Card Rates Continue Ascent, Back Over 14%

Core credit card interest rates have been rising and will likely rise higher by early next year. At the start of the recession average credit card APRs hovered around 16%, dropping to a rock bottom 12.64% earlier this year. However, rates have been rising ever since over the past 8 months and is back up to the typical 14% range. According to CardTrak, credit card APRs declined from 16.02% in December 2007 (recession start) to 14.55% in September 2008 (credit crunch) to 14.12% in August 2010. The “CARD Act” was passed by Congress in late May of 2009. A study of 150 credit cards released last week by BillShrink found that purchase rates are up nearly 20%; balance transfer fee maximums have increased 34% (from a maximum average of $94 in January to maximum average of $126 in July); issuers have not changed their rates equally; issuers that have changed their rates the least include American Express and Bank of America; and issuers that have increased rates the most are Capital One, US Bank, Discover and Citi.

CREDIT CARD APRS
Aug 08: 14.77%
Sep 08: 14.68%
Oct 08: 14.55%
Nov 08 14.37%
Dec 08 14.17%
Jan 09 14.11%
Feb 09 13.98%
Mar 09 13.96%
Apr 09: 13.96%
May 09: 13.99%
Jun 09: 14.01%
Jul 09: 14.12%
Aug 09: 14.39%
Sep 09: 13.99%
Oct 09: 13.89%
Nov 09: 13.01%
Dec 09: 12.87%
Jan 10: 12.64%
Feb 10: 12.64%
Mar 10: 12.94%
Apr 10: 13.11%
May 10:13.65%
Jun 10: 13.99%
Jul 10: 14.10%
Aug 10:14.12%
Source: CardTrak.com

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Chase Field Deploys MICROS POS HMS

MICROS Systems announced Chase Field has selected its “MICROS 9700 Hospitality Management System (HMS)” as its POS platform. The platform contains 240 of the newly released “MICROS Keyboard Workstation 270’s,” the latest innovation of POS terminals from MICROS, and 26 new Motorola “MC-55 Handheld” devices to facilitate In-Seat service in the club level. For ticket holders “MICROS 9700 HMS” provides Chase Field the ability to accept loaded tickets as payment at the food and beverage point-of-sale terminals, further enhancing the fan experience and driving additional consumer purchases. The Arizona Diamondbacks have been at Chase Field since 1998.

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Heartland Not Target of Austin-Area Data Breach Case

Heartland Payment Systems has confirmed with the United States Secret Service it is not a target in the investigation of data theft at one Austin, Texas-area restaurant. Data breaches at merchant locations are occurring with increasing frequency, for which iHeartland has been vigilant in educating business owners and the payments industry about the importance of credit and debit card security – as well as rolling out its end-to-end encryption technology (E3™) that protects cardholder data. Heartland officials will continue to work closely with the business owner to help identify the source of the intrusion and help the merchant undertake remediation efforts.

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Rewards to Consist of 82% Card Programs by 2013

Credit card rewards programs continue to be integral to the market’s
success, especially for American Express and Discover. Meanwhile, for
Visa- and MasterCard-branded rewards programs are either being refreshed
or are being brought to market for the first time. With this, the
percentage of rewards-based credit cards will grow incrementally from
76% of all general-purpose credit cards in 2009 to 77% in 2010 before
reaching 82% in 2013. This, according to Packaged Facts’ “Rewards Cards
in the U.S. 3rd Edition,” also shows affluent consumers are the most
obvious targets of the post-recession credit card industry while younger
consumers who have jobs are also attractive prospects. American Express
recently introduced its “ZYNC” Card, a pay-in-full charge card that
allows cardholders to select bundles of rewards and benefits called
“Packs” that are tailored to specific lifestyle interests and spending
habits in categories such as music, fashion, food, travel and more. This
provides a needed link to younger debit-driven consumers and position
their charge cards as debit alternatives.

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Transaction Wireless Launches Stoner Bunting Gift Card

Transaction Wireless virtual and mobile gift cards has introduced Stoner Bunting Gift Card Group’s business-to-business (B2B) gift card store on Facebook. Fully developed and hosted by TW, Stoner Bunting markets gift cards in the B2B channel for a wide range of merchants ranging from luxury retail, restaurants, apparel, automotive and health/beauty. The new deal marks TW’s foray into mall development for Facebook Platform, showcasing gift cards for multiple companies on one Facebook Page for easy bulk purchasing. The “Gift Card Crew” Facebook Page features Jiffy Lube, Regis Salons, Gordmans, Omni Hotels and Resorts, Legal Sea Foods, and Charity Choice for distribution of bulk plastic gift cards for incentive programs, employee rewards, customer thank-yous and more.

