Consumers Sitting on $9B in Gift Card Value

A new study has found that consumers are holding $9 billion in unredeemed value on gift cards received during the holidays. The research also found that gift cards generated about $18 billion in retail sales during December and January. According to the report by Deloitte & Touche, adults received 3.2 gift cards during the holiday season just ended, compared to 2.5 one-year ago. This year’s 3.2 cards had a total face value of $142.98. More than six out of ten gift cards received by adults had been fully or partially redeemed by the end of January. General purpose, or bank-issued gift cards, were the type most likely to have been used by the end of January. Nearly three-quarters of these cards have already been fully or partially redeemed. Deloitte & Touche said that if consumers continue to spend unredeemed cards in a similar fashion as they did in December and January — that is, some consumers purchase more than the face value of their cards — then the unredeemed gift cards of $9 billion could have the potential to add as much as $13 billion to retail sales.

GIFT CARD TYPE RECEIVED
Store: 80%
Restaurant: 33%
Mall: 14%
General Purpose: 10%
Personal Service: 5%
Internet Site: 5%
Source: Deloitte & Touche

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ECHO’s Revenue Rises 11% in 4Q/04

Electronic Clearing House reported that revenues for the fourth quarter increased 11.1% to $12.8 million. Bankcard and transaction processing revenue increased 4.9% to $9.2 million, compared to one-year ago. The increase was primarily due to the organic growth in bankcard processing volume from ECHO’s existing and new merchants. Gross margins from processing and transaction revenue was 35.4% for the quarter, as compared to 38.5% for the same period last year. Check-related revenue increased 31.0% to $3.6 million with continued success in the “Visa POS Check” program. For complete details on ECHO’s latest performance visit CardData ([www.carddata.com][1]).

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

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Top 5 Charge-Offs Decline 25 BPS in 2004

Average charge-offs, net of recoveries, declined 25 basis points last year, for the top five issuers with aggregate managed U.S. credit card outstandings of $444 billion. Charge-offs peaked in the second quarter at 5.60%, dipped to 5.06% in the third quarter, before ending the year at 5.22%. Bank of America was the only top five issuer to post an uptick in charge-offs between 4Q/03 and 4Q/04. BofA’s charge-offs for fourth quarter of 2004 were 5.90%, compared to 5.14% one-year ago. The largest improvement was reported by Citibank where charge-offs fell 58 bps to 5.59%. MBNA and Chase posted a 54 bps and 52 bps improvement, respectively, during 2004, while Capital One knocked 30 bps off its average charge-offs. For complete details on delinquency and charge-offs by the top ten issuers visit CardData ([www.carddata.com][1]).

TOP FIVE CHARGE-OFF HISTORICAL
4Q/03: 5.47%
1Q/04: 5.57%
2Q/04: 5.60%
3Q/04: 5.06%
4Q/04: 5.22%
Source: CardData (www.carddata.com)

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

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Over-Limit Fees Increased 3.8% in 2004

The growth in fees for exceeding the credit limit slowed down last year as the average crossed the $30 milestone. However, more top issuers, such as MBNA and Chase, are now charging fees for exceeding the credit limit at any time during the billing cycle instead of just the billing cycle closing data. During 2004, the average over-limit fee increased 3.8%, compared to 4.8% in 2003, and 32.3% in 1997. Between 1994 and 1999, over-limit fees grew 96%, from $12.75 to $24.96. During 2004, the most common over-limit fee among major issuers was $35, although some issuers charge $39 for accounts with higher balances.

OVER-LIMIT FEE HISTORICAL
Year Average Y/Y CNHG
1994: $12.75 +2.6%
1995: $13.20 +3.5%
1996: $13.94 +5.6%
1997: $18.44 +32.3%
1998: $21.14 +14.4%
1999: $24.96 +18.1%
2000: $25.99 + 4.1%
2001: $26.88 + 3.4%
2002: $27.89 + 3.8%
2003: $29.23 + 4.8%
2004: $30.35 + 3.8%
Source: CardData (www.carddata.com)

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MicroBilt to Offer FICO Expansion

MicroBilt has signed a deal to become the first reseller of Fair Isaac’s “FICO Expansion” score to the financial services industry. FICO Expansion score taps non-traditional sources of consumer data to help lenders assess credit risk for the estimated 50 million U.S. adults who cannot receive a traditional FICO score because they have little or no credit history on file at traditional credit bureaus. MicroBilt, a division of Bristol Investments, Ltd., is the leader in credit bureau data access and retrieval, providing credit, collection and data sources. Fair Isaac Corporation (NYSE:FIC) is the preeminent provider of creative analytics that unlock value for people, businesses and industries.

