Geniant Puts Cirrus Network Creator on its Board

Dallas-based Geniant has named Robert Jansen, creator of the “Cirrus Network,” as Vice Chairman of the Board of Directors. Mr. Jansen has held many positions including president and CEO of some of the most successful technology companies in the nation including Affiliated Computer Services, Omron Financial Systems, Cirrus Information Management, LeDiagio, Ltd., and Oracle Corporation. Jansen will have a strategic role at Geniant, where he plans to provide tactical help to assist the company in locating and undertaking growth opportunities in target areas. Geniant is an information technology consulting company, helping the world’s largest organizations operate and expand their businesses.

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MBNA Picks New Logo; May Launch TV Ads Next Year

MBNA unveiled a new logo to its employees this week, displaying it in the main lobby of its Wilmington, DE headquarters. The logo is remarkably different since it uses lower-case letters as opposed to the all caps lettering used since the Company’s formation. The logo also includes a tree with multicolored leaves. According to the Delaware News Journal, MBNA will launch an aggressive promotional campaign in the first quarter, that could include MBNA’s first significant TV advertising. The logo will gradually be migrated to its 70,000,000+ cards-in-force. MBNA launched the logo initiative 18 months ago. London-based advertising giant WPP Group was hired to develop the new logo.

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JUL 04 LENDING

Credit card outstandings rose GBP 801 million during July to bring total outstandings to GBP 55.8 billion, the second largest increase over the past year. Total net lending to consumers for July hit GBP 122.7 billion, an increase of GBP 959 million over June. One-year ago credit card outstandings increased GBP 629 million and total consumer lending rose GBP 1.1 billion. During June, credit card outstandings rose GBP 739 million and total lending increased GBP 1.4 billion. The Bank of England increased its benchmark interest rate to 4.75% this month, the highest in almost three years.

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Sub-Prime Card ABS Metrics Improve Again

Credit card charge-offs, among “prime” asset-backed securities, continued a seesaw pattern, dropping 39 basis points in July after climbing 27 basis points in June. However, “sub-prime” ABS charge-offs continued to march south during July, declining 34 bps, marking the seventh consecutive month they have registered below year-ago levels. “Prime” charge-offs decreased to 6.45%, compared to 6.84% in June, and 6.60% one-year ago. The 60+ day delinquency index for “Prime” portfolios fell 58 bps below the year-ago level, its lowest point since August 2000. According to Fitch’s latest issue of “Credit Card Movers & Shakers,” “sub-prime” charge-offs also decreased, to 16.68%, compared to 17.02% in the prior month, and 18.01% one-year ago. Late-stage delinquencies for “sub-prime” card bonds (60+days) fell for the fifth straight month to 8.55%, the lowest level since July 2002. Fitch’s yield and payment rate indexes moved in opposite directions during July. Fitch’s yield index dropped 5 bps sequentially to 16.72%, 36 bps below the year-ago level. The monthly payment rate rebounded by 60 bps to 17.28%, 139 bps above the year-ago level.

ABS CHARGE-OFFS HISTORICAL
Prime Sub-Prime
Jul 04: 6.45% 16.68%
Jun 04: 6.84% 17.02%
Jul 03: 6.60% 18.01%
Source: FitchRatings

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Major Player Global Profits Up 23%

The most profitable bank credit card issuers in the USA, racked up $12.0 billion in global net income during the twelve months ending June 30th, a 23% increase over the year ago period. MBNA posted the strongest gain with a 33% increase in its global operations, posting a record $2.54 billion in profit. The smallest gain was posted by American Express TRS, which reported $2.61 billion in annual net income at mid-year for a 13% increase over the prior year. The top five most profitable U.S. issuers held $471.6 billion in global managed credit card assets at mid-year, a 14.5% increase over one-year ago. For complete details on mid-year results visit CardData ([www.carddata.com][1]).

