HSBC Completes a VISA Information Source Trial

HSBC Bank has just completed a successful UK trial of “Visa
Information Source” with one of its major corporate customers. “VIS” is
a comprehensive web-based reporting and expense management solution that
helps companies monitor expenditure and streamline administration.
Currently, about 12 million U.S. transactions each year go through “VIS.” “VIS” provides online reporting with 25 months of historical data, standard reporting and a user customizable file extract, cardholder statement reports, a supplier analysis solution, a cost allocation solution and an expense reporting solution.

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AVENTA Data Systems Joins OneLynk Alliance

Atlanta-based RBS Lynk has signed AVENTA Data Systems to its “OneLynk Alliance” program. AVENTA Data Systems provides Point-of-Sale (POS) solutions to over 500 restaurants. RBS Lynk’s electronic payment processing integrates with Aloha POS software, providing fast transaction processing, while eliminating the expense of separate restaurant management equipment and payment terminals. AVENTA develops, markets and supports PC network-based systems for the hospitality industry. RBS Lynk is a single-source provider of electronic payment processing services and is a member of The Royal Bank of Scotland Group (RBS Group), one of the world’s leading financial services companies.

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Triversity Releases FraudWatch 3.0

Toronto-based Triversity has released “FraudWatch 3.0,” a loss
prevention software solution that meets the requirements of the PCI
standards for protecting cardholder data. “FraudWatch 3.0” includes full
encryption of credit/debit card information, audit trails when data is
accessed, advanced password management, masking of sensitive data when
displayed and restriction of information. “FraudWatch” is a Web-based
system that can be accessed from any location via a Web browser.
Triversity is an international provider of retail business solutions.

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Consumer Confidence Drives GDV Higher

The “Consumer Confidence Index” reached a three-year high in June as second quarter U.S. payment card gross dollar volume is expected to top $650 billion for the highest year-over-year growth rate since the third quarter of 2002. Credit and debit card GDV is expected to rise 13.5% in Q2, compared to 11.5% in the first quarter and 11.8% one-year ago. The Conference Board, which produces the “Consumer Confidence Index,” says that consumers are in better spirits and job concerns appear to remain relatively steady. Therefore, there is little reason to expect a dramatic shift in consumer spending. Despite the rebound in payment card volume, CardData expects growth in revolving credit card balances to remain sluggish for the near term.

CONSUMER CONFIDENCE INDEX DEBIT+CREDIT GDV GROWTH
Jun 01: 118.9 2Q/01: $430b +18%
Jun 02: 106.4 2Q/02: $481b +13%
Jun 03: 83.5 2Q/03: $516b + 7%
Jun 04: 102.8 2Q/04: $584b +13%
Jun 05: 105.8 2Q/05: $651b +13.5%
INDEX=100 in 1985 GDV=gross dollar volume
Source: The Conference Board Source: CardData

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Acxiom’s RITAA Boosts Mail Response

AR-based Acxiom announced the general commercial availability of “Ranking Invitation to Apply Approvals,” which helps credit card issuers find and target consumers who are most likely to respond to invitation-to-apply offers and meet the issuer’s credit approval standards. “RITAA” is a model built on Acxiom’s “InfoBase” data. Acxiom’s post-campaign testing shows approval-to-response rates can be increased by 25-50%. If the goal is to increase approval-to-mailed rates, a 17-50% improvement has been observed, with the average well over 20%. The “RITAA” results were validated in 20 campaigns by nine companies.

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Monthly Payment Rates Retreat in May

After hitting the stratosphere in April, monthly payment rates on asset-backed credit card bonds came back to earth in May. Payment rates, the amount that cardholders pay toward outstandings each month, climbed to a record 18.52% in April before dropping 134 basis points last month. However, the trend is still upward as the MPR is tracking 42 basis points above year ago levels. According to FitchRatings, the monthly payment rate among prime issuers was 17.18% in May and 16.76% one-year ago. The increase in MPR over the past year has been attributed to cardholder behavioral changes and debit consolidation via home equity loans.

