RBC and Esso Establish Rewards Reciprocity

Canada’s RBC Royal Bank and Esso have teamed to integrate their rewards programs. Under the agreement, members of both “RBC Rewards” and “Esso Extra” programs will have the ability to transfer blocks of points between the each program. “Esso Extra” is the first loyalty program for which RBC Royal Bank developed a reciprocal points exchange process. Esso and RBC Royal Bank began their relationship in 2000 with the launch of the “RBC Esso VISA.”

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An Interchange Conference Opens Tomorrow

The Federal Reserve Bank of Kansas City will open its “2005 Payments Conference” tomorrow in New Mexico. The conference will focus on the interchange system in the USA. MasterCard’s general counsel Noah Hanft has been selected to be a keynote speaker and he plans to highlight the benefits and efficiencies of the present interchange system. However, the Merchants Payments Coalition says its about time the Federal Reserve questions “high-interchange” debit cards as it “undermines the Fed’s ability to measure and manage the nation’s money supply.” The Coalition also says current interchange fees represent a “hidden tax that is driving up the cost of merchandise and services for American consumers every day.” The group, represented at the conference by Duncan, Hatcher and Zlotnikoff, includes American Petroleum Institute, the Food Marketing Institute, the National Association of Chain Drug Stores, the National Association of Convenience Stores, the National Council of Chain Restaurants, the National Grocers Association, the National Restaurant Association and the National Retail Federation, among others. (CF Library 1/20/05)

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Carlson Wagonlit Enhances its PowrPac Tool

Carlson Wagonlit Travel and its CWT Solutions Group have upgraded their benchmarking, travel modeling and interactive intelligence tool. “PowrPac” takes booked travel, credit card and expense management data and synthesizes it into actionable program recommendations. The new 1.5 version offers smoother navigation, improved archive storage system, additional reporting and benchmarking options, help functionality and a high level of customization. “PowrPac” was introduced in 2004.

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Charge-Offs Soar as BR Filings Increase

Charge-offs among card-backed securities, especially sub-prime portfolios, soared in March as a record number of bankruptcies were filed during the month. However, delinquency (60+ days) continued to fall for prime ABS card portfolios. Sub-prime delinquency (60+ days) dropped for the fifth consecutive month. Prime charge-offs climbed 21 basis points to 5.97% from February, but are 78 basis points below March 2004. Sub-prime charge-offs shot up 112 bps in March to 15.06%, but are 221 bps below one-year ago. According to the “Fitch Credit Card Index,” prime delinquency (60+ days) fell to 2.89% in March, 46 bps lower than March 2004. Sub-prime delinquency (60+days) declined to 7.40%, the lowest level since July 2001. The monthly payment rate declined sharply in March to 16.32% and the yield jumped 144 bps from January to 17.71%.

ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Mar 04: 5.19% 17.27%
Feb 05: 5.76% 13.94%
Mar 05: 5.97% 15.06%
Source: Fitch Ratings

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VISA to Become a Kentucky Derby Sponsor

VISA USA has signed a new five-year agreement with Churchill Downs to become sponsor of the “Kentucky Derby” in 2006. The partnership will enable “VISA Signature” cardholders to gain access to a Churchill Downs “Finish Line Suites” and box seats to the Kentucky Derby. VISA says it intends to create a limited number of “Finish Line Suite” trip packages exclusively for “Signature” cardholders, offering tickets, stable area tours, and access to coveted invitation-only events during horse racing’s biggest weekend. Under terms of the partnership, VISA will be named as “proud sponsor of the Kentucky Derby” and VISA will be the only card that enables cardholders to purchase tickets to the event. VISA USA began its affiliation with horse racing in 1996 when it was named sponsor of the “VISA Triple Crown Challenge.”

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GECF to Launch the Universal Trailer Card

GE Consumer Finance’s Retail Sales Finance unit has inked a private label credit card deal with Ohio-based Universal Trailer Corporation, a specialist in the enclosed trailer market. Universal Trailer is the largest specialty trailer manufacturer in North America with facilities in seven states and offers a wide variety of trailer products ranging in price from under $3,000 to over $100,000. GE Consumer Finance, a unit of General Electric Company, is a leading provider of credit services to consumers, retailers and auto dealers in 41 countries around the world with more than $151 billion in assets.

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Global Debit Cash Card Halts Operations

Global Debit Cash Card has suspended its operations and has moved from New Jersey to Las Vegas to restructure. When operations begin again shortly, Global expects to make strong marketplace inroads with its offer of a $5 fee for worldwide transfers of amounts of up to $1,000 a day and also plans to expand its product line by enhancing its three-card package with the introduction of two- and one-card packages. Global Debit Cash Card specializes in international money transfers and the issuance of debit cards.

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RBI Seeks Better Behavior from Card Issuers

The Reserve Bank of India is asking credit card issuers to clean up their act with the implementation of new guidelines. The RBI’s new credit card policy includes better disclosure of terms and conditions using simple language and penalties for making a misleading card offer. The guidelines also address privacy issues, telemarketing practices and unsolicited credit cards. The RBI has also asked the Indian Banks Association and other credit card issuers to develop a code of conduct.
The RBI says it has been receiving a growing number of complaints about credit card issuers operating in the country.

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HELOCs to Take a Bigger Bite of Card Debt

New research shows that rising rates, an appreciating housing market and the recently passed Jobs Act may set the stage for a large increase in issuance of home equity lines of credit. Fitch Ratings says the Jobs Act, which went into effect on January 1st, has opened the door for HELOC securitizations. The Jobs Act addresses the revolving nature of a HELOC that allows borrowers to draw on their lines, after the loan has been securitized.

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Marks & Spencer Issues a Black MasterCard

The UK’s Marks and Spencer Money has rolled-out a new black credit card. The “&MORE Black MasterCard” replaces M&S Money’s existing “&MORE” card launched in September 2003, according to last week’s issue of CardFlash International. The “Marks & Spencer Money &more Credit Card” offers 1 point per GBP1 spent in Marks & Spencer UK stores, catalogue and Internet. The card also awards 1 point per GBP2 spent outside Marks & Spencer. The card offers points and a variable rate of 15.9%. The card also offers a 0% intro interest on purchases for nine months as well as a 0% APR on balance transfers.

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MBNA Enters its Fourth Intl Market

MBNA and Mexico’s Ixe Banco have inked a deal to form a joint venture that will issue and service credit cards and consumer loans in Mexico. Ixe-MBNA SOFOL will be owned equally by both firms, however, MBNA will oversee and direct the operations. The companies said that Mexico has one of the fastest growing economies in Latin America and the Mexican credit card industry is expected to grow at a rate exceeding 20% per year over the next five years. Ixe Banco is part of Ixe Grupo Financiero. MBNA currently issues cards in the USA, Canada, the United Kingdom, and Spain. The transaction is expected to close in the third quarter. MBNA’s international loans increased 17% in the first quarter to $25.7 billion, compared to one-year ago, according to CardData ([www.carddata.com][1]). (CFI International 4/25/05)

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

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