more than 70 one-year ago and as many as 188 in 2007. In addition to suspending paid online marketing for credit cards, some issuers have insisted that their non-bounty paying cards be removed from consumer-related credit card sites. CardTrak.com reports that U.S. Bank, Barclays, Chase, and Capital One have asked that all non-paying cards be removed too. Bank of America has stopped advertising online totally. Chase and Capital One have pulled advertising back and will not approve any new websites. (CF Library 5/26/09; 6/1/09; 6/3/09)

MAY ATTRITION
(Excludes Discover and AmEx)
2005: 9.35%
2006: 8.99%
2007: 9.10%
2008: 6.80%
2009: 4.98%
Source: CardData (www.carddata.com)

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Springbok Introduces the enPay Payroll Card

CO-based prepaid card provider Springbok has introduced the “enPay”
prepaid payroll card. “enPay” payroll cards enable companies to lower
costs and optimize payment processes. With the cost to cut and mail
checks approaching $2 each, employers can
save nearly $50 per employee annually by using Springbok enPay payroll
cards. Employers can customize their enPay prepaid payroll card with
their company name and
logo, distribute the enPay cards to employees and then upload funds
directly to the payroll card to pay salaries, reimburse out-of-pocket
expenses, pay bonuses and commissions, or fulfill termination payments.
For employees, enPay prepaid payroll cards eliminate the need to stand
in line at a bank or check cashing service and help them avoid the
associated costs. Springbok enPay gives employees immediate access to
their funds via more than 37,000 surcharge-free ATMs across the country
and more than one million ATMs worldwide. Employees can also use their
prepaid payroll cards to make purchases anywhere Visa debit cards are
accepted. Additionally, Springbok enPay payroll cards provide greater
security because cardholder funds are FDIC insured and Visa’s Zero
Liability Policy1 protects cardholders against unauthorized purchases.
Cardholders also have 24 x 7 access to transaction history and customer
support.

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MasterCard to Intro a Summer Jeans Promotion

MasterCard this week will launch a summer promotion offering a five-day/four-night trip plus a pair of jeans to lucky cardholders. Between July 1st and August 31st, MasterCard U.S. cardholders will be automatically entered for a chance to win such a priceless escape and a pair of jeans to break in during their trip. The “MasterCard 2009 Break in Your Jeans” campaign selecting nine Grand Prize winners — one per week throughout the summer. In addition, 62 First Prize winners will each receive a new pair of jeans and a weekend escape for two courtesy of MasterCard, American Airlines and Hyatt Hotels and Resorts. Each MasterCard “PayPass” tap purchase garners cardholders an additional entry. The promotion is a multi-tiered integrated marketing campaign that includes a new :30 “Priceless” TV spot breaking July 1st produced by McCann Erickson NY that features classic scenes of pop culture icons in jeans — from Marilyn Monroe and Marlon Brando to The Ramones and Carlos Santana. In addition, the program includes print, radio, online and out-of home advertising, as well as a mobile texting component. The web portal, developed by MRM Worldwide, where consumers can learn more about the campaign and can register online for a chance to win is located at priceless.com/jeans.

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Visa and NFIB Names 2009 Young Entrepreneur

Visa and the National Federation of Independent Business has recognized
an 18 year old as the 2009 “Young Entrepreneur of the Year”
Jay Shechtman of Weston, owner of a student tutoring service, was chosen
for this top honor from more than
6,000 nationwide candidates and has been
awarded a $10,000 educational scholarship to help defray the cost of his
tuition at the University of Pennsylvania’s Wharton School of Business.
Five additional students were named NFIB/Visa Inc. National Young
Entrepreneur Award winners and will each receive a $5,000 educational
scholarship. Visa’s sponsorship of the NFIB Young Entrepreneur Awards
program is part
of its comprehensive Corporate Social Responsibility program, which
focuses on
bringing more people into the formal financial system through Visa’s
payments
expertise, historic commitment to financial literacy and focused
philanthropic
efforts. Visa supports the important role that entrepreneurs play in
creating opportunities for others while helping communities achieve greater
prosperity and self-sufficiency.

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FTC Settles with Ace Group’s Credit Repair

A federal court order has been issued against Ace Group, d/b/a
American Credit Experts, Inc., The Ace Group, Inc., The Ace Group, and
ACE; Legal Credit Repair Center to enforce the FTC demands against false claims and fraud for credit repair.
The orders bar the defendants from violating the Credit Repair
Organizations Act by charging clients fees in advance and claiming that
a credit repair organization can permanently remove negative information
from credit reports, even when the information is accurate. They also
bar the defendants from making deceptive claims when marketing any
product or service, including credit repair services.
The order against the various companies and Michael Singer and Gerald Roth imposes a
$20,645,754 judgment that will be suspended if Singer and Roth pay
$5,000 each because of their inability to pay the full judgment. The
order against Melvin Kessler also imposes a $20,645,754 judgment, which
is suspended based on his inability to pay. If the defendants are found
to have misrepresented their financial condition, the full judgments
will become due immediately. The orders also contain record-keeping and
reporting provisions to allow the FTC to monitor compliance with the orders.

