The American Airlines “AAdvantage” program, which turns 25 this month, is launching a giveaway of up to 42 million miles during May. The program is also kicking off a special promotion offering reduced redemption levels for members during May. The “Celebration Flights” sweepstakes, which is sponsored by MasterCard, will give up to 1,700 passengers, 25,000 miles each, enough for a free economy round-trip ticket. Passengers will be notified through a surprise announcement in the gate area approximately 30 minutes prior to departure. The “25 Deals in 25 Days” promotion offers reduced mile offers and a sweepstakes. Under the promotion a free domestic round-trip ticket is reduced from 25,000 miles to 18,750 miles. The “AAdvantage” has more than 50 million members.Details
MasterCard has launched its 2006 “Get Wired” sweepstakes which is a component of a global campaign that launched in August. The sweepstakes provides all “MasterCard BusinessCard” and “Debit MasterCard BusinessCard” cardholders with a chance to win one of two $50,000 technology makeovers. The sweepstakes will run from May 1st until June 30th. The last sweepstakes ran between September 1st and November 30th. Last year, MasterCard unveiled new “Priceless” commercials to support the U.S. “Get Wired” campaign. Business cardholders also have access to special technology-related offers via the online “MasterCard Offers for Business” program. (CF Library 8/31/05)Details
Charge-offs among “prime” credit card-backed securities hit their lowest level in more than ten years during March. “Sub-prime” charge-offs also sank to single digits for the first time in more than six years. Both figures follow a huge spike in charge-offs during the fourth quarter and January due to the fall bankruptcy surge. For March, charge-offs in the “prime” asset-backed credit card securities market dropped to 3.10%. “Sub-prime” charge-offs declined to 8.04%. One-year ago, “prime” charge-offs were 5.97% and “sub-prime” charge-offs stood at 15.06%. According to the latest “Fitch Credit Card Index,” “prime” delinquency (60+ days) increased 15 basis points to 2.34% in March. “Sub-prime” delinquency (60+days) for March slipped 70 basis points to 5.18%, and continues to hover at the lowest level in four years. Fitch reported “prime” charge-offs averaged 4.42% for the first quarter. “Sub-prime” delinquencies averaged 10.74% in 1Q/06.
ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Mar 04: 6.75% 17.27%
Mar 05: 5.97% 15.06%
Mar 06: 3.10% 8.04%
Source: Fitch Ratings
United Airlines and Chase have changed the “Mileage Plus VISA” program by switching from awarding miles for card usage to earning a new form of currency called “Choices.” Under the new program cardholders have five new awards, including: flights booked on united.com with no capacity restrictions or blackout dates; hotel stays booked on united.com; car rentals booked on united.com; an annual subscription for access to United’s “Economy Plus” seating; and credit towards Elite status. When purchasing free air tickets the amount of “Choices” needed is based on the price of the ticket rather than the traditional set redemption amounts. Cardholders purchase their air tickets, hotel stay or card rentals and then receive a statement credit using “Choices.” In addition to “Choices,” cardholders can now use redeemable miles to receive a credit for their “Mileage Plus VISA” annual fee or redeem for products from the “Mileage Plus” online rewards catalog. The United “Mileage Plus” program was launched 25 years ago and has nearly 48 million enrolled members.Details
VISA USA’s board of directors added its first four independent members on Friday. The new directors are part of the corporate governance changes that VISA members overwhelmingly approved last week. Among other changes is the addition of a board seat to represent financial institutions with less than $1 billion in annual VISA volume. VISA will also add four more independent members to reach a board majority of independent directors. The independent directors will also be members of a new “Independent Directors Committee” to oversee management’s recommendations on interchange reimbursement fees, member transaction processing and service fees as well as other core economic matters. The new directors are Philip DeFeo, Linda Baker Keene, Jon Madonna and John Swainson.Details
ATB Financial, the largest financial institution based in Alberta, has become the sixth Canadian issuing institution to join the NYCE “Cross-Border Debit” program, providing 420,000 Canadian cardholders with PIN POS debit at more than one million U.S. retailers.Details
Dallas-based ACE Cash Express reports that net income for the first months of 2006 was flat at $9.9 million. The current quarter includes the previously disclosed $0.04 after-tax charge related to the termination of the Company’s relationship with H&R Block. During the fiscal third quarter of 2006, ACE’s total revenue increased 16 percent to $91.2 million from $78.5 million in the prior year period, due primarily to a 19 percent increase in check cashing fees, an 18 percent increase in loan fees and interest, and a 33 percent increase in bill payment services. ACE Cash Express is a 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.Details
Bank regulators are continuing their efforts to drastically slash interchange rates on debit cards. The Payments System Board wants to push interchange fees in the EFTPOS system from 20 cents to 4.5 cents per transaction and cut the interchange fee in the “VISA Debit” system from 40 cents to 15 cents. The Board also wants the VISA system to remove the restrictions on merchants that require them to accept “VISA Debit” cards if they accept “VISA Credit” cards, and that prohibit merchants from imposing a surcharge on “VISA Debit” transactions.
However, the Board did note that earlier proposals that EFTPOS cash transactions by merchants to cardholders will not be subject to the
benchmark cap set out in the new “EFTPOS Standard” on interchange fees.
The new EFTPOS interchange “Standard” will become effective on November 1st. The Reserve Bank has given VISA and MasterCard until July 1st to show they will voluntarily comply with the new “EFTPOS Standard.”
EDP Licensing has inked a deal with the Johnny Cash Estate to launch the “Johnny Cash Prepaid MasterCard” next month. EDP represents a large selection of financial service products in the online direct response market and specializes in lead generation, list management and all forms of online marketing.Details
Benchmark Technology Group has agreed to market and resell Wincor Nixdorf’s line of cash systems including ATMs in the USA. Benchmark will market and resell Wincor Nixdorf’s line of cash systems including full function automated teller machines, cash dispensers, cash recycling systems, intelligent deposit systems and automated teller safes in the U.S. market. Benchmark Technology Group is a provider of end-to-end branch technology solutions for financial services institutions.Details