RiskWatch for PCI Compliance is Unveiled

RiskWatch has released “RiskWatch for PCI Compliance” software which measures compliance directly against the recently updated Payment Card Industry Data Security Standard. The software consists of a simple web-based solution which allows an organization to log in to a secure web site and create compliance surveys that can be distributed throughout an organization and provides full audit trails, validating compliance with the new standard.

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Bank Credit Card Switching Grinds Down

While an on-going CardTrak.com survey shows that 43% of consumers want to switch cards and 19% want to cut-up all their cards this year, the number of consumers closing their credit card accounts has nose-dived. According to CardData, voluntary attrition for the month of May slipped to an all-time low of 6.80%, compared to 9.10% one-year ago and 8.88% five years ago. As credit card issuers tighten credit card approval standards, switching cards has become more difficult for consumers as new credit lines are less generous. Furthermore, as reported last week in CardFlash, direct mail credit card offers have dropped significantly this year. Additionally, a major online credit card marketing concern, creditcards.com, abandoned its planned IPO in the wake of tighter underwriting on consumer credit cards. Voluntary attrition is determined by dividing cardholder-initiated account closings by the gross number of accounts and then annualizing.

MAY ATTRITION
(Excludes Discover and AmEx)
2004: 8.88%
2005: 9.35%
2006: 8.99%
2007: 9.10%
2008: 6.80%
Source: CardData (www.carddata.com)

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SECURITY INDEX

A new global survey has found that identity theft and financial fraud are top global concerns for consumers. The “Unisys Security Index”
declined three points to 134, representing a moderate level of overall concern about security issues worldwide. Consumer concern is highest in Asia, (specifically Hong Kong, Singapore, and Malaysia) – as well as Brazil. Germany is the only European country that registered a high concern about security issues. French consumers are least concerned worldwide, with fears at or near the lowest level of concern in all four areas included in the “Index”. Compared to August 2007, segments of the population in the U.S. and Hong Kong experienced more stress about meeting basic financial obligations, such as paying credit card bills and mortgage payments. The “Unisys Security Index” presents a social indicator that measures consumer concern in relation to four areas of security: national, financial, Internet and personal safety.

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Comdata Names a New HR Executive

Payment platform provider Comdata has named Tracey Power as SVP of human resources. Power formerly held the position of vice president, performance management at Comdata. Prior to joining Comdata in 2006, Power served as manager for HR, training and internal communications at Affinion Group/Cendant where she was responsible for implementing human capital management strategies. She also served as assistant vice president, training manager for J.C. Bradford & Co. (now UBS), where she began her career in futures trading and marketing. Power holds a BA in political science, magna cum laude, from the University of Tennessee and a M.Ed. in human resource development from Vanderbilt University.

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Merchants Say Visa’s Rate Cut is a Rate Hike

The Merchants Payments Coalition says Visa’s announcement that it will reduce fees on gasoline transactions may actually result in higher fees for gas station owners. The National Association of Convenience Stores says the changes will raise fees for those transactions under $60 for those customers using regular Visa credit cards without a rewards program. The MPC says that on debit card transactions, the cap on interchange may only apply to gasoline purchases of more than $97.50. That is a small number of transactions, especially because Visa banks reserve the right not to give gasoline retailers anything more than $75 on a sale.

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Small Business Economic Confidence Sinks

Nearly eight out of 10 small business owners think the U.S. economy is getting worse, a significant increase from the prior month. The latest Discover “Small Business Watch” has decreased to 71.8 in June from 81.1 in May. Confidence indicators were down in June in every category of the “Watch” survey, including cash flow issues and plans to spend on business development. About 53% of owners say that economic conditions for their business are getting worse, compared to 47% in May. Three out of four owners say they will be decreasing or making no changes in what they spend over the next six months on business development activities such as advertising, inventories, and capital expenditures. Forty-five percent plan to decrease spending, 30% are making no changes, and 23% plan to increase spending. Only 8% of owners have plans to hire in the next few months, while 79% are making no changes and 10% plan to lay off workers.

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Card ABS Performance Expected to Worsen

Economic conditions continue to contribute to the continued deterioration of credit card portfolio performance. Fitch Ratings reports that among credit card-backed securities, credit losses have approached, and in some cases surpassed, five-year historical averages. While Fitch believes card issuers have taken steps to manage the near-term pain, Fitch expects the credit quality picture to get worse before it gets better. According to a Fitch special report, credit card asset-backed securities transactions completed this year exhibit higher spreads and shorter durations. The decline in base interest rates has offset a portion of the wider spreads, but the all-in cost of issuance has increased as issuers have largely retained notes rated below ‘AAA’, which requires a higher capital commitment to account for the higher-risk asset on the balance sheet.

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Pioneer Telephone to Use EPX’s PINless Debit

DE-based end-to-end payment solution provider Electronic Payment Exchange has signed a multi-year agreement with ME-based Pioneer Telephone to process its customers’ payments. In addition to traditional credit and debit card payment processing, Pioneer will begin using EPX’s PINless Debit product to process their customers’ payments who choose to pay for services using their debit cards. Merchants who are eligible to accept the PINless Debit transactions for payment recognize a significant reduction in the overall expense associated with non-face-to-face payment acceptance. EPX enables their clients to take advantage of this payment type with less expense than traditional card interchange fees.

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RETAIL PURCHASING

The latest Bloomberg Eurozone Retail “Purchasing Managers’ Index” posted the second-fastest rate of decline in the survey’s four-and-a-half year history and exceeded by April’s record fall.
The Index fell fell from 53.1 in May to 44.0 in June. Italian sales showed by far the strongest rate of decline among the three largest euro countries. Eurozone retail sales also fell sharply on a year-on-year basis in June, posting the second-steepest fall in the past twenty-seven months and representing a marked contrast to the thirteen-month peak in growth seen in May. The year-on-year sales index dropped from 56.1 to 43.6. On average, year-on-year sales over Q2 as a whole showed the steepest fall for three years.

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ABA Tackles Student Credit Card Concerns

Citing recent findings of a study by Student Monitor, representatives of the American Bankers Association has testified in Congress before the House Financial Services Committee to advocate against legislative proposals to limit certain categories of students from obtaining credit cards. Student Monitor has published its findings reflecting the vast majority of students manage their credit obligations well with 65% of college student credit card customers paying their bills in full each month and an average account balance for the remaining 35% only being $452, supporting ABA’s argument. Additionally supporting its position, the ABA holds that credit cards are a valuable means for establishing and building credit.

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GIANT CITIBANK CARD

Giant and Citibank have launched the “Giant Citibank” credit card,
providing consumers a 2% rebate on all purchases made at Giant stores
nationwide and up to 1% rebate on all other purchases. The new card
additionally provides cardholders member prices, discounts, no annual
fee for the first year, a 10% rebate for first spend to those applying
before July 15 on purchases made before Aug 31. This partnership is part
of Citibank’s regional strategy of establishing and promoting
co-branding partnerships with strong brands that influence their
markets, such as Giant, and was attractive to Citi considering 50% of
its customers use their card to purchase groceries. Giant stores provide
over 8 million Malaysians per month throughout the country with
groceries and essentials.

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