MasterCard Canada Launches Credit Report Week

MasterCard Canada has launched its second annual “Credit Report Week.” The program encourages Canadians to check their personal credit report at least once a year. As part of the program, MasterCard Canada is offering TransUnion Canada online credit reports at no charge to the first 10,000 people. In addition, MasterCard Canada is also
launching “Credit Cards Today,” a 16-page guide explains in plain language how credit cards work and covers everything from the mechanics of interest, annual fees, reward programs and point systems, to the process among banks, issuers and merchants. According to research collected by MasterCard Canada, 63% of Canadians have never checked their personal credit report, and nearly a quarter don’t know what a credit rating is. In addition, more than one in 10 of Canadians have been denied a loan, mortgage or some other kind of credit because of a poor credit rating.

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New Pegasystems’ Card Management Applications

MA-based Pegasystems has introduced “PegaCARD Customer Process Manager” and “PegaCARD Smart Dispute.” The new card management applications completely automate customer-facing processes from the point of contact through to resolution. The “PegaCARD Customer Process Manager” helps optimize customer interactions, automatically queuing business processes based on an organization’s policies, as well as anticipated customer requests. “PegaCARD Smart Dispute” automates the dispute and chargeback process, providing issuers with best-practice processes and rules to ensure compliance with complex association dispute rules and regulations. New features for “Customer Process Manager” include an interface that supports intent-driven processing; integrated cross- and up-sell functions; and, workflow templates that guide CSRs through processes and eliminate routine tasks. “Smart Dispute” new features include multi-currency capabilities for international card issuers; multi-association capabilities for VISA, MasterCard and third-party issuers; and, a subscription service for automatically updating VISA and MasterCard regulations twice a year.

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Mellon Names Klinck as Vice Chairman

Mellon Financial has named Jack Klinck, former head of Mellon’s credit card business and currently Chairman of Mellon Europe and president of Investment Manager Solutions, as Vice Chairman. In addition, Mr. Klinck has also joined Mellon’s Executive Management Group, which sets corporate strategies and policies and oversees daily operations. Martin G. McGuinn, chairman and CEO of Mellon Europe, says that Jack’s roles and responsibilities represent important growth opportunities for Mellon. Mellon Financial Corporation is a global financial services company with over $3.6 trillion in assets under management, administration, or custody.

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Advanta Partners with Overstock.com

Salt Lake City-based Overstock.com and Advanta have partnered to offer “Club O Gold” benefits and a 2% annual rebate on all Overstock.com purchases to Advanta business cardholders. The companies provide Club O Gold members with major discounts on a broad range of office supplies as well as the thousands of products on Overstock.com. The Club O Gold membership can be obtained by going on the Overstock.com. web site. Overstock.com is an online retailer that offers discount brand-name merchandise. Advanta provides funding and support to the nation’s small businesses through innovative products and services.

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Consumers Do Not Understand Credit Scores

A new survey has found that the majority of consumers do not understand what credit scores measure, what good and bad scores are, and how scores can be improved. The study by Opinion Research Corporation for the Consumer Federation of America and Providian, revealed that less than half of consumers know that electric utilities, home insurers, and landlords often use credit scores to decide whether to sell a service and at what price. Only about one-third correctly understand that credit scores indicate the risk of not repaying a loan, not factors like financial resources to pay back loans or knowledge of consumer credit. More than one-half incorrectly believe that a married couple has a combined credit score. Only 12% correctly identified the low 600s as the level below which they would be denied credit or have to pay a higher, subprime rate. And, only 13% correctly understand that scores above the low 700s usually qualify them for the lowest rates.

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IN Bank Switches to NCR’s Personas ATMs

Union Federal Bank of Indianapolis is replacing its entire ATM channel with NCR “Personas 86” and “Personas 77” units. NCR’s flexible APTRA Edge software, which speeds the delivery of new ATM services, was the selling point for Union Federal. Union Federal Bank of Indianapolis is the third largest bank in the Indianapolis area with assets of more than $3 billion. Over 60,000 households are served by over 500 employees. NCR Corporation is a global technology leader that helps businesses create strong ties to their customers through their ATMs, retail systems, Teradata(R) data warehouses, and IT services.

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Shell Strikes Gold in a Gas Card Promotion

Shell Oil reports that a promotion for its private-label credit card was highly successful during the second quarter. The promotion, which included a $20 incentive offer, netted 130,000 new applications. The promotion also included strong site-level execution. Shell says the number of applications the promotion generated was double that for the same time period last year, a rarity within the gas credit card market. Shell proprietary credit card holders purchase an average of about 30 gallons per week, more than non-Shell credit card holders.

