Nearly All Teens Have a Gift Card Experience

A new survey shows that 98% of all teens between the ages of 14 and 19 have either bought or received a gift card. The national “Teen Gift Card Survey,” commissioned by Comdata Stored Value Solutions, also found that teens purchased almost double the number of gift cards they did in 2006 (7.6 vs. 4.3 cards – a 77% increase). Further, the average loaded dollar amount on cards given went from $28 to $33. Teens also reported that 46% of the presents they give are gift cards – a 12% increase from 2006. Males are still more likely to give gift cards than females. Also, gift card malls, a collection of various retailers’ gift cards typically found in convenience or grocery stores, continue to gain acceptance. Forty-five percent (up from 29% in 2006) of teens say they have purchased a gift card at a gift card mall and 21% (up from 11% in 2006) say they prefer to buy them there.

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Merchant e-Solutions Now Offers PIN Debit

CA-based Merchant e-Solutions has enhanced its proprietary payment system to support PIN-based debit card transactions. In addition to processing PIN-based debit card transactions, merchants who use MeS payment solutions will benefit from support for e-commerce, mail order, business-to-business, and card present payment processing needs while enabling transactions to qualify for the lowest possible card association fees; support for recurring and installment payments without the need to store card numbers; the use of multiple business names through a single merchant account and the automatic reversal of unsettled transactions; a streamlined Application Program Interface, payment services engineered to eliminate the need for merchants to store credit card information and 24/7 support by U.S. based customer service representatives.Merchant e-Solutions is an Internet-based payments processing company.

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ABS Monthly Payment Rates Rebound in June

Monthly payment rates, the amount that cardholders pay on their credit card debt, rose for the second month in June. Among credit card-backed securities, the MPR hit 20.17% in June after dipping to 19.58% in May. The MPR has remained fairly stable in the first and second quarters and remains consistent with historical levels. According to FitchRatings, the gross yield increased to 18.94% in June from 18.23% in May and was up 97 basis points above year-ago levels. Fitch says the volatility in gross yield in the first quarter mimicked the volatility in the first quarter of 2006 and remained slightly elevated compared with the second quarter of 2006.

ABS METRICS
YIELD MPR
Jun 06: 17.97% 21.00%
Jul 06: 17.63% 20.71%
Aug 06: 17.86% 20.24%
Sep 06: 17.96% 21.06%
Oct 06: 17.58% 19.30%
Nov 06: 17.96% 19.82%
Dec 06: 17.78% 19.32%
Jan 07: 18.28% 19.27%
Feb 07: 17.70% 20.80%
Mar 07: 18.21% 18.76%
Apr 07: 19.23% 21.09%
May 07: 18.23% 19.58%
Jun 07: 18.94% 20.17%
Source: FitchRatings

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TJX Takes $118MM Charge for Card Breach

The TJX Companies reported that it took an after-tax cash charge of approximately $118 million for its recent computer intrusion events. The charge includes $11 million (after tax), for costs incurred during the quarter, as well as a reserve of $107 million (after tax), for the Company’s exposure to potential losses. This reserve reflects the Company’s estimation of probable losses, in accordance with generally accepted accounting principles, based on the information available to the Company as of August 14th, and includes an estimation of total, potential cash liabilities from pending litigation, proceedings, investigations and other claims, as well as legal and other costs and expenses, arising from the intrusions. In addition, TJX expects to incur future non-cash charges of approximately $21 million (after tax), that are not included in this reserve and could be recorded in fiscal year 2009. TJX Companies reported earlier this year that the 2006 security breach opened millions of cardholder personal data to outsiders may also have been intruded upon in July 2005 and on various subsequent dates in 2005. (CF Library 2/21/07)

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ZKA AND G&D

Zentraler Kreditausschuss (ZKA) has awarded Giesecke & Devrient
(G&D) with certification for “SECCOS 6.1” smartcards, allowing banks
and financial institution to launch pilot projects with the new solution.
“SECCOS 6.1” is SEPA compliant and, therefore, can be used in all
SEPA compliant countries. The solution also supports the implementation
of MasterCard’s MAESTRO and VISA’s V-PAY credit card applications,
GeldKarte and an optional digital signature function. There are currently
90 million debit cards and 23 million credit cards in circulation in
Germany.
G&D develops financial solutions, employs nearly 8,300 people and
generated revenue of almost EUR 1.3 billion in 2006.

