Advanta’s Q4 Charge-Offs & Delinquency Rise

Business credit card specialist Advanta posted a 22% rise in managed outstandings during the fourth quarter to $6.35 billion. During the fourth quarter, the issuer opened more than 22,000 net new business card accounts and ended the quarter with a record 1,316,523 gross accounts. Advanta’s Business Card unit earned net income of $12.2 million as compared to $22.1 million in the prior quarter due to VISA Inc. litigation and rising loan-loss reserves. Transaction volume increased 8% to $3.76 billion during the fourth quarter. Charge-offs, on averaged managed receivables, increased from 4.13% in the fourth quarter to 3.87% for the third quarter and are higher than 4Q/06’s 3.40% figure. Over 30-day delinquencies on managed receivables rose 114 basis points to 4.29% from the prior quarter. Over 90-day delinquencies on managed receivables also rose by 56 basis points to 1.97%, compared to the fourth quarter of 2007. For complete details on Advanta’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

ADVANTA’S CARD PORTFOLIO SNAPSHOT
Period Card Loans
4Q/06: $5.21 billion
1Q/07: $5.59 billion
2Q/07: $5.99 billion
3Q/07: $6.21 billion
4Q/07: $6.35 billion
Source: CardData (www.carddata.com)

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

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AMEX 4Q/07

American Express reports that its International Card Services unit reported a fourth-quarter net loss of $68 million, compared with net income of $99 million a year ago. The lower net income was attributed to the increased expense related to “Membership Rewards” and increased investments in business-building initiatives. The gross dollar volume on its international cards rose 24% and its international cardbase expanded 14% during the fourth quarter, compared to the year ago quarter. International card volume rose to $54.5 billion. The total number of international cards-in-force grew to 34.1 million. During the quarter GNS announced a new card issuing partnership with AB Parex Bankas in Lithuania, and issued the first card products, denominated in the Litas currency, in both “Gold” and “Platinum” versions; also launched a new partnership with Banco Privado in de Inversiones in Argentina to issue American Express-branded “Standard,” “Gold” and “Platinum” cards; launched Brunei’s first airline co-brand card; and launched the “ICBC Staples Corporate American Express Card,” the first American Express branded co-brand corporate card in China. For complete details on American Express’ fourth quarter results, visit CardData (www.carddata.com).

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Aite Group Releases a U.S. Contactless Report

A new report by MA-based Aite Group estimates that merchant penetration of contactless payment will only increase from 0.5% today to 2.5% by 2014, unless there are stronger incentives presented by card networks. Although initial pilots for contactless payment cards have indicated a significant value proposition for issuers, merchants and consumers, cash is still the preferred mode of payment in the US, due in large measure to merchant’s avoidance of interchange costs on low-value transactions. Card networks have provided little incentive for merchants to implement contactless payment technology, and have failed to remove the financial barriers that make accepting contactless payments costly to merchants.

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Davidson Companies Database is Compromised

MT-based financial services provider Davidson Companies announced that a database containing certain personal information of its current and past clients may have been breached. The company recently became aware of the intrusion and immediately took its public Internet site offline. The company has contacted law enforcement and its regulatory authorities, notified the three credit reporting bureaus, and retained an information technology security and forensic firm to review the incident to assist the company in its response. Based on the company’s review, there is no evidence the unauthorized access enabled the third party to affect or alter client accounts through company systems.

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CU HERE Premium ATM Program Hits 45K ATMs

FL-based Credit Union 24 has announced that during the initial opt-in period for the “CU HERE Premium” program, more than 130 credit unions have signed up to participate. Credit Union 24 announced the creation of the “CU HERE Premium” program, which is the largest surcharge-fee free ATM network in the country with more than 45,000 ATMs, in December 2008 and since then has received overwhelmingly positive feedback from its member credit unions. The program will go live on February 6, allowing member credit unions to opt into the program through 2008.

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Gemalto’s Fourth Quarter Revenues Jump 10%

Smart card specialist Gemalto reports that overall fourth quarter revenue rose 10% to $696 million. Revenues for the “Secure Transactions” unit, which includes smart payment cards, rose 4% to $161 million compared to 4Q/06. The Company says the EMV roll-out in emerging markets and renewals in more mature markets continue to generate robust market demand. Steady growth of personalization services and contactless payment activities did offset the disturbance induced early in the quarter by the restructuring program in Western Europe. Overall the segment demonstrated good resilience under a severely constrained operating environment. For complete details on Gemalto’s latest performance visit CardData ([www.carddata.com][1]).

