As of April 1st, Bank of America customers traveling to China will have free access when using debit or ATM cards to withdraw cash from more than 11,000 foreign-enabled China Construction Bank ATMs. In return, CCB’s “Happy Investor” cardholders traveling to the U.S. will have access to 17,000 BofA ATMs. In June, BofA inked a deal to buy about 9% of the stock of CCB for $3 billion, with the option of increasing its stake in future years. At the same time, BofA began providing advice and assistance to CCB in such areas as governance, risk management, credit cards, consumer banking and treasury services designed to enhance the Chinese bank’s performance. CCB, the second largest commercial bank in China, has $472 billion in assets and 136 million active retail deposit account relationships. The bank is currently majority owned by China SAFE Investments Limited, an entity of the government of China. (CF Library 6/17/05)
VISA, MasterCard, American Express, Discover, BofA, Chase, Citi, First Data, First National Bank of Omaha, North American Bancard, First PREMIER Bank and Wells Fargo Bank were among 18 financial institutions that joined with the International Centre for Missing & Exploited Children and its sister organization, the National Center for Missing & Exploited Children, in the fight against Internet child pornography. The ability to use credit cards and other payment methods has made purchasing child pornography easy. However, the industry has committed to make credit card use more difficult for such purchases. The members have set a goal to eradicate commercial child pornography by 2008.
Bank of America says its new “ePayables Solution” is now in full production. The solution shifts accounts payable disbursements to corporate purchasing cards. BofA says the number of deployments for the new service has far exceeded its targets. Enabled by “Active Card Integration” capabilities, “ePayables” allows organizations to integrate with their existing accounts payable processes to replace the back-end payment with a secure card payment. “ePayables,” part of the Works solution recently acquired by BofA, is available through Bank of America Global Treasury Services.
Fourth quarter gross dollar volume among the nation’s ten largest issuers grew 11.6% year-on-year with aggregate volume of more than $421 billion. Bank of America posted the sharpest rise of more than 43%, while Discover lagged at the bottom of the top ten with a 1.6% growth rate. Capital One, Wells Fargo, and MBNA posted higher than average gains in volume, according to CardData ([www.carddata.com]).
4Q/05 GROSS DOLLAR VOLUME
($ billions; ranked by outstandings)
Rank/Issuer 4Q/05 4Q/04 CHNG
1. Chase $79.6 $75.3 + 5.7%
2. Citi $75.8 $71.6 + 5.9%
3. MBNA $62.1 $54.0 +15.1%
4. BofA $39.0 $27.2 +43.4%
5. Cap One* $21.2 $17.8 +19.1%
6. Discover $26.1 $25.7 + 1.6%
7. AmEx $93.0 $83.4 +11.5%
8. HSBC $13.5 $12.5 + 8.0%
9. WaMu $ 4.8 $ 4.7 + 2.1%
10. Wells $ 6.2 $ 5.2 +19.2%
TOTAL $421.3 $377.4 +11.6%
* Cap One is purchase volume only
note: some issuers include international
SOURCE: CardData (www.carddata.com)
The number of active accounts remained sluggish last year. The top three issuers posted a lackluster 2% gain in the number of accounts with posted activity in the fourth quarter. The top three issuers reported nearly 145 million active accounts among a total database of 290 million active accounts according to CardData ([www.carddata.com]).
2005 ACTIVE ACCOUNTS
BofA: 42 million
Chase: 44 million
Citi: 59 million
TOTAL: 145 million
Source: CardData (www.carddata.com)
Bank of America has hired Len Heckwolf, formerly with JPMorgan Chase, as head of its new Payments and Receipts Product Management Group within the Global Treasury Services division. While at JPMorgan Chase (JPMC), Heckwolf led Consumer Payments Solutions, a business unit within JPMC’s treasury services unit that delivered ACH, national retail lockbox and consumer payments across the JPMC franchise. He also built a product organization focused on the middle market and commercial bank segments. In his 23-year career with JPMC, Heckwolf managed numerous product and operations businesses, including controlled disbursement, funds transfer, ACH, online bill payment, distributed capture, Electronic Data Interchange (EDI) and retail lockbox.
Bank of America is making a donation to the USOC equal to 5% of all consumer debit card savings transfers resulting from the “Keep the Change” savings program during the month of February up to a maximum contribution of $500,000. In addition to its charitable contribution to the USOC, Bank of America will continue to match 100 percent of the Keep the Change transfers for the first three months a consumer participates in the program. After that, the bank will match five percent of the transfers a year, every year. The maximum match is $250 per year.
