Fifth Third Processing Inks Six CUs

Fifth Third Processing Solutions has signed contracts for electronic fund transfer services, gateway access, debit card processing and ATM driving with 6 new credit unions. These credit unions include The Air Academy Federal Credit Union of CO, the Amarillo Community Federal Credit Union of TX, the Colorado Springs Credit Union of CO, the Hereford Texas Federal Credit Union of TX, the Knoxville News-Sentinel Employees Credit Union of TN and the Postal and Community Credit Union of Missouri. Fifth Third Processing Solutions processes over 26.7 billion ATM/POS transactions per year for more than 2,700 financial institutions and over 157,865 retail locations worldwide for an annual processing volume of $179.1 billion in credit card sales and for assets of nearly $223 billion.

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TransUnion Introduces New Scoring Models

TransUnion has introduced a newly updated “TransUnion Account Management” and “TransUnion New Account” scoring models. The “Account Management Model” is built specifically to help the financial industry manage existing credit accounts while enabling them to identify the most profitable current account holders. The third version of this model, which also predicts the likelihood of an existing account holder becoming 90 days or more delinquent in a 24-month period, revealed a 32.1% improvement in identifying bankrupt accounts in the lowest 5% of scores. The third edition of the “New Account Model” is designed with advanced characteristic evaluation and scorecard segmentation for risk assessment of new prospects and applicants, differs from the “Account Management Model” by predicting the likelihood of a prospective applicant becoming 90 days or more delinquent in a 24-month period.

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Card Issuing Webinar Slated for July 22nd

Mercator Advisory Group and SoundBite Communications will host a one-hour webinar on July 22nd to discuss how integrated, multi-channel communications solutions can be deployed to help address the diverse customer communications needs throughout the cardholder lifecycle. Webinar attendees will receive a complimentary white paper entitled “Winning the Top-of-Wallet and Collections Battle via Multi-Channel Communications,” authored by Ken Paterson and sponsored by SoundBite. Mercator Advisory Group is the leading independent research and advisory services firm focused on the payments industry.

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ICMA to Hold Green Summit Workshop

The International Card Manufacturers Association will hold two annual Academy Workshops this fall in Illinois, which will include a first ever “Green Summit” and Germany. Workshop topics will cover a range of subjects relevant to each region including lamination challenges, advancements in print technology, personalization and UV curing inks in card lamination. The Green Summit will address the environmental concerns, myths and opportunities associated with card manufacturing. Topics will include green logo usage, problems in recycling caused by green polymers, material choices in green cards and producing green cards. Open to members only, the ICMA Academy Workshops are designed to give a unique learning experience on the many challenges currently present in the plastic card industry. The Academy Workshops are suitable for all card manufacturing and personalization production managers, supervisors, executives and line workers. Speakers include, but are not limited to, representatives from JDSU, Datacard, Oberthur, Eclipse Laboratories, Sun Chemical Screen, Burkle and Spartanics.

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Aconite Acquires Datacard’s Affina Platform

In return for an equity stake in Aconite and future royalties, the Datacard Group has transfered its “Affina” enterprise platform software to the smart card software solutions company. Under this acquisition, Aconite becomes the authorized distributor for the issuance of the “Affina” solutions while Datacard Group becomes the global non-exclusive reseller for Aconite solutions. These solutions include “EMV Transaction Enabler”, “EMV Script Processor”, “Contactless PrePaid” solutions and the “Affina Enterprise Platform” software. Aconite has a local presence in many markets, providing smart card payment solutions and consulting expertise to card issuers and processors around the world, while the Datacard Group provides secure ID and card personalization solutions to its clients in over 120 countries.

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Many Americans in a Credit Score Fog

An annual poll has found that consumers indicated credit scores would rise if one paid off a large credit card balance — up from 62% in 2005 to 67% in 2008 — and would fall if one made a monthly credit card payment more than 30 days late — up from 71% to 78%. From a list including Experian, Equifax, and TransUnion, the percentage of respondents recognizing that Tenneco is not a credit bureau — up from 47% to 54%. The survey by Opinion Research Corporation conducted for Consumer Federation of America and Washington Mutual Bank, also found that 28%, up from 24% in 2007, knew that 700 was the approximate lowest credit score that would qualify one for a low-rate mortgage; and 26%, compared to 19% in 2007, selected 400 or 500 as the score (incorrect) qualifying for a low-rate mortgage. While more than three-quarters correctly understand that making a monthly payment more than 30 days late lowers one’s score, less than three-fifths know that maxing out a credit card by using the entire credit line also lowers scores.