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Verizon Wireless Speeds Up BofA M-Banking

Bank of America and Verizon Wireless announced the latest redesign of Verizon Wireless’ “Mobile Web 2.0” service to enable customers to have quicker access. Verizon Wireless customers can find BofA in the new “Money” category under “More in Mobile Web 2.0.” BofA on “Mobile Web 2.0” enables customers to check account balances, view transactions, pay bills, and transfer money between accounts and to other BofA customers. “Mobile Web 2.0” is available for a $5 monthly access fee, plus airtime, if purchased as a standalone service from the phone. NJ-based Verizon Wireless serves 62.1 million customers nationwide.

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OCBC 2Q/07

Oversea-Chinese Banking Corporation(OCBC) has reported a 2Q07
net profit of S$532 million and a core net profit of S$518 million
thanks to a 28% increase in interest income for the period. The 2Q07
had a net profit 2% higher than that of 1Q07 and, for the entire 1H07, net
profit rose 63% to S$1,028 million. Net interest income for the half grew
28% to and non-interest income rose 47%. Non-interest income
accounted for 48.4% of the Group’s total income for the half, up from
44.9% in 1H06. OCBC Bank has assets of S$164 billion with a
network of over 390 branches in 15 countries.

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AmEx & AA Ink a Deal for Admirals Club Access

American Express and American Airlines have partnered to permit consumer, small business and corporate “Platinum Card” and “Centurion Card” members to have access to 44 Admirals Club lounges worldwide. The “Airport Club Access Program” allows cardholders access to Continental Airlines Presidents Club, Delta Crown Room Club, and Northwest Airlines WorldClubs. The AA relationship expands the AmEx airport club access program for “Platinum” and “Centurion” cards, which now provides cardholders with complimentary access to more than 125 participating partner clubs when traveling on the partner airline. American Airlines, the world’s largest airline has more than 4,000 daily flights.

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ICMA EXPO

The International Card Manufacturers Association’s (ICMA) EXPO,
to be held in October of 2007, will conduct seminars addressing ID
technologies, contactless technology, personalization trends and will
focus on issues affecting the card manufacturing industry. Also
featured at the event will be the association’s annual “Élan Awards for
Card Manufacturing Excellence”, to recognize multiple categories for
outstanding card design, and the “Spiritus Award,” to one company
for the implementation of a noteworthy, community-based program
for the betterment of society. Experts predict a record high-turnout for
this year. The ICMA has over 200 members globally and acts as a
clearinghouse for production, technology, application, security and
environmental issues of plastic cards.

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PAY LINX GROWTH ADJUSTMENT

Pay Linx has moved its production platform and technical capabilities
reflecting business growth. This development will upgrade production and
delivery capacity to serve larger-volume clients. The change also includes
a scaleable, fault tolerant production platform for customers. Pay Linx
provides clients with contemporary payment processing that integrates
with financial systems and is 25% owned by Royal Bank of Canada.

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Chordiant Software & First Data Intl Team

Chordiant Software announced that it is working with First Data International to develop a card servicing contact center solution as a service for First Data’s global issuing customers. The new value added service will deliver an enhanced user and customer experience to First Data’s strategic “VisionPLUS” processing solution by facilitating natural-style conversation, flexible business process automation, an intelligent full view of the customer, and a highly intuitive user interface. VisionPLUS is used by financial services companies around the world, and today processes approximately 380 million card and loan accounts. The offering will utilize Chordiant’s “Enterprise Platform”, “Decision Management Suite” and “Contact Center Advisor”. Chordiant Customer Experience solutions blend insight with predictive desktop decisioning to understand the customer’s behavior.

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ADCB FLASH MASTERCARD

Abu Dhabi Commercial Bank has launched a contactless MasterCard. The new “ADCB Flash MasterCard” offers “PayPass” technology. The new card allows cardholders to simply “Tap & Go” for purchases under AED100.
Customers will discover queues are shorter, making fast food
even faster at Burger King, shopping at Choithram will be quicker, and
coffee breaks can be maximized at Cinnabon. Several other shopping and
entertainment locations across the UAE also accept the “ADCB Flash
MasterCard Credit Card” with “PayPass.” The new card also has the extra security of being a “MasterCard OneSmart” card, complete with chip technology that makes it difficult to counterfeit.

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