Hansabank will use Thales e-Security’s P3 for EMV Smart Cards

TietoEnator, a leading IT services provider in the Nordic countries, has chosen Thales e-Security’s “P3” smart card personalisation and preparation process for Estonia based Hansabank. EMV migration in the Baltics is moving fast with the first EMV smart cards issued in December 2002. To-date Baltic banks have issued more than 200,000 smart cards. Hansabank issued its first VISA smart cards in August. The “P3” system is designed to provide card issuers with a ready-made way of migrating from magnetic stripe cards to smart cards. Aimed primarily at the payments card industry, it offers the ability to generate data for credit/debit and electronic purse payment cards. Using P3 reduces or eliminates the need to make changes to the issuer’s host system thereby reducing implementation costs and timescales. Thales’ “P3” sits at the core of TietoEnator’s EMV solution and helps simplify the smart card migration process by providing all the cryptographic data required. The key benefits of Thales’ “P3” are a secure data preparation process, 100% in-house control over cryptographic keys and limited impact on the banks’ host systems. P3 is developed in conjunction with MasterCard and Visa and has been sold to smart card issuers in more than 30 countries around the world.

NPC Renews Kwik Trip Contract

National Processing Company has renewed its credit card processing contract for Kwik Trip and its 350 convenience stores. Under the terms of the renewal, NPC will continue to provide credit card authorization and settlement services for all Kwik Trip VISA and MasterCard transactions. Kwik Trip Inc. is known for its outstanding service, convenience, freshness and cleanliness, and prides itself on providing quality products and quality service to its customers. National Processing, Inc. is a leading provider of merchant credit and debit card processing.

Providian Profits Up Five-Fold in Fourth Quarter

Providian reported net income for the fourth quarter of $67.1 million, a five-fold increase over one-year ago, but down from the third quarter’s $85.3 million. During the quarter, the issuer added approximately 420,000 gross new accounts, and ended the quarter with about 10.5 million customer accounts. Providian’s managed loans declined to $16.93 billion from $16.95 in the previous quarter. The issuer says that its net credit losses in the fourth quarter were better than expected at $147.9 million, resulting in a managed net credit loss rate of 14.33%. The third quarter net credit loss rate was 14.37%. Providian’s managed 30+ day delinquency rates at the end of the fourth quarter were 9.29%, compared to 9.68% at the end of the third quarter. For complete details on Providian’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

Issuers Make a Scramble for Europe’s Egg

CardFlash International reports that speculation is rampant that Royal Bank of Scotland is in final discussions to purchase Prudential’s Internet bank, Egg, for $2.7 billion to $2.9 billion. Earlier rumors suggested that US-based MBNA and Capital One were in talks to purchase Egg with its two million credit card customers. Last week, Prudential confirmed it is was in discussions to unload its 79% stake in the Internet bank after it started to shop for potential buyers in October. Reportedly, Egg hit tough times after purchasing an Internet bank in France in 2002. Through the third quarter, Egg lost $127 million on the card. Egg launched the “la Carte Egg VISA” card in France during November 2002. The card has since failed to meet projections. Prudential launched Egg in October 1998.

Generic Miles Programs Offer Lower Value

CardTrak reports that reward credit cards offering air miles, and not affiliated with any airline, average 1.6 cents per mile, compared to the 2.5 to 3.0 cents per mile offered by credit cards sponsored by a specific airline. However, the non-affiliated air mile programs do offer lower redemption thresholds than the typical 25,000 miles needed to get a free domestic ticket. Overall, Diners Club offers the best value and the most flexibility of all the non-affiliated cards offering air mile options. Diners “Club Rewards” cardholders can convert their points-to-miles, effectively earning one air mile on any major U.S. airline for each dollar charged. American Express cardholders who earn double “Membership Reward” points can do the same but are limited in their choice of U.S. airlines. Discover cardholders can get a value as high as 2.2 cents per mile if they use their miles to fly to Canada or Mexico, otherwise domestic tickets carry a 2.0 cent per mile value and discount certificates have a 1.0 cent per mile value. Among VISA and MasterCard issuers, Fleet’s “Miles Edge” program ranks the highest in value while Capital One’s “Go Miles” and Bank One’s “Travel Plus” programs offer the least value. However, Capital One and Bank One programs do offer the lowest redemption thresholds of 9,000 miles and 5,000 miles, respectively.

