04/04/2007 • CardFlash® - Payment Card Industry News

NBD Adds Selektpoints to its Smart EMV Cards

5, Country, DUBAI, PriorityBy Robert McKinley 04/04/2007

National Bank of Dubai has partnered with Selektpoints to provide the
bank with chip-based loyalty programs. This development is part of the
bank’s customized offerings to reward customers who use their Smart Cards at
select merchant establishments in the UAE and the region. Over the next 24 months,
this new rewards system will be available throughout the Middle East
and will offer reward points that could be redeemed for goods and services. Using the
EMV smart chip embedded in the cards customers are automatically
rewarded for using the Smart Card at participating merchant outlets.
Furthermore, this agreement will designate The NBD as the exclusive ‘Landlord
Bank’ for Selektpoints in the UAE and will be responsible for
inducting establishments into the program.

MasterCard Offers H&R Block Discounts

5, Country, Priority, UNITED STATESBy Robert McKinley 04/04/2007

MasterCard Worldwide has teamed with H&R Block to enable cardholders to easily pay their balances due for federal tax Form 1040 online and save 35% on the H&R Block “TaxCut” tax prep program. According to the IRS, in 2006, 73 million individuals filed their taxes online and 20 million filed from home computers. H&R Block generated revenues of $3.6 billion and net income of $287 million from continuing operations in fiscal year 2006.

Desjardins Introduces a Smart Card in Saint-Jerome

5, CANADA, Country, PriorityBy Robert McKinley 04/04/2007

The Desjardins Group has announced the introduction of a Smart Card for the
Spring of 2008. Saint-Jerome will serve as the city in which the
card will be
launched where ATMs and payment terminals are being adjusted accordingly to
facilitate the Smart Cards’ electronic payment and bank transaction
capabilities.
This migration will be gradual over the coming years and is valuable
considering
the greater security from fraud chip-and pin cards offer. Over 430 million transactions were carried out at Desjardins
point-of-sale terminals and 300 million transactions at Desjardins ATMs in
Quebec during 2006.

CompuCredit Buys Barclaycard Sub-Prime Cards

5, Country, Priority, UNITED STATESBy Robert McKinley 04/04/2007

Atlanta-based CompuCredit has purchased approximately $970 million in face amount of “Monument” credit card receivables from Barclaycard. The purchase price for the sub-prime credit card loans was $769.8 million. This is CompuCredit’s first international portfolio purchase. A substantial portion of the purchase price was funded through a traditional securitization financing arranged by Banc of America Securities Limited and related entities. CompuCredit had total U.S. managed receivables for the fourth quarter of $2.8 billion and 3,865,000 accounts at year-end, according to CardData ([www.carddata.com][1]). (CF Library 2/15/07)

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

SmartTrust Joins GlobalPlatform

5, Country, Priority, SWEDENBy Robert McKinley 04/04/2007

SmartTrust is committed to developing and promoting interoperable
specifications for the smart card infrastructure. In response, the
company has announced its decision to become a member of the
smart card international specifications body, GlobalPlatform. As a
member, SmartTrust will contribute to the technical activities of
the Systems Committee and will participate in the Advisory Council.
Almost 200 mobile networks rely on SmartTrust to manage
subscribers, their handsets and access to mobile services.
GlobalPlatform is a member-driven organization with cross-industry
representation. The organization had over 40 GlobalPlatform-based
smart card implementations and 110 million GlobalPlatform cards in
circulation in 2006. Currently, there are 1.2 billion GlobalPlatform
GSM implementations worldwide.

Sub-Prime Delinquency Remains Very Stable

5, Country, Priority, UNITED STATESBy Robert McKinley 04/04/2007

The sub-prime mortgage fallout appears to have had little impact so far on sub-prime credit card delinquencies as the latest metrics show a steady decline in 60-day delinquency rates, well below year-ago levels. However, there is concern that sub-prime borrowers remain more sensitive to disruptions in the mortgage sector and there could be a spillover into the sub-prime credit card segment later this year. According to the latest sub-prime credit card metrics from FitchRatings, 60-day+ delinquency dropped to 5.35% in February compared to 5.60% in January and 5.88% one-year ago. The rate has declined for three consecutive months. According to Fitch charge-offs also decreased in February to 9.53% from 9.90% in January, as the delinquency bubble from the minimum payment implementation normalized in February. Monthly payment rates ticked up 112 bps to 10.58%. Gross yield increased 151 bps to 26.54% in February.

