TD Banknorth Inks a Long-Term Deal with Metavante

Metavante has inked a long-term contract renewal with TD Banknorth and will continue to drive/monitor its more than 750 ATMs, provide card personalization services and process debit and prepaid debit card transactions for the bank, plus be its preferred financial services technology vendor. In addition to electronic funds transfer and card processing services, Metavante provides TD Banknorth with wealth management services, and its NYCE Network serves as the bank’s sole provider for retail PIN debit access. TD Banknorth also looks to Metavante Image Solutions for check image-enabled returns and exceptions processing solutions. TD Banknorth Inc. is a leading banking and financial services company headquartered in Portland, Maine, and a majority-owned subsidiary of TD Bank Financial Group. Metavante Corporation delivers banking and payments technologies to financial services firms and businesses worldwide.

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31% Spent Less Than $50 for Thanksgiving

A poll by Greenfield Online for Chase has found that 2% of consumers planned to spend more than $500 on Thanksgiving entertainment while 31% planned to spend less than $50. The survey also found that 43% plan to spend less than $100 on travel this year during the Thanksgiving holiday while 7% plan to spend between $100 and $299. Chase says consumers aged 25 and older are more likely to save the money or apply it to debts, while Americans in the South and West are more likely than those in the Midwest to use the money to travel over the long weekend. Most consumers surveyed (31%) report spending less than $50 on entertaining friends and family during the holiday.

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Black Friday Payment Card Sales Rise 7.6%

Retail spending on general purpose payment cards for “Black Friday,” November 24th, rose 7.6% to $4.3 billion, compared to one-year ago. However, retail volume for payment cards cranked-up to more than $5.0 billion on Saturday. The “Entertainment” category rose 20% on “Black Friday” while “Specialty Store” sales rose 13%. VISA says the average ticket for electronic sales rose 8.7%, compared to the same day last year. (VISA has stopped issuing its weekly holiday “SpendTrak” reports this year.)

RETAIL CATEGORIES
Friday, November 24th
Entertainment + 20%
Specialty + 13%
Home & Garden + 12%
Discount + 7%
Department + 6%
Source: CardTrak

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Black Friday Online Peaks at 253PM

Online volumes surged 109% on a like-for-like basis on “Black Friday.” Most online shoppers waited until the afternoon to begin their shopping. The peak shopping hour was between 3:00PM – 4:00PM and the peak shopping minute was 2:53PM. Retail Decisions says analysts have been predicting that this year’s “Black Friday” would be the strongest opening to the holiday season in years.

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U.K. Late Fee Limit Drives Margins to New Lows

A new study has concluded that the U.K.’s Office of Fair Trading’s decision to limit default charges at about $23 is already affecting credit card margins. The research predicts the new rule could cost lenders $1.9 billion a year, or about $67 per year per cardholder. The PricewaterhouseCoopers report found that credit card margins have hit new lows. After allowing for bad debts, net yield on balances fell from 6.5% to just under 5% in the year to June 2006. Although APRs have risen by about 1 percentage point on average, margins have fallen as bad debt has risen faster, from just 4% in December 2004 to 7% by June 2006. The research also revealed that U.K. consumers have overtaken the U.S. in terms of debt penetration. The total debt of the UK population (secured and unsecured) now represents 104% of gross domestic product (GDP) compared to 92% in the US. At the same time, outstanding levels of consumer credit hit 18% of GDP in the UK, compared with 17% in the US.

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S1 Opening an Office in Dubai for Postilion

S1 Corporation has opened a new office in Dubai for the local delivery and support of “Postilion” software. “Postilion” drives payments, including advanced financial transactions such as prepay and
self-service, through ATMs, POS terminals, phones, and Internet access
points for customers in the financial services, retail, mobile, and
processing markets. “Postilion” is used by more than 250 customers in over 50 countries. Totally, the Company has more than 3,000 customers using its software solutions for financial and payment services.

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Supermarkets Now Distribute the Jack Ca$h Card

San Diego-based Jack in the Box expanded its reloadable “Jack Ca$h” card program last month which is now being distributed by Safeway, Albertsons, Randalls and Tom Thumb stores. Jack in the Box Inc. (NYSE: JBX), based in San Diego, is a restaurant company that operates and franchises Jack in the Box restaurants, one of the nation’s largest hamburger chains, with more than 2,000 restaurants in 17 states. The company also operates a proprietary chain of convenience stores called Quick Stuff, with more than 50 locations, each built adjacent to a full-size Jack in the Box restaurant and including a major-brand fuel station.

