Credit Card ABS Continues to Erode in Dec

Fitch Ratings has published the January edition of ‘Credit Card Movers & Shakers’. In this edition, Fitch outlines the latest regulation changes by the Federal Reserve Board which will take effect on July 1, 2010. Fitch also discusses some of the steps credit card issuers have taken to enhance their ABS transactions, either by improving collateral quality or making structural revisions. Credit card performance, as measured by Fitch’s Prime and Retail Credit Card Index, is also discussed.

‘Credit Card Movers & Shakers’ is available on the Fitch Ratings web site at under the following headers:

Structured Finance>> ABS >> Newsletters

Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.


Unbanked/Underbanked is a Practical Issue

A new report from Aite Group addresses 10 myths commonly held by bank executives, regulators and
consumer advocates about unbanked and underbanked consumers. It reveals that people are unbanked for very practical reasons,
Among the myths debunked is the belief that consumers are
unbanked or underbanked because of cultural and attitudinal reasons when in fact
53% of unbanked consumers are impeded by
credit issues, while an additional 28% face pricing issues with checking
accounts, 12% are impeded by cash flow issues, and 7% constrained by
service issues. The
analysis is based on a 400-person survey with consumers at check-cashing



E-commerce payment provider LML announced that Craig Thomson, currently
the President and CEO of the LML’s subsidiary Beanstream
Internet Commerce will be assuming the position of President of
LML Payment Systems Inc. and will oversee the Corporation’s business and
operations in both Canada and the United
States. Thomson was the original founder of Beanstream and has been a
recipient of the “Entrepreneur of
the Year Award” in manufacturing, wholesale and distribution from Ernst
and Young for the Pacific Canada
region and has over 15 years of experience leading high technology
companies. LML
Payment Systems is a provider of financial payment processing solutions
for e-commerce
and traditional businesses, providing credit card processing, online debit,
electronic funds transfer, ACH payment processing and authentication
services, along with
routing of selected transactions to third party processors and banks for
authorization and settlement.



Visa has launched “Choices & Decisions: Taking
Charge of Your Financial Life”. Originally published in 1996, “Choices &
includes practical, ready-to-use, lesson plans designed by classroom
teachers for use in today’s school. Each of the 15 lessons are designed
to give
teachers’ the information they need to help their students understand
planning and budgeting, develop better money management skills, set
goals and start
planning for financial milestones like attending a post-secondary
moving out or buying a car. The updated resource, which now also
includes information to help
students protect themselves from financial fraud, was developed by a
panel of educators to meet curriculum requirements for high schools
across the
country. Teachers can order hard copies of the resource or download
copies of
“Choices & Decisions” through


Equifax’s USCIS Unit Declines 9% for Q4

Equifax reported revenue of $447 million for the fourth quarter, a 9% decrease from the prior year period. Net income edged down 2% to $64 million. For its U.S. Consumer Information Solutions total revenue declined 9% to $208 million and Online Consumer Information Solutions declined 10% to $135 million. Credit Marketing Services revenue was $31 million, down 17% and Direct Marketing Services was off 14% to $24 million. However, Mortgage Solutions revenue was up 43% to $18.2 million. North America Personal Solutions revenue was down 35 to $37 million. International revenue was $106 million in the fourth quarter, down 18%, but TALX revenue of $75 million was up 2%. Also, North America Commercial Solutions was down 6% in the fourth quarter on revenues of $20 million. Equifax says it expects consolidated revenue for the first quarter to be in a similar range as reported revenue for the fourth quarter of 2008. For complete details on Equifax’s fourth quarter performance visit CardData ([](



Citibank N.A. has
launched “Citi Online Remit”, a new online money transfer service to
India. “Citi Online Remit” provides Non Resident Indians the ability to
transfer funds to India from any US checking/savings account
or using a US credit/debit card as a direct transfer into the
beneficiary’s bank account or as a draft couriered to the beneficiary’s
mailing address in India. “Citi Online Remit” has a wide range of security features built into the
platform such as Online Identity Verification, Multi-Factor
Authentication, Global IP tracking and Account authentication. The
platform also offers an online tracking system that allows NRIs to
follow their transaction at every stage of the transfer process and
facilitates the scheduling of dates for future transfers by setting up
recurring transfer instructions. It is powered by the “QuikRemit” platform from Citi’s Global Transaction
Services which offers integrated cash management, trade,
and securities and fund services to multinational corporations,
financial institutions and public sector organizations around the world.
With a network that spans more than 140 countries, Citi’s Global
Transaction Services supports over 65,000 clients. As of the 4th quarter
of 2008, it held on average $292 billion in liability balances and $10.7
trillion in assets under custody.


Paying Down Card Debt Ranked High

A new study from Target Research focuses on changes in credit card behaviors with 28% making paying down on debt a primary goal.
In addition, when the data are viewed by those who are “Credit Worthy”, the 40% of households have no trouble paying their balances
and “Credit-On-The-Edge”, the 60% who would be challenged to pay off all balances,
Of the “Credit-Worthy”, 38% are most interested in providing for retirement. Of those who are
“Credit-On-The-Edge”, 47% want to pay off their debt, and
this number has increased by 25% over the past year. Target Research Group is a
full-service marketing research company offering consumer and business
to business insights that drive competitive marketing solutions for the
Financial, CPG and Legal industries.


