ABS Charge-Offs Head North in August

Credit card charge-offs, among “prime” asset-backed securities, headed north in August, but, the 60+ day delinquency ratio remained stable. Nevertheless, total charge-offs will edge up by year-end despite the fact that bankruptcy filings are down more than 65% year over year. According to FitchRatings, “prime” charge-offs for August were 3.94%, 50 basis points higher than July and compared to 5.97% one-year ago. The “prime” 60-plus day delinquency index for August was 2.33%, compared to 2.36% in July. Fitch also reported that “sub-prime” 60+ day late payments increased five bps to 5.00%. “Sub-Prime” charge-offs jumped 105 bps to 9.45%. Charge-offs for the year have averaged 9.13%, a 419 basis points improvement from 13.32% for the same period the year before.

Jan 06: 6.88%
Feb 06: 3.29%
Mar 06: 3.10%
Apr 06: 3.19%
May 06: 3.58%
Jun 06: 3.58%
Jul 06: 3.44%
Aug 06: 3.94%
Source: FitchRatings

Experian Expands Credit Bureaus With an Acquisition

Experian has expanded its Canadian operations by acquiring Quebec-based Northern Credit Bureaus. This extends the number of countries in which Experian operates consumer credit bureaus to 13.
Consumer borrowing levels in Canada have increased substantially in recent years. Experian says with total consumer debt now exceeding total
personal disposable income, financial institutions, credit grantors and
retailers need better alternatives for data and tools to manage their

Global Payments’ Q3 Profit Rises 41%

Atlanta-based Global Payments Inc. reported that revenues for the quarter ended August 31st increased 16% to $260.3 million. Net income for the quarter jumped 41% to $44.2 million. GPN says the growth was driven by strong revenue and operating margin growth in its merchant services segment, with the domestic ISO channel remaining the fastest growing area for the Company. During the quarter GPN signed a deal with NYC-based AmeriMerchant, a provider of working capital to businesses against their future credit card sales and was recognized by Business 2.0 magazine as one of the “100 Fastest-Growing Technology Companies” in the USA. Recently, GPN agreed to purchase the portion of Discover’s merchant portfolio for which it currently provides VISA/MasterCard processing and will begin to sell Discover Network card acceptance during the first quarter of next year. GPN is also raising the low end of its annual fiscal 2007 revenue guidance to $1,057 million, and reaffirming the high end of this guidance of $1,084 million. This revenue guidance reflects an expected 16% to 19% growth versus $908 million in fiscal 2006. For complete details on Global Payments latest results, visit CardData ([www.carddata.com][1]). (CF Library 6/5/06; 6/15/06; 9/12/06)

3Q/05: $224.5mm $31.3mm
4Q/05: $219.7mm $31.3mm
1Q/06: $225.2mm $30.1mm
2Q/06: $238.8mm $34.1mm
3Q/06: $260.3mm $44.2mm
Source: CardData (www.carddata.com)

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

Morgan Stanley’s UK Card Portfolio Up 3% Sequentially

Morgan Stanley reported that credit card outstandings for its British MasterCards during the quarter ended August 31st rose by more than $100 million to $4.5 billion, a 3% sequential increase. The quarter included $1.4 billion of managed loans associated with the February acquisition of the Lloyds TSB “Goldfish” credit card business in the U.K. The number of accounts for its “Classic,” “Gold,” “Platinum,” and “buy & fly!” cards held steady at 2.9 million from the prior quarter, but, is up by 300,000 since the acquisition. There are approximately 1 million “Goldfish” credit card accounts. MS, which issues the “Discover” card in the U.S. paid a 22% premium for the “Goldfish” portfolio. The Company has been aggressively promoting the “Goldfish” brand. MS introduced its first credit card in the U.K. in 1999. For complete details on Morgan Stanley’s latest performance, visit CardData (www.carddata.com).

Cybertrust Intros Partner Security Program

VA-based Cybertrust has announced the “Partner Security Program” to enable its customers to identify and eliminate risks that result from opening up its networks and systems to partners, customers and other vendors that may not be compliant with an individual organization’s security requirements. A recent Cybertrust study found that nearly three quarters of organizations worldwide feel that business partners increase their levels of information security risk, and approximately one third of respondents reported that their organizations had suffered a security incident involving business partners within the previous year. Cybertrust Partner Security Program was developed to help customers understand and manage the risks of doing business as an extended enterprise through a repeatable and scalable process that controls costs and minimizes the level of effort. Cybertrust is the global information security specialist, delivering services that secure critical data, protect identities and help customers demonstrate ongoing compliance.

