MasterCard Offers Fee Free Tax Payments

MasterCard International is now offering “Debit MasterCard” cardholders the option of paying their Federal Tax Year 2004 Form 1040 balance-due payment online without incurring a convenience fee. The new option is being offered in conjunction with H&R Block and Link2Gov. MasterCard has been part of the federal tax card acceptance program since its introduction in 1999. This is the first time MasterCard has offered the convenience fee-free option for tax payments. Last year, taxpayers paid nearly $200 million in federal tax obligations with MasterCard cards. Nashville-based Link2Gov provides online payment processing for many U.S. government agencies.

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Plug & Pay Completes Level 3 P-Card Certification

Plug & Pay Technologies has completed “Purchasing Card Level 3” certification on the Paymentech Tampa credit card processing platform. Plug’n Pay Technologies, Inc.,is a provider of payment and digital fulfillment solutions for Internet merchants. Plug’n Pay’s payment systems allow merchants to accept and manage both credit card and electronic check payments in a secure environment. Plug’n Pay’s digital fulfillment systems allow merchants to offer digital goods for real-time fulfillment and to manage and maintain online membership and recurring billing services.

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Wright Express Adds Online Payment to WEXOnline

Maine-based Wright Express has added an online payment feature for the company’s private label and co-brand partners as well as fleets using its “Wright Express Universal Card” that eliminates the cost of cutting and mailing a check and provides fleet managers a high degree of integration between invoice, payment, account maintenance and other functions. Wright Express is a provider of payment processing and information management services to the U.S. commercial and government vehicle fleet industry. Wright Express provides these services for over 280,000 commercial and government fleets containing more than 3.9 million vehicles and markets these services directly as well as through 83 strategic relationships.

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Encore Card Services Signs 4 D.C. FCUs

Massachusetts-based Encore Card Services & Merchant Services has recently signed four credit unions in Washington, DC including the AFL-CIO Employees FCU; Department of Labor FCU; General Services Administration FCU and the Transit FCU. Encore ® Card Services offers credit unions full service MasterCard or Visa credit card issuing and processing solutions. Encore ® Merchant Services is a division of Primax Payment Systems, currently has over 5,000 merchants located in 48 states. Encore ® Merchant Services targets new business through credit unions to offer full service credit and debit card acceptance services to credit union member businesses nationwide and offers check guarantee, electronic check conversion, Internet processing solutions, and private label card support. Full service help desk support is also provided as well as point-of-sale equipment and supplies.

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Comdata Launches Merchant Bank Card Processing

Comdata has closed its acquisition of Illinois-based Tranvia, a merchant processor for credit, debit, pre-paid and e-commerce activities. Tranvia currently serves a range of merchants nationally and is also a direct provider of processing services to financial institutions, independent sales organizations, and providers of stored value payment products for educational institutions. Comdata provides credit and debit processing and reporting for commercial fleets and merchants, electronic cash, gift and smart/chip card programs for retailers and governmental agencies, Comchek eCash payroll services for food, retail and other service industries, and point-of-sale equipment, software and auxiliary services for merchants and convenience stores.

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MasterCard Profits Up 187% 04 to $238MM

MasterCard reported a profit for full-year 2004 of $238 million, compared to a net loss of $386 million for 2003. However, fourth quarter profits came in at $1.27 million due to a huge increase in advertising and market development expenses. For the full-year, advertising and market development expenses were only up 8% over 2003 to $915.8 million. MasterCard noted that it spent $192 million last year as part of a four-year plan to build brand recognition worldwide. The 2003 loss was related to the settlement of the U.S. merchant lawsuit, which unfavorably impacted 2003 net income by $469 million. Operating expenses as a percentage of total revenue were reduced to 86% from 93% in 2003, excluding the impact of the U.S. merchant lawsuit and other legal settlements, resulting from an emphasis on cost control and streamlining of operations. For complete details on MasterCard fourth quarter performance, visit CardData ([www.carddata.com][1]).

