GIFT CARD PRIMER

The Ministry of Small Business and Consumer Services’
Consumer Protection Branch reminds consumers that the expiry dates on
gift cards issued on or after October 1, 2007,
fees or deductions from a gift card’s value and expiry dates on mall
gift cards issued as of September 1, 2008 are
banned and there are limits on administrative fees. Canadians spend
about $1.26 billion on gift cards during the
holiday with 82% of Canada’s largest retailers offering gift cards.

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TransFirst Inks BankAtlantic Merchant Deal

FL-based BankAtlantic has entered into an merchant services agreement with Dallas-based TransFirst LLC.
Through the agreement, BankAtlantic will provide its business, corporate and
municipal customers with “TRANSACTION CENTRAL”, a Web-based centralized
payment processing system that performs local and national processing
24/7, and “TransLink”, a comprehensive Web-based reporting system and
management tool, delivering 24/7 access to a variety of merchant
services and merchant bankcard solutions. BankAtlantic’s customers also
benefit from dedicated and collaborative sales support teams, portfolio
performance reports, a 24/7 Merchant Helpdesk, competitive pricing, and
innovative products.

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KETERA & VAT

On demands spend management provider Ketera is ready to manage the recent change in the Value Added
Tax (VAT) rate which took effect December 1, 2008. The British government’s recent decision to reduce the standard VAT rate
by 2.5%, as part of the country’s economic stimulus package, introduces
compliance challenges and requires significant investments in time and
resources for business owners who are using software applications to
manage many aspects of their businesses, particularly accounting / ERP
and Ecommerce. Updates to tax rates were made seamlessly and
transparently without any impact to customers using Ketera’s web-based
suite, offered in a Software as a Service (SaaS) model. These automatic
updates to transactional forms, including procurement and invoicing,
save time and money through improved accuracy and by avoiding manual
updates to multiple forms.

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Solidcore Systems and Esprida Partner

Retail security provider Solidcore Systems has partnered with SaaS remote management software supplier
Esprida to help retailers secure and remotely manage kiosk systems and maintain compliance with PCI requirements.
Solidcore “POS Check and Control” provides a single-solution on the
endpoint that easily and cost-effectively addresses all of the PCI and
security requirements of a kiosk system. “Esprida LiveControl” automates
administrative tasks to give businesses complete visibility and control
over a kiosk network. The joint solution can enforce that only authorized changes deployed through “Esprida
“LiveControl are allowed to alter the kiosk, including registry entries
or data files. Solidcore also protects the kiosk from malware, zero-day
vulnerabilities and any unauthorized local changes that might include
reading or copying protected files off of the system.

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Credit Rating Cut for Citi’s SD Card Bank

Moody’s Investors Service has cut its rating for Citibank (South Dakota) NA. The credit card issuing bank’s financial strength rating was dropped to “C-” from “B.” The bank’s long-term deposit and senior debt ratings were cut to “Aa3” from “Aa1.” The short-term rating was affirmed at “Prime-1.” Moody’s says the financial strength rating was cut because Citi SD earnings are wholly dependent on U.S. credit cards. With economic conditions deteriorating, the bank is exposed to a potentially severe consumer-led economic downturn in the U.S., which makes the company susceptible to significant asset quality and earnings volatility through higher net charge-off and provisioning levels. Moody’s also noted that potential regulatory actions that restrict interest-rate pricing on credit cards could also affect Citibank’s revenue. Meanwhile,
Fitch Rating this week released its latest “U.S. Credit Card ABS Issuance Trust Updates” for the American Express, Bank of America, Capital One, Chase, Citibank, Discover, and Washington Mutual. The latest editions have been enhanced to include Available ‘AAA’ Issuance Capacity for each trust and an issuer peer comparison sheet.

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2009? – 8% Charge-Offs and 5% Delinquency

With the unemployment rate expected to hit 7.6% by next summer and possibly topping 8.0% by year-end 2009, delinquency rates may rise 25% and charge-offs by 31% over the next twelve months. During the third quarter credit card delinquency (60+ days) stood at 3.6% as charge-offs averaged 5.4%, according to CardData. It is expected that unemployment will come in at 6.9% for the fourth quarter which models to a delinquency rate of 3.9% and a charge-off rate of 5.9%. The first quarter historically carries artificially high delinquency and charge-off ratios following the holiday volume pay down. Nevertheless, the two metrics will likely follow a significant upward trend throughout 2009. With a projected 8.5% unemployment rate by year-end 2009 delinquency would model to 4.9% and charge-offs to 7.6%. Some analysts beleive charge-offs could hit 8% in 2009. The big unknown is what impact a second quarter auto industry bankruptcy may have on unemployment figures. It is not unreasonable for unemployment to top 10% in that scenario pushing credit card charge-offs above 8%.

