White Paper Issued on CU Card Reward Programs

TNB Card Services has released a new white paper “Winning with Rewards that provides information to help credit unions enter the rewards program game. The 10-page, in-depth guide is available in an electronic version on the TNB Card Services website. Key sections of the white paper address current trends in rewards programs, providing credit unions a framework for understanding how their programs should be implemented in order to achieve a level of differentiation and become truly important to their member cardholders and addresses the changing nature of rewards – how consumers have become much more selective today – and most importantly, provides a best practices approach to implementation. The white paper also examines the benefits and costs of a rewards program, noting that across the board, rewards programs provide a significant lift in terms of card and other product usage as well as in average spending levels per transaction.

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VENDTEK U.S. TRANSACTIONS

VendTek Systems Inc. now allows U.S. transactions to be conducted
on its network following its agreement with The Brennes-Jones Group
payment processor. VendTek provides software for prepaid service
distribution and licenses automated transaction system software to improve
the efficiency of product delivery. The Brennes-Jones Group Inc. is an
Independent Sales Organization that provides payment processing
throughout the United States and Puerto Rico.

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Ball Bearings Firms Turns to Card Acceptance

NY-based Pacamor Kubar Bearings has expanded its service offering to include major credit cards in its list of acceptable payment methods. Pacamor Kubar Bearings manufactures high performance miniature and instrument ball bearings for the aerospace, defense, medical, dental, industrial, and commercial industries. Customers include major aerospace manufacturers and key resellers as well as various national laboratories and prestigious government organizations such as the National Aeronautics and Space Administration (NASA). PKB provides these industries with precision ball bearings, including those with unique designs and materials used at sub-cryogenic temperatures.

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MASTERCARD & SEPA

MasterCard has designed a SEPA Development Program for banks and retailers
currently implementing the Europe-wide payment program. For these
establishments,
the MasterCard Development Program will leverage the benefits of local
programs
and provide new solutions. MasterCard Europe has identified 149 card
features in
separate countries to provide the SEPA solution cost effectively, on a
microeconomic
level. These “best in class” categories include, for example, the
easiest ‘PIN change at
ATM’, the most convenient ‘mobile phone top-up’, and the most secure mail
order/telephone order-solutions. In doing so, however, MasterCard
maintains the
overall SEPA features, including the electronic purse. “E-purse”
Migration through
MasterCard PayPass provides globally inter-operative payment solutions,
regardless
of the card currency. Additionally, MasterCard Europe’s “combo card” has
been
introduced to 5 banks in Finland. The “combo card” will serve as a
multi-function
payment card to combine debit and credit accounts, determined at the
time of
purchase by the cardholder. MasterCard Europe works with 51 European
countries
for the incorporation of (SEPA) and is a division of Mastercard.
MasterCard processes
over 16 billion transactions annually and serves consumers and
businesses in more than
210 countries and territories.

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Texas’ Frost Bank Renews its PULSE Contract

TX-based Frost Bank has signed a new long-term participation agreement with PULSE EFT Association. As part of the agreement, Frost will utilize PULSE exclusively for PIN debit transactions at the point of sale and will establish an in-house processing connection to the network, enabling the bank to obtain signature debit processing services from PULSE and utilize the network as its exclusive gateway to other networks. Frost is the banking subsidiary of Cullen/Frost Bankers, Inc., a financial holding company located in San Antonio, Texas, with assets of $12.9 billion at June 30, 2007. PULSE is one of the nation’s leading ATM/debit networks.

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Most Cardholders Wary of Issuers’ Web Sites

A new survey has found that 32% of credit card users have never visited the Web site associated with their most frequently used credit card. However, consumers that do visit the issuer’s Web site typically do so on a regular basis with 53% of visitors making at least two visits to the site each month. NY-based Auriemma Consulting Group says it found that cardholders that do not visit their credit card company’s Web site do so because of a concern for personal information safety. It also found that seven out of 10 consumers think that redeeming their credit card rewards on their card company’s Web site is difficult. Auriemma suggests that an opportunity lies in encouraging frequent visitors to become more engaged with the site’s offerings, particularly in the area of rewards redemption, for companies that can offer consumers a more positive and valued experience.

