CA-based Boost Mobile has teamed with Next Estate Communications and Columbus Bank and Trust Company to launch the “Boost Mobile Prepaid VISA Card”. Boost Mobile’s Prepaid Visa Card functions like any Visa debit card, and can be used anywhere Visa debit cards are accepted – at millions of brick-and-mortar and online merchants worldwide. Cardholders can also access their funds through the worldwide Visa/PLUS ATM network. Boost Mobile, an Irvine-based division of Nextel Communications, is a provider of quality wireless telecommunications products and services that have gained a zealous following due to Boost’s brand recognition and popularity among today’s youth. Next Estate Communications is America’s oldest and largest provider of retailer sold prepaid debit cards.
Updated figures from the “Chip and PIN” program show that it reached all of its 2004 roll-out targets for upgrading cardholders and businesses. For 2005, the program expects to complete its roll-out to all 42 million cardholders and 860,000 tills. At the end of 2004, 36 million cardholders and 688,000 tills were upgraded to “Chip and PIN.” Last year’s target was 35 million cardholders and 636,000 tills. Since its roll-out began in October 2003, 76.8 million “Chip and PIN” cards have been issued. The total includes 31.4 million “Chip and PIN” credit cards and 45.4 million “Chip and PIN” debit cards. There are 122 million total cards in the country. The program says 48% of credit or debit card transactions per day are now verified by PIN.
VeriFone has introduced the “Omni 7000LE” payment system for multi-lane retailers. The Omni 7000LE provides a compelling baseline POS solution for multi-lane retailers with an 8-line display, ATM-style keypad, and multiport serial cable interface. It accommodates a complete selection of payment and value-added applications and provides the same stringent security protections as the module Omni 7000MPD and Omni 7100MPD. The Omni 7000MPD was an industry-first modular payment POS solution supporting debit, credit, signature capture, smart cards and advanced USB and Ethernet connectivity.
MasterCard’s general counsel Noah Hanft has been selected to be a keynote speaker at the Federal Reserve Bank of Kansas City “2005 Payments Conference” scheduled for May in New Mexico. As the keynote speaker representing the payments industry, Hanft will highlight the benefits and efficiencies of the present interchange system to all parties, and underscore how interchange has supported the development of one of the world’s most competitive industries. MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs.
Citigroup reported this morning that fourth quarter profits for its credit card business in North America neared a record $1.2 billion, increasing 18% annually, and 12% sequentially. Credit card outstandings for North America increased 3% over 4Q/03 to $147.8 billion, which includes $26.1 billion in private label card outstandings. Charge volume increased 14% year-on-year, to $82.5 billion. Citi’s account base at the end of the fourth quarter declined by 200,000 accounts from the prior quarter, and was down 3% from one-year ago. At EOY 2004, Citi had 120.0 million accounts in North America. Citi noted that its “ThankYou Network” continued to gain momentum and ended the fourth quarter with 8.7 million members. Citi’s charge-offs dropped from 5.66% in the third quarter, to 5.59% for 4Q/04. Charge-offs for bank credit cards declined to 5.22%, compared to 5.34%% in the third quarter, and 6.17% one-year ago. Charge-offs for private label credit cards increased, from 7.08% in the third quarter to 7.24% for 4Q/04. Charge-offs for private label cards remain above year ago levels by 59 basis points. Delinquency (90+ days) declined slightly from 1.84% for 3Q/04 to 1.80% for the fourth quarter 2004. Delinquency for bank credit cards was flat sequentially at 1.58%, and down 30 basis points from the year ago level. For complete details on Citigroup’s 4Q/04 performance visit CardData ([www.carddata.com]).
North American Credit Card Net Revenues
4Q/03: $1010 million
1Q/04: $832 million
2Q/04: $850 million
3Q/04: $1067 million
4Q/04: $1190 million
Source: CardData (www.carddata.com)
NY-based Hand Held Products has unveiled its “TT8810” POS transaction terminal which supports non-contact credit payment processing at the point of sale. The TT8100 with RF payment allows users to charge purchases by waving a credit card embedded with a RFID tag at the payment counter, thereby decreasing individual payment processing and increasing customer throughput at the POS. Hand Held Products is a worldwide leading manufacturer of image based data collection systems for mobile, wireless, and transaction processing solutions.
