House Hearing Tackles Credit Card Practices

The U.S. House Financial Services Committee held a hearing yesterday on “Credit Card Practices: Current Consumer and Regulatory Issues.” However, no credit card issuers testified. Among those present were Edward Yingling, President and CEO, American Bankers Association who said credit cards provide more services at little or no cost, and with lower interest rates than ever before. However, Yingling noted that the increased complexity of credit cards causes confusion and sometimes results in a difficult financial situation. But, the industry is taking these concerns very seriously and working to address them. Yesterday was the first in a two-part series of hearings on credit card practices. The second is scheduled for the first week in June wherein federal and state regulators plan to discuss the anticipated revision to the regulations governing disclosure for credit cards by the Federal Reserve.

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Nordstrom Launches a Fashion Reward Program

Seattle-based Nordstrom has launched a new rewards program that blends the Company’s current points system with more benefits based on customers’ spending levels using any Nordstrom credit or debit card. The new “Nordstrom Fashion Rewards” offers the points program customers, but will also feature new rewards such as complimentary in-store services and access to red carpet events. The program will offer three new levels of cumulative benefits to “Rewards” customers who qualify. Unique to the Nordstrom program, “Rewards” participants can move to higher levels based on their Nordstrom spendings each quarter versus waiting a full year. The program was developed after extensive customer research, which included input from stores, a peer group study and focus groups. Nordstrom also surveyed its customers to determine which additional benefits would motivate them to strengthen their relationship with the Company.

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Merchant Link’s TransactionVault Okayed

MD-based Merchant Link’s “TransactionVault” has been validated by Visa USA as a “Payment Application Best Practice” “TransactionVault” is an innovative security solution that safeguards consumers’ payment card and personal information by moving data from a merchant’s POS system to Merchant Link’s monitored, secure and fully Payment Card Industry compliant environment. The validation, part of Visa’s ongoing Cardholder Information Security Program, applies to the MICROS RES 3000 version 3.2 Service Pack 7 Hot Fix 5. In November 2006, MICROS Systems partnered with Merchant Link to launch TransactionVault as part of its “Restaurant Enterprise Series” point-of-sale solution. Visa established certified PABPs to assist in the creation of secure payment applications that help ensure merchant compliance with Payment Card Industry Data Security Standards. Merchant Link provides solutions to the integrated point-of-sale industry, including high-end technical support and data transport services.

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Authorize.Net 1Q/07 Volume Rises 24%

MA-based Lightbridge reported that revenue from continuing operations for the first quarter was a record $16.3 million, a 21% jump over 1Q/06. The Company reported net income of $1.9 million for the quarter versus net income of $1.6 million for the comparable period of 2006. The Company recorded a gain of $1.4 million in connection with the sale of the TDS business on February 20th and incurred a loss from TDS operations in the first quarter of $1.6 million. Authorize.Net processed a record $8.9 billion of merchant transactions in the first quarter, up 24% compared to the same period in 2006. The unit also processed 86.4 million transactions in the first quarter, a 19% increase over 1Q/06. Active merchants were at a record 175,439, up 23% over the prior year. Lightbridge recently announced the potential acquisition of PSiGate. For complete details on Lightbridge’s latest results, visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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U.S. Consumers Prune Cards from Wallets

A new survey shows that more consumers are shedding payment products compared to two years ago. Nearly half of those trimming their wallets have canceled or reduced their usage of standard credit cards. The “PaymentDynamics 2007 Preferred Payments Study” by TransUnion and Edgar, Dunn & Company reveals that 20% of consumers said they shed payment products in 2006 compared to 16% in 2004. Of those that have canceled or reduced their usage of payment product in the past 12 months, about 14% have done so with either a store credit card, debit card or a rewards credit card. Only 10% have canceled or dropped a co-branded or affinity credit card. In contrast, 31% of respondents added a new payment device to their wallet this past year versus 56% in 2004. The study also revealed that more consumers prefer debit cards than any other type of payment for point-of-sale purchases.

