Moneris Predicts Some Strong Card Activity During the March Break

The current “March Break” may produce record increases in debit and credit card volume for some merchants, while others see a decline. Last year, Canadian charge volume increased 27% in video rental stores, 24% at movie theatres, and 24% at bowling alleys. Moneris Solutions says aside from “Valentine’s Day,” “March Break” is the first major spending period after the busy holiday season for the majority of Canadian merchants. Moneris says not all mechants benefit from the school break as hardware stores fell 31%, household appliance stores declined 17%, and glass, paint and wallpaper stores were down 14%, last year. More than 350,000 merchant locations rely on Moneris to process and streamline their card payment processing.

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FTC Closes the Case on a Catalog Card Scam

The FTC announced a final court judgment of $36.7 million in consumer redress against the majority of the defendants involved in the catalog credit card program operated from Miami as Capital Choice Consumer Credit. The defendants were charged with operating a large-scale advance-fee credit card scam in this “Operation Dialing for Deception” law enforcement sweep case. The defendants marketed a credit card with a $4,000 credit limit. Consumers were required to pay $199.95 to receive the card. The FTC charged that the defendants led consumers to believe that the credit card they were offering was an unsecured, major credit card, such as a MasterCard or Visa.

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TNB Signs Four More CUs to its Agent Program

Dallas-based TNB Card Services announced the signing of new processing card contracts with four credit unions. The new processing clients include Alcoa Community FCU in Arkansas, Anne Arundel County Employees FCU in Maryland, Raincross Credit Union in California, and Yavapai FCU in Arizona. Three of the credit unions with the processing contracts are issuing cards for the first time, and the fourth, Yavapai, decided to replace its previous processing vendor with TNB Card Services. Meanwhile, since launching its agent credit card program last year, TNB has signed up more than two dozen credit unions. About 75% of the credit unions that signed on for agent issuing sold their portfolios to TNB, while the others launched card programs for the first time. The agent issuing credit union clients range in size up to $130 million in assets, 37,000 members, and 2,700 credit card accounts. TNB is owned and directed by credit unions since 1976 and serves more than 400 credit unions and managing more than one million cards.

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Charter One Signs a Wal-Mart Banking Deal

OH-based Charter One Financial has signed a deal to open 67 in-store banking centers with ATMs in Wal-Mart Stores located in Ohio, Illinois, Indiana, Michigan, Pennsylvania, and New York, even though Wal-Mart does not accept signature transactions for Charter’s debit MasterCard. The agreement will allow Charter One to open additional banking centers within its current footprint, as well as to expand into new markets. Charter One’s banking centers provide a full range of deposit products such as The Best Free Checking, totally free business checking, free online banking with bill payment capabilities, 24-hour ATM access, home mortgages, lines of credit, and business lending services. Charter One has $43 billion in total assets, making it one of the 25 largest bank holding companies in the country.

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Gap Between VISA and MC Credit Cards Widens

VISA continues to pull ahead of MasterCard in the U.S. credit card horse race as the gap between the two widened to more than 11 million cards at the end of last year. MasterCard surpassed VISA during the third quarter of 2002 in the number of U.S. credit cards in circulation, and held the leader position for three consecutive quarters. However, VISA edged ahead in the second quarter of 2003 by 1.4 million cards, and expanded the lead by 6.9 million cards in 3Q/03. By the end of 2003, VISA had 283.7 million credit cards versus MasterCard’s 272.6 million credit cards. At the end of 2002 MasterCard was 8.5 million cards ahead of VISA. For the fourth quarter of 2002, MasterCard had 266.9 million U.S. credit cards while VISA had 258.4 million cards. For complete details on VISA’s and MasterCard’s fourth quarter and YTD performance visit CardData ([www.carddata.com][1]).

Quarterly V/M Credit Cards-in-Force (millions)
4Q/03 3Q/03 2Q/03 1Q/03 4Q/02 3Q/02 2Q/02 1Q/02
VISA: 283.7 277.5 270.5 263.1 258.4 259.0 259.5 259.3
MasterCard: 272.6 270.6 269.1 264.7 266.9 264.2 252.1 239.4
TOTAL: 556.3 548.1 539.6 527.8 525.3 523.2 511.6 498.7
Source: CardData (www.carddata.com)

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

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Washington Mutual Uses its Debit Card to Fund Schools

Washington Mutual has introduced a new program for its “VISA Check Card” to generate donations for K-12 schools. Under the “WaMoola for Schools” program, customers with a “Washington Mutual VISA Check Card” enroll by selecting a school to benefit. The designated public or private school will receive a point worth approximately five cents for each purchase made using the card. At the end of the year, the points will be converted into cash and schools will receive a check from Washington Mutual. Actual rewards can vary, however, since Washington Mutual also plans to run special promotions including an offer to double points for check card purchases made through this coming April 30. Parents can choose a child’s school, grandparents and aunts and uncles can also participate, and even neighbors can designate a local school. Enrollees who do not have a specific school in mind can opt to have points allocated to a local underserved school.

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Card Information & Transaction Data Stolen

MA-based BJ’s Wholesale Club confirmed over the weekend a possible compromise of its computer system that may have resulted in credit card information theft. Meanwhile, eBay’s PayPal says it has learned that third parties may have obtained limited transaction information of selected customers through the PayPal site after obtaining the passwords of several PayPal merchants. However, there was no breach on the PayPal site or system. BJ’s says the number of members affected by the consumer credit card information theft is a tiny fraction of its 8 million members. BJs says it ruled out the likelihood of a centralized security compromise and implemented several measures at its club-level systems to eliminate possible avenues by which credit card information could be accessed. PayPal says the stolen transaction information from its Web site included first and last name, mailing address, email address, and transaction details. PayPal says no other personal financial information was disclosed. However, PayPal is warning its users to be on the lookout for fraudulent emails. Last week, the U.S. payment card networks issued bulletins about the possible data compromise.

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Coinstar Moves Beyond Coin Machines with an Acquisition

WA-based Coinstar has acquired Chicago-based CellCards, formerly a majority-owned subsidiary of American Payment Systems. CellCards, founded in 1998, offers a prepaid products including wireless, long distance and MasterCard cards and has multi-year agreements with national drug store retailers CVS, Eckerds, and Walgreen. Coinstar say the acquisition adds new drug store point-of-sale locations, and combined with Coinstar’s existing kiosk network, brings the Company’s total number of distribution points to approximately 25,000 in North America. As part of the acquisition, Coinstar has engaged the services of ATM industry veteran and founder of Cash Resources, Sam Jonas, to accelerate the integration and expansion of the CellCards’ business. The management team of CellCards has signed employment agreements with Coinstar and will continue to operate the business based in Chicago.

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Citigroup Names Banamex CEO to Lead Citigroup Latin America

Citigroup has promoted Manuel Medina-Mora to Chairman and CEO of Citigroup Latin America and Mexico. He will retain the position of CEO of Banamex that he has held since 2001. Jorge Bermudez, outgoing CEO of Citigroup Latin America, has become Senior International Advisor of Citigroup. Citigroup also announced that Guillermo Acedo has been named Head of the Global Consumer Group – Latin America, and Gustavo Marin has been named Head of the Global Corporate and Investment Banking Group – Latin America. Additionally, John Gerspach has been named Chief Administrative Officer of the Latin America region.
Grupo Financiero Banamex has become the number one corporate bank, the number one retail bank, the number one credit card issuer, and the number one pension fund manager in Mexico.

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