FRB Begins its 2007 Consumer Finance Study

The Federal Reserve Board has begun a statistical study of household finances called “The Survey of Consumer Finances” to provide insight into the economic conditions of American families. The survey, undertaken every three years since 1983, will provide data that offers a representative picture of what Americans own–from houses and cars to stocks and bonds–how and how much they borrow and how they bank. Past study results have been important in policy discussions regarding pension and social security reform, tax policy, deposit insurance reform, consumer debt and a broad range of other issues. Participants in the study are chosen at random from seventy-nine areas, including metropolitan areas and rural counties across the United States, using a scientific sampling procedure. Summary results for the 2007 study will be published in early 2009 after all data from the survey have been assessed and analyzed. A letter from FRB Chairman Bernanke was mailed to approximately 10,000 households urging their participation in the study.

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GE Money Renews The Anderson Credit Card

Ohio-based The Andersons retail stores and GE Money have signed an agreement to extend its 10 year relationship with The Andersons Credit Card consumer financing program. The Andersons Credit Card offers consumers an option to earn 2 percent reward certificates on every purchase, 90-day, 6-month and 12-month deferred payment and deferred interest on specified levels of purchase, no annual fee, and a 25-day grace period on all new purchases. A Contractors Card also is available. The Andersons has six large retail stores that offer extensive traditional home center merchandise along with a broad array of products including lawn and garden, house wares and work wear. The stores also feature a unique offering of high-quality fresh foods including produce, deli, bakery, specialty gourmet foods, frozen and fresh meats and one of the largest selections of fine wines in the Midwest. Total revenues in 2006 were $1.5 billion. GE Money, a unit of General Electric Company, is a provider of credit services to consumers, retailers and auto dealers in more than 54 countries around the world with more than $190 billion in assets.

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PAI Acquires NetBank Payment Systems Assets

KY-based Payment Alliance International announced that it has acquired the principal operating assets of NetBank Payment Systems and will add over 8,500 ATMs to PAI’s base. The company will maintain the 20,000 sq ft facility in Jackson, Mississippi and expects to retain NPS’ 60 employees. PAI now has 315 employees and serves over 40,000 retailers and community banks across the country. The Tremont Capital Group of Boston, MA and Inverness Management of New York City, NY served as transaction advisors to PAI. Payment Alliance International offers credit card, check, ATM network management, cash management and business information services.

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Consumer Credit Card Applications Fall

The number of credit card applications has fallen out of fear of interest
rate hikes and are being replaced with personal loans and store financing
according to Veda Advantage credit research. Applications fell 7.3% in
1Q/07 compared with the same quarter in 06, down 70,498 applications
to 889,396. Correspondingly, personal loan applications rose 7.7% to
745,753 1Q/07 compared with 1Q06. Due to cost-effectiveness,
consumers feel that personal loans are better suited to finance their
purchases, according to experts.

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Free Discover Network Payroll Cards Launched

FL-based nFinanSe has launched a suite of “Discover Network Payroll Cards” that carry no fees to the employer. The new payroll cards are instantly issued and use the existing direct deposit program to load payroll onto the card via ACH, Internet or batch loads. An employee photo on the payroll card is also available. In February, nFinanSe first launched its line of instant issue “nFinanSe Discover Network Reloadable General Spend Cards” which will be sold at retail locations. Features include instantly issued Discover Network cards for immediate use, a $5.95 suggested retail price, $2.95 monthly fee, free first load, no hidden transaction fees or gimmicks and reloadable at 80,000 nFinanSe Network locations. nFinanSe owns and operates the “nFinanSe Network” as a standardized, national network of stored value and prepaid card cash load stations nationwide. (CF Library 2/8/07)

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OFT Greenlights the Voca/Link Merger

Voca and LINK were given approval by the Office of Fair Trading(OFT) to
merge forming the payment processor, “VocaLINK”, that will compete
in Europe after SEPA is launched. “VocaLINK” will provide ATM and
automated payment services across Europe for SEPA transactions
delivering real-time solutions, including the “Faster Payments” initiative and
employ its network of partners to offer online and mobile services. The
new solution forecasts volumes of over 8 billion transactions for 2007.
Since 1968, Voca has processed more than 60 billion transactions. LINK
connects 130 million card accounts and 63,000 ATMs and last year
processed and settled over 2.9 billion transactions.

