ADS & Epsilon Ink the Sharper Image Card

Alliance Data Systems will launch an integrated private label credit card program and permission-based email marketing services with retailer Sharper Image. Alliance Data’s bank subsidiary will provide Sharper Image with a full suite of services, including account acquisition and activation, receivables funding, credit authorization, card issuance, statement generation, electronic bill presentment services, remittance processing, marketing and customer service functions. The program will also include loyalty and reward incentives for eligible cardholders, such as merchandise discounts and rebate certificates based on purchases, invitations to in-store events, and other exclusive offers.ADS’ Epsilon will deploy its proprietary email communications and campaign management platform for Sharper Image. Epsilon will also provide strategic consulting to help Sharper Image develop highly targeted permission-based email marketing campaigns designed to acquire, retain customers and generate increased sales through up-sell and cross-sell opportunities. Sharper Image is a specialty retailer with 2006 fiscal year-end revenues exceeding $525 million.

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Recession Can Flatline ARM Industry Profits

About $1.65 billion from 48 completed M&A transactions took place in the accounts receivable management industry last year. Kaulkin Ginsberg says the year was characterized by fewer transactions involving comparatively larger deal values. Significant deals include Sherman Financial, West Corporation, AllianceOne and NCO Group. Kaulkin Ginsberg says that during a recession, major credit issuers like credit card lenders typically increase the volume of placement outsourcing to collection agencies and debt buyers, but it becomes harder for the debt purchasing companies and collection agencies to liquidate the debts. This can potentially flatline or reduce the level of collections and profitability of ARM firms in the short term.

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Shift4 & JDA Software Form an Alliance

TNB Card Services has hired Doug Farrell, formerly with Remitpro, and Andy Bowers, formerly with Fifth Third Bank Processing Solutions, as VPs of regional sales. Farrell will focus on the south central and western regions. He previously held positions with a variety of companies in the electronic payments market, including First Data Resources and Eastman Kodak. He has had extensive experience in selling outsourced software applications and technology solutions to Fortune 1000 companies. He has a degree in business administration from the University of Nebraska, Lincoln. Andy Bowers, who focuses on the northeastern region, previously worked in sales with Muzak Corporation. He has a degree in business administration/organizational communication from Ohio University.

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Credit Union Outstandings Rise 15% in 4Q/07

Credit unions turned in a solid performance during the fourth quarter, besting industry averages and the nation’s top credit card issuers. Based on early returns in CardData’s fourth quarter portfolio survey, credit union outstandings were up 15.2% year-on-year while volume increased 13.5% over 4Q/06. Account growth was up a modest 3.6%, on par with the industry. The results are based on credit union card portfolios representing more than $1 billion in aggregate outstandings. Pennsylvania State Employees Credit Union posted an 8.5% gain in outstandings and an increase of 7.8% increase in quarterly volume. However, America First CU posted a 41% gain in outstandings and a 25% gain in 4Q/07 volume. Chase reported this week that end-of-period managed loans of $157 billion increased by 3% year-on-year. Charge volume of $95.5 billion increased by 2% from 4Q/06. Citi posted credit card outstandings of $116.4 billion, up 4% compared to one-year ago. Purchase volume for the fourth quarter rose 8% to $87.8 billion for Citi.

CREDIT UNIONS 4Q/07
Outstand Volume Accounts
PA State Emp CU $308MM $125MM 121K
America First CU $294MM $198MM 141K
NC State Emp FCU $187MM $131MM 193K
Randolph Brooks FCU $129MM $108MM 67K
Kinecta FCU $111MM $ 53MM 59K
Source: CardData (www.carddata.com)

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CREDIT CARD COMPARISON

European Union lawmakers are refining legislation that will allow
consumers to more easily compare loan terms and rates across the
continent. Currently, figures show that consumer credit interest rates
vary from as low as 6% in Finland to as high as 12 percent in
Portugal, according to experts, which seriously compromises market
competition. With these new legal requirements, the EU hopes to
address this issue of one-sided competition in the consumer credit
market and provide the consumers key facts amid figures regarding
their loans with greater transparency. Furthermore, the EU is seeking
to increase consumer rights when such loans are contracted with such
benefits as the allowance to terminate a loan without justification or
additional fees and to make early payments.