San Francisco-based Pay By Touch has hired Drew Hyatt as SVP and Elizabeth Yata as VP/Group Product Manager to lead its banking and credit authorization services. Hyatt was president of HNC Software’s Financial Solutions Group and SVP and corporate officer of Digital Insight. Yata was formerly with Bank of America, holding numerous product management positions including VP and group product manager for both retail and wholesale banking services. Prior to BofA, Yata spent nine years in various roles at VISA USA, including SVP of service management. In January the firm closed more than $60 million in new financing, raising more than $190 million during the past three months. (CF Library 1/27/06)
Bank of America and VISA have launched an “Olympic” prepaid VISA card to be used by each athlete and staff member for their daily per diem at the upcoming Games. The card, featuring the image of a flag bearing the U.S. Olympic Rings, providing a better alternative to cash and checks, gives immediate access to their funds throughout Torino and at tens of millions of locations worldwide. They are protected by Visa’s Zero Liability policy in the event of loss or theft and will help reduce administrative and processing expenses for the USOC.
Growth in bank credit card outstandings continues to decline as the top ten issuers posted a paltry 2% gain for 2005, compared to 4% one-year ago and 11% five years ago. The steady decline has largely been attributed to the siphoning-off of balances from cards to home mortgage refinancing and a growing aversion to credit by consumers. During 2005, Citigroup, MBNA and Discover lost ground while American Express expanded U.S. card loans by 14%. Among the top issuers Chase, Bank of America, and Wells Fargo posted the strongest organic growth rates of 2005, according to figures compiled by CardData ([www.carddata.com]).
Top Ten U.S. Issuers
($ billions outstandings)
RANK/ISSUER 4Q/05 4Q/04 CHNG
1. Chase $142.3 $135.4 + 5.1%
2. Citi $113.7 $118.1 – 3.7%
3. MBNA $ 80.6 $ 82.1 – 1.8%
4. BofA $ 60.8 $ 58.6 + 3.8%
5. Cap One $ 49.5 $ 48.6 + 1.8%
6. AmEx* $ 45.7 $ 40.1 +14.0%
7. Disc** $ 44.3 $ 48.3 – 8.3%
8. HSBC $ 27.0 $ 22.2 +21.6%
9. WaMu $ 20.0 $ 18.5 + 8.1%
10. Wells $ 10.3 $ 9.8 + 5.1%
TOTAL $594.2 $581.7 + 2.1%
*AmEx excludes charge card (30-day credit) balances
** Discover figures for period ending 11/30/05
Source: CardData (www.carddata.com)
Last year turned out to be the worst year for growth in credit card outstandings in the industry’s history. The top five issuers, who control more than $400 billion in outstandings, posted a paltry 1% year-on-year gain, with Citigroup and Discover posting losses of about 3%. Chase assumed the number one position in 2005 after its merger with Bank One, posting a 5% annual gain. Bank of America also posted a respectable 3.8% gain, not including the results of its recent merger with MBNA. The overall sluggish performance of the Top 5 is attributed to debt consolidation via lower-rate home equity loans, debit card usage, and the backlash over aggressive pricing including high punitive APRs and associated fees.
Top 5 U.S. Issuers Managed Outstandings
Rank/Issuer 4Q/04 4Q/05 Chng
1. Chase $135.4b $142.3b +5.1%
2. Citi $118.1b $113.7b -3.7%
3. BofA $ 58.6b $ 60.8b +3.8%
4. Disc $ 48.3b $ 46.9b -2.9%
5. Cap One $ 48.6b $ 49.5b +1.9%
TOTAL: $409.0b $413.2b +1.0%
Source: CardData (www.carddata.com)
Bank of America has launched online sales of more than 200 affinity credit cards for certain sports, universities and charities in what is the first major integration of MBNA offerings. For the first time, consumers can sign up for certain MBNA cards at bankofamerica.com. Throughout the year, more cards will be integrated into bankofamerica.com, and the cards will roll out to Bank of America banking centers. Bank of America Card Services has more than 40 million active accounts and nearly $140 billion in managed balances. Bankofamerica.com has more than 1.6 billion visits annually and is one of the top 50 U.S.-based Web sites in terms of unique visitors.