Equity Commerce to Market CrossCheck Services

MD-based Equity Commerce has signed an agreement to market CrossCheck’s check services as part of their enhanced payment offerings. CrossCheck’s standard guarantee and check conversion services, including Business Office Conversion Plus(sm), will now be available to Equity Commerce merchants. These services offer maximum check authorization flexibility and convenience along with special programs for business check conversion, disputed stop payment protection and a hold check program for standard guarantee. Equity Commerce is a payment solutions company designed specifically to give businesses the tools they need to achieve their goals and build equity in their businesses. CrossCheck, Inc. provides check approval and guarantee for a variety of merchants nationwide.

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First Data Inks a Long-Term Deal w/Barclaycard

First Data International and the U.K.’s Barclaycard have inked a long-term processing contract. FDC will provide credit card and loans processing for Barclaycard’s new partnership programs in the U.K. on its “VisionPLUS” processing platform. The deal also includes a full range of contact center services and managed services to include plastics personalization, applications processing, payment processing, statements, letters and PIN mailers. In the UK, Barclaycard manages the Barclaycard branded credit cards and other non-Barclaycard branded card portfolios including Monument, SkyCard and Solution Personal Finance. In consumer lending, Barclaycard manages both secured and unsecured loan portfolios, through Barclays branded loans, being mostly Barclayloan, and also through the FirstPlus and Clydesdale Financial Services businesses. Outside the UK, Barclaycard provides credit cards in the United States through Barclaycard US, Germany, Spain, Italy, Portugal, Scandinavia and across Africa. Barclaycard has 11.2 million U.K. customers and has issued 5.3 million international cards to-date. The bank currently has 95,000 retailer relationships.

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Bankruptcy Filings Drive Down the ARM Index

The indicator of economic conditions affecting the accounts receivable management industry slipped in July after hitting a record high in June. The index was driven by an increase in the number of bankruptcy filings and the market capitalization of public ARM companies. The “Kaulkin Ginsberg Index” for July decreased to 1454.2 compared to 1475.2 for the prior month. During the second quarter the ARM index hovered around 1460. The KGI remains up 15.1% year over year. KGI says the “Index” should continue to gradually increase until after the completion of the NCO Group buyout. During July PA-based NCO Group inked a definitive agreement to be acquired by One Equity Partners and Michael Barrist, Chairman, President and CEO of the Company for $1.26 billion. The price represents a 44% stock premium. (CF Library 7/25/06)

KGI HISTORICAL
Jan 06: 1179.3
Feb 06: 1229.3
Mar 06: 1222.4
Apr 06: 1472.7
May 06: 1458.6
Jun 06: 1475.2
Jul 06: 1454.2
Source: Kaulkin Ginsberg

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Natl City to Present a Payment Trends Webcast

Cleveland-based National City is holding a free Webcast tomorrow entitled “Synchronizing the Global Supply Chain: An Opportunity to Capitalize on Payment and Transaction Processing Trends”. This webcast is approved for one recertification credit by the Association for Financial Professionals (AFP). AFP does not require documentation of credits. However, CTPs and CCMs are encouraged to retain documentation of their attendance for a period of two years in the event of an audit. National City Corporation (NYSE: NCC), headquartered in Cleveland, Ohio, is one of the nation’s largest financial holding companies.

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Bankruptcy Filings Edge Down in August

Bankruptcy filings took a slight turn south in August but still are averaging about 14,000 per week compared to approximately 8,000 filings per week six-months ago. One-year ago filings averaged 35,000 per week level, prior to the full implementation of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” During August filings dropped to 57,000, the second highest level since October when the reforms went into effect. The number of filings in the first quarter of 2006 is the lowest number of quarterly filings in the last 20 years.

MONTHLY FILINGS
Nov 05: 21,457
Dec 05: 32,480
Jan 06: 34,411
Feb 06: 39,636
Mar 06: 42,724
Apr 06: 44,989
May 06: 43,780
Jun 06: 54,937
Jul 06: 62,986
Aug 06: 57,412
Source: CardData (www.carddata.com)

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InComm to Acquire DataWave for $36MM

Atlanta-based InComm Holdings has signed an agreement to acquire NJ-based DataWave Systems for $36 million in cash. DataWave is a provider of prepaid and stored-value delivery systems in Canada with operations in the U.S. InComm plans to integrate DataWave’s 10,000 retail locations and 6,000-plus POSA terminals located in Canada and the U.S. into its network of more than 145,000 retail locations. DataWave will become a wholly-owned subsidiary of InComm. Josh Emanuel, DataWave chairman and CEO, will remain as president of the InComm subsidiary. InComm offers financial debit cards, gift cards, music downloads, ring tones, games, long-distance cards, online games, broadband, digital television as well as bill payment solutions. The deal is expected to close in the fourth quarter.

