VISA Offers a Personalized Rewards Option

VISA said this morning it has enhanced its processing systems to allow for the management of cardholder rewards and enhancements at the individual account level. The new processing capability is an improvement over current capabilities, which require management of benefits at an aggregated level based on clusters of cards within the same account group. In addition to increased customer loyalty from personalized rewards and account services, this step will alleviate the need to change a cardholder’s account number simply because the product has changed. VISA’s systems upgrade has also enabled “Visa Incentive Network,” which helps merchants tailor discounts and promotions to the most interested cardholders. Instead of grouping cardholders by pre-selected reward categories, merchants and card issuers can in the future offer dining promotions to cardholders who are avid restaurant-goers, discounts to consumers who prefer boutique shopping or special offers to frequent travelers. The V.I.N. initiative was launched in April. By October, VISA anticipates that more than 50 million accounts in the USA will be eligible for tailored rewards.

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CVS to Deploy Hypercom RFID Terminals

The CVS retail pharmacy chain is deploying 12,000 Hypercom “Optimum L4100” RFID-enabled payment terminals. The terminals, configured to CVS specifications, accept magnetic stripe cards, smart cards, and contactless cards or key fobs. The “L4100” features a 200Mhz 32-bit Intel “XScale” processor, a 64K color VGA screen, a bi-directional, dual-sided magnetic stripe reader, an advanced screen protection and replacement system, multiple connectivity options and a contactless RFID reader. The RFID readers supports American Express “ExpressPay,” “MasterCard PayPass,” and “VISA Contactless” payment programs. CVS/pharmacy has 5,400 stores.

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Desjardins Doubles Efforts to Fight ATM Fraud

Desjardins has lowered its threshold whereby users must enter their date of birth from $1,000 to $300 for deposits and from $400 to $300 for withdrawals. The change affects users of the “Desjardins Access Card” (debit card). Last March, Desjardins announced its intention to modify its systems to enable the use of chip cards as of 2008, which will make it possible to provide even greater protection to account holders. In 2004, there were 5.6 million “Desjardins Access Cards” in circulation, making Desjardins one of the largest debit card issuers in Québec. That same year, Desjardins caisse members carried out more than 800 million direct payment and Desjardins ATM transactions.

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Wells Fargo Kicks-off an Online Sweepstakes

Wells Fargo will launch a 10-year online anniversary sweepstakes tomorrow offering $100,000 in prizes for online payments, funds transfer or online statement sign-ups. In 1995, Wells Fargo became the first financial institution to introduce access to banking accounts on the Web. Online banking is now the most heavily-used channel among Wells Fargo customers. Over half of the bank’s consumer checking accounts are currently accessed online. Wells Fargo & Company is a diversified financial services company with $436 billion in assets and more than 23 million customers.

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BNL and First Data Form a JV for Merchant Acquiring

Banca Nazionale del Lavoro and First Data announced an agreement to
create a joint venture to provide merchant acquiring services for
Italian merchants. The services will include the technical and
commercial management of POS payments transactions. BNL Group has total
assets of more than euro 78 billion. The transaction is subject to the
approval by Italian regulatory boards and is expected to be operating by
the third quarter.

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Intelli-Check and VeriFone Integrate

Intelli-Check and VeriFone have agreed to integrate Intelli-Check’s proprietary age- and document-verification technology into VeriFone’s point-of-sale terminals. VeriFone ships approximately one million terminals annually to vertical markets ranging from financial retail, multi-lane retail, petroleum/convenience store, to government and healthcare. Intelli-Check’s ID-CHECK technology instantly reads, analyzes, and verifies the encoded data in magnetic stripes and barcodes on government-issue IDs from approximately 60 jurisdictions in the U.S..

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Fiserv Renews SCA and Unicorn

Fiserv Credit Processing Services has renewed its deal with Shoppers Charge Accounts and Unicorn Financial Services. Unicorn Financial Services is a nationwide consumer finance company that provides patient financing programs to doctors and dentists, enabling them to offer to patients monthly payment plans for elective procedures as an alternative to cash or a credit card. Shoppers Charge Accounts Co., the sixth largest private label credit card issuer, is a division of Hudson United Bank, a $7.8 billion asset company.

