HSBC Buys the Bon-Ton Store Card Portfolio

HSBC Retail Services has sealed a deal to acquire Bon-Ton’s private label credit card business. At the end of the first quarter, the accounts receivable balances in the portfolio was about $300 million compared to approximately $200 million five years ago. Under the multi-year HSBC agreement, Bon-Ton will participate in the revenue generated by future credit sales. Effective November 1st, Bon-Ton, due to the HSBC sale, will cease to operate its corporate credit center and nearly all 84 corporate credit positions will be eliminated. The Bon-Ton Stores operates 139 department stores and two furniture stores in 16 states from the Northeast to the Midwest under the Bon-Ton and Elder-Beerman names. The deal is expected to close next month.

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MAY DEBT

Credit card borrowing continues to down shift, as Brits added GBP117 million during May, compared to GBP417 million in May 2004. The modest increase in May follows a small net repayment of credit card borrowing in April of GBP44 million. Overall sterling lending to the UK private sector showed a net increase of GBP600 million to GBP1.1 billion in May. The British Bankers Association noted that mortgage lending was below its recent average and, although personal loans saw an average rise, the slow growth in credit card lending by the major banks is in line with weak retail sales. The Office for National Statistics reported that retail sales in May increased 10 basis points and annual sales were only up 130 basis points. The BBA collects data from Abbey National, Alliance & Leicester, Barclays, Bradford & Bingley, HBOS, HSBC Bank, Lloyds TSB, Northern Rock and The Royal Bank of Scotland.

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PayPal Targets SMBs for Payment Services

PayPal has formally introduced a new product suite for small- and medium-sized businesses. The new “PayPal Website Payments Pro” suite includes: “Express Checkout,” “Direct Payment API” and “Virtual Terminal.” “Express Checkout” helps buyers with PayPal accounts pay for items in just three clicks on a merchant’s website. “Direct Payment API” is for buyers who don’t have PayPal accounts. “Virtual Terminal” supports phone, fax and mail orders by providing merchants with an online interface to manually enter credit card transactions through the PayPal system. “Website Payments Pro” is PayPal’s first non-hosted payment suite. Pricing for the new service is $20 per month (waived for most of this year) and a per-transaction rate of 2.2% to 2.9% plus 30 cents.

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BankCardLaw Web Site Opened for Merchants

BankCardLaw Media has opened an online resource to educate businesses on correctly accepting credit cards and combating fraud. Businesses must understand their merchant accounts to actively reduce their risks of card data theft and fraudulent card purchases. The merchant account book is written in easy to understand language. It contains a practical explanation of the credit card transaction process, risks, schemes of fraud & crime, common merchant mistakes and best practices and provides more than 50 resource links to further information. Anthony L. Ogden, a bankcard attorney since 1994, is President of BankCardLaw Media Corp.

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MBNA Execs Shaken in a NYC Copter Crash

A helicopter that crashed Friday into the East River in New York City carried six top MBNA executives. All on board survived in what could have been a disaster for the giant firm. However, one of the pilots was hospitalized with injuries. The MBNA executives included Frank Bramble, Bruce Hammonds, Richard Struthers, Lance Weaver, Thomas Wren and Douglas Denton. MBNA’s Sikorsky S-76C was lost. In a news conference over the weekend, MBNA’s general counsel Louis Freeh said the company has a policy of restricting the number of top executives who can travel together. Freeh says the policy was followed because COO John Cochran and CFO Kenneth Vecchione were not part of the group.

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Next Gen of DataSecure Platforms Introduced

Ingrian Networks has launched its next generation of its “DataSecure Platforms,” the only appliance-based encryption solution that features granular, field-level encryption capabilities and that can be integrated at the Web server, application server or database layer. Ingrian Networks DataSecure Platform features dedicated security appliance and specialized software that enables organizations to encrypt critical data in applications and databases.

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ViVOpay Readers Certified for ExpressPay

ViVOtech’s “ViVOpay 3000” and “4000” readers have been certified by American Express for use in its “ExpressPay” program. ExpressPay, the American Express contactless payment alternative to cash is being incorporated into the Blue from American Express credit cards. Payment is authorized in seconds and no signature is required. ViVOtech provides an end-to-end transaction platform that allows consumers to make contactless payments with radio frequency-enabled payment methods.

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40MM Accounts Exposed by Lax Security

Nearly a month after discovering a potential security breach affecting as many as 40 million credit card accounts, Atlanta-based CardSystems Solutions publicly acknowledged the incident late Friday. The Company said the FBI, who was notified on May 23rd, requested silence to avoid compromising the investigation. However, MasterCard began notifying members and issued a press release Friday afternoon indicating that 13.9 million MasterCard-branded cards may have been exposed by the breach. VISA and MasterCard also acknowledged that CardSystems Solutions has failed to meet the association’s security requirements. The breach reportedly took place following the installation of new data mining software which enabled a rogue computer program to extract files. In an interview with The New York Times, the CardSystems Solutions CEO said the 200,000 account records actually stolen were being held in a file being stored for “research purposes” to determine why certain transactions had registered as unauthorized or uncompleted. The chief executive acknowledged this was a violation of network rules. The company processes payment transactions for more than 115,000 customer locations and handles about $15 billion in annual volume.

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Cap One D.C. Stash Your Cash Program Ends

Capital One’s six week “Stash Your Cash” financial education program in Washington, DC has ended with an auction of several giant piggy banks to benefit D.C. Public Schools. The Stash Your Cash program, based on a curriculum developed by the Dallas Federal Reserve Bank, introduced local middle school-aged students to basic money management skills, with an emphasis on saving for the future. The program reached more than 4,000 students. Capital One’s subsidiaries collectively had 49.1 million accounts and $81.6 billion in managed loans outstanding as of March 31, 2005.

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Google to Launch an ePayment Service?

There is mounting scuttlebutt that search engine king Google is gearing up to launch an electronic-payment service this year. The new “Google Wallet” may function similar to eBay’s PayPal e-payment service which enables buyers and sellers to link their credit cards or checking accounts to the service. In April, Google filed papers in California to form Google Payments Corp. The New York Times reports that the chief executive of a major online merchant has been approached by Google to take part in the proposed service. The Wall Street Journal says the move would highlight the growing rivalry between the two Internet companies, even while eBay itself is a big buyer of Google’s online ads. According to CardData, PayPal handled $6.23 billion in gross payment volume during the first quarter, generating $227.1 million in transaction fees. As of March 31st, PayPal had 71.6 million accounts.

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