WaMu Card Q1 Profits Rise 24% Year-on-Year

Seattle-based Washington Mutual reported that first quarter net income for its Card Services unit increased 24% from the year-ago quarter and up 72% sequentially. The prior quarter results included an increase to the loan loss provision of $95 million. Managed card outstandings were $23.6 billion as of March 31st, compared to $20.1 billion one-year ago. The 30+ day delinquency rate dropped 10 basis points to 5.15%, compared to 5.25% for the fourth quarter and down from 1Q/06’s 5.18%. However, charge-offs increased from 5.84% in the fourth quarter to 6.31%. The charge-off figure reflects an increase in contractual losses due to the 2006 change in minimum payment policy. WaMu also reports that it opened 782,000 new credit card accounts in the first quarter, compared to 839,000 in the fourth quarter. The issuer noted that more than a third of the new accounts came through the company’s retail channel. For complete details on WaMu’s latest performance, visit CardData ([www.carddata.com][1]).

WaMu Net Income Track Record
1Q/06: $207.0 million
2Q/06: $183.2 million
3Q/06: $207.0 million
4Q/06: $149.0 million
1Q/07: $256.0 million
Source: CardData (www.carddata.com)

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

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I.C.E. Fourth Quarter Revenues Decline 2%

CA-based International Card Establishment reported net revenues of $3.1 million for the fourth quarter, a 2% decrease over the comparable year ago period. The company reported quarterly net income of $ 28,956 as compared to quarterly net loss of $(1,751,570) in 2005. Net income would have been significantly higher absent a large charge related to a defaulted merchant account that generated approximately $198,000 in losses. EBITDA also rose sharply to $526,125 or 25% for the quarter, as compared to $422,076 for the same period in 2005. For the year ended December 31, 2006, I.C.E.’s net revenues rose 91% to $10,765,826 from $5,644,079 the previous year. I.C.E. is a provider of diversified products and services to the electronic transaction processing industry.

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Hypercom Supports Planet Payment Product

Hypercom will now support Planet Payment’s multi-currency processing product as an available application for Hypercom’s “Optimum T4100” terminals. Planet Payment’s Dynamic Currency Conversion (DCC) and Multi-Currency Pricing (MCP) services, provide merchants with pricing localization tools that can drive additional sales from international customers and improve customer service. With DCC, merchants continue to price their goods in United States dollars. After a MasterCard or VISA card issued in one of the supported foreign currencies is swiped on an Optimum terminal, the device will automatically display the transaction amount in both US Dollars and the customer’s currency. The customer can then select which currency he wants to use to complete the purchase, while the merchant still receives the settlement in US dollars. Planet Payment is a multi-currency payment and data processor.

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Hypercom Introduces SmartPayments Client

Hypercom has introduced the first electronic payment processing solution that easily integrates into PC-based POS systems without special hardware. “SmartPayments Client,” enables merchants who use Windows-based POS systems to accept credit cards and other forms of electronic payment on their PCs with all the benefits of integrated solutions, offering key advantages for small and midsized retailers as well as the ISOs, VARs and system integrators who service them. “SmartPayments Client” has also been optimized for use with select customer-facing Hypercom PIN entry, signature capture devices and card readers, providing a complete solution with package pricing and single-supplier accountability. The solution captures electronic payment information either from a keyboard entry or a hardware peripheral, passes it to the integrated POS system, and routes transactions to the payment processor.

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Consumer Groups Object to Gift Card Settlements

Three consumer groups are objecting to a recently proposed FTC settlement with the Kmart over its gift card practices. The Consumer Federation of America, Consumers Union and U.S. PIRG, charged that the settlement unjustly enriches Kmart by allowing it to keep its ill-gotten gains. The groups say the Kmart card had hidden fees that reduced its value by more than $50 in less than two years of inactivity. Last month, Kmart agreed to settle FTC charges by implementing a refund program. According to the FTC’s complaint, Kmart promoted the card as equivalent to cash but failed to disclose that fees are assessed after two years of non-use and misrepresented that the card would never expire. Kmart has agreed to disclose the fees prominently in future advertising and on the front of the gift card. As of May 1, 2006, Kmart stopped charging a dormancy fee on all Kmart gift cards. This was the FTC’s first law enforcement action involving gift cards. Earlier this month, Darden, which owns restaurant chains Olive Garden, Red Lobster, Smokey Bones, and Bahama Breeze, agreed to restore fees that were deducted from consumers’ gift cards and disclose fees or expiration dates in future gift card sales after FTC action. (CF Library 3/13/07; 4/4/07)

