Capital One’s top executive realized a gain of more than $249 million last year. The big payday for Richard Fairbank was due to exercised options to buy about 3.6 million shares. In 2004, Fairbank earned $56 million. Most of the exercised options in 2005 were granted more than ten years ago and were nearing their expiration. At the end of 2005, Fairbank held options on an additional 8.2 million shares. Fairbank gave up salary, bonuses, etc. in 1997 in exchange for stock options. Meanwhile, the chief executive of American Express had his payday increase 10% in 2005 to more than $23 million. Ken Chenault earned $1 million in salary, $6 million in a bonus, $9 million in a restricted stock award, and $7 million in miscellaneous compensation, primarily employee benefits.
E-Monee.com has signed an agreement to market its “Global
Electronic Treasury System” in Jeddah. E-Monee’s pre-paid
consumer card, “Crewpay” will substitute payments of payroll currently
made in cash to thousands of international workers. The “Crewpay Card”
allows individuals to receive pay via E-Monee’s private network of ATMs
in the currency of choice and features a MasterCard that lets individuals
spend money or make purchases anywhere in the world. Workers will also be
able to credit money to their “Crewpay” companion cards for family members
residing in their native countries enabling the international workers to
eliminate the traditional money sending costs. E-Monee also features a “Crewpay MasterCard.”
The bank credit card industry lost more than $25 billion during 2005 due to personal bankruptcies. The record loss was driven by the introduction of new laws which created a stampede of filings in February when passage was imminent and in the fall when the new rules took full effect. It took Congress eight years to reform the bankruptcy laws and during that period credit card issuers lost more than $147 billion. Since 1996, charge-offs cumulatively total $332 billion, peaking in 2005 at more than $50 billion. In 1995, bankruptcy-related charge-offs were $4.6 billion, or 30% of gross charge-offs. In 2001, bankruptcy-related charge-offs doubled from year 2000, from $9.9 billion to $19.1 billion, comprising 48% of all charge-offs, according to CardData ([www.carddata.com]). Last year, 50% of all charge-offs ended up in a bankruptcy filing.
BANK CREDIT CARD BANKRUPTCY LOSSES
YEAR RECV C-O C-O BR NET
1995: $358 4.31% $15.4 30% $ 4.6
1996: $412 4.85% $20.0 41% $ 8.2
1997: $444 5.63% $25.0 42% $10.5
1998: $454 5.49% $24.9 42% $10.5
1999: $490 4.98% $24.4 40% $ 9.8
2000: $569 4.58% $26.1 38% $ 9.9
2001: $608 6.55% $39.8 48% $19.1
2002: $661 7.51% $49.6 47% $23.3
2003: $677 7.22% $48.9 46% $22.5
2004: $698 6.22% $43.4 38% $16.5
2005: $711 7.11% $50.6 50% $25.3
RECV-year-end receivables; C-O: charge-offs; BR- percentage
of charge-offs in bankruptcy; NET: net losses due to bankruptcy.
Source: CardData (www.carddata.com)
Milwaukee-based Jefferson Wells has been named a VISA “PCI Qualified Data Security Company”. Having been recognized by Visa USA, Jefferson Wells is now able to perform on-site security audits for merchants and processors who accept and process payment cards. In June 2001, Visa USA introduced the Cardholder Information Security Program to help protect cardholder data wherever it resides in the Visa payment system. The program is intended to ensure that members, merchants and service providers maintain the highest information security standard. Jefferson Wells is a global provider of professional services in the areas of risk, controls, compliance and financial process improvement.
PA-based USA Technologies has introduced the sixth generation of its “e-Port” payment card solution for vending machines. The new “e-Port G6” will now support contactless cards. The new contactless “e-Port” technology is currently undergoing marketplace trials by MasterCard in hundreds of vending locations across multiple U.S. cities. The new “G6” unit can be mounted in the machine’s existing bill acceptor opening or mounted anywhere on the face of the vending machine. USAT says it will sell for the same price as the “e-Port G5. The Company estimates that there are 8 million vending machines in the U.S., and the estimated 30 million vending machines worldwide.
NCR Corporation announced the rollout of 30 new NCR “Personas M
Series 87” ATMs with image-based “Intelligent Deposit” capabilities at
Credit Agricole Martinique bank branches in France and French Guiana.
Credit Agricole Martinique’s initiative is part of the bank’s “New
Concept Branch” project which gives its customers more autonomy in
performing everyday banking transactions. The cash or check deposit
function available with NCR’s “Personas M Series” has largely contributed
to attaining this goal. With these deposit-taking units in place, Credit
Agricole Martinique has successfully increased available times to
conduct banking transactions and also offers immediate crediting of
deposits to customer accounts.
