MBNA Delinquency & Charge-Offs Rise in Oct

MBNA’s managed consumer credit card delinquency edged upward for the fourth consecutive month as charge-offs headed north. The nation’s third largest issuer posted managed credit card outstandings in October of $98.5 billion, about $300 million less than September, and down $4.6 billion since the start of the year. MBNA’s consumer credit card outstandings peaked in December. Delinquency for consumer credit cards increased to 4.18% during October, compared to 4.15% during September, and compared to a 2004 high of 4.49% in February. Charge-offs rose to 4.36% in October, compared to 4.22% for September. In May, MBNA’s charge-off rate was 4.88%, the high for the year. MBNA recently reported that domestic credit card loans for the third quarter were $79.7 billion, compared to $81.6 billion one-year ago. For complete details on MBNA’s third quarter results and monthly metrics, visit CardData ([www.carddata.com][1]).

MBNA CONSUMER CREDIT CARD SNAPSHOT
Month Outstandings Charge-offs Delinquency
Jan 04 $103.1b 4.77% 4.34%
Feb 04 $ 99.6b 4.71% 4.49%
Mar 04 $ 99.1b 4.79% 4.27%
Apr 04 $ 98.0b 4.70% 4.21%
May 04 $ 98.5b 4.88% 4.15%
Jun 04 $ 99.4b 4.64% 4.10%
Jul 04 $ 99.5b 4.52% 4.00%
Aug 04 $ 99.7b 4.52% 4.01%
Sep 04 $ 98.8b 4.22% 4.15%
Oct 04 $ 98.5b 4.36% 4.18%
Source: CardData (www.carddata.com)

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

Details

Banking Codes to be Revamped

Recommendations published by Professor Elaine Kempson of Bristol
University include proposals for improving the way banks and building societies handle the relationship with their credit card customers and customers in financial difficulty. The recommendations, some of which were the result of ideas put forward by the industry, and some by consumer groups, are due to take effect from March 1, 2005. Other changes to be introduced following the review include: (1) Basic bank accounts will be more readily available to people who want one. (2) Health warning on credit card statements where customer is making
only the minimum repayment. (3) Summary box to be included on credit card agreements. (4) New commitments to customers if branches close or services are reduced. (5) Better explanation for customers on how to claim balances on dormant accounts. (6) Greater transparency of clearing cycles for electronic payments as well as cheques. The British Bankers’ Association, the Building Societies Association and the Association for Payment Clearing Services are the three industry sponsors of the “Banking Code.”

Details

U.K. Chip & PIN Hits 75% Mark; 2 Months to Go

The “Chip and PIN” roll-out in the U.K. has topped 65.5 million cards. At the end of October, 30.8 million cardholders had at least one new “Chip and PIN” debit or credit card in their wallets, according to CardFlash International. The figure represents about 75% if the total cardholders in the country. Furthermore, more than 520,000 tills in the U.K. have switched over to “Chip and PIN.” The latest major firms to roll out “Chip and PIN” include HMV, Selfridges, Shell and Debenhams. “Chip and PIN” recently launched the second phase of its advertising campaign with TV, radio and press advertisements. The campaign, which runs for 13 weeks, aims to ensure cardholders are ready to use their PIN, with specific messages about how to unlock their PIN, remind them they can change their PIN to something they can remember easily, and to encourage them to keep their PIN a secret. The roll-out of “Chip and PIN” began in October 2003 and is backed by the U.K.’s banking and retail industries. The “Chip and PIN” goal is to migrate 42 million cardholders to the new platform by year’s end.

Details

Discover Buys PULSE; Enters the Debit Market

Discover Financial Services has agreed to acquire the PULSE EFT Association for $311 million. The merger will join PULSE’s 4,100 member banks, credit unions and savings institutions with Discover network and its more than 4 million merchant and cash access locations. Discover says the combined entity will provide financial institutions of every size and type with a full-service debit platform and a complete product set, including credit, signature debit, PIN debit, gift card, stored value card and ATM services. PULSE will retain its brand, pricing and operating platform as well as its management team, staff and Houston headquarters.

