KY-based Retriever Payment Systems will see its merchant processing services grow from 100,000 to 260,000 merchant locations in the U.S. following a deal announced Friday. Financed by GTCR Golder Rauner, Iron Triangle Payment Systems, which owns Retriever will acquire the independent sales organization business of BA Merchant Services. Bank of America’s BA Merchant Services ISO channel serves more than 140,000 merchant locations. The transaction also includes the National Processing Company brand name. Additionally Best Payment Solution, which operates as a separate wholly-owned subsidiary of BA Merchant Services, is included as part of the transaction. BPS provides services to an additional 20,000 merchant locations. The combined businesses will support over 700 independent sales offices and more than 650 community and regional banks. ITPS was founded in 2003 by Thomas Wimsett, former CEO of NPC, in partnership with GTCR. TX-based Retriever Payment Systems and KY-based Iron Triangle Payment Systems merge on January 1st, 2005. (CF Library 1/24/05)
Bank of America’s FIA Card Services (f/k/a MBNA America Bank) priced an offering of $1.75 billion in credit card asset-backed notes from the BA Credit Card Trust at one basis point over the one-month LIBOR. This offering, scheduled to close on August 30, 2006, was lead managed by Banc of America Securities LLC and co-managed by ABN AMRO Incorporated, Barclays Capital, Merrill Lynch & Co. and RBS Greenwich Capital. The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates.
Bank credit card outstandings among four of the top U.S. players increased a paltry 1.5% during the second quarter compared to 2Q/05 but jumped 2.6% sequentially. Among the top five players who break-out their U.S. portfolios only Capital One posted above average growth. The nation’s top issuer, Bank of America, posted a 7.6% year-on-year gain in global outstandings. (BofA no longer discloses its domestic portfolio statistics.) Industrywide credit card outstandings increased 8.6% year-on-year according to CardData ([www.carddata.com]). Chase, Citibank, Capital One and Discover hold a collective marketshare of 48%. Among the big four from the top five, Capital One grew 5.0% while Chase posted a 1.5% gain and Citibank a 1.0% increase. Discover’s domestic portfolio decreased by 0.5%.
BIG FOUR PLAYERS
($ billions outstandings)
2Q/06 1Q/06 2Q/05 CHNG
Chase 139.3 134.3 137.3 +1.5%
Citi 111.3 109.7 110.2 +1.0%
Cap One 48.7 47.1 46.4 +5.0%
Discover 44.1 43.6 44.3 -0.5%
TOTAL 343.3 334.7 338.2 +1.5%
INDUSTRY 721.4 704.1 664.5 +8.6%
Source: CardData (www.carddata.com)
This week Bank of America has made more than 350 affinity credit cards-endorsed by sports, colleges and universities, and cause related organizations, available in all of its 5,700 retail domestic banking centers. The initiative follows the the acquisition of MBNA. Affinity cards were successfully test-marketed in approximately 800 banking centers before the nationwide rollout this month. More than 170 collegiate affinity card programs are currently offered in BofA banking centers. Bank of America Card Services has more than $190 billion in managed balances.
Bank of America reported that revenue for its global card services unit rose 18% to $5.47 billion. Net income of $1.6 billion was more than double the year ago period. Managed card loans at the end of the second quarter increased 7% year-on-year to $190.1 billion. Second quarter credit card services charge-offs were 3.59%, compared to 2.89% in the prior quarter and 5.20% one year ago. The managed 30+ day delinquency was 4.56%, compared to 4.37% in the first quarter and 4.37% for 2Q/05. BofA also reported that its merchant acquiring business handled $97.2 billion in processing volume during the second quarter from total transactions of 2.0 billion. (BofA now includes consumer finance, international card operations and merchant services in reporting Card Services.) BofA also reported that debit card income grew more than 20% from the second quarter of 2005, as higher checking account volume and the “Keep the Change” program increased usage of debit cards at retail locations. Debit card purchase volume topped a record $42 billion in the quarter, an increase of 22% from the second quarter of last year. For complete details on Bank of America’s 2Q/06 performance, visit CardData ([www.carddata.com]).
