41% of Consumers to Reduce Holiday Spending

Deloitte’s “22nd Annual Holiday Survey” of retail spending and trends shows that 41% of consumers expect to reduce their spending this holiday season. Only 57% of consumers surveyed said the economy will improve or remain the same next year. However, 85% say they feel secure about their jobs, which is about even with last year. Surprisingly, the recent credit crunch was not cited as a primary reason for spending less this year. For the fourth straight year, gift cards are expected to be the top gift purchase, with 69% of consumers surveyed planning to buy them, compared with 66% last year. In addition, holiday shoppers are planning to buy even more cards this year: an average of 5.5 cards, compared with the 4.6 cards they planned to buy last year. One in six consumers plan to buy 10 or more cards, compared with 11% last year. Consumers are also spending more in total on gift cards and more per card: $36.25 per card on average compared with $30.22 last year.

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Healthcare VISA Gift Card is Launched

Health insurance provider Highmark has launched the “Healthcare VISA Gift Card” for consumers and recipients to cover out of pocket expenses related to maintaining personal health and wellness. The “Healthcare VISA Gift Card” can be used for a variety of purchases, including co-pays for doctor visits, prescriptions, vision care, dental care, health club memberships and elective procedures. The use of the card is limited to health and wellness merchants where VISA debit cards are accepted. The card is available for purchase online at the Healthcare Gift Card website. Highmark serves 4.6 million people through the company’s health care benefits business.

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Chase Picks Up the Tab Promotion is Launched

Chase is launching the “Chase Picks Up the Tab” promotion that is expected to make an estimated 50,000 purchases free for Chase debit card users. That’s because Chase will pick up the cost for every 500th debit card purchase made without using a PIN up to $500 during November and December. Chase’s 10 million checking account customers need to enroll in the program and start making purchases with their Chase debit card without using a PIN. And if a winning purchase is less than $5, Chase will increase the payoff to an even $5. Within 24 hours of their purchase, winning consumers will receive notice of this holiday present from Chase. All eligible debit card purchases from November 1st through December 31st are automatically entered in the promotion.

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Heartland Payment Systems Promotes 3 Execs

Heartland Payment Systems announced a series of executive promotions for Robert Baldwin, Alan Sims and Marty Moretti. Baldwin has been promoted to president and CFO. He has been responsible for building the finance function as the company grew from a $15 million value to $1.1 billion in market capitalization. During that time, he oversaw Heartland’s initial public offering on the New York Stock Exchange in 2005 and held primary responsibility for the company’s internal controls, financial policies and procedures, and investor relations. Sims has been promoted to CTO. He was instrumental in the development and implementation of Exchange, Heartland’s proprietary front-end processing system. Marty Moretti has been promoted to chief service officer and will manage the company’s service center in Jeffersonville, IN. Moretti joined Heartland in 2002 from Welsch Financial Services most recently serving as executive director of servicing.

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eBay to Offer Gift Cards via Grocery Stores

eBay.com has introduced a gift card via nearly 10,000 grocery stores across the USA. The new card is available in $25 and $50 denominations and can be purchased at Kroger, Safeway, Vons, Dominick’s, Fred Meyer, and Ralphs. This is the first time eBay has offered a gift card offline. In order to redeem an “eBay Gift Card,” consumers can shop on eBay.com for items from sellers who accept PayPal. Once they win an item, buyers click “Pay Now” to proceed to checkout, then enter the 13-digit code from the back of the gift card. In addition to the new gift card, eBay also offers gift certificates that can be sent instantly via e-mail or printed, in denominations of $5 to $500.

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Comdata and Qualcomm Team for Gift Cards

Comdata Stored Value Solutions has announced a strategic alliance with Qualcomm to manage gift cards via mobile phones. Comdata’s 500 major retail clients and 600 million gift card users will be able to check and store their gift card balance information using mobile phones, rather than going to the retail store, going online or calling a voice response system. The service will offer convenience to cell phone consumers and give retailers the opportunity to communicate one-to-one messages with consumers who have opted-in to receive them and are inquiring about their cash balance on their gift cards. The retailer now has an opportunity to drive incremental traffic to its store by positioning a “call to action” message along with the gift card balance to the shopper who has opted in to receive such messages.

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MasterCard Q3 Profits Soars Nearly 63%

MasterCard posted record net income of more than $314 million for the third quarter compared to $193 million one-year ago, as net revenues climbed 20% to more than $1 billion for the quarter. In the prior quarter, MasterCard earned $252 million on revenues of $997 million. Gross dollar volume climbed 13% for 3Q/07 to $577 billion and worldwide purchase volume increased 14% to $430 billion. As of September 30th, the Company’s customers had issued 878 million MasterCard, an increase of 11% over the same period in 2006. General & Administrative Expenses rose 10% to $432.8 million. However, Advertising & Market Development Expenses rose about 26% to $268.3 million. Total operating expenses increased 16.3%, to $730 million, in the third quarter compared to the same period in 2006. For complete details on MasterCard’s third quarter performance, visit CardData ([www.carddata.com][1]).

MASTERCARD HISTORICAL ($ millions)
3Q/06 4Q/06 1Q/07 2Q/07 3Q/07
G&A: $392.1 $399.3 $398.5 $431.5 $432.8
A&M: $209.2 $352.9 $178.5 $268.3 $264.4
Net Income: $193.0 $ 40.9 $214.9 $252.3 $314.5
Note: G&A: General & Administrative Expenses;
A&M: Advertising & Market Development Expenses.
Source: CardData (www.carddata.com)

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

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DCS CardWizard is VISA PABP Validated

Dynamic Card Solutions’ CardWizard is the first instant issuance application in the financial marketplace to have validated compliance with VISA Payment Application Best Practices (PABP). Adherence to Visa’s PABP requires participating payment application vendors to conduct an extensive independent assessment by a Visa-approved independent security assessor. This audit looks at all areas that might pose security threats for issuers and customers and examines details such as how customers select a pin, how the application transfers information from the branch to the server, and how the software transmits data to the card personalization device. Dynamic Card Solutions is a developer of instant issuance and PIN selection solutions for banks, credit unions and retailers.

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Wright Express Q3 Profits Leap 40%

Fuel card specialist Wright Express posted third quarter revenues of $87.7 million, up 10% from 3Q/06. On a non-GAAP basis, the Company’s adjusted net income increased 40% to $22.4 million. Payment processing transactions increased 15% to 53.6 million and transaction processing decreased 35% to 9.8 million, primarily reflecting the conversion to payment processing of the Company’s ExxonMobil portfolio in December. Total fuel transactions processed increased 3% from the third quarter of 2006 to 63.4 million. Total MasterCard purchase volume grew 40% to $511 million from $366 million for the comparable period in 2006. For the fourth quarter the Company is projecting revenue in the range of $81 million to $86 million. For complete details on Wright Express’ current and past performance, visit CardData (www.carddata.com)

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Nearly Two-Thirds to Buy Gift Cards in 07

A new survey from PayPal has found that more shoppers are playing it safe this holiday season by buying gift cards, rather than purchasing tailored gifts for their loved ones. About 64% of shoppers said they plan to give gift cards. According to the survey, consumers plan to spend roughly $412 online during the holiday gift giving season, and conduct an average of 40% of their holiday shopping online, compared to 28.9% in 2006.

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