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ReD Makes The Finish Line for e-Commerce

NJ-based Retail Decisions has signed a deal with athletic specialty retailer, The Finish Line, to use ReD’s risk management service for its e-commerce transactions. Kent Zimmerman, Finish Line’s Director of E-commerce, says that using ReD’s solution “ebitGuard” enables Finish Line to maximize revenue by increasing the number of orders they accept without compromising protection against fraudulent transactions. ReD has over 16 years of experience in payment card risk management and processing services and operates in the U.S., Europe, South Africa, and Australia. The Finish Line, Inc. is a leading athletic retailer that operates more than 560 stores in 46 states.

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Discover Profits Up 13% as Charge-Offs Dive

Morgan Stanley reported this morning that its Credit Services division, including the “Discover Card,” posted $330 million in pre-tax profits for the quarter ending August 31st, compared to $292 million for the year-ago quarter. While managed outstandings were down 6% for the third quarter, transaction volume increased more than 2%, and delinquency and charge-offs fell sharply compared to one-year ago. Merchant and cardholder fees declined 5% to $499 million, due to lower over-limit and late payment fees. Managed credit card loans of $47.1 billion at quarter end were up slightly from the prior quarter but down 5.8% year-over-year. Total transaction volume increased 2.4% to $25.4 billion, the second highest quarterly volume ever. The account base contracted during the third quarter by 0.6% year-over-year, but flat sequentially. Active accounts declined 8% from 3Q/03 to 19.6 million. The credit card net charge-off rate was 5.76%, 114 basis points lower than a year ago, and down 72 basis points from the prior quarter. The charge-off ratio was the lowest in three years. The over-30-day delinquency rate declined 124 basis points from 3Q/03 to 4.81%, and the over-90-day-delinquency rate declined 69 basis points over the same period to 2.22%. For complete details on Discover’s third quarter performance visit CardData ([www.carddata.com][1]).

DISCOVER CARD PORTFOLIO SNAPSHOT
3Q/03* 4Q/03* 1Q/04* 2Q/04* 3Q/04* Y/Y CHNG
Outstandings: $50.0b $48.4b $47.3b $46.8b $47.1b -5.8%
Volume: $24.8b $23.0b $24.2b $24.4b $25.4b +2.4%
Accounts: 46.3m 46.1m 45.9m 46.0m 46.0m -0.6%
Actives: 21.3m 20.8m 20.3m 19.9m 19.6m -8.0%
Chargeoffs: 6.90% 6.87% 6.31% 6.48% 5.76% -114bps
**Delinquency: 6.05% 5.97% 5.80% 4.88% 4.81% -124bps
Yield: 11.94% 12.05% 12.20% 11.88% 11.69% -25bps
*: 3Q/03 ended 8/31/03; 4Q/03 ended 11/30/03; 1Q/04 ended 2/29/04; 2Q/04
ended 5/31/04; 3Q/04 ended 8/31/04. ** delinquency is 30 day only; excludes
90 day rate. Source: CardData (www.carddata.com)

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

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CORPORATE MASTERCARDS

The top issuer of commercial cards in the country, Societe Generale, is introducing “MasterCard Corporate” cards to service large and multinational corporations. The issuer will also launch an “Executive” version of the corporate card for senior managers and executives within its corporate customer organizations. The new cards available to major corporations will feature “MasterCard Smart Data onLine” which provides comprehensive MIS reporting. The new “Societe Generale MasterCard Corporate Card” can debit either corporate or individual accounts, benefits from a wide range of insurance and assistance services, and offers the choice of PIN code, a unique feature of Societe Generale card products. The “MasterCard Corporate Executive Card” has all the features of the standard “Corporate” card, but also includes a range of additional features, for example higher spending limits and additional privileges and VIP services, appropriate for senior or executive employees. Societe Generale serves more than 15 million retail customers worldwide.

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Genpass Wireless is Introduced

Genpass Technologies, Ventus Networks, and Lipman USA, have introduced Genpass Wireless. Genpass Wireless uses Ventus Networks’ CDMA technology to enable ATMs to process transactions without telephone line connections. It can support Lipman ATMs configured for dial-up or TCP/IP communications. The companies expect the wireless service to be a popular alternative to dial-up. Genpass, Inc. is a leading provider of PayCards and processes over 360 million transactions in one year. It is owned and operated by GTCR Golder Rauner, LLC, a leading private equity investment firm, which manages over $6 billion in equity capital. Ventus Networks’ secure cellular solution has units in operation in all U.S. regions and has commitments for over 1600. Lipman Electronic Engineering Ltd. is a chief global provider of electronic payment systems.

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SBM & Aconite to Lead the Smart Card Migration

Jeddah-based Saudi Business Machines has signed an alliance with
UK-based Aconite to expand financial smart card technology in the country. The launch of smart cards is expected next year, following EMV Saudi Arabia requirements issued by the Saudi Arabian Monetary Authority. As a result, the number of cards in circulation is expected to increase by 76% to 18.2 million, according to Euromonitor.

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