Merchants Run Ads Ahead of House Hearing

Washington, DC-based the Merchants Payments Coalition has launched a new series of advertisements this week showing how the major credit card issuers use some of the billions they collect from the credit card “interchange” fee to pay for marketing campaigns. The ads depict a consumer buried in envelopes full of credit card junk mail, and carry the text: “Ever wonder who pays for all that credit card junk mail? You do. It comes from your credit card interchange fees. Interchange is the biggest credit card fee you’ve never heard of — and it’s dangerous.” The ads began running in Washington newspapers this morning in anticipation of a hearing on interchange fees scheduled to be held Thursday by the House Judiciary Committee’s Antitrust Task Force. The MPC is a group of nearly 30 retailer associations.

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ABECS STATISTICS

According to ABECS, between May 2006 and May 2007, the sale of
debit and credit cards rose by 20% with a volume of 12.4 billion USD.
Comparing the two months of May in and of itself, the sales volume for
May 2007 was 7% greater than that of May 2006. Also, in comparing
May 2006 to May 2007, the purchase costs to debit credit rose 16% to
reach 400 Million in May 2007. Other statistics show that from 2000 to
2006, transactions by credit and debit cards increased at a CAGR of
21.61% and 41.21% respectively.

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OCC Launches HelpWithMyBank.gov

The Office of the Comptroller of the Currency has launched “HelpWithMyBank.gov”, a new Web site dedicated to providing answers and assistance to national bank customers. “HelpWithMyBank.gov” provides answers to common questions based on thousands of calls made to the OCC Customer Assistance Group each year. The site presents information in straightforward easy-to-use terms in a simple question-and-answer format. Topics include credit cards, interest rates, check cashing, late payments, mortgages, and many others. The site also provides guidance on how to determine if a bank is a national bank or operating subsidiary and who to contact if the bank is not. The Office of the Comptroller of the Currency was created by Congress to charter national banks, to oversee a nationwide system of banking institutions.

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TESCO ATM DEPLOYMENT

Tesco Personal Finance will be expanding the deployment of its Euro ATM
in response to the popularity of the ATM solution. The trial introduction of
4 initial ATMs will now be increased by 20 allowing for easy access to Euros
for travelers in the United Kingdom. The Euro ATMs are to be located near
transport hubs at Tesco branches in Ashford, Gatwick, Long Eaton,
Altrincham, Glasgow (Silverburn), Bury, Hemel Hempstead, Chester,
Finchley, Aylesbury, Port Glasgow, Dover, Hatfield, Andover and Newton
Abbott. A further five will be opened over the next few weeks across
Northern Ireland.

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G&D Receives ISO 9001 Certification

Giesecke & Devrient has received ISO 9001 certification for its card-based operations in Virginia and Ohio. Giesecke & Devrient has received ISO 9001 certification for its card-based operations in Virginia and Ohio. The international ISO 9001 certification validates that business processes and procedures are performed in accordance with the highest quality management standards and incorporate consistent review to ensure adherence to the policies. The practices outlined in this international quality management system standard are used across industries to demonstrate a level of commitment to quality. Giesecke & Devrient is a provider of smart cards, providing smart card based solutions for the fields of telecommunications, electronic payment, health care, ID, transit, and Internet security.

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BARCLAYS NAKUMATT VISA

Barclays Bank and Nakumatt Holdings have introduced a credit card that
provides cardholders with Nakumatt benefits, according to The Standard
Business News. Benefits offered the cardholder include interest rates from
2.5%, 50 days interest free credit, flexible payments of a minimum of
10% after the interest free period, and bonus “Smart” points to be awarded
monthly. One “Smart” point is to be awarded for every Sh100 worth of
shopping in Nakumatt and one Smart point for every Sh500 spent anywhere
else. Barclaycard currently has 65% of the share in the credit card market
with 60,000 issued cards.

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Monthly Payment Rates Head Lower

Monthly payment rates continued to spiral downward during June, falling to its lowest level in two years. The MPR, or the amount that cardholders pay on their credit card debt each month, peaked in October of last year, reaching almost 21%. The higher payment rates were driven by new minimum payment standards. According to CardData, the MPR declined to 17.99% in June, compared to 19.01% in the prior month and 19.99% one-year ago. While the dip historically has been seasonal, it appears that many borrowers are increasingly pressured by current economic factors. The combination of higher interest rates and a cooling off of the real estate market diminished the attractiveness of “cash out” refinancing activity in which many borrowers reduced their more expensive credit card debt by drawing on the equity in their home — either by refinancing their mortgages or by accessing their home equity lines of credit.

