DISNEY JCB

The first naira denominated internationally functional Visa cards have been introduced. Lagos-based Diamond Bank has launched a “Classic,” “Gold” and “Platinum” Visa card that employs the EMV application and will soon offer “Verified by Visa.” The credit cards are also linked to the bank’s “Diamond Gems Reward” program. The bank’s first partner under the rewards program is Virgin Nigeria, the flag carrying Nigerian airline. “Diamond Gem Reward” points can also be converted to “Virgin Nigeria Eagle Flier” points on a one for one basis.
The new cards also feature a 5% monthly minimum payment and free SMNS alerts for all transactions. The cards carry a range of fees including monthly service fees of 500 naira for the “Classic Visa,” 750 naira for the “Gold Visa,” and naira 1000 for the “Platinum Visa.” Interest rates vary from 2.5% per month for the “Platinum” card to 3.00% per month for the “Classic” card.

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New Starbucks RED Prepaid Card Takes-Off

Starbucks and RED have expanded their stored value loyalty card program. Through 2009, every time a customer uses the “Starbucks RED Card” to make a purchase at Starbucks, five cents will go directly to a global fund to help save lives in Africa. Additionally, customers who register their card online receive free refills on brewed coffee; free select syrups and milk options like soy milk or whip cream; and up to two consecutive hours of complimentary Wi-Fi daily at participating Starbucks in the USA. The new card was launched on November 27th with the introduction of the “STARBUCKS RED EXCLUSIVE Beverages” and has since generated contributions equal to more than 1.4 million daily doses of antiretroviral medicine. Other RED partners include: American Express (U.K. only), Apple, Converse, Gap, Emporio Armani, Hallmark, Dell, and Windows.

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Most Innovative Direct Mail Citations Released

While direct mail for credit card solicitations and other banking
services has largely dried up this year, a marketing research firm is
handing out citations for the five most innovative and insightful of
2008. Chicago-based Mintel Comperemedia recognized Discover, Bank of
America, Capital One, Chase and Citibank. Discover positioned itself as
a leader and advisor for consumers seeking financial guidance across the
board. BofA used direct mail to encourage borrowers to continue tapping
into their home equity, offering rewards points. Cap One’s “Rewards
Checking Account” direct mail campaign was bold and brightly colored,
featuring a flip-through format that showed a vast multitude of rewards;
Chase Bank teamed with Facebook with unique promotions in direct mail
and email for its “+1 Student MasterCard;” and
Citi seamlessly integrated direct mail, email and print advertising for
its “CitiAssist” student loan program.

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NCR’s Two-Sided Receipt Printing Deployed

NCR has partnered with Nutricate to offer customers personalized
nutritional information printed on sales receipts.
Nutricate’s software enables restaurants to communicate personalized
nutritional information about customers’ orders. By using the NCR
“RealPOS” Two-Sided Thermal Receipt Printer – which
allows businesses to print simultaneously on both sides of the receipt
with dual print heads – the restaurant can deliver nutritional
information to its patrons while keeping the length of receipts more
manageable. This approach increases customer satisfaction and helps
Silvergreens save paper, up to 45%, by splitting the receipt.
Silvergreens’ receipts can also contain targeted marketing messages and promotions.

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eCommLink and Rechargeplus Combine Platforms

Prepaid platform processor eCommLink and AZ-based payment solution
provider Rechargeplus have partnered to provide prepaid debit platforms with
mobile and merchant applications to serve the needs of the international
money transfer market. The solution will serve the needs of the growing
Overseas Foreign Worker
markets with particular emphasis on workers from the Sub Continent and
Asian markets, where remittance and money transfers are upwards of 10%
of the GDP. This
market has grown to millions of legal and contracted workers from these
regions
working around the world.The Rechargeplus card program solution,
processed by eCommLink, provides a set of linked prepaid debit cards.
Workers can
have their salaries loaded to a card account and transfer any portion of
their pay at any time to the linked card of their beneficiary. The
recipient can
then use that card at any POS system, withdraw from an ATM machine, or
transfer
funds from the card to any participating merchant around the world.

