Debit Card Overdraft Fees Drawing More Scrutiny

A new survey has found that 17% of all U.S. bank customers did not pay
an overdraft fee in the previous twelve months, compared to 19% in the
prior year. However, the surge in overdraft fees caused by rising debit
card usage has turned the spotlight hot and heavy on this bank practice
which produces about $38 billion per year in revenue. The August survey
for the American Bankers Association by Ipsos-Reid found that of the
consumers who did pay overdraft fees in the past 12 months: 36% paid
one; 10% paid two; 15% paid three; 13% paid four; 6% paid five; 11% paid
between six and ten; and 5% paid more than ten. A survey released in
July from Moebs Services reported the average overdraft fee rose 10%
this year to $27.50, and compared to $23.25 five years ago. GA-based
bank consultancy Bretton Woods found that the average U.S. household now
has more than 12 overdraft transactions per year and pays $368 annually
in fees. Bretton found the NSF/ODP fee income by state ranged from
nearly $73 million in Alaska to $4 billion in California.
A 2008 FDIC survey discovered that customers living in low-income areas
carry the brunt of most of the fees, and that 46% of young adults are
charged for unauthorized overdrafts in high numbers. The FDIC report
also shows that over half of the large banks surveyed process overdrafts
from largest to smallest, which can artificially increase the number of
overdrafts fees incurred by consumers. Additionally, the FDIC found that
a majority of banks reported automatically enrolling customers into
overdraft systems that impose a fee. (CF Library 12/04/08; 1/13/09; 7/13/09)

OVERDRAFT FEES
2004: $23.25
2005: $23.89
2006: $24.44
2007: $25.07
2008: $25.64
2009: $27.50
Source: Moebs

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iPhone to Change Banking Industry Biz Models

A new report projects that by 2014, 45% of mobile-phone users will
actually use mobile banking. Also, mobile banking will rival online
banking, with the former used as a remote control and the latter as a
detailed form of control panel for more complex transactions. The
Javelin Strategy & Research reports also says AT&T has the highest
number of mobile bankers due to the iPhone’s influence, while Verizon
Wireless has the lowest penetration for mobile bankers among the top
tier U.S. wireless carriers. About half of all iPhones users do mobile
banking today. Javelin predicts 99 million U.S. adults will conduct
mobile banking transactions at least once per year by 2014 – with 52% of
mobile-phone users relying on smartphones. Javelin says that just as the
iPod changed the music industry the iPhone will change the banking industry.

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Card Solicitations Target Quality Not Quantity

While the overall number of credit card direct mail solicitations are
off by two-thirds, issuers sent 28% more direct mail offers for premium
cards in Q2 compared to Q1. New high-end cards such as the “Chase
Sapphire,” the “Visa Black Card” and the “American Express Hilton Honors
Surpass Card” are producing the most mail. In the first half of this
year premium cards accounted for 19% of mail campaigns tracked by Mintel
Comperemedia, an increase from 9% in the first half of 2008. According
to Synovate’s “Mail Monitor” direct mail credit card offers declined 67%
year-on-year during the second quarter, but only 6% sequentially. U.S.
households received 349.1 million offers during the second quarter,
compared to 1060.0 million offers received during 2Q/08. Synovate
reported that credit card mail volume for Bank of America was up 77% and
Citibank was up 65% over 1Q/09. CardWatch.com last month reported that
direct mail was off at least 70% in the second quarter, with American
Express and Discover dispatching the largest credit card solicitation
mailings. Secured credit card and sub-prime credit card issuers also
ratcheted up direct mail during the quarter.
(CF Library 8/6/09; 8/17/09)

DIRECT MAIL VOLUME
1999: 2.8 billion
2000: 3.5 billion
2001: 4.9 billion
2002: 4.5 billion
2003: 3.9 billion
2004: 4.2 billion
2005: 6.0 billion
2006: 5.8 billion
2007: 5.6 billion
2008: 3.9 billion
2009: 1.2 billion (projected)
Source: CardWatch.com (www.cardwatch.com)

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Sterling Payment Adds New ISO Sales Exec