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S.M.A.R.T. Joins the Smart Card Alliance

S.M.A.R.T. Association has announced that it has become a “Healthcare Council Member” of the Smart Card Alliance. SMART is taking a key leadership role in educating the healthcare industry to the values and benefits of Smart card technology. SMART is working closely with the Alliance to develop white papers, technology strategies, and market positioning for Smart cards within the U.S. healthcare market. S.M.A.R.T. Association has developed and enhanced permission-based membership marketing systems and operations for healthcare providers for over 16 years.

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JUNE DEBT

Mastercard Europe has issued the “World” MasterCard with Capital One
targeting
the nearly 7 million affluent consumers in the UK. In targeting this
segment, the
card offers travel features such as comprehensive travel insurance, an
assistance
program and a reward points program. The rewards program will offer
cardholders 4% cash-back for the first 4 months, then 1% rewards points
cash-back thereafter. This development is part of an effort to provide
cardholders
with value for money and significant rewards. Mastercard Europe offers
its products
in 51 European countries on the SEPA platform. Mastercard Worldwide
processes over 16 billion transactions each year serving consumers and
businesses
in more than 210 countries and territories. The UK Operations Center for
Capital One
Bank employs 2,000 Associates, is a top-ten credit card issuer in the
USA and the
UK and has more than four million UK customers. Capital One subsidiaries
has a
total of approximately 50 million managed accounts and $144 billion in
managed loans.

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Charge-Offs Edge Up for the 3rd Month

Charge-offs headed north, hitting 4.65% in August matching the record for this year set in May. This is the third consecutive month that credit card charge-offs have increased. There has been concerns that the mortgage meltdown may have spilled over into the general consumer finance market. During the second quarter Citi reported that charge-offs for bankcard and private label cards declined to 4.55% compared to 4.63% in the prior quarter and 4.11% one-year ago. BofA posted second quarter credit card charge-offs of 5.20%, compared to 4.81% in the prior quarter and 3.55% one year ago. Capital One reported that the net charge-off rate for U.S. credit cards was 3.73% for the second quarter, compared to 3.99% for the first quarter and 3.29% one-year ago. (CF Library 7/19/07; 7/20/07)

CHARGE-OFFS
Jan 07: 4.33%
Feb 07: 4.39%
Mar 07: 4.44%
Apr 07: 4.60%
May 07: 4.65%
Jun 07: 4.60%
Jul 07: 4.62%
Aug 07: 4.65%
Source: CardData (www.carddata.com)

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LOVEFILM & PREPAY TECH CARD

LOVEFiLM & PrePay Technologies have signed agreements for the
implementation of “LOVEFiLM Gift Cards”. The cards will be available in
GBP 15 & GBP 25 increments and can be used on the company’s website
to purchase any of the 65,000 movie titles in stock. The cards are
available
for purchase at Gift Card malls/centers in Sainsbury’s, Gift Card
centers in
ASDA and are MasterCard certified, EMV Chip/PIN Compliant and FSA
regulated.

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TSYS Europe Names a New Sales Director

TSYS Europe has named Arnold Sneijers, formerly with SiNSYS, the first pan-European interbanking company serving the card payments industry as Netherlands-based European Sales Director. Before his tenure at SiNSYS, Sneijers was general manager of e-commerce services for Interpay Nederland B.V. During this time he was responsible for mobile and internet payments operations, strategy, and several large investment projects. Sneijers earned a bachelor’s degree in information technology engineering and a master’s degree in business administration, with a concentration in international management. TSYS provides outsourced payment services.

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LUKAS & POSTILION

LUKAS Bank of Poland will be utilizing the Postilion payments
processing engine for consumer card issuing and processing to support
its overall growth and expand in-house operations. LUKAS Bank
currently has 1.3 million credit cards issued in Poland and, with this
development, will offer a range of products and services to partners and
customers while reducing its operational costs. The agreements with
Postilion
also provides flexibility and allots the bank greater control over card
products
and services. Postilion serves customers in over 50 countries, is a
division
of the S1 Corporation and provider of solutions for payment processing. S1
employs over 1,400 people and has over 3,000 customers that use their
software solutions.

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