Direct mail solicitations for credit cards declined last year after topping five billion in 2001, in the wake of the collapse of the sub-prime market. Response rates have also declined to a record 0.5% as the number of credit card solicitations per credit worthy household averages five per month. According to Synovate’s Financial Services Practice, credit card mail volume declined to 4.89 billion offers for 2002. The research firm says only 20% of the offers during the fourth quarter were received by households with annual incomes of less than $35,000, compared to 32% of offers targeting those same types of household during the fourth quarter of 2001. Synovate also found that the average APR dropped to 11.48% during the fourth quarter of 2002, compared to 13.77% the same time the year before, and over half of all offers were promoting APRs that were actually lower than 11%. Fifty-nine percent of all offers promoted a 0% introductory rate for balance transfers in the fourth quarter, up from 45% in the same period of 2001; and 45% of all offers featured a 0% introductory rate for purchases, which was up from 31% during the same time the year before. According to Mintel Comperemedia, first quarter credit card solicitations hit 915 million, compared to 965 million for 1Q/02, and 883 million for 1Q/01. (CF Library 5/28/03)
VISA USA reported this morning that its annual gross dollar volume exceeded $1 trillion for the first time, based on the twelve-month period ending March 31st. The milestone has been driven by VISA’s overwhelming dominance in domestic off-line, or signature-based, debit cards. VISA currently holds a 74% share of the off-line debit card market and a 43% share of the bank credit card market in the USA. VISA said this morning the figures mean that an average of $32,000 went through VISANET every second of every day over the past twelve months. VISA also reported that quick service restaurants volume is up 71%, recurring payments volume is up 28%, B2B volume is up 21%, volume for tolls and bridges is up 47%, and government acceptance is up 18%. VISA also noted this morning it has been endorsed by an industry newsletter, “The Nilson Report,” which purports to be an independent advisory service, as “the most dependable processing and settlement system in the industry.” (CF Library 5/23/03)
The U.S. Postal Service Governors yesterday approved the first “Negotiated Service Agreement” with Capital One. The first NSA features discounts for Capital One First-Class Mail volume above an annual threshold of 1.225 billion pieces and electronic return of undeliverable mail data by the Postal Service to Capital One. Prior to Monday’s Board decision, the “Capital One NSA” was examined during eight months of open litigation before the Postal Rate Commission. Under terms of the deal, Capital One will receive volume discounts between 3 cents and 6 cents per piece, depending on mail volume. The deal caps the discount at $40.6 million for the three year term. Capital One is the largest producer of First-Class mail and the USPS’ fourth-biggest customer. Capital One mails out more than 1.2 billion pieces of mail annually, and currently pays 29 cents for First-Class mail. (CF Library 5/21/03)
Boston Communications Group announced that two carriers have implemented “bcgi Payment Agent Service,” an end-to-end solution for credit card payment processing. With the new service, Dobson Cellular Systems and Centennial Wireless are able to offer their prepaid wireless subscribers the ability to purchase additional airtime using their credit or debit cards anytime, anywhere. The carriers are able to provide this convenience while bcgi manages the associated risks, costs and complexities of payment card processing. Employed as a standalone service or as a complement to other bcgi solutions, such as bcgi Prepaid Wireless and bcgi Prepaid Connection, Payment Agent Service is deployed using bcgi’s TOTALsource implementation model in which bcgi provides all aspects of the solution, including implementation and ongoing support.
Wincor Nixdorf said this morning that Burlington Coat Factory is deploying an additional 2,900 “BEETLE/S” POS systems at its stores nationwide, for a total of approximately 5,000 “BEETLEs” installed throughout the chain. The additional “BEETLEs”, when the rollout is finished in late summer, will run “Red Hat Linux” and will be deployed in all of Burlington’s current locations. The “BEETLE/S” systems configured for Burlington are sealed-chassis POS appliances with external power supplies and heat sinks rather than internal fans for heat dissipation. There are 600,000 “BEETLE” family installations to-date.
