Card Mail Slows; Response Rates to Top 0.6%

A new report projects that U.S. households will receive about 5.3 billion credit card solicitations during 2007. The full year projection shows a slight decrease from the 5.76 billion offers received last year, which was also down from the all time high of 6.05 billion card offers received in 2005. According to Synovate’s “Mail Monitor,” response rates will edge up slightly to 0.6% from 0.5%, representing some 32 million applications for new credit cards. The 2007 dip is a continuation from 2006, and mainly due to the Bank of America/MBNA merger and a decrease in direct mail by Chase and Capital One. Synovate says that despite the decrease, 2007 will likely be the third heaviest year on record for credit card direct mail since Synovate first began tracking solicitations in 1988. Synovate says other acquisition channels, particularly the Internet, will play an increasingly important role but direct mail, with more than 50% of card applications, will likely remain dominant for the foreseeable future.

CARD MAIL HISTORICAL
YEAR OFFERS RESPONSE
1998: 3.44b 1.2%
1999: 2.54b 1.0%
2000: 3.54b 0.6%
2001: 5.01b 0.6%
2002: 4.89b 0.5%
2003: 4.29b 0.6%
2004: 5.23b 0.4%
2005: 6.05b 0.3%
2006: 5.76b 0.5%
2007: 5.30b 0.6%
Source: Synovate’s Mail Monitor

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CONSUMERS & SAVINGS

In conjunction with the introduction of a new interest rate on balances
in its
“Direct Savings Account” of 4.25%, an HSBC Canadian survey was recently
conducted to examine the spending and savings habits of consumers. The
survey
showed that across all regional and age demographics, Canadians tended
to be
money savers. Moreover, the research showed that 70% of Canadians have
either
investments or savings, 33.3% are saving on a schedule of pre-authorized
deductions, 55% save up rather than using credit and 12% will pay their
credit cards
off tomorrow. The survey also showed that 91% feel a high savings rate
is important,
less than 50% know what their savings account return rate is, and 48%
check their
rates of return each month. Comparing different Canadian regions, 88% of
Albertans
are confident in managing their money and 32% twice as likely as others
to put away
a set amount of money on a monthly basis, 29% of those in the Prairies
are more
likely to be at their credit maximum and 78% British Columbians say they
are no
where near their credit card maximum. HSBC Bank Canada has more than 170
offices while HSBC has nearly 10,000 offices in 83 countries and
territories with
assets of US$2,150 billion.

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JET AIRWAYS & CYBERSOURCE

Jet Airways has implemented CyberSources’ automated fraud assessment
solution, “Decision Manager,” to reduce the risk of fraud. Jet Airways
selected
the fraud management solution because of its reliability, scalability,
and flexibility
to the Indian market. “Decision Manager” evaluates transactions in
real-time
based on specifications determined by Jet Airways to determine whether the
online ticket purchase should be accepted, rejected or reviewed. This
evaluation,
or “decision”, is made automatically within the matter of a few seconds.
Demonstrating the flexibilty of the solution, the client, in this case
being Jet
Airways, can update specifications and terms for the determination of
fraud at
anytime. Jet Airways operates a fleet of 66 aircraft and operates over
340 daily
flights to 53 destinations around the world having flown over 75 million
passengers
since it first began operating in 1993.

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DEALOGIC EXPANSION

In response to Dealogic’s recent growth and subsequent increase in
customers service demand, the transaction management company will
be expanding its presence around the world. The technology firm is
expanding its offices in New York, Hong Kong, Tokyo and Sydney
that will provide the additional, needed client support and software to
its clients. New York offices are scheduled to opened in 2008, Hong
Kong offices are slated to be open in November of 2007 and the lease
for the expanded Tokyo offices are to commence on Jan 15, 2008.

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BANAMEX & SORIANA

Banamex has announced that it will be providing its prepaid and savings card
offering, “Mi Ahorro Banamex” (My Banamex Saving), at Soriana retail
stores. This strategic alliance was developed to provide customers with
a more
diverse offering of financial services. The “Mi Ahorro Banamex” prepaid
card
can be opened with a minimum $50.00 pesos deposit and a maximum balance
of $5,700.00 pesos while the savings card has no balance limit and provides
high interest. Grupo Financiero Banamex is a member of Citigroup, Inc. and
operates over 1,450 branch offices and 5,800 ATMs in Mexico. Citi has over
200 million customer accounts and operates in over 100 countries.

