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Citibank Philippines Thursday launched a MasterCard Premier Airlines Miles credit card to replace its existing miles card that was exclusive to Hong Kong-based Cathay Pacific, according to a local report. Citibank says the card is designed to increase its miles-reward membership to 80,000 cardholders by the end of the year, up from 40,000 as of the end of May. "It's more than just a replacement card. It's a significant step forward," Mark Jones, Citibank Philippines business manager, says in the report. Besides Cathay, the new rewards card includes Singapore Airlines, Philippine Airlines, Thai Airway and Northwest Airlines, the reports says. The card also supports two travel alliances, One World and Star Alliance, which enables cardholders to earn and redeem their miles on more than 70 airlines worldwide. Miles earned with the new card do not expire, Citibank says.

United Kingdom-based payments-network provider PayPoint plc Monday announced it has secured a new credit and debit card interchange agreement with UK-based Lloyds TSB Group plc to enable its affiliated retailers to pay a maximum of 1.4% on credit card payments and a flat fee of 14 pence per debit card payment. PayPoint's terminals accept payments for gas and electricity bills, mobile phone top-ups, and transportation tickets. PayPoint has more than 19,800 terminals in such UK and Irish shops as Spar, Costcutter, Sainsburys Local, One Stop and Londis.

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Capital One Financial Corp. and Alliance Data Systems Inc. on Monday both reported increases in net charge-off rates for May. The annualized charge-off rate for Capital One's $67.9 billion credit card portfolio rose 20 basis points, to 6.28% from 6.08% in April. The portfolio's 30-day delinquency rate was 3.81% in May, down from 3.9% in April, according to a Cap One filing with the U.S. Securities and Exchange Commission. The delinquency rate has decreased incrementally since the start of the year. In January, Cap One reported its delinquency rate at 4.36%. Alliance Data officials reported that the net charge-off rate in its master trust declined 138 basis points from April but climbed 53 basis points from a year earlier, to 5.28%. Alliance Data issues private-label credit cards.

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Superior Bancorp of Birmingham, Ala., and Heartland Payment Systems Inc. have formed a joint marketing agreement offering their payments and banking services to businesses.

TD Banknorth Inc. is set to announce today that it is expanding its private-label card business into Canada.

Alliance Data Systems Corp. announced Friday it has proposed to settle a class action lawsuit its stockholders filed against it in May 2007 by paying the plaintiffs $380,000 for their attorney fees, says a spokesperson with the Dallas-based transaction processor. The 68th Judicial Court of Dallas County, Texas, has scheduled a hearing July 28 to consider the proposed settlement. The shareholders filed the lawsuit in response to an acquisition agreement Alliance Data reached with Blackstone Capital Partners. Ultimately, Blackstone backed out of the proposed purchase of Alliance Data (CardLine, 4/24). Alliance Data then filed a lawsuit to collect a $170 million "business-interruption fee" from the New York-based investment company.

Envelope-free ATMs will increase the machines' cash deposits because bank customers receive an image of each note, Nicole Sturgill, research director of delivery channels at TowerGroup, the Needham, Mass.-based research arm of MasterCard Worldwide, tells ATM&Debit News, a CardLine sister publication. Many bank customers refuse to put cash into an ATM-deposit envelope because they fear a bank employee might steal it, Sturgill says. ATMs that accept envelope deposits provide a receipt for the overall transaction amount, but they do not identify individual bank notes deposited. Bank customers, however, do not have qualms about using envelopes to deposit checks into an ATM, Sturgill says. Large banks, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., are converting their entire networks to envelope-free ATMs because customers deposit cash into the ATMs instead having a teller perform the function, Sturgill says. ATM transactions are less expensive, and the machines enable teller to perform other functions.

JPMorgan Chase & Co.'s Chase Bank is promoting its mobile-banking service with a contest that gives consumers a chance to win free tickets to the U.S. Open Tennis Tournament by sending a text message to the bank. All residents, not just Chase customers, of New York, New Jersey and Connecticut are eligible to participate, says a bank spokesperson. Consumers who send Chase a text message with the word "WIN" until Aug. 9 will receive a text message back from Chase notifying them if they won tickets and directing them to a Web site to claim the prize. "When consumers get the text [message] back from Chase, it shows the capabilities and convenience" of the bank's mobile system, says the spokesperson. The promotion "drives attention to Chase Mobile," the mobile-banking service the bank launched in September, the spokesperson says. As of May, more than 460,000 customers had enrolled in Chase Mobile. Consumers who do not win U.S. Open tickets by sending a text message to Chase can receive tickets by opening a Chase checking account or by depositing additional funds into an existing account, says the spokesperson. Mobile-banking users can check account balances, pay bills, transfer funds and view transactions using cell phones and other mobile devices.

