Businessowner Confidence Picks Up in Feb

Economic confidence among small business owners improved in February for the first time since July of last year. Forty-one percent of owners said current economic conditions have forced them to reduce business spending, and 67% report having to curtail personal spending. Another 55% have been forced to reduce the amount of money they take out of their businesses, according to the “Discover Small Business Watch” index. The index rose in February to 90.9, a 4.6-point increase over January’s 86.3. About 34% of small business owners said they see economic conditions for their businesses getting better over the next six months, up from 31% who felt the same in January. One-third said they planned to increase spending on business development activities over the next six months, an increase over 28% in January who planned to do the same. Two-thirds of small business owners feel that economic conditions in the U.S. are getting worse, a decrease from 74% who felt this way in January. More than 40% said they have experienced cash flow issues over the last 90 days, a slight decrease from 44% in January, but consistent with the past several months.

Discover Small Business Watch
Feb 07: 113.4
Mar 07: 117.7
Apr 07: 110.3
May 07: 110.0
Jun 07: 102.5
Jul 07: 107.3
Aug 07: 102.4
Sep 07: 99.2
Oct 07: 96.8
Nov 07: 93.2
Dec 07: 92.7
Jan 08: 86.3
Feb 08: 90.9
Source: Discover Business Card

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Merchant Acquiring Net Spread Increases

A new report reveals that while there is an undeniable margin squeeze on the discount rate charged by ISOs and acquirers, the net spread in merchant acquiring has been rising steadily. This not only contradicts the industry belief of margin compression, but highlights how successful ISOs and acquirers have been in increasing their revenues, which are expected to grow from $70.5 billion in 2008 to $95.9 billion in 2012. According to Aite Group, the acquiring model started by Discover and emulated by American Express will allow ISOs and acquirers to move from a reseller agreement to an acquiring agreement. This model will offer ISOs and acquirers new revenue opportunities.

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Compass Bank Names a Big VISA Winner

AL-based Compass Bank has awarded $1 million to the winner of the “VISA Your Life, More Wonderful” Sweepstakes. Jeff Dubuisson won with a $5.98 purchase of a chicken sandwich at a Birmingham-area Wendy’s restaurant. The 2007 VISA “Your Life, More Wonderful” Sweepstakes, took place between Nov. 15 and Dec. 31, 2007, and involved not just Compass Bank VISA clients, but customers of other financial institutions within the VISA network. Entries in the sweepstakes were made by making a VISA card purchase, bill payment with a VISA card or without purchase by a mail-in method. Compass Bank is a subsidiary of Compass Bancshares, a wholly owned subsidiary of BBVA, a financial services group with approximately $700 billion in total assets.

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Travelex’s VISA TravelMoney Draws an Award

Travelex’s “VISA TravelMoney” card has been named as a finalist as “Best Consumer Card Program” awards to be given at the Prepaid Card Expo in Las Vegas next month. The Travelex Visa TravelMoney card is used extensively by leisure travelers and has begun to be adopted by businesses as a tool to fund overseas staff expenses. More than 160,000 Travelex cards were purchased last year totaling more than $150 million USD. Travelex is a foreign exchange and business payments specialist, operating through subsidiaries and branches in the Americas, United Kingdom; Europe, Asia Pacific; and Middle East and Africa.

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World’s Foremost Bank Grows Card Loans 26%

The World’s Foremost Bank, a subsidiary of Cabela’s, the “World’s Foremost Outfitter,” reported that its average VISA credit card loans increased 26% in the fourth quarter compared to one-year ago. With an estimated 1.8 million cardholders for its “Club VISA,” WFB posted managed card loans of $1.864 billion for 4Q/07. For the fourth quarter, the nation’s 23rd largest issuer also reported interest income of $50.3 million, interchange income of $15.4 million and other credit card fee income of $7.7 million. Over the past year Cabela’s has introduced a loyalty card and a debit card with rewards. Last year, U.S. Bank and Cabela’s introduced the “Cabela’s VISA Check Card,” offering reward points for signature purchases. The “Club VISA” offers 2% back on all Cabela purchases and 1% on other purchases. The U.S. bank-issued “VISA Check Card” offers one point for every $2 spent at Cabela’s stores and one point for every $3 spent at other merchant locations. For complete details on Cabela’s/World’s Foremost Bank latest performance, visit CardData ([www.carddata.com][1]).

