The U.S. Postal Service confirmed it has inked a “Negotiated Service Agreement” with Discover Financial Services. The Discover NSA is similar to the Capital One NSA implemented last year. Bank One, which struck a deal with the Postal Service in June, is now awaiting approval from the Governors of the Postal Service. Under the terms of the Discover NSA, the issuer will earn lower rates for First-Class Mail volume in excess of 405 million pieces in the first year of the agreement. In exchange, Discover will accept information electronically from the Postal Service about undeliverable-as-addressed First-Class Mail in lieu of receiving the actual mail. Since September 2003, Capital One has been able to mail credit card solicitations using First-Class Mail at discounts up to 6 cents per piece under its NSA. (CF Library 8/27/04)
San Diego-based Encore Capital Group reported that gross collections were up 22% to $59.9 million, and that total revenues were up 58% to $46.5 million. Net income rose 90% to $5.9 million. The Company spent $21.0 million to purchase approximately $721 million in face value of portfolios during the third quarter, a blended purchase price of 2.91% of face value. Credit card portfolios represented 42.2% of total purchases in the quarter. Encore has been shifting to more profitable non-credit card portfolios, which do not require contingent interest payments. For complete details on Encore’s third quarter performance, visit CardData ([www.carddata.com]).
The federal bank and thrift regulatory agencies are requesting comment on proposed guidance for “Internal Ratings-Based Systems for Retail Credit Risk for Regulatory Capital”. A description of the agencies’ current views about the components and characteristics of a qualifying IRB system for measuring credit risk of retail exposures is provided to banking organizations through the proposed guidance. Comments are requested by January 25, 2005. Directions on how to file a comment are found in the Federal Register notice.
Continental Airlines is now accepting checks via the TeleCheck “Internet Check Acceptance” service, cash via Western Union and is offering the “Bill Me Later” service from I4 Commerce. Customers who purchase tickets at continental.com using cash, check, or deferred payment options before December 31, 2004 will earn an electronic certificate, valid for a 5% discount on a future Continental Airlines ticket. Continental Airlines operates over 3,000 daily departures throughout the Americas, Europe, and Asia, making it the world’s 6th largest airline. It serves more domestic and international destinations than any other airline in the world. FORTUNE ranks Continental as one of the 100 Best Companies to Work For in America and as the top airline in its 2004 edition of Most Admired Global Companies.
Capital One has named Ann Fritz Hackett, president of the Horizon Consulting Group, to its Board of Directors. Ms. Hackett will serve on the Board’s Audit and Risk Committee and its Governance and Nominating Committee, filling a new seat on the Board. Before her career at Horizon, Hackett served as vice president and partner in strategy and human resources at Strategic Planning Associates, Inc. She serves on the board of Woodhead Industries, Inc. and formerly served on the Board of Trustees at Dartmouth College, her alma mater. Capital One Financial Corporation is a holding company with principal subsidiaries, Capital One Bank and Capital One, F.S.B. Capital One is a Fortune 500 company and one of the largest providers of MasterCard and Visa credit cards in the world.
The “Starbucks Card Duetto VISA” is offering new cardholders, through December 31st, a free six-week subscription to The New York Times Sunday edition and $10 “Duetto” dollars, to be loaded on the card. Colleagues can apply for the promotion by visiting the Duetto Web site at [http://www.firstusa.com/cgi-bin/webcgi/webserve.cgi?partner_dir_name=starbucks&page=cont&mkid=6S19]
Sofia-based Transcard SA has signed acquiring and card issuing license agreements with JCB International. Transcard will start merchant operations by March 2005 and card issuing by September 2005. Transcard entered the credit card business in 2002, when there were only
about 50,000 credit cards in Bulgaria. Offering cash-back benefits that
vary from 1 to 30%, Transcard built a substantial base of over 60,000
cardholders with 100,000 cards in two short years. It offers “Classic” and “Gold” cards for individuals, a “Business” card for corporate clients, and a “Fleet” card for use at gasoline stations. They are expecting to issue 30,000 of the new JCB cards in the first year. In merchant acquiring, Transcard is planning to achieve a coverage rate of 80% of merchants accepting credit cards in Bulgaria by the end of this year. JCB’s merchant network includes 11.7 million merchants and spans 190 countries and territories.
