MasterCard & US Airways Launch Fall Promos

MasterCard has teamed with US Airways to offer two fall promotions. US Airways customers who book roundtrip airfare to select cities throughout Europe and pay with a MasterCard card can save up to 20% and earn up to 20,000 “Dividend miles.” Under the promotion customers can receive a 20% discount on business class or “Envoy Class” fares for travel between Sept 2nd and Nov 14th. Customers who purchase a roundtrip “Economy” ticket will receive a 10% discount. MasterCard and US Airways are also offering a 5% discount on roundtrip airfare and 5,000 bonus miles for travel to beaches in Mexico and the Caribbean. The US Airways beach discount is available to customers who book their roundtrip airfare by Sept 30th and travel between Sept 1st and Nov 14th.

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PAYPASS PILOT

Bank Danamon Syariah and Baznas Dompet Dhuafa have signed agreements
for the generation of zakat, an obligatory tax required of Muslims, and
funds
for charity from the syariah credit card, “Dirham Card”. The card requires
its holders to maintain a goodwill investment and manages a charity fund,
“Qardhul Hasan”, supported by card fees. Other goals are to educate and
encourage customers to save through the goodwill investment which is 10%
of their
card limit. ‘Akad’, consists of 3 contracts; Ijarah, Kafalah and Qardh. The
Ijarah scheme requires that the card issuer acts as the provider of payment
and service system for the card holder by charging a membership fee.
Kafalah
transaction scheme requires that the issuer acts as the guarantor
against the
merchants and the Qardh scheme requires the issuer to act as a lender
through
the cash withdrawals from the bank and is, therefore, obliged to return
the same
amount withdrawn.

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PSCU Selects GIS Platform for B2B

PSCU Financial Services has acquired Gentran Integration Suite (GIS) to become its business-to-business platform. The solution gives PSCU the ability to automatically handle a variety of multiple management credit and bill payment services in a variety of file formats and protocols on one centralized platform. GIS will also enable PSCU to optimize its data-transfer processes and improve service to the credit union community. GIS enables companies to extend processes to their customers, partners and suppliers while maximizing existing and future IT systems and technologies. PSCU Financial Services was formed by credit unions to provide products and services to credit unions.

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Monthly Payment Rates Head Lower in July

Monthly payment rates continued to spiral downward during July, falling to its lowest level in two years. The MPR, or the amount that cardholders pay on their credit card debt each month, peaked in October of last year, reaching almost 21%. The higher payment rates were driven by new minimum payment standards. According to CardData, the MPR declined to 18.30% in July, compared to 18.40% in the prior month and 20.46% one-year ago. While the dip historically has been seasonal, it appears that many borrowers are increasingly pressured by current economic factors. The combination of higher interest rates and a cooling off of the real estate market diminished the attractiveness of “cash out” refinancing activity in which many borrowers reduced their more expensive credit card debt by drawing on the equity in their home — either by refinancing their mortgages or by accessing their home equity lines of credit.

MONTHLY PAYMENT RATES
Jul 06: 20.46%
Aug 06: 20.20%
Sep 06: 20.02%
Oct 06: 20.83%
Nov 06: 20.01%
Dec 06: 19.70%
Jan 07: 19.88%
Feb 07: 18.79%
Mar 07: 18.21%
Apr 07: 18.04%
May 07: 19.01%
Jun 07: 18.40%
Jul 07: 18.30%
Source: CardData (www.carddata.com)

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Most Americans Are Worried About Finances

The sub-prime lending implosion and the volatility on Wall Street has most Americans worried. A new poll from Harris Interactive found that 56% of Americans say they are worried about their financial situation. Just under half of U.S. adults say the economy is declining. One-third of Americans say, compared to a year ago, their own personal finances have gotten worse. One-third of Americans say that paying down their own personal debt is a problem while 44% say it is not a problem. Over the last year, 33% say that paying down this personal debt has become harder while 28% say it is neither easier nor harder and 18% say it has become easier. Almost half of “Gen Xers” (those aged 31-42) say paying down debt has become a problem while 41% of this generation say it has become harder in the past year to pay down their personal debt. Just one-quarter of “Echo Boomers” (those aged 18-30) say paying down personal debt is a problem for them. Harris noted that “Echo Boomers” are also the ones with the least amount of personal debt as 39% say they have none.

