Australian Debit Card Use Hits a New Record

Debit card EFTPOS volume in Australia hit a record A$6.0 billion during October, an 8.8% increase over one-year ago. Over the past five years debit card dollar volume has doubled, according to CardFlash International. During October, Australians used debit cards for A$4.6 billion in purchases among 74 million transactions. Total EFTPOS transactions were 88.6 million for October. Over the past twelve months, Australians have used debit cards for A$67.7 billion in purchases and cash transactions. There are 25.0 million debit card accounts in the country at the end of October, compared to 24.4 million one-year ago.

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Private Label Cards to Stagnate Through 2006

Consolidation and stagnation will continue to be evident in the private label credit card business, according to a new report. The trend toward outsourcing private label cards will continue, with major third-party issuers like Citi Commerce and GE Consumer Finance positioned to acquire the few remaining sizable in-house portfolios. According to the TowerGroup study, between 1998 and 2003, private label receivables grew at a CAGR of 2.6% annually. The research firm expects this growth percentage to decline through 2006 to a more modest CAGR of 1.4%. Citi Commerce, GE Consumer Finance and Household now account for over 90% of total third-party issuer receivables in the USA. TowerGroup believes these top issuers will continue to grow since they offer competitive pricing based on scale. TowerGroup also expects ongoing robust activity in the cobrand and reward programs.

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Hudson & Keyse Hires Marketing & Sales Exec

Hudson & Keyse, a purchaser of charged-off consumer bank debt, has hired John Reid as VP of Marketing & Sales. John will be responsible for business development and account management for clients. Hudson & Keyse, L.L.C., a leading purchaser of charged-off consumer bank debt, analyzes and prices both geographic and national debt portfolios in the consumer credit card and unsecured loan verticals.

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Illinois AG Sues Two Catalog Credit Card Firms

The Illinois Attorney General has filed a lawsuit against FL-based Latin Card Plus and Pro Line Card for an alleged deceptive catalog credit card offer. Madigan’s two lawsuits ask the court to prohibit the defendants from offering for sale and selling credit cards or credit card services in Illinois. In addition, the lawsuits ask the court to assess civil penalties of $50,000 and additional penalties of $50,000 per violation found to be committed with the intent to defraud. Finally, Madigan’s lawsuits ask the court to order the defendants to pay restitution to the consumers as well as the costs of the investigations and litigation.

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Credit Card ABS Turns in a Solid Year in 2004

Among credit card-backed securities, credit quality and financial performance improved markedly during 2004. While yield declined slightly as overall consumer credit slowed, the improvement in average loss rates more than offset the erosion. According to Standard & Poor’s “Credit Card Quality Index” the average loss rate for card bonds last year declined 60 basis points to 6.6%. The average 30-plus-day delinquency rate declined 70 bps to 4.6%, and the average payment rate increased 100 bps to 17.2%. S&P says the average yield dropped 20 bps to 17.4%. Over the past 12 months, revolving consumer credit debt increased a modest 4.1%, and revolving credit dropped to 9.1% of disposable income from a peak of 9.5% in May 2001. S&P says credit card ABS could reach $68 billion in 2005, a 30% increase over the issuance level for 2004, and matching issuance the market achieved in 2003.

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Debit Card EFTPOS Volume Hits A$6.0 Billion

Debit card EFTPOS volume hit a record A$6.0 billion during October, an 8.8% increase over one-year ago. Over the past five years debit card dollar volume has doubled. During October, Australians
used debit cards for A$4.6 billion in purchases among 74 million transactions. Total EFTPOS transactions were 88.6 million for October. Over the past twelve months, Australians have used debit cards for A$67.7 billion in purchases and cash transactions. There are 25.0 million debit card accounts in the country at the end of October, compared to 24.4 million one-year ago.

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VISA to Debut a New Check Card Ad for the Super Bowl

VISA will debut a new television commercial for the “Super Bowl” that will focus on the security protections of the “VISA Check Card”. The television spot was created by BBDO NY and will run nationally on network and cable television through summer 2005. Visa is the world’s leading payment brand and largest payment system, enabling banks to provide their consumer and business customers with a wide variety of payment alternatives.

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VISA Surpasses AmEx in the Commercial Card Sector

A new study has found that VISA is now setting the pace in the $495 billion U.S. commercial card market. Over the past three years VISA’s share of commercial card transaction volume has increased from 27% to 36%, while American Express’ share has declined from 42% to 35%. The total universe of U.S. commercial expenditures is estimated to be $14.5 trillion. The new report by Packaged Facts also found that VISA increased its lead over American Express in the number of domestic commercial cards. The researcher says VISA has 16.4 million cards compared to American Express’ 11.4 million. Packaged Facts estimates the volume of transactions on all commercial credit cards increased 23% last year. Commercial card transactions are estimated to grow at a rate of 25% annually during the next five years, topping $1 trillion by 2008.

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Store Card Competition is Scrutinized in the U.K.

The British Competition Commission has raised concerns over the limited competitive pressure on store credit card pricing and payment protection insurance sold with such cards. The CC document, “Emerging Thinking,” suggests that consumers are insensitive to store card costs and that they lack choice for insurance services sold with the cards. The document has been delivered to store card issuers in the U.K. and the parties are being asked to respond to the “Emerging Thinking” by the end of January. The CC then plans a further round of hearings during February. The Emerging Thinking document identifies two interdependent markets: an “upstream” market for the provision of store card credit and related services to retailers by credit providers; and a “downstream” market for the provision by credit providers and retailers jointly of store card and related services to the retailer’s customers. The CC is required to investigate whether any “features” of the relevant markets prevent, restrict or distort competition. The $9 billion U.K. store card market is dominated by four players who control 90% of the market. The inquiry was referred by the Office of Fair Trading March 18, 2004. The CC is required to publish its final report by March 17, 2006.

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MBNA Extends the TSYS C-Card Processing Contract

MBNA has extended its existing seven-year relationship with TSYS for commercial-card processing services by an additional three years. TSYS serves nine of the 10 largest issuers of Visa and MasterCard commercial accounts in the United States, and 100 percent of the federal government’s “Smart Pay” accounts. TSYS brings integrity and innovation to the world of electronic payment services as the integral link between buyers and sellers in this rapidly evolving universe.

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PayPal to Drop Credit Card Blocking Next Month

PayPal is dropping the option for sellers to block customer payments funded by a credit card when the sender has a bank account registered with PayPal. Doing so should improve the overall efficiency of the marketplace, while offering greater clarification regarding the PayPal User Agreement. Sellers should not experience any noticeable changes to the way payments are received.

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eFunds to Acquire ClearCommerce for $19MM

AZ-based eFunds has inked an agreement to acquire ClearCommerce for $19.4 million in cash. The deal will expand eFunds’ market footprint in the retail sector with more than 140 new customers in seven countries. Privately-held ClearCommerce is a specialist in fraud prevention and payment processing solutions for card-not-present transactions, including online and mail order/telephone order sales. The combined entities will provide customers with a comprehensive perspective on fraud detection, based on data from both ClearCommerce’s “FraudDetect” database and eFunds’ “DebitBureau” database. The sale is expected to close during the current quarter.

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