UT-based Aradyme has fully integrated Vital Processing’s payment gateway into all its database software. All applications developed on the “Next Generation” database platform from Aradyme will be enabled to bypass third party gateway services by going directly to Vital Processing Systems, that processes one in every four electronic payment transactions in North America. This integrated functionality means companies running Aradyme applications can eliminate the third party processing service that costs as much as $.30 per transaction, plus 2.39% of the payment amount. Vital is a leader in technology-based commerce enabling services; Vital Processing Services(R) is the commerce connection between acquirers and merchants, processing one out of every four authorized payment transactions in North America.
Bank One plans to replace 550 ATMs in Chicago this year, and add about 50 new off-site ATMs in the area over the next two years to bring the total number of Bank One ATMs in the Chicago market to 1,250. Most of the new branches will be storefront locations, which provide convenient bank access in areas with high levels of foot traffic. The 50 new off-site ATMs will be located inside Walgreens drug stores and in other venues, and the ATM replacements will include 200 machines inside Bank One branches and about 350 inside Walgreens. Bank One Corporation ( ) is the nation’s sixth-largest bank holding company, with assets of $326 billion.
First Data confirmed this morning that its Western Union Financial Services subsidiary received a “Civil Investigative Demand” from the U.S. Department of Justice on Wednesday of this week. FDC says the CID is focused on its contractual relationships between the company and its money transfer agents. Western Union also has been informed that certain states are aware of this CID and may join in the investigation or conduct separate inquiries concerning competitive aspects of its money transfer business. First Data notes that during the 2000-2001 period, the Federal Trade Commission and one state conducted preliminary investigations of similar issues. First Data says its contractual practices reflect common industry norms and it does not expect this civil investigation of the money transfer business will impact its ability to complete its merger with Concord EFS. Earlier this week, First Data reported its fourth quarter results which showed that its Payment Services unit, comprised primarily of Western Union, produced quarterly operating profits of $323 million, a 13% increase compared with the fourth quarter of 2002. For the full year, Western Union and ValueLink, combined, handled more than one billion transactions, up 26%. (CF Library 2/3/04)
Chicago-based Rewards Network has named Adam Aron, CEO of Vail Resorts and former senior executive at United Airlines and Hyatt, to its Board of Directors. Prior to joining Vail Resorts, Mr. Aron served as President and Chief Executive Officer of Norwegian Cruise Line Ltd. He previously was the Senior Vice President of Marketing for United Airlines and prior to that he served as Senior Vice President of Marketing for the Hyatt Hotels Corporation. Rewards Network provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform. Incentives are offered through the Rewards Network branded program, airline frequent flyer dining programs, club memberships and other affinity organizations.
MA-based MBI says its “Flex Convenience MasterCard,” which provides access to employee flexible spending accounts and health reimbursement arrangements, has topped 800,000 cards. In the last 18 months the number of employers offering MBI debit cards has jumped over 400% from 1,600 to 8,900. Some participating employers include Staples, British Airways, Toshiba, Dow Jones, The PGA Tour, Krispy Kreme, eBay and the State of Texas. MBI says it will introduce major enhancements and new product offerings this year designed to simplify substantiation for MBI’s “Third Party Administrator” and health plan partners. The key features of the new system include: a health identification card that provides both health plan member information and debit card functionality onto one simple card; credit line features attached to the FSA and HRA accounts; HSA capabilities, including fund investment management; and, a new pharmacy authorization system that reliably substantiates both prescription and over-the-counter drug purchases.
Capital One has officially made Catherine West, EVP and President of its $46.3 billion U.S. Card business. West served in the position on an interim basis in April of last year, as Capital One’s former President/COO Nigel Morris announced his stepping down on May 1st, and planned departure on April 30th of this year. West joined Cap One in March, 2000 as EVP/U.S. Consumer Operations. She previously worked as a senior executive at First USA and as VP of Credit Card Operations Servicing for Chevy Chase FSB. West currently serves on VISA’s Risk Control Advisors Committee. During the fourth quarter, Capital One grew its managed loan portfolio by $4.0 billion, and its domestic card loans by nearly $2.0 billion, compared to the previous quarter. Year-over-year, Capital One’s managed loans have increased 19.3%, and U.S. card loans have risen 13.2%, according to CardData ([www.carddata.com]). At year-end, Cap One had a managed loan portfolio of $71.2 billion and 46.7 million accounts worldwide. (CF Library 4/22/03)
Corillian reported fourth quarter revenues of $12.2 million, compared to $10.1 million for 4Q/02, a 21% increase. Net income was $2.1 million, compared to a net loss of $1.5 million in 4Q/02. The online banking solutions provider achieved profitability last year. During 2003, end user adoption for Corillian customers grew more than 50% to 14.0 million users at the end of 2003. Corillian “Voyager 3.0” had 14 customers migrating to its platform last year. During 2003, Corillian signed strategic partnership agreements with NCR, CashEdge, Centerpost and Hipbone. Corillian anticipates that first quarter 2004 revenues will be in the range of $11.0 to $12.0 million. For more details on Corillian’s latest performance visit CardData ([www.carddata.com]).
