Morgan Stanley reported that credit card outstandings for its British MasterCards approached a record $2.6 billion at the end of the fourth quarter, a 16% increase over the year ago quarter. The number of accounts for its “Classic,” “Gold,” “Platinum,” and “buy & fly!” cards rose 18% to 1.3 million, compared to one-year ago. At the end of the quarter, Morgan Stanley, which issues the Discover card in the USA, posted $2.571 billion in managed card loans, compared to $2.216 billion for the fourth quarter of 2003. Compared to the prior quarter, card loans jumped 10%. During the second half of 2004, Morgan Stanley added the “buy and fly! MasterCard” which earns one point for every GBP10 of purchases with bonus points earned for purchases made at participating U.K. retail merchant partners. Points can be redeemed for travel on 17 airlines. MS introduced its first credit card in the U.K. in 1999. For complete details on Morgan Stanley’s latest performance visit CardData (www.carddata.com).Details
Metris plans to make its third prepayment of corporate debt of the past three months, paying $50 million on senior notes on February 24th. This is the third prepayment of corporate debt Metris has announced in the past three months. The Company made a $50 million prepayment on November 23, 2004, and a $25 million prepayment on December 22, 2004 of its senior secured credit agreement maturing in 2007. Metris Companies Inc., based in Minnetonka, Minn., is one of the largest bankcard issuers in the United States. The company issues credit cards through Direct Merchants Credit Card Bank, N.A., a wholly owned subsidiary headquartered in Phoenix, Ariz.Details
Oberthur Card Systems has rolled-out the first fully functional
128Mbyte USIM card empowered by M-Systems’ “MegaSIM” technology. The new
“GIGAntIC” card increases the memory capacity by one thousand and the communication speed far and beyond any current industry performance, compared to current USIM cards. Fundamentally, the “MegaSIM” empowered “GIGAntIC” card’s secure large flash memory enables operators to offer considerably more revenue-generating services, with advanced crypto-functionality for digital content protection — allowing storage and secured access to MP3 files, Java Games, video clips, pictures and personal settings. The cards will be available from Oberthur Card Systems starting with the second half of 2005.
Diebold reported that ATM sales in the fourth quarter rose 14.5% to $281.3 million (or up 12% on a fixed exchange-rate basis). ATM services revenues climbed 10.5% to $247.4 million (or up 8% on a fixed exchange-rate basis). During the quarter, Diebold had total “Opteva” ATM orders of approximately $100 million. Orders totaling $8.6 million for “Opteva” and other self-service equipment came from three financial institutions in Western Europe. There were three “Opteva” orders in Latin America totaling $4.6 million, a major order for “Opteva” in Southeast Asia totaling $4.3 million, and an order for “Opteva” in Eastern Europe for $3.3 million. Other financial self-service orders came from four major banks in China totaling $36.7 million and three banks in Latin America totaling $15.1 million. Diebold expects financial self-service revenue growth of 8% to 10% (fixed exchange-rate basis) for 2005. For complete details on Diebold’s fourth quarter performance, visit CardData ([www.carddata.com]).
Four smart card manufacturers have teamed to form a non-profit association dedicated to fostering and facilitating the usage of smart cards to make payments. The Smart Payment Alliance was created by Axalto, Gemplus, Giesecke & Devrient, and Oberthur Card Systems. The strategy of SPA is to position itself as a partner of EMVCo
and to bolster VISA and MasterCard actions on EMV specifications and
their implementation. The SPA will also devise joint industry specifications for value-added applications, which is not covered by the payment associations. The four manufacturers also encouraged card vendors, terminal vendors, and payment associations to join the association.
Lipman has received a $2.5 million order for its “NURIT 8320” desktop POS terminal from United Bank Card. Lipman is a manufacturer and designer of advanced wireless and tel-line point-of-sale (POS) terminals and cash registers, betting and home services terminals, thermal and impact printers, PIN pads, smart-card readers, coin-operated or credit/debit/smart card controllers for integration into vending machine, commercial washer/dryer payment systems and numerous other card-type payment applications. United Bank Card, Inc. (UBC) is a payment and transaction processor serving businesses nationwide.Details
The FTC announced a $106 million judgment has been entered against the Assail Telemarketing Network which sold hundreds of thousands of fraudulent advance-fee credit card packages. The Assail Telemarketing Network engaged in more than $100 million in deceptive telemarketing sales, including the sale of hundreds of thousands of fraudulent advance-fee credit card packages using names such as Advantage Capital, Capital First, and Premier One. The settlements with Assail officers Dunn, Best, and Henriksen contain a suspended $30 million judgment, which would be payable in full if the court finds that they have made any material misrepresentations on sworn financial statements submitted to the FTC. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.Details
Advanta posted a 14% increase in net income for its business cards during the fourth quarter, compared to the year ago period. However, full year net income was up 33%. The current quarter’s earnings of $13.2 million reflect a 127 basis point decline in net charge-offs on managed business credit card receivables. Managed charge-offs for 4Q/04 dipped to 6.04% on an annualized basis, as compared to 7.31% for 4Q/03. During the third quarter, Advanta’s charge-off rate was 6.48%. Over 30-day delinquencies on managed business credit card receivables declined 170 basis points to 4.12%, and over 90-day delinquencies decreased 94 basis points to 1.99%, each as compared to 4Q/03. In the prior quarter, Advanta’s over 30-day delinquency rate was 4.42% and the over 90-day delinquency rate was 2.13%. Managed card loans at the end of the fourth quarter were $3,294,630,000 compared to $2,981,787,000 one-year ago. Charge volume was $2,214,215,000 for 4Q/04 compared to $1,944,617,000 for 4Q/03. For complete details on Advanta’s fourth quarter performance, visit CardData ([www.carddata.com]).
