Accor Services Acquires Kadeos Prepaid Cards

Accor Services will now lead the gift card and voucher market in France.
The company has announced the acquisition of Kadéos, a smaller gift card
and voucher business, for 210 million euros. Kadéos cards and vouchers
are sold in over 6,500 outlets and can be used in nearly 1,000 stores
and websites in France. The acquisition will enable Accor Services to
provide the market’s broadest offering of media and an extensive network
of affiliates. Kadéos reported 2006 issued volume of 336 million euros
in Europe. Thanks to the new development, however, volume is expected to
be around 2 billion euros in 2007 and sales are expected to increase by
10% to 15% a year in the corporate and works council segment and by 20%
to 25% in the retail segment.

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MasterCard Entertains Obsessive Golfers

MasterCard is going after golfers with a new highly-interactive platform and two new TV commercials. The new “Priceless” golf program enables golfers to rank their level of obsession with the game, participate in a pro telethon and receive access to special golf offers, usage incentives and experiences. Through the use of flash video and IVR technology golfers respond to a series of questions posed by top golf personalities to determine their obsession level. To support the platform, MasterCard is airing two “Priceless” TV ads that feature a call to action to go to priceless.com/golf. The first is entitled “Hit the Cart” and the second spot is called “On the Job.” The second ad will debut on March 15. The TV spots were created by McCann Erickson; sister company MRM Worldwide created priceless.com and the siteâ™s new interactive golf content.

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Banamex Deploys Verifone Payment Processing At McDonalds

Contactless payments will streamline customer service at McDonald’s
Mexico. Banamex, a division of Citibank, has announced the deployment of
Verifone’s “MX870” at McDonald’s locations in Mexico. This will allow
customers to pay using the contactless payment system offered by
MasterCard “PayPass” and speed up the payment process at the restaurants’
cash registers. The “MX870” is also useful as a content delivery system
that verifies the customers’ order and offers promotions. To date,
Banamex has issued 10,000 of these contactless cards. The group has a
net distribution of over 1,400 branches and 5,700 ATMs located
throughout the country.

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BSG Releases its Advanced Payment Gateway

San Antonio-based BSG Clearing Solutions announced the availability of its “Advanced Payment Gateway” – a combination of three core integrated services: credit card payment processing, “Bill2Phone” alternative payments and integrated risk management services. The “APG” suite of services marks the company’s transition from traditional third party billing to a leading provider of payment services for digital content providers. BSG also announced the general availability of “Bill2Phone,” a real-time payment solution that offers online merchants, content aggregators and e-wallet providers the ability to process electronic payments to consumers’ local telephone bill. “Bill2Phone” includes risk management, advanced transactional and settlements reporting, recurring payments and a virtual terminal. Since its availability on January 15, 2007, BSG has closed five new “Bill2Phone” customer contracts.

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TD Canada Trust Unveils the Rebate Rewards VISA

TD Canada has introduced a rewards program that gives customers more
options. The “TD Canada Trust Rebate Rewards VISA” offers new cash
back options that give the customer freedom to choose how they want the
rewards applied. Cardholders can earn cash back of up to 1% on the amount of their net annual purchases made using their card, without paying an annual fee. TD Canada Trust also offers the “TD Gold Elite VISA.” TD Bank Financial Group serves more than 14 million customers and, as of January 31, 2007, the company had CDN $408 billion in assets.

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Carded Federal Tax Payments Up 63%

LINK2GOV announced that its PAY1040.com service is witnessing a 63% year-over-year increase in dollars processed for federal tax payments during tax season 2007. This news follows a recent IRS report that showed significant growth in card-based tax payments during 2006. Taxpayers can use their American Express, Discover, MasterCard or VISA card to make a federal tax payment. A convenience fee of 2.49% of the tax payment (minimum $1.00) is charged by LINK2GOV for using this service. The convenience fee for business tax payments is tax deductible to the extent permitted by law. LINK2GOV, a Metavante company, provides comprehensive, customized electronic service applications for government agencies. Metavante provides banking and payments technologies to financial services firms and businesses worldwide.

