U.S. credit card asset-backed securities market should reach roughly $70 billion in 2002, up from $66 billion in 2001. Standard & Poor’s says issuance was down slightly in the first half but 60% of the total credit card refinancings will occur in the second half of this year. Bank One tops the refinancing list for transactions expected to mature in 2002 at close to $8 billion, followed by MBNA at $5.5 billion, and Citibank at $4.8 billion. Although Standard & Poor’s Credit Card Quality Index loss rates have trended upward since the end of the third quarter of 2001, losses have started to stabilize and, on average, portfolio yield, payment rates, and excess spread remain healthy. Currently, average bankcard losses are 6.6% and may go up as high as 7.2%.
Paris-based Oberthur Card systems reported second quarter revenues of US$118.5 million, a slight increase over 2Q/01. During 2Q/02, Oberthur partnered with Discover Financial Services on the manufacturing of the Discover “2GO Card.” The Discover 2GO Card,
the first card of its kind in the credit card industry, has a unique, compact shape and is housed in a protective case that easily attaches to a key-chain, belt or money clip. Oberthur generated US$30.0 million in revenues in the Americas, a 21% decline
from 2Q/01. However, card revenues in Asia/Pacific rose 54% to US$4.6 million, compared to US$3.0 million one year ago. Card sales in Europe, Middle East, and Africa rose 9% over the past year to US$84.4 million. During the second quarter Oberthur delivere
d 9 million smart cards worldwide. Oberthur has been reducing expenses this year, cutting its work force from 3,433 to 3,136 as of mid-year 2002.
Citibank has introduced the Citibank Money Card Account to remit money from the U.S. to Mexico. The Money Card is linked to a distinct U.S. Citibank bank account featuring an ATM card for the recipient in Mexico. Account fees for the Citibank Money Card Account include a $5.00 monthly maintenance fee and a $7.95 fee for each withdrawal of funds transaction in Mexico. These fees are assessed to the U.S. account and are not deducted from the recipient’s cash withdrawal. Citibank Money Card Account holders in the U.S. may deposit or transfer funds into their U.S. account and the Money Card holder in Mexico may withdraw the funds at any of the approximately 20,000 ATMs in the country, including over 4,400 Banamex ATMs. Both Citibank and Banamex are member companies of Citigroup. The Citibank Money Card, currently in a pilot stage, is available through 26 Citibank Financial Centers in New York, Chicago and Los Angeles.
Centrodyne and U.S. Wireless Data have unveiled the new Centrodyne “CardMeter” taximeter which features a traditional Centrodyne “Silent 620” taximeter fitted with U.S. Wireless Data’s “Synapse Enabler,” which comprises special hardware and software to enable real-time authorization of credit cards. The Centrodyne CardMeter taximeters are available for all U.S. metropolitan areas and are currently in use in Dallas, Texas. U.S. Wireless Data is an established source of wireless transaction processing for the U.S. taximeter market.
Cardtronics, an ISO, has signed a distribution agreement to offer CashWork’s “PayPort,” a proprietary POS countertop terminal, to approve checks and use an existing ATM to dispense cash. Cardtronics is the largest ISO thus far to distribute the CashWorks solution, with a network of more than 7,500 ATMs from coast to coast, handling approximately 150,000 transactions per day. Using the CashWorks PayPort, Cardtronics customers can offer check-cashing services in their stores with a minimal investment.
Vancouver-based GSB Financial Services announced it has signed a marketing agreement with Direct Card Services. GSBF will be paid a fee of 30% by Direct Card Services for any merchant
contract approved for processing. GSBF has submitted merchant contracts to DRFL for processing of approximately $20 Million per month so far. GSBF on January 24th reported the company was in negotiations for
the placement and processing of up to $100 million per month in credit card transactions. This $20 million is the first in launching an innovative marketing program for GSBF with Direct Card Services.