MONTHLY PAYMENT RATES
(Prime Credit Card-Backed ABS)
Apr 04: 16.76%
Dec 04: 17.09%
Jan 05: 17.70%
Feb 05: 17.64%
Mar 05: 16.32%
Apr 05: 18.52%
May 05: 17.18%
Source: FitchRatings

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Shere Integrates Hypercom chip & PIN Solution

Self-serve ticket machine specialist Shere has inked a $1 million deal to use Hypercom’s “chip & PIN”-based credit and debit card payment solution. The Hypercom solution includes its “K1100” keypad and display device and “Optimum H2200 Motorized Magtek” card reader. It is also
EMVCo, VISA PED, and ISO1332-3 approved. Additionally, it complies with
the UK’s “Disability Discrimination Act.” More than 65% of the UK Train
Operating Companies, including Virgin Trains, First Group, Go-Ahead and
GNER use Shere’s “FAST and SMART” ticketing system. Hypercom’s
unattended products can fit into most self-service environments
including kiosks, ticketing, transportation self-checkout systems,
entertainment, fast food, pay-at-pump and more.

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Charge-Offs Head North as Filings Rise

The recent decline in charge-offs among credit card-backed securities abated in May while delinquencies continued a downward spiral. Charge-off ratios will likely trend up through January 2006 as last minute personal bankruptcy filings make their way into the courts thru mid-October. For May, charge-offs in the “prime” asset-backed credit card securities market increased 32 basis points to 6.20%. “Sub-prime” charge-offs edged down by one basis point to 13.42%, after collapsing 163 basis points in April. One-year ago, “prime” charge-offs were 6.57% and “sub-prime” charge-offs stood at 16.69%. According to the “Fitch Credit Card Index,” “prime” delinquency (60+ days) fell to 2.72% in May, 36 bps lower than May 2004, the lowest level since July 2002. “Sub-prime” delinquency (60+days) for May declined to 6.78%, the lowest level since June 2001.

ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
May 04: 6.57% 16.69%
Apr 05: 5.88% 13.43%
May 05: 6.20% 13.42%
Source: Fitch Ratings

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Wright Express and TCI Co-Brand a Card

SC-based TCI Tire Centers Commercial Division and Wright Express are introducing a new co-branded fleet fuel card for TCI customers requiring a one-card fueling solution. The new TCI card will consolidate fuel purchases, minimize reporting and enable our local-billed truck fleet customers to establish and enforce fueling policies. The “Wright Express Affinity Card” program allows service marketers to offer a branded fleet fueling card to increase sales, build brand awareness and establish customer loyalty. The fuel card is accepted at more than 180,000 fuel and service locations.

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Golden 1 CU to Deploy ATM Manager Pro

Jack Henry’s e-ClassicSystems is providing California-based Golden 1 Credit Union its “ATM Manager Pro” to manage its network of 270 ATMs. ATM Manager Pro supports ATM channel management by consolidating ATM-related information into a centralized database and provides analytical and reporting tools. The Golden 1 Credit Union is the fourth largest credit union in the United States with over $5.6 billion in assets and more than 600,000 members. Jack Henry & Associates, Inc. is a leading provider of integrated computer systems and processor of ATM/debit card/ACH transactions for banks and credit unions.

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Interchange Reforms May Cost Americans

VISA-funded Americans for Consumer Education and Competition yesterday said the merchant lawsuits filed against credit card companies over interchange could come back to hit consumers at the POS. The Washington, DC-based group cited Australia as an example that regulating interchange produce higher annual fees, higher prices at check out and weaker rewards programs for consumers. ACEC also cited a DATAMONITOR study which concluded that taken collectively, the direct impacts of the Australian interchange reforms on consumers have been wholly negative.

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