CITIBANK-LOT CREDIT CARD

Citi Handlowy and LOT Polish Airlines have awarded some who have
conducted at least one transaction between July 1, 2007 and November
30, 2007 using the “Citibank-LOT” credit card through a promotional
lottery . Hosting the award ceremony in Warsaw on February 11,
2008, the organizations offered the grand prize winner a check of one
million award miles for the Card’s “Miles & More” frequent flyer program
for redemption in various configurations for multiple items. Used by over
30,000, the Citibank Card offers an opportunity to earn miles with every
completed transaction while Citi oversees over 200 million customer
accounts in more than 100 countries around the world.

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U.S. Market Set for Tightening/Re-Pricing

A new report says credit card loss rates will continue to rise this year, and, on average, will increase roughly 100 basis points during the first half of the year. According to First Annapolis’ “Navigator” profitability dropped in the fourth quarter to just over 2% pre-tax return on assets, roughly a 50% drop from the same period in 2007. Rising losses, higher funding costs, and generally lower profitability will cause most issuers to take action including a rationalization of expenses, re-balancing of marketing investments, and tightening/re-pricing of credit in certain segments. In the partnership sector, where returns have been impacted by aggressive competition over the last few years, First Annapolis expects issuers to be much more selective, reserving hefty compensation arrangements for only the largest, highest-quality opportunities. In essence, there will be a flight to quality, increasing competition for the high-spending affluent customer.

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Processor i2c Names a Project Manager

Card processor i2c has hired Carol Lucca, previously with Western States Bankcard Association, as Project Manager. Lucca has extensive background in Process Improvement, Project Management and Account Management, all in the payments industry. While at Western States Bankcard Association, she worked with the FDR system audits to determine accuracies and recommend improvements to management. Lucca was an Account Manager with Visa USA during which time she was involved in numerous key initiatives such as Integrated Billing, VAP/DEX implementations and large partner initiatives launched by Visa and the client. She conducted settlement training for issuing banks and was considered a subject matter expert for financial operations and revised the SAS-70 audit procedures. Lucca has extensive knowledge in Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA) and Health Savings Accounts (HSA) for debit cards.

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JITTER ENABLED CARD READER

Having updated the final 1,200 ATMs, all HDFC Bank’s 1,910 ATMs are
now NCR “Jitter-Enabled”. NCR Corporation’s “Jitter-enabled” card
reader provides a security measure which prevents the most common types
of skimming attempts. Given perpetrators steal information held
on the ATM user’s magnetic stripe using a device which copies the
information, the “jitter” feature disrupts these skimming attempts. In
doing
so, the feature implements a stop-start movement during card entry and
exit.
HDFC Bank has over 754 branches in 327 Indian cities while the NCR
Corporation provides services across various sectors over 100 countries.

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TOP OUTSOURCING DESIGNATION

The International Association of Outsourcing Professionals (IAOP) has
designated Diebold as a top outsourcing company for having
maintained a standard in the self-service industry. Diebold
was awarded based on its size and growth, client satisfaction and
management capabilities of the financial institutions and other
self-service
organizations which rely on the company’s outsourcing services. The IAOP,
formed in early 2005, has 40,000 members from around the world and
is composed of nearly 250 organizations. Diebold employs over 17,000 with its operations in 90 countries worldwide, had
a 2006 revenue of $2.9 billion and provides outsourcing services which
include self-service devices, deposit automation, security solutions, money
management, software management and network management, among
others.

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AUB BNI VISA

Ahli United Bank and and Bahrain National Insurance Company have partnered to issue a VISA credit card offering discounts in insurance premiums plus a rewards program. The new card offers a 10% discount on premiums for motor, medical and Al Dar home insurance and 5% on premiums for life insurance with BNI. For every dinar spent on the card with AUB’s credit card rewards program cardholders earn “Pearl Rewards.” Accumulated “Pearl Points” can be redeemed for free air tickets, hotel
stays or can even be used for payment of insurance premiums at BNI.
AUB reported a consolidated net profit of US$ 296.3 million for 2007.

