FAMS Acquired by Management and ACS

Atlanta-based Financial Asset Management Systems has been sold to management and American Capital Strategies with Kaulkin Ginsberg Company serving as Advisor. The acquisition of FAMS was completed in 2005 by American Capital, a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion, and the senior management team at FAMS. The terms of this transaction were not disclosed, however,all senior managers will remain with FAMS and have an equity stake in the business. Financial Asset Management Systems services clients predominantly in the financial services, government/education, and telecommunication/wireless industries. American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion.

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GE Acquires the Hudson’s Bay Portfolio

The Canadian arm of GE Consumer Finance has acquired Hudson’s Bay Company credit card financial assets. The private label portfolio includes 3.1 million cardholders and has been on the market since October. After peaking in 2003, HBC’s credit card outstandings have been steadily declining due to lower store sales and higher customer payments. The deal announced today also includes a 10-year alliance under which GE Money will provide credit marketing and analytic support, credit servicing and customer care for Hbc’s retail cardholders. The acquisition will also include the transfer of approximately 650 Hbc employees directly involved in Hbc’s Financial Services business to GE Money. These employees will continue to work at their current locations, at operations centers in Montreal, Toronto and Vancouver. GE Money currently has 600 employees at its headquarters in Mississauga and its operations center in Edmonton. (CFI Library 10/7/05)

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TSYS Names a New ESC Loyalty President

TSYS has named Lars Holmquist, formerly with MasterCard, as president of ESC Loyalty after serving as ESC Loyalty’s EVP of business development and consulting since 2002. As vice president of Loyalty Consulting Services for MasterCard, he managed the U.S. business development and client management areas and consulted with many card issuers in designing and managing profitable reward programs. TSYS provides outsourced payment services.

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Asta Funding to Acquire VATIV Recovery

New Jersey-based Asta Funding has inked a deal to acquire TX-based VATIV Recovery Solutions, which provides nationwide bankruptcy and deceased account servicing. The acquisition is anticipated to close in the next two weeks. Financial terms were not disclosed. Asta Funding is a consumer receivable asset management company that specializes in the purchase, management and liquidation of performing and non-performing consumer receivables.

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MASTERCARD 4Q/05

Growth in MasterCard International’s gross dollar volume and purchase volume growth continued in double digits during the fourth quarter. Excluding online debit programs such as “Maestro,” the European region posted a 14.4% year-on-year increase in GDV as the South Asia/Middle East/Africa region soared by 57% and Latin America increased by 27%. Gross dollar volume of $445.8 billion was up 11.9% year-on-year while purchase volume increased 13.6% to $318.3 billion. Purchase transactions for the fourth quarter hit 4.50 billion, compared to 4.26 billion in the prior quarter. Globally, MasterCard has 749.3 million cards-in-force linked to 652.3 million accounts. The number of acceptance locations worldwide as of December 31st was 24.7 million compared to 23.9 million for the third quarter. For complete details on MasterCard’s fourth quarter results, visit CardData (www.carddata.com).

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Card Balance Growth Sinks For the 5th Year

Growth in bank credit card outstandings continues to decline as the top ten issuers posted a paltry 2% gain for 2005, compared to 4% one-year ago and 11% five years ago. The steady decline has largely been attributed to the siphoning-off of balances from cards to home mortgage refinancing and a growing aversion to credit by consumers. During 2005, Citigroup, MBNA and Discover lost ground while American Express expanded U.S. card loans by 14%. Among the top issuers Chase, Bank of America, and Wells Fargo posted the strongest organic growth rates of 2005, according to figures compiled by CardData ([www.carddata.com][1]).

Top Ten U.S. Issuers
($ billions outstandings)
RANK/ISSUER 4Q/05 4Q/04 CHNG
1. Chase $142.3 $135.4 + 5.1%
2. Citi $113.7 $118.1 – 3.7%
3. MBNA $ 80.6 $ 82.1 – 1.8%
4. BofA $ 60.8 $ 58.6 + 3.8%
5. Cap One $ 49.5 $ 48.6 + 1.8%
6. AmEx* $ 45.7 $ 40.1 +14.0%
7. Disc** $ 44.3 $ 48.3 – 8.3%
8. HSBC $ 27.0 $ 22.2 +21.6%
9. WaMu $ 20.0 $ 18.5 + 8.1%
10. Wells $ 10.3 $ 9.8 + 5.1%
TOTAL $594.2 $581.7 + 2.1%
*AmEx excludes charge card (30-day credit) balances
** Discover figures for period ending 11/30/05
Source: CardData (www.carddata.com)

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

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PDS Signs a Card Deal with a Church Group

Texas-based Payment Data Systems has signed a contract with TN-based Shelby Systems, which serves over 8500 faith-based organizations, to offer credit card payment options for ancillary services. Within the agreement, a church contacts Shelby, the software provider, and indicates an interest in providing credit card payment capability to the congregation. After receiving this notice of interest, Payment Data completes a contract with the church. The church can then begin processing credit cards using Shelby’s “e-Give” or “e-Registrations” software. Payment Data Systems is an integrated payment solutions provider to merchants and billers. Shelby Systems provides software to over 8500 churches and other faith-based organizations in over 40 countries.

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Prudential Gobbles Up Egg Card

The UK’s Egg announced that Paul Gratton, its Chief Executive, will leave Egg following Egg’s delisting from the London Stock Exchange on February 20th. On January 23rd, Prudential announced that its share ownership of Egg had risen to 96% and that it had applied to delist Egg on February 20th. Mark Nancarrow has been appointed CEO and will assume executive responsibility effective immediately. Kieran Coleman has been appointed Chief Financial Officer.

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Google’s GBuy Payment Service Plugs Along

Google continues to explore and expand its beta online payment service. The Wall Street Journal reports that for the last nine months, Google has recruited online retailers to test “GBuy.” The new consumer payment option will feature an icon posted alongside the paid-search ads of merchants. The WSJ also says GBuy will let consumers store their credit-card information on Google. Meanwhile, The New Scotsman reports that Larry Page and Sergey Brin, billionaire founders of Google, had their credit card denied at the Gula Gula restaurant in Ipanema for a $50 lunch tab. They were reportedly able to come up with another card to settle the tab. The denied card was not identified.

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GCA Signs a Contract with Station Casinos

Nevada-based Global Cash Access has signed a multi-year agreement with Station Casinos to provide its products and services at 13 Station Casinos’ gaming establishments. Under the agreement, Station Casinos’ locations will utilize QuikCash cash advance terminals, QuikCash Plus (QCP) Web and Casino Cash Plus(R) 3-in-1 ATM, which offers patrons a quick way to access cash through ATM cash withdrawals, point-of-sale (POS) debit card transactions and credit card cash advances with patented 3-in-1 rollover functionality. One of GCA’s most popular ATMs, the Casino Cash Plus(R) 3-in-1 ATM provides convenience to casino patrons and revenue potential to casino operators. Las Vegas-based Global Cash Access is a provider of cash access products and related services to approximately 960 gaming properties.

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Best Present Becomes Springbok Services

Colorado-based The Best Present Company, a provider and processor of prepaid MasterCard products, has changed its name to Springbok Services Based on estimates from the Mercator Advisory Group, Inc., the total spending on open network prepaid cards will grow from $17.1 billion in 2005 to over $145 billion by 2008. Springbok Services, Inc. is a leading provider and processor of prepaid MasterCard programs issued through KeyCorp and provides a wide variety of solutions to over 4,000 clients.

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