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Record Penalty Fees in the Current Recession

While annual fees were largely driven from the U.S. credit card market
in the early 1990s by the “Discover Card,” “AT&T Universal Visa” card
and the “General Motors MasterCard,” the escalation of penalty fees has
more than made up for the lost revenue. Compared to prior recessions
Americans are facing late fees and over-limit fees that were either
nonexistent in prior recessions or that have tripled in dollar amount.
In reviewing the last five recessions, CardTrak.com has found that the
current recession carries late payment fees and over-limit fees that
average about $35 each, compared to $11 to $12 in the prior recession.
In the 1980s over-limit fees did not exist and late payment fees
averaged about $10, and both were cost-based instead of profit-driven.
Besides the significant rise in the actual dollars, penalty fees are
also accessed in a much more prompt and widespread manner. In the 1980s
cardholders were generally permitted to submit payments up to 15 days
after the due date without bumping into a late fee. CardTrak says the
late fee usually reflected the cost of making a reminder phone call or
sending a reminder letter. Today, late payment fees are generally
charged if the cardholder fails to submit a payment by mid-afternoon on
the due date. Over-limit fees first appeared in the 1990s and were not
widely adopted until the mid-1990s. Most cardholders were permitted to
go over the credit line by 5% to 20% before any penalty was accessed.
Today, cardholders are automatically charged an over-limit fee if the
balance exceeds the credit line anytime during the billing cycle and
even if interest charges or other fees create the over-limit situation.

CREDIT CARD FEE HISTORICAL
Recession Annual Late Pay Overlimit Total
Jan 1980-Jul 1980: 20.00 10.00 0.00 30.00
Jul 1981-Nov 1982: 20.00 10.00 0.00 30.00
Jul 1990-Mar 1991: 16.50 11.00 5.00 32.50
Mar 2001-Nov 2001: 0.00 12.00 11.00 23.00
Dec 2007-Dec 2008: 0.00 35.00 35.00 70.00
Source: CardTrak.com

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Leading Economic Indicators Signal a Weak Q1

The “Composite Index of Leading Economic Indicators” continued its
downward spiral signaling a very weak first quarter. The Conference
Board reports that the “Leading Index” declined 40 basis points in
November, following a 90 basis points decline in October, and no change
in September. Also, the “Coincident Index” fell 30 basis points in
November, after a 30 basis points increase in October, and a substantial
100 basis points decline in September. The Conference Board says the
decline in the “Leading Index” was due mainly to large declines
in building permits, stock prices, and initial unemployment claims,
which offset the continued positive contributions from real money supply
(M2) and the yield spread. Without the very large increases in
inflation-adjusted money supply since September, the leading index would
have been significantly weaker. The “Leading Index” now stands at 99.0
(2004=100).

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SCA and ETA to Host a Contactless Webinar

The Smart Card Alliance and Electronic Transactions
Association will present the “Best Practices: Contactless and Mobile Payments
Implementation,” webinar January 13. Speakers including Rori Ferensic, ETA;
Brent Bowen, INSIDE Contactless;
Randy Vanderhoof, Smart Card Alliance; Dan Loomis, VeriFone; and
Mohammad Khan, ViVOtech will discuss the best practices and practical
knowledge required for merchants implementing contactless and mobile
payments. Attendees can also expect a discussion on the status of
merchant acceptance in the United States, a demonstration of the ROI
model developed by the Smart Card Alliance to assist merchants
evaluating the business case for investing in contactless payments
acceptance, and a presentation on best practices for POS upgrades,
training and support.

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VeriFone Expands its Board of Directors

Electronic payment provider VeriFone Holdings has appointed Richard A.
McGinn, General Partner at RRE Ventures, to its Board of Directors.
McGinn is a General Partner at RRE Ventures, an investment advisory
and venture capital firm. Previously he served as the Chief
Executive Officer at Lucent Technologies and from February 1998 to October 2007 he
also served as Chairman of the Board. Mr. McGinn currently serves on the board of
directors of American Express Company and has previously served on the board of
directors of Oracle Corporation.

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MoneyGram ExpressPayment Doubles Locations

MoneyGram has grown to 40,000 ExpressPayment locations with the rollout
of services available at CVS and 7-Eleven.
MoneyGram recently completed rolling out its services
in 6,200 CVS stores and, through an agreement with Cardtronics, in 2,250
7-Eleven locations. MoneyGram has nearly doubled its number of its
ExpressPayment locations, which include retailers such as
Walmart, Advance America and Albertsons stores as well as U.S. Bank
branch locations over the past two years. MoneyGram International is a
global payment services company with approximately 162,000 global money
transfer
agent locations in 180 countries and territories.

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