Keynote Identifies Top Holiday 2007 E-Tailers

A Web traffic service has found that Cabelas, a sporting goods retailer, Barnes and Noble and Best Buy had the retail industry’s best reliability over the holiday season, an indication their sites were highly available and experienced little or no downtime over the 30 day study period. According to Keynote, Victoria’s Secret, Circuit City and Cabelas had the industry’s best site responsiveness over the holiday season, an indication of how fast those sites were in downloading pages and completing transactions for consumers. Cabelas and Best Buy had the industry’s best overall service levels over the holiday season, ranking highly in terms of both site reliability and site responsiveness. Keynote also found that some of the leading retail sites showed up to 400% slow-downs during peak shopping days, a rate at which Keynote experts caution leads to consumer abandonment of a product search or check-out. On average, retailers experienced 5% to 10% slow-downs during peak holiday shopping periods, which would not significantly impact the consumer’s online experience or impede check-out.

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Consumer Banks Must Lead Mobile Banking Market

A new report has found that mobile banking deployments will develop significantly over the next five years. However, TowerGroup finds that the most critical driver for the successful evolution of mobile banking and payments will be the ability of financial institutions and mobile operators to balance ease of use with security. TowerGroup says banks must also be wary of mobile operators that wish to control the emerging mobile payments space and profit from the anticipated high volume of mobile transactions. Although the mobile operators deserve their fair share of mobile banking and payments revenues, TowerGroup believes that consumer banks — with deep expertise in payments processing and maintaining trusted consumer relationships — must be the central player in this burgeoning market.

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Loss Provisions & Reward Costs Impact AmEx Q4

American Express reported that its U.S. Card Services division posted a fourth quarter net income of $7 million, compared to $473 million for 4Q/06 due to higher loan loss provisions and increased expense related to “Membership Rewards.” U.S. gross dollar volume rose 11% and the AmEx cardbase expanded by 6% during the fourth quarter, compared to the quarter one year-ago. Total net revenues for the fourth quarter increased 14% to $4.38 billion. Total U.S. card loans rose 29% to $43.3 billion. Delinquency on U.S. card loans (30+ days) rose to 3.5% versus 3.1% in the prior quarter and 2.7% for 4Q/06. Charge-offs on total U.S. card loans rose to 4.3%, compared to 3.7% for 3Q/07 and 3.5% for 4Q/06. Card volume in the U.S. hit $123.0 billion, up 11% from the year-ago quarter. The total number of domestic cards-in-force grew to 52.3 million cards, compared to 48.1 million for 4Q/06. For complete details on American Express’ third quarter results, visit CardData ([www.carddata.com][1]).

American Express U.S. Card Portfolio Snapshot
4Q/07 3Q/07 2Q/07 1Q/07 4Q/06
Volume $123.0B 115.2 115.7 105.4 109.7
Cards 52.3mm 51.7 50.5 49.3 48.1
Source: CardData (www.carddata.com)

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

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Consumer Confidence Dec Rebound is Short-Lived

The modest improvement in consumer confidence last month was short-lived as consumers’ appraisal of current business conditions is slightly less negative than in December, is more negative than a year ago. The “Conference Board Consumer Confidence Index,” which had improved moderately in December, gave back the gain in January. The Index now stands at 87.9, down from 90.6 in December. The “Expectations Index” declined to 69.6 from 75.8. The “Present Situation Index,” however, increased to 115.3 from 112.9 in December.

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Mobile Payments Gain Consumer Popularity

A new study sponsored by PSCU Financial Services, and conducted by Hitachi’s Dove Consulting, found that nearly two-thirds of study participants chose mobile banking and 30% chose mobile payment at the point-of-sale. Only a handful indicated they were excited about mobile person-to-person payments. Convenience is the most compelling feature of both mobile banking and mobile payment at the point-of-sale. Participants cited the ability to perform banking functions, such as check balances and pay bills, from anywhere without the need of a computer as the major convenience of mobile banking, and the prospect of no longer carrying a wallet as the major convenience of mobile payment at the point-of-sale. Conversely, participants indicated security and fraud were their main concerns regarding these mobile applications, wondering what would happen if their mobile devices were lost or stolen.

