04/19/2004 • CardFlash® - Payment Card Industry News

AmEx Credit Cards Penetrate Middle East

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

The first ever American Express credit card billed in bahraini dinars has been launched in Bahrain, according to last week’s issue of CardFlash International (www.cardflashinternational.com). The new “Blue” credit card, issued by American Express Middle East and North Africa, offers a 1% rebate on all card purchases. Cardholders may pay as little as 5% of the outstanding balance per month. The “AmEx Blue” card carries an annual fee of BHD12, and a monthly interest rate of 1.95%, compounded daily. AmEx also issues a gold credit card in Bahrain, which offers a 1% rebate on all purchases, plus access to Middle East airport lounges. American Express Middle East and North Africa issues cards denominated in United Arab Emirates dirhams. For example, the “Dubai Duty Free American Express Credit Card” offers a 10% discount on a range of over 15,000 items at Dubai Duty Free. The UAE card also offers chances to win the “Millennium Millionaire” and “Finest Surprise” sweepstakes.

32% of Students Use Credit Cards; 43% Use Debit Cards

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

For the first time since 1997, high school students are reversing declining scores and are demonstrating increased aptitude and ability to manage financial resources such as credit cards. The survey conducted for the Jump$tart Coalition for Personal Financial Literacy, and funded by Merrill Lynch, found that students who participated in the 2004 survey answered 52.3% of the questions correctly, compared to 50.2% the prior year. The research also found that the percentage of students who do not use a credit card was 68.2% versus 67.8% in 2002. Eleven point four percent use their own card compared to 12.1% in 2002. In addition, 15.7% use their parents’ card versus 15.4% in 2002 and 4.8% use both their own and their parents compared to 4.7% in 2002. Over one third (43.3%) of the 2004 students have an ATM card, compared with 35.9% in 2002. Nearly 78% of the students have a savings and/or checking account with a bank.

Cardholders Revolve Nearly $4,000 Each; 21% Uncarded

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

[Click Here for the Full Story][1]

[1]: /cardflash/secure/oldstatic/2004/april/19a.html

Mid-Size Issuers Post 17% Gain in First Quarter Volume

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

Medium size issuers, with $100 million to $600 million in outstandings, posted an average 7.5% increase in year-over-year outstandings, and a strong 17.2% boost in first quarter volume, compared to the first quarter of last year. The gain in credit card volume is nearly twice the level of growth for smaller issuers, with $15 million to $100 million in outstandings, but less than the 19% first quarter increase reported by Citigroup last week. However, the Citigroup figure was fueled by its Sears card portfolio acquisition. The major issuers will be reporting first quarter data this week. Among the strongest gainers in credit card loans for the middle level peer group is FL-based SunTrust, posting an an impressive 18.7% increase in first quarter outstandings. Among volume gainers are Columbus Bank & Trust with a 33% gain, Redstone Credit Union with a 28.9% increase, and Golden 1 Credit Union with a 28.3% gain. For complete details on first quarter portfolio results, posted daily, visit CardData ([www.carddata.com][1]).

$100 Million to $600 Million Peer Group – 1Q/04
ISSUER Outstandings Y/Y Volume Y/Y
1. Commerce Bancshares $545.5 million (+8.4%) $386.3 million (+10.2%)
2. Columbus B&T $220.0 million (+4.3%) $162.6 million (+33.1%)
3. Penna State Emply CU $210.2 million (+7.4%) $91.2 million (+5.6%)
4. Golden 1 CU $149.2 million (+5.4%) $118.8 million (+28.3%)
5. SunTrust $143.6 million (+18.7%) $257.6 million (+21.9%)
6. Security Srvc CU $127.7 million (+9.4%) $32.8 million (+6.1%)
7. Redstone FCU $113.2 million (+8.8%) $62.4 million (+28.9%)
8. Delta Emply CU $100.6 million (-2.4%) $56.8 million (+4.0%)

TOTAL $1610.0 million ( +7.6%) $1168.5 million ( +17.2%)
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

MBNA Eyes Up the Chinese Credit Card Market for 07

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

MBNA announced it is probing the Chinese market following the recent opening of an office in Shanghai. The affinity credit card king currently holds more than $21 billion in total managed loans in the U.K., Canada and Spain. MBNA says the new office in China will be used to conduct market research, to further develop relationships with Chinese regulators and the banking community in China, and to design long-term strategies for entering China’s credit card market. At the end of 2003, MBNA had approximately 1,400 total international affinity contracts in place. In Europe, total managed loans reached $17.2 billion last year. In Canada, total managed loans for 2003 reached $3.6 billion. In February, Shanghai Pudong Development Bank and Citibank officially launched their first international credit card in China that can be settled both in renminbi and US dollars. Last month, American Express and the Industrial and Commercial Bank of China inked a deal to issue American Express branded credit cards in China that are also dual denominated. (CF Library 2/5/04; 3/30/04).

AmEx Opens the Tribeca Film Festival Ticket Gate

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

Starting this week, American Express cardholders can purchase advance tickets to individual film screenings at New York City’s “Tribeca Film Festival” as AmEx starts its third year as a “Founding Sponsor” of the event which drew more than 325,000 visitors last year. In its third year as Founding Sponsor of the Festival, American Express once again welcomes fans back to downtown New York City to enjoy the international film and cultural festival that has helped revitalize the spirit of the historic neighborhood. The Tribeca Film Festival was founded by Robert De Niro, Jane Rosenthal and Craig Hatkoff to celebrate New York City as a major filmmaking capital, and to contribute to the long-term recovery of lower Manhattan after the attacks of September 11, 2001.

