FEE FRENZY

In response to caps on default payments by the Office of Fair Trade,
Defaqto reports that credit card companies have been charging customers
in new found ways. The report, entitled “Credit Cards in the UK,” shows
that as a means of compensating for lost revenue to OFT caps, credit
card companies are literally inventing new fees, raising rates and
increasing
charges. These developments are in correlation to the June 2006 OFT caps
that resulted in the reduction of the average late-payment fee from
GBP22.21
to GBP11.81, average over the limit fee from GBP22.21 to GBP11.73 and
an average returned payment fee of GBP20.10 to GBP11.39. Defaqto
provides information on over 30,000 products from more than 1,000 service
providers and is used by over 200 financial organizations.

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Chase Paymentech Partners to Offer A-Claim

Chase Paymentech and TX-based payment processor Preferred Health Technology have launched the”A-Claim” healthcare payment solution. “A-Claim” combines Chase Paymentech’s payment functionality and enhanced payment processes to provide physicians with reduced accounts receivable, shorter collection cycles and decreased risk of non-payment. A-Claim achieves the full-cycle automation of information and payment flows, from the submission of claims to the receipt of payments and reconciliation. Patients benefit by being able to use their credit or debit card, along with their health insurance information, to automatically pay their portion of the bill. Physicians typically collect only about 50 percent of outstanding patient balance, resulting in almost $60 billion in bad debt annually. Chase Paymentech Solutions is a global payments firm and merchant acquirer. Preferred Health Technology is a provider of healthcare insurance application systems.

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OLYMPIC RFID TICKETS

ASK TongFong has announced it will be providing the 12.2 million
contactless inlays needed for the XXIX Olympics’ RFID tickets. The tickets
eliminate counterfeiting with a silver ink printed antenna and flip chip
die attach. Furthermore, the tickets are made using clean, renewable
energy at a recycling-implementing processing plant. This, and all ASK
TongFang products, are made using “green” raw material including recyclable
paper and the aforementioned silver ink. The manufacturing process also
implements automated state-of-the-art production equipment allowing for the
production of 200 million units per year of paper based tickets, inlays
and labels.

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Heartland Bank Launches Next Day Funding

Heartland Bank is now offering next day funding services for its credit card merchants. Heartland, now working with Heartland Payment Systems, will provide new processing options giving bank customers access to funds earlier than previously allowed. With many conventional processors, merchant funds usually post within 48 hours from the transaction date. From Thursday through Saturday, however, it could be a 72-hour turnaround before merchants see their funds. With Heartland Bank’s next day funding service, the merchant’s funds will post a day earlier. Heartland Payment Systems is currently the sixth largest payment processor, with over $50 billion of annual processing volume from its current restaurant, hotel and retail merchants.

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HALIFAX PUCHASE CARD

On behalf of Halifax Credit Cards, GfK NOP has conducted research on
British shopping habits during the Christmas season based on the surveys
of 1003 adults earlier this year. The survey findings showed that the
average Brit spends an average of GBP 384.40 on presents, buys 18
presents, spends the most on children, 10% start shopping in the
September and 50% of men don’t buy the first present until December.
Further research shows that women buy more presents, men are more likely
to spend more on a single item, 7% start bargain shopping in January and
the younger demographic is more likely to stick to a budget (of the 36%
whom actually do budget for Christmas shopping). Subsequently, Halifax
found that most consumers overpay on card interest for Christmas
purchases. In response, the bank is offering customers the “Halifax
Purchase Card” that require no interest payment until 2009.
Additionally, the “Purchase Card” provides 0% interest for 6 months on
balance transfers, an APR of 14.9% and 59 days of interest-free credit.

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Branded Gift Cards Deliver High Satisfaction

A recent study commissioned by the Network Branded Prepaid Card Association about gift cards that carry the American Express, Discover, MasterCard or VISA logo found that more than 93% of consumers who buy branded gift cards are satisfied with their purchase. The survey also estimates that 28% of American consumers intend to purchase a branded gift card this holiday season. This is double the number of consumers who purchased branded gift cards last year. When asked to comment on a series of statements about why branded gift cards are purchased, 91% of recipients indicated they can get whatever they want; 85% indicated that branded gift cards are good for recipients who like to shop and 86% purchase cards as gifts if they do not know what the recipient would like or need. Overall, 76% of respondents suggested that branded gift cards are an intelligent way to give a gift. The Network Branded Prepaid Card Association is a nonprofit, inter-industry trade association that supports the growth and success of network branded prepaid cards