Arizona Federal Credit Union, Capitol Bancorp with 16 member banks, Grand Canyon Federal Credit Union and Honeywell Aerospace Federal Credit Union announced yesterday they will use EPN’s private-sector network to process its ACH transactions starting in September. Consumers use the ACH to receive Direct Deposit of payroll, Social Security and other government benefits. The ACH also processes Direct Payments of taxes, utilities and other recurring bills.
CardinalCommerce has signed agreements with Transactional Technologies and Digital Courier Technologies to resell “Cardinal Centinel,” an easy-to-install software authentication platform that supports credit card industry initiatives to reduce the incidence of online fraudulent transactions. Cardinal Centinel makes it easy for merchants to participate in these programs and to integrate them into their electronic shopping sites.
Providian reported 2Q/02 net income of $153.9 million compared to net income of $232.4 million for the second quarter of 2001. Providian also announced Tuesday the closure of its Sacramento operations facility, effective immediately, and plans to close facilities in Fairfield, California and Salt Lake City, Utah by the end of this year. Approximately 300 employees will be affected by the closing of the Sacramento facility and an additional 1,000 employees will be affected at the Fairfield and Salt Lake City facilities. Since October, Providian has cut its workforce by 47% after the collapse of the sub-prime credit card market. The Company ended the second quarter with $19.6 billion in total managed credit card loans and 12.9 million accounts, down from $22.1 billion in managed credit card loans and 15.0 million accounts at the end of the first quarter 2002. During 2Q/02, Providian originated approximately 350,000 new customer accounts with a balanced distribution in the middle and prime market segments of approximately 65% and 35%, respectively. The managed net credit loss rate and the managed 30+ day delinquency rate for the second quarter of 2002 were 17.53% and 10.16%, respectively. The quarter ended with a managed charge-offs for the month of June 2002 of 17.22%, down from the managed net credit loss rate for the month of March 2002 of 17.64%. Providian says it spent $104.2 million in solicitation and advertising during the second quarter. For complete details on Providian’s 2Q/02 results visit CardData ([www.carddata.com]).
Transaction Systems Architects reported 2Q/02 revenue of $65.0 million and net income of $1.3 million. The Company completed the quarter with $179.1 million in backlog, up from $169.7 million at the end of the previous quarter, a 5.5% sequential increase. TSAI says it added another top-100 U.S. retailer during the quarter, bringing its total to 25 of the top 100; and the company has now shipped the latest release of our BASE24 e-payments product to over 100 customers. In addition, TSAI secured a new long-term commitment from Bank of America for the newest version of its “Money Transfer System” product. Transaction Systems Architects’ solutions are used on more than 1,750 product systems in 71 countries on six continents. For complete details on TSAI’s 2Q/02 results visit CardData ([www.carddata.com]).
Electronic Clearing House reported second calendar revenue of $8.4 million, an increase of 8.5% over the same quarter in 2001 and a net loss for the quarter of $168,000, compared to net income of $282,000 for the same period last year. The loss reflects a reduction in gross margin, as well as the Company’s investment to develop infrastructure and staff to support the Visa POS check processing platform. Research and development expense increased to $466,000 in the third fiscal quarter, from $307,000 in the same period last year. The Company’s total processing and transaction revenue increased 10.6% to $8.3 million for the quarter, up from $7.5 million in the same quarter in 2001. Bankcard processing and transaction revenue increased 6.3% to $6.9 million for the quarter, compared to $6.5 million in the same quarter of 2001. Check-related revenues increased over 23% to $1.48 million, as compared to $1.20 million in the prior year quarter. For complete details on ECHO’s 2Q/02 results visit CardData ([www.carddata.com]).
Fujitsu Transaction Solutions and Retalix have named Bruce Minale, Tony van Seventer, and Dror Ben-David as a management team to lead the companies’ Dallas-based joint venture, StoreNext Retail Technologies LLC, which will focus on information technology solutions for independent grocers and dealers. StoreNext is headquartered in Dallas.