Consumers Get Too Much Irrelevant Mail

A new survey has found that 88% of financial consumers claim to receive regular communications for products and services that are not directly relevant to them and their circumstances and 58% claim to regularly receive communications selling them products and services they already have with that company. The research also discovered that 64% of financial consumers claim they are more likely to stop using companies that regularly send them inaccurate or irrelevant communications material and 65% of financial consumers don’t feel like they are being treated as an individual with regard to the communications they receive. StreamServe says the results show that firms are missing a tremendous opportunity to enhance customer value by failing to communicate with their clients in a relevant, personal manner. Survey results also indicate that the majority of financial services companies fail to effectively communicate and market products and services to existing customers, causing these organizations to miss an opportunity to increase revenue and improve customer service. Seventy-four percent of respondents indicate they would be more likely to buy products and services from financial companies if the offers were highly personalized, relevant and treated them as individuals.

Global Analytics Hires Fair Isaac’s Crooks

Global Analytics has hired Ted Crooks as VP of Business Development. Crooks specializes in inventing and leading development of fraud solutions. Previously a VP at Global Fraud Solutions for Fair Isaac Corporation, Crooks rejoins former colleagues from HNC Software which was acquired by Fair Isaac in 2003 to become its fraud organization. Crooks will continue to work on new fraud challenges, but will also spend considerable effort on improving entrepreneurial credit systems in developing economies and credit expansion to the under-served. Global Analytics applies mathematics and artificial intelligence to solve problems for business, education and government.

BBVA to Buy Alabama’s Compass Bancshares

AL-based Compass Bancshares has signed a definitive agreement under which Banco Bilbao Vizcaya Argentaria will acquire Compass for a combination of cash and stock for $9.6 billion. Compass, the 36th largest U.S. bank credit card issuer, has about $550 million in credit card outstandings at year-end 2006. According to CardData (www.carddata.com), Compass has about 330,000 bank credit card accounts with 160,000 active customers. At the end of 2006, Compass had nearly 340,000 cardholders. BBVA, which operates in 35 countries, is based in Spain and has substantial banking interests in the Americas. Upon completion of the transaction, Compass will rank among the top 25 banks in the U.S. with approximately $47 billion in total assets, $32 billion in total loans and $33 billion in total deposits.

Veritec and Datacard Group Integrate

Minneapolis-based Veritec has entered into a long-term value-added re-seller agreement with Datacard Group. Datacard “ID WorksIdentification” Software is now VSCode-enabled and Datacard products will play a vital role to enhance and expand Veritec’s “VSCard” technology in reference to both positive identification for ID card-holders as well as VISA debit-card security. Veritec is a provider of microprocessor-based encoding and decoding system products that utilize Matrix Symbology or 2-Dimensional Barcode technology.

VISA Signature Gets Special Golf Access

VISA USA has entered into an agreement to give VISA Signature cardholders special access to Pinehurst Resort in North Carolina, known as the “Cradle of American Golf” and one of the top ten U.S. golf destinations and the historic Old Course at St. Andrews, Scotland. Pinehurst is comprised of eight championship golf courses and has been the site of more single championships than any other course in the United States. VISA Signature cardholders can enjoy tee time access on Pinehurst No.2, site of the 2005 U.S. Open Championship each time they stay at the resort. Through Pinehurst’s special relationship with St. Andrews and The Old Course Experience, VISA Signature cardholders also have access to a round on the fabled Old Course, site of the 2007 British Open Championship.

TNB Acquires A+ FCU Credit Card Portfolio

Austin-based A+ FCU has teamed with TNB Card Services to issue credit cards. Through the issuing partnership, TNB acquires the $16 million card portfolio of A+, which includes more than 9,000 cardholders. The 76,000-member, education-based credit union has eight branches covering 10 counties in central Texas. TNB Card Services serves more than 450 financial institutions and manages more than 1.6 million cards. TNB Card Services recently reported it acquired 21 credit card portfolios from credit unions in the U.S. last year. TNB, or Town North Bank, has nearly an estimated $1 billion in credit card outstandings and approximately 900,000 accounts at the end of 2006. NH-based Brookwood Capital brought the two parties together. (CF Library 1/22/07)

Chase Issues the Orvis Rewards VISA Card

VT-based Orvis Company and Chase have launched a co-branded credit card. The new “Orvis Rewards VISA” offers five points per dollar spent on all purchases at Orvis and one point per dollar for all other card purchases. Once cardholders have accumulated 2,500 points, they automatically receive $25 in “Orvis Rewards,” which can be used towards their next Orvis purchase. Card. Cardholders also get free regular shipping on all “Orvis Rewards VISA” purchases. Orvis operates a chain of retail stores in the U.S. and England including its Flagship store in Manchester, Vermont; and maintains a network of over 400 dealers worldwide. Orvis donates five percent of pre-tax profits each year to environmental programs.

