Sig Debit Continues to Gain Momentum in 05

Growth in off-line debit card volume in the U.S. continued to rebound in 2005, increasing 20% to $823.5 billion. Over the past five years, signature debit volume has enjoyed a CAGR of about 27%, compared to a CAGR of approximately 8.5% for VISA and MasterCard credit cards. Growth in the number of cards-in-force also picked up last year, growing about 16% to 265.4 million cards. This is the highest rate of growth since 2001. Compared to 2000, signature debit card volume has nearly tripled as the number of cards-in-force has nearly doubled, according to CardData ([www.carddata.com][1]).

VISA & MASTERCARD SIG DEBIT HISTORICAL
Year Volume Y/Y Cards Y/Y
2000: $301.8b +37.9% 135.9mm +18.2%
2001: $420.7b +39.4% 157.9mm +16.2%
2002: $496.4b +18.0% 174.9mm +10.8%
2003: $576.6b +16.2% 199.0mm +13.8%
2004: $686.0b +19.0% 228.7mm +14.9%
2005: $823.5b +20.0% 265.4mm +16.0%
Source: CardData (www.carddata.com)

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

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Business Card Use Expands 10% in 05

A new survey of small business principals has found that the use of business credit cards increased by nearly 10% to 65% during 2005. Also, overall satisfaction with business credit cards as a form of payment reached 64% last year. The new VISA USA survey revealed that within the next 12 to 18 months, 30% of small business owners said they plan to increase their reliance on business payment cards. For those respondents who already have business credit or debit accounts, 45% noted that if they could they would make all of their purchases using some type of business payment card. Nearly 27% said that they see card-based payments further providing greater efficiency in receiving and collecting payments. The survey was conducted in January and involved the responses of 468 small business owners or individuals with financial authority within a small business.

VISA USA COMMERCIAL VOLUME
Gross Dollar Volume
4Q/03: $27 billion
1Q/04: $25 billion
2Q/04: $30 billion
3Q/04: $32 billion
4Q/04: $33 billion
1Q/05: $32 billion
2Q/05: $38 billion
3Q/05: $41 billion
4Q/05: $42 billion
Source: CardData (www.carddata.com)

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TOYOTA VISA

ICICI Bank has teamed with Toyota Kirloskar Motor to launch the country’s first automobile co-branded credit card. The new “Toyota ICICI VISA” card offers 4 reward points for every Rs. 100 spent on the card at a Toyota dealer and 1 reward point for every Rs. 200 spent elsewhere. Points can be redeemed for dealer servicing or for parts and accessories. New cardholders also receive one free service voucher and a 5% discount on standard Toyota accessories. Additionally, the card offers a “Multiplier Rewards” program which can multiple existing points by 10 times and an “Accelerated Rewards” program wherein cardholders earn up to 10 reward points on every Rs200 spent on the card. Cardholders can also use the new card to make a down payment for the purchase of a Toyota and can spread the payment out in equal monthly installments. Toyota has more than 2 lakh customers in India.

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Card Debt – Consumers’ Biggest Worry

A new poll has found that consumers’ biggest concern is credit card debt and secondly, savings and investments. Although 70% who received a tax refund last year used it for personal spending, this year 47% plan to allocate their refund money to savings accounts and credit card payments. The findings come from the “Consumer Preference Index” poll conducted by Prospectiv. The poll also found that 63% of consumers polled would be very likely or likely to take advantage of online resources such as personal finance-focused Web sites and e-newsletters tailored to their specific interests.

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Amdocs Releases Micro-Payments Solution

St. Louis-based Amdocs has released the “Amdocs Dynamic Pricing and Product Bundling Solution,” “Amdocs Customer Communications Solution,” and “Amdocs Mobile and Micro-payments Solution”. The Amdocs Dynamic Banking model helps retail banks combat customer churn. Retail banks have relatively low customer loyalty and experience significant customer turnover each year. The average customer uses less than two products at one bank, yet has ties to an average of four other financial institutions. Dynamic Banking is based on the strategy of bundling products and tailoring services using customer data to help increase the number of products and services per customer, and building loyalty. To successfully adopt the Dynamic Banking model, banks must ensure that their systems are integrated across all lines of business.

