Nodus Credit Card Advantage PABP Certified

E-payment provider Nodus Technologies is now VISA PABP 2008 certified
for its integrated Credit Card Advantage product line. Visa developed
the Payment Application Best Practices (PABP)
specifications as part of the CISP/PCI compliance program. The program:
Assists software vendors in creating secure payment applications that
help merchants and agents mitigate security compromises, prevents
storage of sensitive cardholder data that otherwise might
suffer unauthorized access from hackers and supports compliance with the
PCI Data Security Standard (PCI-DSS). On October 1, 2008, Visa began
requiring their merchants who use payment application software to adhere
to Visa’s Payment Application
Best Practices (PABP). Merchant account providers will not issue
accounts to any
company using application software that is not PABP certified. Companies
that use an uncertified credit card payment solution may be unable to
get a merchant account or may be forced to pay higher rates.

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Visa Mobile and Google’s Android Get Yoked

“Visa Mobile” is now operational on mobile devices powered by Google’s “Android.” Chase Visa credit and debit cardholders will have exclusive access to the “Visa Mobile” application for a limited time. The application will allow select Chase Visa cardholders to receive notifications about transaction activity on their accounts; obtain offers from merchants; and use the integrated Google mapping technology to locate nearby participating merchants or ATMs that accept Visa.
Fourteen national merchants are supporting the initial launch of “Visa Mobile on Android,” including 1-800-FLOWERS.COM, Bonefish Grill, eBags.com, eMusic.com, FragranceNet.com, Jos. A. Bank, Lenovo, Overstock.com, Planet Hollywood, Restaurant.com and Shoes.com. Visa’s applications will be demonstrated by Visa and Google representatives today at a special live premiere of Saturday Night Live’s Seth Meyers, Bill Hader, Jason Sudeikis and Simon Rich series of digital short films, “THE LINE,” at the WIRED Store in Manhattan. “Android” is the “Open Handset Alliance”’s open source platform for mobile devices, including the T-Mobile “G1” phone.

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NCO Settles with Texas Over Collections

Collections processor NCO Group has signed an “Assurance of Voluntary
Compliance” with the State of Texas to resolve customer disputes over
collection practices. Under the terms of the AVC, NCO, without
admitting any
wrongdoing, has agreed to pay Texas $250,000, which includes a
reimbursement of $150,000 for
the State’s legal expenses and $100,000 to the Texas general revenue
fund. NCO has also agreed to spend in excess of $300,000 over the next
three years on its compliance programs and to establish a restitution
fund of up to $150,000. NCO intends to deploy additional technology
designed to further strengthen its
communication with consumers and to assist consumers in resolving
disputes that arise in the collection process.

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CBA Adds a BBVA Compass Exec to its Board

The Consumer Bankers Association has named Shelaghmichael
Brown, Senior EVP of BBVA Compass Retail Banking, to the
Board of Directors of the Consumer Bankers Association.
As head of Retail Banking, Brown is responsible for the company’s retail
banking operations, which include its 576 branch distribution system,
alternative delivery channels such as online and telephone banking,
traditional consumer and
small business credit and deposit products, marketing, and all of the
operations of Compass’ former Consumer Finance business unit. Throughout
her career she has held various leadership roles, such as President and
CEO of Telecheck International, Inc. and Executive Vice President at
JPMorgan Chase Bank where she was responsible
for the nationwide consumer banking segment. Brown is a graduate of
Wheaton College and received a MBA
from the University of Chicago.

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Affinion Slates a Tues Value-Added Webinar

CT-based loyalty marketer Affinion Group will host a webinar, “Meeting
Consumer Needs Pays Dividends”, focusing on attracting and retaining
customers. The December 16th webinar explores how to navigate, survive
and flourish by acquiring and retaining account holders through
value-added programs that drive revenue opportunities and strengthen
loyalty and stand out from the competition through comprehensive,
multi-channel strategies and turnkey benefit solutions that maximize
consumer appeal. Trends and insights will include ways to target needs
of account holders, the latest marketplace analysis on consumer demands,
and the best solutions to meet
those needs.

