ACH Exec Named to NACHA’s Marketing Group

ACH Direct’s Deborah Matthews has been named to NACHA’s Marketing Management Group. As Vice President of Marketing at ACH Direct, Matthews participates in numerous industry activities, including NACHA’s Electronic Check Council. She currently serves as the Marketing and Education Coordinator of the Steering Committee of the Internet Council, and has been a member of the American Payroll Association’s ACH Advisory Committee for the past five years. Matthews earned the Accredited ACH Professional designation in 2001, and holds a B.S. degree in Communications from Northwestern University. ACH Direct is one of the largest privately held electronic funds transfer processors in the United States, with over $3 billion in transactions processed in 2004.

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Transactional Data is a Gold Mine

A new report says that while banks today realize on average between $2 and $3 per average $50 transaction, primarily from interchange fees and interest on credit, there is additional hidden value in the data that can be obtained with electronic transactions. Chicago-based DiamondCluster says private label credit card providers know this. They said by modeling detailed customer and purchasing data it can greatly benefit both retailer and the card issuer. One such PLCC issuer told DiamondCluster that their estimate of the marketing effectiveness of such a campaign built on transactional data was worth up to $20 million to the retailer or an estimated $1 to $3 per transaction. The group also noted that another revenue opportunity lies in creating an ancillary information-based business.

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Charge-Offs Driven Above 7% in Oct

Managed charge-offs topped 7% in October due to the surge in bankruptcy filings in the final weeks leading up to the full implementation of the bankruptcy reform laws. The worst is not over since issuers treat bankruptcy related charge-offs differently with a possible 8% or 9% level coming. Over the past 12 months, managed charge-offs have been hovering between 5.79% and 6.38%. Credit card issuers should realize lower charge-off ratios in the second quarter of 2006 and beyond as the bankruptcy process becomes more onerous for American consumers. During July, August and September, there were a record 542,022 consumer and business bankruptcy filings, a 37% increase over one-year ago. It is expected that filings for the first two weeks of October may exceed 300,000. These filings will be reflected on card issuers’ books in December and January.

2005 MANAGED CHARGE-OFFS
Jan: 6.18%
Feb: 6.03%
Mar: 5.98%
Apr: 5.90%
May: 6.16%
Jun: 6.26%
Jul: 5.99%
Aug: 5.79%
Sep: 6.23%
Oct: 7.03%
Source: CardWeb.com. Inc.

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Diebold Loses Another Top Executive

Another major resignation hits the payments industry as the head of a major ATM firm exits. Diebold confirmed that chairman and CEO Wally O’Dell has resigned from the company and its board for “personal reasons.” Thomas Swidarski, president and COO, has been named CEO and elected to the company’s board effective yesterday. The Diebold board also elected John Lauer as non-executive chairman of the board. Other top executives have left Diebold in recent months. In August, Diebold announced that its SVP/CFO Gregory Geswein resigned. In September Eric Evans, President/COO and board member, departed. Diebold reported in October that its net income for the third quarter plunged 45% to $26.4 million due to sluggish U.S. sales, installation delays and Hurricane Katrina. ATM sales in the third quarter declined 3% to $194 million. ATM services revenues were off slightly to $217.3 million. Diebold says financial self-service orders were essentially flat for the quarter, with order growth in EMEA well into the double digits offset by a decline in North America. The company yesterday reaffirmed its EPS guidance for the fourth quarter of $0.50 to $0.60. (CF Library 8/8/05; 9/21/05; 10/26/05)

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CUP & TSYS

The payments-processing subsidiary of China UnionPay has signed a deal
to give U.S.-based TSYS a 34% equity interest that may increase to 45%
by early next year. The two-year old China UnionPay Data. Co, Ltd.
currently provides transaction processing, disaster recovery and other
services for banks and bankcard issuers in China. CUP is sanctioned by
the country’s central bank, has 166 members banks and is responsible
for operating the only national bankcard network to enable and promote
the acceptance of bankcards in China. More than 875 million general
purpose bankcards carry the CUP brand. The deal brings together the
largest bankcard processor in China and the world’s largest credit-card
processor.

