BofA/Fleet Merger Gets the Blessing of the FRB

The Board of Governors of the Federal Reserve System has approved the merger of Bank of America and FleetBoston. On March 17, both Bank of America and Fleet will hold special meetings of shareholders to vote on the proposed transaction. With the approval of both companies shareholders, the merger would close in early April. Bank of America is one of the world’s largest financial institutions.

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Upromise Signs Dixie to College Savings Program

Georgia-Pacific’s Dixie division has joined the Upromise college savings account program. Georgia-Pacific is one of the world’s leading manufacturers and marketers of tissue, paper, packaging, building products and related chemicals. With 2003 annual sales of approximately $20 billion, the company employs more than 61,000 people at 400 locations in North America and Europe. Upromise is a service that helps families save for college. Members can automatically earn money for college while making everyday purchases at more than 18,000 grocery and drug stores, 200 online shopping sites, and 9,000 restaurants nationwide, as well as tens of thousands of retail locations.

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Merseyrail Signs $4 Million Fare System Contract with Cubic

Liverpool-based Merseyrail has inked a GBP 2 million deal with Cubic Transportation Systems Limited to build a modularly constructed access control and fare management system. The gates will be installed at the busiest of the 66 stations on the Merseyrail network. The gates support the magnetic strip farecards that Merseyrail initially plans to use, and include Cubic’s “Tri-Reader,” which can process any type of contactless smart card that meets international standards. The gates will be ready to accept smart cards when Merseytravel, the Passenger Transport Executive in Merseyside, upgrades to a smart card scheme in the future. Including the Merseyrail project, which will be completed later this year, Cubic will have delivered more than 1,000 gates to the UK train operating companies that have been running the former British Rail network since it was privatized in the mid-1990s. Merseyrail has an annual ridership of over 27 million passengers.

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Capital One and Consumer Action Launch a Web Site

Capital One and Consumer Action have launched the “MoneyWi$e” Web site. MoneyWi$e is the first program of its kind to combine free, multilingual financial education materials with community training and seminars for consumers at all income levels. MoneyWi$e topics include understanding and building good credit, basic money management, banking basics, talking to teens about money, and understanding the pros and cons of bankruptcy. Capital One, a Fortune 500 company, is one of the largest providers of MasterCard and Visa credit cards in the world. Consumer Action is a non-profit, membership-based organization founded in San Francisco in 1971.

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PayPal Settles Chargeback Issues with NY

eBay’s PayPal reached a settlement with the New York Attorney General yesterday to better disclose the rights of account holders when an affiliated merchant fails to deliver merchandise. The online payment service also agreed to pay $150,000 in penalties and costs of investigation. PayPal continues to be investigated by the FTC and other states for related complaints. New York Attorney General Eliot Spitzer said PayPal’s “User Agreement” misrepresented to account holders certain terms and conditions, including a statement that it afforded to its account holders “the rights and privileges expected of a credit card transaction.” In practice, consumers were often denied these rights ­ both by PayPal and by the credit issuers American Express and Discover, Spitzer says. This is the third agreement obtained by Spitzer’s office to address complaints that consumers were denied chargebacks when goods ordered through PayPal, and funded with American Express or Discover cards, were not received as promised. Late last year, Spitzer’s office obtained agreements with American Express and Discover, both of which are issuing chargeback credits to consumers who did not receive goods ordered through a PayPal merchant. Spitzer says the agreements, taken together, close a loophole that, if left uncorrected, would have effectively exempted credit card purchases made through e-payment systems from the rigorous protections of the federal Fair Credit Billing Act and similar state laws. PayPal has more than 25 million account holders including 2.5 million New Yorkers.

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TRM ATM Sales Up 38% in the Fourth Quarter

Portland, OR-based TRM Corporation reported net income for the fourth quarter of $2.0 million compared to a net loss of $3.4 million for the same period in 2002. Net sales for the quarter grew to $20.5 million, representing an increase of 15.6% when compared to 4Q/02. The increase in net sales for the quarter is attributable to ATM unit expansion and higher pricing throughout the Company’s ATM and photocopy networks. ATM operations produced net sales of $9.0 million, including $430,000 in ATM machine sales, during the fourth quarter, representing an increase of 38% as compared to the same period in the prior year. At the end of December, the Company’s ATM network consisted of 3,416 revenue-generating machines deployed throughout the UK and USA, which represents an increase of 359 ATM machines when compared to the same date in 2002. For complete details on TRM’s latest performance visit CardData ([www.carddata.com][1]).