Card processor Sterling Payment Technologies’ has tapped Robert “Bob” Ficarra , previously with CrossCheck,
as its Vice President of Sales. He will focus on expanding Sterling’s
Independent Sales Office (ISO) Channel. At CrossCheck, he served
as Vice President of ISO and Partner Sales. During the company’s
formative years, Ficarra worked closely with company founder Timothy
LaBadie and industry expert Paul Green. He was instrumental in
developing CrossCheck’s sales channels, helped lead CrossCheck to record
growth, and was responsible for introducing many of the company’s
innovative programs. Before joining CrossCheck, Ficarra served as Vice President of Sales for
American Marketing Corporation (AMCOR), one of the nation’s first mega
ISOs. During his long career, he has also held leadership positions on
various committees of the Electronic Transactions Association (ETA).

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Lower Biz Travel Spend Impacts Profits

Research commissioned by NBTA and American
Express Business Travel and conducted by IHS
Global Insight and previewed during the National Business Travel
Association International Convention & Exposition, explores the link between changes in business travel and
sales and profits. According to NBTA, the study shows that “economy-wide corporate profits
would be maximized at a point where business travel spending is
increased by 5.3 percent or about $14 billion. Using the correlation
established over the last 10 years, increasing travel this much could
result in increased total industry sales of 3.7% or $894 billion.
Adding in the additional business travel expense and assuming other
costs are proportional, gross operating profits for U.S. business in
aggregate would increase by $224 billion or 4.4% . However, this
correlation does not factor in the current recession of 2009 and the
fact that business travel is expected to contract by 14.7% this
year.”

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EZIO & AWS

Gemalto digital security has made its “Ezio” Time Token device ready for
use with Amazon Web Services’ (AWS) new Multi-Factor Authentication
(MFA) feature. The Gemalto Device can be purchased directly from its Web
store to provides AWS users a secure way to access their account. The
small, lightweight, long lasting “Ezio” token provides a unique six
digit one-time password (OTP), which the user need simply presses a
button on the device to display and is only good for one access attempt
within a short time interval. Ensuring only authorized users are
accessing their AWS account, the authentication solution allows users to
combine their email address and password with the device.

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Experian Launches the GreenAware Blog

Experian Marketing Services has launched its blog site
(http://greenaware.experian.com) helping marketers target
environmentally conscious consumers, a segment worth about $500 billion.
Featuring content from industry marketing and data experts,
greenaware.experian.com is regularly updated to offer a variety of tips
and tools for marketers looking to reach green-minded consumers. Tools
provided to users include whitepapers, Webinars on demand, case studies,
links to industry resources and topic-related blogs. The blog site is
ultimately designed to give marketers a better understanding of
consumers’ environmental consciousness and how those “green” attitudes
impact lifestyle and buying behavior.

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Average Credit Score Stable at 673 in August

A monthly tracking poll reports that during August, 37% of consumer
credit scores increased, 29% decreased and 34% remained the same. San
Francisco-based Credit Karma’s “U.S. Credit Score Climate Report” says
the current average U.S. consumer credit score is 673.
The Midwest had the highest percentage of increasing credit scores
with 39% of consumers seeing their credit score increase during August
The Denver MSA had the highest percentage of credit scores decreasing
with 34% of Denver consumers noticing a drop in their credit score.
In August, the average consumer with an open account had $6,775 in
credit card debt, $195,386 in home mortgage loans, $54,642 in home
equity, $14,439 in auto loans and $26,080 in student loans.

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Performance Plus Tire to Offer mPayy

Performance Plus Tires has selected e-payment provider mPayy to process
online payments from customers.
mPayy offers multiple payment models with integration to
merchant websites through its “lightbox” checkout window; and email and
text messaging invoices that power checkout on any online or mobile
website. mPayy’s secure debit solution is built around the mobile number
and enables secure, convenient purchases and bill payment directly from
customers’ checking accounts. Performance Plus Tire accepts orders
online, confirms the inventory, and
invoices customers via email for any of the tires, wheels or rims
customers purchase each day.

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