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Payment Rates and Yield Retrench in May

Monthly payment rates, the amount that cardholders pay on their credit card debt, took another turn south in May. After topping 20% in 2006, the MPR dropped 49 basis points between April and May. Among managed credit card outstandings, the MPR declined to 17.54% in May, compared to 18.03% in the prior month and 19.01% one-year ago. The May MPR figure is the lowest in four years. According to CardData ([www.carddata.com][1]), the yield also declined in May to 13.85% from 13.89% in April, but was down 102 bps, compared to year-ago levels.

U.S. PORTFOLIO METRICS
YIELD MPR
May 07: 14.87% 19.01%
Jun 07: 14.93% 18.40%
Jul 07: 14.77% 18.30%
Aug 07: 14.80% 18.99%
Sep 07: 14.71% 18.86%
Oct 07: 14.82% 19.21%
Nov 07: 14.80% 18.89%
Dec 07: 14.63% 18.41%
Jan 08: 13.53% 18.11%
Feb 08: 13.33% 19.10%
Mar 08: 13.68% 18.33%
Apr 08: 13.89% 18.03%
May 08: 13.85% 17.54%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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Consumer Online Security Concerns Grow

A new survey reveals that 65% of adults are more concerned about online security now than they were five years ago. Over a quarter of respondents to Mintel Comperemedia’s survey say they are “significantly” more concerned. Despite their fears, 71% of adults report managing at least one financial services account online. The average American manages three financial services accounts via email and the web. Mintel believes the incidence of identity theft is actually on the decline. According to the DOJ, the number of American identity theft victims fell 12% from 2003 to 2006. Additionally, in 2006 only 8.3% of identity theft cases were the result of online behavior such as computer viruses, hackers or phishing. The majority of actual identity thefts resulted from simple theft such as a stolen checkbook or a dishonest friend. Recent data from Mintel Comperemedia’s email panel confirm the lower-than-imagined threat of phishing. In 2007, less than 1% of emails tracked by the firm were phishing scams.

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ECONOMICS MAY

The United Kingdom leading index decreased .6% while the coincident
index increased .2% for the month of May 2008 according to the
Conference Board. The leading index’ decline for the seventh consecutive
month is consistent with a 2.6% decline over the past 6 months.
Meanwhile, the coincident index increases for the month were driven
primarily by increases in retail sales while it has grown a total of .5%
over the previous 6 months. Founded in 1916, The Conference Board is a
business membership and research network to help executives build
professional relationships, expand business knowledge and find solutions
to business challenges.

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PINSENTRY

Gemalto has announced over one million UK Barclays customers now bank
online using the Barclay “PINsentry” solution. Using chip-enabled bank
cards with the Gemalto cryptographic smart card reader, Barclays
customers can implement “PINsentry” for stronger authentication when
online banking using One-Time-Passwords for signature and
authentication. Moreover, the portable Gemalto devices can be used to
perform secure online transactions from any personal computer.
Subsequently, the “PINsentry” solution offers a higher level of security
than just authentication using static credentials from wherever the user
pleases. Barclays consumers are limited to conduct personal online
transactions of a maximum amount from an initial GBP1,000 to GBP10,000.

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COMMERCE INDEX

Carlson Wagonlit Travel and American Express Global Commercial Card have
partnered under the terms of a multi-year, preferred supplier agreement.
The agreements stipulate CWT will promote and distribute AmEx’ “Business
Travel Account,” “Corporate Card and Corporate,” and “Meeting Card” to
clients in 21 countries. These CWT clients will also be allowed to
consolidate their card program across countries with flexible solutions
adapted to clients of all sizes in all market segments. CWT and American
Express will be able to provide greater value to mutual clients by
delivering enhanced data and reporting consolidated on a local, regional
and/or global basis. CWT provides numerous companies across various
sectors with travel program solutions for a sales volume, wholly owned
operations and joint ventures total of US$25.5 billion.

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