MASTERCARD 2004 HISTORICAL ($ millions)
1Q/04 2Q/04 3Q/04 4Q/04
G&A: $276.8 $284.6 $284.9 $338.7
A&M: $167.5 $228.8 $190.1 $329.5
Net Income: $ 73.6 $ 65.7 $ 97.5 $ 1.3
Note: G&A: General & Administrative Expenses; A&M:
Advertising & Market Development Expenses.
Source: CardData (www.carddata.com)

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

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Hypercom Revenues Rise 26% in 4Q/04

Phoenix-based Hypercom reported that fourth quarter revenue rose 26% to $79.7 million compared to one year ago. Fourth quarter income before discontinued operations was $4.5 million, compared to $2.8 million or $0.05 per diluted share for the prior year. The Company closed the quarter with a sales backlog of $35.4 million versus $49.5 million as of September 30th and $57.0 million as of December 31, 2003. During the fourth quarter, Hypercom introduced a contactless version of the “L4100” terminal; joined the VISA “Smart Breakthrough Acceptance Device” program; signed a $4 million terminal contract with European processor euroConex and landed its largest order ever in the Middle East market with its distributor Alhamrani Universal for “ICE 5500Plus” terminals to be delivered to some of Saudi Arabia’s largest banks. For the full year, revenue increased more than 10% to $255.2 million. However, the Company posted a full year loss before discontinued operations of $8.7 million, compared to net income, before discontinued operations of $4.0 million in 2003. The loss was largely attributed to a second quarter reserve of $11.3 million related to the uncertainty of future payments from the Brazilian Health Ministry. For complete details on Hypercom’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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JAN 05

Credit card outstandings dipped seasonally to GBP 54.1 billion during January, but remained up about 4% over one year ago. Total net lending to consumers for January was GBP 183.6 billion. Overall, consumer credit grew by GBP 2.3 billion or 1.3% in January, seasonally adjusted, GBP 0.7 billion stronger than the increase in December. The three-month (annualized) growth rate rose to 12.3% from 10.5% in December and the twelve-month growth rate rose to 12.6% from 12.5%. Gross advances were GBP 18.7 billion, GBP 0.4 billion stronger than the average in the three months to December. The Monetary Policy Committee of the Bank of England decided February 10th to maintain its benchmark interest rate at 4.75%.

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Walgreens Gift Card Adds a Distributor

Chicago-based SVM has signed an agreement to market and distribute the “Walgreens Gift Card” for promotional and incentive programs nationwide. Walgreens launched its gift card for sale at its drugstores in 1998. SVM issues, markets, distributes and services cash card programs for over 70 major retailers and oil companies; SVM is also one of the fastest-growing privately held companies in the United States. Walgreen Co. is the nation’s largest drugstore chain with fiscal 2004 sales of $37.5 billion. Based in Illinois, Walgreens operates 4,714 stores in 44 states and Puerto Rico, and plans to open approximately 450 new stores nationwide in 2005. In addition, Walgreens provides services to pharmacy patients and prescription drug plans.

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PVN Lowers Estimates for Accounting Adjustments

Providian lowered its estimate regarding the impact of adjustments to the value of interest-only strips recorded in connection with securitized receivables by $37 million for last year. The company will also be revising prior year amounts, which results in a cumulative impact on net income for years 1999 through 2003 estimated to be $29 million. The changes announced today are based on Providian’s recent review with its external auditors of its accounting for securitizations, specifically interest-only strips. The focus has been on a series of changes to the interest-only strip valuation methodologies that were adopted in 2001 and 2002 as part of a larger effort to refine its forecasting and estimation processes following the credit deterioration experienced at that time. San Francisco-based Providian Financial is a leading provider of credit cards to mainstream American customers throughout the U.S.

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Trilegiant Targets Gen Y with New Services

Virginia-based credit card enhancement specialist, Trilegiant Loyalty Solutions, has introduced a new suite of products designed for the 74 million pre-teen through college-age market. The new services for “Generation Y” include a “Music/Movie Incentive,” “Cell Insure,” “Burglary Protection,” “Buyers Appreciation” and more. The “Music/Movie Incentive” offers certificates for hot CD or DVD releases. “Cell Insure” provides insurance protection for lost, stolen or damaged cell phones. The “Burglary Protection” offers protection in the event of a burglary while staying in a hotel. “Buyers Appreciation” enables young adults to extend the manufacturer’s warranty on retail credit or debit purchases for up to an additional year for warranties of one year or less and provides 90-day insurance protection against lost, stolen or damaged items. Other Trilegiant “Gen Y” services include: “Rewards Cash,” “AutoVantage,” “Trip Assurance,” and “Legal Assistant.”

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