PCBB Details ATM Cash Advantage Program

Pacific Coast Bankers’ Bancshares is pioneering a new program to allow smaller banks to provide cash to non-bank ATM networks. The “ATM Cash Advantage” program enables banks to earn 50 bps above the Fed Funds rate and helps banks reduce reserve levels at the Fed. The innovative program may also give banks credit under the “Service Test Provision” of the CRA. The program’s risk is similar to bank in-house ATM programs. PCBB said yesterday that ten banks are currently using the product. PCBB is the holding company for one of the nation’s largest bankers’ banks, serving more than 230 financial institutions in seven western states. Palm Desert National Bank, a PCBB partner, operates a major non-bank ATM network and provides ATM cash and management services to over 10,500 ATMs nationwide.

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National Bank of Oman and Oman Air Launch Co-branded Card

National Bank of Oman and Oman Air have teamed to launch a “Gold” and “Silver” MasterCard. The new co-branded cards offer special discounted fares and double points for Oman Air tickets purchased at the airline’s ticket offices. Cardholders will also be priority wait listed.
“Gold” cardholders will have complimentary access to lounge facilities at Seeb International Airport.

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Study Finds HELOC Cards Unprofitable

A new study shows that credit cards linked to home equity loans do not motivate customers to access their accounts, and may expose lenders to the higher risks associated with card-based products. The research found that 85% of all draws on “HELOC” accounts are by check, while 3% to 4% of “HELOC” draws are by credit card, and 1% to 3% by debit card. The new report from TowerGroup says that instead of focusing on the vehicle used to access accounts as the lever to drive greater utilization, lenders should look to customer use itself. While some “HELOC” customers use the credit line to make home improvements, many others use these lines as their own universal loan account, to fund major investments from automobile purchases, to weddings, to their own retirement. TowerGroup says fraud risk should be the major mitigating factor for lenders considering card access to “HELOCs”. Lenders suffered high losses in the mid-90s from thieves tapping into credit cards linked to home equity lines, driving the number of institutions offering “HELOC” card access to decline from 45% in the late 1990s to less than 25% of lenders in 2003. While debit cards have been raised as a more secure card alternative, the growing number that allow signature authorization as well as PIN access are exposed to the same fraud risks as credit cards.

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ViVOtech Rolls Out Two New Contactless Readers

ViVOtech has integrated its contactless payment products with HID’s proximity and “iCLASS” technologies, to give corporate campus users a one-card solution for both secure access and payments. The new “ViVOpay PROX” and “ViVOpay iCLASS” readers connect to POS terminals through ViVOtech’s software suite called “ViVOplatform” that links the personal data of an individual stored in the security office with the POS system, making a seamless transaction in the closed loop. ViVOtech solutions upgrade existing magnetic stripe POS terminals for contactless payments.

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First Holt Renfrew/American Express Card Unveiled

The first specially designed “Holt Renfrew Card from American Express” was unveiled last week in Toronto. Holt Renfrew and American Express announced in early August plans to develop a suite of co-branded credit cards to replace Holt Renfrew’s store credit card. The first card was designed by Italian fashion designer Roberto Cavalli. The card displays a one of a kind silk gown created by Cavalli’, with an estimated value of US$4,000. Cavalli is known for his eclectic and highly original designs. The card includes the new “Holt Renfrew Rewards” program that allows customers to collect one “Holt Renfrew” point for virtually every dollar spent anywhere. Plus, when the card is used at any Holt Renfrew location, cardholders receive 40% more points for every dollar charged.

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Card Volume Growing 4.8% Annually at Mid-Year

Credit card volume in the USA is currently growing by 4.8%, with American Express leading the charge with a 10.1% annual growth rate. Discounting AmEx would lower the current growth rate to a paltry 3.8%. VISA’s second quarter credit card volume was up 4.6%, compared to MasterCard’s 3.1%, and Discover’s 2.1%. Based on data compiled by CardData (www.carddata.com), total credit card dollar volume in the second quarter was $373.2 billion compared to $356.0 billion for 2Q/02.

Quarterly Credit Card Gross Dollar Volume
(all figures $ billions)
2Q/03 1Q/03 2Q/02 CHNG
VISA: 158.8 145.2 151.8 +4.6%
MasterCard: 125.8 117.2 122.0 +3.1%
Amer Exp: 64.6 58.9 58.7 +10.1%
Discover: 24.0 26.1 23.5 +2.1%
TOTAL: 373.2 347.4 356.0 +4.8%
Source: CardData (www.carddata.com)

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