Debit Cards Capture Half of Grocery Sales

A new survey has found that 54% of U.S. respondents are paying for their groceries with a debit card or a debit/credit card combination. Second highest payment method was cash at 20%, followed by major credit card at 14% and check with 10.5%. The poll by Lightspeed Research also found that females favored using debit/credit card combination (29%) over males (25%), and that males tended to use cash more than females (23% vs. 18%). Seniors age 65 and over use a major credit card as their typical payment method (27%) followed by check (19%). The poll collected responses from 106,784 U.S. panelists.

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GE Money to Issue Boston College MasterCard

GE Money has signed a deal to launch an affinity MasterCard for Boston College on November 1st. Under the terms of the agreement, which is scheduled to launch November 1, GE will provide a MasterCard product featuring the Boston College brand. Cardholders will earn Boston College Rewards one point for every dollar spent. Points may be redeemed for merchandise, travel or cash, as well as unique and exciting Boston College experiences. Boston College is a coeducational university with an enrollment of 9,000 undergraduates and 4,700 graduate and professional students representing every state and more than 99 countries. GE Moneys Personal Finance business is an innovative, customer-centric lending organization that provides financial services such as personal loans, mortgages, bankcards and student loans both directly to consumers, as well as through partner-based channels.

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ARM Index Moves Up Slightly in August

The indicator of economic conditions affecting the accounts receivable management industry increased slightly in August. The index continues to reflect excellent conditions for the ARM industry. However, it is partially affected by the market capitalization of public ARM companies. The “Kaulkin Ginsberg Index” for August increased to 1457.0 compared to 1454.2 for the prior month. During the second quarter the ARM index hovered around 1460. The KGI remains up 15.1% year over year. KGI says the “Index” should continue to gradually increase until after the completion of the NCO Group buyout. During July PA-based NCO Group inked a definitive agreement to be acquired by One Equity Partners and Michael Barrist, Chairman, President and CEO of the Company for $1.26 billion. The price represents a 44% stock premium. (CF Library 7/25/06)

KGI HISTORICAL
Jan 06: 1179.3
Feb 06: 1229.3
Mar 06: 1222.4
Apr 06: 1472.7
May 06: 1458.6
Jun 06: 1475.2
Jul 06: 1454.2
Aug 06: 1457.0
Source: Kaulkin Ginsberg

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Comdata Adds the Midas Touch to its Fuel Cards

Midas, with 1,600 automotive service shops in the U.S., has become an approved vendor partner of fleet card specialist, Comdata, to provide automotive repair and maintenance services to certain Comdata fuel card customers. Franchisees operating more than 90 percent of the U.S. shops have now signed their agreements enabling Midas to launch a consistent nationwide fleet program. Midas is one of the world’s largest providers of automotive service, with more than 2,600 franchised, licensed and company-owned Midas shops in 19 countries, including nearly 1,800 in the United States and Canada. Comdata Corporation, based in Brentwood, Tenn., is a leading business-to-business processor of payment cards, primarily in the retail and transportation industries.

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Chase Card Profits Up 31% Despite High MPR

J.P. Morgan Chase reported this morning that third quarter credit card profits rose 31% from one-year ago to $711 million, however the figure was $164 million lower than the prior quarter and $190 million lower than the first quarter’s record of $901 million. Managed card loans were up 4.5% to $143.8 billion year-on-year and up 3.2% sequentially. Compared with the prior year, both average managed and end-of-period managed loans continued to be affected negatively by higher customer payment rates. Chase says it believes that contributing to the higher payment rates are the new minimum payment rules and a higher proportion of customers in rewards-based programs. The managed net charge-off rate for the quarter was 3.58%, down from 4.70% in the prior year, but up from 3.28% in the prior quarter. The 30-day managed delinquency rate was 3.17%, down from 3.39% in the prior year, but up slightly from 3.14% in the prior quarter. During the quarter Chase opened 4.2 million new accounts. Charge volume was up 15% to $87.5 billion, compared to the year ago quarter. Merchant processing volume for the quarter rose 18% to $168.7 billion. For complete details on Chase’s third quarter performance, visit CardData ([www.carddata.com][1]).

