Chase Paymentech Has the Pulse on Online Sales

Dallas-based Chase Paymentech has created a “pulse” index to measure online commerce at the top merchants this holiday season. This week shows that online sales for the first Monday in December rose 49% from one-year ago. Overall sales for 10 of the largest Internet retailers during the period Nov. 20th thru Dec. 6th increased 17% over 2005. Early weekdays continue to emerge as favored online shopping days. In addition to Monday’s strong sales, Tuesday December 5th and Wednesday, December 6th outperformed 2005 by 20% and 28%, respectively. Overall sales growth is counter-balanced by an equally significant dip in weekend online shopping activity, in some cases dipping below 2005 sales performance. The Chase index is based on actual transactions going through the system rather than samples.

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Loyalty Access Solutions to Deploy SCTN

Loyalty Access Solutions will be deploying the Smart Chip Technologies’ “Loyalty System” to several of its clients early next year. Smart Chip Technologies’ turnkey customer retention solutions,
including loyalty, pre-paid stored value, punch cards, and gift cards, enable issuers, acquirers, and merchants to take advantage of real-time programs using their cardholder’s existing cards using bar codes, magnetic stripes, smart chips, RFID, Internet accounts, and other consumer electronic devices.

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VISA Intl to Set Powered Cards Protocol

VISA International announced this week a new set of test requirements to help card manufacturers ensure that emerging card technologies, such as battery powered cards and display cards, meet VISA standards. VISA has developed a set of test requirements including testing protocols, best practices for addressing local and global regulations, and a selection of qualified test laboratories ready to evaluate powered cards. Tools and information will be available to VISA member financial institutions and qualified card manufacturers. VISA says its expects to pilot a number of powered card capabilities next year. Powered cards can incorporate value-added capabilities such as displays, dynamic account information, authentication services, light and sound. They work by embedding a tiny battery into the plastic card.

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AmEx Merchant Fees Sink Sharply in Q3

The average merchant service fee charged by Bankcard, MasterCard, VISA and Diners Club in the third quarter edged down by one basis point from the prior quarter and dipped three basis points from one-year ago. However, fees charged by American Express dropped six basis points sequentially and sunk 15 basis points from 3Q/05. The Reserve Bank of Australia also reports that since it forced pricing reforms on VISA and MasterCard in 2003, the market share of American Express and Diners Club has climbed from 14.5% to 16.9% for the third quarter of 2006. The pricing advantage has enabled American Express and Diners Club to offer more generous rewards program. The average merchant service fee charged by Bankcard, MasterCard and VISA in the third quarter was 0.93%, compared to 0.94% in the prior quarter and 0.96% for 3Q/05. The average merchant service fee charged by American Express in the third quarter was 2.22%, compared to 2.28% in the prior quarter and 2.37% for 3Q/05. The average merchant service fee charged by Diners Club in the third quarter was 2.26%, compared to 2.27% in the prior quarter and 2.29% for 3Q/05.

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MasterCard Regains World Cup Sponsorship

MasterCard Worldwide has won the rights to continue sponsorship of the “World Cup” soccer tournament for at least the next two “World Cups” despite a deal VISA signed with FIFA calling for it to receive the rights on Jan. 1st. About six months ago VISA was awarded the sponsorship by the Federation Internationale de Football Association for the next eight years. MasterCard, a long-time FIFA sponsor quickly filed a lawsuit claiming FIFA broke its contract giving MasterCard the right of first refusal on an extension of its 16-year sponsorship of the “World Cup.” The ruling was handed down this morning by U.S. District Judge Loretta Preska in New York City. Preska ordered that FIFA proceed with the “2007-2014 MasterCard Agreement” that the parties agreed to. She also noted that FIFA’s negotiating team misled MasterCard about an extension period while FIFA was simultaneously and aggressively negotiating with VISA.

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73% of Consumers are Concerned About ID Theft

More than one-quarter of Canadians say they or someone they know has been a victim of identity theft. Nearly three in ten Canadians say that while they hear a lot about identity theft they are not sure what it means. The findings come from Capital One Canada’s second annual identity theft survey which also found that 36% of Canadians say they would not know who to call or what steps to take to restore their name and credit if they were a victim of identity theft. Concern over identity theft has led Canadians to be more guarded about their personal information. Over half say concern has led to the use or purchase of a shredder, while 92% of concerned Canadians say they now review, rather than toss away, their monthly financial statements and pay closer attention to the way merchants handle their credit and/or debit
card when shopping. In spite of increased vigilance, over half of
Canadians do not review their credit report at least once per year to check for errors or unfamiliar activity.

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Bankruptcy Filings Slowly But Surely Rise

Bankruptcy filings rose for the fifth consecutive month in October, now averaging about 14,000 per week compared to approximately 8,000 filings per week in the fourth quarter of last year. One-year ago filings averaged 35,000 per week, prior to the full implementation of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” During October filings topped to 57,000, the highest level since October 2005 when the reforms went into effect. The number of filings in the first and second quarter of 2006 is the lowest number of quarterly filings in the last 20 years. Through the first nine months of 2006 bankruptcy filings have exceeded 400,000 and will likely hit 600,000 by year’s end.

MONTHLY FILINGS
Jan 06: 34,411
Feb 06: 39,636
Mar 06: 42,724
Apr 06: 44,989
May 06: 43,780
Jun 06: 46,620
Jul 06: 48,849
Aug 06: 54,937
Sep 06: 56,412
Oct 06: 57,566
Source: CardData (www.carddata.com)

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Bankruptcy Reform Success is Controversial

While the nation’s President is reeling from the defeat in Iraq and dealing with a “lame duck” presidency with a Democratic Congress, he is still receiving some support in Congress today over his very controversial bankruptcy reform law, enacted one-year ago. The Senate Judiciary Subcommittee on Administrative Oversight and the Courts are holding a hearing on the “success” of the new law. The National Association of Consumer Bankruptcy Attorneys says the hearing is like “slapping some lipstick on the pig” of the 2005 bankruptcy reform law changes. Among those testifying: Steve Bartlett, president, Financial Services Roundtable; Clifford White, acting director, Executive Office for United States Trustee; and Professor Todd Zywicki, George Mason University School of Law. The NACBA notes that Bartlett represents banks and credit card companies; White is more interested in protecting big corporations from consumers; and Zywicki stood virtually alone among law professors in support of the legislation.

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