Prepaid RushCard Attracts $2B in Volume

OH-based prepaid card provider RushCard announced that is now manages
over $2 billion in deposits and transactions for underbanked members
and has implemented “Spend Tracker”.
The new online “Spend Tracker” tool enables members to keep track of what
they spend and, therefore, make better financial choices. “RushPATH to
Credit”, an important new program, provides members the ability to build
a positive credit file by reporting their regular payment history to
participating consumer credit reporting agencies. “RushText” alerts enable
members to check their account balances or receive deposit confirmations
on their mobile phones. RushCard is the only major pre-paid
debit card with free customer service.

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WOMEN & FINANCES

A new survey commissioned by State Farm found that even though 51% of
women ages 25-65 are concerned about their financial future,
only 19% have reported making major changes to their
financial planning. Thirty-one percent conducted research, but
ultimately didn’t do anything
differently, and 38% only made small changes with little or no impact
on short- or long-term financial performance, such as moving money from
checking to savings accounts. When women look for financial guidance,
they don’t always seek out
expert advice. The survey also found that 18% turn to their parents ,
15% to friends and 12% to spouses for financial advice and may not be as
likely to seek the guidance of professionals like insurance agents (7%) or
accountants (5%). More than 42% find going to the dentist less
excruciating than talking to their spouses about their daily finances
and 32%of women report only having
enough money in their savings to cover one month or less of expenses.
While 79% women feel it’s important to be adequately prepared for the
future; however, 38% suspect they’re falling short,
worried that they haven’t done enough to secure their financial futures.

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SCA and MPC Offer Contactless ROI Tools

The Smart Card Alliance and Mobile Payments Council have rolled out new
tools for merchants
to maximize ROI when accepting contactless and mobile payments.
Merchants can now access a model for accepting contactless payments.
The model asks merchants to enter data specific to their business, such
as revenue, store information, payment transaction information,
transaction speed, expected changes in
transaction volume and speed after contactless payments are accepted,
and implementation costs. With this information, the model then
calculates an ROI based on increase in revenue, savings from fewer
chargebacks, reduced cash handling and improved operational efficiency
and incremental costs of implementing contactless payments. Merchants
also have access to an online discussion forum to interact with and ask
industry
experts questions and post comments about contactless and mobile payments.

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EBS & TRANSNET

IP-based payment solution provider Precidia Technologies announced that
its TransNet POS system will
be implemented by Emerald Business Systems as a solution for EBS’ retail
clients.
EBS customers can integrate secure payment functionality with a POS
device, PC or application.
TransNet can route transactions to multiple processors by card type or
BIN range, with no extra costs or difficulty. In addition, TransNet
offers management tools and capabilities not available with any other
solution, including remote application updates and transaction logging.
With transactions removed from the POS system and housed instead on the
POSLynx220™ payment router, TransNet also offers the industry’s most
comprehensive approach to cardholder data security. TransNet can be
integrated with an existing user interface or can operate with its own
user-friendly Virtual Terminal (TransNet-VT).

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Recommended Payments Sted of Minimum Payments?

A new study has found that the average monthly payment on a credit card account increased by 70% when the minimum monthly payment amount was not included on the statement. The National Financial Awareness Network says the University of Warwick psychological study released in October by Dr. Neil Stewart suggests that consumers are encouraged to pay less on their balances when credit card companies present the minimum monthly payment option amount on credit card statements. The NFAN says the credit card industry should adopt a similar practice found in the restaurant industry wherein some restaurants include “recommended tip” calculations on the bill.