No-Risk Multi-Currency e-Commerce Service Launched

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

E4X and ECNext have teamed to integrate E4X’s online multi-currency services with ECNext’s hosted e-commerce solutions. By incorporating E4X’s solution in it’s Web commerce platform, ECNext can provide clients with a multi-currency e-commerce service which will enable them to sell in local currencies without currency risks. E4X, Inc. provides currency management and conversion services for merchants who sell online internationally. ECNext builds and manages online channels, enabling leading financial analysts, market research firms and business publishers to grow their business by selling high-value information via the Web.

Capture Resource Completes Loyalty Card Acquisition

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

Philadelphia-based Capture Resource has completed its acquisition of the loyalty card services business from FL-based Catalina Marketing Corporation. This acquisition strengthens Capture Resource’s position as a leading provider of image and data capture, transaction processing and business process outsourcing solutions. In addition, it enables Capture Resource to offer a complete, reward processing outsourcing solution to clients seeking to capitalize on this growing trend in consumer marketing. Catalina Marketing Corporation was founded 20 years ago based on the premise that targeting communications based on actual purchase behavior would generate more effective consumer response. Capture Resource is a leading provider of innovative input management solutions including high-volume mail processing, high-speed forms and document scanning, automated data capture, and domestic and offshore manual data capture.

AIR-ASIA MASTERCARD

5, Country, MALAYSIA, PriorityBy Robert McKinley 04/19/2004

Discount airlines, AirAsia, has partnered with DBS Bank to launch a co-branded MasterCard for Malaysia, Thailand, Indonesia, and Singapore. The new “AirAsia AA$ MasterCard” enables cardholders to earn free travel for charging S$24,000 instead of the typical S$40,000 required on most frequent flyer bank credit cards. Cardholders can actually earn free travel with as little as S$480 in charges, depending on the amount of cash rebates granted by the different participating merchants. The “AirAsia AA$” program rewards members with rebates in the form of “AA$.” The rebates of up to 25% of the dollar value spent are given out by more than 100 merchant outlets in diverse businesses. In addition, DBS will award bonus “AA$” to card members based on the outstanding balance in their accounts at the end of each month. With the accumulated “AA$,” cardholders will be able to redeem free flights to any of AirAsia’s 13 destinations in the region. The “AA$” is as good as real money with one “AA$” equivalent to S$1. They can also be used to offset purchases at participating merchants. As part of the launch promotion, successful applicants will also enjoy a two-year waiver of annual fees. DBS Bank is a leading credit card issuer in Singapore and Hong Kong with a more than 1.5 million cards issued.

Hedge Fund Seeks Control of Intercept; Lawsuit Filed

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

Atlanta-based InterCept has filed a lawsuit to eliminate confusion created by JANA Partners that four Board seats are up for election at InterCept’s upcoming 2004 Annual Meeting. Early last week, JANA Partners, which owns 8% of InterCept’s common stock, notified InterCept by letter that it intends to nominate and solicit votes for its handpicked candidates at InterCept’s Annual Meeting. The hedge fund indicated that upon taking control it would immediately hire an investment banking firm to possibly sell the company. InterCept says it has a six-member classified Board of Directors and is seeking a declaratory judgment confirming that, under Georgia law and InterCept’s governing documents, only the two Class III Directors whose terms expire at the 2004 Annual Meeting are up for election. JANA contends that the Class I Board seat held by Mark Hawn and the Class II Board seat held by Dr. James Verbrugge are also up for election at the 2004 Annual Meeting, even though the terms of the Class I and Class II Directors do not expire until the InterCept Annual Meetings in 2005 and 2006, respectively. JANA asserts that the terms of Mr. Hawn and Dr. Verbrugge expire at the 2004 Annual Meeting because they were elected in February 2004 to fill vacancies in those board seats resulting from the resignations of two former directors. JANA contends that directors elected to fill vacancies in existing Board seats only serve until the next election of directors.

MSI Deploys Always-On IP Terminal

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

NJ-based Merchant Services has deployed a VeriFone “Omni 3750” IP payment terminal connected to an existing DSL for a client, and says it shaves three or four seconds off a transaction due to the always-on approach. The VeriFone Omni 3750 IP is an all-in-one payment terminal featuring a built-in jam-proof printer and a PIN pad for debit card acceptance as well as both Ethernet and dial-up communications capability. MSI offers gift cards, prepaid phone cards, electronic check processing and other services to enhance the value of the Omni 3750 to its merchant customers. MSI offers end-to-end transaction processing solutions for Visa, MasterCard, American Express, Discover and private label card acceptance.

Tribal Gaming Casinos Targeted for Smart Cards

5, Country, Priority, UNITED STATESBy Robert McKinley 04/19/2004

Dallas-based NACAHA has launched a marketing campaign featuring British Columbia-based QI Systems’ smart card systems and is targeting tribal gaming casinos in the USA. Native American gaming corporations within the United States have annual revenues exceeding $8 billion dollars. NACAHA, Inc. will market smart card solutions that are developed, designed, manufactured and serviced exclusively by QI Systems, Inc. QI Systems Inc. designs hardware and software for the smart card industry, supplying top-to-bottom applications for a wide variety of industries. QI Systems has a high level of expertise in delivering stored value solutions for specialized needs.

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