WFB AVG CARD LOANS
4Q/06: $1484 million
1Q/07: $1584 million
2Q/07: $1607 million
3Q/07: $1731 million
4Q/07: $1864 million
Source: CardData (www.carddata.com)

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

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NBPCA Issues a Prepaid Card & Laundering Report

The Network Branded Prepaid Card Association has released “Recommended Practices for Anti-Money Laundering Compliance for U.S.-based Prepaid Card Programs.” The report recommends how to implement internal controls, monitor and manage third-parties involved with prepaid card processes and mitigate risks associated with money laundering. It is the result of 11 months of work by the NBPCA AML Task Force, which drew on the extensive experience of the NBPCA membership, which includes card brands, financial institutions, issuers, program managers, law firms, distributors and processors. The NBPCA’s Working Groups drive the activities of the Association for its more than 35 members.

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CU of Texas and FIA Sign an Agreement

For its 19,000 accounts and its portfolio of $44 million in outstanding loans, The Credit Union of Texas has chosen FIA Card Services as its credit card partner following the recommendation of Brookwood Capital and extensive consideration. The decision to partner has been made based on the quality of the FIA’s card products, which has a record of member satisfaction, has demonstrated portfolio growth and, according to the Credit Union, is committed to providing exceptional service to provide members with tangible benefits through programs, rates and rewards. During the transaction, Brookwood Capital served as an advisor to The Credit Union of Texas, which serves its 175,000 members through 10 branches in the Dallas area and has over $1 billion in assets.

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Port Authority and NJ Transit to Test PayPass

Initially available to MasterCard “PayPass” customers, The Port Authority, MasterCard and NJ TRANSIT have been authorized by The Board of Commissioners to launch an 8-month pilot to test contactless bank cards, key fobs, cell phones and other devices for NFC transit fare settlement. After the first 2 months of the pilot, which will determine compatibility of the solution with the regional transit systems, the NFC pilot will be available for all commuters who travel from any of the 13 PATH (Port Authority Trans-Hudson) train stations and 2 of the system’s bus routes. This development is in response to an earlier pilot launched for the NYC Metro Transit Authority with MasterCard during July of 2006 for the Lexington Avenue subway line at 80 fare gates in 30 stations. A permanent solution is expected to launch in early 2009 following the pilot and additional testing.

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VISA Expands its Olympic Game Initiatives

VISA has introduced its team of athletes for the “Beijing 2008 Olympic” and the “Paralympic Games” at the “VISA Olympic Media Summit,” for which the organization has contributed over $14 million to U.S. Olympic and Paralympic Team hopefuls since VISA initial designation as “America’s Olympic Team Partner” in 1986. Additionally, VISA has extended its partnership for “Play Every Day,” supporting the initiative for children to get at least 60 minutes of physical activity each day with funding for parks, playgrounds, trails and open spaces. With the launch of the organization’s Integrated Marketing Programs, VISA has provided 225 issuing U.S. banks and 300 merchant partners with means of participation and producing over 48 million pieces of marketing collateral to enhance card-marketing efforts.

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Asset Acceptance Posts a Slight Q4 Increase

MI-based Asset Acceptance Capital reported that total revenues increased 1.1% to $62.2 million for the fourth quarter, compared to 4Q/06. Cash collections increased 10.1% to $89.1 million. In the fourth quarter, Asset Acceptance invested $62.8 million to purchase charged-off consumer debt portfolios, net of buybacks, with a face value of $1.5 billion, representing a blended rate of 4.10% of face value. The Company expects to report net income in the fourth quarter of $4.0 million, compared to net income of $9.8 million in the prior year period. For complete details on AACC’s latest performance visit CardData ([www.carddata.com][1]).

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

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BRIT AWARDS

For the first annual “BRIT Awards”, ID Data and MasterCard
supplied the 5,350 attendees with a “BRIT Awards MasterCard
PrePaid PayPass”, each pre-loaded with GBP10. The card allowed for
purchases at the event, such as the “BRITs Hits” album from kiosks,
food and drinks, and wherever the payment solution is accepted through
“Tap & Go” card readers. There are over 23 million “PayPass” cards in
use, accepted at more than 95,000 merchant locations in over 24
countries. MasterCard Worldwide provides payment services in nearly
210 countries, processing more than 16 billion transactions per annum,
while ID Data supplies plastic cards and solutions across Europe in the
banking, retail, travel and government sectors.

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Hypercom Lands MasterCard’s Goff as President

Hypercom has hired former MasterCard executive Heidi Goff as President and Managing Director, the Americas. Goff will join Hypercom next week to drive the Company’s sales, service and support throughout North America, South America, Mexico, the Caribbean and Central America. Goff served for 11 years with MasterCard International in leadership roles including SVP/Global Merchant Services and SVP and General Manager, Merchant Services. She was a founding executive and EVP of Global Payment Systems, EVP and GM of Transaction Network Services? North America division, and President and COO of U.S. Wireless Data. Hypercom recently purchased Thales’ e-Transactions business. (CF Library 2/14/08)

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