CompuCredit CIO

Atlanta-based CompuCredit has hired Guido Sacchi, formerly of Deloitte Consulting, as CIO. Mr. Sacchi most recently served as Senior Manager at Deloitte Consulting. Prior to that position, he was a Manager in the operations consulting division at PricewaterhouseCoopers. Mr. Sacchi’s background includes 13 years of international experience across industries, degrees in engineering from the University of Rome (Italy), and appointments at the Massachusetts Institute of Technology.

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Fleet NYC ATMs

FleetBoston will expand its Manhattan retail network with the opening of two new Midtown branches by year-end, a branch relocation in Harlem in January, and signed leases on six new remote ATM sites to open in early 2003. The new state-of-the-art branches feature consumer, small business, and brokerage sales and service specialists, including representatives of Quick & Reilly, Fleet’s wholly owned brokerage firm.

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EBPP Penetration

Consumers using EBPP outnumber non-users two-to-one in America’s most affluent families, and are 50% less likely to leave their financial institution than non-EBPP users according to new consumer research from Collective Dynamics. With 16% of respondents currently using an EBPP service, the study showed 65% get their service from a bank, and 30% use a portal. Almost 75% of this group comes from households with incomes over $40,000 per year. At the upper income level of $80,000 or more per year, EBPP users outnumber non-users two-to-one. When asked what effect being enrolled in an EBPP program through their primary financial institution would have, 38% of the current EBPP users said they would be less likely to change banks versus 24% for non-EBPP users. In other words, EBPP users are more than 50% less likely to leave their financial institution than non-EBPP users.

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Card Bond Pulse

Bank credit card charge-offs, among credit card-backed securities, rose slightly in September, following declining losses in August. The monthly charge-off rate rose slightly by 20 bps to 6.8% in September from 6.6% in August. Standard & Poor’s “Credit Card Quality Indexes” also found that delinquency rates in August rose to 5.20%, a 10 bps increase from July’s number. In September, delinquencies came in at 5.45%, a 25 bps increase. S&P expects bankruptcy-related defaults to add to a growing default trend heading toward the end of the year. Yield remained stable in September at 18.3%, but with the Federal Reserve cutting rates this month and another cut likely, Standard & Poor’s anticipates that yield may drop further. However, the impact of a further cut would be minimal, as many issuers have already hit their cap floors. The weighted average base rate for the trusts tracked by the indexes continues to benefit from recent Federal Reserve actions and remains unchanged at the current low level of 4.4%.

STANDARD & POOR’S CARD BOND QUALITY INDEX
Performance Month Sep 00 Sep 01 Jul 02 Aug 02 Sep 02
Yield(%) 18.9 18.9 18.7 18.3 18.3
Charge-offs(%) 5.1 6.5 6.8 6.6 6.8
Weighted base rate(%) 8.4 5.7 4.4 4.4 4.4
Excess spread (%) 5.5 6.7 7.5 7.4 7.2
Delinquencies (%) 4.4 5.1 5.1 5.2 5.4
Payment rate (%) 15.4 14.8 16.1 16.1 15.6
Source: Standard & Poor’s Ratings Services

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Marriott Gift Card Bonus

Marriott offering a “$25 Bonus Coupon” for any purchase of a “Marriott GiftCard” valued at $50 or $100 between now and the end of the year. The $75 or $125 value can be used to treat family, friends or yourself to a host of services and amenities from hotel stays and dining to spa treatments and rounds of golf at more than 2,000 Marriott locations worldwide, including Marriott Vacation Club International resorts.

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Home Trust & FDC

Toronto-based Home Trust has signed a deal to offer VISA credit card acceptance services to Canadian merchants through First Data. First Data will provide Home Trust with processing, risk management, and sales and marketing expertise through a Canadian subsidiary, CardSolve International Inc. A referral arrangement between CardSolve and First Data Loan Company, Canada – a MasterCard member – will provide Home Trust merchants with a one-stop solution offering both Visa and MasterCard acceptance, as well as other card payment methods.

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Online Fraud

Two-thirds of U.S. merchants are taking more online fraud precautions this year than they did in 2001 with such tools as address verification service, data encryption, and penetration audits. The fourth annual “CyberSource Fraud Survey” found that 71% of merchants plan to use AVS compared to 46% the year before. To battle identity theft, 59% of merchants say they are now encrypting stored credit card numbers, an increase of 11% over last year’s 48%. Penetration audits, checks to determine if a site has been hacked, have nearly doubled since last year (63% vs. 33%), and nearly half of the survey respondents (49%) now report having a paid risk management employee responsible for battling online credit card fraud. Survey numbers suggest merchants are confident their newly installed anti-fraud measures are working. The percent of respondents rating online credit card fraud a “Serious” or “Very Serious” business issue fell to 46% this year from 59% in 2001.

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U.S. Bank Cash Rewards VISA

U.S. Bank has introduced the “U.S. Bank Cash Rewards VISA Credit Card.” The card offers a rebate tiered so customers earn a 0.25% rebate on the first $1,000 spent, 0.50% on the next $1,000, 0.75% on the next $1,000 and a full one percent on the balance. Customers can earn up to $350 in rebates. There are no points to track and the rebate check is sent to the customer automatically. The new card offers an introductory, low-interest rate on all purchases made in the first six months, and there is no annual fee as long as one purchase is made with the card each year.

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USTT Tokens

USA Technologies has inked a deal with Standard Change Makers to incorporate “e-Port” into Standard’s line of token dispensing equipment. Standard Change Makers, a leading manufacturer and global supplier of coin changers and token and ticket dispensing equipment in nine countries, spanning three continents, has incorporated the e-Port(TM) cashless payment system into their token dispensing product line.

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Gen W/X/Y & Debt

A new survey found that 58% of respondents ages 35 or younger are reluctant to make large purchases in the coming months because of their level of credit card debt. The NFO World Group study also found that “chronic revolvers” grew six percent in 2002. The study also indicates that 33% of consumers under the age of 35 are “uncomfortable with my ability to handle the amount of debt I have”. Even more — 42% — say they “spend too much when using credit cards.” Among consumers who pay off balances, half the time the new card with a low APR goes unused after the rate expires. But about one-half of consumers who transfer high balances to the new card often still have those balances when the card moves to a higher interest rate. To retain new customers, card issuers are extending low rates for longer periods; nearly a quarter of the offers extend the low rate for ten months or more, up from three to six months a year ago. However, only one in five consumers opened one of these new accounts in 2002, and they are largely credit-savvy consumers who usually pay off their monthly balances.

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HOME TRUST & FDC

Toronto-based Home Trust has signed a deal to offer VISA credit
card acceptance services to Canadian merchants through First Data. The
contract will take effective early next year. Under terms of the deal,
First Data will provide Home Trust with processing, risk management, and
sales and marketing expertise through a Canadian subsidiary, CardSolve
International. A referral arrangement between CardSolve and First Data Loan
Company, Canada – a MasterCard member – will provide Home Trust merchants
with a solution offering both VISA and MasterCard acceptance, as well as
other card payment methods.
First Data currently serves more than 90,000 merchants throughout Canada.

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VISA ACCEPTANCE

VISA International has reportedly entered a deal with China UnionPay Co.
to expand the acceptance of foreign issued VISA payments cards at retail
locations throughout China. The Shanghai Daily says the partnership will
initially focus on Guangzhou and Beijing. The newspaper says less than
50,000 of the 300,000 POS terminals in China accept overseas-issued VISA cards.

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