The National Association of Credit Management’s “Credit Manager’s Index” for April showed a record gain of 210 basis points. The CMI survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. Favorable factors include sales, new credit applications, dollar collections and amount of credit extended. The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 business credit and financial professionals worldwide with premier industry services, tools and information.
MasterCard International reported first quarter worldwide gross dollar
volume (purchases + cash ) of $331.9 billion, an increase of 8.4% over the
first quarter of 2003. Total purchases on MasterCard credit and debit cards
rose 13.6% in the first quarter, with each region reporting double-digit
growth. Purchase volume in South Asia/Middle East/Africa increased 25% and
Latin America rose 24%. In Europe purchase volume rose 16%, compared to 13%
in the USA and Canada. In Asia-Pacific, where total gross dollar volume
declined 3%, purchase volume was up nearly 11%. GDV for worldwide credit
and charge programs grew 8.9% to $270.1 billion, and GDV for offline debit
programs rose 6.7% to $61.7 billion over the same period in 2003. Gross
transactions for credit and offline debit programs increased by 10% in 2004
compared to the first quarter in 2003. MasterCard’s almost 25,000 customer
financial institutions around the world had issued more than 627.5 million
MasterCard-branded cards, a 6.6% increase over first quarter 2003.
Fort Lauderdale-based Connections USA, a/k/a iServe.com, pleaded guilty yesterday to processing credit card payments for an international child pornography ring. Before being raided by the FBI last year, the company processed about $1 million in monthly payment volume. The firm collected an 11% commission for the transactions. Connections USA laundered the proceeds from the sales of memberships to Web sites containing child pornography on behalf of Belarus-based Regpay. The money was laundered by transmitting it to accounts in Latvia. Four of Regpay’s principals have been picked up so far.
Bank One renamed historic South Street in Philadelphia to Southwest Street as part of the kick-off Southwest Airline new service to the city. Bank One, the issuer of the co-branded “Southwest Airlines Rapid Rewards VISA,” also organized a day of special retail and marketing promotions surrounding the card. The SWA VISA card offers one “Reward Dollar” for every dollar in purchases. One “Rapid Rewards Credit” is issued for every 1,200 “Reward Dollars” earned. After earning 16 credits in 12 consecutive months, cardholders receive an automatic roundtrip award valid to any of the destinations Southwest Airlines serves. Southwest Airlines will begin service to and from Philadelphia International Airport May 9th,
ICM Telecommunications has launched a “1st Financial Payroll Card” program. The company said experience shows it will be of substantial benefit to both employers and their employees. There are equally compelling advantages for employees, the CEO said, including funds immediately available on payday, the elimination of check cashing fees and long lines to cash checks. Greater safety is also offered since the employee does not need to carry large sums of money, and has the security of a PIN-protected card. ICM Telecommunications Inc. is the exclusive distributor of debit instruments for 1st Financial Solutions Inc., which is in partnership with Sutton Bank.
PayPal introduced a set of application programming interfaces to its payments platform based on open standards. The new “PayPal Web Services” is comprised of four new informational and transactional APIs and includes PayPal’s “Instant Payment Notification” service. In its initial release, the service will provide access to “TransactionSearch” (based on specified search criteria such as payment date or customer name, returns a set of matching transaction IDs and basic transaction details); “GetTransactionDetails” (for a given transaction, returns all details associated with the transaction, such as customer email address, time of payment, and purchase details); “RefundTransaction” (for a given transaction, reverses the transaction and issues a refund or partial refund to the purchaser); and, “MassPay” (transfers funds to one or many recipients by providing an automated alternative to cutting paper checks or manually initiating individual payments).PayPal has more than 45 million member accounts globally.
TIAA-CREF’s proposal that at least two-thirds of MBNA Corporation directors be independent received 56% of the votes cast Monday at MBNA’s annual meeting of shareholders. MBNA shareholders also withheld 36% of their votes for Randolph Lerner, board chair, and 35% for Bruce Hammonds, CEO. The disputed independents, Benjamin Civiletti and James Berick, had 41% and 47% of withheld votes, respectively. Last week, MBNA announced two new independent directors. TIAA-CREF says the appointment of the two new directors was a step in the right direction, but MBNA still has not reached the two-thirds independent majority it requested in its proposal. Also, questions about the composition and independence of the board’s audit, compensation and nominating committees remain to be settled, the TIAA-CREF said yesterday. MBNA is not required to follow yesterday’s vote.
