SmartPay Launches Shanghai Utility Bill Pay Services

Smartpay and Fufeitong Shanghai have jointly launched a mobile utility
bill payment service that covers 15 utility companies in the Shanghai
municipal region. Mobile phone or PHS users in Shanghai can register
for the service via participating bank hotlines or directly with
SmartPay. Once registered, users can pay any utility bill as soon as
it’s received by sending the bill code by
SMS to SmartPay and can elect to receive monthly SMS alerts
when bills are due, which can then be paid by replying to the alert.
Payment is made by real time debit from the user’s bank account
to the utility. Bank Partners for the service include ICBC,
Agricultural Bank of China, Bank of China, Construction Bank of China,
Bank of Communications, China Post Savings Bank, Pudong Development
Bank, China Merchant’s Bank, Shenzhen Development Bank, Guangdong
Development Bank, China Everbright Bank, Citic Industrial Bank, Huaxia
Bank, Minsheng Bank and Bank of Shanghai.

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BITS CEO Chairs the NFCC Advisory Council

The National Foundation for Credit Counseling has named Catherine Allen, CEO of BITS, as Chair of the NFCC Advisory Council. Allen currently serves as Chief Executive Officer of BITS, a nonprofit, CEO-driven consortium comprised of the 100 largest financial institutions in the United States. Before joining BITS, Allen was vice president for business development and alliances for the corporate technology officer at Citicorp. She also represented Citibank as the founding chair of the Smart Card Forum. The NFCC, founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization.

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57% of Americans to Buy Holiday Gift Cards

American Express has released a new survey that shows 57% of Americans plan to purchase gift cards this year, spending on average $339. Gift card purchasers say that they expect to visit fewer stores (62%), purchase less actual merchandise as gifts (60%), and shop more online (28%). In addition, they plan to finish shopping faster and with less stress (74%). Recipients shopping with their gift cards will shift retail spending later in the cycle, extending the peak shopping season past traditional year-end holidays and providing incremental sales opportunities to retailers.

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VISA Intros an Advanced RFID Card

VISA is getting dead serious about contactless technology with the launch of a new RFID card. The new card offers a smaller than usual antenna that gives issuers more room for card design and embossing and even supports a variety of card shapes. Also, the enhanced card and chip performance boosts card-terminal read capabilities leading to a more consistent cardholder experience at the point of sale. The card was developed under the VISA “Smart Breakthrough” program. INSIDE Contactless worked on the development of the chip and with Smartrac Technology on antenna design and pre-lamination processes. CPI Card Group and Giesecke & Devrient contributed their expertise in card manufacturing. Volume production for U.S. financial institutions will begin in January.

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GemAuthenticate is Certified for the MC OneSMART

Gemplus announced that its user authentication Server “GemAuthenticate”
was successfully tested against the MasterCard “OneSMART Chip
Authentication” program specification. Gemplus is the first smart
card manufacturer to achieve this certification. The approval makes it
possible for MasterCard’s customer financial institutions to secure
customer access to online banking services and online purchases using
two-factor authentication. Cardholders simply insert their standard EMV
card into a portable reader, which is supplied to them by their bank,
and enter their PIN. Each time a user enters their PIN, a one time
password is generated and used to authenticate the user over the bank’s
network. The “OneSMART Chip Authentication” program is part of MasterCard’s “SecureCode” program, which extends MasterCard’s guaranteed payment model to the Internet.