U.S. CREDIT CARD METRICS
(Past, Present & Future)
Unemployment Delinquency Charge-Offs
4Q/06: 4.6% 2.6% 4.1%
1Q/07: 4.5% 2.7% 3.9%
2Q/07: 4.6% 2.6% 3.7%
3Q/07: 4.7% 2.7% 4.0%
4Q/07: 4.9% 3.0% 4.1%
1Q/08: 5.0% 3.0% 4.5%
2Q/08: 5.7% 3.3% 5.3%
3Q/08: 6.5% 3.6% 5.4%
4Q/08: 6.9% 3.9% 5.9%
1Q/09: 7.4% 4.2% 6.3%
2Q/09: 7.6% 4.4% 6.7%
3Q/09: 8.1% 4.6% 7.1%
4Q/09: 8.5% 4.9% 7.6%
Source: CardData (www.carddata.com)

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Free FICO on Bank Statements Gets Traction

Fair Isaac reports that more than one million consumers now have access through their banks and credit unions to a free FICO score every month on their online statement. Also the Company has compiled practical guidelines to help consumers
manage their FICO scores in a volatile economy. They include making payments on time, keep credit card balances low,
open new credit cards or loans only when necessary, get free annual credit reports from each national credit
reporting agency through www.AnnualCreditReport.com, know the current FICO score,
ask banks about getting your FICO score free every month and
contact lenders to arrange for a payment plan that is manageable should there be financial hardships.

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Federal Reserve Updates its ID Theft Booklet

The Federal Reserve System has revised the “You Have the Power to Stop Identity Theft”
brochure. The updated brochure focuses primarily on Internet “phishing” by
describing how phishing works, offering ways to protect against identity
theft, and detailing steps to follow for victims of identity theft.
The brochure is available to download from the websites
of the Board of Governors of the Federal Reserve System, Federal Deposit
Insurance Corporation, Office of the Comptroller of the Currency,
National Credit Union Administration, and Office of Thrift Supervision.

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Half of U.S. Cardholders Report Rate Hikes

In the wake of the credit crunch issuers have taken a proactive stance
to mitigate risk with higher interest rates, lower credit limits and
closing inactive accounts. An informal online CardTrak.com poll this
month found that more than 53% of cardholders report their interest
rates have increased this year, while 37% say their credit limit has
been lowered. Surprisingly, nearly 29% report that their credit limit
has been increased. About 23% report having a credit card account
closed; 26% say that some fees have been raised and 16% indicate new
fees have been added this year. Nearly 13% report changes in the rewards
program attached to a payment card. The CardTrak homepage poll drew
about 1,000 responses during the December period. Also, this week
Bankrate released the findings of a national poll which found that 40%
of consumers say they would not be upset if their credit lines
disappeared. In fact, of the respondents who have credit cards, nearly
one-third say they will probably charge less in 2009. A much smaller
group (only 5%) responded that they would be devastated with the loss of
access to their credit cards.

Have any of these actions been taken by your credit card provider this
year?

* Credit Card Account Closed (22.5%)
* Credit Limit Lowered (36.9%)
* Credit Limit Increased (28.7%)
* Interest Rate Increased (53.5%)
* Interest Rate Lowered (12.8%)
* Some Fees Raised (26.1%)
* Some Fees Reduced (2.6%)
* New Fees Added (16.1%)
* Rewards Program Changed (12.9%)
* Other Changes Raising Costs (9.1%)

Source: CardTrak.com

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Uno’s and CashStar Intro Virtual Gift Cards

Uno’s Chicago Grill and partner CashStar are offering virtual gift cards.
The gift cards are available via the chain’s website at
www.unos.com and are powered by CashStar, the interactive gift card and incentives company.
Consumers order them the same way they order a plastic gift card, only
the virtual gift card is delivered via an email with a link to activate the gift.
Available in denominations of $25 or $50, there are nine unique designs to choose
from, and each card can be personalized with a message or holiday greeting. Uno also
offers plastic gift cards via its website and its restaurants. Both the Uno
plastic and virtual gift cards have no expiration date.

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ALIBABA & NICE

NICE Systems announced that B2B e-commerce provider Alibaba.com placed an initial order for
NICE SmartCenter solutions for two of its VoIP contact centers.
NICE SmartCenter will provide Alibaba.com contact center supervisors
with precision quality management to ensure customer satisfaction and
foster customer loyalty. It will enable supervisors to proactively
evaluate and improve the quality of service provided to customers
calling about Alibaba.com’s services and for technical support. By
targeting key calls as well as correlating them with agent screen
activity, supervisors will be able to more accurately identify how agent
behaviors are impacting quality of service, and develop programs for
performance improvement where needed. NICE’s solutions address the needs of the enterprise
and security markets, enabling organizations to operate in an insightful
and proactive manner, and take immediate action to improve business and
operational performance and ensure safety and security. NICE has over
24,000 customers in more than 135 countries.

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ClairMail Web System Optimized for iPhone

Mobile payment platform provider ClairMail has released an upgrade of the
ClairMail System that includes an iPhone mobile web solution. The iPhone solution includes the comprehensive mobile
banking and payments functionality found in ClairMail’s traditional mobile web
offering — account management, fund transfers, bill payments and ATM/branch locators
presented on the iPhone’s rich user interface. ClairMail’s highly secure mobile web solution adjusts its
user interface based on the capability of the mobile device all from the same mobile web URL.
ClairMail is the first and only solution provider capable of delivering 2-way
mobile banking and payments functionality on all mobile phones across
all three user interface options. The ClairMail System seamlessly
and securely integrates with a bank’s systems of record and provides bank customers
with a comprehensive suite of 2-way mobile banking and payment services and
incorporates a powerful Event Engine that can easily handle the
potential transaction volumes from banks of any size and deliver real-time, 2-way Actionable Alerts.

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