The pain in banking has been real enough, to be sure. There have even
been some prognosticators who have recently opined about the final nails
being hammered into the coffin for the credit card industry. Massive new
regulation decimating the card business models; increasing costs to
comply with those new rules; profits being slashed by two-thirds over
the past two years. The list goes on. Painful as it has been to observe,
we do not think the end game is upon the card business. In a period of
enormous change, there are a few things we’ve seen that have gone less
reported but worth considering, for those who wish to remain in the
business for the long haul. In terms of damage control, in the R.K.
Hammer financial model the pre-tax returns for the credit card business
fell from 4.24% ROA in 2008 to 1.50% ROA in 2009. Fewer new accounts being
issued, cardholders using their cards less often, repayment rates rising;
all contributing to a weaker P/L. These and other operational and
marketing strategies are proving successful to client bank enterprises.
No doubt other tactics will emerge as the card business adapts and makes
necessary changes to compete in this heavily competitive, higher-risk,
greatly regulated industry.

Visa Releases Statement on Fed Recommendations

Visa released its statement on the Federal Reserve’s Recommendations on the Dodd-Frank Act. Accordingly, the Company is still reviewing the specific elements of the recommendations and will provide the Federal Reserve feedback on the questions they have raised eventually. The Federal Reserve has left a significant number of issues open for additional comment and deliberation in the coming months. Visa also has concerns that the Federal Reserve’s proposal includes artificial caps on debit interchange that do not realistically reflect the value of card acceptance and do not reflect the actual costs of running a secure, reliable and efficient debit network. Further, the proposed routing and exclusivity alternatives put retailer profits ahead of consumer protection, choice and convenience.

Applebee’s Deploys Digital Gift Cards

Applebee’s has introduced its Digital Gift Cards to allow holiday shoppers to buy and send personalized
electronic gift cards 24/7 online via and Applebee’s Facebook Fan Page. Applebee’s Digital
Gift Cards allow gift givers to personalize the card with everything from a photo to a personally recorded
message. They can be bought and sent instantly to a mobile device or email. The cards also feature 24/7
365 purchase availability; can be set up for timed/future delivery; lets the recipient know right away or when you want them to through text messaging; charge no fees, have no expirations, no shipping, handling, and works same as a plastic card.

MTA & Chase to Intro Yellow Taxi Debit Card

The New York MTA is kicking off its 90-day pilot program for Access-A-Ride customers with the prepaid Chase Visa Card to pay for taxi service on regularly scheduled, pre-planned trips. Four hundred Access-A-Ride registrants have volunteered for the pilot program that includes pick-up and drop-off locations in Manhattan below 96th Street. With the prepaid card, these customers will be able to hail any yellow cab to take them to and from their destination. The volunteers are all ambulatory customers on Access-A-Ride’s subscription service, which means they do not use wheelchairs and travel to and from the same place on a regular basis. The MTA expects to reduce the cost per trip by nearly 70% by using yellow cabs instead of transporting them on more costly Access-A-Ride vans. JPMorgan Chase worked with Transit to develop an electronic debit card for these customers and has since been processing the cards and mailing them out to customers.

First Data Announces Expiration of Private Debt Exchange

First Data Corporation announced the expiration and final results of its previously announced private exchange offers (the “Exchange Offers”), in which the Company offered to exchange its 9.875% Senior Notes due 2015 (“Old Cash-Pay Notes”) and its 10.550% Senior PIK Notes due 2015 (the “Old PIK Notes” and together with the Old Cash-Pay Notes, the “Old Notes”), subject to the Maximum Exchange Amount (as defined below), for the new securities, payable (i) 50% in new 8.25% Senior Second Lien Notes due 2021 (the “New Cash-Pay Second Lien Notes”) or, at the election of each holder who tendered prior to the Early Tender Date (as defined below) and subject to the Maximum New PIK Toggle Amount (as defined below), in new 8.75/10.00% PIK Toggle Senior Second Lien Notes due 2022 (the “New PIK Toggle Second Lien Notes” and, together with the New Cash-Pay Second Lien Notes, the “New Second Lien Notes”), and (ii) 50% in new 12.625% Senior Notes due 2021 (the “New Unsecured Notes” and together with the New Second Lien Notes, the “New Notes”). The Exchange Offers expired at midnight, New York City time, on December 15, 2010 (the “Expiration Date”). The maximum aggregate principal amount of New Notes issuable in the Exchange Offers was $6.0 billion (the “Maximum Exchange Amount”). The maximum aggregate principal amount of New PIK Toggle Second Lien Notes issuable in the Exchange Offers was $1.0 billion (the “Maximum New PIK Toggle Amount”).

