Survey Says: America’s Credit IQ is Down

The second annual survey of America’s IQ on personal finance from Consumer Action and Capital One finds that Americans continue to fall short in taking steps to protect their credit. Twenty-seven percent of Americans have never checked their credit report – a four percent increase from last year. More than six out of 10 Americans are using budgets regularly and 66% report that they stick to their budgets and modify them rarely or if unexpected expenses arise. An additional 54% of Americans report that they are checking banking and credit account statements more than once a month.

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VISA EMV CARDS

VISA Asia-Pacific reports that the number of EMV chip cards in the region has reached 52 million while the number of EMV terminals in Asia-Pacific has risen to more than 1.5 million at mid-year. VISA says it expects 80% of the terminals in the region to be EMV-compliant by 2010. Markets that have seen more than a 50% increase in the number of EMV chip terminals include Australia, India, Japan, New Zealand, Philippines, South Korea, Singapore and Thailand. At the end of June , 28% of all terminals deployed in Asia Pacific were EMV-compliant. In Japan more than 30 million VISA EMV chip cards have been issued to-date. In Taiwan more than 90% of its terminals are EMV-compliant and six million EMV chip cards have been issued. In South Korea 5.3 million EMV cards have been issued, double the number one-year ago. The Bank of Indonesia has set a chip migration mandate for credit cards by 2009. In Australia, the federal government will soon introduce a chip-based “Access Card” for use in the administration and payment of health and social service benefits. In Asia-Pacific, VISA has a greater market
share than all other payment card brands combined with 62% of all card purchases at the point of sale being made using VISA cards.

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Breast Cancer MasterCard Introduced

Las Vegas-based Cubis Financial and eCommLink have launched the “CureBreastCancer.org Prepaid MasterCard Gift Card.” Sub-prime specialist, First PREMIER Bank is the issuer of the new card. Dr. Ernie Bodai and Cure Breast Cancer teamed with both firms to create the new card. Bodai is the mastermind behind the U.S. Postal Service Breast Cancer Research Stamp. Launched in 1998, it was the first fundraising stamp in U.S. history. About 800 million stamps have been sold to date raising nearly $70 million for breast cancer research.

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Contactless to Drive $36B in Spending

A new report says that mobile contactless payment will be used to drive sales of $36 billion by 2011. The research projects that “FeliCa” alone will drive $900 million worth of payments in Japan during 2006. Boston-based Strategy Analytics says that although greater levels of collaboration between banks, operators and payment networks are required for mobile contactless payments to emerge in the U.S. and across Europe, momentum is gathering, with numerous mobile phone based contactless payment trials planned. These will involve the major stakeholders and should help determine how services will be implemented. However, consumer attachment to existing payment methods, combined with concerns over the security of phone-based systems, as well as competition from alternative contactless devices like plastic cards and key fobs, will slow adoption.

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EFMARK-Bantek Becomes Pendum

EFMARK-Bantek announced it will adopt “Pendum, Inc.” as its new company name and brand identity, effective immediately. The name change follows the merger of Bantek West and EFMARK Premium Armored, announced in January. With the introduction of the new name, all iterations of the EFMARK, Premium Armored, Bantek West, and The Wilson Group (a Bantek subsidiary) names and logos will be phased out. Pendum services more than 100,000 ATMs and transaction terminals in 43 states.

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MasterCard Online Fraud Monitor Unveiled

MasterCard unveiled a new advanced fraud detection and mitigation solution designed to enhance security for PIN debit transactions. The new “MasterCard Online Fraud Monitor,” developed in collaboration with BasePoint Analytics, uses a new risk-scoring model to detect potential fraudulent PIN debit transactions in real-time, during the authorization process. The model uses advanced analytics that consider factors such as account spending, device level (ATM and POS) activity, and historical transactions to calculate the likelihood of fraud on an individual ATM card or debit account. The new service will be available during the first quarter of 2007.

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U.S. Bank Access Purchase is Launched

U.S. Bank has introduced a new tool that extends the power of its commercial card beyond payment processing and automates its entire P2P process, called “U.S. Bank Access Purchase”. It allows U.S. Bank commercial customers to define approved suppliers, products and services, generate electronic purchase orders, create and route requisitions for approvals, monitor orders and account activity, retrieve information and create reports all with a single point of access. The system is designed to help medium to large enterprise companies reduce the cost and complexity of implementing an electronic procurement system, while improving efficiencies and lowering costs associated with the traditional non-uniform and fragmented purchasing process. U.S. Bancorp operates 2,434 banking offices and 4,966 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions.

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Oberthur to Supply Smart IDs for the DoD

Oberthur Card Systems is set to supply one million smart IDs for the U.S. Department of Defense. U.S. Bancorp (NYSE:USB), with assets of $213 billion, is the 6th largest financial holding company in the United States. The company operates 2,434 banking offices and 4,966 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Oberthur Card Systems is one of the world’s leading providers of card-based solutions, software and applications, including SIM and multi-application smart cards, as well as services ranging from consulting to personalization.

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Reward Cards Impact Overall Profitability

A new report has found that rewards programs have become an essential aspect of bank card business strategy and help increase card usage, customer retention and margins, but, they come with a cost to the institution in terms of overall profitability. The research also found that an overall decline in bank cards is signaling the need for banks to evolve their rewards strategies. The study by TowerGroup says general-purpose cards produced 75% of the bank card industry’s sales volume. Yet even with a greater number of solicitations mailed by bank card issuers in 2005, only 0.3% of target consumers responded – yielding the industry’s lowest historic response rate. This downward trend in response rates has increased the cost to acquire new customers. TowerGroup expects that within five years, 90% of consumers holding GPC will have some form of rewards. Yet these rewards undoubtedly place increased financial burdens on the profitability of bank card programs. TowerGroup believes that 2006 marks a transition year for banks in terms of moving from using rewards programs as a tool simply to attract and retain customers, to being more careful in evaluating the effect of rewards on the bottom line as well as how rewards are delivered.

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GE Inks a Stein Mart MasterCard Deal

Stein Mart and GE Retail Consumer Finance have inked a multi-year agreement to launch a Stein Mart co-brand credit program. The new “Stein Mart Platinum Rewards MasterCard” will offer its cardholders a points-based rewards program plus the benefits of the “Stein Mart Preferred Customer Program.” Shoppers can apply for the new card four ways, including instant credit in-store or online. Under the new agreement, Stein Mart will integrate and promote the new Stein Mart credit card in its internal and external marketing activities. GE Retail Consumer Finance will be responsible for managing the Stein Mart card program, providing customer service, billing, database management and analytics support, and credit management.

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Equifax Names a New CFO to Replace Heroman

Equifax has appointed Lee Adrean as CFO, replacing Donald Heroman who has announced plans to retire. Adrean brings 30 years of commensurately senior positions in financial management, business leadership, and international strategy consulting to Equifax. Most recently, he served as Executive Vice President and Chief Financial Officer for NDCHealth Corporation. Adrean holds a Masters in Business Administration from Harvard University, and a Bachelor of Science in Accounting from Bucknell University. Equifax Inc. is a global leader in information technology that enables and secures global commerce with consumers and businesses.

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