The TowerGroup has released a new report, “Consumer Bankruptcy Reforms of 2005: Promises Kept, Unintended Consequences” indicating that “The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” is not effective and expects the new Congress to review BAPCPA and revise the Act. While a reduction in total bankruptcy petitions since its passage in 2005 offers evidence of the Act’s success, TowerGroup found that initial optimism may need to be tempered in the face of growing criticism. While bankruptcy filings are down, recent bankruptcy volumes and consumer delinquencies are back on the rise. The National Association of Consumer Bankruptcy Attorneys met with legislators in February 2007 to share its point of view that BAPCPA is not working. Critics of BAPCPA point to the Act’s unintended negative consequences including higher costs to administer the bankruptcy process, longer time frames to resolve bankruptcy proceedings, and higher costs for consumers. TowerGroup is a research and advisory services firm focused exclusively on the financial services industry.
Atlanta-based S1 Corporation reported that revenue for the first quarter rose 9% to $47.6 million. However, “Postilion” segment revenue was essentially flat, while the “Enterprise” segment revenue increased 19%. During the quarter Retalix formed an alliance with “Postilion” to deliver an integrated commercial fueling solution for travel centers and an open-systems payment switch for credit and debit transactions for convenience stores. Last month, NCR announced it will install “Postilion” payment processing software at its NCR Toronto, Ontario data center and “Postilion” announced an alliance naming Metavante a strategic provider of electronic presentment and payment services. S1 projects 2007 full year revenues of between $200 million and $206 million. For complete details on S1 Corp’s first quarter performance, visit CardData ([www.carddata.com]). (CF Library 2/1/07; 4/4/07; 4/19/07)
EFD, f/k/a eFunds, says it has received interest for a potential merger and has formed a special committee to explore its strategic options. The Company reported that first quarter revenues declined 4% year-on-year to $134 million however, operating income grew 10% to $17 million compared to 1Q/06. The Company posted a 9% year-on-year decline in its U.S. Payments segment with $67.6 million in revenue but income rose 64% to $8.95 million. The International segment soared by 27% to $19.3 million in revenue but lost $4.0 million for the quarter. The U.S. Risk Management segment revenue dipped 6% to $47.1 million with flat income. EFD also reported that it now expects full year 2007 net revenues to fall within its previously published ranges of $591 million to $613 million of total revenue. During the quarter EFD launched its “Integrated Fraud Platform” solution. In March, the Company introduced its new global corporate brand: EFD. For complete details on eFunds’ first quarter performance, visit CardData ([www.carddata.com]). (CF Library 3/7/07)
EFD/eFunds Revenue Historical
1Q/05: $114.2 million
2Q/05: $116.3 million
3Q/05: $133.2 million
4Q/05: $138.0 million
1Q/06: $139.7 million
2Q/06: $132.4 million
3Q/06: $139.4 million
4Q/06: $140.9 million
1Q/07: $134.0 million
Source: CardData (www.carddata.com)
Los Angeles-based Medical-Billing.com has introduced a Below-Prime line of credit to physicians based on their receivables. The company also offers physicians an 8% debit card available to any physician immediately upon execution of an agreement. Medical-Billing.com will offer this line of credit exclusively to physicians nationwide through its finance arm, Medical-Finance.com.
Europe’s first watch equipped with “MasterCard PayPass” contactless technology has been launched by Garanti Bank. The news follows the launch in June 2006 of the world’s first watch equipped with “PayPass” in Asia, to coincide with the “2006 FIFA World Cup in Germany.” Garanti Bank first launched its “PayPass” program in June of last year with the introduction of the “Garanti Bonus Trink” card. More than 600 merchant locations in Turkey accept “PayPass” including Burger King, Starbucks, Cinebonus, TAV and the I.stanbul Ferry. As of March 31st, there are more than 14 million “MasterCard PayPass” cards and devices in the market that are accepted at more than 51,000 merchant locations globally.
