BioPay Sues Pay By Touch

VA-based BioPay has filed suit against San Francisco-based Pay By Touch over the use of biometric technology in point-of-sale transactions. BioPay said it asked the court to declare patents held by Pay By Touch to be invalid and also asks the court to declare that BioPay has not infringed on Pay By Touch’s patents. BioPay has 29 patents pending covering biometric technology. The Company says more than 1.5 million consumers are enrolled in its “Paycheck Secure” service.

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DRFS Expands Card Load Locations to 10K

Los Angeles-based Direct Response Financial Services has entered into an agreement with Express Payment Solutions/Optimum Pay USA to enable cardholders to load their prepaid MasterCards at four banks with over 10,000 bank branches nationwide. Direct Response Financial Services’ debit cardholders may load their debit cards at any participating bank using a custom-printed deposit slip which allows for electronic tracking of deposits to the debit card account and automatic transfer from the depositing bank to the issuing bank. Optimum Pay, Inc. was founded on the principle of offering a simpler, less-expensive alternative to traditional payment process methods such as paper invoices, credit cards, checks and cash. Direct Response Financial Services, Inc. is a provider of payment card systems including a variety of branded and co-branded stored value cards (i.e., prepaid debit cards).

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Biz & Personal Credit Scores are Related

A survey shows that small business owners possess unique credit characteristics that set them apart from the rest of the consumer population. According to the Experian survey, small business owners have a 21% higher income than the general population, and are more likely to reside in higher-value homes. And, there is a significant positive correlation between the consumer credit score and the commercial credit score. Thus, positive changes in one score frequently are associated with positive changes in the other score. Conversely, negative changes in one score frequently are associated with negative changes in the other score.

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CITI INTL 4Q/04

Citigroup reported that its international card business produced fourth quarter net income of $251 million, more than double the year-ago quarter, largely driven by the performance in the EMEA region. During the final quarter of 2004, Citi posted a 22% gain in card loans, and a 31% increase in sales volume. For the full year, Citi’s profits for its international card business were up 53%, from $498 million to $761 million. Credit card loans at the end of 2004 stood at $17.9 billion, compared to $14.7 billion one-year ago. Charge volume for the fourth quarter was $15.3 billion, compared to $11.7 billion for 4Q/03. The account base was flat at 20.8 million accounts compared to the previous quarter, but up 32% compared to year end 2003. In Japan, average credit card loans were up 7% sequentially, and 12% year-over-year. In the rest of Asia, credit card loans grew 33% to $9.3 billion. Citigroup holds $5.8 billion in card loans for the EMEA region and $600 million in Latin America, which grew 12% and 20%, respectively. Charge-offs dropped sharply during the fourth quarter as delinquency remained flat for international cards, compared to the previous quarter. Delinquency (90+ days) remained at 1.55% for 4Q/04. Charge-offs decreased from 5.08% in 3Q/04 to 3.89% for the fourth quarter. For complete detail’s on Citigroup’s international cards performance, visit CardData (www.carddata.com).

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Hispanics Targeted for the VISA Debit Card

VISA USA is targeting Hispanics for its offline debit card. VISA’s research showed that more than 30% of Hispanics carrying a offline debit card cited the “VISA Check Card” as the first payment card they were ever issued in their own name. The new VISA marketing campaign features Spanish-language national and local television, print and radio advertisements promoting the security and convenience of the “VISA Check Card” over cash and checks. The advertising campaign, created by Lopez Negrete of Houston, features “VISA Check Card” users who remind their family and friends of the convenience of using the card over cash and checks. The TV commercials will air on Telemundo, Univision, Telefutura, Galavisión, TV Azteca, Fox en Español, ESPN Deportes, and GolTV this month. Radio spots are airing in 10 key Hispanic markets, including Los Angeles, New York, Miami, San Antonio, Dallas/Fort Worth, San Francisco, Chicago, Houston, Albuquerque and Phoenix. The print ads will start appearing in spring 2005 in Spanish-language long-lead entertainment, lifestyle and parenting publications.

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Wells Fargo Credit Card Loans Rise 18%

Wells Fargo Card Services and Wells Fargo Financial Bank reported fourth quarter outstandings of $8,850,037,868, a 17.8% increase over the same period one-year ago. Fourth quarter card volume rose 28% for Wells Fargo Financial Bank, and about 21% for Wells Fargo Card Services. Combined, Wells Fargo Card Services and Wells Fargo Financial Bank reported 4Q/04 volume of $5,152,347,14. At the end of the fourth quarter, Wells Fargo Financial Bank had 595,767 active accounts, a 10% increase over the prior year. Wells Fargo Card Services had 3,583,391 active accounts, a 6% increase over the prior year. For complete details on Wells Fargo Card Services and Wells Fargo Financial Bank fourth quarter results visit CardData ([www.carddata.com][1]).