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GreenZap Revenues Up 300% Sequentially

San Diego-based GreenZap reports that November revenues are up 300% from the prior month, with fourth quarter revenues up 48% from the third quarter. The company expects the record growth to continue as new merchants are added daily to GreenZap’s online store, where account holders can purchase thousands of brand name products and services using a portion of their rewards dollars. Individuals and businesses use GreenZap as a platform to send and receive money online via email to complete transactions in an auction or retail environment. WebCash, GreenZap’s rewards dollar, is an electronic currency that can be spent at partnering merchants and can be used to pay GreenZap transaction fees. Since opening on June 1, 2005, GreenZap has grown to over 375,000 users.

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GE Launches the IJO Jewelry Express Program

GE’s Retail Sales Finance unit and the Independent Jewelers Organization have signed a new consumer credit program. The Master IJO Jeweler “Jewelry Express” program will be available through more than 850 IJO retailers, and provides on-the-spot applications, credit decisions within minutes, special promotions and competitive interest rates. The IJO is the world’s largest jewelry buying group and service organization for retail jeweler members.

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Issuers Miss Email Marketing Opportunities

According to a new report credit card issuers are doing a less than stellar job in marketing to their customers using email. NY-based Corporate Insight found that between July 1st through October 31st, researchers received only 65 emails in total from the eleven firms they track. Even more surprising was that six of these firms sent four emails or less in the four month period while two firms sent none at all. Nearly 75% of all emails came from just three firms and 60% from two issuers.

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YEEPAY

Beijing-based YeePay has become the first company in the country to provide a single platform integrating both online and offline electronic payments. Industrial and Commercial Bank of China, China Merchant Bank and China Minsheng Bank have teamed with YeePay to launch a telephone payment service. YeePay’s current customers include Baidu.com, Sohu.com, Tom.com, DangDang, eLong, JRJ.com (China Finance Online) and China Unicom. YeePay’s solution integrates with bank’s existing IVR telephone banking system. Most consumers in China use debit cards which are protected by a password, this prevents them from using the cards directly over the phone. There are over 800 million bank cards issued by different banks in China, but with less than 600,000 POS terminals installed and less than 40 million of PCs connected to the Internet, many of these bank cards remain inactive; on the other hand, there are over 800 million mobile phones and telephones.

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The Teen Allow MasterCard is Introduced

Arizona-based Allow Card of America has launched the “Allow MasterCard” for teens. The prepaid card is geared toward helping teenagers get a grasp of their allowance and finances, establish a better sense of trust with their parents and learn valuable life lessons, while still giving them financial independence. The personalized Allow Card is accepted at more than 26 million locations in the U.S. and abroad. The online portal enables parents to load finances to the Allow Card from any credit card, checking or savings account.

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U.S. Airways Introduces a Gift Card

U.S. Airways has launched a gift card redeemable for air travel, related taxes and security fees on the America West and US Airways combined networks or for flights on our code-share partners. The new $100 US Airways gift card will be available for purchase at participating Kroger and Staples stores. Online purchase from the airline’s Web site will be available in 2006. US Airways and America West’s recent merger creates the fifth largest domestic airline.

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TNB Signs Four CUs for Card Processing

Dallas-based TNB Card Services has signed United SA FCU San Antonio, TX; Woodlawn Auto Workers FCU of Blasdell, NY; PCM Employees CU of Green Bay, WI; and Moog Employees FCU of East Aurora, NY for credit card processing. United SA has 30,000 members and assets of $230 million, and although the credit union is 50 years old, it has just launched its first credit card program. Woodlawn Auto Workers FCU has 15,450 members and $79 million in assets. PCM Employees has 7,000 members and assets of $95 million and Moog Employees FCU has approximately 9,500 members and assets of $94 million. TNB Card Services is owned and directed by credit unions and serves more than 450 financial institutions and manages more than 1.6 million cards

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