MBNA Canada and Starwood Hotels have teamed to launch a co-branded MasterCard next week. The new “MBNA/Starwood Preferred Guest MasterCard” is the first hotel affinity card offered in Canada. In the USA, American Express holds the Starwood co-branding relationship and has also inked a deal for MBNA to issue AmEx cards next year in the USA. Under the “MBNA/Starwood Preferred Guest MasterCard” program, cardholders earn one “Starpoint” for every C$2.00 spent. A welcome bonus of 5,000 “Starpoints” will be awarded on the first retail usage of the card. Customers will earn an additional 5,000 bonus “Starpoints” for every C$10,000 in retail spend, up to 15,000 bonus “Starpoints” each year. Additionally, customers will earn another 5,000 bonus “Starpoints” the first time they charge a stay at one of the Starwood properties to their new credit card. The “Starwood Preferred Guest Program” debuted in 1999 and has been voted “Hotel Program of the Year” since its introduction.Details
Capital One was upgraded yesterday to a “long-term buy” rating by analysts at Hilliard Lyons Research. The target price was set at $89. Cap One is currently trading at $75 per share. It reached a 52-week high of $77.67 in mid-April. Hilliard Lyons analysts says the Company’s consistent EPS growth is the key factor in the upgrade. Cap One’s EPS is expected to rise by 17% this year, and 16% next year. Cap One’s second quarter U.S. card profits increased by 40% year-over-year. For the second quarter, COF posted net income for U.S. cards of $384.1 million, compared to $386.8 million in the first quarter, and $274.2 million one-year ago. At the end of the second quarter Cap One had $45.2 billion in U.S. card loans, compared to $45.3 billion in the first quarter. COF’s global managed loan portfolio grew by $1.6 billion to $73.4 billion in 2Q/04. For complete details on Capital One’s latest performance visit CardData ([www.carddata.com]).
NY-based Universal Express has signed a deal with Points.com for a gift card program. Cecilia Vesnesky, President of Luggage Express, says that Points.com allows program members to receive more value from their participation in loyalty programs through its relationship and exchange with companies such as Delta Airlines and Intercontinental Hotels. Earned points can be exchanged for luggage and gift card services. Richard A. Altomare, Chairman of Universal Express, says that frequent flyer miles or earned value credits can be exchanged for luggage services. Miles and loyalty points convert into cash for their services. Points International Ltd. operates the only independent loyalty points exchange. Universal Express, Inc. owns and operates subsidiaries that provide its private postal trade association customers and couriers with various value-added services and products including the cost-effective delivery of goods and luggage worldwide.Details
MA-based Pipeline Data has launched its wholesale processing division: Pipeline Data Processing. Pipeline Data Inc. is a provider of integrated transaction processing services. Services are provided for all major credit cards. Pipeline Data is currently serving over 10,000 merchant customers.Details
Suncoast Schools FCU, the largest credit union in Florida, has selected Certegy Card Services to process its 100,000 VISA credit cards with $275 million in loans outstanding. Suncoast is the largest credit union in Flordia, and the eighth largest credit union in the nation with $4.3 billion in total assets and 350,000 members. Certegy will service Suncoast’s credit card portfolio, which contains a platform that provides card processing solutions. Certegy provides various services including credit and debit processing, check risk management, check cashing, merchant processing, and e-banking to almost 7,000 financial institutions, 117,000 retailers, and 100 million consumers around the world.Details
PA-based USA Technologies reported revenues for the year ending June 30th of $5.6 million, nearly double the year-ago level. The fiscal year produced a net loss of $21.4 million compared to a net loss of approximately $21.9 million for the prior fiscal year. The Company also reported it had shipped a record number of “e-Ports” in the last two quarters to 58 vending operators and bottlers, bringing the “e-Port” customer base to a total of 215 vending operators and bottlers in 41 states. Many of these customers own and operate in excess of 10,000 vending machines. The Company also entered into an agreement with Sony Electronics, who worked with USA Technologies to develop cashless transaction capabilities for its “PictureStation” photo-finishing systems, which are currently being launched nationwide. For complete details on USTT’s latest performance visit CardData (www.carddata.com).Details