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EAPS

Six European card payment programs have joined together
to establish a new company to facilitate pan-European transactions, effectively creating a new European card system. The “Euro Alliance of Payment Schemes” (EAPS) is being created by card companies that represent more than 222 million issued payment cards, over 2.1 million POS terminals as well as more than 189,000 ATMs. Initial pilot transactions have already been successfully completed; roll-out in the countries of the participating “EAPS” partners will begin on January 1st. The founders of EAPS are: CO.GE.BAN (Italy); EPCS European Payment Card Solution/Deutsches Geldautomatensystem (Germany); EUFISERV (Belgium); EURO 6000 (Spain); LINK Interchange Network (UK); and Sociedade Interbancaria de Servicos (Portugal). During 2008, direct
participation in EAPS by individual banks will open.

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World Fuel Services to Acquire AVCARD

World Fuel Services has signed a definitive agreement to acquire MD-based AVCARD, a provider of contract fuel sales and charge card services to the aviation industry, for a purchase price of approximately $55 million. AVCARD maintains a merchant/fuel supplier network of over 7,600 locations in over 190 countries. World Fuel Services provides fuel and related services at more than 2,500 airports, seaports and tanker truck loading terminals worldwide.

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Bank Credit Card Debt Expands by 7% in 07

After growing less than 5% in 2006, bank credit card debt is growing at an annual rate of 7% this year and will approach the $800 billion milestone by the end of this year. Based on current growth through the third quarter, bank credit card debt will hit $797 billion while store and gas credit card outstandings will top $110 billion, by December 31st. At year end 2006, Americans owed $745.1 billion on general purpose bank credit cards, compared to $710.9 billion for 2005 and $660.9 billion five years ago. In 2000, bank credit card outstandings exploded to $568.5 billion from $490.1 billion in 1999, according to CardData ([www.carddata.com][1]). Over the past ten years bank credit card loans have jumped by 70%. In 1992 bank credit card debt stood at $201.8 billion. CardData estimates that store and gas credit card outstandings for 2006 was slightly more than $100 billion.

U.S. BANK CREDIT CARD OUTSTANDINGS
1990: $172.6 billion
1995: $358.1 billion
2000: $568.5 billion
2001: $607.7 billion
2002: $660.9 billion
2003: $677.0 billion
2004: $684.9 billion
2005: $710.9 billion
2006: $745.1 billion
2007: $797.1 billion
Source: CardData (www.carddata.com)

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

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Gap in Card Pricing Models Narrows in 07

The gap between variable rate credit cards and fixed rate credit cards has narrowed to 140 basis points due primarily to recent fed action to lower short term interest rates which has cut the prime rate by 75 basis points. At the beginning of this year the gap between the two pricing models stood at 188 basis points. Variable (go-to) rate cards have saturated the market this year, now making up 87% of all cards-in-force. Less than five years ago, the number of fixed rate cards outnumbered variable rate cards, according to CardTrak ([www.cardtrak.com][1]). Today, variable rate cards carry an average go-to interest rate of 16.39% versus 14.99% for the average fixed rate cards. In January, the average go-to variable interest rate was 16.59% versus 14.72% for fixed rate cards. (The averages do not include introductory or punitive interest rates.)

CREDIT CARD INTEREST RATES
Month Prime Fixed Variable
Jan 07 8.25% 14.72% 16.59%
Feb 07 8.25% 14.74% 16.61%
Mar 07 8.25% 14.74% 16.61%
Apr 07 8.25% 14.88% 16.64%
May 07 8.25% 14.92% 16.65%
Jun 07 8.25% 14.93% 16.65%
Jul 07 8.25% 14.96% 16.69%
Aug 07 8.25% 14.97% 16.70%
Sep 07: 7.75% 14.98% 16.58%
Oct 07: 7.75% 14.99% 16.39%
Source: CardTrak.com (www.cardtrak.com)

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

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TRM Corp Continues its Clean-Up in Q3

OR-based TRM Corporation reported that third quarter gross sales were $23.3 million, down 1% from 3Q/06. Net sales declined 5% to $8.3 million. The average number of transacting ATMs was 10,176 during the third quarter, compared to an average of 10,473 during the second quarter, reflecting the loss of two large retailers. To date, the Company has added 1,544 new ATM units since the beginning of the year, including 451 in the third quarter. TRM noted that driving this performance was the addition of 122 full placement units. The Company also noted that average withdrawals per unit per month have been maintained at a level consistent with the same period one year ago. For complete details on TRM’s third quarter performance visit CardData ([www.carddata.com][1]).

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

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