Charge-Offs & Lower Spending Impact ROA

Bank credit card loss and less consumer spending resulting from the credit crunch will be responsible for a return on asset loss down 15% from the year prior during 2008, placing pressure on profitability. The recession of 1990 demonstrated card issuers focused efforts on current customers to keep the respective divisions afloat, as is the projected reaction to the current situation, given ROA from credit cards are a fundamental source of revenue for card-issuing organizations. The research report from MA-based TowerGroup, titled “Credit Crisis: What Card Issuers Can Learn from Previous Economic Downturns,” identifies effective options for generating profit despite the rigidity of the economy. TowerGroup says that by focusing their business strategies on customer retention and expansion rather than acquisition, credit card issuers can still tap profit opportunities this year.

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LaserCard Revenues Drop 20% in 1Q/08

LaserCard reported revenues for the first calendar quarter of $7.3 million, compared with $11.2 million in the prior quarter and $9.2 million in the same quarter a year ago. The net loss for the fourth quarter of fiscal 2008 was $3.3 million, compared with a net loss of $1.1 million in the prior quarter, and a net loss of $6.9 million in the same quarter a year ago. Revenue from optical memory cards totaled $22.1 million annually, compared with $19 million in fiscal 2007. Revenue from specialty cards and printers totaled $13.2 million versus $11.8 million in fiscal 2007, with the remaining revenues coming from the enabling services and other products and services within the drive systems and services segment. For complete details on LaserCard’s latest performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Fiserv/SunTrust Team for a Green Initiative

Fiserv has teamed with SunTrust to donate one tree for every SunTrust customer that signs up for electronic bill activation. Customer must pay at least three bills online or via a mobile phone between April 14 and June 30th. Fiserv and SunTrust have set a goal of planting more than 10,000 trees as part of the campaign. According to a 2007 green banking study by Javelin Strategy and Research, if all U.S. households viewed and paid bills online, it would save 16.5 million trees each year.

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Obopay Picks-Up $20MM in Venture Funding

CA-based Obopay has secured $20 million in venture funding for the 4th round in conjunction with the addition to new members of its board. Funds were raised with investors including Essar Communications Holdings Limited, Alliance Bernstein, ONSET Ventures, Redpoint Ventures, Citi, Qualcomm, and Promethean while K B Rajendran and Robert G. Hottensen were appointed to the organization’s board of directors. K B Rajendran is an engineering graduate from National Institute of Technology Calicut and has over 17 years experience in the telecom and payments businesses while Hottensen has experience as a managing director with Goldman Sachs.

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Air China and Airplus Ink a Deal

Air China and Airplus have signed partnership agreements for the introduction of the “Air China AirPlus Company Account” to provide customers with travel payment options on Air China flights and tariffs. The account provides corporate travel managers with a payment tool for air travel, access to aggregated data, allows comprehensive analysis of travel-related expenses, is designed to save time, recognize tangible cost reduction and provide access to corporate net rates. The offering will be made available in July of 2008, prior to the Olympic Games, and is being introduced in conjunction with the AirPlus Payment Management Co subsidiary based in Shanghai. AirPlus International has over 32,000 corporate customers worldwide and settles flight tickets from more than 260 airlines while Air China Limited operates 230 routes within 28 countries and regions, serves 71 cities in China and 43 international cities.

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ID Data Group Lands a Big Card Agreement

UK based card processor ID Data Group has won a contract to supply bank and co-branded cards to a large financial services company. The initial three year contract is expected to lead to further business as ID Data proves its skills and capabilities to the client that includes “touch and go” payment technology alongside its traditional technology which is used for chip and pin transactions. ID Data is one of the few “Multos” issuing partners in the world, where it can develop and deliver multi application technology using the Multos platform.

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ID DATA GROUP

UK based card processor ID Data Group has won a contract to supply bank and co-branded cards
to a large financial services company. The initial three year
contract is expected to lead to further business as ID Data proves its skills
and capabilities to the client that includes “touch and
go” payment technology alongside its traditional technology which is used for
chip and pin transactions. ID Data is one of the few “Multos” issuing partners in the world, where it
can develop and deliver multi application technology using the Multos platform.

