GE is donating $1 million to the Red Cross International Response Fund for the Southeast Asia disaster. In addition, GE employees worldwide are being offered an opportunity to support Red Cross emergency response efforts through an employee giving campaign that the GE Foundation will match 100-percent. In just three days, employees have given over $700,000, and donations continue to be given. The GE Foundation the philanthropic organization of the General Electric Company, works to strengthen educational access, equity, and quality for disadvantaged youth globally; and supports GE employee and retiree giving and involvement in GE communities around the world.Details
First Data has signed a five-year renewal agreement to provide electronic payment processing products and services for Sovereign Bank’s merchant customers in the New England and Mid-Atlantic markets. First Data provides merchant payment processing services on behalf of Sovereign Bank in Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania and Rhode Island. In the past year, Sovereign Merchant Services had more than 27,185 merchant outlets, 73 million merchant transactions and $5.3 billion in merchant sales. Sovereign Bancorp, Inc., is the parent company of Sovereign Bank, pro forma, a $60 billion financial institution. First Data Corp. with global headquarters in Denver, helps power the global economy.Details
NY-based Universal Cash Express is expanding its gift card distribution network with PRE Solutions, which currently serves more than 55,000 retailers nationwide. PRE Solutions Inc. (www.presolutions.com) is a leading provider of prepaid transaction processing solutions designed to offer retailers powerful revenue opportunities in prepaid products and other services. PRE Solutions currently serves more than 55,000 retailers throughout the United States and Caribbean, including Amerada Hess, The Pantry, Pilot Travel Centers, Circuit City, Food Lion, Family Dollar, Dollar General and many other leading chains. Universal Express, Inc. owns and operates several subsidiaries including Universal Express Capital Corp.Details
MasterCard’s contactless payment system is gaining more momentum with the signing of a large PA-based convenience store chain. Sheetz plans to deploy “MasterCard PayPass” system-wide by March 1st. In August, McDonald’s inked a deal to accept MasterCard “PayPass.” McDonald’s restaurants in Dallas and the New York metropolitan area were the first to implement “PayPass”, with additional locations to be added this year. McDonald’s will eventually accept “PayPass” nationwide. “MasterCard PayPass” cardholders pay for purchases by simply tapping their “PayPass”-enabled payment card on a RF equipped terminal. “MasterCard PayPass” also eliminates the need for customers to sign their payment card receipts for all sales under $25. Currently, more than 80% of c-store transactions are under that threshold. Sheetz has 305 locations in Pennsylvania, West Virginia, Maryland, Virginia, Ohio and North Carolina.Details
Ascom is going to outfit the Toulouse public transport network with a new information and ticketing system. The current equipment will be replaced by new machines from Ascom that can read the existing tickets and communicate with the present system until the contactless ticketing system is introduced in September 2006. The contract is worth 24 million euros. The development of the information, control and management system, as well as of the equipment software, accounts for one quarter of this 24 million euro project. Toulouse is installing a ticket validation system that will be able to collect high-quality data. The central management system will analyze more than 700,000 daily trips. In September 2006, the city will switch to a contactless
solution on the whole network.
Citigroup is providing $3 million and is matching employee donations to support relief efforts for the South Asia tsunami disaster. American Express and First Data donated $1 million each for disaster relief. AmEx is also matching employee donations. First Data says its donation is the single largest donation made by its Foundation since its inception in 2000. MasterCard International says it has contributed $250,000 to the Singapore Red Cross Society and initiated a relief program in which personal donations made by employees will be double matched by the organization. The December 26th earthquake triggered a series of tsunami waves which claimed an estimated 139,000 lives.Details
R.K. Hammer released its “2004 YEAR-END REPORT”:
At 4.50% pre-tax ROA for 2004, the credit card industry enjoyed the highest earnings period since 1988 (also at 4.50% that year).
The Hammer model estimated the following metrics:
Total Income Yield: down 10 basis points in the last year, principally due to intense marketing competition, to 17.5%. This is for all interest and fees.
