ADS’ Fourth Quarter Income Rises 53%

Dallas-based Alliance Data Systems reports that fourth-quarter revenue
declined slightly to $508 million. However, Q4 net income rose 53% to
$52 million driven by Loyalty Services and Epsilon Marketing Services.
Despite a 3% revenue decline, ADS notes it has completed 31 consecutive
quarters since its IPO of meeting or beating expectations.
Loyalty Services’ revenue increased slightly to $196 million, but was
dampened by the decline in the Canadian dollar. Epsilon Marketing
Services’ fourth quarter revenue was essentially flat at $129 million,
impacted by lower volumes associated with retailers who went bankrupt.
Private Label Services fourth quarter revenue increased 10% to $98
million. During the quarter, Epsilon signed Marriott as a new client;
Loyalty Services renewed Boston Pizza and Hudson’s Bay Company for “AIR
MILES”; and Private Label finished the year by signing its tenth new
program versus the typical annual total of five or six. ADS expects to
report 2009 revenue of approximately $2.1 billion and adjusted EBITDA of
approximately $680 million. For complete details on ADS’ latest results
visit CardData (www.carddata.com).

ADS REVENUE HISTORICAL
4Q/07: $522.0 million
1Q/08: $499.3 million
2Q/08: $507.2 million
3Q/08: $511.2 million
4Q/08: $507.6 million
* originally reported as $602.7 million
Source: CardData.com

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INSIDE & SAGEM

INSIDE Contactless is partnering with Sagem Wireless, a leading mobile
design company, to create new handset platforms that will support
enhanced NFC services. The Sagem Wireless NFC
platforms will utilize INSIDE’s “MicroRead” NFC chip, and
will also incorporate the associated “MicroRead Software Foundation” NFC
protocol stack, which Sagem Wireless has licensed, and which will be
integrated and validated with Sagem Wireless’ handset platform software.
the “MicroRead” chip’s self-powered battery-off
mode and low-power RFID tag detection features will help provide
simplicity and convenience by enabling payment or other transactions to
take place successfully even when the handset is turned off or the
battery is completely drained. Additionally, INSIDE Contactless has
reinforced its strength in NFC by establishing a new support facility in
Cergy, staffed with a team of former Sagem Mobiles engineers
with specialized expertise in phone system integration and validation,
giving INSIDE a unique set of capabilities to provide extra value to its
NFC customers and enable INSIDE to conduct mobile phone RF performance
testing and validation to further qualify NFC
integration for its customers and accelerate global interoperability.

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M2 Global Rolls-Out the AcqENGIN Gateway

Processing technology provider M2 Global has rolled out “AcqENGIN” a
comprehensive and customizable e-commerce payment gateway. “AcqENGIN”
allows M2 to offer high volume Internet merchants
credit card processing anywhere in the world all managed from a central
web based portal that provides reporting and security management tools
that lead the industry. “AcqENGIN” includes multiple currency
acceptance, patented card-integrated technology,
settlement reporting, chargeback and re-presentment automation and
patented fraud protection tools. M2 Global is an online transaction
processing technology company
that develops, acquires, operates, holds and licenses software that
enables platform interoperability and in the initiation and settlement
of electronic payments.

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TECH AWARD

Gemalto’s “Smart Enterprise Guardian” has been awarded the “Tech
Innovation Award for Hardware” from the Austin, Texas Business Journal.
Jointly developed by Gemalto and Lexar, the “SEG” is a first-of-its-kind
multipurpose security device that solves problems every enterprise
faces: how to better secure remote access to their networks and how to
better protect information employees store on portable devices. In a
single device, Gemalto has combined strong authentication, digital
signatures, encrypted Flash storage and encryption tools for desktop or
laptop files. The “SEG” has built-in support in Microsoft Vista using
Gemalto .NET technology.

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UBC Acquires Optimal Payments Portfolio

Payment processor United Bank Card will acquire Optimal Payments’
portfolio of 5,000 merchant accounts for $11 million. It is
a portfolio of residual payments from merchants processing credit
card-present transactions. Optimal Payments processes credit card
payments, primarily for small and medium-sized retail point-of-sale
merchants. Under the terms of the option agreement and related
agreements entered
into by the parties, the purchase price for the portfolio is US$11
million. Until either party has exercised its right to cause the
completion of a purchase and sale transaction, United Bank Card will
continue to service the portfolio and Optimal Payments will continue to
receive residual payments from the portfolio and pay a service fee to
United Bank Card for its services. The aggregate amount of residuals
earned by Optimal Payments, net of the aggregate service fees paid, will
be set off against and will reduce the purchase price monthly until the
completion of a purchase and sale transaction. The adjusted purchase
price will be increased monthly by a notional rate of interest. Optimal
Payments’ right to cause United Bank Card to purchase the
portfolio may be exercised any time on or after February 2, 2011. United
Bank Card’s right to cause Optimal Payments to sell the portfolio may be
exercised at any time up to December 31, 2014. UBC currently handles
the merchant accounts for over 100,000 locations and
processes in excess of $9 billion annually.

