RETAIL PURCHASING

The latest Bloomberg Eurozone Retail “Purchasing Managers’ Index” posted the second-fastest rate of decline in the survey’s four-and-a-half year history and exceeded by April’s record fall.
The Index fell fell from 53.1 in May to 44.0 in June. Italian sales showed by far the strongest rate of decline among the three largest euro countries. Eurozone retail sales also fell sharply on a year-on-year basis in June, posting the second-steepest fall in the past twenty-seven months and representing a marked contrast to the thirteen-month peak in growth seen in May. The year-on-year sales index dropped from 56.1 to 43.6. On average, year-on-year sales over Q2 as a whole showed the steepest fall for three years.

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ABA Tackles Student Credit Card Concerns

Citing recent findings of a study by Student Monitor, representatives of the American Bankers Association has testified in Congress before the House Financial Services Committee to advocate against legislative proposals to limit certain categories of students from obtaining credit cards. Student Monitor has published its findings reflecting the vast majority of students manage their credit obligations well with 65% of college student credit card customers paying their bills in full each month and an average account balance for the remaining 35% only being $452, supporting ABA’s argument. Additionally supporting its position, the ABA holds that credit cards are a valuable means for establishing and building credit.

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GIANT CITIBANK CARD

Giant and Citibank have launched the “Giant Citibank” credit card,
providing consumers a 2% rebate on all purchases made at Giant stores
nationwide and up to 1% rebate on all other purchases. The new card
additionally provides cardholders member prices, discounts, no annual
fee for the first year, a 10% rebate for first spend to those applying
before July 15 on purchases made before Aug 31. This partnership is part
of Citibank’s regional strategy of establishing and promoting
co-branding partnerships with strong brands that influence their
markets, such as Giant, and was attractive to Citi considering 50% of
its customers use their card to purchase groceries. Giant stores provide
over 8 million Malaysians per month throughout the country with
groceries and essentials.

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CANADIANS AND TRAVEL INSURANCE

A new survey commissioned by RBC Insurance and Ipsos Reid indicate that
the cost of fuel is impacting Canadian travelers who chose to not to
protect themselves with travel insurance. Many Canadians assume they
are covered through existing travel plans. For example, the survey shows
43% of travellers feel they
don’t need to buy travel insurance because they have sufficient coverage
through
work or their credit card and 37% of Canadians never purchase travel
insurance when travelling on vacation to the United States, a country where
medical costs are among the highest in the world. These Canadians are left
potentially exposed to the high costs of the U.S. healthcare system.
The survey also reports that 55% of Canadian travellers never
purchase travel insurance when they travel outside their home province but
within Canada and 62% of Canadians believe they don’t need to
purchase travel insurance when travelling to another province within Canada
because they believe their provincial health plans will cover their medical
costs. In fact, government health insurance plans may limit
reimbursement for
expenses such as land and air ambulance services and X-rays. An air
ambulance with a full medical team travelling from Calgary to Toronto, for
example, can cost $28,000 and is not covered by a GHIP.

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BANKWAY INTERNATIONAL

China Banking Corporation, Metavante Bankway International client since
1995, has extended its core banking relationship with Metavante. With
this, Metavante’s “Bankway International” technology software will be
deployed in China Bank’s network of over 200 branches and 286 ATMs
located throughout the Philippines and will continue to support its
nearly 750,000 accounts. Established in 1920 with assets now exceeding
$4 billion, China Bank is the fourth largest Philippine bank by market
capitalization.

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Visa Caps Gas Interchange & Raises Limits

In response to the current frustration of consumers and merchants at the gas pump, VISA announced a change in its consumer interchange and transaction limits. Effective July 18th, interchange for Visa consumer debit cards will be capped at $0.95 per transaction. Effective in October, or sooner for some fuel merchants, Visa credit interchange applied to fuel transactions has been restructured into a single, lower rate across all consumer credit card transactions. This fall, Visa will also implement “Real-Time Clearing” which will enable fuel transactions to be processed immediately instead of at the end of the day and eliminate the holds generally placed on consumer debit card transactions. Until the new processing changes are implemented in Visa’s October systems upgrade, Visa is allowing consumer fuel transactions up to $125 to qualify for its best-available interchange rates. This interim step is effective July 18th and will remain in place through October 2009. Once gas stations and their financial institutions migrate to “Real-Time Clearing,” consumer fuel transactions up to $500 can qualify for Visa’s best available interchange rates.

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Idcentrix & Advantics Team for ID Bidding

CA-based Idcentrix secure ID cards has inked a preferred partnership with Advantics to jointly accept bids on projects in the Caribbean, Central America and South America. Advantics provides systems integration, enrollment hardware, software and database management, specializing in the government ID industry across Latin America, and is based in the Dominican Republic. iDcentrix has licensed patented technology providing highly secure identification cards based on Swiss banknote paper and polycarbonate to prevent duplication and counterfeiting.

