Bankruptcies & Revolving Credit Both Way Down

[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”0″ ihc_mb_template=”1″] Of the total $2.4 trillion in outstanding US consumer debt, total outstanding revolving credit dropped nearly 1.5% in April to 790.1 billion, while May consumer bankruptcies fell 16% nationwide from the year ago period with overall consumer filing totals having dwindled from 136,142 down to 114,803. This in large part means…

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INSOURCING The New Black?

“Insourcing” – retaking operational control of a credit card function, or the entire card business and returning it to an organization that previously outsourced it. The trend for the 90’s and much of the last decade was definitely outsourcing. “Lower your operating expense,” went the mantra, and many card organizations followed suit. The allure of letting others put up with the headaches of running some card function for you seemed compelling. For many, it still works very well. Now, though, more and more financial institutions are resuming those functions, turning to what R.K. Hammer calls, “Insourcing.” Insourcing brings back management control of the day to day operational function being shipped elsewhere, not to mention jobs.

Among the more than 700 credit card portfolios which sold out since 1990, many of their 5-10 year outsourcing agreements and restrictions are expiring, which gives rise to the flurry of such activity today. “Will most past sellers retake control of their card portfolios?” poses Hammer. “In a word, no,” answering his own question. What typically determines if they will is considering how the relationship has gone since the sale with the buyer; second, have the post-sale reduced credit risk and interest rate risk been important to the seller; third, what do the cardholders say about how the service levels performed since the sale; fourth, would the past buyer be willing to negotiate a good faith purchase price; fifth, have the buyer’s product menu and services been superior to what the seller could now offer themselves; sixth, what is the current appetite for unsecured credit now that the non-compete has expired.

“It’s tough to say with precision what percentage of past card deals will unwind – with or without a repurchase of those assets,” notes consultant R.K. Hammer. ” We’d say far more will simply resume the business without such a transaction, simply issuing cards from scratch to their customers. Not many organizations who now hold the accounts and card loans will want to unwind the deal, especially if they have unamortized premiums still on their books from the first transaction. Whether or not “insourcing” seems to be roaring back, let’s put it this way…a lot of very interesting renegotiations are taking place every day , as this is written,” concludes Hammer.

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Visa Acquires Fundamo, Re-ups With Monitise

Visa is acquiring Fundamo mobile financial services platform for $110 million in cash, in conjunction with having signed long-term commercial agreements with Monitise mobile money solutions. This is meant to accelerate the execution of Visa’s global strategy announced last month to provide the next generation of payments solutions, enabling consumers to transact wherever and whenever they choose, using a card, a computer or a mobile device with Visa’s reliability, security and global acceptance. It will ultimately allow Visa to offer mobile financial services and payments capabilities to consumers on everything from basic services on simple handsets to more advanced services on smart phones.

Fundamo’s platform enables the delivery of mobile financial services to unbanked and under-banked consumers around the world–including person-to-person payment, airtime top-up, bill payment and branchless banking services. Combined with Visa, the Fundamo platform will add enhanced functionality and new services to existing mobile financial services subscribers across Africa, Asia and Latin America for globally accepted payments that will expand the utility of closed-loop, interoperable systems.

Meanwhile, the new commercial agreement with Monitise will expand delivery of mobile financial services to banked Visa account holders in conjunction with Visa’s financial institution partners. Monitise’s expertise in customizing mobile applications for a broad range of phone models and operating systems enables Visa to virtualize existing Visa accounts on mobile phones and offer Visa account holders globally a new array of payment types. Also, the partnership will launch a mobile banking solution in the U.S. for clients of Visa DPS, Visa’s debit and prepaid processing platform designed to allow clients and processing partners to offer their mobile payments, person-to-person payments, mobile transaction alerts and mobile marketing offers.

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MasterCard Senior VP Named to 3rd Class of Aspen Fellowship

MasterCard Worldwide announced JoAnn Stonier, SVP, Global Privacy & Data Officer, -recognized as a financial privacy expert- has been selected to join the Aspen Institute Business and Society Program’s third class of First Mover Fellows. Stonier joins a class of 20 fellows from leading companies around the world focused on developing products and services that drive growth while promoting a sustainable society. The 12-month Fellowship includes three seminars and is built around the core themes of innovation, leadership, reflection and community.

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Debit Interchange to Take Effect Next Month, No Delay

With only 54 of the 60 Senators needed to vote in favor, the Senate elected against the measure to postponed the implementation of reduced debit card interchange fees. This would have required a delay to study the unintended consequences of capping the swipe fee under the Durbin Amendment, but now the new fees are scheduled to take effect on July 21 as originally planned. The Fed has proposed capping the fee at a maximum of 12 cents per swipe, a blowing revenue loss for banks which charge about 44 cents per swipe.