Operating Expense: down 10 basis points in the last year, due to seasoning of earlier technology investments, to 4.9%. This should continue to improve.
Net Charge Offs: down 20 basis points, as consumer bankruptcies softened during the year, to 5.6%. Unemployment rates also continue to soften, down 10% from last year.
“Blended” Cost of Funds: upward during the year by 10 basis points, to 2.5%.
Net pre-tax Income: up 10 basis points, reflecting all of the above factors, to 4.50%.
The range of ROA for various issuers was from less than 1% to over 12%, a new high.
Continued intense competition for new booked accounts, as leading issuers seek to sustain sequential account and earnings growth in the 18-20% range.
“Flight to quality” remains a key strategy, as it has since 2Q00, to boost profits from lower-risk, higher FICO scored applicants.
Focus on repricing by many, especially for higher-risk accounts; late/overlimit fees will continue to rise and be charged earlier in the billing cycle/due date, plus using “universal default” to trigger higher penalty APR’s, in order to raise the income components.
Customer Service “FTE Ratios” will rise, by design; meaning a planned fewer full time equivalent employees handing any given function. Reduces operating expense ratios.
Portfolio consolidation will continue: we expect 75 -100 larger transactions this year, and 100 – 150 “mini” deals less than $10MM (mostly credit unions).
Funds Cost will continue to trickle upward, in measured 25 basis point increments.Details
Incentive Solutions Canada has licensed Smart Chip Technologies’ loyalty, stored value and gift card program. GiftCards.ca will offer new SCTN functionality to their existing “SuperCard” merchant clients including Winners, HomeSense, Napster and Amazon.ca. Smart Chip Technologies’ turnkey customer retention solution, including
loyalty, pre-paid stored value and gift cards, was co-developed with the
Airos Group and IBM. GiftCards.ca recently signed on Josee Chouinard, Olympic star and Canada’s figure skating champion, in a three-year deal as part of their marketing campaign.
Global Links Card Services has received a 106,000 card order from AZ-based Sharing Way for its debit MasterCard program issued via SD-based BankFirst. Sharing Way (www.sharingway.com) provides churches and charities a means of obtaining additional financial support by issuing a prepaid MasterCard to their members and supporters that, when used, will generate royalties to these charities. PTS in November, 2004, acquired Glove Box, Inc. Glove Box, Inc. owns the rights to the patented, revolutionary Glove Box(TM), the only product that offers contamination reduction through automated glove dispensing.Details
San Jose-based Indala Corporation says it has achieved record growth in 2004 for the second consecutive year. Joe Grillo, chief executive officer of Indala parent company, Identification Technology Group (ITG), and Marc Freundlich, Indala president, made the announcement during a “town-hall” employee meeting at the Company’s San Jose headquarters. Indala Corporation is a leading security technology company that develops and manufactures 125 kHz proximity; 13.56 MHz contactless and contact smart cards; and associated readers for physical and network access-control applications.Details
The University of Montana’s “Monte the Grizzly” has been named Capital One “Mascot of the Year” for a second time. Monte proved himself the fittest, surviving competition from 11 deeply talented (and oddly-proportioned) dogs, birds, turtles and gophers and working tirelessly to bring glory to the University of Montana. The break-dancin’, back-flippin’, never-hibernatin’ bear, who won the crown in 2002, again received ferocious support from the school’s administration, alumni and passionate fans. Capital One Financial Corporation (http://www.capitalone.com) is a bank holding company whose principal subsidiaries, Capital One Bank and Capital One FSB, offer consumer lending products.Details
MasterCard International reported an 18% increase in global holiday transaction volume, processing 774.9 million total authorizations between the day after Thanksgiving and Christmas Eve. More than $60 billion in card transactions were processed over its network during the holiday period, a 13% increase over 2003. MasterCard says that December 23rd was the highest volume day of 2004 with 36.9 million transactions moving across its network. “Black Friday” (the day after Thanksgiving) was actually the 6th busiest day of the holiday shopping season based on MasterCard data.Details