Charming Says Credit Card Trusts are Okay

PA-based Charming Shoppes says that questions over its credit card securitizations have not effect on its corporate debt rating. Moody’s Investor Service issued a press release this week indicating that it was seeking additional information regarding servicing procedures and reports pertaining to the credit card trust. Moody’s placed the securities issued by the trust on “Watch” for possible downgrade. Charming says the operating and servicing errors cited by Moody’s resulted primarily from a transfer from one credit card processor to another in 2002, and that these errors have been substantially corrected. Charming Shoppes is the largest plus-size specialty apparel retailer in America, with over 2,200 stores nationwide.

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Cardholders Online — an Emerging Factor

A new study suggests that credit card-issuing institutions not equipped to meet the online needs of its cardholders are facing an imminent risk of losing many of their strongest customers. The research also shows that 57% of all adult credit cardholders who use the Internet now manage one or more aspects of their credit card accounts online and that many of these cardholders have only started to manage their accounts online in the past 12 months. The findings come from a recent “Online Consumer Credit Card Survey” commissioned by TSYS. Other key findings: 54% of Internet cardholders have shopped for a credit card on the Internet, and nearly one-half have applied for a card online; cardholders who use the Internet to manage their card accounts online make up two-thirds of cardholders using the most cards (four or more) and of cardholders who use their cards the most (11 or more times per month); and, that cardholders who manage their accounts online are younger, better educated and have higher incomes than Internet-using cardholders who don’t manage online.

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VISA Canada Set to Move to Smart Cards

VISA Canada announced yesterday it is gearing up to migrate to EMV smart cards. Chip cards have been in use in Canada for a number of years, particularly in telephone cards used in payphones. All VISA cards in France have been equipped with chip technology since 1992. Approximately 60 million VISA EMV smart cards are in use around the world. There are major conversion programs underway in Europe and Asia. VISA Canada says that one significant improvement for the consumer will be the use of a PIN at the point of sale rather than a signature. In a survey conducted in January, 61% of Canadians said they would prefer entering a PIN at the point of sale.

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MasterCard Latin America Region Up 30%

In terms of payment card volume, Latin America is MasterCard’s fastest growing region with an annual growth rate of nearly 30%. During the first quarter, the region posted gross dollar volume of US$8.1 billion, according to The RAM Report ([www.ramreport.com][1]). Purchase volume, which makes up 62% of total volume, was up 22%, while cash advance volume soared by 44%. The number of cards issued in the region increased 14% over the same period in 2002, to 44.5 million. With 34.1 million “Maestro” cards in circulation, the growth for first quarter was close to 21% over the same period in 2002, and the number of merchant terminals in the region increased close to 22%. MasterCard has 1.4 million merchant locations in Latin America.

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

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GPN and Metavante Renew

Atlanta-based Global Payments has extended its agreement to serve Milwaukee-based Metavante’s merchant portfolio with front-end POS payment card processing services. Metavante’s solutions drive customer relationship management, electronic banking, electronic funds transfer and card solutions, electronic presentment and payment, financial account processing, and wealth management. Metavante EFT and Card solutions include debit, stored value, and credit card processing, card personalization, ATM management, gateway transaction processing, merchant processing, and transportation payment solutions. Global Payments Inc. is a leading provider of electronic transaction processing services to merchants, Independent Sales Organizations, financial institutions, government agencies and multi-national corporations located throughout the United States, Canada and Europe.

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FTC Settles with Magazine Subscription Firms

The FTC has settled a lawsuit with Cross Media Marketing Corporation and its subsidiary Media Outsourcing for $1.1 million in regard to deceptive magazine subscription sales practices and credit card charges. In April 2002, the law enforcement agencies charged the telemarketers, who also operate under the name Consolidated Media Services or CMS, with violating federal laws by misrepresenting and failing to disclose adequately the costs and conditions of magazine subscription agreements and buying-club memberships. The named defendants include Cross Media, a Delaware corporation based in New York; Media Outsourcing, based in Atlanta, Georgia; Ronald S. Altbach, then-chief executive officer and chairman of Cross Media and president of Media Outsourcing; Dennis Gougion, a vice president; and Richard Prochnow, who previously owned and operated the magazine telemarketing business under the names Direct Sales Inc. and Magazine Sweepstakes Ltd.

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EU CARD

MasterCard has become the official corporate payments card of the European Commission. MasterCard Europe and Belgium-based member financial institution BCC (Bank Card Company) announced last week they were awarded the EU card program, replacing a five-year old corporate card program. The new program introduces MasterCard cards for the first time as the Commission’s official corporate credit card. It will be introduced to Commission employees in a phased roll-out throughout 2003, with the majority of the 4,000 cards expected to be rolled out in the first year.

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Diners Summer Promotion

Diners Club has launched a new summer promotion to boost card volume from its U.S. “Carte Blanche” cardholders. According to CardWatch ([www.cardwatch.com][1]), cardholders who charge at least $9,605 in each month, from July to September, will earn an extra 10,000 “Club Rewards” points. Citigroup’s Diners Club revived the “Carte Blanche” two and half years ago. The card carries a $300 annual fee and offers the best of Diners Club perks. For example, cardholders receive free companion air tickets and access, for up to three guests, to many of the world’s finest private, semi-private and public golf courses. (CardTrak 12/15/00)

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[1]: http://www.cardwatch.com
[2]: http://www.cardweb.com/images/d/dinersclub/summerpromo2.jpg

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Book Volume

VISA USA reported yesterday that the weekend release of the new Harry Potter book produced nationwide VISA transactions at bookstores of $33.4 million on June 21st, an 118% increase over the same day last year. VISA also noted that June 21st set a new record as the number of VISA transactions in bookstores exceeded one million for the first time ever during the summer bookselling season, a 141% increase over the same day last year. VISA said that the number of VISA credit and debit transactions in bookstores rose 26% in the first three weeks of June compared to the same period in 2002, due to other major releases including Hillary Clinton’s “Living History.”

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Hypercom Deals

NY-based ISO POS Payment Systems has awarded Hypercom a contract with a potential for up to 5,000 high-speed card payment terminals and technology, including the “T7Plus with HyperSafe” operating system. PPS is a full service provider of electronic transaction products and services to more than 400,000 merchants nationwide. The PPS deal is the latest in a series of new contract wins for Hypercom. Earlier this month, Staples announced it will purchase and install 6,500 Hypercom card payment terminals and technology including the new “ICE 6000Plus.” In April, Hypercom was awarded a 12-month contract for 10,000 card payment terminals and technology for use by FL-based JRs POS Depot. Also in April, IL-based ABANCO International awarded Hypercom a $16 million contract for payment technology and terminals. ABANCO is an ISO and a registered agent of EFS National Bank and Fleet National Bank. NJ-based MSI Merchant Services also signed a one-year contract this year for 10,000 Hypercom “ICE” card payment terminals. MSI provides services to more than 25,000 businesses in the retail, hospitality and emerging market sectors. (CF Library 4/2/03; 4/15/03; 6/11/03)

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Least Cost Routing Certified

VA-based InteliData Technologies has completed its certification and implementation of its “Payment Warehouse” and “Least Cost Routing” solution with the MasterCard RPPS. MasterCard RPPS delivers comprehensive access to electronic bill payment and presentment services, offering connectivity to approximately 95 percent of industry providers. The Company is also currently in production at two customer sites and is working with several other clients with respect to this technology launch although specific timeframes have yet to be determined.

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