PrePaid International Forum Launched

When China becomes a center of Standard Chartered Bank operations,
the bank will have a network projected to be more than 170 by 2011.
Currently with 24 outlets in China, the British bank plans to expand
to 40 outlets by 2008. The bank also projects to be the largest lender of
small- and medium-sized enterprise (SME) businesses and to have the
largest employee base in China, compared to its other global operations.
These projections are citing an estimated expansion 20 to 30 times the
business currently in China over the next five years. Standard Chartered
Bank plans to launch operations in August 2007 in Shanghai and Beijing
with investable wealth of more than $1 million.

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Interchange Raises Antitrust Concerns

The House Judiciary Committee’s Antitrust Task Force heard testimony yesterday from merchant groups claiming that VISA and MasterCard are in violation of federal antitrust laws in the setting of interchange fees. Panel Chairman John Conyers (D-MI) said he believes the burden of proof lies with the credit card companies to reassure Congress that increasing interchange fees are not harming merchants and ultimately consumers. The National Retail Federation and the Merchants Payments Coalition says recent research shows that only about 13% of the interchange fee is spent on actual transaction processing. The rest goes for marketing, profit, and rewards programs. NRF Senior Vice President and General Counsel Mallory Duncan testified that this is the only market he knows of where the parties compete to raise prices rather than to lower them. VISA and MasterCard did not testify.

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European PayPass Pilots Expand to Italy

The first “MasterCard PayPass” pilot in Italy is set to start by the end of this year. In partnership with Banco Posta’s Poste Italiane business unit, the trial will run for six to eight months. New cardholders will be offered the “PostePay Evolution MasterCard,” a prepaid card with “PayPass” technology. The prepaid card will be available for purchase and use at retailers in Milan and Rome in a variety of retail categories. The Italian pilot follows the launch of several “PayPass” pilot programs across Europe, beginning in June 2006 with the region’s first “PayPass” credit program launched with Garanti Bank and major retailers in Turkey. Most recently, MasterCard announced the forthcoming launch of a major “PayPass” pilot in Spain with Caja Madrid and more than 200 retailers.

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Prime Factors Renews Thales Agreement

Citibank has launched its “Mobile Bill Payment” allowing customers
in Malaysia to pay bills with a credit card using their mobile
phone. This development is in response to research suggesting that
society is become increasingly mobile-phone-centric, which has
created a “mobile phone culture” in which everything is done in a
remote manner. This solution is designed to save the customer time
by allowing them to remotely pay bills minus the need to leave their
home and is expected to attract nearly 500,000 users over the next
2 years. Citi financial services serves approximately 200 million
customers in more than 100 countries.

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Acacia Lands an eCommerce Pricing Patent

Acacia Research Corporation has acquired rights to a patent relating to ecommerce pricing technology. This patented technology generally relates to transacting business over a network such as the Internet. This technology can be used in auctions or competitive transactions where the final price is based upon the buyer’s actions. The Acacia Technologies group develops, acquires, and licenses patented technologies.

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Vesta Launches a Top-Up Service for O2 Ireland

Global Payments Europe will be providing card processing for Home Credit
Kazakhstan, a member of the Home Credit Group. Global Payments Europe
will provide Home Credit Kazakhstan with authorization, card management
system services and with a solution for PIN generation and PIN printing for
expansion of operations to emerging markets. Home Credit Group of the
Central & Eastern Europe consumer finance markets had granted loans of
USD 2.7 billion as of 2006.

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CMS Becomes CardWorks Servicing

CardWorks subsidiary, Cardholder Management Services, LLC (CMS) has changed its name to CardWorks Servicing. The new name more accurately reflects the Company’s position and reputation as a premier provider of turnkey services and support to bankcard issuers and acquirers in the United States and Canada. CardWorks Servicing provides customized outsourced solutions, including customer service, risk management, loss mitigation, accounting/finance support, and portfolio management that enable issuers and acquirers to successfully meet the challenges of today’s increasingly competitive bankcard environment with high-quality servicing, improved operating efficiencies and increased profit potential. CardWorks Servicing is a servicer of credit cards, national debit cards, pre-funded cards and other unique card products and is the largest privately held servicer of MasterCard and VISA cards.

