BofA Customers Get Access to Chinese ATMs

As of April 1st, Bank of America customers traveling to China will have free access when using debit or ATM cards to withdraw cash from more than 11,000 foreign-enabled China Construction Bank ATMs. In return, CCB’s “Happy Investor” cardholders traveling to the U.S. will have access to 17,000 BofA ATMs. In June, BofA inked a deal to buy about 9% of the stock of CCB for $3 billion, with the option of increasing its stake in future years. At the same time, BofA began providing advice and assistance to CCB in such areas as governance, risk management, credit cards, consumer banking and treasury services designed to enhance the Chinese bank’s performance. CCB, the second largest commercial bank in China, has $472 billion in assets and 136 million active retail deposit account relationships. The bank is currently majority owned by China SAFE Investments Limited, an entity of the government of China. (CF Library 6/17/05)

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ATEbank Replaces EFT Platform with S1’s Postilion

ATEbank of Greece has signed an agreement to use the full S1 “Postilion” suite to replace the bank’s existing ATM-driving platform and enable it to expand its service offering. In the first phase of the project, “Postilion Realtime” will be used to drive the bank’s existing and new ATMs. ABG intends to migrate its current network of 600 ATMs and the 15 ATMs it drives on behalf of another Greek bank to “Postilion” in mid-2006. “Postilion Realtime” will enable the bank to fulfill
its EMV compliance commitments. “Postilion PostCard” will manage ABG’s
1 million debit cards. “Postilion Office” will allow the bank to perform
continuous back-office processing without impacting the online system.
S1 Corporation is a provider of customer interaction software solutions for financial and payment services.

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FTC Sues a Debt Elimination Program

The FTC is seeking to shut down a debt elimination program operated from Washington State. The FTC alleges Debt Solutions made false promises of substantially reduced interest rates and thousands of dollars in savings for consumers in financial hot water. The firm allegedly charged $399 to $629 to get interest rates lowered for consumers and promised a full refund if the consumer does not save at least $2,500. According to the FTC complaint, consumers who purchase the program typically do not have their interest rates lowered at all and if they do the reductions are rarely more than one percentage point. The FTC also says the defendants claimed the program was endorsed by the Financial Standards Council in Canada and the Registered Financial Planners Institute of North America and that both claims were apparently false.

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Covestic Becomes a VISA QDSC Provider

Washington-based Covestic has been named as a VISA “Qualified Data Security Company” VISA USA instituted the Cardholder Information Security Program (CISP) that endorses the PCI data security standard to protect Visa USA cardholder data, wherever it resides, and ensures that members, merchants and service providers handling that data maintain the highest information security standard. Other payment card brands have endorsed the PCI data security standard under their own cardholder security programs.

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TransFirst Inks the City of Coronado

The City of Coronado, California has awarded the sole contract for payment processing services to Dallas-based TransFirst. TransFirst will help the city improve overall customer service for residents and visitors and create significant efficiencies, allowing Coronado the opportunity to reallocate existing municipal resources to other priorities. Through this contract, TransFirst will provide Coronado with TransAction Central that instantly networks all devices, including POS, e-commerce, software and wireless. Transactions of all types, including e-check, ACH and recurring payments, can be entered over the counter, over the phone or over the Internet with this single, integrated system and can be accessed in real-time, 24 hours a day, seven days a week via the Internet.

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Restaurant Gift Cards Grow in Popularity

A recent survey found that 35% of consumers reported giving restaurant gift cards over the past holiday season and about 43% received them. Technomic also found that nearly 70% of gift-card givers say they were a better choice than regular gifts; among restaurant gift-card recipients, 97% hope to receive them again. Of those that gave restaurant gift cards, nearly 40% plan to purchase even more of them during the next holiday season. Technomic produces the “American Express Market Brief” which tracks chain restaurant trends.

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Sig Debit Continues to Gain Momentum in 05

Growth in off-line debit card volume in the U.S. continued to rebound in 2005, increasing 20% to $823.5 billion. Over the past five years, signature debit volume has enjoyed a CAGR of about 27%, compared to a CAGR of approximately 8.5% for VISA and MasterCard credit cards. Growth in the number of cards-in-force also picked up last year, growing about 16% to 265.4 million cards. This is the highest rate of growth since 2001. Compared to 2000, signature debit card volume has nearly tripled as the number of cards-in-force has nearly doubled, according to CardData ([www.carddata.com][1]).

