Capital One Backs Off its NetSpend Merger

Capital One and prepaid card specialist NetSpend confirmed yesterday they have pulled the plug on their proposed merger. However, the companies signed a “LOI” to expand their existing strategic relationship. Cap One intends to acquire a minority interest in NetSpend along with an option to purchase additional shares of the company. In addition, the parties expect that a Cap One representative will join the NetSpend Board of Directors. The Companies will also jointly pursue the distribution of prepaid card products through a variety of mainstream retail channels. In August Cap One proposed to acquire NetSpend for $700 million in cash. NetSpend has more than 1.5 million active customers nationwide and a retail network that has 15,000 locations where cards can be purchased and 50,000 locations where funds can be loaded. (CF Library 8/8/07)

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DEBT COLLECTION FORECAST

The Credit Services Association (CSA) has announced its 2008 projections
for debt collection to hit 24.3 billion by the end of the year. Furthermore,
debt collection is expected to increase by over 20% during the next 4 years
thanks to a credit squeeze, with lenders making it increasingly difficult to
extend credit. The steady increase in debt collection throughout the UK is
consistent with the predictions citing the steady increase since September
2000, with collections of GBP5.2 billion, GBP8.6 billion in September of
2003 and GBP21 billion in September of 2006. Additionally, with LIBOR
on the rise and UK lenders having yet to announce losses, the situation is
expected only to worsen.

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Chase to Stop Linking APRs to Credit Scores

Chase announced it is expanding its “Clear & Simple” pricing program with the elimination of its practice of increasing interest rates for individual cardholders when their credit-bureau scores decline. However, the change will not be effective until March 1st and it is not retroactive. The practice of increasing rates based on credit-bureau information is largely confined to the nation’s top ten issuers. In January Chase announced it will switch to the average daily balance method of calculating finance charges on all of its cards, eliminating the two-cycle method of calculating interest. In March, Chase announced the “Clear & Simple” initiative which included consumer management tools; financial literacy and education; and clearer disclosure of terms and conditions. The tools include automatic payments, free alerts, paperless statements, and payment calculators. (CF Library 1/22/07; 3/6/07)

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RETALIX 3Q/07

Ra’anana-based POS specialist, Retalix, reported third quarter revenues of $58.1 million, a 16% year-over-year increase. Net income was $3.1 million for the quarter, compared to a net loss of $1.1 million in the third quarter of last year. The Company says the higher product revenues were driven by a number of significant new contracts. In the U.S., Love’s Travel Centers contracted with Retalix to provide an integrated POS and headquarters system to serve more than 200 retail and fuel sites. Save Mart Supermarkets, a tier-1 grocery chain based in California, licensed multiple components of Retalix’s supply chain management application suite for implementation in their three distribution centers. Customer loyalty and promotions system was selected by several retailers, including Big Y, as it expanded the relationship to include the “Loyalty” system. In the distribution segment, Odom, a distributor of beverages in the Pacific Northwest, signed a deal to install the “Retalix Power Enterprise” suite. In Europe, Retalix’s POS solution has been selected by a major grocery retail chain in the Baltic states. For complete details on Retalix’s latest results visit CardData (www.carddata.com).

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Xirrus Offers Wi-Fi PCI White Paper

Wi-FI provider Xirrus has announced its new tool and whitepaper explaining the PCI Data Security Standard for companies that use Wi-Fi and handle payment card information. Xirrus is also releasing a new feature that automatically audits the Xirrus wireless network to ensure continued compliance to the PCI standard and automatically generates alerts on any non-complying elements. Xirrus manufactures the patented “Wi-Fi Array” platform that integrates up to 16 radios with an onboard Gigabit Switch, Wi-Fi Controller, Firewall, and dedicated Wi-Fi Threat Sensor into a single device.

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BARCLAYS GIFT CARD

Barclays has introduced its “Gift Card” as a flexible, gift-giving option which can be loaded for any amount between GBP10 and GBP300.
The card can be customized with any of 6 designs, depending on the
occasion, and is personalized with the recipient’s name. Furthermore,
it is accepted wherever VISA is accepted and can easily be canceled
if lost or stolen. Experts predict that the card will be a popular item for the upcoming holiday season.

