Jan CMI Shows New Credit Applications Up 70 bps

The National Association of Credit Management “Credit Manager’s Index” for January 2005 continued to show economic growth despite a decline of 230 bps from December. While there was a decline in both the manufacturing and service sectors, it was the manufacturing sector that accounted for the overall CMI drop. The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 business credit and financial professionals worldwide with premier industry services, tools and information.

Axalto’s Financial Smart Card Revenues Up 22%

Axalto, formerly Schlumberger Smart Cards, reported that fourth quarter
revenue for financial cards rose 22% to $51.7 million. Microprocessor
card sales were also up 22% to 18.6 million cards for 4Q/04. Overall
revenues for the quarter were $291.5 million, a 30% increase over the
year ago quarter. POS terminal revenues for 4Q/04 rose 43% to $22.4
million, but down 15% from the prior quarter. Axalto says the terminal
growth is driven by strong sales in the EMEA region, derived from a
growing number of EMV-related supply contracts. For the full year, POS
terminal sales were up 66% in the EMEA region. During the fourth
quarter, Axalto joined the “Visa Smart Breakthrough” card program. For
complete details on Axalto’s fourth quarter performance, visit CardData
(www.carddata.com).

AssetExchange Brokers Ten CU Card Sales

OR-based AssetExchange reports it recently brokered the sales of ten credit union credit card portfolios. Atlanta-based InfiCorp signed purchase and agent deals with TN-based Old Hickory CU, CA-based Sun Community FCU, NH-based Triangle CU, CO-based Community Financial FCU, and, WI-based Guardian CU. Dallas-based TNB Card Services purchased and formed partnerships with ID-based Advantage Plus FCU and CT-based Windsor Locks FCU. AssetExchange would not disclose the buyer of the other three portfolios. AssetExchange recently released a report that showed the penetration of credit cards among credit union members has declined 19.0% to 18.5% year-on-year. (CF Library 11/30/04)

Fraud Concerns 60% of Canadians

A new survey by VISA Canada has found that while 86% of Canadians say they keep track of their monthly credit card statements, only 61% shred their personal documents before disposing of them.
Despite the fact that 52% of respondents say that they feel vulnerable to fraud, there are still many Canadians who have little or no awareness about certain types of fraud. The January survey of 1,351 Canadians conducted by Maritz Research shows that 60% of respondents are either very or somewhat concerned about becoming a victim of credit card fraud.

Citibank Brazil and Banco Itau Split Credicard Assets

After agreeing to acquire all of Unibanco’s interest in Credicard, Citigroup and Banco Itau have no decided to divide equally the assets of Credicard, without any financial consideration paid by either party. As a result of this agreement Citibank Brazil will
add more than 3.8 million cards, bringing Citibank’s total number of
Brazilian credit cards to approximately 4.7 million. In November 2004, Citibank Brazil, Banco Itau and Unibanco announced the restructuring of the ownership of their jointly owned Credicard Group, including the purchase by Citibank and Itau of Unibanco’s interest in the Credicard card issuing business, and the purchase by Itau of Citibank’s and Unibanco’s shares in Orbitall, the card processing and servicing business. Redecard, the merchant acquiring business, maintained its ownership structure, with Citibank, Itau and Unibanco each owning 32%, and MasterCard owning 4%. After the transition is complete, which is expected to occur later in 2005, Citibank Brazil and Banco Itau will manage their respective credit card operations in the manner that best supports each company’s distinct business strategies.

Infineon Names an Asian Pacific President

Germany’s Infineon Technologies announced that Tony Ng Fook San will take over as President and Managing Director of Infineon Technologies Asia Pacific. He will succeed Loh Kin Wah who
has since been promoted to be a Member of the Management Board and Head
of the Communication business group. From 2002-2004, he headed the Sales & Marketing team and served as Vice President, Sales of Infineon Technologies Asia Pacific between 1998 and 2002.

