05/10/2004 • CardFlash® - Payment Card Industry News

MASTERCARD 1Q/04

5, BELGIUM, Country, PriorityBy Robert McKinley 05/10/2004

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.

Delinquency Heads South for All Major Issuers

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Delinquency (30+ days) among the top prime issuers declined 63 basis points during the first quarter, while delinquency for sub-prime issuers declined 228 basis points, compared to the first quarter of 2003. All of the top issuers posted lower delinquency for the first quarter with Capital One reporting the sharpest decline among prime issuers, and Providian experiencing the steepest decline among sub-prime issuers. The nation’s largest issuer, Citibank, reported that its 90-day delinquency rate for bank credit cards was flat for the first quarter at 1.83%. Capital One’s delinquency dropped from 5.55% for 1Q/03 to 3.99% for the first quarter of this year. Providian’s 1Q/04 delinquency rate of 7.36% compares to 10.31% one-year ago. The average delinquency rate for the nation’s top five prime issuers (excluding Citibank) was 4.76%%, compared to 5.39% one-year ago. The average delinquency rate for the nation’s top three sub-prime issuers was 9.42% for 1Q/04, compared to 11.70% one-year ago. For complete details on first quarter issuer performance visit CardData ([www.carddata.com][1]).

1Q/04 PRIME ISSUER DELINQUENCY
Issuer 1Q/04 1Q/03
Bank One: 5.57% 5.96%
MBNA: 4.27% 4.74%
Chase: 4.43% 4.59%
Cap One: 3.99% 5.55%
BofA: 5.56% 6.09%
AVG 4.76% 5.39%
Source: CardData (www.carddata.com)

1Q/04 SUB-PRIME ISSUER DELINQUENCY
Issuer 1Q/04 1Q/03
Providian: 7.36% 10.31%
Metris: 10.40% 11.50%
CompuCredit 10.50% 13.30%
AVG 9.42% 11.70%
Source: CardData (www.carddata.com)

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

Minneapolis Become Fair Isaac’s Headquarters

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Fair Isaac this morning announced that the company has designated its Minneapolis location as its corporate headquarters instead San Rafael, California. Fair Isaac opened a new corporate office in downtown Minneapolis in 2003, building upon a significant Twin Cities presence that began with the acquisition of database marketing company Dynamark Inc. in 1992. The Minneapolis location now includes the offices of the CEO and CFO, as well as numerous other corporate and market-facing leadership positions. Fair Isaac Corporation is the preeminent provider of creative analytics that unlock value for people, businesses and industries.

Bank One AKC VISA Adds Cardholder Rewards

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Bank One and the American Kennel Club have partnered to launch the “AKC Rewards VISA” card. Since 1995, the AKC and Bank One have offered an affinity credit card in which a contribution is made to the AKC after each card purchase. With the new “AKC Rewards VISA” card, a contribution will continue to be made to the AKC after each card purchase to promote and support responsible dog ownership, canine health research, recovery of lost pets, public education and more. Existing AKC cardholders will have the opportunity to enhance their card by opting to participate in the new rewards VISA card program. New cardholders will automatically receive the “AKC Rewards VISA” card. Cardholders earn one point for every dollar spent in card purchases. Every time 2,500 points are earned, cardholders can redeem them for a $25 check, gift card or gift certificate that can be used at a pet retail store and select merchants including gas stations, restaurants and other retailers.

Americans Believe Online Shopping is Getting Safer

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Fifty-one percent of Americans say the Internet became a safer place to shop in 2003 and 61% believe it will become even safer in 2004. The new ACNielsen International Research survey, conducted during March, reports that 75% of Internet shoppers are aware of potential fraud when shopping online, including the proliferation of fake or “spoof” e-mails. But the survey found that concerns about Internet fraud are not prohibiting Americans from shopping online. Findings show that 53% of online shoppers plan to buy even more on the Internet this year because of the convenience, speed, selection and increased security the Internet offers. The survey was commissioned by PayPal and eBay.

FTC Shuts Down a Nonprofit Debt Negotiation Network

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

The FTC has filed a lawsuit and obtained a asset freeze against a group of defendants allegedly masquerading as a nonprofit debt negotiation organization including National Consumer Council, London Financial Group; National Consumer Debt Council, Solidium Credit Recovery Services; J.P. Landis; Financial Rescue Services; Signature Equities; M&L Springfield Trust; PC Hailey Trust; and, Via Lido Trust. The FTC alleges that the defendants, operating a complex web of companies advertised as National Consumer Council, leave pre-recorded messages on consumers’ home answering machines claiming NCC is a nonprofit organization that will stop creditors’ collection efforts and significantly reduce consumers’ debt. According to the FTC, the defendants also violated the TSR by calling consumers who have registered their telephone numbers on the National Do Not Call Registry and by continuing to call consumers who previously have stated that they do not wish to receive calls from the defendants.

New Providian Marketing is the Key to Future Earnings

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

[Full Story – html 1M][1]

[1]: /cardflash/secure/oldstatic/2004/may/10e.html

Consumers Debt Rebounds After an Anemic February

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

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[1]: /cardflash/secure/oldstatic/2004/may/10b.txt

Rewards Network Promotes Adel

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Chicago-based Rewards Network has promoted Bryan Adel from general counsel to SVP. Adel joined the company in 2003 as general counsel. Adel brings to Rewards Network the benefit of more than 15 years’ experience in corporate law and SEC compliance. Rewards Network, headquartered in Chicago, provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform.

Viisage Lands DoD CAC Related Contract

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Viisage announced Friday that it has received a $10 million order to support the production of secure, smart credentials as part of the U.S. DoD’s “Common Access Card” smart card program. As previously reported, Viisage will provide a solution to the DoD’s DMDC through Telos, the DMDC’s support contractor. The solution, which is expected to include 1,700 Toppan CP400 printers as the fixed-site desktop printers, as well as consumables and services, will be used for the production of secure identification cards throughout the RAPIDS. Viisage delivers advanced technology identity solutions for governments, law enforcement agencies and businesses concerned with enhancing security, reducing identity theft, providing access control, and protecting personal privacy.

FDC To Lose 14 Million Credit Card Accounts to M&As

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

[Full Story – html 827K][1]

[1]: /cardflash/secure/oldstatic/2004/may/10d.html

Givex Eyes British Gift Card Market

5, Country, Priority, UNITED STATESBy Robert McKinley 05/10/2004

Canada-based gift card and loyalty transaction processor, Givex Corporation, has launched its card program in the United Kingdom. Givex clients can safely merchandise their gift cards since they have no value until purchased and activated at the point of purchase. Customers also prefer gift cards because they fit in their wallet just like a credit card and are easy to use. Givex Corporation () processes gift card and loyalty transactions and provides payment processing gateway services for a wide range of industries including hospitality, retail, grocery and petroleum.

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