Delta Eliminates a $1.1B Card Holdback

Delta Air Lines has an extra $800 million in unrestricted cash to use after the elimination of a cash holdback required under its VISA/MasterCard processing agreement. The holdback also included a $300 million letter of credit provided by Merrill Lynch which was likewise terminated. Under the amended agreement, which was extended to October 31, 2008, no future holdback or cash reserve is required except in limited circumstances. The holdback was required to protect the processor’s potential liability for tickets purchased with VISA or MasterCard which have not yet been used for travel. Delta also announced that it has changed the accounting method for its “SkyMiles” program. Delta has historically accounted for frequent flyer miles earned on Delta flights on an incremental cost basis as an accrued liability and as operating expense, while miles sold to airline and non-airline business partners were accounted for on a deferred revenue basis. Effective with its emergence from bankruptcy on April 30th, Delta is now using a deferred revenue model for all frequent flyer miles. Miles earned after April 30th, will be valued and the related revenue deferred using a rate of $0.0054 per mile.

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Hypercom SmartPayments is Vista Certified

Hypercom’s “SmartPayments” solution suite has become the first electronic payment processing software to pass certification tests ensuring compatibility with “Windows Vista”. SmartPayments Server is a complete electronic payment processing solution that combines a comprehensive front-end payment application for retail, restaurant, mail-order/telephone-order and Internet transactions with a centralized transaction processing gateway that can run as an inexpensive in-store controller for smaller merchants, at corporate headquarters of multi-store operations, or in datacenters that process payments for multiple businesses. The product has a built-in browser-based virtual terminal for anytime/anywhere management by merchants or ISO/resellers. Hypercom SmartPayments products still maintain their certifications for earlier-generation operating systems, including Microsoft Windows XP and Windows Server 2003.

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CPSB & VERIFONE

The China Postal Savings Bank has selected VeriFone as the sole provider of its electronic payment systems. CPSB will use the “VeriFone Vx 510” and the wireless “NURIT 8000.” CPSB chartered as a lending institution last year and opened for business earlier this year. It succeeded the depository-only postal savings service making it China’s fifth largest bank. The bank operates 36,000 branch offices throughout the country. VeriFone’s “Vx 510” countertop system, with dual dial and IP connectivity, provides payment and value-added applications, including data-intensive, EMV smart card transactions. The “NURIT 8000,” with GPRS connectivity, is a handheld system and supports credit, debit, EBT, smart cards, prepaid, loyalty, gift and proprietary cards.

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GFI Software Releases the GFI PCI Suite

GFI Software has released the GFI “PCI Suite” to help companies meet the strict requirements and tight deadlines imposed by the Payment Card Industry Data Security Standards. The GFI PCI Suite provides a centralized management console through which systems administrators can deploy the PCI DSS enhanced versions of GFI EventsManager and GFI LANguard N.S.S. GFI EventsManager boosts PCI DSS compliancy efforts by alerting administrators on key events occurring on the network while GFI LANguard N.S.S. allows IT professionals to proactively identify network security weaknesses and fix them. GFI’s PCI Suite also contains enhanced reporting mechanisms that include “The GFI EventsManager ReportPack” , with eight new reports specifically designed to provide more granular information on the activity of network users and components. The GFI LANguard Network Security Scanner ReportPack features a new report which presents the status of antivirus solutions deployed on the network and new data filters which provide even more granular control over the information presented in the reports. GFI is a software developer for network administrators to address their network security, content security and messaging needs.

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HPS CEO Receives 2007 Stevie Award

Heartland Payment Systems’ CEO Robert O. Carr received a 2007 “Stevie Award” from the American Business Awards, the only national, all-encompassing awards program honoring great performances in business. Carr received the “Best Executive – Other Industries” award which recognizes the efforts and achievements of individual performers in American business. Carr competed with more than 2,000 executives from companies of all sizes and in virtually every industry. The Stevie Awards are conferred in four programs: The American Business Awards, The International Business Awards, The Stevie Awards for Women in Business, and the Selling Power Sales Excellence Awards Honoring companies of all types and sizes and the people behind them. Heartland Payment Systems provides credit/debit/prepaid card processing, payroll and payment solutions to more than 150,000 small and mid-sized businesses nationwide.

