YUCHENG & CCB

Yucheng Technologies has expanded its partnership with China
Construction Bank and will be providing POS merchant acquiring to the
Beijing Branch of the bank (“CCB Beijing”). Since 2007, Yucheng has
built a team of 376 sales representatives for a presence in 15 cities
across China thanks to added revenue factors. These factors include POS
terminal revenue costs down from US$250 to US$225 in 1Q/08 and an APV
per POS terminal over US$7,000 after 3 months active, collectively
allowing for roughly US$14 in revenue per month per terminal. China
Construction Bank has a network of 13,629 branch outlets across the
country with total assets of US$902 billion and over12.6 million credit
cards/220 million debit cards issued across China.

Details

Fiserv Releases CheckFree PaymentView

Fiserv’s CheckFree has released “PaymentView” web-based payment monitoring solution. “PaymentView” is a comprehensive, web-based payments monitoring system with a dashboard view across existing check, cash, wire, Automated Clearing House (ACH), credit and debit card activities. PaymentView gives banks of any size and their corporate treasury clients real-time risk management capabilities along with multiple operational cost-savings and fee income opportunities. The PaymentView solution include centralized end-to-end check monitoring, including source capture monitoring; real-time business process monitoring for more comprehensive compliance and risk management and alerts about operational events that have the potential to result in losses with robust reporting and analytics functionality providing banks new treasury services revenue opportunities through corporate payments trending, historical performance and forecasting.

Details

HSBC 1Q/08

HSBC reported that its U.S. credit card delinquency and charge-offs moderated somewhat in the first quarter. The issuer says that its decision to pull back in credit card lending, which produced lower origination balances helped dampen the rising metrics. For the first quarter HSBC posted a 60+ day delinquency rate of 5.9% for its U.S. general purpose credit cards, compared to 5.8% in the prior quarter. Private label credit cards in the U.S. posted a 3.6% 60+ day delinquency rate for 1Q/08 compared to 3.4% for 4Q/07. Overall, HSBC continues to be dogged by its U.S. mortgage business as it reported a first quarter loan impairment of $3.2 billion, compared to $1.6 billion one-year ago. For more details on HSBC’s latest performance visit CardData (www.carddata.com).

Details

MC FOUNDATION

The MasterCard Foundation has awarded $600,000 to six microfinance training institutes to fund 200 scholarships. According to a recent study by the Center for the Study of Financial Innovation, the greatest risk facing the microfinance sector, which provides access to financial services to low-income populations in developing countries, is the uneven quality of management and limited staff capacity. The Scholars Program will help meet this need by extending educational and training opportunities to microfinance staff at the regional and local levels. The MasterCard Foundation is an independent, private charitable foundation headquartered in Toronto, Canada. It was established through MasterCard’s customer financial institutions at the time of the company’s initial public offering, to fuel economic growth and opportunity for underserved people around the world.

Details

Nonbank Wallets Not a Threat to Banks

A new report has concluded that “nonbank wallets” are not a threat to the banking industry. TowerGroup believes that the concern “nonbank wallets” engender among financial institutions is warranted, yet more on an individual bank or provider basis than as a macro financial services industry threat. The challenge that “nonbank wallets” present to the traditional payments system will ultimately be countered by the overall value that they will provide to the financial services industry as both clients and partners. TowerGroup projects overall U.S. e-commerce retail sales reached $232 billion in 2007, though they remain a relatively small percentage of total retail sales at 5.6%. The “nonbank wallet” category has seen a flood of new entrants, from such major names as Amazon and Google, to more focused players like Moneta. TowerGroup defines a “nonbank wallet” as an Internet-based storage service of consumer financial data, which helps facilitates online purchases without exposing consumers’ financial information directly to the online merchant. These “nonbank wallets” do not replace traditional payment processes, but rather provide merchants and consumers with a secure integration layer that connects multiple payment methods and processes.

Details

TRM Cuts Losses as it Nears Profitability

OR-based TRM reported that first quarter net sales declined 14% to $7.4 million and a net loss of $436,000 as compared to a net loss of $7.7 million in the first quarter of 2007. The average number of transacting ATMs was 8,117 during the first quarter compared to an average of 10,808 during the first quarter of 2007. The decrease in the number of ATMs in its network has been primarily in the merchant-owned, and merchant-cashed category and was primarily due to merchants electing not to upgrade their machines in compliance with network mandated encryption regulations. However, the decrease in the number of ATM’s in TRM’s network was partially offset by a 3.4% increase in average transaction-based sales per withdrawal transaction which increased to $0.86 from $0.78 in the first quarter 2007. On April 18th TRM acquired Access To Money, one of the nation’s largest independent ATM deployer with approximately 4,248 transacting ATMs for $4.2 million in cash, 3.6 million shares of common stock valued at $955,535 and a note payable to the owner for approximately $9.8 million. For complete details on TRM’s latest results visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

