GLOBAL INTERCHANGE

Retail Banking Research) analysis has concluded Global POS
interchange fees have increased 140% between 2000 and 2006 for a total
$64 billion, thanks mainly to an increase interchange rates in the USA
and payment card purchase expenditure around the globe. With this, RBR
forecasts major changes to POS interchange fee arrangements and fee
levels around the world due to growing competition in POS interchange
fees, increasingly tough stances on multilateral interchange fee (MIF)
arrangements and regulatory pressure to converge and standardize fees in
the SEPA area for the decline in POS interchange fee levels.

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LifeLock CEO Fights Back Over Lawsuits

LifeLock CEO Todd Davis has responded to the recent spate of lawsuits and accusation of fraud by the company. Recent claims have suggested that Davis’ social security number has been used at least 20 times to obtain drivers licenses and other credit. Davis explained that the “claims are completely untrue and reflect total inexperience and lack of understanding of how credit files and identities work. While there have been more than 100 attempts to use my identity information, none of these recorded in the credit files resulted in any loss for me”. To date, four customers have filed lawsuits against LifeLock and in turn, Davis has filed motions with two federal judges to dismiss claims in the cases before them. The plaintiffs are continuing to maintain their LifeLock accounts, according to Davis.

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TIM’S DEPLOYMENT

Telecom Italia Mobile has teamed with Gemalto for the
deployment of a NFC program in Trento, Italy, the first of its kind in
the country. Providing TIM with transport applications embedded in the
SIM cards, the Gemalto platform allows TIM customers to use their mobile
phone as a access device to take public transportation with
mobile contactless deployment. Gemalto has already conducted several programs on various NFC transport infrastructures. In Western Europe for example, in 2005, Gemalto joined together with Bouygues Telecom and RATP to launch the first SIM-based contactless system in Paris. In 2006, Gemalto working also with Bouygues Telecom, and with regional operator Transdev, delivered a contactless program covering Grenoble and its region, including smart posters so that end users can download maps on their mobiles.

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Card Solicitations Drop 14% from Q4

The estimated number of direct mailings sent from banking, credit card, investment, and mortgage and loan companies fell 10%. According to Mintel Comperemedia estimates 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.

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Dynamic Card Releases CardWizard 4.0

Dynamic Card Solutions has released “CardWizard 4.0” software application that creates flexible instant card issuance for debit, ATM, credit and prepaid cards. Highlights of CardWizard 4.0 includes complete CHIP personalization with PayPass/payWave contactless technology that allows financial institutions the benefit of offering ease and convenience to consumers. The system will be able to instantly issue cards with both contactless chips and magnetic stripes allowing them to remain usable with a variety of existing merchants’ payment systems and custom background selection that allows further customization capabilities that produce a fully personalized, thermally printed, unembossed card in real-time for cardholders which includes immediate transmission of all card personalization information such as the cardholder’s name, account number, expiration date, CVV or CVC 2 security codes along with front and back card images. Other features include expanded camera support for photo capture and key injection security and support for contactless cards, a new rewritten Batch Input component and improved font capabilities for unembossed cards.

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FTC Settles an Advance Fee Lawsuit

The Federal Trade Commission has settled with NC-based Home Buyers Consulting Network for for alleged federal law violations, including illegally charging an advance fee for credit repair and falsely claiming that they can remove negative information from consumers’ credit reports, even if the information is accurate and timely. According to the complaint, consumers are led to Home Buyers Consulting Network if they need credit repair or access to zero or low down-payment home financing. In sales pitches for its credit repair services, HBCN makes claims such as: “Our program offers the ability to REPAIR, RESTORE, or ESTABLISH your credit so that you may be able to qualify for 100 % home financing, lower interest rates and better quality credit.” Before performing the promised credit repair services, HBCN’s representatives typically require advance payment of at least $99 for those services, and $399 for bundled credit repair and home-buying consulting services. They also require additional advance payments for credit repair services, typically ranging from $19 per week to $49 per month, and promise to refund all but a $99 fee if consumers do not receive the promised results, provided that the consumers work with them for a period ranging from six months to a year.