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Continuing Recession Has Issuers Revenue-Scrambling

The impact of a continuing weak economy coupled with high unemployment give rise, resulting in a possible “double-dip” recession, could be very undesirable. Consumer credit would continue to fall, with the most recent revolving credit numbers already down below an important $830 Billion level (about 90% of that being card) by as low as 20% deeper. This, according to RK Hammer credit card consultancy, shows 2009 saw $13.9 Billion pre-tax card profits, down fully two-thirds from 2008 levels and 2010 will still be a tough one for many in the card business. Also With unemployment stubbornly high above 9%, and so far no effective plans or policies put forth inside the Beltway to deal with it, bankruptcies are up at the time the card business needs this to stabilize or drop. Roughly half of all credit card loan losses come from delinquencies, the other half from bankruptcy filings. A circular-risk pattern has become pretty clear. Subsequently, issuers need to create fee income, charging for services previously provided free and raising fees for existing fee-based services.

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Coastal Federal CU Introduces One-Cent Overdraft

Coastal Federal Credit Union is set to implement an overdraft forgiveness program that will allow members to reduce their overdraft fee to just a penny in many situations, instead of charging the standard $28. Coastal will charge just one cent per overdraft, provided the member either corrects the overdraft before 11:00 PM that same day or had a small overdraft that did not take their end-of-day account balance into the negative by more than $10. Any account that remains negative by more than $10 after 11:00 PM will still be charged a fee of $28 per overdraft. These changes apply to all checks and automated (ACH) drafts, as well as debit card and ATM transactions on checking accounts that have opted-in to Coastal’s BounceGuard Plus overdraft coverage service.

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Cardlytics Closes $18 million of Growth Capital

Cardlytics transaction marketing has raised $18 million in new equity for its expansion through ITC Holdings and Kinetic Ventures. Leveraging the Cardlytics platform, financial institutions will be providing retail offers to over 10 million consumers this fall. Cardlytics’ innovative platform continues to win industry accolades. In July, the company was named a 2010 Red Herring North America Top 100 award winner, a prestigious list that honors the year’s most promising 100 private technology ventures from the North American business region. In March 2010, Cardlytics was also named as a Top 10 Innovative Georgia Technology Company. Cardlytics unites banks and merchants to provide rich rewards to customers based on their individual purchase behavior.

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Discover and Firethorn to Launch mGift Card

Firethorn Holdings mobile commerce solutions provider and Discover have
collaborated for the upcoming launch of the “SWAGG” mobile gift card
application. For this, Discover Network will provide core processing
services for payment transactions when the “SWAGG” service is made
available to provide direct-to-consumer mobile commerce offering with
“smart” technology that allows consumers to purchase, personalize and
exchange gift cards directly from their mobile device. The partnership
has its sights set on making “SWAGG” available in time for the 2010
holiday shopping season. Firethorn Holdings mobile commerce will bridge
relationships among consumers, retailers, wireless carriers and
financial institutions.

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CARDTRONICS

Cardtronics retail ATMs and financial kiosks has inked agreements for
Scotiabank to place its brand on 200 ATMs in high-profile retail
locations throughout Puerto Rico. The long-term deal is the first
between Cardtronics and Scotiabank and the first for Cardtronics in
Puerto Rico. The Scotiabank logo will appear on Cardtronics ATMs in
Puerto Rico, expanding secure, convenient ATM access for its customers.
Initially, Scotiabank will brand approximately 40 ATMs and collaborate
with Cardtronics to brand an additional 160 ATMs in the Puerto Rican
market as Cardtronics installs those locations over time. In addition
to Puerto Rico, the master ATM branding agreement establishes the
framework to brand additional ATMs in other Scotiabank markets.

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Discover Launches Customer Service Ads

Discover Financial Services launched its advertising campaign to highlight its cardmember customer service, appealing to consumers who have endured poor customer service across industries. The television advertisements, which portray a likable but incapable customer service representative named “Peggy,” are the focal point of a marketing and communications strategy designed to convey the value of Discover’s superior customer service. The ads will remind viewers of some of the most common and frustrating experiences with customer service calls, such as long hold times, excessive call transfers and the inability to solve problems. The ads will debut on August 16 on all four major networks on popular shows such as America’s Got Talent, The Office, Parenthood and the Emmy Awards.

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