MONTHLY PAYMENT RATES
Jun 06: 19.99%
Jul 06: 20.46%
Aug 06: 20.20%
Sep 06: 20.02%
Oct 06: 20.83%
Nov 06: 20.01%
Dec 06: 19.70%
Jan 07: 19.88%
Feb 07: 18.79%
Mar 07: 18.21%
Apr 07: 18.04%
May 07: 19.01%
Jun 07: 17.99%
Source: CardData (www.carddata.com)

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WESTERN UNION & EUROGIRO

Western Union and Eurogiro have extended a cooperative agreement to
provide WU services at banks, post offices and postal banks through out
Europe. Originally signed in 1998, the agreement was responsible for
providing more than 40,000 locations with WU Service in more than 20
different countries through over 25 Eurogiro members. Eurogiro provides
cross border payments in more than 51 different countries around the
world with 62 connections. Western Union provides global money
transfer services through 305,000 Agent locations in over 200 countries
and territories.

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Citibank Launches the AirAsia MasterCard

Citibank and AirAsia have launched the Citibank “AirAsia MasterCard”. The new card offers cardholders an “evergreen rewards” program which provides, discount prices, privileges and free flights when the customer shops at over 25 million outlets around the world. When using the card for purchases, consumers will earn one “AirAsia Point” for every one “Ringgit” they spend on their card, which can be redeemed for an RM20 AirAsia voucher with as little as 3,400 “AirAsia Points.” In addition, when booking flights, cardholders have access 24-hour-priority booking ahead of the general public. In its 6th year, AirAsia has carried 33 million passengers and serves over 75 domestic and international routes with it’s fleet of 54 planes.

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CLEAR2PAY

Clear2Pay has launched its Open Frame Network (OPF) allowing for
generic payment solutions, including Bank Payment Hub and the
Corporate Payment Hub for Microsoft infrastructures. The OPF
consists of different payment solutions components built on a Service
Oriented Architecture (SOA) delivering services consisting of a
comprehensive data model, and choreographed payment business
processes. This new development allows payment service providers
implementing Microsoft solutions to benefit with OPF products.
Service providers will see efficiency and increased Straight Through
Processing rates with a more cost-effective and scalable platform,
thereby incurring lower processing costs and enhanced transparency.
Clear2Pay clientèle includes regional financial institutions such as
ING, SEB Kort, VISA, MasterCard, ABN AMRO, Nordea, Abbey
National, Fortis Bank, ANZ and Commonwealth Bank and operates
out of Belgium, the Netherlands, Poland, Spain, United Kingdom,
United States, Australia, China and Singapore and currently employs
260 staff.

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Delinquency Slides South in June

Delinquencies for managed outstandings headed south in June for the second time in nine months after hitting a new high in April. According to CardData ([www.carddata.com][1]), delinquency (30+ days) for June slipped to 4.65% of managed outstandings, versus 4.67% in the prior month and 4.22% one-year ago. Chase reported that the first quarter 30-day managed delinquency rate was 3.07%, down from 3.10% in the prior year and 3.13% in the prior quarter. BofA posted a first quarter managed 30+ day delinquency rate of 5.44%, compared to 5.49% in the fourth quarter and 4.48% for 1Q/06. Citi reported that overall delinquency (90+ days) declined slightly from 1.62% for 4Q/06 to 1.57% for the first quarter 2007. (CF Library 4/16/07; 4/18/07; 4/19/07)

DELINQUENCY 2006
Jun 06: 4.22%
Jul 06: 4.18%
Aug 06: 4.22%
Sep 06: 4.27%
Oct 06: 4.32%
Nov 06: 4.40%
Dec 06: 4.44%
Jan 07: 4.56%
Feb 07: 4.63%
Mar 07: 4.66%
Apr 07: 4.72%
May 07: 4.67%
Jun 07: 4.65%
Source: CardData (www.carddata.com)

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

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