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V/MC Incentive Spending Doubles Since 02

A new report has found that spending on rebates and incentives from VISA USA and MasterCard Worldwide increased to $1.7 billion last year, compared to $1.3 billion in 2005 and $700 million in 2002. The study by Boston-based Aite Group suggests the expansion was due largely to the U.S DOJ’s 2004 ruling in favor of network competition. However, Aite says that as card networks increasingly rely on rebates and incentives to protect and grow GDV, the yield they receive on GDV will take a major hit. To fend off that trend, VISA and MasterCard will need to grab a greater share of intracountry processing volumes outside of the U.S.. The alternative – failing to grow the share of branded cards processed on their network – might otherwise have consequences as dramatic as obliterating their futures as independent corporations.

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VX SOLUTIONS

VeriFone Holdings has received GIE Groupement des Cartes Bancaires
certification for the deployment of its countertop and portable payment
“Vx Solutions”, which includes the “VX 510” and “VX 670”, across
France. With this certification, the company can provide payment solutions
in various market sectors with its “VX 510” for payment processing,
expanded memory and support for post-factory applications while the
VX 670 is compact, portable, Bluetooth compatible, GPRS compatible
and Wi-Fi compatible for delivery, restaurant or high volume vendors.

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Sub-Primer CompuCredit Charge-Offs Top 13%

Atlanta-based sub-prime card specialist CompuCredit reported net GAAP income for the fourth quarter of $15.8 million compared to a $53.2 million net GAAP loss in the prior quarter, and net GAAP income of $9.7 million one-year ago. Total managed receivables soared by 47% year-on-year for the fourth quarter ending at $4,142,638,000. During the fourth quarter the Company discontinued 105 of its retail micro-loan branches in six states, its stored value card operations, and its Internet-based installment loan operations. At year-end, CompuCredit had 5,313,000 accounts, compared to 3,851,000 in 4Q/06. The adjusted charge-off rate was 13.4% in the fourth quarter, up from 10.9% for the fourth quarter and 10.1% in the previous quarter. As of December 31st, the 60-plus day delinquency rate was 18.4%, up from 14.1% for 4Q/06 and 14.6% for 3Q/07. For complete details on CompuCredit’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

COMPUCREDIT NET INCOME* SNAPSHOT
4Q/06: $ 9.7 million
1Q/07: (-$ 2.5 million)
2Q/07: (-$11.0 million)
3Q/07: (-$53.2 million)
4Q/07: $15.8 million
*GAAP
Source: CardData (www.carddata.com)

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

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SEPA

SEPA’s progress in the migration of payment cards has been slowed in
recent weeks, creating an atmosphere of uncertainty for banks, card
issuers and consumers, according to recent research compiled by the
Mercator Advisory Group. This uncertainty is mostly in card scheme
confusion, multilateral interchange fees, clarity in the SEPA Cards
Framework (SCF) and standardization issues, which are collectively
preventing the completion of the migration. Furthermore, card scheme
uncertainty is hindering efforts, with most national schemes not
settling on
1 of the 3 names (MasterCard, Visa Europe or EAPS) until more clarity
is provided to the payment cards industry and regulatory legislation is in
place ensuring SEPA’s progress. Mercator Advisory Group provides
independent research and advisory services across the payments industry
to provide revenue growth and contain costs for clients in the payments
industry around the world.

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Moneris Solutions Introduces eSELECTplus

Moneris Solutions has introduced a multi-functional Internet-based application that uses a PC and Web browser to process card payments. The new “eSELECTplus” enables merchants to process credit cards, signature and PIN-based debit cards, and ACH transactions without the need to install any special software. In addition, “eSELECTplus” offers an easy to use API for integration into business management software applications. Merchants can also set-up recurring and automatic payment plans. “eSELECTplus” offers a variety of modules tailored to different types of businesses, and can work in both customer-present and customer-not-present environments.

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HOLIDAY SPENDING

According to APACS December 2007 spending figures, British
spent GBP32.2 billion with their credit cards, of which GBP5.4 billion
was used to conduct Internet purchases, 4% over the prior year.
This marks the slowest rate of growth in 4 years for credit card
spending, thanks in part to a 6.8% increase in debit card spending of
GBP20.9 billion. This is in conjunction with a 2.8% decrease in the
volume of credit card transactions from 197 million transactions in
Dec.’06 to 192 million in Dec.’07. Overall, plastic card purchases
accounted for 64% of all December purchases with 690 million
transactions up 3.2% from the year prior.

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