MO-based Jack Henry & Associates reported that first calendar quarter revenues rose 16% while gross profit rose 13% and net income 12% over the year-ago period. For the quarter ended March 31st, the company generated total revenue of $168.9 million, gross profit of $71.7 million and net income of $26.4 million. The Company says license fees were below expected levels, increases in support and service revenue more than offset any shortfall. Meanwhile, electronic payments increased 34% for the quarter and 41% year to date compared to last year and its electronic payments now represent 15% of the Company’s total revenue. EFT Support, which includes ATM/debit card processing, bill pay, remote capture and Check 21 transaction processing services, was the largest contributor with growth of $7.1 million or 34% in the quarter compared to the same quarter a year ago. The bank systems and services segment revenue increased 18% to $141.9 million. Last month, Jack Henry & Associates founder, acting Vice Chairman and SVP, John W. Henry, died of natural causes. For complete details on Jack Henry’s latest performance, visit CardData ([www.carddata.com]). (CF Library 4/16/07)
While merchants promise they’ll lower prices if credit card interchange fees are reduced, consumers are not buying it. A new study has found that 56% of Americans believe merchants would do nothing and that prices would remain the same if card fees were lowered. The report by Javelin Strategy & Research found that two-thirds of consumers over 55 are skeptical about the impact on lower interchange fees. In fact, only 19% of Americans believe that merchants would actually lower prices overall. The study also concludes that large merchants looking for sympathy from consumers regarding interchange will not receive it, and efforts to make interchange a consumer issue using large merchants are fruitless. The fight for the hearts and minds of consumers rests with portraying smaller, locally owned businesses as victims. Large merchants and merchant organizations who represent them are attempting to politicize the issue by indicating that interchange is a “hidden tax” that consumers actually pay. As long as large merchants lead this fight, it is an ineffective strategy. Two-thirds of consumers state that they know that there are fees charged to merchants for each card transaction, and an overwhelming 84% believe it affects the prices that merchants charge for goods and services. But few consumers are willing to change their choice of payment method at large chain retailers because of this issue. Only 23% would use “the cheapest method for the merchant” at a large chain retailer.
San Diego-based debt collector Encore Capital Group reported that first quarter revenues rose 8% to $65.4 million and that net income rose 21% to $5.7 million. Revenues from the debt purchasing business were $62.2 million, also an 8% increase over the same period of the prior year. Gross collections were $90.5 million, a 3% increase over 1Q/06. During the first quarter, Encore invested $45.4 million to purchase $2.5 billion in face value of debt with a high concentration quarter in credit card portfolios. The Company also noted it generated $3.2 million in fee-based revenue during the quarter, compared with $2.9 million in the first quarter of 2006, primarily through the Ascension Capital bankruptcy services business. Last month, Encore has landed new investors including J.C. Flowers, FPK Capital and Red Mountain Capital Partners. For complete details on Encore Capital Group’s first quarter performance, visit CardData ([www.carddata.com]). (CF Library 4/23/07)
BRANDZ and the Financial Times has released the “Top 100 Most
Powerful Brands” ranking measured by their dollar value. The study has
interviewed more than 1 million consumers annually and covers 39,000 brands worldwide. The value of all brands in the ranking has increased by 10.6% since last year, from $1.44 trillion to $1.6 trillion in 2007. Google is at the top
this year with a brand value of $66,434 million, followed by
General Electric ($61,880 million), Microsoft ($54,951 million) and
Coca-Cola ($44,134 million). This ranking combine financials with measures
of consumer sentiment derived from company’s database to determine
Citi has launched “Let’s Get it Done”, a new global, corporate brand identity advertising campaign. The ads, featuring scenarios such as buying a house, merging a company and graduating from college, show that Citi is ready to help companies, organizations and individuals achieve their financial dreams and goals. An underlying theme of the campaign is that Citi’s outstanding array of financial products and services can drive its clients towards financial success. In addition to the new tag line, the campaign makes strong use of Citi’s symbolic red arc, which serves as a visual metaphor for connecting human aspirations to realities.
ABN AMRO Bank has introduced the country’s first transparent credit card that offers lifetime cash back on all purchases. The new “ABN AMRO One MasterCard” offers cash back of up to 2% on spends
across all categories. The card also offers discounts of up to 3% on domestic airline tickets and 2.5% on international tickets purchased through International Travel House Ltd and 15% discount on car rentals.
ABN AMRO also previously introduced India’s first chip enabled credit card, the “Smart Gold Card”; India’s first card with a flexible credit limit, the “Freedom Credit Card”; and the Barista and Adlabs co-branded cards, both firsts in their respective categories.
AirPlus International has announced its 2006 results. Total settlement volume rose by 15% to USD 18.6 billion, driven by expansion into international markets. Some highlights of 2006 include its corporate card issued jointly with China Merchants Bank; FlexEbill, a tool that enables companies to create and modify the format of their electronic billing information through the AirPlus Business Travel Portal and AirPlus once again received the prestigious Business Travel World Award for the Best Expense Management Process and two awards for innovation in its home market of Germany. AirPlus International is a provider of business travel payment solutions.