In its ongoing efforts to ensure the continued integrity of the MasterCard(R) brand and network for the benefit of its customer financial institutions, MasterCard International is reviewing the merger of PULSE EFT Association with Discover Financial Services as it relates to MasterCard’s applicable franchise policies and brand rules. Specifically, MasterCard will determine whether the new “Discover/PULSE” organization may continue as a principal debit licensee and as a sponsor of financial institutions into Debit MasterCard(R), Maestro(R), and Cirrus(R) programs. MasterCard will also examine whether the new entity’s network logo may continue to reside on the Debit MasterCard(R) Card.
MasterCard will continue to provide updates to its customers as the review progresses.
Capital One’s fourth quarter U.S. card profits plunged by 37% year-over-year, as global marketing expenses soared 76%, and overall provision expenses for loan losses increased 20%. U.S. card outstandings of $48.6 billion were up 5% compared to one-year ago and to the previous quarter. For the fourth quarter, COF posted net income for U.S. cards of $201.9 million, compared to $414.1 million in the third quarter, and $322.7 million one-year ago. Globally, Cap One’s net income was $195.1 million, a 27% drop from 4Q/03. Marketing expenses hit $511.1 million in the fourth quarter, compared to $290.1 million one-year ago. The Company continued with its extensive “No Hassle” U.S. television advertising campaign in the fourth quarter, now featuring its new “PrimeLock” offer. Total provision for loan losses was $467.1 million, compared to $390.4 million for 4Q/03. The managed delinquency rate (30+ days) for U.S. credit cards was 3.97% for the fourth quarter, compared to 4.14% for 3Q/04, and 4.60% for the fourth quarter of 2003. The net charge-off rate for U.S. credit cards was 4.93% for the fourth quarter, compared to 4.68% for the third quarter, and 6.16% one-year ago. During the fourth quarter, total managed loans grew $4.4 billion from the prior quarter to $79.9 billion, a 12% annual gain. In the fourth quarter, the company completed the sale of its French loan portfolio and recorded a gain of $41.1 million. This month, the Company completed its acquisition of HFS, Onyx, and InsLogic. For complete details on Capital One’s fourth quarter performance visit CardData ([www.carddata.com]).
COF U.S. CARD NET INCOME
4Q/03: $322.7 million
1Q/04: $386.8 million
2Q/04: $384.1 million
3Q/04: $414.4 million
4Q/04: $201.9 million
Source: CardData (www.carddata.com)
American Express has added another upper crust benefit to its $2500 per year “Centurion” card program. Under a new partnership with Exclusive Resorts, AmEx “Centurion” cardholders will have access to more than 150 luxury residences, with an average value of $2.5 million each, worldwide. “Centurion” cardholders will be able to use their card to charge the fees. To join Exclusive Resorts, members pay a one-time membership fee of $375,000, 80% of which is refundable upon membership resignation, as well as annual dues that vary depending upon the usage plan the member elects on an annual basis. Under the new partnership, “Centurion” cardholders receive a special membership fee, a dedicated service line, and double “Membership Rewards” points for the membership fee, annual dues and in-residence charges.
CO-OP Network reported it posted a 21% increase in transactions last year. A record 1,000,798,103 transactions were processed last year. The nation’s largest credit union EFT network was created in 1981 with 24 credit union members. Today it has more than 1,770 member credit unions connected to 19,500+ surcharge-free ATMs nationwide, and serving 20 million credit union cardholders. The network noted that the most significant segment jump in its transaction totals is an increase of more than 5 million monthly PIN debit transactions in 2004. For the year, CO-OP Network PIN debit transactions experienced an overall 34% rise, with signature debit transactions increasing 25%.
U.S. Bancorp reported that its fourth quarter debit card volume topped $5.5 billion, a 21% increase over 4Q/03. Credit card charge volume for 4Q/04 was $14.6 billion, compared to $12.9 billion one-year ago. Consumer credit card volume for the fourth quarter was $8.8 billion, an 11% increase. Corporate credit card volume for the quarter $5.9 billion, compared to $5.0 billion for 4Q/03. Merchant (acquiring) volume for 4Q/04 hit $38.2 billion, a 39% increase. For complete details on US Bancorp’s 4Q/04 performance visit CardData ([www.carddata.com]).
Amit Yoran, former US Department of Homeland Security as the National Cyber Security Division director appointed by President Bush, has joined Cyota’s board of directors. Appointed by President Bush, Mr. Yoran served as the US Department of Homeland Security as the National Cyber Security Division director. Prior to joining DHS, Yoran was the vice president for worldwide managed security services at Symantec. Cyota is the leading provider of online security and anti-fraud solutions for financial institutions.