Personix Recognized in Best Practices Study

The Personix unit of Fiserv has received the highest rating of participants in a 2005 study of best business practices conducted by Madison Advisors. The Best Practices Study measures business practices associated with the composition, production and delivery of personalized documents such as statements, transaction summaries and checks for both print/mail and electronic (Web) delivery. Personix provides plastic card manufacturing, personalization and mailing services and high-volume laser printing, mailing and electronic document delivery solutions to more than 9,000 clients worldwide.

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Hypercom Targets China with New Exec

Hypercom has rehired TK Cheung as Senior Vice President and General
Manager – Hypercom Asia-Pacific. Previously associated with Hypercom
Asia-Pacific for seven years, he is returning to Hypercom from a
private consulting practice. Cheung has 26 years of experience in the
telecommunications and electronic payment industries. Before joining Hypercom in 1991, Cheung spent 13 years with American
Express. As President of Hypercom Network Systems, Cheung was instrumental in bringing the company’s innovative custom network management products to many of the world’s leading financial institutions and large networks in Asia, Europe, Latin America and the United States. With Cheung’s appointment, Hypercom has refocused its operations in the People’s Republic of China. The Company will retain and build channel sales and technical personnel in the cities of Beijing, Shanghai, Guangzhou and Shenzhen today; and potentially other cities in the future, to support Hypercom resellers who will now serve as the Company’s exclusive representatives in China.

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Single-Factor Authentication Inadequate

The Federal Financial Institutions Examination Council said yesterday that financial institutions offering Internet-based products and services should have reliable and secure methods to authenticate their customers. The FFIEC says its recent study revealed that single-factor authentication as the only control mechanism is inadequate in the case of high-risk transactions involving access to customer information or the movement of funds to other parties. The FFIEC says banks should implement multifactor authentication, layered security, or other controls reasonably calculated to mitigate those risks. The new guidance replaces the FFIEC’s “Authentication in an Electronic Banking Environment” issued in 2001.

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Card Fraud Drops to Three Basis Points

A survey of bank and law enforcement officials from across 18 markets in
Asia Pacific was conducted at the recent VISA Asia Pacific Risk
Management Conference. More than 80% of the respondents attribute the
historically low levels of card fraud to collaboration
among member banks, law enforcement agencies, merchants, regulators,
cardholders and payment card companies. Card fraud has dropped to three
cents for every US$100 spent in Asia Pacific, compared with seven cents
globally. Among the other attributes for the successes in the fight
against fraud were technology solutions, stronger legislation and
increasing public awareness. A mature EMV chip card environment was
cited as the best solution for counterfeit challenges.

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UK Card Bonds Deteriorate with Uncertainty

The performance of U.K. securitized credit card receivables continued to deteriorate. Moody’s says the aggregate payment rate continued to decline and gross yield appears to have reversed its downward trend over the period. The combination of a sharp deterioration in charge-offs during the second quarter and a slight upward trend in gross yield led to relatively stable aggregate excess spread during the first six months of this year. Moody’s says it remains to be seen whether charge-offs have reached an upper turning point or will deteriorate further from present levels. Overall, Moody’s notes that the rapid deterioration in charge-off levels, combined with the sustained increase in bankruptcies, highlights the problem of escalating consumer debt difficulties in the U.K.

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Women Entrepreneurs Not Leveraging Resources

The Small Business division of Capital One and Braun Research released a report that shows women entrepreneurs are not taking advantage of loans, credit lines and other common small business financing options and 65% don’t leverage online banking. More than 10 million companies in the United States are owned by women and those firms generate an estimated $2.5 trillion in sales each year. 41% of the women small business owners surveyed cited financial issues as the biggest hassle they face in building a successful company, noting the challenge of keeping up with day-to-day finances and getting the capital they need to grow their businesses. Despite these hurdles, nearly the same percentage of women (39.7%) reported that they are not taking advantage of available sources for small business financing.

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Six of Ten Business Women Hold a Biz Card

MasterCard and Ipsos-Insight released a “Women’s Small Business” study that shows 56% hold a business credit card, 28% hold a business debit card, and 40% use a business credit or business debit card to pay for the majority of their business purchases. The survey offers a look at the reasons why women are starting their own businesses, how they pay for business-related expenses and the challenges women face in trying to establish and run successful businesses. While businesses owned by women have made great strides in achieving financing and leveraging commercial credit, they still tend to rely predominantly on business earnings (35%) and personal savings (30%) as their primary funding source for business expenses. Two out of three (63%) female respondents also used personal savings to finance the start-up of their companies. All the survey respondents were owners of U.S. small businesses with 100 or fewer employees.