Alliance & Leicester announced this morning it has teamed with MBNA Europe to launch a business credit card. This is the first time MBNA Europe has offered a branded business credit card in conjunction with another provider, according to The RAM Report. MBNA Europe currently issues Alliance & Leicester’s consumer credit cards. The new business credit card features a six month 7.9% interest rate followed by an on-going rate of 16.5%. The principal cardholder annual fee is $41.00 and is based on a credit limit of $8,200. Additional cardholders are charged an annual fee of $23.50. The new “Alliance & Leicester Business Credit Card” is only available to existing business banking customers.
Marceco, a wholesaler of prepaid telecommunication products, has selected Q Comm’s transaction processing platform and “Qxpress 200” POS technology for the electronic distribution of prepaid services through Marceco’s retail network. Under the agreement, Marceco will purchase Qxpress 200 terminals and pay Q Comm a fee for each transaction processed through the terminals. Rollout of a limited number of terminals has just begun. Marceco intends to eventually install Qxpress terminals in all 400 retail locations that it services.
Ingenico says it has shipped its 200,000th “eN-Touch 1000” touch screen and signature capture terminal to major retailers in the USA. The eN-Touch 1000’s durable capacitive screen technology provides optimal finger touch sensitivity for customer PIN entry, complemented by proven electrostatic pen technology for electronic signature based transactions. Together, these resilient technologies provide optimal ease of use and a much lower cost of ownership than competitive terminals featuring membrane-based resistive touch screens.
VeriFone International Partner CCV-CardPay has successfully deployed its first VeriFone “Omni 3740” terminals and “SC 5000” programmable smart card PINpads at leading retailers in Zurich, where the “ep2” pilot is taking place. VeriFone is only the second terminal supplier to have its solutions integrated in the “ep2” pilot phase. The “ep2” system supports the full functionality of EMV, including offline authorization of transactions. A major result of the “ep2” pilot is the proof of much faster transaction processing times at the point of sale for off-line transactions. CCV, the Holland-based parent company of CCV-CardPay, developed the software for the terminals, which will be deployed throughout world-renowned brand outlets in the city, including restaurants Down Mexico Way and Churrasco Steakhouse, and the Central Plaza Hotel.
Discover Financial Services and Metavante have teamed to enable issuers, other than Discover Bank, to issue card products and use the Discover/NOVUS Network. The first products to be issued under the partnership will be stored value/gift cards. The companies said the key benefits of their program include neutral branding, real-time authorization, and a zero floor limit. The Discover/NOVUS Network currently has more than 4 million merchant and cash access locations. Discover is also accepted in some travel related merchants in Canada, the Caribbean and Mexico. Metavante is wholly owned by Marshall & Ilsley Corporation.
Kookmin Bank announced it is merging its in-house credit card unit with
its affiliate Kookmin Credit Card Co in an effort to cut costs.
In April, Kookmin Credit Card announced a 20% reduction in its work force
in the wake of rising credit card losses throughout the country.
Kookmin Bank, which owns nearly 75% of Kookmin Credit Card Co, says it
expects to close the merger by the end of the third quarter. Two months
ago, the Financial Supervisory Service reported that major companies and
banks agreed to raise approximately $3.6 billion to fend off potential
bankruptcy in their credit card subsidiaries. Also, government-run Korea
Asset Management is buying between $4 billion and $5 billion worth of bad
credit card loans. The Korean credit card industry has been hit hard by an
economic crisis. The FSS recently reported that card payments, 30+ days
overdue, increased 23% to $6.3 billion in January from $5.1 billion in
December. Credit card issuers lost a total of $207 million in 2002. In
January, credit card losses topped $326 million.
Paymentech has inked an agreement to provide complete payment processing services for more than 400 Mac’s Convenience Stores including the Big Foot, Dairy Mart, and Handy Andy brands. Paymentech’s comprehensive payment options and premium service is well known in the convenience store industry. From high-speed authorizations, customized pre-paid cards and innovative reporting solutions.