Corporate Insight Cites Best Card Issuers

Competitive intelligence provider Corporate Insight has released a
report detailing the best consumer financial education tools provided by
the industry’s leading retail financial institutions. The report,
“Consumer Financial Education Today: Best Practices,”
indicates that in the past eight months alone, 33% of the self-directed
brokerage firms that Corporate Insight tracks have made major
improvements to their online education, incorporating interactive media
like webinars and other progressive features into their offerings.
Recommendations for how to achieve best practices in terms of content
and presentation are also included within the report. The report
highlights emerging trends for educating consumers about such timely
topics as home
financing in the current economic crisis, the proper use of credit,
planning for retirement across various life stages, options trading and
teaching young people about personal finance. Corporate Insight studied
the techniques used by industry leaders – like interactive online tools,
microsites targeting specific demographic groups, social media, and
webinars – and identified several best practices for each tactic. The
report provides detailed recommendations to help financial services
firms improve their existing educational content.

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Direct Mail Solicitations Slowly Picking Up

Direct mail credit card offers declined 67% year-on-year during the
second quarter, but only 6% sequentially. The Q2 drop follows a 67%
decline in the prior quarter, a 55% decrease in the fourth quarter and a
20% decline in the third quarter. For the full year of 2008 there were
3.8 billion solicitations mailed, compared to 5.2 billion in 2007.
According to Synovate’s “Mail Monitor,” U.S. households received 349.1
million offers during the second quarter, compared to 1060.0 million
offers received during 2Q/08. The market tracker found that some top 25
card mailers ramped up their mail volumes in the second quarter. The
biggest increases were seen by Bank of America (up 77% over 1Q/09) and
Citibank (up 65% over 1Q/09). Synovate noted that every single offer
mailed during the second quarter had a variable APR associated with it,
compared to 60% of the offers in the year ago quarter.

CREDIT CARD SOLICITATIONS
2Q/07: 1275 million
3Q/07: 1290 million
4Q/07: 1286 million
1Q/08: 1132 million
2Q/08: 1060 million
3Q/08: 1032 million
4Q/08: 576 million
1Q/09: 372 million
2Q/09: 349 million
Source: Synovate Mail Monitor

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Prepaid Cards Gain Traction in the U.K.

A new survey has found that 12% of the U.K.’s population has purchased
a prepaid card with nearly twice as many men as women as buyers. More
than three out of four Brits are aware of prepaid cards and how they
work and 60% have purchased a gift card for someone. However, nearly
half of non-PPC users have no perceptions on what the cards cost and
among PPC users about 45% believe they are paying no fees or less than
GBP 1 per month. The study for Cards International by BMRB also found
that nearly 50% use PPCs for Internet purchases and 20% use the cards
for money transfer purposes. Additionally, 58% of consumers have
reloaded a PPC at some time and those that purchased prepaid cards
within the last six months are more likely to have reloaded it. Nearly
70% of those that load regularly so so at least once per month or more.
Cards International also noted that prepaid cards used for payroll and
by teens are gaining traction.

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CBI LENDING SURVEY

With 27% of business seeking new sources of credit having found availability had improved over the past three months, business loans are becoming easier to secure. Small business lending, however, remains weak with 25% of small businesses still struggling to find affordable finance and having reported a decline in the availability of existing credit lines. Bank of England’s July “Trends in Lending” Financial Facts highlights that this new credit has been restricted to large businesses, those employing over 5,000 people. The Bank of England’s figures show that lending fell 3.4 billion pounds in May. Some lenders expected credit would become more available over the next three months, supporting BoE reports fees and spreads on business loans have risen in recent months.

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ProPay Introduces a E2E Security Solution

ProPay has deployed its End-to-End data security solution to reduce and
eliminate the risk to merchants having sensitive payment data
compromised. The ProPay solution initially removes existing sensitive
data from a merchant, then providing a means of accepting and processing
payments without the need to store, transmit, or process sensitive
payment data. ProPay is focused on capturing the data at the POS and
protecting it throughout processing, transmission and storage. The
merchant’s PCI scope is significantly reduced and the associated risks
of losing the data are removed using “E2E Security”; “E2E Compliance for
secure data storage; “E2E Data Storage” using unique ID/tokens for
further transactions on the data; and “E2E Single Vendor Partner,”
leveraging more than a decade of experience in the industry.

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Cabela’s and Visa Launch a Fall Promotion

Visa and Cabela’s are launching the “CLUB Outdoor Adventure of a
Lifetime Sweepstakes” this week. Customers using a Visa card at a
Cabela’s store between August 20th and September 7th will be
automatically entered. The Grand Prize includes a $25,000 gift
certificate from Cabela’s Outdoor Adventures, a $5,000 Cabela’s gift
card to buy gear and a $500 Visa debit card. The Cabela’s “CLUB Outdoor
Adventure of a Lifetime Sweepstakes” is part of Cabela’s “Fall Great
Outdoor Days,” the premier kickoff event of the fall hunting and fishing
season taking place at all Cabela’s stores. “Cabela’s CLUB Visa”
cardholders receive a bonus entry.