SUB-PRIME DELINQUENCY
Sep 06: 5.32%
Oct 06: 5.54%
Nov 06: 5.66%
Dec 06: 5.68%
Jan 07: 5.60%
Feb 07: 5.35%
Source: FitchRatings

CARTA VIVA MASTERCARD

5, Country, ITALY, PriorityBy Robert McKinley 04/04/2007

Gruppo Linea and Giesecke & Devrient have teamed to introduce a new MasterCard for the Italian soccer club A.C. Milan. Numbered, limited-edition “CartaViva Milan” cards will be issued to players and club managers with tens of thousands of cards to be issued this year to fans. Giesecke & Devrient, the world’s second largest smart card maker, says the card will be outfitted with a chip over the next few months and will be fully compliant with the EMV standard. The “CartaViva Milan” credit card offers the benefits of A.C. Milan’s loyalty program, and every month, “CartaViva Milan” users are entered to win fan prizes-from tickets for club matches to jerseys autographed by the players to tours of the Milan stadium and the Milanello Sports Center. In fan shops, cardholders profit from special discounts. And once they enroll in the “CartaViva” bonus program, fans can even earn points based on their team’s performance. Their accounts get credited one bonus point for each game A.C. Milan wins and one additional point for each cup.

Advanta Splits Stock and Raises Dividends

5, Country, Priority, UNITED STATESBy Robert McKinley 04/04/2007

Card issuer Advanta announced that its Board of Directors met and approved a three-for-two stock split for both the Class A and Class B Common Stock. This split will be in the form of a 50% stock dividend, payable June 15, 2007 to stockholders of record as of May 25, 2007. The Company’s common stock will begin trading at the split-adjusted price on June 18, 2007. In addition, Advanta’s Board approved a 25% increase in its regular quarterly cash dividends beginning with the dividends to be paid in the second quarter of 2007 and the Board of Directors also authorized the repurchase of up to 1.5 million shares of the Company’s Class B Common Stock, stated on a split-adjusted basis.

INSIDE Extends Smart Card Membership

5, Country, FRANCE, PriorityBy Robert McKinley 04/04/2007

INSIDE Contactless has announced its decision to extend
membership in the Smart Card Alliance to the Leadership Council.
Charles Walton, INSIDE’s Executive Vice President for Payments,
will be co-chairman of the Contactless Payments Council, a division
of the Alliance. The Alliance focuses on the adoption, use and
widespread application of smart card technology, is the industry voice
for smart card technology and strongly advocates its privacy and
enhanced data security. Furthermore, the Alliance keeps members
connected to the industry and industry innovations. INSIDE has been
growing over the past two years with more than 12M chips delivered
for contactless payment cards.

Discover Upgrades its Miles Card Product

5, Country, Priority, UNITED STATESBy Robert McKinley 04/04/2007

Discover has enhanced yet another product in its product arsenal. The “Discover Miles Card” now offers travel with no restrictions, enabling cardholders to book their own travel and then redeem their available “Miles” for account credits for their travel purchases. Cardholders also earn “Double Miles” on travel and restaurant purchases up to $3,000 per year, in addition to earning one “Mile” for every dollar they spend on all other business and personal purchases. Cardholders can redeem “Miles” for travel credits to their account or cash starting at 5,000 Miles, or for gift cards from over 50 brand-name Partners starting at just 1,000 Miles. Discover also this week announced it renamed and upgraded its “Discover Platinum Card” and the “Discover More Card.” (CF Library 4/3/07)

Uptick in Online Card-Not-Present Fraud

5, Country, Priority, UNITED KINGDOMBy Robert McKinley 04/04/2007

First Data International has released the findings from the
study it commissioned that explores opinions of senior fraud experts,
from 52 different financial institutions in different countries, on ATM,
POS, online banking and card not present (CNP) fraud. The study
was conducted by the independent research firm Olive Insight and
showed that of the respondents, 96% believe fraud is perpetrated
on a global stage, learned and passed from one part of the world to
another. Furthermore, 55% of respondents believe that regulation
helps to combat fraud. Others however are concerned that
regulation may prove too restrictive. Also, of the respondents, 38%
have reported an increase in phishing attacks and over a third are
seeing more online CNP fraud. Technology is critical in combating
fraud and priority for over 50% of respondents. The study concludes
that experts believe fraud to be a global phenomenon and regulation
using technology is necessary. FDI has approximately 7,900 employees
and operates across Europe, Middle East and Africa, Latin America,
Canada, Australia and Asia-Pacific.

U.S. Economy to Regain Stability in 2008

5, Country, Priority, UNITED STATESBy Robert McKinley 04/04/2007

The U.S. economy is expected to grow by only 2.4% this year but climb to 2.9% in 2008 as the housing market regains strength. The latest economic forecast from RBC shows the housing market is starting to show signs of stability, as existing home sales have improved and mortgage applications have increased for the first few months of 2007. Risks to consumer spending and the economy was limited as more than 80% of U.S. households are immune to interest rates changes. One third of all homeowners have no mortgage debt and 50% have mortgages with a fixed rate. RBC also expects businesses will continue to spend but at a more moderate pace in 2007. RBC also predicts that stronger growth next year will see the Fed shift into rate hike mode with a 50 basis-point increase expected in the second half of the year.

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