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Consumer Want Regulators to Rein in Issuers

As the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration are gearing up to approve new credit card regulations this week for 2010, consumer groups are rallying for quicker action to rein in card issuers amidst a potentially disastrous economy for 2009. Yesterday, the Center for Responsible Lending released two new studies detailing the “Hall of Shame” of alleged deceptive and abusive business practices. The reports, entitled “Priceless or Just Expensive? The Use of Penalty Rates in the
Credit Card Industry” and “What’s Draining Your Wallet? The Real Cost of Credit Card Cash Advances,” concludes that credit card issuers
consistently choose complex pricing tactics that exploit borrowers’ lack of information. Among findings: only 3% of consumers understand the differences among introductory teaser rates and rates on purchases and on cash advances causes; 10% of credit card balances carry a penalty interest rate the cardholder doesn’t understand or know about; more than 50% of cardholders paying penalty rates do not know it; and, the spread between borrowers’ regular interest rates and their penalty rates, averaged 16.9 percentage points in 2008, more than double from seven years ago. Besides the interest rate and fee issuers, the reports also focused on the allocation of payments to outstanding balances and the triggering of penalty pricing.

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CKI MOBILE BANKING

Citibank Korea has launched “Virtual Machine mobile banking service”.
CKI customers can execute fund transfers and GIRO
payments as well raise queries and request more information related to
saving, credit card and loan accounts. They will also be able to check
the latest FX rates. Current CKI Internet banking customers can apply
for, and download the
program via the Citibank web site. CKI is offering VM free services
until the end of the year.
While the service will be offered to SKT and KTF mobile phone
subscribers immediately, it will be made available to LGT mobile phone
customers in the near future.

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Fifth Third Processing to Offer eBillme

Fifth Third Processing Solutions has partnered with eBillme to extend
payment options for consumers.
Fifth Third can refer the payment alternative to its merchant
processing customers and eBillme
will have access to extend its payment product offering to more online
retailers. eBillme transactions occur securely, bank to bank, with no
personal or
financial information required or transmitted over the Internet. Because
shoppers pay directly from their online bank account, they don’t release
any financial information online. eBillme’s Buyer Protection Program is
provided at no cost to shoppers and retailers, the buyer
protection features have the same or a better level of buyer protection
than premium credit cards. Protection features include a return
guarantee, price guarantee, in-transit protection, and fraud protection.

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Debt Collectors Shutting Down/Cutting Jobs

NCO Group yesterday laid off 175 technical service representatives at its Bridgeview Surrey Canadian call center. The B.C. Government and Service Employees’ Union says workers are entitled to and will receive 60 days paid notice. Meanwhile, Elite Recovery Services of Buffalo, citing cash flow issuers, abruptly shut down late last week putting 73 people out of work. Last month, First American Recovery Services, also of Buffalo, shut down and filed Chapter 11 bankruptcy protection after its lender closed a credit line. In November NCO Group reported that its third quarter net loss soared to $26.5 million, compared to a net loss of $4.6 million for 3Q/07. NCO says all three of its operating divisions: Accounts Receivable Management, Customer Relationship Management and Portfolio Management posted lower revenues for the quarter than anticipated. (CF Library 11/14/08)

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TALF – Credit Card Biz Helper or Destroyer?

New analysis suggests that the “Term Asset-Backed Securities Loan Facility” is likely to have only marginal success in its current form and may amount to a virtual freeze-up of the U.S. consumer credit markets, partly because of lack of funding hitherto available from ABS.
The TowerGroup report entitled “Can TALF Save U.S. Consumer Lending, or Have Forces Already Killed the Goose That Laid the Golden Egg?,” finds that the proposed rule changes by the Financial Accounting Standards Board would repatriate billions of dollars of credit card debt onto card issuers’ balance sheets, effectively changing the character of the U.S. credit card industry indefinitely. Also, the size of “TALF” as initially configured is dwarfed by the size of the market of outstanding asset-backed securities; “TALF” does not address lenders’ anxiety about the source of their funding and the flexibility of their portfolio management, especially regarding recent changes to rules and legislation; and the proposed changes by the Federal Reserve Board and legislation before both houses of Congress could inhibit pricing flexibility and reconfigure the risk profile of U.S. consumer lending.
However, TowerGroup notes that a positive provision of “TALF” is its focus on new loans to stimulate activity for small business lending and consumer loans, including auto loans, student loans, and credit cards.

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