GEMALTO REVENUE HISTORICAL
4Q/06: $631.6 million
1Q/07: $495.9 million
2Q/07: $544.8 million
3Q/07: $588.0 million
4Q/07: $696.0 million
Source: CardData (www.carddata.com)

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

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Cardtronics Adds Two Board Members

Cardtronics announced the appointment of Dennis Lynch, CEO of RightPath Payment and Tim Arnoult, previously with Bank of America as its two newest members to the Board. Lynch is currently the Chairman and CEO of RightPath Payment, a company providing business-to-business payments via the web. From 1996 to 2004, he served as CEO of NYCE Corporation. Prior to NYCE, Mr. Lynch served 13 years at Fleet Financial group in a variety of information technology and product roles, ultimately managing Fleet’s consumer payments portfolio. Arnoult retired from Bank of America in 2006 after having spent 27 years with the organization. During his tenure at Bank of America and several of its predecessor banks, Arnoult served as President of Global Treasury Services, President of Global Technology and Operations, and President of Central U.S. Consumer and Commercial Banking.

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Wachovia Extends its VISA Debit Card Deal

Wachovia Bank and VISA have signed a partnership agreement, renewing their long-standing relationship. Under terms of the deal, Wachovia will continue to offer Visa-branded credit and debit products to its customers as a major component of its consumer and small business payments business. As part of the agreement, Wachovia will issue the VISA check card for consumer and small business customers and will issue the majority of the bank’s consumer credit and small business credit products with the VISA brand. In addition, VISA will continue to offer debit processing to Wachovia through Visa Debit Processing Service.

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SMART PILOT

Western Union and Smart Communications (SMART) have partnered
for the launch of the Mobile Money Transfer pilot, targeting the more than
8 million overseas Filipino workers. SMART currently has more than
30 million subscribers and service agreements with five Philippine
commercial banks to provide pilot users with cash access at over
7,000 ATMs nationwide, in addition to its “Wireless Centers” and various
third-party fulfillment agents. Given the Philippines is currently the
fourth-largest receiver of remittances in the world, with an estimated
USD$17 billion in 2007, and 80% of the global population has mobile
phone service, the partner organizations are projecting a fruitful return
with this venture. The mobile pilot will connect users to WU’s
“mobile wallet” software for person-to-person mobile money transfers
on the Company’s cross-border remittance network. GSM
trade association represents over 700 mobile phone operators for cross-
border mobile money transfer services and will be lending its services
for the pilot. Western Union serves remittance customers around the
world from its 320,000 locations in over 200 countries and territories.

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CyberSource Fourth Quarter Revenue Rises 177%

CA-based CyberSource reported that fourth quarter revenue soared by 177% to $45.4 million, compared to the same period the previous year. The Company processed a record 1.2 billion billable transactions last year, a 45% increase over 2006. The value of transactions processed was $54 billion, a 57% increase over 2006. Fourth quarter results include two months of Authorize.Net results, as the acquisition closed on November 1st. In Europe, CyberSource is growing its U.K. based operations to target new business opportunities in countries including France, Germany, Netherlands, Spain, Portugal, and Italy. CyberSource added approximately 7,000 net new customers in the fourth quarter, bringing its installed base of customers to approximately 228,000. Customer wins this quarter included Borders Group to provide bank cards, alternative payments processing and fraud protection services for their upcoming Borders.com site, which is expected to launch in early 2008. CyberSource also announced extended support for PayPal Express Checkout to U.K merchants, and released enhanced fraud protection for merchants worldwide who accept PayPal Express Checkout transactions. Other new customers include Air France, Air India Charters, Christian Dior, Juniper Networks, and La-Z-Boy. For complete details on CyberSource’s fourth quarter results visit CardData ([www.carddata.com][1]).

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

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SKYWAYS & GUESTLOGIX

The Skyways Group has signed agreements for the implementation of
GuestLogix’ “Mobile Virtual Store” POS across its entire fleet of planes
to allow for in-flight transactions. The service is expected to be fully
established by the end of January 2007 for the acceptance of cash
and payment cards for the settlement of in-flight retail, food and
beverage.
Skyways Airlines served 850,000 passengers throughout 2006 while
GuestLogix provides its on-board retail technology for flight passengers
around the world.

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Exante Bank Names a New President

MN-based HSA administrator Exante Bank has named Kelvin Anderson, previously with Escrow Bank USA and Capmark Bank as President. Anderson most recently was the chief operating officer and chief financial officer of both Escrow Bank USA and Capmark Bank. At Escrow, he was instrumental in building assets under management to $6 billion while maintaining internal controls to sustain rapid growth. Capmark’s assets grew under his guidance from $3.8 billion to more than $8 billion in just the last 12 months. Prior to Escrow Bank and Capmark Bank he was president and CEO of Merrick Bank and vice president and controller of First USA Financial Services, Inc. Exante Bank has more than $540 million in assets and more than 1.3 million health financial accounts. It also processed more than 100 million health transactions in 2007 via its Electronic Payments and Statements solution, a fully integrated electronic remittance advice and funds transfer system.

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