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Rising Paper Costs Drives Down Card Mail

Credit card solicitations may be sharply scaled back as a result of manufacturing cost increases of 12-14% this year due to the escalation in energy, wood, transport and chemical prices. RISI, which tracks the global forest products industry, says most paper producers have announced a $50-60 per ton price hike for July on coated mechanical paper-commonly used for glossy catalogs and direct mail packages. The Pulp & Paper Products Council reports that North American demand declined a whopping 13.5% as printers and other end users started cutting orders sharply to match the performance of their true consumption of paper, which has been very weak all year. Mintel Comperemedia last month estimated that financial services direct mail volume at 4.2 billion for 1Q/08, 13% lower than the 4.8 billion estimated for the year ago quarter. Among financial services companies, credit card issuers cut back on direct mail the most. Mintel Comperemedia estimates that mail volume for credit cards fell 14% from 4Q/07 to 1Q/08 (from 3.0 billion offers to 2.6 billion). Three of 2007’s top five credit card mailers including Chase, Bank of America and HSBC reduced their direct mail by over 15% during 1Q/08. I(CF Library 5/27/08)

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CANADIANS AND TRAVEL INSURANCE

A new survey commissioned by RBC Insurance and Ipsos Reid indicate that
the cost of fuel is impacting Canadian travelers who chose to not to
protect themselves with travel insurance. Many Canadians assume they
are covered through existing travel plans. For example, the survey shows
43% of travellers feel they
don’t need to buy travel insurance because they have sufficient coverage
through
work or their credit card and 37% of Canadians never purchase travel
insurance when travelling on vacation to the United States, a country where
medical costs are among the highest in the world. These Canadians are left
potentially exposed to the high costs of the U.S. healthcare system.
The survey also reports that 55% of Canadian travellers never
purchase travel insurance when they travel outside their home province but
within Canada and 62% of Canadians believe they don’t need to
purchase travel insurance when travelling to another province within Canada
because they believe their provincial health plans will cover their medical
costs. In fact, government health insurance plans may limit
reimbursement for
expenses such as land and air ambulance services and X-rays. An air
ambulance with a full medical team travelling from Calgary to Toronto, for
example, can cost $28,000 and is not covered by a GHIP.

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Credit Card APRs May Bounce Back this Year

The Federal Open Market Committee decision this week to keep the lid on short-term interest rates will have little impact on the credit card market. Average variable interest rates on bank credit cards have dropped from 16.65% to 15.08% over the past twelve months, while the prime rate has plunged from 8.25% to 5.00% during the same period. For credit card users this may mean the bottom on APRs as it appears the Fed will likely raise rates in the future to fight off inflation due to rising gas and food prices. If the Fed stops lowering rates than it is likely credit card issuers will switch back to variable interest rates to ride the future rate hikes. CardTrak advises that consumers should be weighing carefully all card offers they receive in the mail or via the Internet to lock-in a good promotional rate or long-term rate, before rates head north again.

PRIME RATE & CREDIT CARD RATES
Prime Fixed Variable
Jun 07 8.25% 14.93% 16.65%
Jul 07 8.25% 14.96% 16.69%
Aug 07 8.25% 14.97% 16.70%
Sep 07: 7.75% 14.98% 16.58%
Oct 07: 7.75% 14.99% 16.39%
Nov 07: 7.50% 15.00% 16.29%
Dec 07: 7.25% 15.02% 16.02%
Jan 08: 6.50% 14.97% 15.79%
Feb 08: 6.00% 14.95% 15.64%
Mar 08: 6.00% 14.93% 15.60%
Apr 08: 5.25% 14.89% 15.35%
May 08: 5.00% 14.88% 15.11%
Jun 08: 5.00% 14.85% 15.08%
Source: CardTrak (www.cardtrak.com)

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RBS Lynk and Chockstone Link for Loyalty

Chockstone has partnered with RBS Lynk acquirer to provide its loyalty services to restaurant merchants. The Chockstone loyalty platform allows RBS Lynk to differentiate its product offering, especially designed for restaurant operators, to provide loyalty products and services. The POS delivery solution makes it easier for a merchants to put together loyalty campaigns that shape the consumer’s behavior and deliver messaging on the customer’s receipt.

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Society of Payment Security Professionals

The Aegenis Group has introduced its Society of Payment Security Professionals membership community, focused on the professional development of individuals and organizations responsible for security within the payments industry. Allowing organizations to enroll up to 12 employees, the Aegenis Group intends to provide the payments security industry with a communications network for educational and professional development opportunities with SPSP through such membership benefits as a career center, collaborative communication tools (discussion forums and blogs), eLearning courses and targeted white papers. The SPSP also allows members to share articles, podcasts and materials of relevance. The Aegenis Group regulatory compliance and risk management consulting organization provides strategic consulting, training and market development assistance for companies in and around the payment card industry.

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