St. Charles, IL-based Perfect Plastic Printing has named Mike Fox as Executive Director of Manufacturing. Mr. Fox brings with him over 20 years of Printing and Manufacturing management experience. Perfect Plastic Printing is the largest independent manufacturer of secure cards in the world.
In terms of organic growth, Bank of America, Capital One, and American Express led the U.S. credit card industry with double digit gains in receivables and profits last year. The nation’s top ten bank credit card issuers grew an average of 6.5% during 2003, holding aggregate card loans of $538.9 billion, approximately 77% of the total U.S. market. Citigroup, the nation’s #1 ranked issuer would have slipped to second place had it not been for the acquisition of the Sears MasterCard portfolio in November. Citigroup card loans increased $7.4 billion during 2003 as it added $13 billion in Sears MasterCard card loans during the fourth quarter. Indeed, Citigroup’s organic growth was negative in every quarter of 2003. Bank of America led the top issuers with a 24% gain in outstandings. BofA also led with a 25% in card profits, according to CardData ([www.carddata.com]). Discover was the only issuer to post a portfolio contraction. However, Discover data does not reflect the impact of the December holiday season. (CF Library 2/4/04)
Top 10 U.S. Issuers by Card Loans
RANK/ISSUER 4Q/03 4Q/02 Y/Y
1. Citigroup $119.8b $112.4b + 6.6%
2. MBNA $ 85.8b $ 79.5b + 7.9%
3. Bank One $ 76.3b $ 74.0b + 3.1%
4. JPM Chase $ 52.3b $ 51.1b + 2.3%
5. Discover* $ 48.4b $ 51.1b – 5.3%
6. Capital One $ 46.3b $ 40.9b +13.2%
7. AmEx $ 38.5b $ 34.3b +12.2%
8. BofA $ 36.6b $ 29.5b +24.1%
9. Household $ 17.9b $ 17.0b + 5.3%
10. Fleet $ 17.0b $ 16.2b + 4.9%
TOTAL $ 538.9b $506.0b + 6.5%
*Discover data as of 11/30/03, all others as of 12/31/03.
Source: CardData (www.carddata.com)
Euronet’s e-pay has launched its electronic top-up services at approximately 240 Shell Select convenience store and petrol sites. Vodafone has an agreement with e-pay to enable its customers to purchase prepaid airtime at Shell and other participating retailers. Upon completion this agreement, New Zealanders will have direct access to top-up their Vodafone prepaid mobile phones at more than 600 locations throughout the nation. Shell New Zealand Ltd is the third major oil company to join e-pay’s New Zealand prepaid network. e-pay, a Euronet subsidiary, is the largest electronic payments processor of prepaid mobile airtime top-up services in the U.K. and Australia. The company currently supports top-up purchases for mobile service providers at more than 74,000 POS terminals in approximately 29,000 retail locations.
London-based HSBC Holdings is deploying Norkom Technologies’ “Alchemist Risk Management” software application to improve their defenses against all types of risk including credit and debit card fraud, money laundering, operational risk and other types of financial crime.The “Alchemist” platform uses sophisticated data mining techniques and applies advanced analysis to generate new insights about customers, products, employees, channels or partners. It then automates the process of sharing and managing that knowledge to key decision makers and action takers across the organization. Norkom Alchemist provides intelligence to the right people and processes providing the vital link between analysis and action. HSBC’s international network has more than 9,500 offices in 79 countries.
The Federal Reserve’s “January 2004 Senior Loan Officer Opinion Survey on Bank Lending Practices” says it found that a moderate fraction of banks reported that they had decreased the extent to which credit card accounts are granted to customers who do not meet credit-scoring thresholds. Moderate net fractions of both domestic banks and U.S. branches and agencies of foreign banks indicated that they had eased lending standards and several lending terms on C&I loans over the past three months. Credit demand from households reportedly weakened over the past three months. On net, almost 40 percent of domestic banks indicated that the demand for residential mortgage loans to purchase homes had deteriorated, a significantly greater proportion than in the October survey. However, respondents may find it difficult to separate mortgage originations used to buy homes from those used to refinance existing mortgages, and the pace of refinancing has slowed considerably since the middle of last year.