ADVANTA’S CARD PORTFOLIO SNAPSHOT
Period Card Loans
4Q/03: $2.98 billion
1Q/04: $3.08 billion
2Q/04: $3.12 billion
3Q/04: $3.22 billion
4Q/04: $3.29 billion
Source: CardData (www.carddata.com)
eFunds made several organizational changes including the formation of a new business unit. Jack Benton, previously head of eFunds’ International Division, will now lead a newly-formed Solutions Group which will focus on the structuring of significant commercial transactions and large-scale project management. The Solutions Group will continue developing eFunds’ “Enterprise Account Management” initiative, manage key strategic relationships such as the Company’s alliance with MasterCard International and oversee the development of eFunds’ consulting activities. Kathleen Flanagan, the former head of the Company’s Global Outsourcing Group, is being promoted to lead a consolidated Global Services Group responsible for Global Outsourcing, ATM Managed Services and the expansion of eFunds’ international business. eFunds also announced that George Gresham will be promoted to SVP/CFO, effective April 1st, following the planned retirement of Thomas Liston.Details
American Express Travel Related Services reported fourth quarter net income of $729 million, compared to $726 million in the previous quarter, and $606 million one-year ago. Nearly two million cards were added in the fourth quarter, boosting total U.S. cards to 39.9 million, about a 10% gain over one-year ago. The increase was driven by the introduction of the “MBNA American Express” card. AmEx says it is pleased with the quality of the accounts coming from MBNA. Charge volume for 4Q/04 in the U.S. increased 15% year-over-year, compared to 14% for the prior quarter. AmEx says record cardholder spending contributed to a 16% increase in discount revenue. Total expenses increased 10% while marketing, promotion, rewards and cardholder services expenses increased 24%. AmEx says the growth in rewards costs is attributable to a higher redemption rate, strong volume growth and the continued increase in cardholder loyalty program participation. The increase in marketing and promotion expenses is primarily due to the company’s new brand advertising campaign. For complete details on AmEx’s fourth quarter performance as well as prior quarters, visit CardData ([www.carddata.com]).
American Express U.S. Card Portfolio Snapshot
4Q/04 3Q/04 2Q/04 1Q/04 4Q/03 Ann Chng
Volume $83.4b 75.6b 75.7b 70.1b 72.3b +15.4%
Cards 39.9m 38.0m 37.4m 37.0m 36.4m + 9.6%
Source: CardData (www.carddata.com)
WA-based HIMC Corporation has launched “MedCoPay,” an electronic payment service which enables medical professionals to seamlessly process the co-payments for office visits or medical prescriptions. MedCoPay(TM) interfaces with the medical billing software used by a wide range of healthcare organizations and inexpensively transfers the co-pay amount directly from the patients’ bank account into the medical office’s bank account through the automated clearing house (ACH) network. Through MedCoPay(TM)’s technology, patients are authenticated using the company’s PersonaGUARD(R) biometric finger scanning hardware and software, which is included in the offering. HIMC Corporation (“HIMC”), through its wholly-owned subsidiary ITI Internet Services Inc. (“ITI”), has been a leading provider of payment services to over 25,000 customers.Details
MBNA’s international loans increased 26% in the fourth quarter to $26.2 billion, compared to one-year ago. However, credit cards, consumer loans and business loans outside the USA rose by $1.6 billion in the fourth quarter due to the weakening of the U.S. dollar against foreign currencies. In Europe, MBNA’s total managed loans reached $22.5 billion, a 31% increase from the fourth quarter of 2003. MBNA added approximately 610,000 new accounts in Europe during the fourth quarter. MBNA Europe also added 166 new affinity programs during the year. In the fourth quarter MBNA Europe signed the University of St. Andrews. In Canada, total managed loans were up 4% to $3.8 billion. MBNA added approximately 97,000 new accounts during 4Q/04. MBNA Canada also added 34 new affinity programs during 2004. In the fourth quarter MBNA Canada signed Harley Davidson.Details