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Debit Cards to Capture 26% of Holiday Card Sales

Debit cards will capture 26% of retail sales volume on payment cards between Thanksgiving Day and Christmas Day this year, compared to 23% last year, as credit cards continue to sputter in the USA. The busiest full week is expected to be between December 11th and 17th when Americans are expected to rack-up more than $34 billion on credit, debit and store payment cards. During the 31-day shopping period, Americans are expected to charge $85.6 billion on general-purpose credit/charge cards, $35.3 billion on signature debit cards and $13.9 billion on limited-purpose store credit cards. The figures exclude groceries, gasoline, and travel related charges. The “Black Friday” weekend (Nov 24-26) should produce carded retail sales of $13.9 billion on VISA, MasterCard, American Express and Discover credit cards, $5.6 billion on VISA and MasterCard debit cards and $2.2 billion on store credit cards.

2006 Holiday Retail Sales on Payment Cards
Shopping Period TOTAL
($ billions)
Nov 24-26: $ 21.7
Nov 27-Dec 3: $ 27.2
Dec 4-10: $ 31.4
Dec 11-17: $ 34.2
Dec 18-24: $ 20.3
TOTAL: $134.8
Source: CardData (www.carddata.com)

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MasterCard Outpaces Rival Networks in the U.S.

Based on third quarter reports, MasterCard is now the fastest growing payment card in the U.S. with a 17.3% jump in gross dollar volume, compared to VISA’s 11.6% gain, American Express’ 14.3% increase and Discover’s 13.1% rise over 3Q/05. Over the past four quarters the four major payment card networks have racked-up nearly $3.0 trillion in U.S. gross dollar volume on credit and debit cards. CardData ([www.carddata.com][1]) reports that VISA’s U.S. share is now 54.7%, compared to MasterCard’s 29.2% share. Based on the four quarters through September 30th, VISA has a 57.7% share compared to MasterCard’s 26.4%. During the third quarter VISA posted U.S. gross dollar volume on all products of $446.2 billion compared to MasterCard’s $238.0 billion. Over the past four quarters, VISA GDV has climbed to $1717.6 billion compared to MasterCard’s $785.9 billion, American Express’ $390.1 billion and Discover’s $111.6 billion. MasterCard’s recent surge is linked to its strong performance in debit cards which grew more than 50% in the third quarter.

3Q/06 U.S. GROSS DOLLAR VOLUME
VISA: $446.2 billion
MasterCard: $238.0 billion
American Express: $101.7 billion
Discover: $ 30.2 billion
TOTAL: $816.1 billion
Source: CardData (www.carddata.com)

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

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58% of College Students Pay Cards Off Each Month

A new survey has found that 72% of college students have at least one credit card, but, 58% report they are managing their debt wisely and 13% receive parental help for paying balances. The study, by Boston-based Experience also found that 23% of college students select a credit card based on interest rates; 22% look first at fees associated with the use of the card; 15% focus on the terms of the credit card; 11% select a credit card based on bank or creditor’s reputation; and 8% are interested first in the free gift or incentive for applying. The research determined that 38% of college students have only one credit card; 34% have two or more cards; 23% do not have any credit cards; and 5% use a parent’s card. Additionally, 58% of college students pay their credit card balance in full each month; 24% pay some of the balance each month; 13% have their parents pay the balance each month; and 5% only pay the minimum balance each month. The poll involved more than 4,800 students from colleges and universities nationwide.

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Euronet Inks a $500 Million Deal for RIA Envia

KS-based Euronet Worldwide has acquired Los Angeles-based RIA Envia, the third-largest global consumer-to-consumer remittance company. The deal involved $380 million in cash, $110 million in Euronet stock and certain contingent value and stock appreciation rights. Ria originates transactions through a network of over 10,000 sending agents and 98 company-owned stores located throughout 13 countries in North America, the Caribbean, Europe and Asia and terminates transactions through a payer network of over 32,000 locations across 82 countries. Ria processed $4.5 billion in money transfers last year. Euronet has processing centers located in the U.S., Europe and Asia, and processes electronic top-up transactions at more than 265,000 point-of-sale terminals across approximately 157,000 retailers in Europe, Asia Pacific, Africa and the U.S. The deal is expected to close during the first or second quarter of 2007.

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