AmEx GDV Outpaces V/MC Globally for Two Years

After struggling through the recent recession, American Express has outpaced VISA and MasterCard in global card volume growth for the past two years. Driven by growth in the U.S. small business segment and its Global Network Services partnerships, AmEx’s worldwide GDV surged by more than 18% last year, compared to VISA’s 10.5% growth rate and MasterCard’s 9.4% gain. (VISA and MasterCard 2004 gains may be slightly higher when data are released this month.) Since year-end 1999, MasterCard’s GDV has climbed 91%, while VISA’s GDV has grown by 81% and American Express’ annual GDV has increased by 64%. VISA leads with a CAGR of 14.87%, compared to MasterCard’s 13.84%, and American Express’ 10.37%. However, the overall trend shows that VISA and MasterCard have been losing momentum globally since the recession of 2001. Last year, American Express posted GDV of $416 billion, compared to $352 billion for 2003. For the 12 months ending September 30th, VISA’s global GDV was $3.26 trillion, compared to $2.95 trillion for the prior period. During the same period MasterCard reported GDV of $1.39 trillion, compared to $1.27 trillion for 2003. The VISA and MasterCard figures do not include some online debit volume.

GLOBAL GDV BY NETWORK
NETWORK 2000 2001 2002 2003 2004
VISA $1.93t $2.30t $2.64t $2.95t $3.26t**
MasterCard $0.86t $0.99t $1.14t $1.27t $1.39t**
American Express $ 297b $ 298b $ 311b $ 352b $ 416b
t- trillion b-billion
* does not include Maestro ** 12-months ending 9/30/04

YEAR/YEAR GROWTH
2000 2001 2002 2003 2004 5YR CAGR
VISA 18.4% 19.2% 14.9% 11.7% 10.5% 81.0% 14.87%
MasterCard 17.8% 15.1% 15.2% 11.4% 9.4% 91.2% 13.84%
American Express 16.9% 0.3% 4.3% 13.2% 18.2% 63.8% 10.37%

Source: CardData Platinum (www.carddata.com)

Metris Companies Knocks-Off Some More Debt

Metris Companies announced that it has retired $900 million of asset-backed securitization debt that is scheduled to mature in May. Metris recently announced plans to make another prepayment of corporate debt of the past three months, paying $50 million on senior notes later this month. This is the third prepayment of corporate debt Metris has announced in the past three months. The Company made a $50 million prepayment on November 23, 2004, and a $25 million prepayment on December 22, 2004 of its senior secured credit agreement maturing in 2007. Metris reported last week that it made a full-year profit of $33.7 million in 2004. (CF Library 1/26/05; 1/27/05)

Hypercom Lands Two Electronic Payments Veterans

Hypercom has hired Bill Mardis, former Director of Sales & Marketing for VeriFone, as VP/Value-Added Services, and has also hired Dan DeBraal, former AVP/Merchant Products for Fifth Third Processing, as VP/Processor Sales. Mr. Mardis will manage the global payment technology leader’s North America Value-Added Channel. He will also manage the company’s authorized repair center program and parts sales. Mr. DeBraal will focus on processor product development and certification. He will also serve as an internal product development/certification support coordinator and liaison. Hypercom Corporation is a leading global provider of electronic payment solutions that add value at the point-of-transaction for consumers, merchants and acquirers, and yield increased profitability for its customers.

Dec Debit and Credit Card Transactions Up 13%

Payment card transactions reached 584.6 million in December, a 12.6% gain over one-year ago. According to figures released by APACS, debit card purchases led the growth, with a 15.8% growth in transactions to 380 million. Credit card transactions grew by 7.1% to 205 million.
Despite reports of a below-expectations Christmas trading period, total
retail sales over Christmas were estimated at GBP30.8 billion, 3% higher than December 2003. Payment cards accounted for 61.5% of all retail sales, and December’s high street purchases on plastic were the highest ever recorded, up 11% on December 2003 figures.

Washington Trust Nails a RI Municipality Deal

The Washington Trust Company has been awarded a three-year ATM contract with The State of Rhode Island to permit any Rhode Island municipality to place Washington Trust ATMs in their public buildings and schools. The agreement also allows any Rhode Island municipality to place Washington Trust ATMs in their public buildings and schools. The Washington Trust Company is the largest independent bank headquartered in Rhode Island. Washington Trust offers a full range of financial services, including trust and investment management, through its 16 branch offices located in Rhode Island and southeastern Connecticut.