Chase Introduces a Flagship Card Rewards Program

The impact of regulatory, legislative and economic changes are beginning to have an effect as one of the nation’s top three issuers consolidates some of its rewards programs into a new program with fees and lower redemption value. The new Chase “Ultimate Rewards” program will initially be available to cardholders of the “Chase Freedom” and the new “Chase Sapphire” cards. The new “Chase Sapphire Preferred” card, to be introduced nationally this summer, carries a $95 annual fee. “Chase Freedom” cardholders who opt to earn a fixed 3% bonus for spending in grocery, gas and fast-food categories, will soon pay a $30 annual fee. Redemption levels generally have a maximum value of 1%, lower on merchandise purchases. Key features of the new “Ultimate Rewards” program include: one-to-one points earning; no points caps or points expiration dates; double points on airline travel if booked and paid through Chase; and up to 10 bonus points per dollar of spend when shopping with a Chase card online at more than 300 retailers who participate in the “Ultimate Rewards Bonus Mall”; redemption on three million merchandise items available through Amazon.com; and redemption for gift cards and cash-back. The new Chase “Ultimate Rewards” is expected to become Chase’s flagship credit card rewards program similar to American Express’s “Membership Rewards” and Citi’s “ThankYou Network” program.

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ID Fraud Protection Report is Released

Javelin financial research has released its research report entitled
“2009 Consumer Identity Protection Services Scorecard”. Offering updated
information on the latest trends in fraud, including identity
protection, new accounts fraud and consumer perceptions of protection
products, the new research addresses consumer satisfaction levels and
the effectiveness ratings of security services (credit monitoring, fraud
alerts, personal information monitoring and credit freezes). Javalin
also expands on its comprehensive industry research report released in
December 2007 when ID fraud was growing fast and institutions held an
increasingly vested interest in consumer security. Companies evaluated
include Affinion Security Center, Debix, Experian, EZShield, FraudStop,
Identity Force, Identity
Guard, Identity Secure, Identity Sweep, IdentityTruth, IDWatchDog,
Intelius, Intersections, LifeLock, TrustedID and Truston, among others.
Javelin quantitative and qualitative research focuses on research in
financial services using statistical methodologies.

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Next on the Radar – Mandatory Arbitration Ban?

A new report suggests that mandatory arbitration by credit card issuers and financial institutions is unfair to consumers. The Center for Responsible Lending says that aside from the high frequency of hidden clauses requiring consumers use arbitration rather than courts for complaints, the “Stacked Deck” report also discloses factors such as favoritism/incentive among arbitrators to favor the firms providing repeat business over the consumer, companies in favorable rulings in arbitration over consumers and companies frequently involved in arbitration cases receive more favorable rulings against consumers than those involved in fewer cases. CRL recommends that borrowers try to opt-out of arbitration clauses and remember that such clauses may not always be enforceable.

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ClairMail Brings on Two Executives

Mobile banking and payment solution provider ClairMail has hired Todd
Clyde, previously with Purisma,
as VP of channels and alliances and Donald MacCormick, previously with
SAP, as VP, product management and customer adoption. Clyde joins ClairMail with more than 20 years of sales and
executive management experience in the technology industry. He will be
responsible for indirect sales worldwide through strategic alliances,
including the acquisition and management of strategic partners and
resellers; Clyde will also manage ClairMail’s dedicated channel sales
team. Previously, Clyde was vice president of worldwide
sales and alliances at Purisma. MacCormick will be responsible for spearheading the company’s
product management initiatives and working with financial institutions
to maximize consumer adoption and usage. MacCormick comes to ClairMail
with more than two decades of wide-ranging technology experience, having
held executive roles in product management, product marketing and
corporate strategy at SAP, Business Objects, Crystal Decisions and
Holistic Systems.