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

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AEROPLAN BIZ CARD

Amex Bank of Canada and Aeroplan launched the country’s first corporate rewards card. The new
“American Express AeroplanPlus Corporate Card” offers an annual “Air Canada Cash Rebate” between 2% to 4% when their employees use the card for Air Canada
travel purchases. The card also offers an up to 5% cash back each year on other travel and everyday business expenses. Companies are also able to give their employees the opportunity to earn
“Aeroplan Rewards.” Employees can receive one “Aeroplan Mile” for every $2
of purchases charged to the corporate card. They also have the option to earn “Aeroplan Miles” twice as fast by enrolling in
an upgrade program for an additional $75 per year which means cardholders can
earn one “Aeroplan Mile” for every $1 of purchases charged to the card. In January, American Express rolled-out three co-branded charge cards with Air Canada. The new “AeroplanPlus Card,” “AeroplanPlus Gold Card,” and, “AeroplanPlus Platinum Card” reward users with 1.0 mile to 1.5 miles for each dollar charged. AmEx won the right to team up with Aeroplan after the court overseeing Air Canada’s restructuring opened up the airline’s card partnership contracts in April, 2003.

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Citibank Re-launches Secured Card Program

In another sign that the sub-prime credit card market is gearing up for a revival, Citibank announced this morning it is reentering the secured card segment. The new secured “Citi MasterCard” is linked to an 18-month CD and requires annual income of at least $8,000. The interest-bearing CD deposit has a $200 minimum and a maximum of $5,000. Citibank says accounts kept in good standing for a full 18 months may be eligible for an unsecured credit card or other financial products. Resident and non-resident applicants must be at least 18 years of age and have a valid SSN or TIN. Non-residents can apply by completing a W-8BEN Form and by providing a copy of a government issued ID, such as an “I/94” Immigration form, passport or national identification card as well as proof of an existing banking relationship. The secured card has an APR of prime + 9.99%, and a $29.00 annual fee. The collapse of the sub-prime market in the 2001 recession was driven by high priced, unsecured sub-prime credit cards. Most sub-prime issuers were wounded or shifted to higher credit quality. Providian, Metris and Spiegel’s First Consumers National Bank were deeply impacted. Capital One, which had as much as 40% of its portfolio in sub-prime, has pulled back, shifting to the middle and super-prime markets. Regulators clamped down on nearly all sub-prime issuers. However, the worst appears to be over as the economy slowly rebounds.

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STV Cards Enhanced with Phone Services

OR-based Chockstone and Vesta have teamed to expand the functionality of retail-branded stored value cards by adding prepaid long distance and/or wireless minutes to existing cards. The partnership brings together the leader in integrated gift and loyalty card programs for retailers with the leader in stored value recharge services. The integration of these services will allow retailers to generate additional revenue by increasing the utility of their stored value programs. Chockstone is the Technology Behind Stored Value”. As the leading stored value card processor, Chockstone focuses on gift, loyalty, and marketing card programs for multi-unit QSR and retail organizations. Vesta is the leader in stored value recharge services.

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UK Card Fraud Drops After Eight Years

Fraud committed on U.K. payment cards declined 5% last year to $739.4 million, the first decline in eight years. Counterfeit card fraud saw the largest reduction, down by 28% to $196 million in 2003. Fraud on lost and stolen cards also dropped, by 2%, to $195 million, due primarily to neural fraud intelligence systems. Cardholder-not-present fraud is now the biggest fraud type in theUK according to CardFlash International (www.cardflashinternational.com). However, it only increased by 6% last year rising to $214 million according to the Association for Payment Clearing Services. The largest percentage increase in fraudulent activity was in identity theft which grew by 45% to reach $54.5 million, while fraud at UK cash machines grew by 34% to $72 million. Together, fraud on lost and stolen cards and counterfeit fraud accounted for more than half of all plastic card fraud. They remain a critical issue in the UK. However, the introduction of chip and PIN, the system which replaces signatures with PINs for verifying payments, will directly tackle these fraud categories. The UK chip and PIN rollout is currently underway..

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Provo and Humana Trans Roll-Out a Payroll Card

Provo International and MD-based Humana Trans have rolled-out the “Provo Paycard”. With the Provo Paycard, employers electronically deposit an employee’s pay directly on to their card, which can be used as a debit and/or cash transfer card. The Provo Paycard offers employers and employees many advantages over paper paychecks. Provo International Inc. has two operating divisions, Provo Mexico and Provo US. The Provo Mexico division, acquired in April, 2003, is a Mexican corporation which maintains a dominant position within the prepaid calling card and cellular phone airtime markets in Mexico. The Provo US division provides a revolutionary solution for cash disbursements of employee’s payroll, commission, and other expenses with the use of the Provo Paycard.

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