American Eagle Adds the PayPal Payment Option

Specialty retailer American Eagle has added “PayPal” as a payment
alternative on its website. , American Eagle customers join the 62
million “PayPal” account holders to pay for clothing and accessories
through debit cards, bank accounts,
stored balance or credit cards without sharing their financial
information. From July 31 through August 15, customers who make a
purchase on
ae.com using “PayPal” will receive 20% cash back into their PayPal
accounts. American Eagle Outfitters designs, markets and sells its own
brand of clothing targeting 15 to 25 year-olds, providing high-quality
merchandise at affordable prices.

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SMARTRAC RFID

SMARTRAC produced and shipped over 20 million RFID-Inlays from its
Ayutthaya, Thailand facility, surpassing a milestone and reaching an
all-time high. The Thailand manufacturing facilities produce standard
inlays for logistics, animal ID, mass transport and access control
implementing SMARTRAC wire-embedding technology. These locations are in
addition to the organization’s production locations in Brazil, the USA
and Germany, collectively contributing to the growth of the RFID market.
SMARTRAC was founded in 2000 and currently employs some 2,600 employees
around the globe.

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Europe’s Equens Becomes a Societas Europaea

Equens payment processor has been converted to a Societas Europaea and is now designated “Equens SE,” a direct result of the mergers of Equens Nederland B.V. and the German Equens Deutschland AG, reflecting the organization’s European payments market ambitions. With the SE title, a legal form under the laws of the European Union, Equens is permitted as an internationally operating company to transform into a European public limited-liability company governed by a uniform European body of law based on the EU directive. As the first significant operational SE in the Netherlands, Equens is to establish an SE Works Council to implement a stable, future-orientated international co-determination regime which will lead to cost savings at the operative level. Equens payment processor oversees an annual volume of 7.3 billion payments and 2.1 billion POS and ATM transactions for more than a 15% euro zone market share.

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INTEREST RATE CAPS

Thanks to the Turkish government, the maximum allowable monthly interest
rate on credit cards in the country has decreased from 5.72% in July
2006 to 4.39% in June 2008, with intentions to reduce this to 2.7%. In
response, Celent’s Banking group has published its report examining the
profitability of credit card issuers in Turkey and the strategies
undertaken to remain competitive. These strategies include cost
reduction in order to sustain credit cards’ profitability, customer
relationship management for the marketing of more profitable products,
strategic implications concerning credit card operations, fee
structures, costs, efficiency, approaches in banking, a customer-centric
approach and partnering with retailers. Celent research and advisory
firm helps financial institutions formulate comprehensive business and
technology strategies through its reports identifying trends and best
practices.

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Citi’s North American Card Profits Plummet 75%

Citigroup reported that 2Q/08 profits for its North American Cards unit
declined 75% year-on-year to $178 million due to soaring losses. Second
quarter revenues for North American cards also dropped 11% year-on-year
from $3.3 billion to $2.9 billion. Card profits declined 64% in the
EMEA region; 10% in Latin America; and 4% in Asia. In North America,
credit costs increased $345 million, driven by a 51% surge in net credit
losses, and a $111 million incremental net charge to increase loan loss
reserves. The managed net charge-off ratio increased 202 basis points to
6.53% for North American cards from 2Q/07 and jumped 72 basis points
from the prior quarter. The 90-day delinquency ratio for North American
cards increased 6 basis points from the prior quarter to 2.02%, and as
compared to 1.47% for 2Q/07. Citi also reported 146.9 million open
accounts at the end of the second quarter in North America, compared to
150.1 million one-year ago. Purchase volume for North American cards was
flat at $83.8 billion, compared to $83.5 billion for 2Q/07. North
American managed loans rose 6% year-on-year to $151.2 billion. In March,
Citi announced its new corporate organizational structure. It now
reports Global Cards in four geographical areas instead of just U.S.
Cards and International Cards. North America now includes the U.S.,
Canada and Puerto Rico. For complete details on Citigroup’s 2Q/08
performance, visit CardData ([www.carddata.com](http://www.carddata.com)).

CITIGROUP
North American Credit Card Net Income
2Q/07: $711 million
3Q/07: $808 million
4Q/07: $322 million
1Q/08: $537 million
2Q/08: $178 million
Source: CardData (www.carddata.com)

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Austin Logistics Names a New CEO

Austin Logistics has announced John Carreker III has been appointed
Chief Executive Officer, bringing with him over 20 years’ of leadership
experience in the global financial services sector. Carreker comes to
Austin Logistics from Global Payments Technologiesas president, seceding
his time as the Executive VP and Managing Director of International
Operations with the Carreker Corporation. In addition to this
development, Austin Logistics secured commitments to provide its third
round of growth capital from its existing institutional investors,
provides event-based analytic solutions to increase profitability of
customer interactions and has more than 80 product installations around
the globe.