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Ezic Offers Discounted Stepdown Rebilling

Digital payment solution provider Ezic has introduced “Stepdown Rebilling” features to its “Recurring Billing” system. “Stepdown”
gives merchants the ability to set automatic retry schedules for failed recurring billing transactions and give merchants more control by allowing them to choose the number of retires for each transaction, the frequency of retries, and the discount amount attempted for each consecutive retry. Discounted retry amounts are determined by the merchant, and can be based on a percentage or fixed dollar amount. The rebilling is automatically reset to the original amount and date, before the next regular billing period. Merchants are able to review overall effectiveness of “Stepdown Rebilling” with Ezic’s “Stepdown Rebilling” reports that detail each retry attempt, the dollar amount attempted and actual amount recovered with each successful attempt to see exactly how much revenue was recovered from the original failed recurring billing transactions. Ezic is a private-label gateway provider and offers payment-processing platforms complete with multi-level security against fraud for all Internet-based transactions.

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PDS ACH Platform & Plug’n Pay Gateway Combine

E-payment provider Payment Data Systems has integrated the “Plug’n Pay” e-Commerce
gateway to the PDS ACH platform to provide e-Check service to its
customers.Through the integration of the PDS ACH platform to the Plug’n Pay
gateway, PDS’ services are fully available through the Plug’n Pay
gateway with no additional integration involved. The e-Check transaction
reporting is integrated into the industry leading Plug’n Pay reporting
so there is only one reporting interface that the merchant accesses for
both check and credit card sales information.
Plug’n Pay is a provider of payment and
digital fulfillment solutions for Internet merchants. Plug’n Pay’s
payment systems allow merchants to accept and manage both credit card
and electronic check payments in a secure environment.
Payment Data Systems is an integrated payment solutions provider to
merchants and billers.

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Comdata Names Enterprise Solutions Sales Exec

TN-based payment solution provider Comdata has promoted Greg Koren,
previously VP of Sales, to SVP of Sales for Enterprise Solutions Koren
is directly responsible for overseeing the sales efforts for Comdata’s
prepaid solutions, merchant solutions, and its new healthcare
initiative. He will assist with building and implementing the sales
strategy for each suite of payment. He has been with Comdata for 21
years and most recently served as the vice president of sales for
Corporate Payments, eastern region. Comdata Corporation is a
business-to-business issuer and a processor,
enabling millions of fleet card, credit card, pay card and virtual card
transactions annually.

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Fitch Ratings Takes More ABS Under Analysis

Fitch Ratings has designated 55 classes as ‘Under Analysis’ that indicate and intent to issue a rating action within 30 days. A rating action could include an affirmation, upgrade, downgrade or placement on the “Rating Watch”. The “HSBC Master Note Trust” is reviewed because the trust performance is outside of expectations. The “Discover Card Master Trust” and Discover Card Execution Note Trust have been placed ‘Under Analysis’ because they will be reviewed following the placement of classes B and C on Rating Watch Positive. Three hundred and ninety-three classes of U.S. credit card ABS transactions were designated with a SMARTView date of June 25th, indicating that performance has been reviewed and a rating action is not
anticipated within the next 30 days. Fitch’s analysts scrutinize the output to decide which deals need further review, which are noted as ‘Under Analysis’. A transaction may also be designated as ‘Under Analysis’ when a review is undertaken because of a material event affecting the transaction or when a regular, more in-depth periodic review is being performed.

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Banc of America Merchant Services is Created

Bank of America and First Data confirm plans to form a new company to offer a comprehensive suite of payments solutions including credit, debit and prepaid cards to merchant loyalty, check and eCommerce payments. Banc of America Merchant Services, LLC will be 46.5% owned by Bank of America and 48.5% by First Data, with the remaining stake held by Rockmount Investments. BofA will contribute approximately 240,000 merchant relationships and FDC will contribute approximately 140,000 merchant relationships to the new company. Following a transition period, FDC will provide the merchant processing and related services. Thomas Bell, chief strategy officer and president of First Data’s financial services business, was named chief executive officer of Banc of America Merchant Services. The combined entity will process over one billion transactions per month. Both firms said they will provide more details in July.

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ABNOTE NA

Arthur Blank & Co., American Bank Note Company, and Keystone Plastics of Canada, three subsidiaries of ABnote Group, announced they are consolidating under a new brand, “ABnote North America.” The newly branded firm will be led by CEO Joe Caffarella. The Company has a corporate history dating back to 1795. ABnote North America will offer plastic commercial cards, financial cards, secure access cards, identification cards, secure documents, and related secure personalization, warehousing, distribution, and fulfillment services. While the Arthur Blank & Co, American Bank Note Company, and Keystone names will remain for an interim period, the brands will be phased out as marketing is transitioned over to the new brand.

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New 1World ATM/Debit Card Targets Payroll

One World Ventures has launched its “1World Card” ATM/ Debit solution,
targeting customers seeking payment solutions for payroll or sales
compensation. As a bank issued, PIN-based ATM/Debit card in 140
countries, “1World Card” requires no qualifying process, no credit
checks or applications, no credit fees, overdraft charges, late fees,
interest charges, offers a secure way to store money and allows access
only to the amount of money stored on the card. One World Ventures
invests in technologies, communities and systems that facilitate trade,
finance, communication and travel across international boundaries,
cultures and languages.

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