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ARM Index Picks Up Strong Momentum in Q2

An indicator of economic conditions affecting the accounts receivable management industry rose 3.7% during the second quarter. The “Kaulkin Ginsberg Index” also showed that the market cap of ARM companies grew 14% in 2Q/07. However, the “KGI” is down 5.0% from 1472.5 at the same time a year ago. The market cap data for ARM stocks in the second quarter reflect higher revenue for four of the five ARM companies assessed by the “Index” over results from the same quarter in the prior year. Second quarter cash collections were also up (as much as 20 percent) for all five companies over the same period in 2006, and are expected to remain strong following several large purchases of distressed debt portfolios by these firms earlier in 2007.

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HOME CAPITAL & PSIGATE

Home Capital Group has announced its acquisition of Payment Services
Interactive Gateway Corp. (“PSiGate”). The transaction is worth 18.4
million
and is contingent upon acceptance of holders of not less than 66 2/3% of
PSiGate’s Shares and receipt of all regulatory approvals and other
customary
conditions. Home Capital Group Inc. is a subsidiary of Home Trust Company
and offers deposit, mortgage lending, retail credit and credit card issuing
services. PSiGate provides e-commerce solutions and has 10,574,469
common shares outstanding and 914,000 options to purchase common
shares.

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POST OFFICE & BRITISH GAS

A recently signed agreement between Post Office Ltd and British Gas,
running until the end of 2010, allows the 6 million British Gas customers
to pay their gas and electric bills at the 14,000 Post Office branches, of
which 99% of the population lives within a 3 mile radius. Of the Post
Office branches, 7,500 are equipped with a “Post Office paystation”
terminal which allow customers to add credit to electricity key meters.
Over 24 million people visit the Post Office each week with 270 million
bill payment transactions in 2006. The payment service is free and accepts cash, check and debit card.

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Chase Paymentech Ranked #1 by E-Tailers

Dallas-based Chase Paymentech has been ranked as the number one payments provider by the 2007 edition of “Internet Retailer’s Guide to E-Commerce Technology. The Top 500 Guide lists America’s largest retail web sites ranked by annual sales. The 500 largest U.S. eRetailers generated sales of $83.6 billion in 2006, representing 61 percent of the nation’s $136.2 billion retail web sales. The Top 500 grew their online sales by 21 percent last year, and three new sites raised the total number of companies that recorded online retail sales of $1 billion or more to 17. Chase Paymentech provides payment services to 80 percent of this $1 billion list. Chase Paymentech Solutions is a global payments firm and the world’s largest merchant acquirer, transacting payments in 140 currencies.

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PAYZONE & BLOCKBUSTER

payzone cash acceptance network has signed agreements with
Blockbuster entertainment stipulating approval of marketing
payzone’s “pink brand” at 700 of the company’s outlets. This will open
the market of “pink brand’s” mobile phone top-up service & gifts, valued at
GBP4.2billion in 2006, to the 9.5 million Blockbuster customer households.
In addition, payzone will provide customers with “gift services
transactions
card”, re-loadable gift cards for use at various retailers. Experts
project this
agreement to generate revenue of GBP 40 million from MTU and GBP
18 million from gift cards in the first year. These 700 Blockbuster outlets
are among the 6500 payzone has added in 2007, which are among the
29,000 total locations.

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Card Accounting Impacts Nordstrom Earnings

Seattle-based Nordstrom reported that the costs associated with a new accounting treatment for its co-branded VISA receivables and securitized debt, which is secured by both the co-branded VISA and private label receivables, impacted its latest quarterly earnings . Nordstrom reported net earnings of $180.4 million, or $0.71 per diluted share,for the second quarter ended August 4, 2007. For the same period last year, net earnings and earnings per diluted share were $178.8 million and $0.67, respectively. Earnings per diluted share in the second quarter increased 6% compared to the same quarter last year. Total sales in the second quarter were $2.39 billion, an increase of 5.2% compared to sales of $2.27 billion during the same period in fiscal 2006. Second quarter same-store sales increased 5.9% Approximately $14 million of the bad debt reserve is non-comparable due to the new accounting treatment for co-branded Visa receivables. The remaining $8 million of the incremental provision resulted from growth in both the Visa and proprietary card receivables ahead of plan, and from changes to assumed repayment rates versus last year. In other income, the company recorded a gain on sale of approximately $5.0 million for the disposal of an asset, which had a positive impact on earnings per diluted share of $0.01. Nordstrom repurchased approximately 11.4 million shares of its common stock during the second quarter for $590 million. This reduction in weighted-average shares outstanding had a $0.01 positive impact on earnings per diluted share for the quarter.

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