Mint, DM2, Peoples Trust Launch a Prepaid MasterCard

Mint and Peoples Trust are jointly the first organizations to market a prepaid MasterCard card product in Canada. Working with DM2 Technology, this pilot agreement represents the first undertaking by an ISO in selling a prepaid MasterCard card product. DM2 Technology plans to focus on the Quebec market by selling the DM2-branded “Prepaid MasterCard” to its client base made up primarily of small and mid-size merchants. Horizon Plus Card Services is an affiliate of Peoples Trust, and is the managing agent for the MasterCard prepaid card programs issued by Peoples Trust.

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BofA Launches a Platinum VISA for Hispanics

Bank of America has launched a new rewards card targeted at the Hispanic community which collectively holds about $630 billion in buying power. The new “Efectiva VISA Platinum,” offers 1% cash-back, credit building features and a full range of bilingual services. The card carries no annual fee and caps reward points at 600 per year. Bilingual services include welcome kits, a reward redemption site, program materials, communications, check offers and monthly statements. According to a 2004 study by Simmons, only 41.2% of Hispanics currently have and use credit cards, while 74% of non-Hispanics own and use credit cards.

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American DreamCard VISA Hands-Out Another $25K

Direct Merchants Credit Card Bank, a subsidiary of Metris, announced Philadelphia resident Doris Hanson is the $25,000 jackpot winner of the American DreamCard Sweepstakes . The DreamCard Platinum MasterCard card program includes a sweepstakes that gives cardholders an opportunity to win a monthly cash jackpot every time they spend $1.00 on everyday purchases.

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BofA Raises Penalty Rates; Modifies Rate Basis

Bank of America has announced cardholder changes that go into effect with the billing cycle that ends in April, according to CardWatch (www.cardwatch.com). The BofA variable rate will now be based on the prime rate on the last day of the month or the highest prime rate published by the WSJ within the immediately preceding three months. The issuer also adjusted its penalty interest rate to prime +23.99% from prime +21.99% with a 25.99% minimum. The rate is triggered if there are two late payments or two over-limits in a twelve month period. The cash advance APR is increasing to prime +15.99% instead of a variable rate with a 19.99% minimum. Additionally, BofA is raising its foreign currency adjustment fee from 2% to 3%, as VISA and MasterCard drop their 1% conversion fee.

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ASK Receives Contactless Card Award

ASK has become the recipient of the “2004 Frost & Sullivan Market Leadership Award” in the contactless world smart card market. The award recognizes implementing superior market strategies and establishing itself as the market share leader. ASK recently developed a platform called “TanGO” with a new flexible and customized operating system. “TanGO” is also suitable for banking applications and ASK is now ready to be part of the global migration of contact interface banking smart cards toward contactless as VISA and Mastercard have launched pilots for the first phase of this technological enhancement.

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More Than 50% of Consumers Want Cash Rewards

A new survey has found that 67% of consumers prefer to receive their rewards as cash instead of merchandise and 57% also want the flexibility of receiving those cash rewards in the form of a debit card they can spend virtually anywhere. The study of 21,000 consumers conducted by Chicago-based CoolSavings, found that miles for travel was the preferred selection by only 6%, and 1% selected tokens for merchandise. With redeeming points, 28% prefer a gift certificate and another 15% indicated they prefer a voucher for free groceries. CoolSavings says loyalty and continuity programs comprise a $1.8 billion industry in the USA, with more than 75% of consumers participating in a points-based loyalty program.

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TSYS Inks a 7YR Processing ABN AMRO Deal

ABN AMRO has become the first card issuer to sign a processing agreement with TSYS in continental Europe. The seven-year agreement covers the processing of ABN AMRO consumer and commercial credit-cards.
All of ABN AMRO’s Dutch accounts will be converted to “TS2,” the
multi-currency and EMV-compliant processing system from TSYS that
supports more than 20 million accounts in Europe. Conversions are
tentatively planned for the first and second quarters of 2005. ABN
AMRO’s portfolio will be processed at the new TSYS European Data Center
in Knaresborough, England. The TSYS Operational Services
Center is located in Barneveld and opened earlier this month.