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Mortgage Loan Delinquency Sets a New Record

Mortgage loan delinquency has increased for the tenth straight quarter
to an all-time national average high of 5.81% in 2Q/09, up 11.3% since
previous quarter and up 65% since the year ago period. Delinquency rates
were highest in Nevada at 13.8% and Florida at 12.3% while the lowest
mortgage delinquency rates were seen in North Dakota at 1.5 %, South
Dakota at 2.1 and Alaska at 2.4%. TransUnion.com released the results of
its analysis of trends in the mortgage industry for the quarter and the
associated impact on the U.S. consumer. The trends also showed areas of
the greatest percentage growth in delinquency from the previous quarter
were in Wyoming at +27.8%, Utah at +22.2% and Hawaii at +21.7% while
North Dakota posted a decline in delinquency of .66% as did Ohio by
0.22%. Additional data shows the average national mortgage debt per
borrower dropped .86% to $193,811 for a 0.59% increase since the year
ago period and forecasts indicate the 2009 mortgage delinquency rates
are continuing to climb at a slower pace, to reach reach less than 7% by
years’ end.

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European Credit Culture & U.S. Underserved Linked

A new report suggests that credit risk managers should look to the
European credit culture to better understand how to serve the
underbanked and unbanked in the U.S. The study estimated that 40 million
U.S. households make up the underserved with $10.5 billion to $17.5
billion in untapped annual revenues. The Zoot white paper found that
the Hispanic population in America represent 34% of the underserved
population with buying power estimated at $925 billion. African
Americans make up 46% of the underserved marketplace with purchasing
power of $913 billion. Zoot noted that the underserved do not
necessarily have bad credit or unstable financial behavior. In fact,
when surveyed, the reasons many of the underserved don’t use traditional
financial products had more to do with their lifestyles and mind-sets
than it had to do with having failed in the traditional financial model.
Zoot says Europe has four fundamental connections to the underderserved
market: a history of limited credit product use; preference for cash;
stigmas associated with credit; and concerns about accessibility and
convenience.

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AIG CHAIRMAN

Director Harvey Golub has been elected Non-Executive Chairman of the Board for American International Group (AIG). Originally elected to the AIG Board of Directors in May 2009, Golub was Chairman and CEO of AmEx from 1993 to 2001, where he was hired in 1984 from McKinsey & Co. as a partner. Harvey is also a member of the Board for Non-Executive Chairman of Ripplewood Holdings, Campbell Soup Company, a Non-Executive Chairman of the Board of Directors of The Reader’s Digest Association and a director of RHJ International public investment company. AIG insurance and financial services runs operations in more than 130 countries and jurisdictions.

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SPARTANICS FINECUT

Spartanics Finecut Combination Web & Sheet-fed Laser Die Cutting Machine designed to
overcome the limitations of traditional die cutting operations is now
available to worldwide card manufacturers. The Spartanics
Finecut Combination model laser die cutting machine has multiple
flexibility-focused design features sheet-fed or coil-fed jobs can be quickly interchanged, with jobs
loaded and setup completed in minutes, with any and all types of printing processes can be finished by the same
laser die cutting machine— from flexo, screen, digital etc. printing
lines-and cut in intricate detail in limitless shapes and geometries.
Any combination of cutting and marking details can be made in one
cycle—kiss-cutting, through-cutting, consecutive numbering,
personalizing, perforating, creasing, and more. The process allows for single source laser design combined with the sophisticated software
that underlies all Finecut technology delivers defect-free cutting and
ability to seamlessly stitch images together for unlimited X-direction
part dimensions.

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First Data Second Quarter Revenues Flat Y/Y

First Data reported that revenues for the second quarter were flat at $2.21 billion and adjusted earnings were $607 million, down 5% from the year ago quarter. The net loss for the quarter rose 22% from 2Q/08 to $195.9 million. Retail and Alliance Services reported revenue of $1.3 billion, up 8%. Financial Services revenue was $532 million, down 4%. International generated revenue of $404 million, down 13%. During the quarter FDC formed a new alliance with Bank of America Merchant Services, which will process more than one billion transactions per month. Also, FDC and PNC Bank extended their merchant alliance for an additional eight years; Wells Fargo expanded its agreement for card processing services; and the Company announced plans to move its headquarters to Atlanta. FDC noted that 33 new ISOs, 11 new referral partners and one new RSA were added to the Retail and Alliance Services distribution network; Financial Services renewed 68 contracts in the quarter; and International transactions grew 7%. For complete details on First Data’s second quarter performance visit CardData (www.carddata.com).

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