Credit Card Delinquency Stays Calm in Q4

Credit card delinquencies, based on total dollars outstanding, continued to head north during the fourth quarter, rising to its highest level since the third quarter of 2005. Sequentially, delinquent dollars edged up by four basis points while the number of past-due credit card accounts dropped by one basis point. According to the American Bankers Association’s “Consumer Credit Delinquency Bulletin,” delinquencies based on total dollars outstanding for 4Q/06 were 3.54%, compared to 3.50% in the third quarter and 3.21% for 4Q/05. Based on the number of accounts past-due, the figures were 4.56% for 4Q/06, 4.57% for 3Q/06, and 4.27% one-year ago. The ABA also reports that the composite ratio, which tracks delinquencies in eight closed-end installment loan categories, increased to 2.23% in the fourth quarter, compared to 2.12% in the third quarter. This increase was driven by delinquencies in indirect auto loans, which are arranged through dealerships and home equity loans. Composite ratio delinquencies are in line with the 10-year average of 2.20%.

4Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
1999: 4.28%
2000: 4.25%
2001: 4.67%
2002: 4.63%
2003: 4.92%
2004: 4.19%
2005: 3.21%
2006: 3.54%
Source: ABA Delinquency Bulletin

Details

Frontier Airlines Goes to a Cashless Cabin

Denver-based Frontier Airlines introduces “Cashless Cabins” on its mainline aircraft beginning April 1, 2007. In-flight amenities can be purchased using credit or debit cards. Frontier’s flight attendants will carry a state-of-the-art personal digital assistant (PDA) equipped with a card reader, eliminating the complications that come with cash transactions. Frontier offers routes linking its Denver hub to 56 destinations including 49 U.S. cities in 29 states spanning the nation from coast to coast, eight cities in Mexico and one city in Canada.

Details

Rapid7 Joins the PCI Vendor Alliance

Boston-based Rapid7, provider of the “NeXpose” vulnerability scanning solution and the NeXpose “PCI Compliance Portal,” has joined the Payment Card Industry Security Vendor Alliance. Rapid7 is certified by the payment card industry to help merchants, service providers and others achieve compliance with the PCI DSS by performing onsite security assessments and quarterly network scans. The Rapid7 PCI Compliance Portal is a remote scanning solution that meets the security requirements of all credit card companies by going beyond scanning network devices to locate the website and database vulnerabilities that hackers commonly exploit to capture credit card data. Using the NeXpose expert system, the Rapid7 PCI Compliance Portal searches for vulnerabilities. Like NeXpose, the Rapid7 PCI Compliance Portal generates detailed remediation reports containing project plans, system links, vulnerability definitions and a step-by-step guide for fixing any exposures, allowing companies to achieve compliance quickly. Rapid7’s PCI Compliance Portal is a hosted, self-service solution that requires no software or hardware and is accessed via a Web browser.

Details

Experian & US Biometrics Partner

Experian announced a joint technology sharing and marketing referral agreement with US Biometrics, a biometric technology software company. The initial joint offering will include Experian’s “Knowledge IQ”, featuring challenge-based questions, and US Biometrics’ authentication product, “Qrl”. The integration will result in the essential component of positively identifying an individual during an enrollment process for online services, at a teller location or during other remote-access interfaces. Once the identity is verified and enrollment proceeds, a fingerprint is captured that can be used for ongoing identity verification purposes. Experian provides analytical and information services to organizations and consumers to help manage the risk and reward of commercial and financial decisions. US Biometrics designs and deploys a range of biometric technologies for financial, corporate, governmental, health care, manufacturing and educational clients who require absolute authentication of customers and employees.

Details

Age 18-34 Credit Card Ownership Declines

A new report has found that only 33% of consumers 18-34 are using online banking services. Chicago-based Mintel also found that 80% of those 18-24 years old and 83% of those 25-34 years old own a debit cards and that credit card ownership has been dropping in recent years for these age groups. However, contactless credit cards provide a new outlet for attracting new consumers, with over 60% of consumers in this age range showing interest in the newer option. Mintel noted that younger consumers more cautious when it comes to using credit cards. Over 70% of respondents in the 22-24 age range stated that they do not like the idea of being in debt, and that can significantly impact their relationship with credit card companies.