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San Diego County FCU Implements Fiserv bill payment

San Diego County Credit Union (SDCCU) announced same-day payments are now available through “Bill Payer Plus” online bill payment solution, powered by “CheckFree RXP” from Fiserv. Allowing members to select the same-day delivery option as part of the normal payment scheduling process, “Bill Payer Plus” makes bills available for same-day payment on credit card, utility, phone and other common household bills, with an available same-day delivery option as part of the normal payment scheduling process.

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Heartland Chief Security Officer Named Executive of the Year

John South, chief security officer at Heartland Payment Systems, has received the Information Security Executive Central 2011 Award from Tech Exec Networks (T.E.N.) national technology and information security executive networking organization. The ISE Central Awards recognize outstanding achievements in risk management, data asset protection, compliance and privacy and network security. South was honored for his work securing Heartland’s enterprise through risk management and mitigation initiatives, as well as his collaborative efforts to help other organizations in the financial services industry protect themselves from cybercriminals.

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First Data Shows Transaction Growth Steady

First Data Corporation released its “SpendTrend” analysis for the full month of April 2011 compared to April 2010. Tracking same-store consumer spending by credit, signature debit, PIN debit, EBT cards and checks at U.S. merchant locations, “SpendTrend” concluded year-over-year transaction and dollar volume growth held steady in April. Transaction growth was 6.7%, identical to March’s growth; dollar volume growth was 8.0% versus 8.1% in March; and year-over-year overall average tickets increased 1.3%, the same level as March. However, the impact of gasoline prices on overall average ticket growth increased in April. Excluding gasoline stations, average tickets were up only 0.5%, compared to 0.7% in March.

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National Restaurant Association Thanks Senate

The National Restaurant Association thanked Senate for its vote to protect critical debit-card swipe-fee reforms. “We are grateful to Senator Durbin for his leadership and to the bipartisan group of Senators who stood up for swipe-fee reform, small businesses and consumers to allow these important regulations to move forward,” said Scott DeFife, Executive Vice President of Policy and Government Affairs for the National Restaurant Association. “The Federal Reserve has spent nearly a year working on regulations to ensure that debit-card fees are in line with what it costs to process these transactions. The final rule is imminent and will represent intensive study and analysis. The restaurant industry relies on these common-sense reforms as we work to streamline costs and pass every bit of savings on to our guests.”

With only 54 of the 60 Senators needed to vote in favor, the Senate elected against the measure to postponed the implementation of reduced debit card interchange fees. Subsequently, the new fees are scheduled to take effect on July 21 as originally planned. The Fed has proposed capping the fee at a maximum of 12 cents per swipe, a blowing revenue loss for banks which charge about 44 cents per swipe (Cardflash Library, 6/9/11).

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Arise Virtual Business Achieves PCI-DSS 2.0 Certification

Arise Virtual Solutions virtual business services has received the highest security standard for processing customer transactions making it the first virtual business provider to achieve this distinction. Arise earned certified compliance with PCI-DSS version 2.0 as a Level 1 Service Provider. As an early adopter of PCI compliance six years ago and a PCI Security Standards Council member, Arise applies stringent processes and procedures to all client applications.

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EVO Partners with Trustwave to Offer PCI Compliance

EVO Merchant Services selected Trustwave to provide PCI DSS compliance validation solutions to its Level 4 merchants. Trustwave is a leading provider of information security and compliance solutions. EVO Merchant Services engaged Trustwave to provide its merchants access to TrustKeeper, its security and compliance web portal. The web portal supports merchants’ compliance efforts, including moving merchants through the complex compliance process with greater ease and efficiency by making the tasks achievable by non-technical users to facilitate PCI DSS compliance validation for merchants or acquirers. It features PCI Wizard, which simplifies the complex PCI DSS compliance process.

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Layered Technologies Achieves PCI 2.0 Compliance

Layered Technologies compliant hosting, managed dedicated hosting and on-demand virtualization/cloud computing services is now compliant with PCI DSS 2.0. Having provided PCI compliant hosting and managed services under the previous standards, Layered Tech has already supported clients who have successfully been assessed against the new PCI 2.0 requirements. The latest criteria include clarification, additional guidance and evolving requirements to address emerging threats and changes in the market. The compliant hosting solutions help enterprises adhere to the Payment Card Industry’s extensive data security standards by providing a comprehensive layer of secure management services ranging from PCI-compliant monitoring, vulnerability scans and change management processes to an advanced suite of network administration and server management services.

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