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WAY Systems Appoints a New COO

MA-based WAY Systems, a wireless card payment systems provider, has promoted Bruce Shirey, who previously worked for First Data, to the position of COO. Earlier in his career, he founded his own company and was one of the early pioneers in electronic commerce. Concurrently, Shirey announced the appointment of two other members to the WAY Systems leadership team. WAY Systems is the fastest growing firm engaged in providing solutions for wireless transaction processing.

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CSU CardSystem’s Board Approves a Share Buy-Back

Sao Paulo-based CardSystem’s Board of Directors has approved the stock buy-back of up to one million common CSU shares. This equivalent to 5.3% of the free float. On September 13th, the Company held 120,000 common shares in the treasury at an average cost of R$11.03 per share, equivalent to 0.6% of the free float and 0.2% of the Company’s total capital. The maximum and minimum acquisition prices were R$12.19 and R$10.50, respectively. On September 13th, the market value of CSU’s shares was R$13.50. CSU manages many different types of electronic payment services and has a card base of approximately 10.1
million cards (including credit cards, private label cards and vouchers).

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Wincor Nixdorf Names a New U.S. CEO

TX-based Wincor Nixdorf has named Brad Waugh, formerly with Watch Hill Partners and MasterCard Advisors, as its new U.S. CEO. Waugh previously served as founder, President/CEO of Watch Hill Partners (WHP), a venture-backed CRM (Customer Relationship Management) consulting that specialized in the optimization and mobilization of sales force and service level automation of financial services companies. Prior to his executive roles at Watch Hill Partners and MasterCard Advisors, Waugh was President at an infrastructure management services company, and executive vice president for a consulting and technology services company. Wincor Nixdorf is one of the world’s leading suppliers of IT solutions to the retail and banking industries.

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DataWave Systems Acquired by InComm

British Columbia-based DataWave Systems is being acquired by Atlanta-based InComm Holdings for $36 million in cash. DataWave is a provider of prepaid and stored-value delivery systems in Canada with operations in the U.S. InComm plans to integrate DataWave’s 10,000 retail locations and 6,000-plus POSA terminals located in Canada and the U.S. into its network of more than 145,000 retail locations. DataWave will become a wholly-owned subsidiary of InComm. Josh Emanuel, DataWave chairman and CEO, will remain as president of the InComm subsidiary. InComm offers financial debit cards, gift cards, music downloads, ring tones, games, long-distance cards, online games, broadband, digital television as well as bill payment solutions. The deal is expected to close in the fourth quarter.

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Credit Card APRs Up 476 bps Since Jul 04

Even though gas prices are falling and consumer optimism is rising it appears the Fed will hold the lid on short-term interest rates tomorrow. Regardless, credit card interest rates continue to climb with punitive rates among the top issuers hovering at an unprecedented 32.24% this month. The rising rate climate has also largely driven fixed interest rate credit cards from the market with the exception of short-term promotional rates. According to CardTrak (www.cardtrak.com), the average fixed interest rate is now 14.55% versus an average variable interest rate of 16.34%. Since the Fed started tightening rates in July 2004, the average variable credit card interest rate has soared 476 basis points. More than 86% of credit card accounts now carry variable interest rate structures. Most of the top issuers charge at least nine points over the prime rate for standard accounts which means a return to 17%-18% APRs.

CREDIT CARD INTEREST RATES
Month Prime Fixed Variable
Aug 04 4.50% 12.85% 11.89%
Sep 04 4.75% 12.88% 12.11%
Oct 04 4.75% 13.00% 12.19%
Nov 04 5.00% 13.04% 12.37%
Dec 04 5.25% 13.09% 12.49%
Jan 05 5.25% 13.22% 12.67%
Feb 05 5.50% 13.25% 12.84%
Mar 05 5.75% 13.32% 13.08%
Apr 05 5.75% 13.39% 13.17%
May 05 6.00% 13.48% 13.45%
Jun 05 6.00% 13.59% 13.61%
Jul 05 6.25% 13.64% 13.84%
Aug 05 6.50% 13.76% 14.24%
Sep 05 6.75% 13.80% 14.49%
Oct 05 6.75% 13.87% 14.64%
Nov 05 7.00% 13.91% 14.89%
Dec 05 7.25% 13.93% 15.20%
Jan 06 7.50% 14.08% 15.53%
Feb 06 7.50% 14.11% 15.75%
Mar 06 7.75% 14.15% 15.81%
Apr 06 7.75% 14.19% 15.99%
May 06 8.00% 14.23% 16.02%
Jun 06 8.00% 14.32% 16.10%
Jul 06 8.25% 14.42% 16.27%
Aug 06 8.25% 14.55% 16.34%
Source: CardTrak (www.cardtrak.com)

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