Employee Poll Shows Dampened Spending

EAP provider ComPsych has released the results of a survey that
indicates 61% of employees polled plan to spend “much less” for the
holiday compared to last year and 29% indicated they would spend
“somewhat less”. Calls to ComPsych’s FinancialConnect service have
increased considerably in the current economic climate as employees
rethink their budgets. The calls to ComPsych’s
FinancialConnect service have included credit cards/debt management,
budgeting questions, mortgage issues, hardship issues and tax questions.
ComPsych is the world’s largest provider of employee
assistance programs (EAPs) and is the leading provider of fully
integrated EAP, behavioral health, wellness, work-life, crisis
intervention services and outsourced HR solutions under the
GuidanceResources brand.

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Tight Credit Disables Cash Flow Forecasting

About 67% of senior financial executives said that their company’s
working capital is flat or has deteriorated compared to three years
ago as their access to credit has been curtailed. According to a recent
KPMG survey, which polled more than 550 companies across the U.S. and
Europe, 83% of executives said managing working capital was the highest
or a high priority at their companies. Only 37% of those surveyed had a
working capital improvement program in place during the past five years.
In addition to deficient working capital management programs, an
overwhelming number of companies fail to produce reliable cash
forecasts. Although almost all respondents (95%) report forecasting
their cash flows, only 14% of respondents report achieving accurate
forecasts in the last 12 months. Last month the American Express “OPEN
Economic Pulse” found that businesses are feeling the pinch of
tightening credit and weakened cash flow, with 63% being impacted in
October versus 50% in August. Overall, credit tightening is having the
greatest impact on sales, where almost eight-in-ten business owners
indicate a decrease. Over the next 12 – 18 months, 46% of small business
owners believe economic conditions will worsen, while 34% think the
economy will get better. (CF Library 11/12/08)

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2009 Retail Credit Card Charge-Offs May Hit 12%

Performance among retail or private label credit cards has deteriorated rapidly this year as many of these portfolios have a greater proportion of lower quality borrowers and higher base interest rates. Based on the latest metrics for retail credit card-backed securities, charge-offs have soared by more than 40%, delinquency is up nearly 24% and the excess spread has declined 13%, compared to one-year ago. According to the latest ABS “Credit Card Index” results from Fitch Ratings 60+ day delinquencies hit 4.5% and charge-offs hit 9.1% at mid-year. Fitch expects charge-offs to exceed 12% in first half 2009.
The “Excess Spread Index” is at 9.4% and remains consistent with historical averages. Even with Fitch’s charge-off projections, retail card excess spread should hold above 5%, a level considered healthy for credit card ABS. Fitch tracks more than $72 billion in principal receivables backing approximately $40 billion of retail or private label credit card ABS.

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iTeknik Inks a Major NY Phone Card Deal

Telecommunications provider iTecknik Holding will provide 50,000 PIN
numbers and call origination services for NY-based prepaid calling
provider Smart Distributor. iTecknik, TeleCents Communications and Send
Global Corporation offer cutting edge retail and wholesale
telecommunications products and services including international and
domestic gateway services through Tier-1 carriers.

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Database Risk and Compliance Gap Grows

Cross platform security provider Application Security has released the
results of the “Database Security Controls” survey which reveal that 54%
of respondents feel that a lack of internal processes
and controls hinder the effectiveness of their database security
efforts” and that 73% predict that database attacks will increase.
Other findings include 84% who feel their organization maintain a false
sense of security that their organization’s data security controls for
sensitive information was adequate, but follow-up security questions
made it clear that there is a disconnect between the initial responses
and realities of preventing hacks and supporting compliance mandates and
in addition to the high number of reported data breaches during the past
year, organizations failed audits in key categories more than one-third
of the time.

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Australia Overhauls ATM Practices & Ends Fees

The Reserve Bank of Australia is implementing a package of ATM reforms
in March that will improve fee transparency and may lower customer
costs. Under the new rules bilateral interchange fees paid by financial
institutions to ATM owners for the provision of ATM services will be
abolished; ATM owners will have the ability to directly charge
cardholders for ATM withdrawals, as long as it is clearly shown before
the customer proceeds with the withdrawal; and an “Access Code” will be
established to set out the conditions that new entrants are required to
meet, the rights of new entrants and the requirements on current
participants in dealing with new entrants. Given changes, the RBA no
longer sees a case for financial institutions to charge “foreign” fees
when their cardholders use an ATM owned by another institution,
particularly given that most financial institutions now provide
transaction accounts which offer unlimited electronic transactions for a
monthly fee. The Payments System Board is also proposing to use an
“Access Regime” to set bilateral interchange fees to zero and to cap the
fee that existing institutions can charge new entrants for establishing
the necessary direct connections.