VISA & MASTERCARD SIG DEBIT HISTORICAL
Year Volume Y/Y Cards Y/Y
2000: $301.8b +37.9% 135.9mm +18.2%
2001: $420.7b +39.4% 157.9mm +16.2%
2002: $496.4b +18.0% 174.9mm +10.8%
2003: $576.6b +16.2% 199.0mm +13.8%
2004: $686.0b +19.0% 228.7mm +14.9%
2005: $823.5b +20.0% 265.4mm +16.0%
Source: CardData (www.carddata.com)

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

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Business Card Use Expands 10% in 05

A new survey of small business principals has found that the use of business credit cards increased by nearly 10% to 65% during 2005. Also, overall satisfaction with business credit cards as a form of payment reached 64% last year. The new VISA USA survey revealed that within the next 12 to 18 months, 30% of small business owners said they plan to increase their reliance on business payment cards. For those respondents who already have business credit or debit accounts, 45% noted that if they could they would make all of their purchases using some type of business payment card. Nearly 27% said that they see card-based payments further providing greater efficiency in receiving and collecting payments. The survey was conducted in January and involved the responses of 468 small business owners or individuals with financial authority within a small business.

VISA USA COMMERCIAL VOLUME
Gross Dollar Volume
4Q/03: $27 billion
1Q/04: $25 billion
2Q/04: $30 billion
3Q/04: $32 billion
4Q/04: $33 billion
1Q/05: $32 billion
2Q/05: $38 billion
3Q/05: $41 billion
4Q/05: $42 billion
Source: CardData (www.carddata.com)

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TOYOTA VISA

ICICI Bank has teamed with Toyota Kirloskar Motor to launch the country’s first automobile co-branded credit card. The new “Toyota ICICI VISA” card offers 4 reward points for every Rs. 100 spent on the card at a Toyota dealer and 1 reward point for every Rs. 200 spent elsewhere. Points can be redeemed for dealer servicing or for parts and accessories. New cardholders also receive one free service voucher and a 5% discount on standard Toyota accessories. Additionally, the card offers a “Multiplier Rewards” program which can multiple existing points by 10 times and an “Accelerated Rewards” program wherein cardholders earn up to 10 reward points on every Rs200 spent on the card. Cardholders can also use the new card to make a down payment for the purchase of a Toyota and can spread the payment out in equal monthly installments. Toyota has more than 2 lakh customers in India.

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Card Debt – Consumers’ Biggest Worry

A new poll has found that consumers’ biggest concern is credit card debt and secondly, savings and investments. Although 70% who received a tax refund last year used it for personal spending, this year 47% plan to allocate their refund money to savings accounts and credit card payments. The findings come from the “Consumer Preference Index” poll conducted by Prospectiv. The poll also found that 63% of consumers polled would be very likely or likely to take advantage of online resources such as personal finance-focused Web sites and e-newsletters tailored to their specific interests.

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Amdocs Releases Micro-Payments Solution

St. Louis-based Amdocs has released the “Amdocs Dynamic Pricing and Product Bundling Solution,” “Amdocs Customer Communications Solution,” and “Amdocs Mobile and Micro-payments Solution”. The Amdocs Dynamic Banking model helps retail banks combat customer churn. Retail banks have relatively low customer loyalty and experience significant customer turnover each year. The average customer uses less than two products at one bank, yet has ties to an average of four other financial institutions. Dynamic Banking is based on the strategy of bundling products and tailoring services using customer data to help increase the number of products and services per customer, and building loyalty. To successfully adopt the Dynamic Banking model, banks must ensure that their systems are integrated across all lines of business.

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Sovereign to Offer AmEx Business Cards

PA-based Sovereign Bank has agreed to offer American Express business cards to its small business customers. Beginning in late spring, “OPEN from American Express” will issue three new co-branded cards to Sovereign’s small business customers via more than 650 branches throughout the Northeast. The cards include the “Business Gold Rewards Charge Card” and the “Business Platinum Charge Card,” which are linked to the “Membership Rewards” program. The “Platinum Business Cash Rebate Credit Card” offers up to 5% cash back annually on purchases. The agreement marks OPEN’s first strategic bank partnership in the Northeast region.

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