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Electronic Recovery’s eSoftPay Desktop is Upgraded

Florida-based Electronic Recovery announced the update of eSoftPay Desktop software. This version runs on the Windows platform and allows users to configure recurring ACH debits or credits, accounts receivable, as well as point-of-purchase transactions, pre-arranged consumer debits, and business-to-business transactions. Electronic Recovery, Inc., a division of Quick Check, Inc. provides software and services related to the processing of electronic payments.

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Card Fees Exceed Retail Gasoline Profits

The National Association of Convenience Stores says the huge increase in gasoline prices in 2004 and 2005 accelerated the trend of consumers paying with credit or debit cards. The NACS estimates that upwards of 70% of all gasoline purchases are now paid with plastic. As credit card usage and gasoline prices increase, so do the fees per fill-up. The NACS says this means that razor-thin profit margins for retailers selling motor fuels results in banks taking in more from a gallon than the retailers selling the fuel. Many retailers also have reported an increase in “drive-offs.” In addition, when gasoline prices rise, retailers lose in-store sales as consumers often curtail additional spending because of reduced discretionary income.

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Threats to Confidential Information Rise 44%

Malicious code activity created to expose confidential information such as credit card data continues to rise, driven in part by the proliferation of Trojan horses. A new report from Symantec shows that malicious code activity was up 44% in the first six months of 2004 and 36% in the second half. Symantec says its anti-fraud filters were blocking an average of 33 million phishing attempts per week by the end of last year, compared to an average of 9 million per week in July 2004. From July 1st to December 31st, Symantec documented more than 7,360 new “Windows 32” virus and worm variants. This represents an increase of 64% over the previous six-month period. At years end 2004, the total number of documented “Windows 32” threats and their variants was approaching 17,500. In the second half of 2004, Symantec documented more than 1,403 new vulnerabilities, with 97% considered “moderately” to “highly severe,” which means that successful exploitation of the vulnerability could result in a partial or complete compromise of the targeted system. The financial services sector experienced the highest ratio of severe attacks, with 16 severe events per 10,000 security events.

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TU Unveils 4 Incidence-Based Collection Models

Chicago-based TransUnion announced the release of four new collections recovery models. They include a generic all-industry model, as well as three others targeting bank and retail cards, auto and installment loans and medical debts. The models will assist collections organizations identify which customers are most likely to repay their debts and identify the most cost-effective treatment strategy based on the likelihood of repayment. TransUnion is a global information solutions company that offers a broad range of financial products and services that enable customers to manage risk and capitalize on market opportunities.

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Allpoint Surcharge-Free Network Tops 32K ATMs

The country’s largest surcharge-free ATM network has surpassed 32,000 ATMs. Two-year old Allpoint has announced the signing of Michigan’s largest independent savings bank, three state credit union leagues and Houston’s largest credit union. Michigan’s Flagstar Bank added 125 ATMs with Allpoint’s 750 in Michigan. In addition to Michigan, Flagstar Bank customers will have access to more than 2,000 free ATMs in the surrounding states of Illinois, Indiana, and Wisconsin. The partnership between Allpoint and the Pennsylvania Credit Union Association, Maryland Credit Union League and Delaware Credit Union League, was formed under the leagues’ CUSO, known as MARS (Mid-Atlantic Regional Services Corp.). The three state partnership with Allpoint provides participating state league members with unlimited surcharge-free access to 1,500 ATMs in Pennsylvania, 875 in Maryland and 180 in Delaware. Allpoint also provides Houston’s JSC FCU members more than 2,500 surcharge-free ATMs across Texas, 875+ in Houston alone, located at retailers such as Target, Costco, Circle K, and ExxonMobil. Launched in April 2003, Allpoint has grown from 23,000 ATMs to more than 32,000. Key network partners include Cardtronics, NetBank Payment Systems, Fiserv EFT, and America’s Community Bankers.

ALLPOINT SURCHARGE-FREE ATM HISTORICAL
2003: 23,000
2004: 25,000
2005: 32,000
Source: Allpoint

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