After rescinding its deal to acquire Penthouse’s Media Billing Company last week, FL-based Care Concepts yesterday announced it has entered into an agreement with GMI Investment Partners and PET Capital Partners to purchase 48% of General Media. Upon its emergence from bankruptcy next month, General Media will be renamed Penthouse Media Group, Inc. Care Concepts owns Forster Sports, a producer of sports radio talk shows and iBidUSA.com. Penthouse International last month announced a deal to sell iBill less than six months after acquiring the business from Atlanta-based InterCept. Penthouse’s Media Billing subsidiary acquired iBill in March in a transaction valued at approximately $33 million. Penthouse sold iBill to FL-based Care Concepts for $55 million in stock. (CF Library 3/17/04; 3/23/04; 5/25/04; 8/2/04; 9/1/04; 9/28/04)Details
Credit card charge-offs, among “prime” asset-backed securities, dipped to their lowest level in nearly two years during August, as 60+ day delinquency hit a four-year low. The monthly payment rate also climbed to 17.33%, the highest ratio since April 2000. “Prime” charge-offs decreased to 6.01% in August, compared to 6.45% in July, and 6.78% one-year ago. The 60+ day delinquency index for “Prime” portfolios remained steady at 2.86%, its lowest point since August 2000. Fitch’s yield and payment rate indexes moved in opposite directions during August. Fitch’s yield index dropped 35 bps sequentially to 16.37%, 23 bps below the year-ago level. The monthly payment rate was up 5 bps above the prior month. According to Fitch’s latest issue of “Credit Card Movers & Shakers,” “sub-prime” charge-offs decreased to 15.58% during August, compared to 16.68% in the prior month, and 16.45% one-year ago. Late-stage delinquencies for “sub-prime” card bonds (60+days) rose for the first time since December to 8.66%.
ABS CHARGE-OFFS HISTORICAL
Aug 04: 6.01% 15.58%
Jul 04: 6.45% 16.68%
Aug 03: 6.78% 16.45%
National City has launched a program to offer agent banks instant-issue VISA gift cards, after scoring success with its in-house program. Offered in pre-denominated values ranging from $25-$200, branch representatives activate the card at the point of sale by calling a toll-free number; no new or dedicated equipment is required by the agent bank. The agent bank VISA gift card program enables banks to earn revenue on each card sold, and provides the flexibility for the agent bank to set the purchase price charged to customers. The agent bank VISA gift card program provides consumers complete access to customer service resources. Cardholders can obtain balance information anytime online or through the gift card’s toll-free support number. Pen Air FCU of Pensacola Florida, recently began participating in the agent bank program and is selling VISA gift cards to members at its 12 retail offices.Details
Elan Financial Services has introduced two ATM options: a turnkey outsourcing plan in which Elan owns and maintains the ATM, or a modified outsourcing plan in which the financial institution owns the ATM and contracts with Elan for certain services. The outsourcing program helps to reduce the burden of replacing or upgrading ATMs to comply with certain mandates. Elan will provide transaction processing services, maintenance, ATM monitoring, and cash and deposit management as well as replace and upgrade ATMs. The outsourcing program was the result of surveys indicating that many financial institutions prefer to outsource their ATM program. Elan Financial Services supports over 7,800 ATMs, 15 million ATM/POS cards, and 2 million credit cardholders.Details
Even though reward programs are heavily promoted by credit card issuers, consumers prefer a low interest rate or no annual fee most of all. Nearly half of Americans (47%) say a low interest rate is the most valuable credit card feature, while one-fourth say no annual fee is the best feature. According to a CardWeb.com homepage poll conducted between September 7th and 28th, only 21% of the 1,302 participants designated rewards for purchases as the most valuable credit card feature. Slightly more than 3% say a high credit limit is the biggest attraction while about 2% say online account access is the most valuable. Less than 2% says automatic discounts are the key feature they look for in a credit card offer. The CardWeb.com survey has a margin of error of plus or minus approximately 4.0 percentage points.
HOMEPAGE POLL 9-7 to 9-28
Question: Which of the following is the most
valuable credit card feature?
Low Interest Rate 47%
No Annual Fee 25%
Rewards for Purchases 21%
High Credit Limit 3%
Online Account Access 2%
Automatic Discounts 2%
Source: CardWeb.com, Inc. (R)
Omaha-based Transaction Systems Architects announced that Gregory Derkacht, president and CEO, will retire no later than June 30th, 2006. The company also announced a revised employment agreement with Mr. Derkacht that would provide his continued service until his successor is found. The Board of Directors is looking for an experienced leader who could take over for Mr. Derkacht. Transaction Systems Architects, Inc. has software that facilitates electronic payments by providing consumers and companies access to their money. The company’s solutions are used on over 1,700 product systems in 76 countries.Details