Schwab Bank Launches New Cash-Back Visa

Charles Schwab, with 7.4 million client brokerage accounts, 1.3 million corporate retirement plan participants, and 427,000 banking accounts, has launched a cash-back credit card. The new “Schwab Bank Invest First Visa Signature” credit card offers an unlimited 2% cash-back on purchases that is automatically deposited into a Schwab One brokerage account each month. Clients can choose to invest their accumulated deposits at a time of their choosing by selecting a Schwab offer. The new card offers a prime +9.99% APR and has no annual fee.
The Schwab card also promotes no foreign exchange transaction fees.
For clients who qualify for a credit line of $5,000 or more, the “Schwab Bank Invest First” credit card offers “Visa Signature Dining with Zagat” ratings and reviews, “Visa Signature Access” to exclusive events, and no preset spending limit. The credit card program is issued and administered by BofA’s FIA Card Services. MBNA (now part of BofA) issued a co-branded “Schwab Visa” card in 2004, featuring the ability to redeem points for equity trades. Charles Schwab Bank NA was set up in 2003 to offer general retail banking services, including ATM access, but not bank credit card issuance. (CF Library 2/19/03; 10/07/04)

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SVS Hires a Total Merchant Services Exec

KY-based Stored Value Solutions has hired Ralph Rolen, formerly with
Total Merchant Services, as its EVP/GM. Rolen will lead strategic
direction, operations, product development and
revenue initiatives. Prior to TNS, he held leadership positions at First
Data Corporation
and First Horizon National Corporation. Rolen holds a Bachelor of
Business Administration degree from University
of Oklahoma and a MBA from University of
Texas at Austin.

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Brennes-Jones to Offer TNS’ Synapse

Dallas-based Brennes-Jones Group has added “Synapse” wireless processing
services from Transaction Network Services for its merchants.
The full-function, wireless IP solution has proved to be the ideal
technology for the Susan G. Komen Race for the Cure organization and
Synapse devices have been used to
process transactions at sporting and outdoor events at University of
Texas. The Synapse solution offered by TNS provides a one-stop-shop for
ISOs, acquirers, and processors to manage wireless terminal portfolios.
The Brennes-Jones Group is an Independent Service Organization (ISO)
specializing in petroleum, supermarkets and wireless
markets. The organization has merchants in 38 states nationwide.

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IPAY MULTI-CURRENCY

Planet Payment had launched a multi-currency service
through its “iPAY” payment gateway. The solution works seamlessly within the merchant’s existing business
processes. All funding remains in the domestic currency and is handled by the
merchant’s domestic merchant bank, eliminating the need to establish and maintain
international entities, or overseas bank accounts, as may be required in
other solutions. The solution is currently available through supported partner
merchant banks in the United States, with international support through Planet
Payment’s network of international banking partners anticipated in the future.
This newly added functionalities include the ability to process all major credit card types and ACH transfers;
a reporting package that provides merchants with a complete and
easy-to-read view of all transaction activity; a subscription management capability that allows
merchants to manage recurring payments effectively and fraud and chargeback management tools that help merchants
minimize the risk of conducting business in a card-not-present environment.

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Datacard Group Names a New CFO

Secure ID provider Datacard Group has promoted Kurt Ishaug to CFO.
Prior to joining Datacard Group, Ishaug held financial leadership
positions with GE Commercial Finance and led the global planning and
analysis function. Ishaug started his career with the Public Accounting firm of Grant
Thornton where he spent eight years. Ishaug holds a master of business taxation degree
from the University of Minnesota – Carlson School of Business and a bachelor
degree in accounting from North Dakota State University.

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OCT ABS

Delinquency among credit card-backed securities for October hit it highest level since May 2007 as charge-offs continue to hover at a high historical level. Last month, the Bank of England’s “Monetary Policy Committee” cut the bank base rate to 3.00% from 4.5% set in October. However, FitchRatings says it appears that banks are increasing interest rates on credit cards. The “Fitch Delinquency Index” increased 10 basis points from October to 3.9%. Only the Cumbernauld trust reported a month-on-month fall in delinquencies, of 60bp, due to increased re-ages. Having increased by 30 basis points from August to September, the “Fitch Chargeoff Index” remained stable in October at 6.6%. Three of the trusts included in the “Index” registered a fall in charge-offs from September, with Arran reporting a 30 basis points drop from the previous month.