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FTC Hits Payneless Credit Repair with a Charge

The Federal Trade Commission has charged TX-based Payneless Credit
Repair and its owner, Lesley L. Payne with violating federal law by
falsely promising to remove derogatory information from consumers’
credit reports. The FTC’s complaint
states that in discussions with consumers, Payne promises results that
far exceed the written claims, offers a “100% money-back
guarantee,” and misrepresents that her company is licensed and bonded.
The defendants ask consumers to sign a contract and pay an advance fee,
typically ranging from $500 to $1,000, but sometimes as much as $2,500.
Payne often meets with consumers in temporary office suites, at the
consumers’ workplace, in restaurants, and even in parking lots.
As stated in the complaint, the defendants do little, if anything, to
fulfill their promises. Consumers find it difficult to reach the
defendants to complain. Consumers’ e-mails and voice-mails often go
unanswered, and they find that the defendants’ temporary offices have
been vacated with no forwarding address. Consumers who reach the
defendants are given a variety of excuses for why their promised results
have not been achieved, and those who persist are told to stop and are
often threatened with lawsuits. The defendants almost always deny
consumers’ refund requests.

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Octopus Citibank Credit Card Issued in Hong Kong

Citibank and Octopus Cards have introduced the first credit card in
Hong Kong that offers a credit card function, a contactless smartcard
payment function, and cashback in addition to the existing “Octopus
Rewards” program. The new “Octopus Citibank Credit Card” comes as a
“Platinum Card” and a “Gold Card” and features an automatic reload from
the credit card for “Octopus” functionalities. At least 0.5% of eligible
credit card spending will be offered as a cash rebate to offset the
“Octopus Automatic Add Value” amount. There is no annual credit card fee
and no HK$50 deposit for Octopus. Launched in 1997, Hong Kong’s Octopus
is the world’s leading and most extensive smartcard payment system, with
over 2,000 service providers across different businesses including
public transport, parking, retail, vending and kiosks, schools and
leisure facilities, and access control for residential and commercial
buildings, with about 50,000 Octopus readers deployed in the market.

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Cap One’s U.S. Card Profits Slide 43% in Q2

Capital One’s second quarter U.S. credit card profits decreased 43% year-on-year to $340.4 million. However, COF’s revenue margin rose 29
basis points year-on-year to 14.96%. Purchase volume in the U.S.
declined slightly to $26.7 billion, compared to $26.9 billion one-year
ago. Additionally, the number of U.S. card accounts declined by more
than one million since the prior quarter to 38.4 million. U.S. managed
card outstandings were $68.1 billion for 2Q/08 compared to $67.4 billion
in the previous quarter and $66.5 billion for 2Q/07. The managed
delinquency rate (30+ days) for U.S. credit cards was 3.85% for the
second quarter, compared to 4.04% for 1Q/08 and 2.98% for the second
quarter of 2007. The net charge-off rate for U.S. credit cards was 6.26%
for the second quarter, compared to 5.85% for the first quarter and
3.56% one-year ago. Cap One says its U.S. Card business remains cautious
on loan growth and continues to focus its marketing and originations on
the parts of the U.S. Card market that the company believes provide the
best combination of risk-adjusted returns and losses. For complete
details on Capital One’s second quarter performance, visit CardData
([www.carddata.com](http://www.carddata.com)).

COF U.S. CARD NET INCOME
2Q/07: $592.9 million
3Q/07: $626.8 million
4Q/07: $498.7 million
1Q/08: $491.2 million
2Q/08: $340.4 million
Source: CardData (www.carddata.com)

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PROMISEC & VIGITRUST

Promisec server security and compliance provider has partnered with the
provider of PCI DSS security assessment and consulting services,
VigiTrust, to provide “Initial Security Assessment of the Payment Card
Industry Data Security Standard (PCI DSS).” In doing so, the “Initial
Security Assessment of the PCI DSS” combines the assessment and
enterprise asset discovery resources of the partnership organizations to
ultimately help merchants and payment service providers engage in PCI
DSS compliance strategies. Moreover, this development provides maximum
security investment to increase employee productivity and reduce
security breaches. VigiTrust provides security assessments and solutions
to government departments and agencies in North America and Europe while
Promisec, Inc offers internal network security solutions for a layered
approach to corporate network security for organizations around the world.

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