Variable Card Rates Jump Ahead of Fixed Rates

Less than twelve months ago variable interest rate credit cards were almost a full percentage point lower than their fixed rate counterparts. However, during the same period, the prime rate, which most variable rate credit cards are based on, has climbed from 4.50% to 6.50%. Today, variable rate cards carry an average go-to interest rate of 14.24% versus 13.76% for the average fixed rate cards. In August 2004, the average go-to variable interest rate was 11.89% versus 12.85% for fixed rate cards. (The averages do not include introductory or punitive interest rates.) Due to the rapid rise in the prime rate, many top issuers have abandoned their fixed rate offers, switching back to variable rates, according to CardTrak ([www.cardtrak.com][1]). In 2001, slightly more than half of all credit cards carried fixed interest rates. Today, nearly three-quarters carry variable interest rates.

CREDIT CARD INTEREST RATES
Month Prime Fixed Variable
Aug 04 4.50% 12.85% 11.89%
Sep 04 4.75% 12.88% 12.11%
Oct 04 4.75% 13.00% 12.19%
Nov 04 5.00% 13.04% 12.37%
Dec 04 5.25% 13.09% 12.49%
Jan 05 5.25% 13.22% 12.67%
Feb 05 5.50% 13.25% 12.84%
Mar 05 5.75% 13.32% 13.08%
Apr 05 5.75% 13.39% 13.17%
May 05 6.00% 13.48% 13.45%
Jun 05 6.00% 13.59% 13.61%
Jul 05 6.25% 13.64% 13.84%
Aug 05 6.50% 13.76% 14.24%
Source: CardData (www.carddata.com)

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

A Spyware Keylogger Targets Online Banking

Florida-based Sunbelt Software has uncovered a spyware keylogger that secretly steals data from users’ Internet sessions, including logins and passwords from online banking sessions, eBay, PayPal and other programs that use html forms to collect personal information. It is a new variant of a family of existing trojans generally known as “Dumaru” or “Nibu.” The spyware keylogger has been named “Srv.SSA-KeyLogger.” The Company is offering a free detection and removal tool.

RRE Ventures Invests in Chinese M-Payment Firm

SmartPay Jieyin announced that RRE Ventures has taken a minority equity stake in its Chinese mobile payments system. Additionally, current SmartPay shareholders, including Accel Partners, Icon Ventures Asia, Lunar Group and others, have exercised rights to invest additional capital in the Company. New York based RRE Ventures invests in entrepreneurial technology companies placing special emphasis on e-commerce, software, communications and related enterprises with $600 million under management. Smartpay operates a mobile payments service in China.

Tier Technologies Lands Jack Williams as SVP

Tier Technologies has hired industry veteran T. Jack Williams as SVP of Strategic Programs, responsible for identifying and executing on new ways to leverage Tier’s core transaction processing assets. Williams brings over 20 years of payment processing industry experience to Tier. He is credited with the creation and implementation of the first giftcard program while at Blockbuster Enterprises and was instrumental in the first live smart card transaction, Visa’s POS Chec. Tier is a provider of transaction processing and packaged software and systems integration services for public sector clients.

HealthCard Systems Renews its GPN Contract

HealthCard Systems has extended its long-term relationship with Global Payments by signing a new, multi-year agreement for front and back-end transaction processing services including terminal-based and Web-based authorization for all major credit and debit cards, as well as settlement accounting, risk management and technical support. HealthCard Systems focuses exclusively on the health care and personal care industries by offering providers proprietary systems that meet the intrinsic needs of these market segments. Global Payments Inc. is a provider of electronic transaction processing services.

Global Cash Access Tops 130 U.K. Casinos

The Rank Group, one of the U.K.’s leading gaming and entertainment companies, has signed a multi-year agreement to use the products and services of Global Cash Access. Thirty-six Rank Group properties will utilize GCA’s QuikCash cash advance kiosks, customer-activated, touch screen terminals that provide casino patrons with POS debit and credit card cash advance transaction options. Las Vegas-based Global Cash Access, Inc. is a provider of cash access products and related services to approximately 960 gaming properties and other clients in the United States, the United Kingdom, Canada and the Caribbean.

Wells Fargo and California Merchants Settle

Wells Fargo has agreed to pay between $19 million and $34 million to settle a lawsuit over card processing fees charged to merchants. The settlement covers about 96,000 California businesses that may have been overcharged between 1999 and 2003. The lawsuit alleged that Wells Fargo Merchant Services failed to properly disclose or explain all fees connected to processing card payments. Wells Fargo said last week that it has always made full disclosures to merchants.

FSV Payment Systems and Meta Launch GiftIT

FSV Payment Systems and Meta Payment Systems have teamed to launch “GiftIT”, a turnkey gift card solution. The GiftIT program allows financial institutions to sell loadable Visa or MasterCard-branded debit cards to their customers for year-round gift-giving. FSV Payment Systems offers host-based FSA,gift, payroll card, and other MarketReady stored-value ePayments solutions as a strategic business partner of Fiserv, Inc. Meta Payment Systems, a division of MetaBank, offers card issuing and program support.

HSBC Modifies its Polaris StarCard Contract

Polaris Industries has signed a new private label credit card contract for its “Polaris StarCard” with HSBC Bank Nevada that removes all credit and funding risk to Polaris and eliminates the need for Polaris to maintain a retail credit cash deposit with HSBC. The new agreement provides for income to be paid to Polaris based on a percentage of the volume of retail credit business generated. Polaris designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs),Victory motorcycles and the Polaris RANGER for recreational and utility use, with reported 2004 annual sales of $1.8 billion. HSBC Retail Services is an issuer of private label, merchant branded, credit cards in the United States.

Asia Pay Processing Revenues Up 21%

Asia Payment Systems reports that processing volume increased by 21% to just over US$9 million on 42,500 transactions. With the addition of new clients and its involvement with Et-china, Asia Pay anticipates very strong growth in coming months as it rolls out the next stage of its China development plan. The Asia Pay’s proprietary system processes domestic and international debit and credit cards using a combination of proprietary advanced technologies and rigorous security procedures. Asia Pay aims to become a provider of world-class third-party processing services to bankcard-accepting merchants and issuers throughout Asia.