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MyECheck Inks Everpay Merchant Services

Alternative payment solution provider MyECheck has signed Everpay Merchant Services to enable Everpay customers to accept MyECheck for online payments. Everpay Merchant Services merchant clients can integrate software allowing their consumers to use their checking accounts as an additional form of online payment. MyECheck’s patent pending software can debit every U.S. checking account, even accounts that ACH cannot debit; thus providing online merchants financial access to more consumers and businesses than any other payment method. Everpay Merchant Services specializes in electronic payment processing and e-Business solutions with personalized assistance.

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Bank Freedom MasterCard Takes Off

Prepaid Card Holding’s subsidiary Bank Freedom has shipped 44,000 prepaid MasterCards in April 2008, more than double the forecasted order. Bank Freedom has recently entered the prepaid card industry with its Bank Freedom Prepaid MasterCard, issued by MetaBank pursuant to license by MasterCard International Incorporated. According to market data available, there are between 40 and 80 million people in the United States who don’t have a bank account or who can’t qualify for a credit card because their credit scores are too low, known as the “under-banked” market. The prepaid card solutions offered by Bank Freedom can act as a card account and payment solution for those people who do not use banks or credit cards. and for the under banked, a way to replace their reliance on check cashing centers, money orders, and enable them to buy certain products that require a major credit card.

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DUBAI BIZ CARD

Dubai First has launched its flexible interest “Business Credit Card”
for consumers in the region in association with Visa International for
acceptance at more than 22 million locations. In doing so, the Dubai
First “Business Credit Card” is offering flexible financing options to
businesses with financial flexibility using an interest rate mechanism
as low as 1.33% per month, a rewards program allowing for points
redemption for cash, services or free offers and a draft facility
feature allowing for card use anywhere. Additional features include
access to a dedicated personal account manager, special discounts and
privileges, discounts on UAE Gate Card, business secure insurance and
information support. Around the world, small and medium sized
enterprises’ spending have been growing at an average rate of 14%
annually with an estimated spend of US $4.2 trillion in 2006.

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Small Business Confidence Rises in May

Fewer small businesses have poor impressions of the current economy, with cash flow issues at the lowest rate in six months. The latest Discover “Small Business Watch” has increased to 81.8 in May from 76.1 in April. Also reflecting a rebounding economy, 28% of owners say business conditions are improving, up from 24% in April, 71% think the U.S. economy is getting worse, down from 76% in April, and 39% have had issues with cash flow over the last 90 days, down from 44% the month prior. Additional findings show these small business owners work more than others with 59% defining a “day off” as being available for calls and emails, 23% not having taken a planned vacation that lasted at least a week in over four years, 25% of owners usually working 10 to 12 hours per day and 47% working “always” or “most of the time” on official holidays.

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Chase Paymentech Solutions JV to End

Citing that the payments and merchant-acquiring businesses are core to their strategies, JPMorgan Chase and First Data announced they have agreed to end the Chase Paymentech Solutions joint venture by the end of this year. Afterwards, JPMorgan Chase and First Data will operate separate payment businesses. JPMorgan Chase will provide global payment solutions for allocated merchants by retaining 51% of the JV’s assets, including most of its employees and the JV’s Canadian and European operations. The bank will name its payments and merchant acquiring business Chase Paymentech and retain the JV’s Dallas headquarters. First Data will continue to provide transaction processing and data commerce solutions for allocated merchants through its current technology platforms. First Data will assume management of the full-service ISO and Agent Bank unit of the JV and will integrate 49% of the JV’s assets and a portion of the JV employees into its existing merchant acquiring business. Chase Paymentech Solutions processed approximately 19.7 billion payment transactions, with more than $719 billion in annual bank card and debit volume.

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’08 AmEx Membership Rewards Announced

American Express has announced the “2008 Membership Rewards Program” partner lineup, including new additions. Among the news additions is the Wynn Las Vegas resort, Air Tahiti Nui, West Elm, Legal Sea Food, Forth Wall Restaurants, U.S. Golf Association Mandarin Oriental Hotel Group and The Peninsula Hotels. The additional 140 partners span various sectors allowing for AmEx point redemption in a wide selection of reward categories, including organizations such as Airlines, Car Rentals, Railway, Charities, Dining, Entertainment, Financial Services, Hotels, Merchandise, Retail, Sports and Adventure.

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