VISA International has released a new white paper on cross-border payments. The report, assembled by Dr. Yoon Park, Professor of International Banking and Finance at the School of Business and Public Management of George Washington University in Washington, D.C., identified five key payment trends impacting cross border payments: 1. The emergence of transnational systems for the settlement of local payments in foreign currency is standardizing formats and driving the implementation of straight-through processing standards for transfers between banks as well as between banks and customers. 2. Regulatory requirements and government mandates are influencing how payments are made and what fees can be charged. 3. Payment systems are becoming more efficient at managing credit and liquidity risks. 4. Bank and business consolidations have been the single biggest force reshaping the global payments landscape over the past two decades. Acting as a transnational system, large banks operate their own internal global payments networks, through which they can route payments to destinations in different countries. Such internal networks do not necessarily differentiate between domestic and cross-border payments, eliminating the need to treat a payment as cross-border, which can lower costs and increase competitiveness. 5. The search for operational efficiency has led to the outsourcing of payment and securities clearing to a third party, which may be a bank or non-bank service entity. Concern exists about the regulatory absence in this area as service firms, unlike banks, are not regulated or supervised by government agencies. Analysts estimate that the volume of cross-border payments will increase at a compound annual rate of 10.2 percent globally during the period 2000 through 2010.Details
Seattle-based Washington Mutual reported that fourth quarter net income for its Card Services unit declined 13.4% from the year-ago quarter and down 28% sequentially. The quarter’s results included an increase to the loan loss provision of $95 million as the company retained a higher level of its receivables on balance sheet and an increase to the provision of $92 million related to the revised accounting for credit card receivables held for sale. Managed card outstandings were $23.5 billion as of December 31st, compared to $20.0 billion one-year ago. The 30+ day delinquency rate dropped 28 basis points to 5.25%, compared to 5.53% for the third quarter. However, charge-offs increased from 5.68% in the third quarter to 5.84%. WaMu also reports that it opened 839,000 new credit card accounts in the fourth quarter, an increase of 3% from the prior quarter and up 17% from last year’s fourth quarter. For complete details on WaMu’s latest performance, visit CardData ([www.carddata.com]).
WaMu Net Income Track Record
4Q/05: $172.0 million
1Q/06: $210.0 million
2Q/06: $183.2 million
3Q/06: $207.0 million
4Q/06: $149.0 million
Source: CardData (www.carddata.com)
Chockstone is providing the platform for Ticketmaster’s new Gift Card program. The new program offers gift cards redeemable toward tickets to participating events on sale through Ticketmaster throughout the United States. The cards are available for purchase and redemption online at www.ticketmaster.com, by phone and at most retail Ticket Centers and select venue box offices. Chockstone is a loyalty and stored value solution provider. Ticketmaster serves more than 9,000 clients worldwide across multiple event categories, In 2005, the company sold 119 million tickets valued at $6 billion.Details
PrePay Technologies has teamed with AVANTRA, the commercial managed
service division of LINK, to launch the “Enterprise Payroll” card.
PrePay’s electronic payroll card allows for employees who do not have
bank accounts to receive payroll in a safe, convenient way. With each
payment cycle, the employees’ payment card is “recharged”. The card can be
used just as a debt card, allowing for purchases and cash withdrawal at
ATMs supporting the Maestro system. PrePay creates stored-value programs
and manages several million stored-value-card accounts for major
PrePay Technologies recently issued its 10 millionth prepaid card.
Prague-based Global Payments Europe and retail chain Globus CR, has launched a mobile phone card re-loading service via POS terminals.
The new GP mobile service for prepaid cards will be available to
mobile telephone consumers through Globus hypermarkets. This new service will allow customers at the 11 Globus hypermarkets, with 550 check-out counters, to quickly and easily re-load their phones provided through mobile service operators Telefonica O2 Czech Republic, T-Mobile Czech Republic and Vodafone Czech Republic. Currently, there are more than 7.2 million prepaid mobile phones in use in the Czech Republic.
Euronet has acquired La Nacional. La Nacional, out of South America,
provides money transfer services from
fifteen states in the U.S. Euronet has processing centers located
in the U.S., Europe and Asia, and processes electronic top-up
transactions at more than 265,000 point-of-sale terminals across
the globe. La Nacional originates transactions through a network of over
800 sending agents and 65 company-owned stores located primarily in the
Northeastern U.S. and terminates transactions through a payer network of
over 10,000 locations worldwide. Euronet has approximately 157,000
retailers and 26 offices worldwide, with clients in more than 80
countries. According to the Inter-American Development Bank, the
Dominican Republic is one of the largest receivers of remittances in
Latin America, receiving approximately $2.7 billion in 2005.
