Americans Support Bankruptcy Reforms

More than 60% of Americans support the recently enacted bankruptcy legislation, according to a new survey. Though a clear majority of Americans are in favor of the new law, support for it has weakened from June 2003, when the “Cambridge Consumer Credit Index” found that 73% were in favor of toughened bankruptcy laws and 27% opposed it. The latest CCCI survey also found that 80% of Americans say the new law would deter them from filing for bankruptcy, while the rest would be more inclined to file for bankruptcy if they were overwhelmed with debt. The biggest support for the law comes from white, older consumers with high incomes and more education, while the consumers who would be impacted the most-younger people with lower incomes and less education and blacks, are more opposed to toughening bankruptcy rules. The new bankruptcy laws take effect on October 17th. (CF Library 4/28/05)

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College Students Carry $8K in Card Debt

University administrators report they lose more students to credit card debt than to academic failure and in 2001, more young adults filed for bankruptcy than graduated from college. Analysis by the Illinois CPA Society shows that college students have an average of three credit cards, with a total balance of over $8,000. Totally, college students leave college with about $20,000 in combined student loans and credit card debt.

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The Distra Payment Switch is Coming

Distra and Oracle have recently performed operational integration tests of a simulated end-to-end payments solution with Ohio-based Synoran. Synoran specializes in enterprise wide payment solutions and check image processing. Distra is a software company that specializes in electronic payments and transaction processing applications. Oracle is the world’s largest enterprise software company.

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MasterCard Certifies SmartCCard Lite

Comms XL has become the first software house to achieve global accreditation from MasterCard for a generic “Chip and PIN” system. MasterCard approved Comms XL’s “Chip and PIN” product, “SmartCCard Lite,” for installation by merchants without further testing. “SmartCCard Lite” is a plug and play “Chip and PIN” solution that due to its all-inclusive capabilities, can be implemented by merchants without the problem of approval and third-party integration. Authorization and payment file fulfillment to the acquiring bank takes place through either the “CCServer” module residing on the merchant’s network or over a secure link to Comms XL’s “SecureCXL” payment service.

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U.S. Bank Launches Three SNHU VISA Cards

U.S. Bank is now offering three new affinity credit cards for Southern New Hampshire University. The program will offer a choice of three card design options featuring the Penmen logo, Robert Frost Hall and the new SNHU logo and will offer a reward program to students and alumni. SNHU educates intellectually and culturally enriched individuals to be successful in their careers and contribute to their communities. U.S. Bancorp is the 6th largest financial holding company in the US with $198 billion in assets.

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MBNA Draws a Shareholder Lawsuit

A class action on behalf of MBNA shareholders is underway for the period between January 20th and April 21st. Lerach Coughlin alleges that MBNA’s false statements during the period caused MBNA’s stock to trade at inflated levels which permitted the Company’s top officers and directors to sell more than $75 million worth of their own shares. Following the Company’s April 21st disclosures concerning its business operations, financial results and reduced 2005 earnings expectations, the Company’s stock price plummeted from its closing price of $23.11 on the close of April 20th to below $19 per share on extremely high trading volume of 51 million shares.

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British Columbian Retailers Get a Card

British Columbia’s Retail BC and BMO Bank of Montreal have teamed to introduce a business MasterCard for retail business operators. The new “Retail BC Mosaik MasterCard for Business” will be offered to the 3,200 member companies of the non-profit Retail BC. “Mosaik MasterCard” enables cardholders to choose from a variety of individual features. The options range from no-fee cards to the “AIR MILES” reward options available in Canada. Cardholders will also have all the benefits of a business credit card plus free access to enhanced online reporting, expense and cash flow management, with revolving credit up to $75,000 plus exclusive discounts.