MC Q4 Profits Down 21% as US PDV Slips 8%

MasterCard posted fourth quarter net income of $239 million, a 21%
decline over 4Q/07. However, net revenue for the quarter was $1.2
billion, a 14% year-on-year gain. Global transactions dropped
significantly in the fourth quarter to an annual growth rate of 6%,
compared to 12% in the prior quarter and 14% in the year ago quarter.
For the fourth quarter there were 7.8 billion purchase and cash
transactions globally. MasterCard’s gross dollar volume gained 3% in the
fourth quarter to $605 billion, compared to third quarter GDV growth of
12%. In the U.S. credit card gross dollar volume fell 11% to $152
billion and debit card gross dollar volume increased 6% to $104 billion.
Purchase volume on U.S. credit cards was down 10% while cash volume
dropped 23% in the fourth quarter, compared to the year ago quarter.
Purchase volume on U.S. debit cards gained 7% while cash volume rose 7%
in the fourth quarter, compared to 4Q/07. At the end of the quarter
MasterCard had 263 million credit cards and 126 million debit cards
in-force in the U.S. MasterCard noted that in response to the difficult
financial environment the Company reduced general and administrative
expenses by 3% and advertising and marketing expenses by 33%. For
complete details on MasterCard’s fourth quarter performance visit
CardData (

(purchases + cash)
Dec 31, 2008 7,768 6%
Sep 30, 2008 7,638 12%
Jun 30, 2008 7,462 12%
Mar 31, 2008 6,972 13%
Dec 31, 2007 7,306 14%
Sep 30, 2007 6,842 13%
Jun 30, 2007 6,657 15%
Mar 31, 2007 6,162 20%
Dec 31, 2006 6,395 20%
Note: All MasterCard Credit, Charge and Debit Programs processed
on MasterCard’s networks.
Source: CardData (


NCR’s Fourth Quarter Net Income Slides 37%

NCR reported that fourth quarter revenue declined 7% to $1.42 billion, compared to 4Q/07. Net income declined 37% to $56 million.
Revenues declined 8% in the Americas region, primarily due to lower sales to customers in the retail and hospitality industries. In the EMEA region, the revenue decline of 8% was attributable to the negative effect of foreign currency translation. Revenues fell 1% in the Asia-Pacific-Japan region. During the quarter NCR completed the largest annual new product introduction schedule in the company’s history. Among new products is “APTRA Vision,” a next-generation management-decision and support system. Hanmi Bank, the largest Korean–American bank in the U.S., introduced “APTRA” software and hosted services. Also, Silvergreens Restaurant became the first to deploy NCR’s two-sided thermal printing technology. NCR expects full-year 2009 revenues to be in the range of 2% to 6% lower compared with 2008. For complete details on NCR’s fourth quarter performance visit CardData ([](


TransCard Offers Online Bill Pay Option

Prepaid card provider TransCard has launched a online bill pay option
for MasterCard clients and cardholders.
TransCard’s online bill pay platform provides cardholders with the
fastest, easiest way to pay their bills. It has been integrated with the
cardholder website, so it’s just another click of the button for
cardholders to go from checking their balance to paying their bills.
Payments can be set up to be either one-time or recurring, with the
amounts directly deducted from cardholders’ accounts as with any other
transaction. It also has the ability to cut paper checks for those
companies who may not have the technology to process 100%-digital
or electronic payments.


International Drives Visa Q4 Profit Up 35%

Visa reported that fourth calender quarter net income increased 35% to $574 million and net operating revenue rose 17% to $1.7 billion, compared to the same quarter in 2007. However, global transaction growth
for the quarter ended December 31st slowed to an annual rate of 8%,
compared to 11% in the prior quarter and 13% in the year ago quarter. For the fourth calendar quarter there were 9.8 billion transactions processed via VisaNet. Service revenues rose 8% in the quarter to $793 million. Visa also released third calendar quarter performance data which showed that payments volume grew 12% over the prior year to $701 billion; total volume, inclusive of cash volume was $1.1 trillion, was up 16%; total cards carrying the Visa brands rose 10% worldwide over the prior year to 1.7 billion; and total payment transactions increased by 13% over the prior year to 14.5 billion. In the U.S. market, gross dollar volume increased 7% to $524 billion; purchase dollar volume rose 9% to $421 billion; cash dollar volume increased 2% to $103 billion; the number of accounts gained 9% to 478 million; and the number of cards-in-force rose 2% to 654 million, compared to the same quarter in 2007. Visa projects that net revenue growth over the next twelve months will be at the lower end of the 11% to 15% range, due to the current economic environment in the U.S. and around the globe. Visa noted that
annual net revenue growth may be somewhat challenged in 2010 if the
current economic environment in the U.S. and around the globe persists beyond 2009. For complete details on Visa’s latest performance visit CardData (

Dec 31, 2008 9,797
Sep 30, 2008 9,590
Jun 30, 2008 9,473
Mar 31, 2008 8,800
Dec 31, 2007 9,094
Sep 30, 2007 8,645
Jun 30, 2007 8,411
Mar 31, 2007 7,645
Dec 31, 2006 8,018
Note: Visa, Visa Electron, Interlink and PLUS
cards processed on Visa’s networks.
Source: CardData (