TSYS is Offering a Debit Rewards Workshop

TSYS has scheduled an October 4th workshop to discuss strategies for debit rewards at the upcoming “ATM, Debit & Prepaid Forum” in Las Vegas. TSYS is one of the world’s largest payment-services companies, offering a broad range of packaged or outsourced issuing and acquiring technologies that support consumer finance, credit, debit and prepaid services for financial institutions and retail companies worldwide. ESC Loyalty is one of the leading providers of loyalty solutions for the financial services and retail industries.

USAT Fiscal Year Revenues Rise 37%

PA-based USA Technologies reported record revenue of $6.4 million for the last twelve months, an increase of 37% compared to one-year ago. Gross profit was $2.0 million for the same period, compared to $1.2 million for the fiscal year ended June 30th, 2005. For the first quarter USAT reported revenue of $1.6 million and gross profit of $687,749. The Company says the fiscal year results were driven by relationships with MasterCard, Pepsi and Coca-Cola, plus it made improvements to manufacturing and developed tight cost controls. During the past year USAT launched the “e-Port Generation Six” and introduced contactless technology in vending machines. For complete details on USA Technologies’ latest results, visit CardData ([www.carddata.com][1]).

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

EFTA Names its 2007 Board of Directors

The Board of Directors of the Electronic Funds Transfer Association selected its new executive officers for 2007. Ronald Congemi, SVP/Strategic Relationships at First Data, was elected as the new chairman. Elected to serve as vice chairman was Raymond Crosier, president and COO of Online Resources. Sandra Hartfield, president and CEO of Palm Desert National Bank and Lynne Barr, a partner in the law firm of Goodwin Procter, were re-elected treasurer and secretary of the Board, respectively.

FDIC to Hold Identity Theft Symposia

The FDIC is holding its next symposia on the importance of consumer confidence in e-commerce on October 5th in Mesa, AZ, and on October 25th in Miami Beach, FL. The half-day meetings will bring together experts from government and the private sector to discuss ways to combat online identity theft and help maintain public confidence in e-commerce. Details about the October 25th symposium in Miami Beach have not been finalized, but will be posted to the FDIC’s Web site as they become available. Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system.

PayPal Makes Peace with AGs & Lawsuit

PayPal has signed an agreement with 28 U.S. Attorneys General to simplify its user agreement and communicate more details on its fraud protection program. PayPal also announced it has reached a preliminary settlement agreement with a proposed class action for $3.5 million. To cover the cost of the investigation, PayPal will pay $1.7 million to the Attorneys General. Under the terms of the settlement agreements, PayPal is not admitting any liability for any of the allegations in the two cases. PayPal had 113.7 million total accounts at the end of the second quarter, a 44% increase from one-year ago. Total payment volume rose 37% to a record $8.9 billion which includes payments initiated through the PayPal system but excludes its payment gateway business. (CF Library 7/24/06)

TNS Names a New CEO to Replace McDonnell

VA-based TNS has named Henry Graham, currently its EVP/CFO, as its new CEO, replacing Jack McDonnell, who has left the Company at the request of the Board. Henry Graham, 56, has held various senior-level finance and management positions. Prior to rejoining TNS as its Executive Vice President, Chief Financial Officer and Treasurer, Mr. Graham served as Senior Vice President and Chief Financial Officer of PaylinX Corporation. While at PaylinX, Mr. Graham successfully raised $35 million in new cash and conversion of debt and facilitated the sale of the company to CyberSource Corporation. TNS is one of the leading providers of business-critical, cost-effective data communications services for transaction-oriented applications and operates through its wholly owned subsidiary Transaction Network Services, Inc.

Wells Launches Two Dual-Line VISAs

IA-based Wells Fargo Financial Retail Services is launching a dual-line VISA credit card for Alliance Flooring and Floors Today. Alliance Flooring does business as Carpets Plus Color Tile, Carpetland USA, Color Tile, and Floorco, has more than 450 flooring retail locations nationwide. Floors Today’s has 57 locations throughout the southeastern U.S. Under the program one line is dedicated for purchases at participating locations and the other line for VISA card purchases everywhere else. In addition, participating retailers can offer special terms promotions on the retailer line of credit such as buy today, and pay later.