VISA Reveals Business Smart Spenders

A new research commissioned by VISA Europe shows a new breed of “smart
spending” businesses are emerging who shop around both
on-line and off-line, look for the best deals on low cost airlines,
encourage employees to use budget hotels and save on travel costs by using
conference calls when purchasing every day goods and services. One finding
was that the vast majority of businesses believe they are more in control
of their everyday spending than they were two years ago, with the internet
appearing to be one reason for this development. The research was conducted by Datamonitor.

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Card Sites Have Usability Problems

A new report has concluded that the Web sites run by Capital One, Bank of America and Discover are the best when it comes to shopping for a credit card online. Change Sciences Group reveals 54% of sites offering multiple cards do not provide a way for prospects to compare card offers and that 60% of the sites do not communicate clearly that credit card fraud protection is a top priority. The research group also says that 93% of credit card applications have well-understood usability problems. Change Sciences noted that 42% of sites reviewed do not provide a chance to transfer balances from other cards during the application process and that of those sites that do, 85% make transferring balances harder than it needs to be.

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Diners Club Wins its 9th Freddie

Diners Club “Club Rewards” has won “Best Affinity Charge/Credit Card Program” (Americas) for the ninth consecutive year as part of InsideFlyer’s “Freddie Awards”. The program offers a comprehensive selection of rewards in categories such as travel, merchandise, unique experiences, dining, shopping, financial options, and charitable contributions. In addition, the program includes “Personalized Rewards”, which allow Cardmembers to create their own rewards. In addition to offering frequent flyer miles with select airline partners, Club Rewards allows Cardmembers to travel anytime to anywhere with no blackouts or restrictions through its Tailored Tickets program.

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FDS Completes 2nd Transfer to Citi

Federated Department Stores has completed the sale of its credit card receivables that it repurchased from GE to Citigroup. Today’s transaction yielded a pre-tax gain of approximately $179 million ($112 million after tax). These proceeds will be used to repay short-term debt associated with Federated’s acquisition of May Company. Under the terms of an agreement announced in June 2005, Citigroup will purchase all Federated and May Company credit receivables in several separate transactions at a premium of approximately 11.5 percent. In total, these transactions are expected to produce after-tax proceeds of approximately $4.6 billion.

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Credit Manager’s Index Slips in Apr

The “Combined Credit Manager’s Index” fell a modest 0.6% for the month of April on a seasonally adjusted basis. The decline was comprised of a 1.8% fall in the service sector index and an offsetting rise of 0.5% in the manufacturing sector index. The CMI, a monthly survey of the business economy from the standpoint of commercial credit and collections, was launched in January 2003 to provide financial analysts with another strong economic indicator. The CMI survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle.

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Monthly Payment Rates Hover at 20%

Monthly payment rates, the amount that cardholders pay on their credit card debt, retreated in March after topping an industry record in the prior month. Driven by higher minimum payments, the monthly payment rate during the first quarter has averaged a record 19.97%. Rising interest rates have also played a role in driving the MPR north. Among credit card-backed bonds, the monthly payment rate was 19.10% in March, compared to 20.85% in the prior month and 16.32% one-year ago. According to FitchRatings, the payment rate averaged 18.60% during 2005. Five years ago the monthly payment rate hovered around 15%. FitchRatings also says a growing dependence on short-term teaser rates and low-rate balance transfer offers may also be contributing to the higher MPR.

Monthly Payment Rate
Oct 05: 18.65%
Nov 05: 18.78%
Dec 05: 18.90%
Jan 06: 19.97%
Feb 06: 20.85%
Mar 06: 19.10%
Source: FitchRatings

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Intersections Q1 Revenues Rise 18%

Virginia-based Intersections reported first quarter revenue of $45.7 million and net income of $3.4 million. Intersections Inc. announced financial results for the quarter ended March 31, 2006. Revenue for first quarter of 2006 was $45.7 million, an increase of 18.4 percent over the same period last year. Net income for the quarter ended March 31, 2006 was $3.4 million, compared to $1.8 million for the quarter ended March 31, 2005, an increase of over 90 percent. Pre-tax income for the first quarter of 2005 included a software impairment charge of $1.5 million. Diluted earnings per share were $0.20 for the first quarter of 2006, compared to $0.10 for the first quarter of 2005.

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Contactless U.S. Merchants Top 30K

Contactless credit card payments picked up another boost as Atlanta-based QSR Arby’s will expand acceptance of “PayPass,” “ExpressPay” and “VISA Contactless” at more than 1,000 company-owned restaurants in the U.S. Over the past year, the number of merchant locations that accept contactless payments has soared from less than 1,000 to more than 30,000. Arby’s plans to install contactless card readers inside its restaurants and drive-thru windows during the third quarter. Major merchants currently accepting contactless payments include McDonald’s, 7-Eleven, CVS, Duane Reade, Meijer and Regal Entertainment Group. PA-based Sheetz was the first U.S. merchant to deploy contactless in all 320 of its locations.

CONTACTLESS U.S. MERCHANT LOCATIONS
1Q/05: 500
2Q/05: 2,000
3Q/05: 12,000
4Q/05: 21,000
1Q/06: 30,000
Source: CardFlash Library

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Bus Fares Go Contactless Credit Card

The Utah Transit Authority is gearing up to allow passengers during the next ski season to use their contactless credit and debit cards to pay for transit fares on 41 Salt Lake City Ski Service buses. The contract, awarded to ERG Group, will also employ micropayment technology from Peppercoin. The “Peppercoin Small Payments Suite Version 3.0” enables transit operators to accept credit and debit cards. The Peppercoin platform uses predictive modeling to automatically assess consumers’ buying behavior and make decisions about the best way to process their credit and debit card payments.

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Coinstar Revenues Climb 19% in Q1

WA-based Coinstar reported $126 million in first quarter revenue, a 19.3% increase over the year-ago quarter. However, net income for 1Q/06 declined from $4.7 million one-year ago to $4.2 million. About $1.9 million in special charges were made during the quarter. At the end of the quarter, the Company had an installed self-service coin counting base of 13,000 units compared to 12,200 one-year ago. More than 6,000 of the machines are coin-to-card or e-certificate enabled. Coinstar also offers electronic payment solutions, entertainment services and self-service DVD rental. The Company estimates that revenue for the second quarter will range from $125 million to $135 million. Coinstar also announced it has received two more patents, bringing the total number to 67 U.S. and foreign patents. The two latest patents relate to Coinstar’s fundamental innovation of putting voucher-issuing coin counting machines in retail environments and the ability of the machines to remotely communicate information. The company’s other patents relate to various aspects of its technology, including fraud-deterrent vouchers and coin cleaning designs. For complete details on Coinstar’s latest results, visit CardData ([www.carddata.com][1]).

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

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MasterCard Names a New Americas President

MasterCard has named a new president for its Americas region which includes the U.S., Canada, Latin America and the Caribbean. Walter Macnee, who served as president of MasterCard Canada between 2001 to 2004, will take over the reins from Ruth Ann Marshall on May 15th. Marshall, who joined MasterCard in 1999, is taking early retirement but has agreed to stay through June to help with the transition. MasterCard is currently in the process of launching an IPO. Before returning to MasterCard, Macnee was EVP of CIBC in charge of its bank’s credit card business and national collections. He also served as Chairman of VISA Canada and Director of VISA International. The Americas region generates more than half of the MasterCard’s worldwide volume.

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