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Fiserv Financial Unit Q1 Sales Up 10%

WI-based Fiserv reported that total revenues for the first quarter increased 11% to $1.22 billion. The company’s Financial operating segment generated revenues of $767.3 million for the first quarter, a year-on-year increase of 9.6%. Driving the internal revenue growth rate were increased sales of the company’s banking and payment products and services to existing and new clients, as well as growth within the output solutions division. Financial segment operating income increased $29.8 million to $159.9 million, up 22.9% compared with the first quarter of 2006. During the quarter, Fiserv Electronic Funds Transfer completed 55 new sales and now has more than 2,700 clients. The company’s BillMatrix business unit increased transactions by 45%, compared with the first quarter of 2006, to 10.2 million. Fiserv also signed 52 new clients for its electronic bill payment services and now has more than 500 electronic bill pay clients. For complete details on Fiserv’s first quarter performance, visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Cerner to Offer the FDC/UMB Healthcare Card

Healthcare info technolopy provider Cerner has selected First Data Healthcare Services and UMB Healthcare Services to launch the industry’s first combined health plan ID and payment cards with a fully integrated line of credit for healthcare consumers. First Data currently provides Cerner with healthcare payment card processing services for Cerner’s Healthcare Flexible Spending Account (HFSA), Health Reimbursement Arrangement (HRA) and Health Savings Account (HSA) benefit plan offerings. First Data’s transaction card processing solution includes a fully integrated line of credit and real-time auto-substantiation solutions at various retail and online merchants. UMB Healthcare Services will serve as the financial custodian, supporting debit card access and HSA services. UMB has in excess of $80 million in HSA assets with insurance carriers, Third Party Administrators, software providers and businesses nationwide. First Data Healthcare Services provides end-to-end payment solutions that streamline the healthcare experience for patients, providers and payers.

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Harley-Davidson Dealers to Use $$$ ON THE NET

Shift4 Corporation has entered into an agreement with Harley-Davidson Dealer Systems to provide secure credit card payment processing with its “$$$ ON THE NET” payment gateway. “$$$ ON THE NET” with Tokenization technology allows Harley-Davidson dealers to choose any bank and processor to achieve the best rates and service and provides both high speed and low cost authorizations and settlements for credit, debit, check, private label and gift card transactions. In addition, Harley-Davidson’s DMS is fully integrated with Shift4’s gift card processing partners to allow users to swipe, charge, report, and process balance inquiries from the same place they charge credit cards. Shift4 is a developer of secure financial transaction processing software and services.

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New England TJX Lawsuit Seeks $10M+

The Massachusetts Bankers Association this week filed a class action lawsuit in U.S. District Court in Boston against TJX Companies over the recent TJX credit and debit card data breach. The suit will seek to recover damages in the tens of millions of dollar since more than 45 million cards may have been compromised. The suit was joined by the Connecticut Bankers Association, the Maine Association of Community Banks, and individual banks. The three bankers associations represent nearly 300 banks. Representing the New England plaintiffs in the new class action suit is the law firm of Tyler Cooper based in Hartford, which is also general counsel to the Connecticut Bankers Association.

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Wells Fargo to Air a Small Biz Webcast

Wells Fargo is airing the “Protecting Your Business” interactive webcast on May 1st as part the Company’s “Small Business Appreciation Month”. The Protecting Your Business webcast will focus on insurance, online security and legal advice. Small business owners will receive tips from leading industry experts on securing their physical assets including property and virtual assets such as customer data. Panel experts include Neal Aton, head of Wells Fargo Insurance Inc.; Richard Weeks, head of Wells Fargo Business Internet Services; Gary Morse, CEO and founder of New York-based Razor Point Security; and Alysa Zeltzer, lawyer at Kelly Drye & Warren LLP in Washington DC. Viewers will be able to submit questions throughout the broadcast for the interactive Q&A segments. Wells Fargo plans to produce a series of webcasts covering specific topics of concern for small business owners and in February 2007, Wells Fargo pre- launched the series with Financing Strategies For Your Business, which offered tips on obtaining and managing credit. Wells Fargo & Company is a diversified financial services company with $486 billion in assets, providing banking, insurance, investments, mortgage and consumer finance.

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