Dataguise Issues Guidance on PCI DSS

Dataguise security solutions is deploying its “Key Steps to Meeting PCI DSS 2.0 Requirements Using Sensitive Data Discovery and Masking” guide to assist organizations on integrating sensitive data discovery and masking solutions as required by PCI DSS 2.0. All organizations with payment card data — including merchants who are authorized acceptors of cards and service providers who store, process or transmit cardholder data — must meet this latest iteration of the standard, released in October 2010, by January 1, 2011. Dataguise solutions help organizations comply with sections 3.1, 3.1.1, 7, and 11 of PCI DSS 2.0 by enabling them to quickly identify cardholder data in networks and systems, facilitate safe testing of applications with masked production data and manage risks to sensitive data. Afree copy of “Key Steps to Meeting PCI DSS 2.0 Requirements Using Sensitive Data Discovery and Masking” is available at

Total Immersion & Credelis Intro Gift Cards

Canada-based Ad-Dispatch, FL-based Credelis Media Group and Total Immersion have teamed to develop personal gift cards for holiday shoppers. This allows shoppers to attach a special video message to a gift card ( With the “AR app” – developed by Credelis and Ad-Dispatch using Total Immersion’s D’Fusion software – gift card buyers can upload or record a video message and enter the recipient’s information. It’s just as easy to receive as to give: all the recipient needs to do is open a website, display the gift card to a webcam and then watch as the gift card plays the personalized message.


NRT Technology and Merlin Technology have forged a strategic partnership. With this, Merlin is to distribute the NRT line of cash handling products. Merlin Technology al agreed to promote, sell, and provide comprehensive support for NRT products. This initiative is consistent with NRT’s Global Expansion Strategy of partnering with stable, successful companies that understand the business and regulatory requirements of the local casino industry. ‘Merlin Technology’ has become a leading supplier of cash handling equipment in the Netherlands while Canada-based NRT Technology provides cash handling solutions, products and services to the casino and gaming industry world-wide, namely through its “QuickJack” redemption ATMs.

Integrated Bank Technology Certifies Digital Check Scanner

IBT financial services products has added to its suite of products the “TS240” check scanner from Digital Check check scanners for the distributed check capture industry. IBT’s, certification of the “TS240” is thanks in part to its higher resolution 300 dpi cameras (a 50% increase over the TS230); a higher capacity, 100 document feed and exit pocket, and an optional franker. The scanner is available in speeds of 50, 75, and 100 documents per minute and features an optional franker. Digital Check’s recently introduced integrated “TS240” scanner/ thermal teller transaction receipt printer module (TTP) sits underneath the “TS240.”

Discover 4Q/10 Net Income Up $90mm Q/Q

Discover Financial reported 4Q10 net income of $350.0 million compared to the year ago figure of $577.8 million and 261.0 million last quarter. This was thanks in part to $23 billion in card sales volume, an increase of 6% year-over-year but $1 billion less than 3Q/10; net card charge-offs down $103 million from the prior quarter to a net charge-off rate of 6.58%; a delinquency rate of 3.89% for loans over 30 days past due with delinquent balances down a total of $181 million; and its Payment Services division having processed a record transaction volume of $40.4 billion. Additionally, Discover Payment Services’ profit before tax up 32% from the prior year. For complete details on Discover Financial Performance, visit (

1Q/09: $167.0 million
2Q/09: $387.9 million
3Q/09: $577.8 million
4Q/09: $546.5 million
1Q/10: $207.6 million
2Q/10: $258.0 million
3Q/10: $261.0 million
4Q/10: $350.0 million
Source: CardData (

Mobey Forum Appoints Executive Director

Sirpa Nordlund has been appointed Mobey Forum Executive Director. Bringing with her vast experience in mobile services and NFC, Nordlund was with Nokia over 10 years in NFC research and development, and subsequently drove NFC development and sales. She was most recently responsible over the past three years for the sales in selected European markets at Venyon, a subsidiary of Giesecke & Devrient which provides trusted NFC services. Mobey Forum defines sustainable and prosperous mobile financial services through financial institutions, mobile network operators, mobile handset manufacturers, payment processors and vendors to accelerate the mass-market deployment of mobile financial services by promoting open and secure technology standards.

FICO Patents 100th Analytic Innovation

FICO analytics and decision management has been awarded 8 new patents by the U.S. Patent and Trademark Office, bringing its portfolio total to 100. The breakthroughs covered by these patents are behind FICO’s industry-leading solutions in credit scoring, credit account management, credit fraud management, insurance fraud management and other areas. FICO’s patents cover predictive analytics, fraud management, insurance fraud management, business rules and credit technology. The are to thank for the onset of FICO “Score”; “Falcon Fraud Manager”; the “Blaze Advisor” business rules management system; and its “TRIAD Customer Manager,” used to manage two-thirds of credit card accounts worldwide.