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Target Credit Card Outstandings Jump 24%

Target reported that its pre-tax credit card profits for the quarter ending November 3rd increased 17% over the year-ago quarter. Credit card outstandings for the quarter increased 24% year-on-year, topping $7.65 billion. Target says the the surge in outstandings was partially driven by the conversion of proprietary “Target Cards” to higher-limit “Target VISA” cards for a group of higher credit-quality “Target Card” cardholders. Target’s third calendar quarter pre-tax credit card profits were $157 million, compared to $163 million in the prior quarter and $134 million one-year ago. Target reported that its total credit card receivables, which include its VISA and “Guest” cards, were $7.652 billion as of November 3rd, compared to $6.906 billion for 2Q/07 and $6.148 billion one-year ago. Delinquency (60 days+) for 3Q/07 increased to 3.8%, compared to 3.5% in the previous quarter and 3.9% one-year ago. Charge-offs, as a percentage of period-end receivables, declined to 7.0% for 3Q/07, compared to 7.4% in the prior quarter and 8.4% one-year ago. Target’s credit card unit had net revenues of $383 million in 3Q/07, a 20% increase over 3Q/06. During the third quarter Target announced it began reviewing potential ownership alternatives for its credit card business. The Company says the review should be completed by year’s end. Target says it is continuing to evaluate whether the benefits of a potential transaction outweigh its expected dilutive impact on earnings per share. For complete details on Target’s latest performance, visit CardData ([www.carddata.com][1]).

TARGET CARD LOAN HISTORICAL
3Q/06: $6.148 billion
4Q/06: $6.711 billion
1Q/07: $6.510 billion
2Q/07: $6.906 billion
3Q/07: $7.652 billion
Source: CardData (www.carddata.com)

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

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GLOBALPLATFORM AMENDMENT

GlobalPlatform has released its “Confidential Card Content Management
Amendment” for secure application management. This solution has been
designed for application providers of mobile networks to establish
neutral infrastructure. This infrastructure will allow application
providers to manage applets Over-The-Air (OTA) on an end-user’s SIM,
namely for mobile telecom implementations with transit, entertainment or
financial applications such as e-tickets, video and payments. There are
currently 195 million GlobalPlatform smart cards in circulation around
the world.

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Cyber Monday Likely to Occur on Dec 10th

When does “Cyber Monday” happen this year? In the past it has been designated as the Monday following Thanksgiving. However, MasterCard says transaction data for historical holiday online shopping data show that “Cyber Monday” fell on December 11th last year and December 5th in 2005. With Thanksgiving falling early this year on November 22nd, this year’s “Cyber Monday” will likely be nearly three weeks later on December 10th. MasterCard noted that on average, consumers who plan to shop on the Web intend to make 40% of their purchases online, spending $253. Meanwhile, Retail Decisions predicts that online purchasing activity will peak for major retailers on December 10th, between 1:00PM and 2:00PM EST. KY-based Lexmark released a survey that shows seven out of 10 consumers will do at least some of their shopping online and even more will research products online before heading to the store. Boston-based SmartBargains predicts the Monday following Thanksgiving will top retail sales growth for the third straight year in a row as the busiest single day in retail e-commerce history.

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KASHFLOW

KashFlow has unveiled its accounting software allowing for SMEs to
collect money through credit/debit card payment from debtors over the
phone. With SecureHosting Internet payment service provider, the software
solution handles payment processing from the payer’s credit or debit
card to
the collecting company’s accounting department, from start to finish. The
accounting solution is self-explanatory for new users and is manageable sans
software training or an accounting background. KashFlow has been awarded
the 2007 Sift Media award, determined by customer feedback, and the 2007
Software Satisfaction Awards for “Best Web-Hosted Accounts”.

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BofA Names a New Checking/Debit Executive

Bank of America has named David J.Rudis, previously a President at LaSalle Bank, as Checking & Debit Product executive. Rudis will have national, end- to-end responsibility for checking and debit product strategy, management and integration. This position includes accountability for developing and monitoring products and services to continually meet customers’ changing needs. As market president, Rudis will provide business, civic and philanthropic leadership for Bank of America in Chicago and throughout Illinois. He will work to strengthen communication and integration among the company’s local business lines, continuously improve customer experience, grow revenue in the state and enhance Bank of America’s presence in the community.

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TICKETMASTER GIFT CARD

Ticketmaster has introduced a Gift Card offering, available in
denominations
from $25 to $250, for redemption with ticket purchases throughout the
United States and Canada. With the Gift Card, consumers can make ticket
purchases online, over the phone, at retail outlets and at venue box offices
and have no expiry dates. Cross-border purchases will be adjusted for
appropriately to account for the exchange rate. Ticketmaster operates in 20
different markets around the world for its 9,000 clients through nearly
6,500
retail outlets and 20 call centers. The company sold 128 million tickets
in 2006
for over $7 billion.

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