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Retail Decisions and Mi-Pay Team for Top-Up

Retail Decisions has partnered with Mi-Pay to enable mobile phone
users to top-up directly through the handset. Retail Decisions
has also made a 20% equity investment in Mi-Pay. ReD is also partnering
with Mi-Pay by providing its payment gateway and card fraud prevention
services to Mi-Pay’s customers. ReD is already the largest processor of
pre-pay mobile transactions in the U.K. through card-not-present
channels. ReD’s mobile telecoms clients include: T-Mobile, Virgin Mobile
and O2 among others. Mi-Pay is led by Norman Frankel, who was formerly
the Mobile Commerce Director of LogicaCMG.

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Parking Machines Move to Chip and PIN

Any new installations of credit and debit card equipped
parking machines in the U.K. must now be able to process an EMV transaction. Following the introduction of the “Chip and PIN” standard in the UK, VISA declared that all new unattended terminals accepting VISA cards in Europe will be required to be capable of performing a
full EMV level 2 (“Chip and PIN”) transaction. Any new terminals which are not chip and PIN capable will not be accepted by VISA and operators
will be unable to obtain merchant facilities to process VISA-branded
cards. The directive does not prevent the acceptance of other branded cards such as MasterCard, American Express, Diners, JCB, etc.

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Global Cash Access Revenues Up 13%

Las Vegas-based Global Cash Access reported record first quarter revenues of $109.7 million, an increase of 12.6% from 1Q/04. Net income for the first quarter was $7.3 million as compared to $14.1 million in the comparable 2004 period. Cash advance revenues were up 12.5% to $56.8 million as the number of transactions increased 4.7% to 2.3 million. ATM revenues increased 14.2% to $43.8 million. The number of transactions increased 10.7% to 14.3 million. Cash disbursed was $2.35 billion compared to $2.02 billion, an increase of 16.6%. Average revenue per transaction increased 3.0% from $2.96 to $3.05. Check services revenues were $6.3 million, an increase of 8.1%. For complete details on GCA’s latest performance, visit CardData ([www.carddata.com][1]).

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

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Means Test Could Boost Profits by 3%

A new analysis has found that the U.S. bank credit card industry wrote off approximately $13 billion last year in credit card receivables, due to cardholders filing under Chapter 7 of the U.S. bankruptcy code. Under the new “means test” to take effect this fall, about $1.3 billion of the losses would have been subject to a repayment plan under Chapter 13. Moody’s Investors Service says the number could be even higher because those Chapter 7 filers who would have failed the “means test” would likely have had larger than average outstanding balances. Even though this is a large number, it equals only 3.4% of all credit card charge-offs, or 20 basis points of the 5.75% total net charge-off ratio in 2004. In addition, Moody’s expects that many of those consumers forced to file under Chapter 13 will still not have the ability to repay all of their credit card debt outstanding. Among those currently filing under Chapter 13, estimates are that only around one-third are able to complete their payment plans, and even those plans don’t usually contemplate a 100% repayment of unsecured debt. Assuming that consumers filing under Chapter 13 rather than Chapter 7 because of the means test are able to pay between a quarter and one half of what they owe, then industry-wide aggregate credit card net charge-offs might decline by $325 million to $650 million a year. This would translate into a 5 to 10 basis point decline in the net charge-off ratio. Moody’s estimates that this modest decline in net charge-offs, if it fell entirely to the bottom line, would increase the average pre-tax profitability for the bank credit card industry by only 1.5% to 3.0%.

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BADR Deploys ACI’s BASE24 Software

Banque de l’Agriculture et du Developpement Rural has deployed ACI’s “BASE24” software. “BASE24” will enhance BADR’s ATM and POS network transaction processing. ACI is helping the bank develop dedicated in-branch areas for customers to make transactions via ATMs.
BADR will also leverage “BASE24” to deploy new functionality including support for EMV and multi-currency capability, improving customer service and reducing the risks associated with credit and debit card fraud. The bank is running “BASE24” on a HP “NonStop” platform. BADR manages the country’s largest banking network with 290 agencies and 40 branches.

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