Experian-Gallup Personal Credit Index Launched

Experian and The Gallup Organization have teamed to launch the monthly “Personal Credit Index.” The new metric will monitor consumers’ perceptions of their credit status to include four key areas related to credit: level of debt, monthly payment burden, credit rating and debt extension capability. The baseline “PCI” score is 100 and suggests that people are considerably more optimistic about their future credit situation than they are about their current credit situation. The current “PCI” shows an index of 44 among consumers with annual incomes under $40,000 a year, 107 for consumers with incomes from $40,000 to less than $75,000 a year, and 171 for consumers with annual incomes of $75,000 or more. Experian and Gallup also found that three in four consumers have a credit card and 69% report having a fixed interest rate.

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OPC Signs the Oregon Department of Revenue

The Oregon Department of Revenue has signed a credit card acceptance deal with Official Payments Corp., a wholly owned subsidiary of Tier Technologies, Inc. Beginning in early 2005, Oregon taxpayers may make personal income tax payments using a Visa(R), Discover(R) or MasterCard(R) via the Internet or through a voice-activated telephone system. Official Payments provides this service at no cost to the State of Oregon but charges users a convenience fee for the service. Taxpayers using debit or credit cards with bonus rewards programs may, depending on their card’s program, earn reward points, airline frequent flyer miles or cash back for paying their taxes and fees. Official Payments provides electronic payment services for the Internal Revenue Service, 25 states, the District of Columbia and over 1,600 local government clients nationwide. Tier is a leading provider of transaction processing and packaged software and systems integration services for public sector clients.

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ABS Metrics Improve in Jan, Except Yield

Delinquency (60+ days) among card-backed securities dropped again in January to 2.90% and has been down year-over-year for five consecutive months. The monthly payment rate continues to rise, hitting 17.70% in January, a 139 basis point increase over one year ago. Prime charge-offs also improved, dropping 4 bps to 6.25%. Prime charge-offs are now 41 bps below last year. According to the “Fitch Credit Card Index,” yield eroded by 17 bps to 16.64% for January, now six bps below one year ago. Sub-prime credit card ABS also improved in January as charge-offs decreased by 48 bps to 14.46%, well below last year’s metric. Sub-prime delinquency also declined to 7.82%, the lowest level since October 2001.

ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Jan 04: 6.66% 17.03%
Dec 04: 6.29% 14.94%
Jan 05: 6.25% 14.46%
Source: Fitch Ratings

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Federated is Mulling a Card Exit

In a follow-up press conference yesterday, Federated indicated it may unload its credit card portfolio later this year, including the soon-to-be acquired May card portfolio. The potential sale could include as much as $5.5 billion in private label and bank credit card loans. As reported in Monday’s CardFlash, Federated Department Stores and The May Department Stores Company are merging. Both portfolios have experienced a steady erosion in outstandings since 2000. Discounting the Marshall Field acquisition by May, the Federated and May store credit card businesses have fallen nearly 14% and 25%, respectively, compared to 2000. It is expected that Citi, GE and HSBC would consider the acquisition. Citi Commerce, GECF and HSBC now account for over 90% of total third-party issuer receivables in the USA. GE recently expanded its card relationship with Wal-Mart, launching the “Wal-Mart Discover” card. (CF Library 1/14/05; 1/21/05)

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Hypercom Places a Major Order for OTI Readers

Hypercom has ordered its first commercial quantities of New Jersey-based On Track Innovations’ contactless reader solutions. OTI’s system is compliant with MasterCard’s “PayPass” and American Express’ “ExpressPay.” The OTI readers will be integrated into Hypercom’s “Optimum T4100” and “L4100” card payment terminals. Hypercom has already integrated into its solution set OTI’s contactless “Saturn 5000” reader, which offers a plug-and-play retro-fit option to merchants already using Hypercom technology at the point-of-transaction. The combined solution also allows issuers to provide consumers with highly secure contactless cards and key fobs with smart stickers and custom designs, such as new specially equipped watches that feature transaction capabilities.

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Asia Pay Hits Record Volume in January

Seattle-based Asia Payment Systems says that Asia Pay reached a major milestone by processing a total of $6.6 million in net retail transactions during January. The company’s proprietary system processes domestic and international debit cards and credit cards using a combination of advanced technologies and rigorous security procedures. Asia Pay is a USA public company with offices in: Seattle, Washington; Beijing and Shenzhen, China; and Hong Kong.

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HSBC’s Bank Card Portfolio Tops $22B in Q4

HSBC Finance (formerly known as Household International), reported that its VISA and MasterCard portfolio grew 5.1% during the fourth quarter to $22.2 billion. However, charge-offs hit 7.54% in the final three months of last year, compared to 6.92% in the prior quarter, and 7.03% for 4Q/03. About 10 basis points of charge-offs was attributed to the adoption of the new FFIEC rules in December. HSBC’s 60+ day delinquency rate for its VISA/MasterCard segment dropped to 3.98% from 4.44% in the third quarter and 4.16% for 4Q/03. During December, HSBC Finance sold its $15.6 billion private label portfolio to HSBC Bank. HSBC Finance issues the “General Motors MasterCard,” the “Union Privilege” cards, and the sub-prime “Orchard Bank MasterCard.” For complete details on HSBC’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

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

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Sharp Launches a New Restaurant POS System

Sharp has introduced a new POS system for restaurants that offers advanced table management, order tracking, liquor dispensing and an EFT connection without needing to connect a PC. The new “UP-X300” uses a LCD touch-screen and has real-time client/server functionality. The new system is intended for configurations with up to six “UP-X300” terminals. The system can also interface with key hospitality peripherals including Ethernet printers, credit card EFT, scales, kitchen video monitors and barcode scanners. The new Sharp terminal will be available in late April.

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Pipeline Data Processing Adds a New Exec

Atlanta-based Pipeline Data Processing has hired Jeffry Beene, formerly with BPS and Genpass Technologies, as Chief Compliance Officer. In this capacity, Beene will be responsible for all operational risk management functions including security, collection and credit underwriting and brings fifteen years of security experience in the transaction processing industry. Mr. Beene is currently the Vice Chairman of the Electronic Transaction Association’s “ETA” Risk and Fraud Management Committee, and is a founding member of the Merchant Acquirers Committee. Pipeline Data Inc. provides integrated transaction processing services for all major credit cards. The Company offers card processing services in three key areas: wireless mobile payment, e-commerce solutions and retail merchant payment. Pipeline Data currently serves over 15,000 accounts.

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Credit Manager’s Index Posts a Strong Gain

NACM’s “Credit Manager’s Index” for February shows that the manufacturing sector posted its single largest increase since March 2003, while the service sector showed modest growth, compared to January results. The CMI, a monthly survey of the business economy from the standpoint of commercial credit and collections, was launched in January 2003 to provide financial analysts with another strong economic indicator. The CMI survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 business credit and financial professionals worldwide with industry services, tools and information.

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TNS Expands into Japanese Retail POS

Transaction Network Services has expanded into the Japanese retail POS transactions market with a five-year deal with Japan Card Network. TNS will transport dial-up transactions from terminals in retail outlets, enabling CARDNET to accommodate expanding credit and debit card transaction volumes. The transactions will be transported from CARDNET terminals across Japan to CARDNET’s server at its headquarters in Tokyo. TNS’ secure and private network will route transactions that CARDNET’s network currently cannot process. CARDNET was formed in 1995 by the major Japanese credit card organizations as a credit card authorization data service providing support and services for credit card companies and member stores.

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