Las Vegas-based Cash Systems has landed Andrew Cashin, formerly with Alliance Gaming, as its EVP, CFO and Treasurer. Cashin brings more than 17 years of financial and operational experience as well as 13 years of experience in the gaming industry. During his ten years at Alliance Gaming, Inc., Cashin most recently served as a Senior Vice President of Bally Gaming, where he ran all business lines in the division, including the Sierra Design Group. Cashin has directly managed seven business integrations, including four systems technology acquisitions. He was also responsible for the daily oversight of Bally Gaming & System’s finance department from 2000 through 2003. Mr. Cashin began his professional career as an accountant with Arthur Andersen & Co.
Voca has appointed Erik Mansson as Director of European Business
Development. Mansson will lead Voca’s engagement with the European banking
community as Voca rolls out its new payments infrastructure. Mansson is a
leading expert on European cross-border payments and
electronic funds transfers in the Single Market. He joins Voca from the
European Central Bank, where he was the Senior Market Infrastructure
Expert. His role at the ECB included facilitating the development and
implementation of the SEPA strategy. He was responsible for coordination
of the ECB’s contacts with commercial banks through the European
Payments Council (EPC), and those with corporates through the European
Association of Corporate Treasurers (EACT). In addition to his experience
at the ECB, Mansson brings 15 years’ experience in the payments industry
gained in both corporate treasury and banking. He holds an MBA from the
Stockholm School of Business. Voca is a provider of payments services.
Consumer resistance to convenience fees charged for making tax payments on credit or debit cards is building. According to a new survey, nearly eight out of ten consumers say they “definitely will not” use a credit card the next time they owe incremental federal income taxes. Market research firm Ipsos Insight says its study revealed for the third year that while 68% of American adults are aware that the IRS accepts credit cards, only 1% plan to use a credit card to pay Federal income taxes for 2005. However, the IRS reports that 1.5 million paid by credit card last year, a 54% increase from 2004. MasterCard says taxpayers paid over $260 million in federal tax obligations with MasterCard cards in 2005. While the growth is impressive the numbers are infinitesimal in the big picture. Ipsos Insight says its research showed that 62% of Americans will use a personal check, 11% will use a money order and 7% will use direct debit to pay Federal taxes this year. The study also reported that if the card service were free, 23% of those open to the concept would use it, up slightly from the 21% reported last year. (CF Library 2/2/06)
The U.K. Court of Appeal has ruled that local credit card issuers must guarantee purchases made on international transactions.
According to guidelines by the Office of Fair Trading, such guarantees can cover single purchases worth between GBP 100 and GBP 30,000, even if the card is only used for a deposit. The court’s decision overturned a November 2004 High Court ruling that “Section 75” of the “Consumer Credit Act of 1974” did not apply to overseas purchases. “Section 75” covers foreign transactions including where a consumer uses a U.K. credit card to buy goods while abroad; a consumer orders goods from a foreign supplier while abroad for delivery into the U.K.; a consumer in the U.K. buys goods which are delivered to a U.K. address from overseas by telephone, mail order or over the Internet; and there is face-to-face pre-contract dealings with a foreign supplier temporarily in the U.K., or with a U.K. agent of a foreign supplier, but the contract is not completed in the U.K. Brits spent almost GBP 123 billion on domestic credit card transactions in 2004, and a further GBP 12.5 billion on overseas transactions.
Las Vegas-based Shift4 has released secure versions of its “MICROS 3700” and “8700” POS payment drivers that meet “Payment Application Best Practices.” The upgrade will reduce security vulnerabilities within legacy payment applications. Shift 4 says that payment applications may cause the majority of problems, they are not something that the merchant generally has direct control over. It is a problem that Shift4 found many of its existing customers were facing with their legacy “MICROS” systems. Shift4 utilized a combination of its “Tokenization” technology, which replaces the credit card number with a randomly generated unique ID, and data truncation. “Tokenization” eliminates the need to store credit card data anywhere in the system, enabling the systems to comply with the PABP requirements while still allowing for full reporting, incremental authorizations, credits and so forth. The enhanced “MICROS 3700” and “8700” solutions were independently audited by MD-based Fortrex Technologies.
Denver-based ePayments Corporation has acquired another Denver-based company specializing in NSF electronic check collection services. The acquisition of eCashflow Systems will enable ePayments to target the $11 billion NSF market. The deal will give ePayments 2,500 clients, including Arby’s, IGA, Great Clips and non profits like the National Federation of the Blind Merchants. Under terms of the purchase, eCashflow’s CEO Rod Hill has been retained along with 18 sales agents. ePayments provides electronic returned check collection, electronic check conversion, check authorization, check guarantee, check-by-phone/web, consolidated returns and credit card processing.