Tag Archives: credit

Facebook Posts Help Credit Bureaus Sniff Out Fraudsters

Credit bureaus and payment companies are testing ways to use social media — say, a Facebook Inc. (FB) post about a recently purchased Corvette — to verify a person’s identity and even assess consumer creditworthiness.

Equifax Inc. (EFX), EBay Inc. (EBAY)’s PayPal and Intuit Inc. (INTU) have begun trials to see whether social posts can help prove identities, and, in some cases, detect whether customers are lying about their finances.

Users of Facebook, Pinterest Inc. and Twitter Inc. share personal details every day through public postings, status updates and location check-ins. That information is proving useful in validating identity, evaluating whether to make a loan and sniffing out fraud that cost U.S. online retailers $3.5 billion last year, according to CyberSource Corp. EBay set aside $580 million, or 4.1 percent of net revenue, to cover transaction and loan losses last year. Continue reading

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Credit Card Cross Fees To Fall To 0.7%

The agreement will cost the credit cards NIS 350 million in annual revenue. 

Credit card cross fees will gradually fall to 0.7% in 2014, and stay at that level through 2018, according to the agreement reached between the Antitrust Authority and the credit card companies. They will submit the agreement to the Restraint of Trade Tribunal for approval within a few days.

The agreement will cost the credit cards NIS 350 million in annual revenue, 10% of their current revenue.

“This isn’t good for us, but the regulator is stronger than we are,” said the CEO of one company. The companies reportedly set a red line of a 0.75% cross fee, but agreed to compromise, since the agreement is for seven years, and provides certainty through 2018.

Antitrust Authority director general David Gilo also compromised. In May, Antitrust Authority chief economist Dr. Shlomi Frizet advised lowering the cross fee to 0.638%. The Antitrust Authority agreed to the higher level partly because of the company tax hike.

In the economic paper submitted to the Restraint of Trade Tribunal, Frizet assumed a future drop in the company tax to 19%, on the basis of the government’s tax cutting plan. However, in the wake of the summer’s social protest and the Trajtenberg Committee’s recommendations, the company tax was raised to 25%, beginning in 2012.

Under the new plan, credit card cross fees will fall from the current rate of 0.875% to 0.8% in July 2012, 0.75% in January 2013, 0.73% in November 2013, and 0.7% in July 2014, and stay at that level through the end of 2018. After the court approves the agreement, Israel’s three credit card companies can operate as a transaction clearing cartel through 2018.

The Antitrust Authority and the three credit card companies – Isracard Ltd., owned by Bank Hapoalim (TASE: POLI); Leumi Card Ltd., owned by Bank Leumi (TASE: LUMI) and Azrieli Group Ltd. (TASE: AZRG), and Israel Credit Cards-Cal Ltd. (ICC-Cal) (Visa), owned by Israel Discount Bank (TASE:DSCT), and First International Bank of Israel (TASE: FTIN) – negotiated the issue of cross fees for years. In 2006, the parties reached a deal to gradually reduce the fee from 1.25% to 0.875% over six years.

The parties also agreed that the fee, which is a restraint on trade, would be set by the Restraint of Trade Tribunal. In August 2011, Judge Nava Ben Or brought the last reduction forward by eight months from July 2012 to November 2011.

Israel’s credit card market has an annual turnover of NIS 200 billion. Since the reduction in cross fees will result in an equivalent reduction in clearance fees paid by businesses, in theory, a 0.1% reduction in the cross fee should reduce the credit card companies’ revenue by NIS 200 million. However, there is a risk that businesses might not pass the savings onto consumers, as the fee amounts to a tiny fraction of the price of goods.

The cross fee, which a credit card company charges a business for transactions by a customer is paid to the company that issued the customer’s card. This fee is the basic expense of the clearing company, and is therefore the lower limit of the clearing fee that the credit card company charges businesses.

Credit Card Cross Fees To Fall to 0.7%. (2001, December 29). By Eran Peer. Retrieved from http://www.globes.co.il/serveen/globes/docview.asp?did=1000710858.

Credit Card Plan To Help Taxis

The government has launched a project to issue NGV energy credit cards to drivers of taxis, passenger vans and samlor taxis.

Prime Minister Yingluck Shinawatra yesterday presided over the launch of the project at Impact Muang Thong Thani. The project is a collaboration of the Energy Ministry, PTT Plc and Krung Thai Bank.

Energy Minister Pichai Naripthaphan said the cards will be issued to taxi, passenger van and tuk tuk drivers in Bangkok and surrounding provinces who are low-income earners affected by an increase in the price of natural gas for vehicles (NGV).