Details

Fiserv’s IntegraSys Inks 29 Premier Deals

TX-based IntegraSys, a unit of Fiserv, has signed three new credit union customers and renewed 26 other credit unions to its “Premier” credit union service bureau core processing solution. The contracts show Premier’s strong position it has established as one of the most frequently used service bureau core applications among credit unions of all sizes across the nation. Credit Unions that have contracts with IntegraSys at this time period have $3 million to over $620 million in assets. Premier’s design creates navigation that is user-friendly and it allows automatic software updates. It supports the needs of a credit union including ATM support to workflow processing to integrated share, loan, accounting, and payroll processing systems. IntegraSys delivers technology to assist credit unions to compete and win in their markets. Fiserv, Inc. is a provider of industry leading information management systems and services. It serves over 15,000 clients including banks, broker-dealers, credit unions, financial planners/investment advisers, insurance companies and agents, self-funded employers, lenders, and savings institutions.

Details

AmEx Seeks Antitrust Damages from VISA & MC

American Express this morning will announce plans for private litigation against VISA and MasterCard in the wake of the recent Supreme Court decision not to hear VISA and MasterCard’s appeal in the government’s antitrust lawsuit against them. The October 4th Supreme Court decision also motivated Discover Financial Services to file a lawsuit in federal court in New York on October 5th. Both networks are seeking damages from VISA and MasterCard as compensation for harm caused by anticompetitive business practices of the two associations. American Express has hired David Boies, founding partner of Boies, Schiller & Flexner, to serve as American Express lead outside counsel in the matter. Both networks are seeking triple damages under current antitrust law.

Details

U.S.Bank’s SKYPASS VISA Adds Bilingual Support

U.S. Bank and Korean Air have added a bilingual automated, 24-hour account access line to their co-branded “SKYPASS VISA” credit card program. These benefits enrich cardmembers traveling experience on Korean Air. The SKYPASS Visa enables customers to earn miles for money they charge while accessing cash at over 805,000 ATMs along with the benefits associated with Korean Air. Miles do not expire and the SKYPASS Visa cards include Platinum, Classic, Secured, and SkyBlue. There is no annual fee for personal use and Business Platinum can be used for business needs. Korean Air is one of the world’s top 20 airlines with a fleet of 117 aircraft. U.S. Bancorp is the 6th largest financial services holding company in the U.S. with $193 billion in assets.

Details

USPS Offers Retailer Gift Cards to Consumers

Touchpoint has teamed with the U.S. Postal Service to launch an online service enabling Americans to include a gift card with their customized greeting card. Cardstore.com and the Web site of the USPS are offering retail gift cards from five major retailers under the new “Gift-n-Card” program. Gift cards offered include Bed, Bath & Beyond, Lowe’s, Circuit City, Brinker Restaurants (Chili’s, Macaroni Grill, etc.), and Safeway. The company says more retail partners will be added shortly. The gift cards are available in $25, $50, $75, $100 and $200 denominations. The cost for “Gift-n-Card,” excluding postage and the value of a gift card, is $4.99.

Details

Payment Data Systems Lands a Major STV Deal

Credit Payment Services has selected TX-based Payment Data Systems to provide and support stored value cards as a supplement to traditional ACH credits. The agreement should generate roughly $1 million in gross revenue for PDS. The offering will provide immediate funding of the loan instead of common delays associated with the ACH credit process. Speedy access to the loan amount is expected to ensure higher service levels for consumers and opportunities for more revenue for CPS. Payment Data Systems, Inc., an Integrated Solution Provider, delivers comprehensive, cost-effective solutions to billers and retailers for electronic payment processing and management conducted online, through point of sale, or payments taken by Customer Service Representatives or through an Interactive Voice Response.

Details

Euronet Expands Top-Up Service to Spain

Euronet Worldwide has closed an asset acquisition of the Movilcarga Division of Grupo Meflur Corporacion. Euronet will own 80% of Movilcarga and Meflur will own the remaining 20%, according to CardFlash International. Movilcarga is a provider of electronic prepaid voucher solutions in Spain. Movilcarga has a distribution agreement with Telefonica, the largest mobile operator in Spain, which services 52% of that country’s mobile telecommunications market. The company plans to expand its top-up services with additional mobile operators in Spain. Based on its most recent three-months’ unaudited financial information, Movilcarga generated net revenue, on a recognition basis consistent with Euronet’s other prepaid processing revenues, of approximately $3.5 million.

Details