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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Chase Credit Card Q4 Profits Dip 15%

J.P. Morgan Chase reported this morning that fourth quarter credit card profits declined 15% year-on-year to $609 million, compared to $786 million in the prior quarter and $719 million in the year-ago quarter. 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. Net accounts opened during the quarter were more than 5.2 million. Merchant processing volume of $194.4 billion increased 9% compared to the year-ago quarter. Net interest income of $3.1 billion was flat compared to the third quarter, but rose 6% compared to 4Q/06. The increase in net interest income was driven by a higher level of fees, a wider loan spread and higher average loan balances. Chase notes that these benefits were offset partially by the discontinuation of certain billing practices (including the elimination of certain over-limit fees and the two-cycle billing) and the effect of higher revenue reversals associated with higher charge-offs. The managed provision for credit losses was $1.8 billion, an increase of $507 million, or 40%, from the prior year, due to an increase of $300 million in the allowance for loan losses and a higher level of charge-offs. The managed net charge-off rate for the quarter was 3.89%, up from 3.45% in the prior year and 3.64% in the prior quarter. The 30-day managed delinquency rate was 3.48%, up from 3.13% in the prior year and 3.25% in the prior quarter. For complete details on Chase’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

JPM CHASE HISTORICAL ($billions)
4Q/06 1Q/07 2Q/07 3Q/07 4Q/07
EOP Outstandings: $152.8 146.6 148.0 149.1 157.1
Charge Volume: $ 93.4 81.3 88.0 89.8 95.5
Source: CardData (www.carddata.com)

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

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GAM & IRM

Galaxy Asset Management has acquired International Risk
Management Mexican collections operator. The move was
made citing the collection operator’s 100% business expansion over
the past year with projections to do the same in 2008. IRM provides
1st and 3rd Party collections to US Hispanic Spanish speaking credit
card and mortgage account holders. The organization employs 160 at
offices in Mexico, Las Vegas, Nevada and Norcross, Georgia while
GAM addresses purchases of domestic and international distressed
consumer receivables.

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Moneris Solutions Signs an AIADA Deal

Payment process Moneris has entered into an affinity partnership with the American International Automobile Dealers Association to offer dealer members exclusive pricing for merchant card processing, check guarantee and conversion, gift cards and ACH/EFT processing. By partnering with Moneris, AIADA dealers will have access to a simple, exclusive pricing structure, a wide array of hardware and software solutions for payment processing, and unparalleled 24/7 customer and technical support to meet their unique needs. As an added bonus, Moneris’ loyalty program will reward dealerships’ best customers and help retain crucial service business

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BofA & CCB

Bank of America and China Construction Bank have taken another
step toward creating a joint credit card business. Having appointed
executives to oversee the development and cooperation of the joint
venture, the 2 organizations are now awaiting joint venture regulations,
and subsequent regulatory approvals, to commence fusing the separate
card divisions. David Stoughton, the BofA Asia Card Services Executive who
is heading the oversight in China, is also prospecting for new credit card
partnerships of the same nature. Bank of America serves over 57 million
in 175 countries, providing access to 17,000 ATMs, and offers products
and services in 12 countries throughout Asia, where the bank employs
nearly 2,200.

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3PEA Acquires a Stake in Wow Technologies

Las Vegas-based prepaid specialist 3PEA International has acquired control of Wow Technologies. As a result of the acquistion, 3PEA has integrated a PCI DSS certified Prepaid Stored-Value MasterCard/ATM Card Issuer Processing Platform into it payment solutions. Additionally, 3PEA has acquired proprietary intellectual properties and internally developed technology capable of supporting 3PEA’s growth in the prepaid card market. With this 3PEA has also acquired a number of patents and patents pending all pertaining to the prepaid industry in the US and other countries.

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PAY IN YOUR CURRENCY

Planet Payment has signed agreements with the Bank of East Asia (BEA)
for the 2008 introduction of its “Pay in Your Currency” solution. With
this agreement, the Bank of East Asia provides tourists and business
travelers that are also users of Visa or MasterCard payment cards,
a choice of denominations in most major currencies to complete purchases.
Subsequently, this will afford the consumer peace of mind and the
knowledge of how much they are paying with native currency while
merchants are given an effective marketing tool to potentially drive sales.
BEA provides retail and commercial banking services throughout East
Asia and is among the first foreign banks authorized to operate in Mainland
China.

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VISA & MC Settle with the West Virginia AG

West Virgina’s Attorney General announced a settlement with VISA and MasterCard over alleged violations of the State’s antitrust and consumer protection laws. It is the only attorney generals’ office in the country to have reached a successful resolution of its charges against VISA and MasterCard. The settlement calls for approximately $12.1 million to be set aside in a trust account for the purpose of providing tax relief in the form of a sales tax moratorium for West Virginia citizens. The lawsuit was filed in October 2003.

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95% of Chinese Americans Have Credit Cards

New research shows that credit card ownership among Chinese Americans is 95%, compared to a U.S. average of 68%. Also, about 44% of the ethnic group banked online at least twice a week. The survey conducted by Global Advertising Strategies and Chinese Media Net also found that 69% reported a post-graduate degree and a median annual household income of $56,000. Additionally, the research found that 40% of Chinese Americans are frequent domestic travelers; 80% own their car; over half remit money back to China; and Chinese language Websites accounted for over 70% of preferred content but Chinese search engines accounted for less than half of search engine usage.

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Wells Card Outstandings Rise 28% Y/Y

Wells Fargo reported that charge-offs hit 5.01% for the fourth quarter, compared to 4.30% in the prior quarter. The issuer also reported that credit card outstandings rose nearly 10% sequentially and are now up 28% year-on-year. Wells noted that about one-third of the $47 million increase in charge-offs was due to growth, but the rest reflected rising consumer stress. Total credit card charge-offs for the quarter were $253 million, compared to $154 million for the fourth quarter of last year. Outstandings topped $18.8 billion for 4Q/07, compared to $17.1 billion in the prior quarter and $14.7 billion for 4Q/06. Wells also reported that debit and credit card fees rose 22% to $588 million in the fourth quarter. For complete details on Wells Fargo’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

WELLS FARGO CARD OUTSTANDINGS
4Q/06: $14.7 billion
1Q/07: $14.6 billion
2Q/07: $15.6 billion
3Q/07: $17.1 billion
4Q/07: $18.8 billion
Source: CardData (www.carddata.com)

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

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TNB Card Services Adds Two Sales Executives

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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Ingenico Lands a Former Hypercom Sales Exec

Ingenico has hired Lisa Shipley, previously with Hypercom North America, as SVP, Sales and Marketing, Ingenico North America. Shipley will focus on growing Ingenico North America’s banking channel and multi-lane retail business to maximize on opportunities in both the USA and Canada. Prior to serving as SVP of National Sales at Hypercom, Shipley spent 10 years with NationsBank, and its predecessor, in both card issuing and merchant acquiring groups. As President of Terminal Management Services, Inc. (TMS), a wholly owned subsidiary of NationsBank, she was responsible for all facets of terminal management sales, support and leasing, including product deployment.

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