Details

H.R. 5546 Draws Fire From Both Sides

Demonstrating adamant support for the H.R. 5546 the “Credit Card Fair Fee Act,” aiming to reduce card interchange fees, representatives of the National Association of Convenience Stores and the Merchants Payments Coalition contributed to the House Judiciary Committee Hearing for the Antitrust Task Force. The bill is being rallied as a means of ending card industry price fixing, high card interchange fees and Visa/MasterCard’s immense profit from the fees. Statistics from the MPC show over 60% U.S. convenience stores paid $7.6 billion to the credit card industry compared with a total pre-tax profit of $3.4 billion while the average family paid nearly $400 in interchange fees for 2007. Meanwhile, the American Bankers Association, Mastercard and the Electronic Payments Coalition urged Congress to oppose H.R. 5546 as an intervening price control that will eventually result in less competition, fewer consumer choices and reduced affordable payment card options. In place of a free market balance, the bill would impose price controls thanks to politically-appointed bureaucrats whom determine the rates and fees. This in turn would limit interchange revenue to electronic payments products/services, such as rewards programs, force issuers to limit credit and raise payment card fees. The global electronic payments system connects over 16,600 banks and credit unions to more than 29 million merchant locations for the acceptance of 1.9 billion cards.

Details

Debit Cards Represent 46% of V/MC U.S. GDV

Visa and MasterCard debit cards added 120 basis points to its share of the two network’s U.S. payment card gross dollar volume last year. For the fourth quarter, V/MC debit card GDV rose 13.7% and V/MC credit card GDV increased 8.4%, compared to 4Q/06. Overall, V/MC payment card GDV was up 10.8% in 4Q/07 compared to the prior year quarter, according to CardData ([www.carddata.com][1]). In the fourth quarter V/MC U.S. GDV was $782 billion with debit cards comprising 45.8%. In the fourth quarter of 2006, debit cards made up 44.6% of the $706 billion total. For complete details on the latest payment card network results visit CardData ([www.carddata.com][2]).

VISA/MASTERCARD GDV
($ billions)
Credit Debit
4Q/06: $391 $315
1Q/07: $362 $316
2Q/07: $397 $340
3Q/07: $404 $341
4Q/07: $424 $358
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com
[2]: http://www.carddata.com

Details

Choice Hotels Offers a Gas Card Promotion

Choice Hotels is offering a $50 gas gift card for Choice Privileges members that book three stays between June 1 and August 14. After each third qualifying stay at any Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, or Cambria Suites, Choice Privileges members will receive enough bonus points on top of the points from their three stays to reach 16,000 points, which can be redeemed any time for a $50 gas card or other rewards. Consumers can earn the points for a $50 gas card an unlimited number of times during the promotion without having to register.

Details

FTC Settles Lawsuit with OR Processors

The marketers of a debit and credit card processing services operation have agreed to judgments of more than $26 million to settle FTC charges that they deceived small businesses throughout the country. OR-based Merchant Processing, Direct Merchant Processing, Vequity Financial Group, and PPI Services are also banned from marketing card processing goods or services for sale or lease. The FTC says the defendants’ operation falsely promised that it would save merchants hundreds to thousands of dollars a year in processing fees by offering lower rates than the merchants’ current credit card processing service. The defendants also falsely represented that they would buy out merchants’ equipment leases if the merchants accepted the offer, failed to disclose fees, and concealed pages of fine print until after merchants had signed contracts.

Details

Debt Settlement Reports Record Settlements

AZ-based Debt Settlement USA has negotiated 739 settlements totaling $4,323,000 for consumers during April. According to the Federal Reserve’s March consumer credit report, credit card debt increased 6.7% and non-revolving debt, such as loans for cars, boats and education, increased 4.6% during the first quarter of 2008. Total consumer credit outstanding in the U.S. at the end of March was $2.558 trillion. Currently, charge-off and delinquency rates are rising and bankruptcy filings increased by 38% from 2006 to 2007, according to Standard & Poor’s Credit Card Quality Indexes.

Details

Citi Adds More Weight to its Diamond Cards

Citi has introduces its enhanced “Diamond Preferred” suite of cards to provide privileges and benefits for no annual fee. In addition to standard Citi card security benefits, such features included with the “Diamond Preferred” suite include concierge service, exclusive money-saving discounts, a free annual account summary, access to guaranteed dining reservations, golf tee times and VIP access to various events. Additionally, cardholders are rewarded 6,000 bonus “ThankYou Points” after making $100 in purchases within the first 3 months of membership and are given access to an introductory promotion offering 5 “ThankYou Points” for every $1 spent during the first 12 months and 1 point for every $1 spent thereafter. Citi provides financial products and services to 200 million customers in more than 100 countries.

Details