BOFA/MBNA EOP CARD LOAN HISTORICAL
2Q/05: $176.9 billion
3Q/05: $182.9 billion
4Q/05: $189.4 billion
1Q/06: $184.9 billion
2Q/06: $190.1 billion
Source: CardData (www.carddata.com)
Bank of America this morning confirmed long-term extensions of three of the longest and most successful affinity marketing agreements in the USA. The National Education Association, Ducks Unlimited and the American Automobile Association all agreed to renew their former MBNA agreements with BofA. BofA acquired MBNA at the start of 2006. The NEA and Ducks Unlimited partnerships were first signed more than 20 years ago. The endorsing agreement with Ducks Unlimited has yielded more than $60 million dollars in contributions for wetland and associated habitat conservation. More than 150,000 Ducks Unlimited members in North America presently hold “Ducks Unlimited” VISA, MasterCard or American Express cards. The AAA agreement covers more than 40 million U.S. members. The NEA represents 2.8 million educators.
Bank of America and Major League Baseball Properties, and MLB Advanced Media today launched a new credit card offering unique experiential rewards. The new “MLB Extra Bases MasterCard” is being launched in conjunction with the “2006 All-Star Week” in Pittsburgh. The card offers invitations to special Major League Baseball events, on field access during pre-game activities and dugout visits, plus the opportunity to throw out a ceremonial first pitch. Cardholders can choose a card design bearing the silhouetted batter or the logo of their favorite Club. Cardholders earn one point for every net retail dollar spent. Points can be redeemed for tickets to regular season games as well as postseason games and the next year’s “All-Star Game.” Points can also be used to redeem official MLB merchandise. Cardholders also receive access to a wide range of benefits including unique MLB experiences.
Following its acquisition of MBNA six months ago, Bank of America announced the launch of a “BofA American Express Rewards Card.” The card, to be launched on June 30th, features a clear plastic card design, offers a sweepstakes for international getaway vacations and includes complimentary enrollment in BofA’s “WorldPoints” program. The new card also offers special privileges such as VIP access to dining, hotel and sought-after tickets from personal concierge services. The sweepstakes offers a chance to win one of four major getaway vacations and one of 1,000 instant prizes. The nation’s leading card issuer also says it will introduce a broader line of premium American Express cards later this year. BofA currently has about 116 million cardholders according to CardData (www.carddata.com). AmEx says it has nearly 100 card-issuing partnership arrangements in nearly 110 countries. MBNA was the first U.S. bank to issue American Express cards. MBNA announced its intent to issue AmEx cards in early 2004 and then began the alliance in the fall of 2004. (CF Library 1/29/04; 11/5/04)
Bank of America is launching a national roll-out of new ATMs that do not require an envelope or slip to make a deposit. The new deposit image ATMs produce an image of each check and/or verification of the amount of cash deposited and automatically adds up the transaction for the customer. BofA will be installing the new ATMs later this year in the New York City, Phoenix and San Diego areas as part of the 1,500-machine national roll-out. The bank began a pilot program in 2003 in Charlotte, and now has a total of more than 60 of the new ATMs in North Carolina and South Carolina. BofA has a total of 16,700 ATMs nationwide, and more than 12,000 of them accept deposits.
TX-based EDS has signed a a six-year, $700 million deal to integrate the communications infrastructure for recently acquired MBNA into Bank of America’s voice and data network. In February 2003, EDS began transforming BofA’s nationwide voice and data communications infrastructure as part of a 10-year, $4.5 billion contract. Once completed, BofA’s voice and data network will connect more than 200,000 associates in 5,800 retail banking centers and 50 contact centers. The network will span 30 states, linking 16,700 ATMs while facilitating Internet and telephone banking services. BofA acquired MBNA at the end of 2005. (CF Library 4/20/06)
Bank of America has completed the nationwide roll-out of its two-factor authentication service. This month, BofA launched the “SiteKey” service for online banking and credit card services in Washington and Idaho. The service is mandatory. With “SiteKey” customers pick one of thousands of images, write a brief phrase and select three challenge questions. The customer and the bank can pass that information securely back and forth to confirm each other’s identity. “SiteKey” is provided to BofA from PassMark Security.
Bank of America’s adoption of Passmark’s two-factor authentication solution has apparently been off to a rough start. According to recent press reports the Passmark “SiteKey,” which is now mandatory for BofA customers, has increased support calls to the bank by 25%. Most of the calls were related to “irrational customer behavior.” Ziff Davis Publishing’s “Baseline Magazine” also noted that attempted phishing attacks have not decreased against BofA since “SiteKey” was deployed. The magazine also reports the bank acknowledged that fully 96% of its customers resisted signing up for “SiteKey” until the bank made it mandatory. Passmark reportedly admitted that “SiteKey” is still vulnerable to trojans, viruses or worms.