Experian Finds Online Furniture Shopping Returns

Experian’s PriceGrabber.com’s latest “Consumer Behavior Report” shows a 92% increase in merchant referrals over the past six months to retailers in the online furniture category and a 50% increase in merchant referrals for online major appliances. Although furniture traditionally is a look and feel purchase, consumers now are willing to purchase items such as sofas, patio furniture and tables online in addition to buying from a brick-and-mortar store. From shopper behavior over the past few months, it appears that shoppers are doing their homework by researching online for sales, lower tax rates and free shipping. PriceGrabber.com, part of Experian InteractiveSM, has established itself as one of the most trusted and effective online comparison shopping services, allowing approximately 21 million consumers each month to search and compare information that enables them to find the right product from the right retailer at the best price.

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MasterCards Featured in an Original Movie

MasterCard and ABC Family have teamed up on an original movie due to premiere next week that takes scripted integration to a whole new level. The “RELATIVE CHAOS” movie will integrate various MasterCard products. MasterCard has also partnered with ABC Family on an extensive marketing campaign including print, TV and online media support. The movie about sibling rivalry features Christopher Gorham, Nicholas Brendon, Charisma Carpenter and Terry Bradshaw. ABC Family distributes its movies to 89 million homes. Two weeks ago MasterCard premiered a two-minute mini-drama via the Turner Network Television. The piece, titled “Late,” is also embedded in TNT on Demand and available for download via TNT.tv, MasterCard’s Priceless.com and TNT on AOL. (CF Library 8/17/06)

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ID Data Systems Expands European Sales Force

ID Data Systems has named seven new additions to its Sales Team.
The new executives will strengthen its new approach by injecting “Fresh Thinking” through the Company’s core values; flexibility, added value, innovation and customer service. The enlarged team will enable ID Data to focus on delivering these values on the European stage. ID Data is Europe’s leading interdependent plastic card solutions network with full Mastercard and VISA accreditation. ID Data also owns CardBASE.

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Card Bond Payment Rates Moderate in July

Monthly payment rates, the amount that cardholders pay on their credit card debt, continues to hover at record levels. Year to date, the monthly payment rate has averaged 20.36%, running well over 200 basis points from one-year ago. Driven by higher minimum payments, payment rates were 20.71% in July, an increase of 224 basis points from year-ago levels. The MPR declined slightly from the June by 29 basis points. According to FitchRatings, the payment rate averaged 19.97% during the first quarter and averaged 18.60% for 2005. Five years ago the monthly payment rate hovered around 15%.

Monthly Payment Rate
Jan 06: 19.97%
Feb 06: 20.85%
Mar 06: 19.10%
Apr 06: 21.74%
May 06: 19.14%
Jun 06: 21.00%
Jul 06: 20.71%
Source: FitchRatings

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JULY CARD DEBT

Credit card outstandings declined for the second straight month, dropping by GBP 100 million in July after hitting a record level in May.
Overall, the increase in consumer credit was higher than in June. The Bank of England reports that net other loans and advances rose by GBP 1.0 billion in July (higher than the increase of GBP 0.8 billion in June). The annual growth rate of consumer credit continued to fall, to 7.2% in July, but the three month annualized growth rate increased by 20 basis points to 6.3%.

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Gen X Favors Online Banking & ATMs

A new survey has found that younger customers ranked branches behind online banking (35%) and ATMs (33%). However, older customers said the opposite with 47% saying branches followed by ATMs (20%) and online (13%). The ABA survey said overall consumers preferred the following banking methods: branches (32%); online (26%); ATM (26%); telephone (5%); and mail (5%). The survey of 1,000 consumers was conducted for the ABA by Ipsos-Reid on July 10-12.

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Cash Now Smart Cards Coming

Cash Now and Mono Bank PLC have scheduled the launch of its white label or private label smart cards that will offer the “smart card chip” by the end of 2006. Cash Now has already secured over 100,000 requests from consumers and businesses alike, for the card over the past 24 months. The end user will be able to load or refill their smart card at over 11,000 participating locations such as Money Gram and
establishments alike.

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Riyad Bank Converts to FDC’s VisionPLUS Platform

Riyad Bank has converted its credit card portfolio to First Data’s “VisionPLUS” processing platform. FDC and Riyad Bank have worked in partnership since 1994, and the conversion project is underpinned by the renewal of FDC’s processing contract with Riyad Bank for more than five additional years. During this period, First Data will process both VISA and MasterCard credit card portfolios for Riyad Bank, as well as provide secure PIN print and mail services to the bank’s customer base. Plans are also underway to support a new Islamic card product.

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Smart Card Market to Hit $315 million by 2011

The Brazilian Smart Card Market hit $125.9 million in 2005 and is now estimated to reach $314.9 million by 2011. According to Frost & Sullivan GSM and the transit markets account for more than 85% of the total smart card unit shipments. The smart cards market in Brazil is strongly price oriented with usually lower prices than the rest of Latin America, given the country’s high volumes. High costs of smart card technology implementation compared to other alternative automatic identification data captures technologies that are the main barrier to the massive adoption of the product across all markets.

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Build Your Business Sweepstakes to Launch

MasterCard will launch its “Build Your Business” sweepstakes tomorrow. U.S. small businesses that use “MasterCard BusinessCard” and “Debit MasterCard BusinessCards” will have a chance to win one of two $50,000 cash prices to be spent to better their business, however they see fit. Small business owners who use their “MasterCard PayPass BusinessCard” or “MasterCard PayPass Debit BusinessCards” will receive two entries each time they use their cards. They can also receive double entries when they use their “MasterCard Business Card” and “Debit MasterCard Business Card” at Staples. MasterCard will also launch the new MasterCardBusiness.com site, where small business owners can find further information about the “Build Your Business” promotion and zero liability protections, as well as tips on how to manage employee benefits, ways to market their businesses on a budget, and helpful money management advice. The new site will also feature podcast interviews with small business owners.

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OFT Challenges Payment Protection Insurance

The OFT says the claims ratios for payment protection insurance
are low compared with other insurance products. The OFT says this suggests that gross profits are high in the UK PPI sector, and implies customers are receiving poor value. The business survey of underwriters shows that the median claims ratio in 2005 were highest for first charge mortgage PPI (35%), 18% for unsecured personal loans, but just 11% for retail credit, motor finance and credit card PPI, and only 10% for secured loan PPI. This represents a median claims ratio of 17% for all PPI policies. Over 50% of underwriter profits appear to be earned from unsecured personal loans (over 70% in 2005). The OFT found that for a GBP 5000 unsecured loan over five years monthly PPI repayments for an accident sickness and unemployment policy (ASU) range from GBP 16 for the cheapest to GBP 40 for the most expensive with very little obvious difference in the coverage provided.

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