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Avg Household Belongs to 12 Loyalty Programs

There are more than 1.3 billion members of loyalty rewards programs in U.S. with nearly 500 million linked to airlines and financial services. Fueled by credit cards with rewards as primary competitive weapons, financial service loyalty programs have soared by 164% this decade with 239 million members. New research from OH-based COLLOQUY found that the average U.S. household belongs to 12 loyalty programs, but only 4.7 yield active participation. With the exception of the “American Express Platinum” card and “Diner’s Club,” affluent reward cards were virtually nonexistent in 2000. Today, dozens of card products now cater exclusively to affluent U.S. households such as “VISA Signature,” “VISA Signature Preferred,” VISA Infinite,” “World MasterCard, “World Elite MasterCard” and Discover’s new “Discover Network Premium Card.” COLLOQUY says the challenge will be for issuers and their loyalty service providers to resist the siren call of simple cash-back rewards schemes and to provide differentiated reward programs while controlling costs.

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AmEx Reigns-In Maverick Corp Card Spending

Maverick spending (or spending off-contract) continues to remain a huge problem for many businesses. Some research reports suggest that 34% of all purchases are currently off-contract, costing companies an average of 22% on each non-compliant transaction. American Express is today introducing two new “Source-to-Settle” solutions that will optimize the procurement steps in the supply chain, dramatically increase control and compliance, and ensure that employees access the negotiated rate for supplies. Last month AmEx launched its “S2S” suite, but will add two new organically developed solutions today, derived from its success at paring $1 billion from its own procurement costs over the past five years.

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PAYPASS WATCH

Europe’s first watch equipped with “MasterCard PayPass” contactless technology has been launched by Garanti Bank. The news follows the launch in June 2006 of the world’s first watch equipped with “PayPass” in Asia, to coincide with the “2006 FIFA World Cup in Germany.” Garanti Bank first launched its “PayPass” program in June of last year with the introduction of the “Garanti Bonus Trink” card. More than 600 merchant locations in Turkey accept “PayPass” including Burger King, Starbucks, Cinebonus, TAV and the I.stanbul Ferry. As of March 31st, there are more than 14 million “MasterCard PayPass” cards and devices in the market that are accepted at more than 51,000 merchant locations globally.

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Check Image Volume Sets an All-Time High

SVPCO – Electronic Clearing Services reported that daily average check image volume rose 14.4% to 9.2 million items in April, an all-time high. The Image Payments Network,a private-sector image exchange system, reported the following highlights and volume for April to include 193.9 million in total monthly items, a 450% increase compared to a year ago; $383.6 billion in total monthly dollar value, a 206% increase compared to a year ago; 9.2 million in daily average items, an increase of 14.4% from March 2007 and The Federal Reserve’s volume increased 13.3% to 32.2 million images. Through April, participating institutions in the Image Payments Network were Bank of America, BB&T, Comerica Bank, Fifth Third Bank, First Citizens Bank, HSBC Bank, Huntington National Bank, JPMorgan Chase Bank, KeyBank, LaSalle Bank, M&T Bank, National City Bank, PNC Bank, Sterling National Bank, Union Bank of California, U.S. Bank, Wachovia Bank, and Wells Fargo Bank. The Clearing House Payments Company L.L.C. is a private-sector, global payment systems infrastructure that clears and settles 40 million payments for more than $1.6 trillion per day.

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FMT Names Director Of Global Services

Fraud Management Technologies has appointed Stuart Mackenzie as
Director of Global Services. Mackenzie
will manage strategy, development, and implementation of client
services. He previously managed e-commerce fraud prevention
strategies in GE Money’s Global Fraud Management team and
served as Remote Channel Fraud Strategy and Policy Manager at
Barclays Bank, pioneering anti-phishing solutions. Mackenzie is a former
member of APACS’ E-Banking Fraud Liaison Group and won the
2005 Anti-Fraud Strategy of the Year honor at the UK’s Finance
Sector Technology Awards. FMT is a provider of
E-Application Intelligence and online fraud prevention.

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