Banks Must Expand Gift Card Disclosure

At least 12 U.S. states have enacted statutes governing gift cards, while over 70 legislative proposals in 31 states are still pending. A new research study shows the legislation will have little impact on gift cards issued by retailers, but may threaten the survivability of prepaid cards issued by banks. TowerGroup says store gift cards and bank card gift cards are very different animals. Gift cards offered by specific retail merchants are a loyalty product to increase sales with the costs absorbed by the sales. Gift cards issued by banks are universally accepted and offer extra benefits such as lost card replacement and therefore carry legitimate expenses that are offset by fees. However, TowerGroup says there is evidence that consumer disclosures – particularly to the ultimate gift card recipient – have been lacking. The research report suggest that the industry must recognize this deficiency and act quickly to correct it, even as it fights to avoid prohibition of fees.

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JK BANK MASTERCARDS

Jammu and Kashmir Bank Limited has launched a credit card and Internet banking division. The new “Global Access” MasterCards are available in “Gold,” “Silver,” and, “Blue.” JK Bank currently issues a “Maestro” debit card that is accepted at 50,000 POS terminals at merchant establishments across India and 8 million worldwide. JK Bank has a network of 487 branches/offices within India and more than 130 ATMs.

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ADS Inks Card Deal with Crescent Jewelers

Alliance Data Systems has inked an eight-year agreement to provide private label credit card services for Crescent Jewelers, which operates 122 fine jewelry stores in California, Arizona and Nevada. Alliance will provide full credit card management and processing and will develop and launch multiple new credit plans to support Crescent Jewelers’ business strategy. Alliance Data Systems is a provider of transaction services, credit services and marketing services, managing over 105 million consumer relationships.

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BioPay is a Big Hit in UT Convenience Stores

Utah-based Combos convenience stores reports it has processed over 1,000 biometric payments using BioPay in slightly over 2 months and that customer enrollments are now increasing 30% per month. BioPay uses a person’s unique finger image and their chosen PIN# to authorize a debit from their checking account. Enrollment can be completed at any merchant that offers the biometric payment service. Biopay has 1.8 million registered consumers and over 1,000 merchants using its smart secure methods.

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MasterCard Targets Affluent Americans

MasterCard rolled-out a new ad campaign targeting affluent consumers for its recently beefed-up “World MasterCard.” The new “Candy Store – Priceless” TV spot broke yesterday in major U.S. markets and will run through the end of the year. Next month, MasterCard will expand the affluent “Priceless” campaign with print and online ads. MasterCard defines the mass-affluent market as those earning more than $100,000 in annual household income. The new “World MasterCard” offers a rewards program based on four categories including, “Personal,” “Family,” “Finances” and “Community.” Cardholder select their rewards. MasterCard says purchase volume for the “World MasterCard” increased over 20% last year. McCann Erickson New York is handling the creative for the new campaign.

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ECHO’s ACH Transactions Rise 42%

Electronic Clearing House reported that revenue increased 11%, bankcard and transaction processing revenue gained 5.8% and ACH transactions processed increased 41.6% during the first three months of this year. Revenue for the quarter $13.3 million and bankcard processing and transaction revenue was $9.9 million. ACH transactions processed were 7.7 million. Check-related revenues increased 30.1% to $3.4 million. For complete details on ECHO’s first calendar quarter performance, visit CardData ([www.carddata.com][1]).

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

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Optimal Acquires 15,500 Merchant Locations

Montreal-based Optimal Payments is acquiring approximately 15,500 merchant locations that generate in excess of $1.5 billion in annual credit and debit card processing volume from New Jersey-based United Bank Card for $44 million in cash. UBC is a payment and transaction processor that serves primarily card-present merchants nationwide. Optimal Payments Corp. is a wholly-owned subsidiary of Optimal Group Inc., a payments and services company with operations throughout North America and the United Kingdom.

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Fair Isaac Upgrades its Blaze Advisor

Fair Isaac has released “Blaze Advisor 6.0,” its renowned enterprise decision management solution. Blaze Advisor 6.0, enables large projects consisting of hundreds of thousands of rules to be segmented per business domain and actively managed by their owners. This allows for processing consistency. Fair Isaac Corporation provides predictive modeling, decision analysis, intelligence management, decision management systems and consulting services.

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NCR Intros Intelligent Fraud Detection

NCR has introduced its patented “Intelligent Fraud Detection” solution that detects the attachment of false fronts, cameras or other devices to ATMs. Should an ATM be tampered or compromised, an automatic alert is sent to the financial institution, providing bank management with the option of shutting down the ATM or alerting law enforcement. Additionally, the technology can isolate customer accounts that are may have been used when the fraudulent action was taking place and take steps to prevent further loss. NCR Corporation provides ATMs, retail systems, Teradata data warehouses and IT services globally.

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HSBC to Issue the PC Mall Credit Card

HSBC – North America has inked a deal with PC Mall for a new private label credit card program for its four primary brands: PC Mall; MacMall; ClubMac; and OnSale.com. PC Mall and its subsidiaries sell more than 100,000 different products from companies such as HP, Microsoft, Apple and IBM. In 2004, total sales volume for PC Mall, Inc. was approximately $1.1 billion. HSBC Retail Services is an issuer of private label credit cards in the United States. HSBC – North America has more than $300 billion in assets and serves more than 60 million customers.

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DAMAS & AMEX

American Express Middle East E.C. and Damas Jewelry have partnered to launch a new credit card billed in UAE Dirhams. The card features a 2% reward voucher on all purchases and special offers such as 30% off on diamond jewelery plus a 10% gift voucher for a future Damas purchase. In 1992, American Express became a joint venture company owned by Mawarid Investment Limited and American Express and now operates in 18 markets in the Middle East and North Africa region. Damas, established in 1907, specializes in gold, diamond and pearl wholesale trading and operates retail outlets in the U.S.A, Lebanon, Jordan, Maldives, India, and throughout all the GCC countries.

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Cap One Delinquency Hits a New Low

Capital One’s managed delinquency ratio has declined for four consecutive months and charge-offs have resumed a southerly trend. For April, Cap One reported that managed charge-offs decreased to 4.22%, compared to 4.35% in the prior month, and 4.70% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency decreased to 3.37% in April compared to 3.455 for March, 3.65% for February and 3.84% in January. Delinquency one-year ago stood at 3.69%. At the end of April, Capital One had $82.5 billion in global outstandings, a $1 billion gain over March. 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
Apr 04 4.70% 3.69%
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%
Source: CardData (www.carddata.com)

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

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