June 21, 2007

GE Money Teams up With eBay to Introduce eBay MasterCard
Business Wire (06/15/07)

GE Money has announced the launch of the eBay MasterCard, an expansion of its partnership with eBay. The card will be available to customers in late June. eBay MasterCard customers will accrue one reward point for every $1 they spend. Points are redeemable for shipping discounts and vouchers that can be used to shop on eBay or to pay eBay seller fees. The card is a good fit with PayPal, because customers can view their account activity within their existing PayPal account. Further benefits include zero percent liability for unauthorized purchases, around-the-clock customer service, and no annual fee. GE Money Bank will issue the card and provide customer service, billing, and credit management. "The eBay MasterCard is another great extension of the partnership we've built with eBay and PayPal over the past few years to offer rewards, security, and convenience for their customers," said Margaret Keane, president and CEO of GE Money's Retail Consumer Finance unit. "With the eBay MasterCard, shoppers can apply and buy with an instant online credit process. As with PayPal Plus, there's no waiting for a card to arrive in the mail before making your eBay purchases."
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Kimmel Center & Citi Announce Five-Year Strategic Partnership to Support Performing Arts in Philadelphia
Citibank News Release (06/18/07)

Citi and the Philadelphia-based nonprofit Kimmel Center Inc., which runs a leading performing arts center that serves a wide regional audience, announced on June 18 a long-term venture to tout the ideals and programming of Kimmel. Through the venture, Citi will be the presenting sponsor for the coming five performance seasons of the Kimmel Center Presents and Cadillac Broadway Series, and have significant logo placement in the Kimmel Center and on its marketing items, including print and Web content. In addition, the two entities will conduct joint marketing events, which will promote Citi's expansion efforts in Philadelphia and permit the Kimmel Center to widen its scope. The venture will also offer advantages to patrons of all of Citi's divisions, including Citi Cards, due to it being the preferred and authorized credit card for the Kimmel Center's programs. Citi has over 1 million customers in the Philadelphia region. In 2006, Citibank launched its initial retail brand in the region, and it currently has five financial centers in the greater Philadelphia area. "The arts positively impact communities and people throughout Pennsylvania," proclaimed Pennsylvania Gov. Edward G. Rendell. "This partnership between the Kimmel Center and Citi, two world-class organizations, increases the visibility of our state and its cultural assets."
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Wells Fargo Joins National Black MBA Association (NBMBAA) to Recognize Entrepreneurial Excellence
Wells Fargo News Release (06/15/07)

Wells Fargo & Co. and the National Black MBA Association (NBMBAA) have partnered to honor outstanding African-American entrepreneurs with the NBMBAA/Wells Fargo Entrepreneur Excellence Award. The award will recognize leaders in business at the 29th Annual National Black MBA Association Conference in September. Eligibility requirements for nominees include being a current NBMBAA member who is at least 18 years old, owning more than 51 percent of their business, and owning their business for a minimum of three years. NBMBAA President and CEO Barbara Thomas says, "As we pay tribute to these incredible visionaries who provide jobs, resources, and inspiration for our community, we challenge them to continue to build and inspire social, financial, personal, and professional wealth." Wells Fargo's African American Businesses Services program has sponsored financial and outreach resources for African-American business owners since 1998, loaning $826 million plus to thousands of business owners to date.
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Wal-Mart Finds a Back Door Into Banking
International Herald Tribune (06/21/07) Barbaro, Michael; Dash, Eric

Wal-Mart announced yesterday that it plans to rapidly expand the financial services it offers in its stores. Among the new offerings expected in the next year is a prepaid debit card called the Wal-Mart Debit Card. The Visa-branded card, which will be issued with General Electric's GE Money division, can be funded with the direct deposit of a paycheck for free or reloaded with cash at a Wal-Mart store for a fee of $4.64. Consumers can check the balance of their card online or on their cell phones, pay certain bills, and withdraw cash from ATMs. In addition, Wal-Mart is planning to expand the number of stores with money centers--which offer check cashing, bill paying, and money order services--from 225 now to at least 1,000 within the next year. The prepaid cards and money center services are seen as a precursor to even wider offering in the future, including mortgages, home equity loans, and an interest-bearing savings account.
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Plastic Replaces Pocket Change
Rutland Herald (VT) (06/18/07)

Generation P, also known as Generation Plastic, are the spenders aged 18 to 25 years old that use plastic for the majority of their purchases. According to Experian Simmons Research, 20-somethings comprise the bulk of spenders supplanting cash and checks for debit and credit. A survey conducted for Visa revealed that 40 percent of Gen P used plastic for payments of $25 or less at least four times a week. Visa's payWave and American Express' Express Pay have promoted the use of cards that are waved in front of a reader, increasing the convenience for making micropayments or purchases less than $5. Although credit and debit have represented considerable growth in recent years, Gen P spenders lead the segment of the population that relies on plastic.
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Credit Card Disclosures Under Fed Scrutiny
Chicago Tribune (06/17/07) P. C5; Ambrose, Eileen

The Federal Reserve Board conducted one-on-one interviews with consumers to test their understanding of credit card disclosures and found that most were unaware of key terms buried in legalese. Among the changes the Fed has proposed, issuers would have to give customers 45 days' notice before raising interest rates due to default or late payment, and creditors would not be able to claim a "fixed" interest rate in advertisements unless the rate did not actually change or remained the same for a specific time. Issuers of subprime credit cards would have to provide extra disclosures so consumers would understand that greater upfront fees would erode their available credit, and the due date would have to be stated on monthly bills along with a specific cutoff time, if necessary. Legislation currently pending in Congress would go further to eliminate practices such as universal default and double-cycle billing. The Fed will accept public comments on the proposals for three months.
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Forget Checks: Employers Turn to Paycards
Wilmington News Journal (DE) (06/17/07) Pappas, Leslie A.

Last week, Discover Financial Services announced that it had partnered with First Data to issue payroll cards through the Denver-based processor's Money Network program. The deal is the latest attempt by Discover to make a name for itself in the growing payroll card market. According to Mercator Advisory Group, employers loaded roughly $6.3 billion on about 1.5 million payroll cards in 2005. Those figures are expected to increase to 3.2 million cards and $12.1 billion in payments by the end of this year, and 4.6 million cards with $17.4 billion in payroll deposits by the end of 2009. Ted Grunberg, JPMorgan Chase's product manager for prepaid products, noted that the cards have really taken off in the past three years, as consumers have grown more comfortable using plastic. Grunberg added that JPMorgan Chase expects to see double-digit increases in the number of employers using payroll cards for the foreseeable future.
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