Issuer 4Q/04 4Q/03 CHANGE
WF Card Services (IA) $7.020b $6.171b +13.8%
WF Financial Bank (SD) $1.830b $1.342b +36.4%
Total $8.850b $7.513b +17.8%
Source: CardData (www.carddata.com)

WELLS FARGO CARD LOAN HISTORICAL
4Q/03: $7.5 billion
1Q/04: $7.5 billion
2Q/04: $7.9 billion
3Q/04: $8.3 billion
4Q/04: $8.9 billion
Source: CardData (www.carddata.com)

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

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OPC to Handle Calif Tax Amnesty Payments

Official Payments has been selected to process credit card payments for California’s upcoming 2005 tax amnesty program. Under this program, available from February 1, 2005 through March 31, 2005, eligible taxpayers may pay past-due individual and business income and franchise taxes free of most penalties and fees and the fear of prosecution. Tier is a leading provider of transaction processing and packaged software and systems integration services for public sector clients.

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Retriever and Iron Triangle Have Merged

TX-based Retriever Payment Systems and KY-based Iron Triangle Payment Systems have merged as of January 1st. As a result of the combination, Retriever will become a subsidiary of ITPS. Retriever’s existing investors, including CEO Bill Higgins and other members of management, have converted their ownership of Retriever into securities of ITPS. Retriever is one of the fastest growing U.S. merchant acquirers and transaction processors, providing payment processing and other related services to small- and medium-sized merchants for credit card, debit card and other payment transactions. Iron Triangle Payment Systems, LLC was formed in 2003 to pursue growth and acquisition opportunities in the transaction processing and payment services industry.

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Cap One’s Metrics March North in Dec

Capital One’s charge-off ratio jumped sharply in December, posting its highest level in eight months. Delinquency also increased, albeit slowly, by five basis points. The uptick came at a time when total loans increased more than $2 billion over the previous month. For December, Cap One reported that managed charge-offs increased to 4.63%, compared to 4.35% in November, and 5.10% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency increased to 3.92% for December, compared to 3.87% for November, 3.94% in October, 3.90% for September, 3.80% in August, 3.77% in July, 3.76% in June, 3.73% in May, and 3.69% in April. Delinquency one-year ago stood at 4.46%. At the end of December, Capital One had $79.9 billion in global outstandings. At the end of the fourth quarter, U.S. card outstandings of $48.6 billion were up 5%, compared to one-year ago, and to the previous quarter. For complete details on Capital One’s monthly metrics and 4Q/04 performance, visit CardData ([www.carddata.com][1]).

Capital One 2003-2004
Month Charge-offs Delinquency
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Feb 04 4.75% 4.14%
Mar 04 4.74% 3.80%
Apr 04 4.70% 3.69%
May 04 4.40% 3.73%
Jun 04 4.17% 3.76%
Jul 04 4.10% 3.77%
Aug 04 3.87% 3.80%
Sep 04 4.18% 3.90%
Oct 04 4.10% 3.94%
Nov 04 4.35% 3.87%
Dec 04 4.63% 3.92%
Source: CardData (www.carddata.com)

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

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Certegy Renews its Manny, Moe & Jack Contract

Certegy has renewed its check risk management and loss prevention contract with The Pep Boys. Pep Boys has 595 stores and over 6,000 service bays in 36 states and Puerto Rico. Along with its vehicle repair and maintenance capabilities, the company also serves the commercial auto parts delivery market and is one of the leading sellers of replacement tires in the United States. Certegy (NYSE: CEY) provides credit and debit processing, check risk management and check cashing services, merchant processing and e-banking services to over 6,500 financial institutions, 117,000 retailers and 100 million consumers worldwide.

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VISA International Offers the CCE Index

VISA International announced the first standardized metric to track business and government spending globally, the “Commercial Consumption Expenditure”. Using CCE, Visa International estimates that total business and government spending in 2004 amounted to US$54.8 trillion, compared to US$41.5 trillion five years ago, a 32 percent increase. For 2005, global CCE is predicted to be US$58.5 trillion, a 6.7 percent increase over 2004. Visa is the world’s leading payment brand generating more than US$3 trillion in annual card sales volume.

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PayPal 04 Volume Soars by 55% Y/Y

eBay reported that gross payment volume for its PayPal business increased 58% year-on-year during the fourth quarter, and 13% sequentially. The payment service also signed up 7.1 million net new accounts and the number of active accounts posted its highest level to-date. During the fourth quarter, PayPal handled $5.61 billion of gross payment volume, compared to $4.64 billion in the prior quarter, and $3.71 billion for 4Q/03. PayPal produced $200.2 million in transaction fees for 4Q/04, a 53% jump over the year-ago quarter. At the end of the fourth quarter, PayPal had 63.8 million accounts, compared to 56.7 million in 3Q/04, and compared to 40.3 million one-year ago. During the fourth quarter, PayPal handled 99.6 million payments, a 19% increase over the prior quarter, and up 46% from 4Q/03. PayPal captured 57% of eBay’s total $9.8 billion in total sales volume during the quarter. PayPal’s 4Q/04 transaction revenue rate was 3.57%, compared to 3.52% one-year ago. The processing expense rate for the fourth quarter was 1.27%, compared to 1.23% for 4Q/03. PayPal’s transaction loss rate came in at 31 basis points, the same as one-year ago. For complete details on eBay/PayPal’s fourth quarter performance, visit CardData ([www.carddata.com][1])

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
4Q/03 $3.7 billion 40.3 million
1Q/04 $4.3 billion 45.6 million
2Q/04 $4.3 billion 50.4 million
3Q/04 $4.6 billion 56.7 million
4Q/04 $5.6 billion 63.8 million
SOURCE: CardData (www.carddata.com)

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

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