Card Profits
(12 month period ending 6/30/04)
1. Citi Global: $4.11 billion +26%
2. AmEx TRS: $2.61 billion +13%
3. MBNA Global: $2.54 billion +33%
4. Cap One Global: $1.40 billion +23%
5. Bank One: $1.34 billion +17%
TOTAL: $12.0 billion +23%
SOURCE: CardData (www.carddata.com)

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

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Samsung to Deploy Philips Near Field Technology

Samsung Electronics has signed a deal to deploy cellular devices that use Philips “Near Field Communication” chip solutions. With “NFC,” the mobile phone transitions from running primarily voice applications to becoming a more personalized device that can let you conduct secure payment transactions, gain access to public transportation, building access and store digital rights. In essence, the mobile phone becomes a
point-of-sale terminal, a ticket counter, keys to your building, a
transport card, a debit/credit card and an electronic business card all
in one easy to use device. “NFC” technology combines the functions of a
contactless reader, a contactless card and peer-to-peer functionality on
a single chip. It operates in the 13.56 MHz frequency range, typically
over a distance of a few centimeters.

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E-Mart Bulks at New Transaction Fees

The country’s largest discount retailer has filed a lawsuit against three major credit card firms over new transaction fees set to go into effect on September 1st. E-Mart has sued KB Card, BC Card, and LG Card alleging collusion in raising fees. KB Card and LG Card are raising E-Mart’s rate from 1.5% to 2.2%, while BC Card is increasing its fee from 2.0% to 2.35%. E-Mart has already begin terminating its BC Card credit card contract in some of its outlets, according to the Korea Times. E-Mart has 63 outlets nationwide. E-Mart says it is taking its dispute to the Fair Trade Commission.

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Epitome Systems gets New EVP/COO

PA-based Epitome Systems has hired Eric Panepinto, formerly with Sanchez Data Systems, as EVP/COO. Mr. Panepinto’s responsibilities will include directing Epitome Systems’ global day-to-day business operations and helping guide the company’s strategic development and its products in order to support an increasing group of customers. Panepinto has an extensive background in financial services having served as a SVP, VP, and other positions for companies such as Citigroup Global Consumer Bank, Citicorp Investment Services, NY Guardian Mortgage Corporation, First Federal Savings and Loan of Rochester, and Sony Music Entertainment. Epitome Systems is a chief provider of Enterprise Productivity Management software solutions, enabling companies to achieve increased productivity, profitability, and competitive advantage.

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South Korean Retailer Fights New TX Fees

South Korea’s largest discount retailer has filed a lawsuit against three major credit card firms over new transaction fees set to go into effect on September 1st. E-Mart has sued KB Card, BC Card, and LG Card alleging collusion in raising fees. KB Card and LG Card are raising E-Mart’s rate from 1.5% to 2.2%, while BC Card is increasing its fee from 2.0% to 2.35%. E-Mart has already begin terminating its BC Card credit card contract in some of its outlets, according to the Korea Times. E-Mart has 63 outlets nationwide. E-Mart says it is taking its dispute to the Fair Trade Commission.

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Inbound Call Centers Get a New Tool

Austin Logistics has launched a new product for inbound call centers that uses predictive analytics and value-driven queuing to achieve near-zero wait times, pre-emptive retention offers, and appropriate cross-sell promotions. “Valeo” uses real-time customer and prospect data to determine each inbound caller’s future value and the caller’s reaction to all available service levels. Valeo then tags each call for the appropriate service level, for example, self-service resolution or retention agent. High-future-value, wait-intolerant callers can be answered quickly and appropriately to increase their loyalty, reduce attrition, and increase sales. According to “StreetTalk” by CQ Research, 20% of the general population has stopped using credit cards because they had to wait too long when they called into customer service. For high-income callers, the loss climbs to 26%.

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Oberthur Gets E-Passport Certification for ID-One

Oberthur Card Systems’ “ID-One” 64K dual interface contact and contactless smart card has received certification for use in the next phase of the U.S. DoD’s “Common Access Card” program. The card is also fully compliant with the “GSC-IS 2.1” specification, a standard that will help to ensure interoperability across government agencies and departments. Oberthur has already issued significant quantities of 32K smart cards for ID and security to the Defense Manpower Data Center. The U.S. government intends to issues its “CAC” card to as many as 40 million individuals.

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July Consumer Spending Up; Income Slows

The U.S. Commerce Department reported that consumer spending on durable goods increased 4.1% in July, after declining 3.2% in the prior month. Spending on nondurable goods increased 20 basis points for a second consecutive month. Spending on services was up 40 basis points, compared to 30 basis points in June. However, personal income only edged up 10 basis points, the slowest since November 2002.

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