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Dresser Wayne Gets a New N.A. President

TX-based Dresser has promoted Neil Thomas to President of Dresser Wayne — North America. Prior to joining Dresser Wayne, Mr. Thomas held the position of Vice President Marketing and Strategy for Tokheim Corporation. He also spent several years consulting to companies in the retail petroleum and energy industries with the consulting firm of Arthur D. Little and before that worked for Gulf Oil/Chevron Corporation in various Sales and Marketing management positions. Dresser Wayne is a technology leader in the manufacture, supply and service of retail and fleet petroleum fuel dispensers, dispenser control systems, credit/debit card processing terminals, and point-of-sale systems.

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CreditXpert Detective Launched for Consumers

MD-based CreditXpert has launched “CreditXpert Detective” which scans an individual’s credit data to reveal potential inaccuracies and recommend specific updates that will most significantly improve the person’s credit score. By putting expert knowledge and analytical intelligence at the fingertips of loan officers and consumers, CreditXpert Detective saves time and improves success rates. Identifying inaccurate, outdated, or missing information and determining the correct value is complicated and time consuming. CreditXpert Inc. provides highly personalized credit management tools to help lenders more effectively originate loans and manage customer relationships, and to help consumers understand, manage, and improve their credit and the credit decision process.

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SputnikNet Offers Card & PayPal Options

Wi-Fi specialist Sputnik has introduced “SputnikNet Premier”, a hosted wireless network management service that can accept online payments for wireless Internet service through credit card billing and PayPal. The SputnikNet Premier PayPal feature enables any network user with an email address to pay securely for wireless Internet service. Operators choose their own rate plans; Sputnik charges no transaction fee for PayPal purchases. Sputnik Inc. is a leading provider of software that allows wireless service providers to manage Wi-Fi networks over the Internet.

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PayPal Aims for Small-to-Medium Biz in 05

eBay said yesterday that its PayPal unit plans to expand its share of the small-to-medium business market this year, and in 2006 to turn its attention to the large merchant segment. PayPal will use new merchant tools, brand positioning, and broadened distribution channels to drive growth in these two new segments. The company also outlined its strategy to continue to add localized sites for in-country payments, grow the adoption of PayPal in those localized markets, and use PayPal as a driver to expand its global network by enabling cross-border trade. PayPal currently has localized sites in 10 countries outside the USA. PayPal now has 64 million user accounts. Nine percent of all consumer e-commerce in the USA, and 5% globally, went through PayPal last year. For complete details on eBay/PayPal current and past performance visit CardData ([www.carddata.com][1]).

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

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MasterCard to Launch Global SMS Alerts

mBlox, a mobile messaging transmission and billing specialist, has teamed with MasterCard to launch the first global fraud detection and alerting system using the “Short Message Service.” The product integrates mBloxâ™s mobile messaging service with MasterCard’s “Aristion” fraud prevention tool and will be offered first in Europe. Throughout 2005, MasterCard will be extending the service to Asia Pacific, SAMEA and later to North America. The product should start to impact consumers in the latter half of 2005. Cardholders will have easy access to the solution after a simple registration process. In the case where a high risk transaction is identified, cardholders will immediately receive an SMS to verify their transaction. If the cardholder believes a fraudulent transaction has been committed, the bank can be notified to block further activity.

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First Global Mobile Fraud Detection Solution Launched

mBlox, a mobile messaging transmission and billing specialist, has teamed with MasterCard to launch the first global fraud detection
and alerting system using SMS. The product integrates mBlox’s mobile messaging service with MasterCard’s “Aristion” fraud prevention tool and will be offered first in Europe. Throughout 2005, MasterCard will be extending the service to Asia Pacific, SAMEA and later to North America. The product should start to impact consumers in the latter half of 2005. Cardholders will have easy access to the solution after a simple registration process. In the case where a high risk transaction is identified, cardholders will immediately receive an SMS to verify their transaction. If the cardholder believes a fraudulent transaction has been committed, the bank can be notified to block further activity.

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