Equifax has introduced its first consumer credit comparison tool: “Equifax Credit Rankings”. Equifax Credit Rankings enable consumers to rank their own credit information against the averages of similar credit information from a local zip code or from around the U.S. Categories of comparison such as mortgage payments, auto loan balances, total debt, credit card debt, the amount of open credit accounts, and late payments are offered in the Credit Rankings. Equifax Credit Rankings is designed to encourage consumers to better manage their credit and overall financial wellbeing. Equifax, Inc. is a world leader in turning information into intelligence.
Hypercom posted revenues of $63.2 million for the third quarter, compared to $59.4 million one-year ago. Revenues were dampened by a delay in component deliveries for the “Optimum L4100” multi-lane product, however, the matter was resolved after the close of the quarter and the deferred orders have been shipped. Hypercom reaffirmed its full year revenue guidance of $254-260 million. The Company expects a strong fourth quarter due to the deferred orders from 3Q/04, and the increased demand for multi-lane and outdoor QSR products. The Company closed the quarter with a sales backlog of $49.5 million, versus $51.8 million as of June 30th, and $69.9 million one-year ago. During the quarter, Hypercom received an additional order for 10,000 payment terminals from an existing QSR customer and launched several new multi-lane pilots with major drug, grocery, and department store chains. For complete details on Hypercom’s third quarter performance, visit CardData ([www.carddata.com]).
HYPERCOM REVENUES SNAPSHOT
3Q/03: $59.4 million
4Q/03: $63.4 million
1Q/04: $50.8 million
2Q/04: $64.7 million
3Q/04: $63.2 million
Source: CardData (www.carddata.com)
MN-based Deluxe Financial has launched the “DeluxeCard VISA Gift Card,” issued by First Federal Savings Bank of the Midwest. The DeluxeCard gift card can be used to buy anything wherever Visa debit cards are accepted. The card is an open-system prepaid card, enabling financial institutions to meet increasing demands for payment tools and a universal gift solution. Card designs are available for multiple occasions and consumers can choose a personal message that can be imprinted below the recipient’s name. The card can be sent directly to the recipient and funds up to $500 can be loaded on the card. Deluxe Financial Services offers checks and other related products to improve consumer satisfaction, strengthen check program security, increase revenue, and improve efficiency. Visa is the world’s leading payment brand and largest payment system. Cardholders in over 150 countries have over 1 billion Visa branded cards, which are accepted at millions of locations all over the world.
The number of consumers who purchase gift cards for themselves has skyrocketed from 2% in 2003 to 21% this year. Of these self-givers, one in five say they use the cards to purchase cheaper gas from large discounters where cash and credit are not accepted at the pump. The findings come from the annual gift card survey conducted by Comdata’s Stored Value Systems. The SVS study found 75% of U.S. consumers, 15 years old and older, have now either purchased or received a gift card compared to 68% in 2003. About 60% of gift card purchasers buy gift cards for relatives outside of their immediate family and 44% purchase gift cards for friends. The average holiday gift card spending is expected to rise by 20% this year to $223. This year, the average card load is $42. SVS also found that 50% of gift card recipients always or often spend more than the value of the card and make up the difference with their own money. More than 40% of those who receive gift cards use them up within one month of receiving it, and only about 4% keep a card without using it for more than one year. The number one occasion for gift card purchases is birthdays (84%) followed by the winter holidays (68%).
Euronet Worldwide reported that third quarter revenues increased 88% and that net income more than quadrupled, compared to one-year ago. EFT transactions and prepaid transactions more than doubled. Consolidated revenues for 3Q/04 were $99.9 million, compared to $53.1 million for 3Q/03. Net income for the third quarter was $6.0 million, compared to a net income of $1.4 million for the third quarter 2003. The EFT processing segment posted third quarter revenues of $20.9 million, a 62% increase. The EFT processing unit processed 70.1 million transactions in the third quarter compared to 31.0 million transactions for the same period last year. The segment completed the quarter with 5,404 ATMs owned or operated, compared to 3,254 ATMs at the end of the 3Q/03. The prepaid processing segment reported third quarter revenues of $75.4 million, a 107% jump over 3Q/03. Total transactions processed by the prepaid processing unit in the third quarter were 59.8 million, compared to 26.3 million prepaid transactions processed in 3Q/03. The prepaid processing segment processes electronic point-of-sale prepaid transactions at more than 168,000 point-of-sale terminals across more than 79,000 retailers in Europe, Asia Pacific and the USA. For complete details on Euronet’s third quarter performance visit CardData (www.carddata.com).