Bank of America has announced that Giesecke & Devrient will provide
over-the-air radio technology for its contactless payment service
trial. The trial will confirm consumer interest in companion devices for
contactless payment and solidify plans to offer as an option the
“MasterCard PayPass” application on an NFC-enabled mobile handset. In
this trial, Bank of America associates are given the option of
NFC-enabled mobile phones, which can be used to purchase items by just
waving the phone past a contactless-enabled POS terminal or vending
machine. G&D is a technology leader in smart cards and provides
smart card based solutions. The company employs over 7,500 people and
generates annual revenue over 1.24 billion euros.
Payment processor Smart Payment Solutions (SPS), a payment processing company, has announced a merger with Automated Financial Group (AFG). The combined company, SPS LLC, offers payment services, including ACH processing, returned check processing, credit card merchant accounts, and check conversion. Clients include corporations of all sizes as well as non- profit organizations. AFG and SPS were founded in 1998 and 2002, respectively.Details
NCR expects to report fourth-quarter revenue of more than $1.8 billion, an increase of 5% from the fourth quarter of 2005 and expects full-year earnings per share of $2.04 or more. NCR’s previous earnings expectation for full-year 2006 was $1.90 to $1.95. On an annual basis, NCR expects to generate revenue of more than $6.1 billion, an increase of roughly 2% from 2005.Details
Peppercoin’s Small Payment Suite and parking solution provider Duncan Solutions have partnered to let drivers in Detroit pay for on-street parking with their credit or debit cards. Detroit recently replaced old, traditional parking meters with 175 new multi-space meters, covering nearly 1,225 parking spots. Each of the new multispace meters will cover up to 10 parking spaces and it is estimated that Detroit motorists will generate 300,000 credit and debit card transactions in the first year of deployment. This is one of the largest deployments of parking paystations that accept credit cards in the United States.Details
MasterCard has completely assembled its new Board of Directors with the addition of a Class A and a Class M director. Nancy Karch, retired from McKinsey & Co., will serve as a Class A director. Tan Teong Hean, former CEO of Southern Bank Berhad, will serve as a Class M director. Class A directors include Robert Selander, Richard Haythornthwaite, Nancy Karch, Manoel Luiz Ferrao de Amorim, David Carlucci, Bernard S.Y. Fung, Marc Olivie, Mark Schwartz, and Edward Suning Tian. Class M members of the MasterCard Board of Directors include: Steven Freiberg, Norman McLuskie, and Tan Teong Hean. MasterCard Board of Directors includes eight Class A directors who are independent; three directors representing the financial institutions that own MasterCard Class M shares; and MasterCard President and CEO Robert Selander, also a Class A director. Richard Haythornthwaite, managing partner of UK-based Star Capital Partners, serves as non-executive chairman of the board.Details
TSYS reported that fourth quarter profits rose 75%, hitting $87.1 million. Revenues topped $503 million, a 20% rise over 4Q/05. However, on a GAAP basis, TSYS’s 2007 net income is expected to decline between 5%-3% as compared to 2006. Excluding the one-time Bank of America contract-termination fee in 2006 of approximately $68.9 million and the acceleration of amortization of Bank of America contract acquisition costs of approximately $6 million, net income is now expected to increase between 14-17% in 2007 compared to 2006, versus previous guidance of an increase between 8%-10%. During the fourth quarter, TSYS substantially completed the Capital One conversion; entered into an agreement with Rabobank in The Netherlands; and acquired majority control of a call center business. Also, Robert Philbin was named president of TSYS Acquiring Solutions. For complete details on TSYS fourth quarter performance, visit CardData ([www.carddata.com]).
TSYS REVENUE HISTORICAL
4Q/04: $307.2 million
1Q/05: $350.0 million
2Q/05: $410.2 million
3Q/05: $422.0 million
4Q/05: $420.7 million
1Q/06: $412.3 million
2Q/06: $429.2 million
3Q/06: $441.8 million
4Q/06: $503.9 million
Source: CardData (www.carddata.com)