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EXPERIAN & SERASA

Experian has announce its 65% acquisition in Serasa Brazilian credit
bureau from a consortium of banks for R$2.32 billion. The Experian
share is to increase to 70% over the next 6 months and is slated for
completion in June of 2008. With this development, Experian will control
60% of total credit bureau reporting around the world and allow the
company to capitalize on Brazil’s rapid growth. Compounding these
highlights, Serasa brings with it the largest consumer and commercial
credit bureau in the country with a 60% market share allowing Experian
to build on the platform to deliver products from its portfolio.
Furthermore,
Serasa has demonstrated its growth at over 20% per annum for each of the
past two years with EBIT margins of over 20%. Experian does not expect to
see any financial gains with the acquisition for the first year but does
expect
a cash benefit from tax relief on the goodwill generated by this
acquisition
of R$70m-R$100m per annum for the next seven years. Finally, to remain
The President of Serasa will be Elcio Anibal de Lucca after the acquisition
is complete.

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Closed Loop Prepaid Solutions Rises 14%

A new report shows that closed loop prepaid solutions increased 13.9% last year to $171.18 billion. The study also found that closed loop gift cards used for consumer incentives grew by 271% while campuses across the nation increased the load placed on campus cards by almost 8%. Boston-based Mercator Advisory Group says the in-store gift card market segment grew by $6.98 billion while the distributed gift card market segment, driven by the rise in prepaid malls, grew a total of more than 87%. Additionally, the use of closed loop prepaid products to support employee benefits jumped by 9%. Mercator also noted that the digital content category had a great 2006, growing overall by $1.49 billion. This represented a growth of 37% for digital media, 35% for net phones, and 45% for games and ring tones.

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DATACARD INVENTORS

Datacard Group has announced that its 47 employees being named
as inventors will be recognized with an awards ceremony at the company’s
facility in Orleans, France. The employees are being recognized on 12
different issued patents and 39 different patent applications addressing the
improvement of card printers, central issuance systems and passport
issuance
systems and supplies. Also included in this list of inventions is the
Datacard
Artista VHD Retransfer Color Printing Module. Datacard provides secure
ID, card personalization solutions, systems for high-volume card issuance,
card delivery, secure ID issuance, passport production, service and supplies
in more than 120 countries.

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VISA Survey Reveals U.S. Halloween Spending

VISA has released a survey showing that 73% of Americans celebrate “Halloween” and that the average consumer will spend $40 on candy and decorations. Parents with children under 18 will spend $54 on candy and decorations while those without children under 18 will spend $32. Of mention, younger people ($44) say they spend more than those 55 and over ($31). Those who live in rural areas ($49) spend $10 more on average than people living in urban areas ($39) and $13 more than suburbanites ($36).

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RESOLUTION FOUNDATION

In response to a poll commissioned from Yougov, The Resolution Foundation
is intent on improving standards and provide reassurance for consumers
about
the transparency of comparison sites. The Yougov poll of 2,010 adults
showed that 45% have used sites such as these to make financial decisions
since July of 2006. Although many of these sites were found to be user
friendly
by Opinion Leader, many were also found to be misrepresenting promotional
features as best value products to consumers. These sites also failed to
explain
technical terms and jargon, often requested excessive personal
information of
the consumer and, on occasion, provided irrelevant information. The
Resolution Foundation is moving that these sites provide transparency in
helping consumers make informed financial decisions, promote a healthy
comparison site market without the need for new regulation and support
Government policies to improve â˜financial capability’.

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Merchants Want a Choice in Storing Card Data

The “Real Security Summit,” sponsored by Shift4 Corporation, has revealed a consensus that the future of credit card payments depends on systems that remove usable card data stored anywhere at the merchant level. Citing concern over data breaches, the National Retail Federation has sent a letter to Payment Card Industry Security Standards Council, requesting changes in how the credit card industry requires merchants to store credit card data. Credit card companies typically require retailers to store credit card numbers anywhere from one year to 18 months in order to satisfy card company retrieval requests. According to NRF, retailers should have a choice as to whether or not they want to store credit card numbers at all. The NRF says the bottom line is that it makes more sense for credit card companies to protect their data from thieves by keeping it in a relatively few secure locations than to expect millions of merchants scattered across the nation to lock up their data for them.

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WESTERN UNION & HERSING

Western Union (WU) will be acquiring 49% of the Western Union Global
Network, its Singapore agent and Hersing Corporation subsidiary.
This development is part of the WU strategy to strengthen its global agent
network and increase its equity stakes. With this, the company’s current
investment will be upgraded to ordinary shares, will now earn a pro rate
share
of profits from WUGN, will be given voting rights and is allowed to explore
additional agent relationships throughout the country. Western Union and
Hersing partnered in 2001 to provide WUGN with over 60 locations
throughout Singapore. Globally, Western Union network consists of over
312,000 Agent locations in over 200 countries.

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