Each card has a credit limit of 3,000 baht. It can be used to pay for NGV bills.

Card holders are also entitled to discounts for the retail price of NGV of between 50 satang and two baht offered on every kilogramme of NGV paid for with the credit cards. The discounts received must not exceed the NGV purchase value of 9,000 baht per month. Card holders can use NGV energy credit cards with all NGV vehicles carrying an NGV refill card. The credit cards have been in use since Dec 1.

The discounts for the NGV retail price will take effect on Jan 16 until the end of 2015.Ms Yingluck said that issuing the energy credit cards forms part of the government’s policy to ease the impacts of the energy prices on low-income earners.

The government will extend subsidies for liquefied petroleum gas and natural gas for vehicles until Jan 15 and resume collecting levies for the Oil Fund on regular and premium petrol, diesel and gasohol starting from Jan 16.

On Sept 30, the National Energy Policy Council chaired by Prime Minister Yingluck approved a proposal for the state Oil Fund to borrow 10 billion baht from commercial banks to finance domestic fuel subsidies.

Credit Card Plan To Help Taxis. (2011, December 16). Retrieved from http://www.bangkokpost.com/news/local/271024/credit-card-plan-to-help-taxis

Bank of America Leaving Agent Card Issuing

December 5, 2011 – By David Morrison

Bank of America is leaving the business of issuing credit cards on behalf of credit unions.

Typically the bank’s card issuing arm, FIA Card Services, has purchased credit card portfolios from credit unions and then continued to issue the cards in the credit unions’ names, often in five-year contracts.

But sources in the card industry say the bank has concluded that the agent card issuing business is no longer key to its core operations and has decided to discontinue it.

Credit unions which currently issue cards with Bank of America have also been told that their contracts will not be renewed after they expire.

Card industry sources estimate that the move will leave between 40 and 50 credit unions around the country with the need to either find another agent issuer or to start re-issuing cards themselves.

Bank of America was once a leader in the agent issuing market, building on the work of MBNA, a mono-line card issuing bank that Bank of America purchased in 2006.  Subsequent to the merger, Bank of America launched FIA card services while retaining the MBNA name for agent issuing in Canada and Europe. But the bank has taken a steadily smaller role in the U.S. market, declining to purchase many smaller portfolios and not renewing some agent issuing contracts.

In a statement about the strategic shift, Bank of America said that it had decided “agent-bank relationship, where we issue cards n behalf of other financial institutions, was not core to our goal of building deeper relationships and we began the process of exiting those relationships.  In many cases, our agent-bank business has serviced predominantly single-service card customers with limited opportunity for Bank of America to do more business with them,” the bank added.

Credit Card Use Is On The Rise

CNNMoney

6:43 a.m. CST, December 5, 2011

Credit cards are making a comeback.

At the end of 2008, more consumers were using debit cards than credit cards but now that trend has reversed, said Silvio Tavares, senior vice president at First Data.

“Credit is back in favor,” he said. “Consumers have spent the last couple of years de-leveraging and reducing credit card use, but during the past month — and since April [of this year] — they’ve been using their credit cards more and are starting to return to pre-recession buying habits.”

Purchases made with credit cards rose 8.2 percent in the first quarter of 2011, 9 percent in the second quarter and 10.6 percent in the third quarter, according to First Data. That compares with gains in debit card use of 9.6 percent, 8.3 percent and 5.9 percent for the same quarters.

Click here to read full article: http://www.chicagotribune.com/business/breaking/chi-credit-card-use-is-on-the-rise-20111205,0,1416388.story

First Data Releases Black Friday SpendTrend®

Black Friday Boosted By Early Openings, Cyber Monday Surges on Big Discounts

ATLANTA, Nov. 30, 2011 –  First Data Corporation released its First Data SpendTrend analysis for Black Friday 2011 compared to Black Friday 2010. SpendTrend tracks same-store consumer spending via credit, signature debit, PIN debit and EBT cards at U.S. merchant locations.

Enticed by earlier store openings, consumers responded by spending more. Significant spending actually started Thanksgiving Day, in advance of Black Friday. Retail year-over-year dollar volume growth on Thursday-Friday was 6.3% and transaction growth was 7.3%. This performance was especially impressive in light of tough comparables for Black Friday 2010, when dollar volume growth was quite strong.  Some merchant categories that saw a boost in dollar volume growth this year were Electronic/Appliances, Clothing and Accessory Stores, and NonStore Retailers. Cyber Monday continued the spending trend of the Thanksgiving weekend, with eCommerce year-over-year dollar volume growth of nearly 20.0%.

Click here to read more: http://www.firstdata.com/en_us/about-first-data/media/press-releases/11_30_11.html