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TRM Expands its Gross Margin in Q1

Portland, OR-based TRM reports first quarter net sales of $8.6 million compared to $12.5 million in 1Q/06. On a sequential basis, net sales were $8.6 million compared to $10.4 million in the fourth quarter. Net revenue performance reflects fewer transactions compared to previous quarters, mainly due to the decrease in the average number of transacting ATMs and the slight decrease in average withdrawal transactions per ATM. The average number of transacting ATMs was 10,808 during the first quarter compared to an average of 13,122 during the first quarter of 2006 and 11,511 in the fourth quarter. The Company expects the number of ATMs will continue to decrease during the remainder of 2007. However, the Company noted that approximately 562 new ATM units were added in the first quarter, which was 30% above the Company’s expectation. On July 1st TRM Corporation was awarded an ATM processing contract with Miami Airport. For more details on TRM’s latest performance visit CardData ([www.carddata.com][1]).

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

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Aloha Airlines Deploys Abanco’s M-Technology

Aloha Airlines has selected Abanco’s “Mobile Data Technology” for in-flight sales and inventory control. Abanco’s MDT solution will enable Aloha to increase in-flight efficiencies and customer experience on its transpacific flights by moving to a “cashless” environment through the use of credit cards while in-flight. Abanco will be supplying Aloha MDT’s patent-pending handheld units with a flight attendant friendly user interface to manage all in-flight sales. The units have robust fraud controls that enforce a tight supply chain from ground to air to ground. Additionally, MDT will provide Aloha robust tools and reports to maintain Aloha’s in-flight profit center inventory from ground to air.

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Cap One U.S. Q2 Card Profits Rise 28%

Capital One’s second quarter U.S. credit card profits increased nearly 28% year-on-year and about 9% sequentially due to revenue growth and reductions in non-interest expenses. Purchase volume in the U.S. was up 4% while U.S. managed card outstandings increased 3% from the year-ago quarter. The number of U.S. card accounts declined by about 150,000 during the quarter, and remained down from the year-on-year figure of 37.2 million accounts. U.S. card net income was $538.3 million, compared to $495.3 million in the prior quarter and $421.8 million for 2Q/06. U.S. managed card outstandings were $50.0 billion for 2Q/07 compared to $48.7 billion one-year ago and $49.7 billion in the previous quarter. Cap One says loan growth was affected by a reduction in marketing of prime customers and teaser rate offers, and a $600 million portfolio sale in the first quarter. Purchase volume hit $21.8 billion for 2Q/07, compared to $19.3 billion for 1Q/07 and $20.9 billion for 2Q/06. The managed delinquency rate (30+ days) for U.S. credit cards was 3.41% for the second quarter, compared to 3.48% for 1Q/07 and 3.30% for the second quarter of 2006. The net charge-off rate for U.S. credit cards was 3.73% for the second quarter, compared to 3.99% for the first quarter and 3.29% one-year ago. For complete details on Capital One’s second quarter performance, visit CardData ([www.carddata.com][1]).

COF U.S. CARD NET INCOME
2Q/06: $421.8 million
3Q/06: $461.6 million
4Q/06: $337.2 million
1Q/07: $495.3 million
2Q/07: $538.3 million
Source: CardData (www.carddata.com)

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

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ADS Second Quarter Revenues Rise 15%

Dallas-based Alliance Data Systems posted record first quarter revenue of $563.8 million, a 15% increase over the year-ago quarter. Net income dipped 2% to $44.1 million. Transaction Services revenue decreased 2% in the quarter to $188.7 million, compared to the prior year. Credit Services revenue increased 14% in the second quarter to $201.4 million, compared to 2Q/06. Marketing Services revenue increased 26% in the quarter to $262.5 million compared to the year-ago period. During the second quarter, the Company announced that it had entered into a definitive agreement to be acquired by Blackstone and the deal should close by year-end. The Company also signed multi-year contract renewals with several long-standing sponsors including A&P Canada, Goodyear Canada and Forzani Group, Canada’s largest sporting goods retailer. The Canadian loyalty business recorded a strong quarter of double-digit organic growth through the continued expansion of the “AIR MILES Reward Program.” For complete details on ADS’ second quarter performance, visit CardData ([www.carddata.com][1]).

ADS REVENUE HISTORICAL
2Q/06: $490.5 million
3Q/06: $506.6 million
4Q/06: $524.5 million
1Q/07: $549.2 million
2Q/07: $563.8 million
Source: CardData (www.carddata.com)

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

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