Edgar, Dunn Names Crone as Director

San Francisco-based Edgar, Dunn has named Richard Crone, formerly of Dove Consulting and CyberCash, as a director. Mr. Crone brings deep expertise in a broad range of electronic transactions, such as Electronic Bill Presentment and Payment, Customer Self-Service and the use of the Automatic Clearing House for electronic funds transfer. Edgar, Dunn & Company is a global strategy consulting firm specializing in payments and financial services.

Bank One Card Profits Up 22% Over Third Quarter

Bank One reported this morning that its credit card profits for the fourth quarter hit $347 million, an 8% increase over one-year ago, and a 22% increase sequentially. The solid increase was primarily due to new or beefed-up co-branded programs including Starbucks, Avon, AARP, Marriott, and Disney. During the fourth quarter, Bank One opened 885,000 net accounts. Total card revenue increased 8% to $2.2 billion and net interest income rose 9% to $1.7 billion. End-of-period managed card loans increased 3.1% to $76.3 billion, compared to $74.0 billion one-year ago. Charge volume increased 5% to $45.5 billion in the fourth quarter. Net charge-offs increased to 5.43%, compared to 5.30% in the prior quarter, and 5.13% for 4Q/02. The 30-day delinquency rate, decreased to 3.90% from 4.02% in the prior year and from 3.98% in the prior quarter. The 90-day delinquency rate was flat at 1.85% for the last three quarters, compared to 1.80% one- year ago. Bank One ended the quarter with 50.8 million cardholders. For complete details on Bank One’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

Citi Card Profits Rise 25% Driven by Sears Cards

Citigroup reported this morning that profits for its credit card business in North America increased 25% in the fourth quarter to slightly more than $1 billion, driven by its recent acquisition of the Sears store and bank card portfolio. Credit card outstandings for North America increased 24% over 4Q/02 to $148.8 billion, which includes $29.0 billion in private label card outstandings. However, charge volume only increased 10%, from $65.7 billion to $72.4 billion. Citi’s account base at the end of fourth quarter was 129.2 million accounts, a 46% gain over 4Q/02. Citi’s charge-offs increased from 5.77% in the third quarter to 6.25% for 4Q/03. Charge-offs for bank credit cards was 6.17% compared to 5.39% one-year ago. Delinquency (90+ days) also increased from 1.82% for 3Q/03 to 2.18% for the fourth quarter 2003. Delinquency for bank credit cards was 1.88% compared to 1.84% for the previous quarter, and 1.77% one-year ago. For complete details on Citigroup’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

US Bancorp Says Debit Fees Off $12.6 Million

US Bancorp reported this morning that its credit and debit card non-interest revenue increased 6.8% during the fourth quarter to $153.4 million. The issuer says that even though credit and debit card revenue grew year-over-year, the growth was somewhat muted due to the impact of the settlement of the antitrust litigation brought against VISA and MasterCard by Wal-Mart, Sears, and other retailers. The year-over-year impact of the VISA settlement on credit and debit card revenue was approximately $12.6 million. Corporate payment product non-interest revenue increased 10.3% to $88.7 million. ATM processing services declined 3.4% to $40.3 million. Merchant processing revenues edged up 2.8% to $146.0 million. For complete details on US Bancorp’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

Motient Corporation and USTT Team

Motient Corporation and USA Technologies have teamed to bring wireless data connectivity and cashless vending to the entertainment, travel and hospitality industries. The integrated solution has already been launched successfully to multiple vending markets, including a prestigious Orlando theme park for both guest and employee locations, major airports for beverage and non-traditional vending applications. Motient Corporation owns and operates the nation’s largest two way wireless data network. USA Technologies is a leader in the networking of distributed assets, wireless non-cash and m-commerce transactions, associated financial/network services and interactive media technology and energy management.