NACHA, the Herndon, Va.-based electronic payments organization that oversees the development and management of rules for automated clearinghouse transactions, today announced that Fidelity National Information Services will offer processing of Secure Vault Payments to its bank clients beginning later this year. Secure Vault harnesses the ACH system to enable consumers to make online purchases through their banks. Financial institutions participating in Secure Vault authenticate online shoppers and authorize and confirm their payments. That enhances security by eliminating the need for merchants to secure bank and account information from consumers' checks. By the fourth quarter, Jacksonville, Fla.-based Fidelity says it will make processing and settlement of Secure Vault transactions available to its 9,000 financial-institution clients worldwide. Metavante Corp. made a similar announcement earlier this year (CardLine, 3/15). A NACHA spokesperson says 34 Synovus-owned banks offer Secure Vault, including Columbus Bank & Trust. A number of other banks are poised to launch the service this summer, including Savings Bank of Maine, the spokesperson says. Last month, Apple Vacations Inc. announced the addition of Secure Vault as a payment option on its Web site, joining igourmet.com as one of the first retailers to offer the service to consumers.

Most consumers worldwide remain reluctant to use mobile devices such as cellular phones for mobile banking and payments, and a majority does not trust mobile devices to provide secure transactions, suggest recent survey results from Unisys Corp. Seventy-one percent of respondents would not consider using a mobile device to bank or shop online, and 59% do not believe their mobile devices will provide secure transactions, according to the survey. Financial institutions should "realize there is opportunity out there, but there's also concern about the perception of mobile banking," says a Unisys spokesperson. "Banks need to look at the big picture and need to educate consumers to get them over the fear factor." Blue Bell, Pa.-based Unisys surveyed 13,296 consumers in 14 countries in March.

Exceleron Software and SmartSynch Inc. have signed an agreement to work together to provide utility companies the ability to offer prepaid utility payments using wireless technology, the companies announced today. SmartSynch, based in Jackson, Miss., provides a wireless transmitter that utilities can install in meters at consumers' homes. Dallas-based Exceleron offers software that works with a utility's billing system to measure consumer use and deduct it from a prepaid account, Jeff Severs, Exceleron chief operating officer, tells CardLine. The agreement with SmartSynch would enable utilities to install a device on meters that use wireless phone networks to send information about consumers' use back to the utility, so the companies could offer prepaid services to consumers without installing new meters, Severs says. The Exceleron software works with utility meters that communicate automatically with the company as opposed to meters that require visits from meter readers, Severs says. The Exceleron software can work with the standard billing systems utilities use or with a prepaid card, Severs says.

While card companies and retailers continue to battle over interchange in the United States, similar events are taking place overseas. MasterCard Europe has "temporarily repealed" its interchange rates that European regulators say violate antitrust rules, the card company said Thursday. The action applies to cross-border interchange merchant acquirers pay card issuers when customers use MasterCards or Maestro debit cards. On Dec. 19, the European Commission ordered MasterCard to lower the rates within six months or face daily fines amounting to 3.5% of global revenues. On 1 March, MasterCard filed an appeal with the European Court of First Instance. The card organization is continuing that appeal, though MasterCard does not expect a judgment until "the second half of 2010," a MasterCard spokesperson tells CardLine sister publication CardLine Global. The interchange rates average 1% of the sale for MasterCard-branded cards and 0.5% for Maestro-branded cards, the spokesperson says. "MasterCard believes its cross-border interchange system has kept the cost of payment cards low for cardholders," Javier Perez, MasterCard Europe president, says in a statement. In March, the European Commission said it was investigating the interchange rates applied to Visa card transactions in Europe and the card organization's rule that merchants must accept all Visa-branded cards regardless of the issuer or type of transaction.

Processor Global Payments Inc. and United Merchant Services Inc., an independent sales organization, have renewed their multiyear processing agreement.