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PaySimple and Billeo form Partnership

Denver-based PaySimple has entered into a partnership with Billeo to address the business demand for online payment capability and the consumer demand for easy, online bill pay. Billeo allows consumers to store their passwords, credit card and bank information securely on their own computers. Customers select the payment option they would like to use, and Billeo automatically stores the transaction confirmation pages and gives customers a choice of payment optionsâ”with a credit or debit card or directly from their bank account. PaySimple both hosts secure online payment forms and provides a robust online payment gateway that enables businesses to set up recurring billing as well as accept credit cards and ACH direct-debits from checking accounts. The PaySimple/Billeo approach enables the merchant to retain complete control of the transaction and the customer by keeping customers on the merchants’ websites during the purchase and bill pay process, rather than diverting them to other payment sitesâ”a key benefit that promotes customer loyalty. PaySimple is a provider of payment management solutions. Billeo gives consumers a way to exercise choice and control over their online purchases and payments.

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Capital One Introduces a No Interest Card

Capital One Is launching a platinum credit card with no interest on
purchases and balance transfers until may 2008, when the APR will
jump to 9.9%. This is in coordination with the company’s recently
introduced “ID Theft Service,” designed to not only protect customers,
but to reimburse in case one does fall victim to identity theft. The
card also offers a 1.7% rate on balance transfers.

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Courts Unprepared for Bankruptcy Overload

With the possibility that bankruptcy filings could approach or surpass one million this year, the cost of processing the filings will likely soar due the higher work per case required under the the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” The bankruptcy reform laws created new docketing, noticing, and hearing requirements that make addressing the petitions more complex and time-consuming. In addition, each petitioner must certify that he or she has been through credit counseling, a document that did not exist before BAPCPA. The District of Rhode Island Bankruptcy Court recently reported an 87% increase in the ratio of motions to filings, a 104% increase in the ratio of orders to filings; and a 68% increase in the ratio of docketed events to filings since BAPCPA. The Administrative Office of the U.S. Courts says the enactment of BAPCPA came at a time when bankruptcy court staffs were undergoing resizing. After reaching a peak of 5,334 on-board employees in fiscal year 2002, employment in FY 2007 is 4,438, a 17% reduction.

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Nationwide Voted Tops in Cardholder Satisfaction

Nationwide has been voted the highest level of overall credit card customer
satisfaction (94%) according to a recent USwitch.com survey. This is in
opposition to Capital One with 32% of customers dissatisfied, voted least
popular. Moreover, uSwitch.com’s annual credit card report reveals that one
in five customers are still not happy with their provider. An existing
relationship
with a bank or building society is cited as the main reason that almost one
third (31%) of credit card customers chose their provider. Accuracy of
statements (45%) and easy to understand statements (37%) were the most
important aspects of service that people wanted from their credit card
provider.
The most popular reason for switching providers (53%) is to take advantage
of balance transfer offers.

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Booz Ranks Retail Banking Performance

A new study from Booz Allen Hamilton says that the U.S. ranks as one of the top three countries in overall retail banking performance followed by Hong Kong and Switzerland. The study, “Striving for growth: Best practices in retail banking sales and service channels,” reveals that the majority of banks worldwide are failing to meet many customer needs and get the best performance from sales channels such as call centers and websites. U.S. banks perform relatively well across all service channels: branches, internet, and call centers, as well as channel integration. Out of a representative sample of U.S. retail bank chains, the study revealed which banks ranked highest in each channel and identified best practices as well as performance gaps. Bank branches need to provide better personalized service. U.S. bank branches compare well to global best practices but offer few segmented offerings and limited availability of specialists. High performers are Chase and HSBC.

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Card Users Don’t Use All Benefits

Research conducted by the UK Post Office reflects that nearly 60%
of credit card consumers do not take full advantage of the benefits
offered. These benefits include low interest rates, cash back, and 0% on
transfers and purchases. Almost half of consumers said they receive no
benefits and those with cash-back card incentives said they see an
annual pay-out of an average of 37 GBP.

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Chockstone Adds Gift Card Dormancy Tracking

OR-based Chockstone has added dormancy reporting into its gift and loyalty marketing platform. The new feature will protect merchants from mishandling funds under abandoned and unclaimed property laws. The new enhancement and current platform will provide detailed reporting for each of the 50 states, categorizing gift card balances by: state where purchased; state where first registered; state where last used; capture complete transactional activity, including how long each card has been dormant; track online purchases and transaction history from Web stores; and report quarterly and yearly activities. Chockstone notes that corporate credit departments can find their A/R portfolios targets of unclaimed property audits by states. Unused credit memos or past-due escheatable credits could cause understatement of liabilities.

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