Morgan Stanley’s Board has decided to retain Discover Financial Services and not spin it off. The Company says that Discover is a strong and attractive business that provides a consistent stream of stable, high-quality earnings and substantial cash flow, diversifies the Company’s earnings and broadens its scale and capital base. Among some of the items considered is the fact that Discover added more than one million merchant locations over the past year, has improved credit quality, launched new partnerships with GE Consumer Credit and China UnionPay and has acquired the PULSE debit network. MS also noted that Discover is poised for new growth due to a favorable 2004 court ruling that allows the network to partner with financial institutions in the U.S. for the first time. The Company reports Discover delivered record before-tax earnings of $1.27 billion in 2004, representing 19% of Morgan Stanley’s total before-tax earnings and in excess of 19% ROE. (CF 4/5/05)Details
OfficeMax has launched a promotion with Aly & AJ to promote the purchasing gift cards by students for teachers. According to the National Education Association, the average teacher spends nearly $500 each year out of their own pocket to stock their classroom. The trend-setting teens are asking their fans to remember to pick up a back-to-school gift of school supplies or an office supply gift card for their teacher. OfficeMax Incorporated provides business-to-business office product solutions and retail office products.Details
Debit card EFT/POS volume grew 12.2% to A$6.6 billion in May.
Over the past five years debit card volume has grown 128%. During May,
Australians used debit cards for A$5.2 billion in purchases with 83.6
million transactions. Total EFT/POS transactions were 98.0 million for
May according to the Reserve Bank of Australia. Over the past twelve
months, Australians have used debit cards for A$60.8 billion in
purchases. There were 25.1 million debit card accounts in the country at
the end of May, compared to 24.7 million one-year ago.
Seattle-based Accelitec has introduced a comprehensive suite of RFID-based payment solutions, including ACH, credit and prepay. The “PayPilot” system consists of three hardware components and supporting backend and transaction software. Consumers sign up at their merchant’s store for a key fob or card using a PayPilot “Automated Transponder Dispenser.” The RFID-enabled fob is presented at check-out to a “PayPilot POS” transponder. Authentication, security and consumer pre-set variables help provide spending controls. Backend transaction software allows merchants to control interchange fees by allowing consumers to use ACH for payments. The “PayPilot” network operates on a Microsoft.Net platform. POS terminals are available in the sub-$100 range.Details
TransUnion has hired Scott Schubert as its new CFO, replacing David Emery who became COO earlier this year. Schubert comes to TransUnion from NTL, Inc. where he was executive vice president and CFO. Prior to NTL, he was CFO for Williams Communications, vice president of global financial services for BP Amoco and vice president of worldwide financial services for the Amoco Corporation. Schubert holds a MBA from Purdue University. TransUnion offers a broad range of financial products and services that enable customers to manage risk and capitalize on market opportunities.Details
A new research report reveals that there is a growing demand for processor value added services due to the rapid consolidation of the card issuing and transaction processor segments. The study suggests that processors are in a position to use their scale and transactional expertise, as well as their key position in the card industry value chain, to assist issuers with profitability issues. The research, by Mercator Advisory Group, says processors have increased their efforts to provide a broad spectrum of new services, from pure cost reduction programs (like data warehousing and implementation of association compliance mandates) to complex data analytics services on top of the core processing activities (like risk prediction, fraud detection, loyalty and marketing programs). The report says issuers spent nearly $72 billion in expenses last year with charge-offs making up the lion’s share. Marketing and operating expenses were about $29 billion in 2004 with processing costs comprising the smallest expense.Details
A leading indicator of economic conditions affecting the accounts receivable management industry has reached an all-time high. The latest “Kaulkin Ginsberg Index” reached 1303.1, a 16.4% increase over the past year. Since its inception in January 2000, the Index has added more than 30% to its original value for the first time. Kaulkin Ginsberg says it has been at least five and a half years since overall economic conditions were more friendly to collection agencies, debt buyers and collections law firms.Details
Experian’s Consumerinfo.com unit has settled FTC charges that it deceptively marketed “free credit reports” using a negative-option for consumers. Under terms of the settlement Experian has agreed to refund up to $950,000 to consumers who enrolled in Consumerinfo’s credit monitoring program between 2000 and 2003, canceled the monitoring service and received a partial refund or filed a complaint about the charges for the service. Experian says the FTC first expressed concern in July 2002 that certain terms of that program were not fully understood by consumers. Experian says many of the changes announced yesterday were completed in September 2003, based on initial discussions and approval by FTC staff. ConsumerInfo.com has marketed free credit reports for ten years.Details
Arizona-based YP Corp, a provider of Internet-based Yellow Pages services,has signed an agreement with MBNA to promote the “MBNA Platinum Plus for Business” credit card and to offer MBNA customers “Preferred Listings” on YP.Com at a special rate. YP Corp. is a longstanding member, exhibitor and sponsor of the Yellow Page Association and the Association of Directory Publishers.Details
Sonae Distribuicao has signed an agreement with TSYS for closed-loop
gift-card services. Earlier this year, Sonae launched pre-denominated
gift cards available for purchase in its Continente and Worten stores.
The cards are available in more than 280 stores across seven store
formats, allowing for Sonae to capitalize on the growing popularity of
gift cards in Portugal. Sonae’s gift-card program will be supported
entirely through TSYS Europe in York, England.
A forthcoming research report has found that less than 1% of fraud losses in the ATM and POS channels actually come from phishing- based fraud. TowerGroup says that based on recent discussions with the largest card-issuing U.S. banks, it found that on average one out of 15,600 ATM and POS debit transactions today are fraudulent, almost all of which originates from stolen cards and card skimming. Given an annual ATM and PIN-based POS transaction volume of just over 17 billion in the U.S. last year, this means there were just over 1.1 million fraudulent debit transactions in 2004. TowerGroup believes that withdrawal and debit purchase limits on retail accounts helped to restrict total ATM and POS fraud losses to not more than $990 million in the U.S. in 2004. TowerGroup estimates that over 90% of the top 100 banks in the U.S. check for “CVV” and “CVC” today.Details
MasterCard is planning to hold three “Global Hospitality Forums” this year. The events will take place in London on Sept. 13, in Miami on Sept. 27, and in Singapore on Dec. 7. Presented in partnership with Zagat Survey, the “2005 MasterCard Global Hospitality Forum” will focus on building loyalty and maximizing customer potential. Each one-day event will bring together more than 200 hospitality industry leaders including hotel chain executives, general managers, restaurateurs, chefs, and operations staff to discuss the most important issues and developments affecting their businesses and profitability. In addition to leading industry speakers, panel discussions on best practices and maximizing new opportunities will be held at each session. MasterCard will also present consumer research and trends specific to each region.Details