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Aberdeen Releases an E-Payables White Paper

MN-based content management provider Metafile has underwritten a white paper by the Aberdeen Group that examines the value of accounts payable automation. The report, titled “E-Payables: Imaging and Workflow” is the first in a three-part series of Aberdeen benchmarks on AP automation, focuses on the initial stages of the accounts payable process, invoice receipt and workflow management. The study disseminates reasons why some enterprises have yet to completely eliminate paper from their financial processes while benchmarking data illustrating the bottom-line benefits of the move towards paperless workflow automation. The Aberdeen group discovered that integrating accounts payable automation solutions with existing IT systems poses the greatest challenge to paper removal. As a result, 44% of enterprises do not move to implement any e-invoicing solutions.

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GLOBALCOLLECT ASIA-PACIFIC

GlobalCollect now has an Asia-Pacific presence with the opening of its
newest branch in Singapore. This development is in response to expansion
opportunities due to a rise in demand for e-payment solutions across the
region. The new branch is to serve as regional headquarters, where
e-commerce is growing steadily, and to support such regional clients as
Air China, PC Tools, StrawberryNET and Nespresso Asia. GlobalCollect
e-payment service provides an online payment platform for local
e-payment methods and currencies in over 200 countries.

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eBillme Drives Volume & Lowers Charge-Backs

DE-based Tool King and Cymax Stores have announced increases in average order values and decreasing chargebacks/costs through the implementation of “eBillme”. Tool King provides the payment solution as their only e-payment option, which does not require disclosure of any financial information allowing secure cash payments, while Cymax Stores offers “eBillme” to provide customers with more payment options, having recognized a need for security and protection for online transactions. Moreover, Cymex saw an increase in average order values of 11% thanks to the deployment of the online payment solution and both of the organizations provide the “eBillme buyer protection” program, which includes a program return guarantee, price guarantee, in-transit protection and fraud protection.

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WINASUGO & UKASH

WinAsUGo Mobile Casino has partnered with Ukash to distribute branded
prepaid card vouchers. The new prepaid vouchers can be purchased with
values of any amount between GBP5 and GBP499 and provide a secure,
readily available alternative to using a credit card to provide real
money with which users can gamble. WinAsUGo UK mobile casino provides
users with 9 different mobile casino games which include Mobile Slots,
Blackjack, Roulette, HiLo, Poker, Baccarat, Lottery and Sports betting
while Ukash e-commerce cash payment allows online purchases with cash
focal on reducing card and ID fraud.

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Alliance Data Systems Q1 Revenue Rises 7%

Dallas-based Alliance Data Systems reported that first quarter revenue increased 7% to $499.3 million. However, income from continuing operations decreased 3% to $62.7 million. Loyalty Services achieved the strongest quarter in its history delivering $40.9 million in adjusted EBITDA, an increase of 60% from the prior year period. Driving this historic performance was a 30% increase in revenue to $171.8 million in the first quarter due to strong growth in both “AIR MILES” reward miles issued and “AIR MILES” reward miles redeemed just shy of 10%. For first quarter, Epsilon Marketing Services posted solid mid-teens year over year revenue and adjusted EBITDA growth to $115.5 million and $23.6 million, respectively. The segment’s performance was driven by larger commitments from existing clients and stable pricing along with new client ramp-ups including the recently announced major expansion with Citibank’s “ThankYou Network.” Private Label Credit posted results in-line with Company expectations for the first quarter of 2008. Both revenue and adjusted EBITDA declined 5% and 13%, respectively, almost exclusively due to the loss of the Lane Bryant portfolio and, to a lesser degree, a modest increase in credit losses which, due to timing, had yet to be offset by favorable funding costs. For complete details on ADS’ first quarter performance visit CardData ([www.carddata.com][1]).

ADS REVENUE HISTORICAL
1Q/07: $466.3 million
2Q/07: $563.8 million
3Q/07: $575.5 million
4Q/07: $602.7 million
1Q/08: $499.3 million
Source: CardData.com

[1]: http://www.carddata.com

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