JPM CHASE HISTORICAL ($billions)
3Q/05 4Q/05 1Q/06 2Q/06 3Q/06
EOP Outstandings: $137.6 142.3 134.3 139.3 143.8
Charge Volume: $ 76.4 79.6 74.3 84.4 87.5
Source: CardData (www.carddata.com)

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

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VISA Posts Interchange Schedules Online

A week after announcing plans to go public VISA USA has quietly posted interchange rates on its Web site. Last month MasterCard announced plans to make its pricing schedules public. MasterCard will publish its U.S. interchange rate schedule on its Web site on or before November 1st. More than 40 interchange lawsuits against VISA and MasterCard have been filed by merchants since 2004. The first major lawsuit by merchants to take on U.S. interchange fees was filed in October 2004, shortly after the U.S. Supreme Court refused to hear VISA and MasterCard appeals in the “Wal-Mart” debit card lawsuit. MasterCard was also the first in the industry to publish its merchant rules and procedures on its Web site. Last June MasterCard opened its rules free of charge or restrictions to any merchant who wants to access them. Member Service Providers previously only had access to abridged rules through their sponsoring acquirers, at a cost to the acquirer. (CF Library 6/03/05; 10/05/05; 11/05/05; 9/6/06)

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Pink All-Access VISA is Launched

NetSpend and ACE Cash Express have launched the “Pink All-Access VISA” prepaid card to support breast cancer research and education. The card will be issued by MetaBank. The pink All-Access Visa Prepaid Card can be used to make purchases or gain access to cash everywhere Visa debit cards are accepted worldwide. ACE Cash Express, Inc. is a leading retailer of financial services, including check cashing, short-term consumer loans, bill payment and prepaid debit card services, and the largest owner, operator and franchisor of check cashing stores in the United States. NetSpend Corporation is the leading provider of innovative, accessible prepaid debit cards that enable financial freedom and growth for self-banked consumers.

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INTERAC & FDC

First Data International has become a member of the Interac Association and will begin offering its services to the Canadian marketplace in the second quarter of next year. As an INTERAC member, FDC will have the ability to capture and process debit transactions in Canada enabling FDC merchant clients to accept the INTERAC branded card at the point of sale. Interac Association is a not-for-profit organization composed of 95 members which include: banks, trust companies, credit unions, caisses populaires, technology and payment-related companies. Interac runs two shared electronic financial services: “INTERAC Direct Payment,” Canada’s national debit card service, and “INTERAC Shared Cash Dispensing Service” for cash withdrawals at “Automated Banking Machines.” Last year Interac had C$137.4 billion in direct payment gross dollar volume compared to C$124.4 billion in 2004. There were more than 51,000 ABMs in the network last year.

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First Data Joins Canada’s Interac Association

First Data International has become a member of the Interac Association and will begin offering its services to the Canadian marketplace in the second quarter of next year. As an INTERAC member, FDC will have the ability to capture and process debit transactions in Canada enabling FDC merchant clients to accept the INTERAC branded card at the point of sale. Interac Association is a not-for-profit organization composed of 95 members which include: banks, trust companies, credit unions, caisses populaires, technology and payment-related companies. Interac runs two shared electronic financial services: “INTERAC Direct Payment,” Canada’s national debit card service, and “INTERAC Shared Cash Dispensing Service” for cash withdrawals at “Automated Banking Machines.” Last year Interac had C$137.4 billion in direct payment gross dollar volume compared to C$124.4 billion in 2004. There were more than 51,000 ABMs in the network last year.

INTERAC DIRECT PAYMENT VOLUME
2000: C$85.2 billion
2001: C$94.9 billion
2002: C$104.9 billion
2003: C$116.0 billion
2004: C$124.4 billion
2005: C$137.4 billion
Source: CardData (www.carddata.com)

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IDT Introduces TuYo Mobile in Los Angeles

NJ-based IDT Telecom has launched “TuYo Mobile” reloadable cards in Los Angeles. TuYo Mobile provides many features and services that are important to Hispanic consumers, including direct international dialing, low rates to Latin America, state-of-the-art handsets, a fully bilingual customer experience, and country specific alerts featuring breaking regional news, Hispanic celebrity gossip, sports, politics and horoscopes. Additionally, TuYo Mobile includes a unique calling card feature allowing international calling from any phone using a TuYo Mobile account balance. TuYo Mobile is a prepaid cellular service that does not require a contract or a credit check and has no hidden charges. IDT Corporation is an innovative and opportunistic multinational holding company with operations that span various industries.

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