Cards

PSCU Financial Services, a credit-union service organization, has signed a five-year agreement with Chevron Federal Credit Union to convert 55,000 debit cards to PSCU Financial's debit platform, the companies announced Monday. Oakland, Calif.-based Chevron Federal is converting 40,000 signature-debit cards and 15,000 PIN-debit cards to PSCU's debit platform because of its fraud-management technology and its contact center, which operates 24 hours per day every day, Chevron Federal officials said. The center manages lost and stolen accounts. St. Petersburg, Fla.-based PSCU has dedicated staff members who create promotions designed to stimulate growth within credit unions' debit portfolios," says David Serlo, PSCU Financial president and CEO. First Data Corp. processes PSCU's debit card transactions. Chevron Federal has 65,000 members in all 50 states, the District of Columbia and 67 countries.

Changes to prepaid cards reduce profits for program managers, according to a report released last week by the Mercator Advisory Group Inc., a Waltham, Mass-based consultancy. Each change affects many parts, such as telephone call centers and terms-and-conditions agreements, says Tim Sloane, director of Mercator's debit advisory service. The changes cost money, Sloane says. David Fish, Mercator senior analyst, tells CardLine the report does not oppose change. Instead, it lays out for card managers issues they should consider before making changes, he says. Managers of small prepaid initiatives will find changes have a relatively high cost because they have fewer cards to spread the expense than do managers of larger programs, Fish says. "One of the lessons of this industry is to always keep scale in mind," Fish tells CardLine.

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The saying goes, "If something's not working, try something else." And clearly, when it comes to the financial services and retail industries' response to phishing, something's not working. Unique phishing attacks reported to the Anti-Phishing Working Group hover around 25,000 per month, with spikes as high as 38,000 in the last year. Somewhere around 150 brands are targeted each month. And Gartner estimates that 3.3 percent of the 124 million consumers who received a phishing email last year lost money because of the attack. Why aren't industry efforts—from consumer education, to diligent takedown, to spam filtering—putting a dent in the problem? "Because we haven't addressed it at the Internet level; it's like Band Aids," says Gartner analyst Avivah Litan.

EdoInteractive, which combines the popularity of prepaid cards, social networking and mobile services among the Generation Y set, launched this week. CEO Ed Braswell tells CardLine he came up with the concept for the company and its products when his teenage daughter received several closed-loop retailer gift cards for her birthday and he noticed she also uses social networking Web sites and text messaging to connect with her friends. EdoInteractive offers a MasterCard prepaid card called Facecard, issued and processed by undisclosed partners, and a marketing platform merchants can use to target promotions via social networking among cardholders. Cardholders and their parents and friends may load funds onto the prepaid card. Cardholders also may transfer funds between their accounts. The service launched this week in the Nashville area with an undisclosed number of merchants. It also will be offered to students at 52 universities, including the University of Tennessee, University of Georgia, University of North Carolina and University of Texas, says Braswell. The company is using messages and electronic invitations on sites such as Facebook to promote discounts at events, including the Bonnaroo music and arts festival in Tennessee and the Country Music Awards Fan Fest.

An ongoing campaign to boost debit card use among cardholders of PSCU Financial Services' credit-union members is meeting with growing success, Merry Pateuk, a PSCU spokesperson, tells ATM&Debit News, a CardLine sister publication. Debit card transactions collected by PSCU, a St. Petersburg, Fla.-based credit-union service organization, topped 500 million last year, 19% more than in 2006, Pateuk says. First Data Corp. processes PSCU's debit card transactions. PSCU's CURewards spring and fall promotions helped boost the growth in debit card use, Pateuk says "We want to bring debit to the top of the wallet over cash and credit," she says. Participating credit unions offer incentives, such as a $10 prepaid gas card, to cardholders who use their debit cards to initiate 15 transactions per month. Meanwhile, Y-12 Federal Credit Union in Oak Ridge, Tenn., reported that offering gifts as incentives led to an increase in debit card usage for the year ended March 31. The credit union also boosted the percentage of debit card accounts that are active to 74% in March from 60% in March 2007, John Stegner, Y-12 vice president and chief financial officer, said in a statement. "In the fall campaign, we had more than 450 accounts go from completely inactive to an average of 24 transactions a month," he said. "We have found that once cardholders make their debit card their primary choice, activity and transaction volumes remain high."

Consumers in Thailand spent approximately 197.3 billion baht (US$6 billion or 3.9 billion euros) with their credit cards in the first quarter ended 31 March, up 14.4% from the 172.5 billion baht spent in the same period last year, according to Bangkok-based Kasikorn Research Center, a subsidiary of Kasikornbank Group. Outstanding balances at the end of March stood at about 174.7 billion baht, up 5% from 166.4 billion baht at the same time last year. Card debts at least three months overdue totaled about 6 billion baht at the end of March, up 22.4% from about 4.9 billion baht a year earlier. "The credit card-spending rise could be attributed partly to rising prices of goods over the previous year," a Kasikorn spokesperson tells CardLine Global. "Intense competition" among issuers in Thailand also has led to aggressive marketing campaigns designed to increase card spending, the spokesperson says. Thailand had more than 11.9 million credit cards in circulation as of February.

ICICI Bank Sri Lanka reportedly plans to launch a Visa-branded prepaid remittance card in the third quarter. The card would enable recipients to make retail purchases and to access funds transferred from abroad through ATM withdrawals. Bank officials offered no comment to CardLine Global. The reloadable card would access funds in Sri Lanka rupees. Consumers will be able to use the cards at more than 1,000 ATMs in Sri Lanka. ICICI is based in India.