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BECU Expands with NCR’s SelfServ ATMs

WA-Based BECU Credit Union has purchased 50 of NCR’s “SelfServ” ATMs to provide customers with “No Envelope” deposit technology and for the implementation of NCR’s ATM “APTRA Edge” remote management solution, “Gasper Vantage”. The “Gasper Vantage” solution will be used to manage the Credit Union’s entire ATM network. NCR has designed “SelfServ” to provide users with convenience technology using image-based “Intelligent Deposit”. Over 4,700 NCR ATMs are deployed across North America and 30,000 are deployed worldwide while BECU provides membership to all Washington residents, has over 525,000 members and assets of more than $7.9 billion.

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NetWinner Selects Ecount for Rewards

NetWinner game site has chosen to implement Citi’s “Ecount” for reward fulfillment. “Ecount” will provide proprietary prepaid technology for convenient rewards in cash, delivered on a prepaid card, and is expected to increase customer acquisition. This has proven successful with 75% of redemptions recorded for the “NetWinner Prepaid MasterCard”, which is accepted anywhere MasterCard is, and can be continuously re-loaded with every additional reward.

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Speedway SuperAmerica Selects RBS Lynk

Marathon Oil’s subsidiary Speedway SuperAmerica has made the decision to implement Royal Bank’s “RBS Lynk” credit card processing solutions for pay-at-the-pump and in-store services. Speedway operates 1,600 gas and retail outlets in 9 states, serving nearly 2.4 million on a daily basis while RBS Lynk provides U.S. payment processing of electronic payment services.

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Business Owners Confidence Sinks to a New Low

Economic confidence among small business owners tumbled to an eighteen month low in January. Cash flow has dipped and spending on business development is down. The “Discover Small Business Watch” index dipped to 86.3, down more than six percentage points from December’s 92.7. The index is down a full 27 points than the same time 1 year ago. Discover also found that 74% of small business owners feel that economic conditions in the U.S. are getting worse, a jump from 65% who felt that way in December. About 44% said they have experienced cash flow issues over the last 90 days, also a slight increase from 42% in December, but significantly more than the 32% in January 2007.

Discover Small Business Watch
Jan 07: 114.3
Feb 07: 113.4
Mar 07: 117.7
Apr 07: 110.3
May 07: 110.0
Jun 07: 102.5
Jul 07: 107.3
Aug 07: 102.4
Sep 07: 99.2
Oct 07: 96.8
Nov 07: 93.2
Dec 07: 92.7
Jan 08: 86.3
Source: Discover Business Card

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CONSUMER INTERNET SHOPPING

Nielsen Research has recently shown that over 85% of the global population
has used the Internet to make a purchase at one point or another, 50% of
Internet users have made an online purchase between December 2007 and
January 2008 and those whom participate in online shopping has increased to
875 million, 40% greater than the 2006 figure of 627 million. Moreover,
South Korea led with 99% of users having shopped on websites, followed by
97% of British and 97% of Germans. Correspondingly, South Korea led with
79% of users having shopped online since the beginning of December
followed by 76% of British. However, 67% of Swiss ranked third on the
global arena of consumers whom have shopped online since early December.
Among hot items, books were the most popular accounting for 41% of
purchases,
clothing accounting for 36% while Videos, DVDs and Games accounted for 24%.
Nielsen Research operates in over 100 countries, providing survey
research and
consulting services.

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OCC Demands Kill ADS-Blackstone Deal

Alliance Data Systems’ stock dropped nearly 40% this morning after Blackstone Group said it was backing out of a deal to acquire the payment card processor for more than $6 billion. Blackstone informed ADS that it does not anticipate the condition to closing the merger relating to obtaining approvals from the OCC will be satisfied. Blackstone’s notice stated that the OCC is “demanding that extraordinary measures be taken by ADS, Holdco and various Blackstone entities in connection with the Change in Control Notice” that “represent operational and financial burdens on ADS, Holdco and Blackstone that cannot be reasonably assumed.” Blackstone stated that it is unwilling to satisfy the requirements specified in the OCC letter. Blackstone also expressed its belief that alternative solutions that would be acceptable to Blackstone would not satisfy the OCC, and therefore that further negotiations with the OCC would be futile.

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