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Coinstar Unveils the Pay As You Go Line

Coinstar E-Payment Services has partnered with Aeria Games, Rixty Inc.,
Spare Change and Wild Tangent online game companies to introduce its new
line of prepaid digital entertainment products, available at select
retail locations. For introduction as part of the Coinstar “Pay As You
Go” line, the 15 digital offerings provide for users online spending
options through Facebook, MySpace, online gaming, massively multiplayer
online game titles, virtual world items and universal online spending
applications, along with Rixty “Coin to Card” coin counting. Coinstar
provides its “4th Wall” solutions to provide coin counting, DVD rental,
money transfer, electronic payment solutions and entertainment services
at nearly 90,000 outlets while “Pay As You Go” offers prepaid wireless
programs, long distance cards, gift cards, digital entertainment and
one-time use MC/Visa branded debit cards.

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Data Age and Pivotal Payments Partner

Financial transaction software provider Data Age and merchant service provider Pivotal Payments have
integrated Data Age’s POS software with Pivotal’s
payment gateway software to enable Data Age clients to process both
credit & debit cards through their computer system. The new integrated offering
is now available in version 8.02 of Data Age products. Pivotal Payments will lower credit card processing rates and provide
the gateway solution and software upgrade at no extra charge; streamline operations by eliminating duplication of payment data entry
and/or transposed numbers and process transactions for retail card presentment, mail
order, telephone order and internet; access real-time web-based transaction reports and transaction
monitoring and receive automatic security and functionality upgrades from Pivotal Payments.

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Fifth Third Lands Another Visa Award

Fifth Third Processing Solutions has been awarded the “Visa Service Quality
Performance Awards” for the 14th consecutive year. The award is based
on exceptional card operations
performance demonstrated in calendar year 2008, Fifth Third has been
distinguished as
best-in-class for its Lowest Chargeback-to-Sales Ratio. This category
reflects an acquirer’s
ability to effectively educate its merchant customers on Visa’s acceptance
procedures designed to ensure that transactions are properly processed
at the point of sale.
Acquirers who educate and monitor their merchants help reduce
unnecessary and costly
chargebacks and improve performance in this important customer service
area.
Visa established the Service Quality Performance Awards Program in 1992 to
recognize exceptional card operations performance by card issuers and
acquirers.

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NBPCA, CFSI and NetSpend Team for PP Education

The Center for Financial Services Innovation has partnered with The Network Branded Prepaid Card Association (NBPCA) and NetSpend to offer educational resources on prepaid cards in support of nonprofit organizations which serve underbanked consumers. Announced at the “Underbanked Financial Services Forum,” the educational resources include “The Nonprofit’s Guide to Prepaid Cards” and a series of informational webinars, both of which are targeting the 40 million underbanked households in the U.S. to hit home how prepaid cards allow for better budgeting, spending and saving practices. Considerable cost-savings are thanks in part to lower service and surcharge fees. The partnership organizations are also offering a scholarship to select nonprofits to attend the “2010 Prepaid Card Expo.” CFSI has been providing financial services for underbanked consumers since 2004 through informational programs, the NBPCA non-profit trade association supports investment in network branded prepaid cards and the NetSpend provides prepaid debit cards to consumers.

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U.S. Mobile Banking Usage to Grow at a 51% CAGR

New research indicates that mobile banking usage will grow from 10
million active users in 2009 to over 53 million active users in 2013,
representing a compound annual growth rate of 51.8%. The proliferation
of mobile devices and smart phones symbolizes a pervasive, networked
consumer market that will be a major disruptive force in the financial
services industry. The TowerGroup report predicts that banks will be
moving beyond basic banking functionality like balance inquiries,
location finders and intrabank fund transfers to more sophisticated
applications that leverage the rich functionality of mobile devices.
The research firm recommends that banks leverage other delivery channels
to create synergies with the self-service model and utilize the full
spectrum of device capabilities; develop smart integration models that
give banks new segmentation and personalization capabilities for true
one-to-one customer outreach based on customers’ relationship desires;
think outside the bank’s customer base to capture new customers such as
current unbanked customers with no bank accounts, ethnic markets and new
generational users, such as the “Generation Y”; and create tight
relationships between mobile banking and ATM vendors to build stronger
ties with customers that currently do not have a relationship with a bank.

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