American Express has introduced a new credit card devoid of any fees and offering an automatic rewards program as well as a free enhanced credit report. The new “Clear from American Express” does not charge any late fees, over-limit fees or balance transfer fees. However, AmEx will still levy a punitive APR of 28.74% if a cardholder makes two late payments within a twelve-month period. Under the “Clear Rewards” feature, cardholders receive a shopping card worth $25 for every $2,500 of eligible spending. The card expires one-year from issuance. There is no annual cap on the rewards earned. The new “Clear” card offers a 0% intro APR for up to 12 months and a 3.99% fixed APR on balance transfers. The go-to APR for purchases is prime plus either 5.99%, 7.99%, or 9.99%, depending on the credit score.
New York-based Acies has introduced a new contactless card payment solution. Using this technology, consumers simply tap or wave their contactless-enabled credit or debit card on a specially equipped merchant terminal that eliminates the need to swipe the card through a reader. In addition, the card never leaves the consumer’s hand. The new solution is ideal for traditional cash-only environments where speed is essential, such as quick serve and casual restaurants, gas stations and movie theaters. Acies Corporation is a financial services company that specializes in providing payment processing and online banking services to small, medium, and large-size merchants across the United States.
Citibank Berhad has launched “Free for Life Citibank Choice” VISA and MasterCard credit cards. The new card features an automatic
“Flexi Payment Plan” for major purchases. Purchases over RM500 are
automatically converted into 12 monthly installments. The card does not carry any annual for life, however, a RM5 monthly charge applies if the
cardholder conducts less than two transactions of RM500 or more. The
card carries a flat annual interest rate of 9.88%. The new card also offers 50 “Reward” points for every RM50 spent. Points can be redeemed for 200 items of merchandise found in a “Rewards” catalog. The bank expects to issue 100,000 “Choice” cards in the first twelve months.
Citibank has jumped on the no late fee bandwagon with the upcoming launch of the “Simplicity MasterCard.” While the late fees are waived, the card will still assess an over-limit fee as well as other fees. To qualify for the late fee waiver, cardholders must make at least one purchase transaction per month. Citi currently charges a $39 late fee to its cardholders. “Simplicity” cardholders will still be subject to Citi’s punitive interest rate of prime plus 23.99% (currently 30.74%). Citi says the 30%+ rate is triggered if the cardholder fails to make a payment to Citi when due, exceeds the credit line or if a payment to Citi is not honored. Citi reportedly will announce the card next week.
First Data reported this morning that third quarter net income dropped by 8% even though total revenues increased 6% to nearly $2.7 billion, compared to one-year ago. The integration costs of its Concord EFS acquisition continues to drag on performance. Payment Services and Merchant Services produced solid growth while Card Issuing Services declined by 12%. Payment Services posted revenue of $1.1 billion, a 12% increase, and operating profit of $361 million, up 8%. The Western Union money transfer business, which makes up 86% of Payment Services’ revenue, delivered a 14% gain in revenue for the quarter. Merchant Services reported revenue of $1.1 billion, up 8% as operating profit rose 7% to $266 million. North America merchant transactions were up 13% to 5.9 billion while issuer transaction rose 5% to nearly two billion for the third quarter. As of September 30th, accounts on file were 402.5 million domestic and 34 million international. Of the 436.5 million card accounts on file, 84.7 million were bank card accounts, 252.0 million were retail accounts and 99.8 million were debit accounts. For complete details on FDC’s third quarter performance, visit CardData ([www.carddata.com]).
FDC NET INCOME
3Q/04: $460.6 million
4Q/04: $465.1 million
1Q/05: $374.5 million
2Q/05: $391.9 million
3Q/05: $421.5 million
Source: CardData (www.carddata.com)
Minnesota-based Cub Foods West Region is launching the Pay By Touch biometric payment option in all of its 65 stores by the end of November after a four-month pilot in four locations. To pay for goods, shoppers simply place their finger on a scanner at the cash register. The Pay By Touch technology does not use actual fingerprints, creating a set of 40 data points that cannot be reverse engineered into a fingerprint. The system then displays the individual’s electronic wallet, which contains the payment options available to them. Current options include eCheck (a direct debit from an existing checking account) and EBT. Additional options, such as credit cards, may be added at a later date.
Shell Oil and Citibank are launching a new promotion this weekend to attract new cardholders to the “Shell MasterCard.” Consumers applying for the card between October 15th and January 15th will earn triple rebates on their “Shell MasterCard” purchases. The triple Shell rebates will apply for the first 60 days. Additionally, new cardholders will earn triple rebates on the first $100 spent at Jiffy Lube locations per day, as well as all other purchases. The program currently rewards cardholders with a 5% rebate on Shell gas and Jiffy Lube purchases over $100, and 1% on all other purchases. The promotional campaign includes a national advertising campaign utilizing cable TV, Internet and radio advertisements. Shell stations will also use pump toppers, pole signs, register signs and other signage to promote the triple-triple-triple offer. The “Shell MasterCard” was originally launched by Chemical Bank (now Chase) in October 1993, and has grown to become the largest gasoline co-branded card in the USA. Citibank took over the program in 2003. (CF Library 1/27/03)
GE reported that profit for its Consumer Finance unit climbed 19% in the third quarter to $810 million as GECF revenues hit a record $4.9 billion, a 22% increase over 3Q/04. During the quarter, GE signed an agreement to acquire 43% of Korea’s Hyundai Card and reached an agreement to acquire 25.5% of Turkey’s Garanti Bank. The Company also entered into an agreement with Ikea to offer private label credit cards to its customers in the U.S. and signed an agreement to acquire the RV and Marine Financing unit of E*TRADE. Additionally, GECF launched India’s first consumer appliance co-branded card with State Bank of India and LG Electronics and signed a deal with eBay in Germany to provide financial services to eBay’s 15 million German users. In late August, GE applied to Canada’s Minister of Finance to set up a bank under the name GE Money Bank Canada. For complete details on GE’s third quarter performance, visit CardData ([www.carddata.com]). (CF Library 8/30/05)
GE CONSUMER FINANCIAL TRACK RECORD
3Q/04: $681 million $4011 million
4Q/04: $637 million $4304 million
1Q/05: $735 million $4689 million
2Q/05: $735 million $4928 million
3Q/05: $810 million $4913 million
Source: CardData (www.carddata.com)
Denver-based Public Service Credit Union, with 16,000 credit card accounts and $35 million in outstandings, has partnered with MBNA. Public Service Credit Union is a not-for-profit, state-chartered, member-owned, financial institution with 80,000 members. MBNA has over 85 partnerships with credit unions.
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Minnesota-based Deluxe Financial Services has added an in-branch purchase option for its open-system “DeluxeCard VISA” gift card program. The gift card, issued by MetaBank, can be used to make purchases everywhere Visa debit cards are accepted. Previously available only through online and telephone channels, in-branch expansion adds personalized contact with a bank employee and gives consumers the confidence that their card is activated at the time of purchase. As an added safeguard, Visa’s Zero Liability policy serves to prevent unauthorized transactions if a card is lost or stolen. Deluxe Financial Services is a business unit of Deluxe Corporation check printing.
Wow! Card Services has signed an agreement with Genpass to offer its customers surcharge-free ATM access at any “MoneyPass” ATM nationwide . Wow! Card Services is a privately held provider of pre-paid stored value cards. Genpass is a provider of EFT and stored value card services. Along with its sister company, Elan Financial Services, Genpass and Elan provide processing services for over 31,000 ATMs nationwide. Genpass is a wholly-owned subsidiary of U.S. Bank.