Card Underwriting Standards Remain Unchanged

The OCC reported that its “10th Annual Survey of Credit Underwriting” practices found that 75% of the responding banks did not change credit card underwriting standards in 2004 while 12% tightened standards and 13% eased them. In contrast, more banks tightened standards than eased them in 2003. Underwriting standards for retail credit products showed more easing and less tightening. However, the change from other years was not as pronounced. The majority of the easing of retail standards was focused on credit cards and home equity products.

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San Fran’s BART Expands the Cubic Contract

San Diego-based Cubic Transportation Systems has landed an additional $3.4 million contract from San Francisco’s BART to expand the scope of its work on the “TransLink” fare collection equipment. TransLink will permit riders to use a single smart card to pay for fares in order to travel across all public transit systems throughout the Bay Area. Cubic will be allowed to integrate its smart card technology into BART’s ticket vending machines. This will enable customers to load fare value onto an “e-purse” on their TransLink cards. The e-purse stores cash value on the smart card chip and serves as an electronic wallet. Each year, Cubic fare collections systems are used for customers to take nearly 10 billion rides around the world.

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Cap One Delinquency Heads North for the 6X

After a one-month uptick, Capital One’s charge-offs headed south, falling 8 basis points in October. However, delinquency continued to edge upward for the sixth consecutive month, rising 4 basis points during October. During October, the issuer added $455 million in managed outstandings. Cap One reported that managed charge-offs decreased to 4.10% for October, compared to 4.18% in September, and 5.30% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency increased to 3.94% for October, compared to 3.90% for September, 3.90% 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 4.52%. At the end of October, Capital One had $75.9 billion in global oustandings. At the end of the third quarter, Cap One had $46.1 billion in U.S. card loans, compared to $45.2 billion in the second quarter. For complete details on Capital One’s monthly metrics and 3Q/04 performance, visit CardData ([www.carddata.com][1]).

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Capital One 2003-2004
Month Charge-offs Delinquency
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
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%
Source: CardData (www.carddata.com).

[1]: http://www.carddata.com
[2]: /images/g/graphs/cofperformance_oct04.jpg

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Transoft Introduces OptiCa$h/Direct for ATMs

Transoft International has introduced “OptiCa$h/Direct” which connects XFS-based ATMs to Transoft’s “OptiCa$h Currency Management” application allowing for highly automated balancing, automatic balance updating, and on-board ATM cash monitoring. Transoft International, Inc. is the world’s largest provider of currency supply chain management and cost optimization solutions designed for the banking industry. It is a privately held company that manages cash for roughly 100,000 ATMs and bank branches with customers on six continents.

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VISA Lowers its Interchange for Utilities

VISA USA is targeting the $177 billion residential utilities market with a new campaign. Effective April 2nd, VISA is instituting, a new, lower interchange reimbursement fee program for consumer card transactions for the acquirers of utility merchants that do not charge convenience fees to consumers paying bills with VISA payment cards. Since many utilities are regulated, convenience fees have created a barrier to expanded acceptance. VISA says it currently processes approximately 2% of all utility bill payments, and that its volume in the utilities segment increased 42% during the year ending September 30th. Under the new campaign, VISA will provide utility firms a return on investment estimator, technology assistance, and marketing materials and programs, among other support items.

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AmEx and MSN Offer Free Music Downloads

American Express and MSN have teamed to offer free music downloads to AmEx consumer cardholders residing in the USA. The service is available via the “MSN Music Service” under two promotions. For every 10 songs purchased with the “Blue” or “Delta SkyMiles” credit card, or the AmEx “Charge Card,” consumer cardholders will automatically receive a free song credit to their MSN Music account. Also, consumers who apply for “Blue” or “Blue Cash” through a link on the MSN site will be eligible to receive a minimum of 10 free “MSN Music” downloads. MSN and AmEx are also launching “In the Mix on MSN Music,” a dynamic music hub where consumers can explore and discover music.

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CITI CORP CARDS

Citigroup Global Transaction Services and MasterCard International have inked a multi-year deal to launch commercial cards throughout the Asia/Pacific region. Citigroup says it will initially target multinational corporate clients in Hong Kong and Australia and then expand into Malaysia and Singapore. Citigroup is the only bankcard provider that can issue commercial card products in over thirty countries. Citigroup commercial cards are currently used by over one million corporate and government cardholders globally. The Citibank “Commercial Cards” suite includes – “Citibank Corporate Card,” “Purchasing Card,” “One Card,” and “Electronic Account.”

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Chase Sponsors the Amazon Theater; Opens Today

Amazon.com is debuting “Amazon Theater” today which is sponsored by Chase. The “Amazon Theater” features five short films and related items that can viewed on consumers PCs. The Chase brand will appear on the Amazon Theater player and the Amazon Theater homepage. The homepages for each of the five films and the pages that offer the products in the films will include an opportunity for consumers to sign up for the “Amazon.com Platinum VISA” card from Chase. Cardholders who use their “Amazon.com Platinum VISA” to purchase products featured in any of the films will receive 5% back on each purchase. New cardholders will also receive a $30 instant discount off their first qualifying Amazon.com order when they purchase items using their “Amazon.com Platinum VISA.” Chase and Amazon.com launched their co-branded card in 2002.

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AmEx Unleashes a Network Focused Ad Campaign

American Express unleashed a new global card brand campaign with the tagline “My life. My card.” The campaign is the first advertising campaign following the opening of the AmEx network to banks in the USA. It is also the company’s first ever umbrella campaign to support all issuers of AmEx-branded cards. The new ads will feature actor Robert DeNiro, golfer Tiger Woods, comedian Ellen DeGeneres and surfer Laird Hamilton. The message is that achievers of all types choose American Express. Director Martin Scorsese and photographer Annie Leibovitz were involved in the production. The campaign shows the signature panel and AmEx blue box logo, but no visuals of any individual card products.

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VISA Says Retail Spending Rose 7.7% Last Week

VISA released figures yesterday showing that spending on VISA cards during the first week of this month were up 15.7% over the same period last year. For the first week of November, VISA spending in the retail category rose by 7.7% to $7.3 billion. Spending in the retail category of “Discount, Mass Apparel and Drug Stores” experienced the biggest surge during the week, showing an 18.4% increase compared to the same time period in 2003. “Home and Garden” sales were up 12.7% and “Department Stores and Apparel” increased 8.9%.

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Commercial Cards Poised for Sharp Growth

A new survey has found that more than half of financial executives plan to reduce their organization’s reliance on checks as a form of commercial payment. The second annual cash management survey by VISA USA also found that 40% of respondents plan to increase their use of commercial payment cards. The survey found that commercial payment cards were used by 34% of respondents for an average of 22% of their total commercial payments. Six out of ten believed they were relevant or very relevant for cash disbursements; 53% believed they were relevant or very relevant for short-term money management and the collection and application of receivables; and, 48% believed they were relevant to very relevant for cash positioning and forecasting. VISA also found that an increasing number of respondents identify the importance of data access and utilization for the following key areas: visibility into payables and receivables (75%); online access to payment and invoice-related detail (77%); and, automated information reporting and back-end integration (70%).

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FASTMAX Debit Cards to be Launched

Las Vegas-based Global Links Card Services has partnered with First Federal Savings Bank of the Midwest to issue the “FASTMAX” debit card. Global Links Corp. is a diversified company that offers real estate information services along with a range of comprehensive electronic products to the retail, restaurant, and hospitality industries as well as certain national associations. First Midwest Financial, Inc. is the holding company for First Savings Bank of the Midwest and for the Security State Bank, both headquartered in Iowa.

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