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Dolans Name Top Credit Card Info Websites

The nation’s most popular personal finance duo searched high and low across of the Internet, carefully reviewing tons of Websites to come up with the “Top 100 Best Money Websites.” Ken and Daria Dolan named cardtrak.com and bankrate.com as the best credit card information sites on the Web. The Dolans said they found a blitz of self-serving and fraudulent sites with many offering inaccurate information, sales pitches, dead-ends, and even outright scams. The Dolans’ “Top 100 Websites” are organized by 39 categories. The Dolans have published five books on personal finance, host a nationally syndicated radio program on nearly 100 stations and are Money contributors to CBS’ “This Morning.”

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LINQPAY & IPS

LinQpay mobile payments and Internet Payment Solutions have
signed collaborative agreements, with undisclosed terms, for the joint
development of an “M-Payments” solution. The joint venture is designed
to provide various payment services on a mobile platform, including
mobile extensions to IPS e-wallets, combining LinQpay’s mobile payment
services and IPS’s Chinese payment platform. With this, IPS will extend
its current payment platform with LinQpay’s m-commerce services to
provide mobile websites, m-commerce and m-fulfillment to companies and
organizations throughout the country. LinQpay provides m-commerce and
m-payments around the world while IPS, a subsidiary of Universal
Technologies Holdings Limited, develops new e-payment solutions for
merchants across Asia in many different sectors.

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NABU VISA

The German Nature and Biodiversity Conservation Union and Volkswagen Bank have teamed to launch a series of VISA cards. Giesecke & Devrient is supplying the new EMV-compliant cards that offer a choice of six different animal motifs. Under the “NABU VISA” card program the first annual fee of 10 euros goes to the nature conservation society. NABU also receives a proportion of the credit card transactions made using the card thereafter. NABU customers can personalize their credit cards by opting for one of six animal motifs (wolves, bears, lynx, robin, snow leopard or stork). Each of these motifs symbolizes a current NABU project.

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Google Checkout Gains Traction as an APM

The new Google Checkout service is rising quickly in adoption by online retailers. A new report found that alternative payment methods in general grew 25% over the past year among top online retailers. Of those, Bill Me Later saw the highest adoption at 21%, with PayPal closely behind at 19% and Google Checkout at 10%, double the adoption it saw in February. About 5% of the surveyed companies now offer all three options. Cleveland-based Brulant says that one-year ago none of the top 100 online retailers surveyed offered all three methods. The interactive agency also says the surge in PayPal adoption over Bill Me Later is probably related to consumer trust.

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Diebold to Restate Financials to 2003

Diebold has completed discussions with the SEC’s Office of the Chief Accountant and has established a revised revenue recognition method from its previous “bill and hold” method of reporting. The company is discontinuing the use of bill and hold as a method of revenue recognition and will change its revenue recognition policy to now recognize revenue upon customer acceptance of products at a customer location. The company’s revised method of recognizing revenue will be adopted immediately and comes after an in-depth analysis and review with its external auditors, the audit committee of the company’s Board of Directors and the OCA.

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BasePoint Introduces Recovery Optimization

CA-based risk solution provider BasePoint Analytics has launched “Recovery Optimization Program” for credit and debit card issuers. The program offers a benchmarking process that helps to identify and size opportunities based on comparisons to issuers with best-in-class performance. Analysis of historic account and transaction level data is used to determine the appropriate target chargeback recovery rates given the issuer’s constraints and business objectives. Each issuer receives a comprehensive assessment which is completed in accordance with a review of the latest association and government regulations as well as an assessment of transactional trends, which can skew recovery performance. When the issuer is comfortable with the changes that are to take place, such as increasing challenge rates, BasePoint will assist in the implementation and measurement of the new processes. BasePoint Analytics is a provider of predictive analytic fraud and risk management solutions for global banks and the mortgage industry.

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