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Sovereign to Offer AmEx Business Cards

PA-based Sovereign Bank has agreed to offer American Express business cards to its small business customers. Beginning in late spring, “OPEN from American Express” will issue three new co-branded cards to Sovereign’s small business customers via more than 650 branches throughout the Northeast. The cards include the “Business Gold Rewards Charge Card” and the “Business Platinum Charge Card,” which are linked to the “Membership Rewards” program. The “Platinum Business Cash Rebate Credit Card” offers up to 5% cash back annually on purchases. The agreement marks OPEN’s first strategic bank partnership in the Northeast region.

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SHOP.COM Intros Data Feed Program

SHOP.COM has introduced its “Certified Data Feed Provider Program,” that includes uploading billing and shipping information, credit card data and product details.A Data Feed Provider (DFP) is a data aggregator or data marketing company that manages a merchant’s data feeds on behalf of the merchant. For example, there are three types of data that can be uploaded: the merchant’s product data which needs to give customers enough information to make an informed, intelligent buying decision; order processing data which includes billing and shipping information, credit card data and product details; and order status information, which communicates the status of an order back to the consumer. Now, each of the three data integration feeds has its own SHOP.COM certification, and a DFP can be tested and certified for any or all of a merchant’s feeds. Consumers can shop on SHOP.COM for more than 7 million products and order from more than 1500 merchants in a single location, managing it all with a single password-protected account.

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Cards Drive Up Vending Sales

PA-based USA Technologies released a survey that shows consumers spend 50% more on average at vending machines when they can make purchases using their credit or debit cards. The 50% increase in average ticket is similar to the increase seen at quick serve restaurants when card transactions were introduced two years ago. Vending machines located in office buildings saw a 28% increase in average ticket, and for the first time the average ticket price rose above $1.00. Card purchases at airports, train terminals and roadside rest areas saw a 52% increase over cash, with the average ticket price for a card purchase rising to $2.33, compared with $1.53 for cash. The Wall Street Journal recently reported that micro-transactionsgenerated $25 billion in revenue for the card industry in 2005 USA Technologies provides networking of wireless non-cash transactions, associated financial/network services and energy management.

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U.S. Bank Launches SinglePoint

U.S. Bank has launched a new tool, called “U.S. Bank SinglePoint,” which enables business customers to use a complete suite of treasury management services from a single point of access. SinglePoint’s suite of online services allows business customers to monitor account activity, retrieve information; create reports and view images; transfer money via Automated Clearing House, initiate wire transfers and book and loan transfers; and prevent fraud. It also contains system administration capabilities including audit and control of employee access, as well as audit and history reporting.

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GECF & AmEx Launch the Dillard’s Card

The newly formed partnership between American Express and GE Consumer Finance has launched its first card product. The new “Dillard’s American Express Card” will award two “Dillard’s Reward Points” for every $1 spent at Dillard’s, and one point for every $1 spent elsewhere. The new Dillard’s card represents AmExs’ Global Network Services division’s first entry into the retail co-brand card market. Under terms of the relationship GECF will be responsible for issuing the card, managing the customer relationship and providing customer service, billing and credit management. Dillard’s is among the nation’s largest fashion apparel and home furnishings retailers with 330 stores in 29 states. GECF is the seventh U.S. partner for American Express. AmEx has now established nearly 100 card-issuing partnership arrangements in close to 110 countries. (CF Library 1/18/06)

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MBNA to Issue a Lesbian Credit Card

The largest lesbian lifestyle company has teamed with MBNA to issue a co-branded credit card. The new “Olivia Credit Card” offers one point for every $1 in net retail purchases. Points are redeemable towards Olivia vacations, airfare, and cash back, as well as everything MBNA’s “WorldPoints” rewards program has to offer. Over 75,000 people have traveled with Olivia in the last 10 years. Olivia charters entire ships or resorts to create one-of-a-kind vacations for lesbians, gay men and their family and friends. The group was founded in San Francisco in 1973.

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India Gets its First Auto Co-Brand

India’s ICICI Bank has teamed with Toyota Kirloskar Motor to launch the country’s first automobile co-branded credit card. The new “Toyota ICICI VISA” card offers 4 reward points for every $2 spent on the card at a Toyota dealer and 1 reward point for every $5 spent elsewhere. Points can be redeemed for dealer servicing or for parts and accessories. New cardholders also receive one free service voucher and a 5% discount on standard Toyota accessories. Additionally, the card offers a “Multiplier Rewards” program which can multiple existing points by 10 times and an “Accelerated Rewards” program wherein cardholders earn up to 10 reward points on every $5 spent on the card. Cardholders can also use the new card to make a down payment for the purchase of a Toyota and can spread the payment out in equal monthly installments. Toyota has more than 200,000 customers in India.

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