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Red Orange Endorses Cashbox’s ATM program

ATM operator, Cashbox, will be a recommended supplier to the retailers
of Red Orange. Red Orange is membership-based organization, begun in
1983, comprised of 36 independent retailers. Placement of the ATMs in
the stores will adhere to Cashbox’s traditional placement model. With
the guidance and monitoring of Cashbox, a convenience-fee ATM is
supplied to the retailer free of charge and replenished by them,
eliminating the need for third party cash-handling costs.

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MUCHMUSIC MASTERCARD

Toronto-based Mint Technology and GE Money Canada have teamed to launch a prepaid card targeted at teenagers. The new “MuchMusic Prepaid MasterCard” offers 10 free music downloads from MuchMusic.com and a 15% discount on all purchases made at the MuchStore for new cardholders. The card also gives 10% of all net profit that goes directly to War Child Canada, an independent charitable organization working to assist children affected by war. The card can be loaded online or at an ATM. Anyone 16 or older can apply on their own for the card. However, those aged 13-15 need a parent or legal guardian to apply.

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Discover Rewards On-Time Cardholders

Discover has launched a credit card that gives consumers cash rewards for good credit management. With the “Discover Motiva Card,” each time cardholders make on-time monthly payments six times in a row, they receive their next month’s interest back as a “Pay-On-Time Bonus”. “Pay-On-Time Bonus” rewards are in addition to the unlimited “Cashback Bonus” cardholders earn on all purchases. Discover also notes that it offers payment tools such as automatic payment reminders, account alerts and free payments by phone, even on the billing date. Cardholders can also set a customized payment due date.

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Identification Drives Contactless Cards

A new report suggests that government and micropayment applications are boosting contactless smart card market growth. The study by Frost & Sullivan also found that the market earned revenues of $408.9 million in 2005 and is projected to reach $1.6 billion in 2011. The e-passport segment made big strides as interoperability efforts intensified, impelled by a heightened sense of urgency for more secure and sophisticated travel documents. However, the increasing use of contactless smart cards in payment, transit and ID raises questions from privacy and human rights advocate groups owing to the lack of and understanding about the technology and the confusion between RFID tags and contactless smart card. Frost & Sullivan says vendors and government agencies should initiate greater efforts to promote awareness and demonstrate that contactless smart cards can be implemented in a highly secure method and can be relied on for secure transactions in payment, health and identification.

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Prime Charge-Offs Hit a 12-Month High

Charge-offs, among “prime” credit card-backed securities, continued its upward path in January hitting a new twelve month high. This is the third consecutive month of increase even though bankruptcy filings are still running about 68% lower than 2005. However, the 60+ day delinquency ratio dipped by two basis points in January after edging up for four straight months. According to FitchRatings, “prime” charge-offs for January were 4.31% compared to 4.21% in the prior month and 6.88% for January 2006. The “prime” 60-plus day delinquency index for January was 2.57%, compared to 2.59% in December. Fitch also reported that “sub-prime” 60+ day late payments decreased slightly to 5.60%. “Sub-Prime” charge-offs increased 67 bps to 9.90%. Fitch says the recent increases in sub-prime charge-offs can be attributed to a delinquency bubble caused by changes made to the minimum payment calculation per OCC guidance.

ABS PRIME CHARGE-OFFS HISTORICAL
Jan 06: 6.88%
Feb 06: 3.29%
Mar 06: 3.10%
Apr 06: 3.19%
May 06: 3.58%
Jun 06: 3.58%
Jul 06: 3.44%
Aug 06: 3.94%
Sep 06: 3.88%
Oct 06: 3.78%
Nov 06: 3.88%
Dec 06: 4.21%
Jan 07: 4.31%
Source: FitchRatings

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