Gift card penetration among large retailers increased more than 27% last year. About 68% of major stores offered gift cards during the 2004 Christmas holiday season, compared with 53% the year before. Among their peers, department stores, home electronics and appliance stores, furniture stores and other general merchandise stores had the highest gift card penetration rates in the last two years, according to Statistics Canada. Not included are paper gift certificates of any kind, plastic phone cards or gift cards sold by shopping centers or credit card companies.Details
The co-branded/affinity market segment led the credit card industry last year with the highest average volume per active account. However, credit unions produced the highest average daily balance per active account among all market segments. Major low rate issuers delivered an average balance of $2,553 and an average volume per active account during 2004 of $5,501. According to this month’s issue of Bankcard Barometer, the co-branded/affinity market segment delivered an average balance of $2,310 and an average volume per active account during 2004 of $7,188. The credit union segment delivered an average balance of $3,034 and an average volume per active account during 2004 of $6,659. Sub-prime issuers generated an average volume per active account last year of $1,924 and an average daily balance of $1,721.
CARD SECTOR 2004 PERFORMANCE
MARKET SEGMENT ADB AAV
Co-branded/Affinity $2310 $7188
Sub-Prime/Secured $1721 $1924
Low Rate (>$2.3B) $2553 $5051
Low Rate (<$2.3B) $2039 $5255 Non-Bank $2305 $3603 Credit Unions $3034 $6659 ADB- average daily balance per active account; AAV- average annual volume per active account. Source: RAM Research Group's Bankcard Barometer
Fair Isaac Corporation announced that Boscov’s is the first retailer to use its Netsourced TRIAD adaptive control system. Netsourced TRIAD enables retailers to send customer data over a secure, Web-based network and returns recommended actions overnight to better facilitate credit and risk management decisions. Boscov’s, the largest family-owned department store in the US, has 41 stores in the Mid-Atlantic region.Details
Sub-prime card issuer Metris Companies continues to improve its debt situation with a strong cash position. Yesterday, the Company announced it will make a $75 million prepayment on a term loan today. The loan was due May 2007. This is the fourth prepayment of corporate debt Metris has made in recent months. Metris made a $50 million prepayment in late February on senior notes. The Company also made a $50 million prepayment on November 23rd and a $25 million prepayment on December 22nd of its senior secured credit agreement maturing in 2007. In February, Metris announced that it retired $900 million of asset-backed securitization debt that was scheduled to mature in May. Metris recently reported that it made a full-year profit of $33.7 million in 2004. (CF Library 1/26/05; 1/27/05; 2/2/05)Details
MasterCard Canada’s Board has named three new directors from the acceptance side of the business. James Baumgartner, President and CEO of Moneris Solutions, Drew Brown, President of Paymentech Canada, and, Jordan Cohen, President of Global Payments Canada all join the MasterCard Canada Board effective immediately. Also joining the Board of Directors are Amolak Grewal, COO, ATB Financial, and Stephen Stewart, SVP/Operations, President’s Choice Bank. Kathryn Silmser, SVP/Cardholder Services, BMO Bank of Montreal, and Martin Parizeau, Senior Executive VP, MBNA Canada Bank, will continue as chair and vice chair, respectively.Details
HSBC – North America announced that Thomas P. Nicholson has been appointed vice president of public affairs. Before joining HSBC, Nicholson was with Sears, Roebuck and Co. as a director of public relations. Prior to Sears, he was a senior executive at several public relations and consulting firms. Nicholson is a graduate of Bradley University.Details
FastFunds Financial Corporation has executed a new multi-year contract with the California-based Eagle Mountain Casino to provide comprehensive cash access services to include full booth operations including FastFunds’ ChexGuard(TM) electronic check conversion system, the CreditGuard(TM) credit card cash advance system and ATM placements and processing, through its wholly-owned operating subsidiary, Chex Services, Inc.Details
Growth in bank credit card loans in the U.S hit first gear last year with a paltry 1.2% gain. At the end of 2004, bank credit card loans stood at $684.9 billion, compared to $677.0 billion one year ago. American Express led the four major networks posting a 4.2% gain in U.S. credit card loans. (The AmEx figure does not include monthly charge card, 30-day credit or outstandings, according to RAM Research Group’s Bankcard Barometer.) Discover was essentially flat during 2004 at $48.3 billion. Among top issuers, MBNA posted a contraction, losing near a full percentage point of market share last year, according to CardData ([www.carddata.com]). MBNA is predominantly a MasterCard issuer.
MAJOR BRANDS U.S. CREDIT CARD LOANS
($ credit card loans)
NETWORK 2003 2004 CHNG
VISA $296.9b $302.9b +2.0%
MasterCard $293.2b $293.6b +0.1%
Discover $ 48.4b $ 48.3b -0.2%
American Express $ 38.5b $ 40.1b +4.2%
TOTAL $677.0b $684.9b +1.2%
Source: RAM Research Group’s Bankcard Barometer
NY-based American Bank Note Holographics has posted its highest profits since becoming a public company, with approximately an 80% increase in net income year-over-year. Sales for the fourth quarter of were $5.5 million, compared to sales of $4.8 million for the fourth quarter of 2003. Net income for the fourth quarter was $0.5 million, compared to net income of $0.4 million for 4Q/03. During 2004, ABNH introduced “HoloMag” which incorporates both overt and covert security features into an integrated holographic magnetic stripe. “HoloMag” efficiently uses the space on payment cards, as the magnetic stripe is customized with distinctive holographic images to help support the branding and design objectives of our customers. The Company is currently investing in a state-of-the-art, consolidated, high security operation in Robbinsville, NJ. For complete details on ABNH’s fourth quarter performance, visit CardData ([www.carddata.com]).
Privately-held, TX-based ATM Alliance Corp. and NV-based ATM Management Services Corp. have been shutdown by the SEC for alleged securities fraud. The SEC says the companies, controlled by Michael Gilot, have been aggressively marketing investors for a turnkey ATM investment in which they can expect annual returns of between 30% and 100%. The SEC Complaint alleges that at least $1 million has been raised from several hundred investors nationwide. The Complaint further alleges that the defendants are using a fictitious contract to convince investors that ATM Alliance had secured rights to place ATMs at a major Las Vegas casino. The SEC froze the companies assets two weeks ago. Gilot says that he and his companies deny any wrongdoing and are cooperating with SEC investigators.Details
Axalt announced that the new microelectronics module fabrication operation at its Maryland-based Advanced Card Center production facility has achieved full qualification. The new production line will supply smart card modules and is the first time in the US, smart card production technologies will be integrated into a single production process. Axalto is a provider of microprocessor cards with worldwide sales of 3 billion smart cards to date.Details
Portland, OR-based Corillian is acquiring VA-based InteliData Technologies in a cash-and-stock deal valued at $21.5 million. The combination will create a major bill payment warehouse provider and a top provider of online bill payment technology. The agreement includes 4.9 million shares of Corillian stock and $4.5 million in cash. InteliData, which employs 48, provides online banking and EBPP technology and services to banks, credit unions, financial institution processors and credit card issuers. InteliData reported yesterday that full year revenues for 2004 were $13.7 million, as compared to $20.6 million for the full-year period of 2003. The net losses for 2004 was $33.2 million compared $1.7 million for 2003. The net loss for 2004 included a non-cash, goodwill impairment charge of $25.8 million. Corillian provides online banking and anti-fraud solutions including integrated applications for credit card management. For complete details on InteliData’s and Corillian’s fourth quarter performance, visit CardData ([www.carddata.com]).