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Mid-Sized Issuers Up Nearly 9% in Q3

Mid-level bank credit card issuers posted an 8.6% gain in third quarter outstandings. Among issuers with outstandings between $100 million and $250 million, SunTrust led the peer group with a 39% gain. The Pennsylvania State Employees Credit Union also posted a solid gain of 12%. However, the North Carolina State Employees Credit Union slid more than 2% and AR-based Simmons, a low-rate issuer, contracted by more than 9%. OH-based FirstMerit was flat according to CardData (www. carddata.com).

ISSUER 3Q/05 OUTSTANDINGS Y/Y CHNG
Columbus Bank & Trust $250.3 million + 8.7%
Penna State Employ CU $239.8 million +12.1%
SunTrust $227.1 million +39.3%
NC State Employ CU $151.2 million – 2.3%
FirstMerit $142.8 million NC
Simmons $137.1 million – 9.7%
TOTAL $1148.3 million +8.6%
Source: CardData (www.carddata.com)

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Weekend Bankruptcy Filings May Top 100K

More than 200,000 Americans may have filed bankruptcy petitions in the final ten days prior to the full implementation of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” which takes place today. Lundquist Consulting says a record 102,863 Americans filed for personal bankruptcy last week and another 100,000 were expected to do so over the weekend. Personal bankruptcy petitions in August soared by nearly 24% from last year and were up about 15% from the prior month. It is expected that filings for September will exceed 175,000, a new monthly record. In the first eight months of this year, there have been 1,119,522 personal bankruptcy filings. This number is now expected to top 1.4 million. The ABA said Friday that under the new law, wealthy filers will no longer be able to use the system as a financial planning tool. The ability to escape debts – such as monetary judgments in a civil court case – by socking away millions in a Florida mansion will be limited. And serial filers will be limited to one filing per eight years instead of one every six years.

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MasterCard Launches Second OneSMART Club

MasterCard International has launched its second “OneSMART Club” in
Northern Europe to bring together MasterCard customers and industry
suppliers in the Baltic States of Estonia, Latvia and Lithuania to foster
and support the deployment of added value chip-based business solutions.
The NE “OneSMART Club” will initially focus on five propositions:
“OneSMART MasterCard Authentication”, “MasterCard Web”, “MasterCard
Pre-Authorised”, “OneSMART MasterCard Retail” and “OneSMART MasterCard
PayPass”. MasterCard provides a range of resources to support Club
members inclduing technical support services and expertise to help
infrastructure set-up, preferred pricing arrangements with vendors,
including privileged support services, support to manage and administrate
the Club and facilitate information sharing, comprehensive marketing
support material for banks and assistance in developing
cardholder communications, and project management support and technical
assistance for pilot launches by individual members.

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M&A ARM Activity Sets a New Quarterly Record

The latest Kaulkin Ginsberg bulletin on M&A activity in the “Accounts Receivable Management” industry shows that third quarter transactions hit $1.14 billion in total deal value, the largest amount of deal value ever recorded in a quarter. High transaction values and competitive deal structures can be attributed to an economic “sweet spot” in the ARM industry. Declining unemployment, rising inflation, and increasing interest rates all create favorable conditions for the ARM industry. With low capital gains taxes, access to relatively cheap debt, and an excess of cash reserves in corporate balance sheets and investment funds, optimal conditions exist for buyers to continue their robust deal activity in this and other industries. Kaulkin Ginsberg provide solutions to accounts receivable management and other business services industries.

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Chip & PIN Drops U.K. Card Fraud by 40%

Counterfeit and lost/stolen fraud on U.K. payment cards dropped by nearly a third in the first half of this year due to the new “Chip and PIN” system. Card fraud involving counterfeit and lost/stolen cards was $158 million this year, compared to $222 million for the first six months of 2004. Last week, the “Chip and PIN Program” announced that effective February 14th “Chip and PIN” cardholders must use their PIN to be sure of being able to pay at the point-of-sale. APACS says the vast majority of people are already using PIN at the POS. For debit cards, 97% of transactions, and for credit cards, 89% of transactions, are already successfully verified by PIN. To encourage the PIN stragglers, the “Chip and PIN Program” launched the “I LOVE PIN” campaign. It will run for four months and will include a PR campaign, online information, a customer leaflet and POS material for shop staff to use.

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