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All Major Credit Card ABS Metrics Head South

For the first time since mid-2003, all five key performance metrics for credit card-backed securities showed deterioration. According to “Moody’s Credit Card Credit Indices,” the February charge-off rate of 4.51% was nearly 35% higher compared to a year ago. The delinquency rate rose for the fourth consecutive month from its year-earlier level, to 3.89% in February, however it has remained relatively flat sequentially. The payment rate fell slightly to 17.72% in February, after posting a record-setting forty-two months of consecutive year-over-year improvement. Yield dropped to 18.33% in February from 18.93% a year ago. The one-month excess spread, a proxy for the profitability of securitized credit card portfolios, fell to 7.42% from its year-earlier margin of 9.20%.

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SONYCARD VISA

Malayan Banking and Sony have partnered to launch the first co-branded VISA credit card in South-East Asia that offers entertainment rewards. The
new “SonyCard” also includes “VISA Wave” technology that enables
contactless payment at the point-of-sale. The new card offers a one-year
annual fee waiver, double reward points, zero interest installment plans
of up to 36 months for Sony products at designated outlets and exclusive
invitations to Sony events. Maybank says the card should attract about
40,000 users from among Sony’s existing 53,000 loyalty card members by
end of this year. Maybank currently has 1.4 million credit card and
charge card users.

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VeriFone QX100 Cleared for V/MC Contactless

VeriFone’s first external contactless card acceptance device, the “QX100,” has been certified for “VISA Contactless” and “MasterCard PayPass. The “QX100” attaches to VeriFone’s Vx Solutions, Omni 3700 and NURIT payment solutions, as well as any stand-alone payment device or POS system for quick merchant upgrades. The “QX100” system is designed to meet VISA Contactless, MasterCard PayPass, American Express ExpressPay, and Discover specifications for magnetic stripe equivalent applications. With four standard inclination angles and a large landing zone, the QX100 allows easy card or fob reading in any retail or service environment.

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YeePay Partners with Bertelsmann on e-Payment

Bertelsmann Book Club will provide YeePay e-payment for its
customers in China thanks to a new agreement focusing on improving
customer satisfaction and increasing sales. YeePay will provide more
diversified payments, including directly paying with a credit or debit,
than Bertelsmann’s previous options. The book club is the largest media
retailer in China and chose YeePay for its high security and broad
coverage. Bertelsmann Book Club has 1.5 million members in China,
35 million members worldwide and 600 service centers. The two
companies are currently developing solutions for customer telephone
payments.

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NCR To Manage HSBC Off Site ATMs

NCR has signed agreements with HSBC to manage the banks
off-site ATMs throughout the western and southern regions of India. The
agreement stipulates that NCR will provide first-and second-line
maintenance, caretaker services, site maintenance, consumables supply and management, not including cash replenishment. NCR’s services will save the bank time and in-house resources on routine management of its ATM network.

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Andhra ATMs Accept Kingfisher Ticket Payments

Financial Software Systems has designed an eTicketing service
allowing VISA cardholders to pay for KingFisher Airline tickets
through Adhra Bank ATMs. Following the reservation of the flight,
the customer is given a “booking reference number” to be used as
reference to pay for the ticket at an Andrah Bank ATM. After the
ticket payment is authorized, the receipt given for this
transaction is what is to be used to claim the boarding pass.
FSS solutions power over 85% of card based transactions for major
banks in the country. Andhra Bank has more than 500 ATMs across
India and more than 23 lakh cardholders.

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