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American Express Ranks as Most Trusted Company

American Express ranked as the “Most Trusted Company for 2008” for
privacy for the second consecutive year.Ponemon Institute and TRUSTe
asked 6,486 adult-aged U.S. consumers which companies they thought were
most trustworthy and which did the best job safeguarding personal
information. A total of 706 companies were named by consumers; 211 made
the final list of most trusted companies. eBay earned a ranking as the
second most trusted company, while IBM, Amazon, and Johnson & Johnson
rounded out the top five. Among credit card issuers making the top
rankings: USAA #11 and U.S. Bank #19. The survey also found that
consumers feel they are losing control of personal information. Only 45%
of consumers feel they have control over their personal information,
down from 56% in 2006. Sixty-two percent of consumers believe that
identity theft most saliently affects their perceptions about a
company’s privacy, while 53% named data breach notification and 42%
cited annoying background chatter in a public venue.

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Gap Between Highest APRs and Prime Rate Widens

Punitive credit card interest rates will likely exacerbate the
recession like none before. In reviewing the last five recessions
CardTrak.com has found that the current recession offers the lowest
prime rate, but the highest credit card APRs ever. During the current
recession that started in December 2007, the prime rate has been trimmed
to 4.00% while punitive credit card interest rates charged by the top
issuers is now 27.99% (prime +23.99%). In the last recession (March 2001
to November 2001), the prime rate was cut to 5.00% and credit card
interest rates topped out at 23.99% (prime +18.99%). Thus, the “spread”
between the prime rate and the highest credit card APRs, charged by the
largest issuers, is now 24% compared to 19% in the prior recession.
During the recession in the early 1990s, the spread was 10% and during
the recession in the early 1980s the spread was about 9%.

HIGHEST CREDIT CARD RATES
RECESSION PRIME CC APR
Jan 1980-Jul 1980: 11.00% 19.80%
Jul 1981-Nov 1982: 11.50% 19.80%
Jul 1990-Mar 1991: 9.00% 18.90%
Mar 2001-Nov 2001: 5.00% 23.99%
Dec 2007-Dec 2008: 4.00% 27.99%
Source: CardTrak (www.cardtrak.com)

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Employee Poll Shows Dampened Spending

EAP provider ComPsych has released the results of a survey that
indicates 61% of employees polled plan to spend “much less” for the
holiday compared to last year and 29% indicated they would spend
“somewhat less”. Calls to ComPsych’s FinancialConnect service have
increased considerably in the current economic climate as employees
rethink their budgets. The calls to ComPsych’s
FinancialConnect service have included credit cards/debt management,
budgeting questions, mortgage issues, hardship issues and tax questions.
ComPsych is the world’s largest provider of employee
assistance programs (EAPs) and is the leading provider of fully
integrated EAP, behavioral health, wellness, work-life, crisis
intervention services and outsourced HR solutions under the
GuidanceResources brand.

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Tight Credit Disables Cash Flow Forecasting

About 67% of senior financial executives said that their company’s
working capital is flat or has deteriorated compared to three years
ago as their access to credit has been curtailed. According to a recent
KPMG survey, which polled more than 550 companies across the U.S. and
Europe, 83% of executives said managing working capital was the highest
or a high priority at their companies. Only 37% of those surveyed had a
working capital improvement program in place during the past five years.
In addition to deficient working capital management programs, an
overwhelming number of companies fail to produce reliable cash
forecasts. Although almost all respondents (95%) report forecasting
their cash flows, only 14% of respondents report achieving accurate
forecasts in the last 12 months. Last month the American Express “OPEN
Economic Pulse” found that businesses are feeling the pinch of
tightening credit and weakened cash flow, with 63% being impacted in
October versus 50% in August. Overall, credit tightening is having the
greatest impact on sales, where almost eight-in-ten business owners
indicate a decrease. Over the next 12 – 18 months, 46% of small business
owners believe economic conditions will worsen, while 34% think the
economy will get better. (CF Library 11/12/08)

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2009 Retail Credit Card Charge-Offs May Hit 12%

Performance among retail or private label credit cards has deteriorated rapidly this year as many of these portfolios have a greater proportion of lower quality borrowers and higher base interest rates. Based on the latest metrics for retail credit card-backed securities, charge-offs have soared by more than 40%, delinquency is up nearly 24% and the excess spread has declined 13%, compared to one-year ago. According to the latest ABS “Credit Card Index” results from Fitch Ratings 60+ day delinquencies hit 4.5% and charge-offs hit 9.1% at mid-year. Fitch expects charge-offs to exceed 12% in first half 2009.
The “Excess Spread Index” is at 9.4% and remains consistent with historical averages. Even with Fitch’s charge-off projections, retail card excess spread should hold above 5%, a level considered healthy for credit card ABS. Fitch tracks more than $72 billion in principal receivables backing approximately $40 billion of retail or private label credit card ABS.

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