Details

Arkansas Bank to Use DSC’ CardWizard

AR-based ANB Financial has selected Dynamic Card Solutions’ “CardWizard” to instantly issue bank cards to customers. DCS’ CardWizard system has enabled ANB to issue cards to customers who come into any location to open new accounts or those needing cards immediately. DCS’ technology enables the bank to also replace cards that have been lost, stolen, compromised or damaged. With instant issuance, which requires that customers present identification to receive a new or replacement card, financial institutions provide an added level of security to protect customers’ personal and financial information. Dynamic Card Solutions is an innovative developer of instant issuance and PIN selection solutions for banks, credit unions and retailers. ANB Financial is a $1.7 billion bank with offices currently serving Arkansas, Wyoming and Utah.

Details

Gen Z Select Their Credit Cards Online

More than four out of ten young consumers between the ages of 18 and 21 who surf the Web now own a credit card, and 65% of this “Gen Z” online group used the Web to apply for a credit card. A new research report also found that Capital One was the most popular credit card among this generation. According to the Forrester Research “Meet Your Next Financial Consumer,” Capital One has a 20%+ share of credit cards held by online youth. BofA, Chase and Citi have about a 13% share of the same group. However, Forrester further found that 21% of “Gen Z” cardholders intend to switch from Chase and American Express cards in the next twelve months. Overall, 32% of online youth applied for a credit card over the Web during the past twelve months.

Details

Kyocera Wireless Integrates VISA Mobile

San Diego-based Kyocera Wireless and VISA International this week are showcasing the marriage of a mobile phone with a VISA payment solution using the VISA mobile platform. At the CTIA Wireless trade show in Orlando, attendees can use a prototype NFC VISA-enabled phone to purchase a beverage from a vending machine, by simply presenting the payment-enabled handset to the vending machine contactless payment spot. Kyocera will also be demonstrating a simulated purchase of movie tickets directly from a movie poster equipped with NFC technology. Eliminating the need for paper movie tickets, the movie poster transmits a code to the phone after wireless payment, which is then read by another NFC terminal at the entrance to the movie theater. Kyocera is this week also showing-off “MobiTV” streaming television over a WiMAX high-speed connection with Runcom; Wi-Fi-powered music downloads; and Voice-over-IP mobile phone calls over dual-mode CDMA/Wi-Fi connections.

Details

Mobile Banking Sees a Tipping Point

A critical tipping point in the emerging mobile banking and payments industry is at hand as several large banks have teamed to use AT&T wireless phones with Firethorn software to create a robust mobile banking marketplace. The news comes on the heels of Bank of America’s roll-out of mobile banking to markets across the country through mid-year. Wachovia, Regions Financial, and SunTrust Banks have selected Firethorn’s mobile banking and payments solution. Marketing strength and advertising power will be added by AT&T. Firethorn is the only mobile banking and payments solution authorized by AT&T. Through the Firethorn solution, consumers can view account balances, transfer funds, receive and pay bills and quickly clear contents if their mobile device is ever lost or stolen. Consumers can perform functions on any supported wireless handset, even when their device is offline. In partnership with Firethorn, financial institutions using CheckFree’s electronic billing and payment solution to receive and pay bills online can offer their consumer’s immediate integrated access to view and pay bills using their mobile devices. Firethorn’s previously announced customers, BancorpSouth and Synovus Financial will also offer mobile banking through Firethorn’s solution.

Details

AmEx Rewards Add Flight & Room Finders

American Express’ “Membership Rewards” program has added “Flight Finder” and “Room Finder” as online booking tools. The new tools enable members to search award inventory, transfer points directly into a frequent flyer or frequent guest account, and book flights or hotel stays in a single online transaction. Some of the featured partners currently include: InterContinental Hotels, Crowne Plaza, Holiday Inn, Staybridge Suites, Candlewood Suites, and Hotel Indigo, AirTran Airways, Hilton, Conrad Hotels, Doubletree, Embassy Suites, Hampton Inn, and Waldorf Astoria. The Membership Rewards program from American Express has more than 140 redemption partners.

Details

Trump Casino to Pilot QuikCash Mobile

Las Vegas-based Global Cash Access has partnered with Trump Taj Mahal Casino in Atlantic City to serve as the pilot site for GCA’s QuikCash Mobile service. QuikCash Mobile is an easy-to-use, handheld device that serves as a mini-ATM, which enables casinos to offer credit and debit card cash advance capabilities directly to patrons on the floor, at the point of sale. Global Cash Access is a leading provider of cash access products and related services to approximately 960 gaming properties and other clients.

Details