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Target Card Profits Rise 30% in Q3

Target reported that its pre-tax credit card profits for the quarter ending October 29th increased 30% over the year-ago quarter and 3% sequentially. Credit card outstandings increased 13%, topping $5.5 billion, compared to 3Q/04. Target’s third quarter pre-tax credit card profits were $158 million, compared to $153 million in the prior quarter, and $120 million one-year ago. Target reported that its total credit card receivables, which include its VISA and “Guest” cards, were $5.54 billion as of October 29th, compared to $4.91 billion one-year ago. Delinquency (90 days+) for 3Q/05 increased to 3.2%, compared to 3.0% in the prior quarter, and 3.8% one-year ago. Charge-offs were 8.1% for 3Q/05 compared to 7.2% in the prior quarter, and 8.2% one-year ago. Target’s credit card unit had revenues of $311 million in 3Q/05, an 18% increase over 3Q/04. Target recently said it will receive at least $27 million from the $3 billion VISA/MasterCard settlement in the Wal-Mart debit card litigation. For complete details on Target’s latest performance, visit CardData ([www.carddata.com][1]). (CF Library 11/7/05)

TARGET CARD LOAN HISTORICAL
(Excludes Mervyn’s & Marshall Field’s)
3Q/04: $4.914 billion
4Q/04: $5.456 billion
1Q/05: $5.251 billion
2Q/05: $5.421 billion
3Q/05: $5.544 billion
Source: CardData (www.carddata.com)

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

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CompuCredit To Give Away $12MM in Profits

Atlanta-based CompuCredit has established a “Charitable Designation Program” through which its shareholders will designate charitable organizations to receive $12 million in CompuCredit donations to be made before the end of this year. Last year, through its 2004 charitable designation program, CompuCredit donated $9 million to a variety of charitable causes, including earthquake, tsunami and other disaster relief; boys and girls clubs, disadvantaged youth programs; and cancer and other medical research. CompuCredit is a specialty finance company and marketer of branded credit cards and related financial services.

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Bankruptcy Avalanche Impacts Card ABS

The recent avalanche in personal bankruptcy filings is forcing some credit card-backed securities to begin trapping cash in spread accounts. Bank of America and First National Bank of Omaha are already doing so. Chase, Citibank, Metris and National City are also expected to join the list. FitchRatings says bankruptcy filings will cause at least a 30% increase in U.S. credit card charge-offs over the next three to four months and charge-offs could surpass 7.5% from its current level of 5.72% in the near term. However, a more severe scenario where past due balances rise 25% would result in the charge-off index growing to nearly 8%, before falling back closer to the 12-month average. Fitch noted that issuers may take steps to lessen the bankruptcy impact and minimize the likelihood of hitting spread account triggers by adding new or unseasoned receivables.

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Fair Isaac Names a New Managing Director

Fair Isaac has hired Toyoaki Ishikawa to serve as managing director of
the company’s Japanese operations. Ishikawa will be responsible for
leading the development and execution of Fair Isaac’s strategic growth
plan in Japan. Prior to joining Fair Isaac, Mr. Ishikawa served as
Managing Director for BearingPoint in Japan, where he
co-managed the company’s financial services practice and led its Risk
and Performance Management consulting practice. He holds degrees from
Carnegie Mellon University and the University of Tokyo.

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Chargebacks Mask eCommerce Fraud Losses

A new survey shows that chargeback rates may understate actual fraud rates for eCommerce by as much as 50%. According to the report, bank-identified fraud chargebacks accounted for only 37% of total fraudulent orders. The “7th Annual Fraud Survey” by CyberSource found that fraudsters will steal more than $2.8 billion from eCommerce this year, an 8% increase over the prior year. CyberSource says that although the overall rate of fraud loss remains relatively constant at 1.6% of revenue, mid-to-large merchants are taking a pounding. To fight fraud, the survey found that two basic tools have gained majority adoption by merchants, specifically “Address Verification System” and “Card Verification Number” (used by 66% of merchants).

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Cardxx Gets a New CEO and President

lorado-based Cardxx has named Kevin Kucera, formerly with Infineon Technologies, as CEO/President. Kucera will oversee marketing and operations to increase market share and sales revenues. At Infineon he managed the exclusive design win for the launch of the American Express Blue Card, the largest cryptocontroller IC project in NAFTA history. Kucera holds an MBA from Thunderbird, The Garvin School of International Management. CardXX has developed patented technologies to securely encapsulate electronics into smart cards and other portable devices or form factors.

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