ROAA Stays Healthy Despite Portfolio Metrics

Despite the uptick in recent delinquency and charge-off figures, U.S. bank credit card issuers are realizing a solid period of returns on average assets. During January the ROAA hit 2.66%, the highest level in more than five years, according to CardData ([www.carddata.com][1]). Rising cardholder fees, interest rates that move within 30-days of the Fed short-term interest adjustments and building balances have been key drivers to the new age of profitability. CA-based R.K. Hammer recently reported that return-on-assets for credit card portfolios for 2006 is projected to rise to 4.6%, compared 4.3% for 2005, and 4.5% for 2004. “Return on Average Assets” (ROAA) (%) is determined by dividing the after-tax return ($) by the average managed card outstandings ($) and then annualizing.

Return on Average Assets
Jan 06: 1.11%
Feb 06: 1.98%
Mar 06: 2.46%
Apr 06: 2.40%
May 06: 2.37%
Jun 06: 2.34%
Jul 06: 2.41%
Aug 06: 2.44%
Sep 06: 2.51%
Oct 06: 2.53%
Nov 06: 2.59%
Dec 06: 2.62%
Jan 07: 2.66%
Note: Excludes American Express and Discover.
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

DEC DEBT

Credit card debt soared to a new record, almost hitting A$39.0 billion in December. However, credit card volume inched up by only 5.6% year-on-year. Credit card limits reached a new high at A$103.7 billion, marking the fourth consecutive month of A$100+ billion. Card volume set a new record at A$17.1 billion during December, compared to a previous record of A$16.5 billion set in August, according to the Reserve Bank of Australia. During the past twelve months, credit card debt has increased 13.7% in Australia. For December, credit card balances increased about A$1.0 billion from the previous month. One-year ago credit card debt stood at A$34.3 billion. Gross dollar volume on credit card and charge cards was A$16.2 billion one-year ago. There are currently 13.3 million credit card and charge card accounts in Australia, compared to 12.6 million one-year ago.

PG&E Offers Customers VISA Payment Options

Pacific Gas and Electric is now accepting VISA online to make automatic monthly payments or one-time payments using VISA-branded debit, credit or prepaid cards. Under the no-fee pilot program, PG&E residential customers can schedule monthly payments or make one-time payments for their utility bills online. PG&E is one of the country’s largest providers of natural gas and electric service and is the nation’s largest utility company to offer its residential customers the option of using a Visa card for their monthly payments. PG&E joins more than 3,500 utilities across the U.S. that participate in VISA’s bill pay program.

VISA INC

VISA’s decision to become a global public company is taking shape as it
names a transition leader. Industry veteran Joseph Saunders will become
Executive Chairman of the Board of Directors of VISA Inc. later this
year after VISA Canada, VISA USA and VISA International complete their
mergers. Initially, Saunders will serve as a designated appointee of
VISA Inc. wherein he will help recruit a CEO and board members for the
new VISA Inc. Saunders will report directly to VISA Inc.’s “Transition
Governance Committee,” which has authority over the restructuring
process and is comprised of representatives from all of the VISA
regions, Inovant and VISA International. As a result of his appointment
to this position, Saunders relinquished his role as a member of the boards
of directors for VISA USA and VISA International. Saunders has served as
the top card executive at Household, Fleet, Providian, and Washington
Mutual. In October, VISA confirmed its IPO plans and said it would take
between 12 to 18 months to complete. Under the new structure, the public
will own a majority of the new company and the majority of the directors
will be independent. VISA Europe will remain a membership association
owned and governed by its 4,500 European banks. It will become a
licensee of VISA Inc. (CF Library 10/11/06)

Upaid Launches Membership-Based Payment Club

Upaid has launched a new payment club, “ValU”, specifically designed
for the online and m-commerce markets. These markets have been estimated
to be worth over $54.3 billion in 2007. “ValU” was designed in
response to demands of these sectors that have been expressing
difficulty with supportive banks and high premiums for acceptance card
payments. These factors impact the company’s profitability. Because of
strong bank relationships and experience with on-demand payment
solutions, “ValU” is capable of providing a free, dependable and
receptive service, tailored to the needs of each content sector. Upaid
holds a portfolio of over 1,000 granted patents in the arena of e-and
m-commerce. The company has a user base of over 50 million consumers,
processing 2 million transactions per month.