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British Issuers Agree to Credit Card Changes

British credit card issuers have agreed to give their troubled cardholders “breathing space” to establish a debt repayment plan with a debt advice agency. Customers will have a minimum of 30 days to set-up a repayment plan, during which time the credit card issuer will suspend collection activity. If discussions remain ongoing after 30 days, there is an option of extending this by an extra 30 days. Card issuers have also agreed to increase transparency for risk-based repricing. Under the new practice customers will be notified when their interest rate is being changed as a result of risk-based repricing, and if their interest rate goes up they will be given sufficient time to close their account or be offered an alternative product. Credit card issuers have also agreed that they will not increase the interest rate on a card on the basis of risk during its first twelve months, or more often than six monthly thereafter. APACS says the two changes will likely be built into “The Banking Code.”

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Hilton and Delta Linked Loyalty Cards

Hilton HHonors and Delta Air Lines have launched “Double Dip” to
earn HHonors points plus SkyMiles and earn six times the number of miles
typically awarded. Registered HHonors members staying during the
promotional period will be able to sextuple their miles whether they
Double Dip with Hilton HHonors to earn “Points & Variable” miles or
Points & Fixed miles. An HHonors member earning Points & Variable miles
typically earns 10 Base points and 1 airline mile for every eligible
dollar charged to their room. Now, during the promotional period HHonors
members can earn 10 HHonors Base points and 6 Delta SkyMiles for every
eligible dollar charged to their room. An HHonors member earning
“Points & Fixed” miles earns 10 Base points per eligible dollar charged
to their room and 500 airline miles per stay. During the Double Dip
promotion, members can earn 10 Base points per dollar and 3,000 Delta
SkyMiles per stay (or 600 miles per stay at Hampton and Homewood Suites
by Hilton hotels) and further maximize their mileage earnings during
shorter stays. HHonors members can also change their earnings style
with every stay. The promotion is available to HHonors members and
SkyMiles members who register at HiltonHHonors.com/sixtimesthemiles,
then book and stay at any participating Hilton Family hotel between Dec.
1 and Feb. 28, 2009.

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Plastic Jungle Offers Amazon Gift Cards

Gift card discounter Plastic Jungle is now offering the “Amazon.com Gift
Cards” as a new option to change out an unwanted gift card. Cardholders
can unload unwanted gift cards with the choice of a
check, or consumers can opt for 105 percent of the cash value in the
form of an Amazon.com Gift Card that can be used to shop for millions of
items in over 40 product categories at Amazon.com. Plastic Jungle
guarantees all
transactions and offers features like gift card
replacement protection in case they are lost or damaged, and instant
alerts via text or email. Users may list gift cards for free on Plastic
Jungle – successful transactions are only charged a 10% fee when
their gift card is sold or traded.

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Employment Trends Index Heads Lower

In November, The Conference Board Employment Trends
Index slipped to 102.9, down 1.6% from the October revised figure of
104.5, and down over 13% from November 2007. The 16 month-long decline
is seen in all eight of its components which include: Percentage of
Respondents Who Say They Find “Jobs Hard to Get”; Initial Claims for
Unemployment Insurance; Percentage of Firms With Positions Not Able to
Fill Right Now; Number of Employees Hired by the Temporary-Help
Industry; Part-time Workers for Economic Reasons; Job Openings;
Industrial Production and Real Manufacturing and Trade Sales.

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More than 40% of Companies to Give Gift Cards

A new survey finds that of the 42% of companies offering holiday bonuses, this year more than half will provide them in the form of cash—spending an average of $863 per employee. Forty-two percent will give gift cards or gift certificates averaging $76 per person, and 16% will give food (e.g., ham or turkey). Most employers that provide holiday bonuses do so to show their appreciation (57%), for goodwill or morale (18%), to maintain tradition (12%), and/or as an incentive for employees to improve business results (8%). The poll by Hewitt Associates also found that beyond holiday bonuses and gifts, most employers (71%) will also continue to throw holiday parties this year as a way to recognize and say thank you to hard-working employees. Of these, 22% will spend $5,000 or less on their parties, 19% will pay between $5,000 and $10,000 and 20% will spend between $10,000 and $25,000.

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CURLING MASTERCARD

The first Hypercom “medCompact” healthcare terminal has been purchased and installed at a doctor’s practice in the North Rhine region. The terminal is part of the new “e-Health” card program in Germany. Hypercom’s “medCompact” is the first healthcare terminal to receive “e-Health BCS” approval from Gematik, the German healthcare organization. The new terminal offers a large, high contrast display and embossed keys, plus it provides an intuitive and highly secure authentication system for patients and healthcare service providers. In addition to accepting patient cards, it accommodates up to eight different medical practitioner cards, making it well suited to environments where several health care professionals operate in the same location. “medCompact” is also designed to process both the current German health insurance card and the new electronic healthcare card, “eGK2.” The terminal complies with the upcoming e-Health “SICCT3” standard and can easily be connected to medical practitioner, hospital and pharmaceutical IT systems. Germany’s “e-Health” card program is one of the largest IT projects worldwide with a planned deployment of more than 80 million electronic health insurance cards.

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