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DELINQUENCY COVERNS

A new report from Deloitte reveals a rise in Canadian credit card
delinquencies as Canadian credit card balances grow by almost 40% since
2004. Deloitte recently interviewed executives at major credit card
issuers in Canada representing over half (54%) the country’s outstanding
credit card balances. The majority of executives indicated that
beginning in October/November of 2008, they started to see a 5% to 10%
jump in delinquencies, which have increasingly translated into
write-offs. The
result has been an increase in losses of 50-100 basis points (100 basis
points equals 1%). At the upper end of this range, this represents
annualized losses of over $800 million to the industry as a whole, where
the total value of outstanding balances is in excess of $80 billion.
Credit card issuers in Canada have traditionally seen loss rates of less
than 4%, but with Canadian
consumers increasing their debt-to-disposable-income ratios to more than
130%, Canadian issuers
face unprecedented risks given their credit card balances have increased
almost 40% since 2004, according to the Bank of Canada and U.S. Federal
Reserve. As a result, Canadian credit card issuers are taking action to
avoid the costly write-downs now common in the U.S.

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Fiserv Payments Business Grows 63% in Q4

WI-based Fiserv reports fourth quarter revenues of $1.06 billion, down
slightly from 4Q/07. However, net income fell 35% to $62 million. The
Payments unit posted a 63% increase in Q4 revenues to $559 million and
operating income of $157 million, a 73% increase. During the quarter,
the Company signed 128 clients for its electronic bill payment services;
extended its value added reseller bill payment relationship with Digital
Insight for three years; inked a deal with Commerce Bank/Harrisburg to
provide a full suite of account processing technology solutions; signed
Greece’s Piraeus Bank for the Fiserv “Universal Banking” solution; and
BB&T rolled-out the Fiserv “Branch Source Capture” solution.
Additionally, Fiserv acquired i_Tech Corporation in December 2008 from
First Interstate BancSystem. The company expects 2009 adjusted internal
revenue growth to be in a range of 0% to 4%. For complete details on
Fiserv’s latest performance visit CardData (www.carddata.com).

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PRECIDIA & TOSHIBA

IP payment and network supplier Precidia Technologies has partnered with
Toshiba to offer its “TransNet” payment engine within Toshiba’s “TEC
America” electronic cash registers. “TransNet’s” design allows
merchants to route transactions directly to any certified processor,
without any additional costs or difficulties which eliminates costly
gateway fees, and gives merchant a greater degree of
choice. The router-based approach delivers the industry’s
most comprehensive security, housing sensitive cardholder data on the
highly secure “POSLynx220” payment router. While the router is secured
by field tested firewalling and encryption, the solution is also PA-DSS
validated and is designed to facilitate
the merchant’s PCI compliance and the “POSLynx220” payment router
can integrate other store peripherals such as pin pads easily, using its
2 dial and 2 serial ports. TransNet is used in a variety of retail
payment applications, and integrates easily with ECRs, PC Systems,
IP/Dial payment terminals, POS applications and even e-commerce websites.

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Consumer Jan Bankruptcy Filings Up 34%

The final numbers are in and bankruptcy is not as bad as projected
earlier this week by CardData. Nationally, consumer bankruptcy filings
increased 34.4% in January, compared to the same period a year ago.
According to the American Bankruptcy Institute and the National
Bankruptcy Research, consumer filings totaled 88,773 in January.
Chapter 13 filings constituted 32.8% of all consumer cases in January, a
slight increase from December. In a recent ABI poll 65% of respondents
predicted that bankruptcies in 2009 would increase by at least 35% over
the nearly 1.1 million cases filed in 2008. Fifty-three percent of
respondents predicted that filings would increase by 35% or more while
12% thought that filings would increase by about 35%.

BANKRUPTCY FILINGS
Jan 08: 66,050
Feb 08: 76,120
Mar 08: 86,165
Apr 08: 92,291
May 08: 91,214
Jun 08: 82,770
Jul 08: 94,124
Aug 08: 96,413
Sep 08: 88,663
Oct 08: 106,266
Nov 08: 99,925
Dec 08: 84,926
Jan 09: 88,773
Source: ABI/NBKRC; CardData.com

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TSYS Unveils a SKU Private Label Card

TSYS has introduced a private label card that can be redeemed for specific merchandise, tracking SKU-level data at the POS. The processor launched more than 45 million private label cards that can read SKU-level data in 2008. Its proprietary processing technology enables merchants and consumer product goods companies to boost consumer loyalty and track buying behavior while eliminating costly paper coupon processes. The patent-pending SKU-reading card is accepted at select merchants nationwide. TSYS currently processes for a network of 30,000 merchants nationwide.

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HYC A/P DIRECTOR

Hypercom has named Jacques-Herve Maupin, previously Managing Director at
Oberthur Technologies, as Managing
Director, Asia Pacific. Maupin is responsible for directing and driving
Hypercom’s sales,
service and support throughout the region. Maupin brings more than 20
years of experience in the electronic
payment, smart card and information technology industries. In his most
recent position with Oberthur Technologies, Maupin directed all
aspects of the company’s operations to the banking and financial
services, telecommunications, government and pay-TV sectors in the
region. Among his many accomplishments at Oberthur, Maupin expanded
the company’s telecom business through both organic growth and
acquisition, started the company’s in-region banking business, created
an R&D center, expanded the company’s presence from six to 13 countries
and generated a more than ten-fold revenue growth. Maupin holds a
Master of Science in Electrical Engineering from
Ecole Nationale Superieure d’Ingenieurs Electriciens de Grenoble.

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