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3 Credit Bureau Simulation Tool Launched

Experian-Scorex has introduced a new credit score simulation tool designed to help lenders and brokers close more loans at better rates. The new “ScoreRight” tool gives users a very detailed, tradeline level view of account information. With this information, lenders can simulate specific credit-related actions across all three credit reports. These simulations are then used to help the consumer better understand their current score and enable them to gain perspective on how their purchasing and financial decisions can affect their overall credit health. Utilizing artificial intelligence, “ScoreRight” improves lenders’ operational efficiencies by automating the manual process of scanning raw credit data. The simulation tool automatically compares an applicant’s credit data across all three credit reporting agencies to check for discrepancies and areas that might adversely affect the credit score. Lenders can then use “ScoreRight” to illustrate how specific credit-related actions can affect a consumer’s credit score.

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SUB-PRIME MARKET

A new study has found that there were 9.6 million credit cards in issue to individuals classified as non-standard or sub-prime last year. Despite a projected decline in the non-standard population, it is
forecast that the sub-prime credit card market will enjoy strong five-year growth. Research and Markets says the opportunity will be driven by an increase in cardholding amongst the lower end of the
non-standard population, due to greater issuer competition and
improvements in underwriting techniques. Research and Markets also found that the bulk of the 9.6 million sub-prime cards issued last year are held by self-employed consumers.

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Phishers Now Target CUs and Small Banks

Online fraud fighting specialist Cyota reports a 633% increase in the number of phishing attacks against credit unions and small/regional banks since January. Last month, Cyota observed that 22 CUs were attacked by phishing scams. Only one or two attacks occurred against each of these institutions — as opposed to hundreds of attacks each month for larger or global banks. Cyota’s “FraudAction,” launched in late 2003, has dismantled more than 7,000 phishing sites in 65 countries and lowered an attack’s life expectancy to an average of five hours. Cyota also this morning announced that the Pennsylvania State Employees Credit Union has deployed Cyota’s “FraudAction” service to proactively fight phishing, pharming and other forms of online fraud. Cyota’s additional products include Cyota “eSphinx,” a strong two-factor authentication solution for online banking; Cyota “eVision,” the company’s online fraud management solution; and Cyota “SecureSuite,” an e-Commerce fraud solution supporting “Verified by Visa” and “MasterCard SecureCode.”

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ABS Credit Card Delinquency Spirals Down

For the first time in a decade credit card delinquencies are set to slip below 4.00%. In April, average delinquency among the majority of asset-backed credit card bonds dipped to 4.07%, compared to 4.52% one-year ago. Three years ago ABS delinquency was running near 5.00%. According to Moody’s Investors Service, charge-offs for April registered 5.91%, the lowest figure in about a year and a half. One-year ago charge-offs stood at 6.52%. However, the figure is expected to soar over the next five months as bankruptcy filings continue their record pace.

ABS HISTORICAL
Charge-Offs Delinquency
Apr 01: 6.50% 4.89%
Apr 02: 7.00% 5.25%
Apr 03: 6.52% 4.52%
Apr 04: 5.91% 4.07%
Source: Moody’s Credit Card Index

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Cap One Delinquencies Turn North in May

After a steady four-month decline Capital One’s managed delinquency ratio inched up by 6 basis points last month. For May, Cap One also reported that managed charge-offs decreased to 4.10% compared to 4.22% in the prior month and 4.40% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency increased to 3.43% in May compared to 3.37% for April, 3.45% for March and 3.84% in January. Delinquency one-year ago stood at 3.73%. At the end of May, Capital One had $82.4 billion in global outstandings, a slight decline from the prior month. At the end of the first quarter, U.S. card outstandings of $46.6 billion were up 3%, compared to one-year ago. For complete details on Capital One’s monthly metrics and 1Q/05 performance, visit CardData ([www.carddata.com][1]).

Month Charge-offs Delinquency
May 04 4.40% 3.73%
Jun 04 4.17% 3.76%
Jul 04 4.10% 3.77%
Aug 04 3.87% 3.80%
Sep 04 4.18% 3.90%
Oct 04 4.10% 3.94%
Nov 04 4.35% 3.87%
Dec 04 4.63% 3.92%
Jan 05 4.19% 3.84%
Feb 05 3.96% 3.65%
Mar 05 4.35% 3.45%
Apr 05 4.22% 3.37%
May 05 4.10% 3.43%
Source: CardData (www.carddata.com)

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

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