MasterCard International yesterday reported that its U.S. gross dollar volume for the first quarter increased 7.3% over 1Q/03 to $157.5 billion, compared to a 4.1% annual growth rate for the prior quarter. However, the number of U.S. credit card accounts declined 3.9 million, and the number credit cards decreased 10.6 million, compared to year-end 2003. MasterCard added 2.1 million debit card accounts during the first quarter. Credit card volume was up 8.0% to $126.7 billion, and debit card volume increased 4.6% to $30.8 billion. Combined purchase volume for U.S. credit and debit cards in the first quarter increased 12.5% to $102.8 billion, compared to one-year ago. At the end of the first quarter, MasterCard had 211.8 million credit card accounts representing 262.0 million cards. Debit card accounts stood at 49.6 million representing 54.4 million cards. During the quarter MasterCard processed 1.2 billion credit card transactions and more than 600 million debit card transactions in the USA. For complete details on MasterCard’s 1Q/04 results visit CardData ([www.carddata.com]).
Diebold announced it will take on the full line of CCTV products from Bosch Security Systems, and has signed a re-seller agreement to offer Bosch’s GSA-approved alarm and CCTV products for the government market. Bosch has a wealth of product knowledge and expertise in addition to its commitment and relationships with those in the government market. Diebold is proud to be a GSA Federal Supply Schedule Contractor, and can provide a total solution for any size government application from initial site surveys through the installation phase. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security and services.
The CO-OP Network has teamed with Ingeniux to form ResolverGroup LLC and offer “Check Management Solutions.” To bring Check Management Solutions to the marketplace, CO-OP Network partnered with Ingeniux, a leading provider of XML-based Web content, and attorneys specializing in check training, business analysis and process improvement to form ResolverGroup LLC. The result of this partnership is a Web-based product that interactively leads credit unions through an online interview process to identify their particular check issue. CO-OP Network (www.co-opnetwork.org), established in 1981 and located in Ontario, Calif., is wholly-owned by its credit union shareholders and provides volume discounts on products and services that include risk management as well as debit and deposit access.
Four of the top five U.S. credit card issuers posted single digit gains in credit card outstandings during the first quarter, but as a group the top ten averaged an 11% increase. Citigroup, the nation’s largest issuer, escaped the distinction due to its fourth quarter acquisition of the Sears card portfolio. Bank of America, the top issuer with the highest organic growth, posted a 28% increase in credit card loans during the first quarter. Marketing powerhouse, Capital One, was only up 17% in the first quarter. Collectively, the top issuers held card loans of $553.9 billion at the end of the first quarter, compared to $499.2 billion as of EOY 2003, according to CardData (www.carddata.com).
Top Ten U.S. Bank Credit Card Issuers
RANK/ISSUER 1Q/04 1Q/03 CHNG
1. Citigroup* $142.3b $108.6b +31%
2. MBNA 82.9b 78.3b +6%
3. Bank One 74.2b 72.8b + 2%
4. JPM Chase 51.0b 50.6b +1%
5. Discover** 47.3b 51.8b – 9%
6. Cap One 45.3b 38.7b +17%
7. AmEx 38.1b 34.6b +10%
8. BofA 37.3b 29.1b +28%
9. HSBC/HH*** 18.8b 16.2b +16%
0. Providian 16.7b 18.5b -10%
TOTAL: $553.9 $499.2 +11%
*Citigroup includes some non-US cards, possibly $5 billion
** Discover data as of 11/30/03 ***HSBC/HH is preliminary
Source: CardData (www.carddata.com)
JPM Chase and Bank One announced yesterday that their merger will close mid-year and that the combined company will have 16 board members, consisting of eight Directors from each company, with fourteen independent directors except for William Harrison, who will be Chairman and CEO, and James Dimon, who will be President and COO. The Directors elected at the annual meetings on May 25 will serve until the merger is completed. Bank One Corporation ( ) is the nation’s sixth-largest bank holding company, with assets of $320 billion. J.P. Morgan Chase & Co. ( ) is a leading global financial services firm with assets of $801 billion and operations in more than 50 countries.