Federated and May Merger Creates a $4B Portfolio

The $11 billion merger of Federated Department Stores and The May Department Stores Company will create a private label credit card portfolio with more than $4 billion in outstandings, more than double the #2 ranked portfolio. Over the past four years, the Federated and May store credit card businesses have fallen 13.5% and 24.7%, respectively. However, the May portfolio picked up $600 million in outstandings last year with its acquisition of the Marshall Fields portfolio from Target during 2004. The Marshall Fields acquisition effectively wiped out the organic loss in the May private label portfolio. Federated is currently in the midst of its largest credit-mailing program ever with more than 14 million new Macy’s credit cards being issued with the “Star Rewards” loyalty program. Federated also has about $925 million in bank credit card outstandings through its FDS National Bank. (CF Library 11/12/04; 1/6/05)

STORE CARD HISTORICAL
Year Federated May
2000: $2.44b $2.19b
2001: $2.38b $2.09b
2002: $2.23b $1.76b
2003: $2.25b $1.71b
2004: $2.11b $2.25b
Source: CardData Diamond (www.carddata.com)

Details

PDS Enters the Telecommunications Industry

Texas-based Payment Data Systems has signed a multi-year agreement with NII Communications, its first entry into the telecommunications industry. PDS products include IPS*CSRView, a web based application which allows customer service reps to accept and enter ACH or credit card payments taken from their customer over the telephone, IPS*Re-Debit Express, a process for handling and recovering NSF checks and electronic returns, IPS*Credit Card Gateway, a web-based application which allows for uploading/processing and reporting of batch-loaded recurring credit card payments. The anticipated initial transactional value of the agreement is approximately $12 million per year based on current volumes. Payment Data Systems,Inc.,is an Integrated Payments Solution Provider for the processing and management of electronic payments via the Internet, point of sale, or payments taken by Customer Service Representatives or an Interactive Voice Response (IVR). PDS is the owner of the electronic bill payment portal, http://www.bills.com. providing transmittal of electronic payments to thousands of national billers. NII Communications, Ltd.,is a UNE-P CLEC offering local exchange, long distance and internet access services to small and medium business customers, residential subscribers and private payphone service providers throughout the South and West, representing over 73,000 access lines.

Details

RewardsNOW Nabs Heatherington as Chairman

New Hampshire-based RewardsNOW has named Gary Heatherington, former CEO at Cyota and seven-year veteran of MasterCard, as Chairman. Duane Kimball, president of RewardsNOW, said he looks for strong leadership from Heatherington as the company moves aggressively into loyalty program innovations. RewardsNOW is a premier provider of marketing services for the financial industry.

Details

OTI’s EasyPark Tops 160,000 Subscribers

On Track Innovations reports that its “EasyPark” parking payment system has reached more than 166,000 subscribers in 25 cities in Israel. OTI says about 5,000 new “EasyPark” devices are being sold monthly, with 60,000 new “EasyPark” devices sold in 2004, an increase of 82% over the 33,000 devices sold in 2003. Transaction fees from “EasyPark” in 2004 were $325,000, up 78% from $183,000 collected in 2003. With “EasyPark,” drivers park their car, turn on the contactless in-vehicle parking device and display it in their window; when they return to the car, they simply turn off the device.

Details

U.S. Bank and Boston University Launch a Card

U.S. Bank and Boston University have launched a new affinity credit card for the University’s 300,000 alumni, parents and friends. The new Boston University card rewards users with points, low rates and will help fund alumni, student and athletic programs. Boston University is the fourth-largest independent university in the United States, with an enrollment of more than 29,000 students. U.S. Bancorp, with assets of $195 billion, is the 6th largest financial services holding company in the United States.

Details

Exxon-Mobil SpeedPass Renews First Data

The Speedpass Network, a venture of Exxon Mobil, has renewed its relationship with First Data for customer processing services. First Data will continue to provide behind-the-scenes database processing that gives Speedpass Network customers flexibility to manage their accounts and will also provide Speedpass Network with Web hosting services. First Data Corp with global headquarters in Denver, serves approximately 4.1 million merchant locations, 1,400 card issuers and millions of consumers. Speedpass is a touchless payment system that allows customers to make purchases fast, simply and conveniently by linking to a credit or check card of their choice.

Details

VISA Officially Approved in Vietnam

The State Bank of Vietnam has presented VISA International with a license to set up a representative office in the country. Since the first merchant in Vietnam began accepting VISA cards in 1991, annual transaction volume by VISA cardholders visiting the country has grown to reach US$237 million in 2004. The total number of Visa credit and debit cards issued in Vietnam reached 62,000 in the same year, generating US$72 million in transaction volume – a 78% increase over 2003. VISA has launched various initiatives in the last six months to help expand electronic payments in Vietnam.

Details

Tesco Deploys FastLane Self-Checkout

Tesco has installed 285 NCR “FastLane” self-checkout units in 96 UK
stores, the largest deployment of self-checkout in Europe to date.
Self-checkout, which enables shoppers to scan, bag and pay for their
purchases themselves, is being used in Tesco’s Metro (compact stores
located in busy areas), Superstore and Extra (hypermarkets) locations in
England, Wales, Scotland and Northern Ireland.

Details

VISA to Offer Contactless Payments in the USA

While smart cards continue to languish in the USA, the use of contactless payment technology appears to be on the verge of exploding. The new technology got a major boost yesterday as VISA confirmed its contactless payment platform is now operationally ready for the U.S. market. The announcement follows on the heels of the national introduction of the “VISA Wave” card in Malaysia two weeks ago. VISA International launched the “VISA Wave” pilot in April 2004. “VISA Wave” is the first commercial implementation of a contactless smart card program built on the EMV standard. VISA’s decision to offer the technology in the U.S. follows contactless deployments by MasterCard and American Express. MasterCard launched its “PayPass” pilot in Orlando during January 2003. In August of last year, McDonald’s inked a deal to accept MasterCard “PayPass” nationwide. MasterCard has since signed up the Pennsylvania-based Sheetz convenience store chain, Seattle Seahawks, and the Baltimore Ravens football clubs for “PayPass” deployments. American Express first piloted its “ExpressPay” program in early 2003 in Phoenix. In December 2004, AmEx inked a deal with the CVS pharmacy chain for a full roll-out of “ExpressPay” for 5,300 stores by mid-year. While MasterCard recently introduced a new logo for “PayPass,” VISA USA has opted for a brand-neutral contactless indicator. (CF Library 5-14-03; 7-17-03; 12-16-04; 1-4-05; 2-22-05)

Details

Pipeline Data Acquires Two ISO Portfolios

Pipeline Data has signed deals to acquire two merchant portfolios totaling 1,500 accounts from ISOs. The portfolios will be purchased with a combination of cash and stock. The Company says the 1,500 accounts represent $142 million in annual consumer charge volume. Operating income is anticipated to be approximately $70,000 monthly. The acquisition will bring Pipeline’s customer base to more than 15,000 accounts. Pipeline reported revenues of $11.1 million for the first nine months of 2004, compared to $7.3 million one-year ago. The Company will release its 2004 year-end report on March 15th. (CF Library 11-17-04)

Details

Pago Moves its Focus to Credit Cards

Cologne-based Pago is putting the credit card at the center of its payment and risk management service portfolio. The change has been driven by the findings of a 2004 Pago study which concluded that the credit card is the No. 1 payment method in global E-commerce. Pago is both an acquirer and a provider offering a wide range of services to enhance credit card transactions.

Details