RBC CASH Index Signals Good Holiday Season

The “RBC CASH Index” for November shows that consumer confidence continues to rise from its low point two months ago and could signal a better-than-expected holiday season for retailers. The CASH Index stands at 81.0 for November, compared to 66.8 in October, but still below last year’s November results of 89.8. Respondents expressed slightly greater confidence in their own financial condition, with one-quarter rating their situation as strong, compared to 23 per cent in October. Similarly, the RBC Investment Index stands at 82.8 for November, compared to 78 in October. While confidence in making major purchases like a home or a car remains unchanged from October, consumers are slightly more confident in making other household purchases. The RBC Jobs Index also remained strong, as it stands at 119.8 for November, surpassing its level of 111 from a year-ago. RBC’s Consumer Attitudes and Spending by Household Index is a monthly national survey of consumer attitudes on the current and future state of local economies, personal financial situations, savings, and confidence to make large investments.

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CTFS 3Q/05

Canadian Tire Financial Services reported that its net managed credit card receivables for the third quarter increased 18% year-over-year to $3.2 billion. The average credit card balance in the third quarter hit $1741, up 16% from one-year ago, largely driven by its “Options MasterCard” product. For the prior quarter, the average credit card balance came in at $1661. Financial Services’ pre-tax earnings of $40 million were up 7% from the third quarter of 2004. Canadian Tire’s MasterCard receivables represent approximately 92% of CTFS’ total managed portfolio. CTFS’ retail credit card and personal loan receivables make up the remaining nine percent of the portfolio. For complete details on Canadian Tire Financial Services’ third quarter performance, visit CardData (www.carddata.com)

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Consumer Conversions Inflate Biz Card Growth

A new report on the U.S. small business credit card market has found that a large portion of the growth in purchase dollar volume is coming from conversions. The study reveals that less than one-third of the 27% annual growth rate in PDV for such cards is due to new spending on existing accounts. The Mercator Advisory Group report determined that 20% of the growth in small business card volume is generated by consumer card conversions. Slightly more than half of the growth is coming from non-consumer card conversions or new accounts. Mercator says about 7.5% of the annual growth rate is from American Express charge card conversions.

ANATOMY OF SMALL BUSINESS PDV GROWTH
TOTAL = 27.2% (2004 Y/Y Growth)
AmEx Charge Card Conversions 2.05%
AmEx New Accounts* 2.80%
MasterCard New Accounts* 1.78%
VISA New Accounts* 7.31%
AmEx Consumer Conversions 1.37%
MasterCard Consumer Conversions 0.96%
VISA Consumer Conversions 3.13%
New Spending -Existing Accounts 7.80%
* Non-Consumer Card Conversions
Source: Mercator Advisory Group

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Duane Reade Implements Ingenico Contactless

Ingenico says it will install the “eN-Touch 1000” with contactless reading technology from On Track Innovations at all Duane Reade locations by the end of this year. Consumers tap their contactless payment card on the eN-Touch 1000 terminal with integrated OTI contactless reader to quickly make purchases at Duane Reade pharmacies. The OTI reader securely transmits card information via radio frequency, eliminating the time it takes to swipe a magnetic stripe card. Ingenico is a provider of electronic payment terminals.

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M-CARE Opts for the Benny Debit MasterCard

The University of Michigan’s “M-CARE” health plan is teaming with Evolution Benefits to offer the “Benny Debit MasterCard” to its HSA plan members. M-CARE members can use the Benny benefits debit card to pay for qualified medical expenditures, such as doctor and prescription co-payments, health plan deductibles, eyeglasses, dental services, and over-the-counter medications. Payment is deducted directly from the participant’s HSA. Participants can get online account balances and history 24 hours per day, seven days per week. Evolution Benefits administers more than 80 managed care and administrative services organizations and covers more than 1,800 employers. M-CARE has more than 220,000 members and contracts with 1,500 employer groups.

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Valutec Acquires STV Solutions Specialist

Tennessee-based Valutec Card Solutions has acquired Oregon-based Mellennia, a provider of off-the-shelf and customized stored value solutions to merchants in the retail, financial, healthcare and government markets. Valutec Card Solutions is a provider of turnkey gift and loyalty card services to small and mid-market general and specialty retail, restaurant, spa/beauty salon and hospitality merchants and processes gift card payments for more than 20,000 merchant locations.

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AmEx OPEN Savings Adds Seven New Partners

American Express added seven new partners to its “OPEN from American Express” business card savings program. The new merchants include Courtyard by Marriott, FedEx Kinko’s Office and Print Centers, Fairfield Inn by Marriott, Hyatt Hotels, Ruby Tuesday Restaurants, SpringHill Suites by Marriott and Wingate Inn. The existing partners include FedEx, Hertz and AT&T. Under the “OPEN Savings” program business cardholders receive automatic savings on each partner transaction, regardless of marketplace offers or volume discount pricing. AmEx says it has saved business cardholders more than $75 million in the past eighteen months.

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MC Introduces Turnkey Travel Card and MCCS

MasterCard announced a turnkey prepaid travel card program and a proprietary card design system for cardholders. MasterCard teamed with Travelex and MetaBank to enable MasterCard banks to offer prepaid, re-loadable MasterCard-branded cards. Under the program, participating financial institutions will act as agents rather than direct issuers. MetaBank will serve as the issuer for the program. The cards are loaded in U.S. Dollars and remaining balances at the end of a trip can either be left on the card for future use, or refunded to the cardholder. MasterCard also introduced “MasterCard Card Customization Services,” that allows issuers to offer consumer and small business cardholders the ability to create their own unique credit, debit or prepaid cards. The service will allow cardholders to upload a personal image, customize the look of the card using simple editing tools, and submit a final design for approval. MasterCard says it found that almost 70% of consumers and 85% of small business owners expressed interest in obtaining a customized card and that most would use the custom card over other cards.

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Cardiff Acquires a College Tuition Card

California-based Cardiff International has closed a deal to acquire Colorado-based Legacy Card Co., the developer of the “Commitment 529 Tuition MasterCard,” in an all stock deal. The Commitment 529 Tuition Card is a tax-free educational savings reward credit card that concentrates consumer loyalty and buying on national retailers in the Legacy merchant coalition. Merchants will contribute from 1% to 10% on card spend to the cardholder’s child’s “529” tax-free educational fund account. The retailer contribution will be supplemented by a 0.5% to 1.0% contribution from the card issuer.

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SunTrust Intros Two New Usher VISA Cards

Atlanta-based SunTrust Banks has introduced two new gift cards in association with Grammy-award winning artist Usher, including the “In the Mix” and “Truth Tour” VISA gift cards. A portion of the card’s proceeds will benefit Usher’s New Look Foundation, a 501 (c)(3) nonprofit organization aimed at giving aspiring yet disadvantaged youth a new outlook on life through education and real world experiences. As of September 30, 2005, SunTrust had total assets of $172.4 billion and total deposits of $113.7 billion.

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