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Credit Card Credit Crunch Likely to Spread

The slashing of credit card credit limits in the U.S. will inevitably lead to a curtailment in available credit in other countries. Over the past five years credit card credit limits in Australia have soared by more than 50% and in the United Kingdom by 15%, according to this week’s CardFlash International. In the U.K. debit cards account for about 74% of all purchases on payment cards, according to APACS. British cardholders owe about US$50 billion on credit cards but have access to about US$237 billion in credit limits as of third quarter 2008. In Australia, credit cardholders owe about US$30 billion but have access to US$78 billion in credit card credit limits. In Australia credit cards account for more than 53% of all purchases on payment cards, according to the Reserve Bank of Australia. While the U.K. is debit driven, the reduction of credit limits could emerge as a major factor in the faltering Australian economy once repricing peters out. Research conducted for Australia’s The Daily Telegraph revealed at least five card providers increased their interest rates in the past three months, even though the RBA has slashed the cash rate by 2% since September.

CREDIT CARD CREDIT LIMITS
(in U.S. Dollars)
U.K. AUSTRALIA USA
2004: $207 billion $51 billion $4.0 trillion
2005: $215 billion $57 billion $4.5 trillion
2006: $222 billion $65 billion $5.0 trillion
2007: $229 billion $72 billion $5.3 trillion
2008: $237 billion $78 billion $5.6 trillion
Source: RBI, APACS and CardData

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SHELL POS

Wincor Nixdorf will integrate its cash management solution in the checkout zones and IT operations of Shell Deutschland’s
1,300 service stations. Staff-assisted self-service
terminals will be installed in Shell service stations. Cash is given to
them by station personnel. The systems are designed to store banknotes securely in an integrated
safe and automatically provide change for payment and will allow consumers
to use their debit card and PIN to receive cash at Shell service stations
equipped with cash recycling technology. The banknote cycle of the staff-assisted self-service terminals ensures
higher security in the service stations and reduces cash management tasks, such as
personnel shift changes. Recycling also reduces the need to replenish or
reduce cash stock levels.

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Visa to Power McDonald’s Financial Ed

The country’s largest employer-based financial literacy program is getting underway as the result of a McDonald’s and Visa partnership. The new “McDonald’s Practical Money Skills” program is being made available to more than 500,000 restaurant-level employees throughout the majority of McDonald’s 14,000 U.S. restaurants. Employees will receive a printed “Wealth Watchers” budgeting guide to track expenses and access to an instructional video and web resource center. The Visa materials will be available in both English and Spanish. The QSR giant is also giving employees a “McDonald’s Gold Card,” a discount program that helps employees save money on everyday purchases at multiple retailers nationwide. More than 20 state governments have officially distributed Visa’s personal finance educational programs.

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TIMESOFMONEY & BARCLAYS

Barclays has partnered with
e-payment provider TimesofMoney to launch “Barclays Online Money
Transfer”.
Barclays Online Money Transfer will enable the bank’s customers in the
UK to transfer money online directly to any Barclays account anywhere in
India. The services will be extended in the near future to customers in
other countries who wish to send money to India. With the availability
of the latest technology from TimesofMoney for the Barclays Online Money
Transfer remittance service, customers can now transfer their money
conveniently and in a secure environment. Remittances ranging between
£250 and £3,000 can be made through this platform. TimesofMoney is a
leading services provider of online remittances that provides money
transfer services
into India spanning 23 countries, 6000 locations and 16000 banks to
30000 NRIs.

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Negative Credit Profiles Hit 110MM

According to the results of a recent study, more than 110 million in
the U.S. now affected by a negative credit history. The study,
released by BadCreditOffers.com, tracks how the credit crisis especially affects those with bad credit, as lenders
tighten their approval standards in reaction to economic conditions in
the U.S. and abroad. Analysts expect these conditions to worsen, which
could lead to more credit problems for the American consumer. BadCreditOffers.com has served as a leading industry resource
for consumers with bad credit, attracting millions of visits to its
website in that time. Its staff researches the financial marketplace and
compiles information on bad credit credit cards, loans, and other offers
geared toward consumers with a poor credit history.

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Banks Switch to Loyalty & Assurance Mail

While direct mail for credit card offers has slowed to a trickle, banks are stepping up direct mail campaigns for other products to encourage customer loyalty and provide reassurance to customers. Chicago-based Mintel Comperemedia reports that the estimated number of banking direct mail offers sent to current customers rose 42% in the third quarter, compared to the prior quarter. Banks sent approximately 53 million offers to their customers during the quarter, almost twice the number seen in the third quarter of 2007. Mintel also found that banks increased their direct mail offers to non-customers during the third quarter and that estimated banking acquisition mail volume rose 8% sequentially. Last month Mintel reported that the number credit card direct mail offers during the third quarter dropped 28% year-on-year and 13% sequentially. So far this year, credit card solicitations, via snail mail, are averaging about 1.5 billion per quarter, compared to slightly more than 2.0 billion per quarter in 2007. (CF Library 11/7/08)

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