Issuers Fail to Capitalize on Website Cross-Selling

A new study has found that credit card issuers are missing cross selling opportunities on their web sites. Nielsen//NetRatings found that while many online users engage in a single online financial activity, a small percentage engage in multiple financial activities online. Of the 28 million who managed their credit card site online, only 28% engaged in online banking transactions, while only six percent engaged in online lending/mortgage activities, and just two percent engaged in online trading activities. The research also found that while there were 25 million online bankers, only 31% of them engaged in credit card transactions online, 12% did their lending/mortgage activities online, and four percent logged onto their online trading/brokerage accounts.

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TNB Card Services Beefs-Up its Web Site

Dallas-based TNB Card Services recently upgraded its Web site for its credit union clients. The redesigned website will make it easier for clients to find important information and for the company to clearly state its benefits to potential clients. TNB based the revisions on client feedback to create a site that is cleaner and more efficient, with streamlined navigation.

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Delinquency Falling as Repayments Hit a Record High

A new report on asset-backed U.S. credit card receivables for June shows the delinquency rate has fallen to its lowest rate in four years and the monthly payment rate has reached an all-time high. The charge-off ratio declined year-on-year for the seventh consecutive month but yields continue to slowly sink. According to Moody’s “Credit Card Credit Indexes for June,” the charge-off rate fell to 6.41%, down from 6.73% in March, and 6.87% one-year ago. The June delinquency rate fell to 4.37% from 5.12% a year ago, and 4.74% in March. Cardholders paid back, on average, 16.81% of their credit card debts in June, well above last year’s June rate of 15.20%. Yield for June fell just slightly to 16.98% from 17.06% a year ago. Moody’s data are based on $400 billion of securitized U.S. credit card receivables.

U.S. ABS METRICS
Delinquency Charge-Offs MPR Yield
Jun 03: 5.12% 6.87% 15.21% 17.06%
Mar 04: 4.74% 6.73% 16.60% 17.41%
Jun 04: 4.37% 6.41% 16.81% 16.98%
Source: Moody’s Credit Card Credit Indexes

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CA Leads and TX Lags Top 5 States in Outstandings

The average bank credit card outstandings per household grew a mere 2.5% last year to $6,429. Among the five most populous states, Texas was the only to come in below the national average. The states with the lowest average bank credit card outstandings per household in the $3,400 range were Mississippi, Kentucky, and North Dakota, according to CardData ([www.carddata.com][1]). Idaho and Nevada posted the strongest gains in bank credit card outstandings in 2003, rising 4% and 6%, respectively. The state-by-state breakdown was based on total bank credit card (VISA, MasterCard, Discover, and American Express) outstandings of $677 billion and 105.3 million households at year-end 2003.

BIG FIVE STATES – EOY 2003
(Avg Outstandings Per Household)
California $8,417
New York $7,986
Florida $7,810
Illinois $7,478
Texas $5,176
Source: CardData (www.carddata.com)

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

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Equitex Posts a $3.5 Million Loss in Q2

CO-based Equitex reported that its second quarter revenues declined from $4.5 million in 2Q/03 to $3.5 million, and that its quarterly net losses grew from $500,000 in 2Q/03 to $3.5 million in 2Q/04. Statements of operations for 2Q/04 contained a total of $2.9 million in non-cash charges and operating expenses were also impacted in the six months ended June 30, 2004.

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Xign Lands Another Order to Pay Client

Williams, an integrated natural gas company, has selected Xign to automate its “Order to Pay” processes. The Order to Pay service will help eliminate paper and data entry, which will substantially lower costs associated with the settlement of business transactions. Williams’ business initiative to apply best practices to improve productivity and lower operational costs will be supported by Xign’s service.

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Prepaid Processing Shakeout Begins Led by PRE Solutions

Atlanta-based PRE Solutions has acquired the prepaid products and processing business of the industry’s largest prepaid transaction processor. The acquisition of Everything Prepaid LLC was an asset purchase transaction. The firm had 10,000 relationships with U.S. retail partners including AutoZone, BP/Amoco, Xtra Mart, Tedeschi Food Shops, Travel Centers of America and Love’s Travel Stops. Following the acquisition, PRE Solutions will have more than 50,000 retail partners throughout the U.S. and Puerto Rico. Claude Ricks, former CEO of Everything Prepaid, has joined PRE Solutions as VP/Indirect Sales.

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Senior Loan Officers Say Card Underwriting is Unchanged

The “July 2004 Senior Loan Officer Opinion Survey on Bank Lending Practices” yesterday reported that standards for approving applications for credit card and other consumer loans, as well as most terms on these loans, were unchanged, on net, since the April survey. Lending standards and terms for commercial and industrial (C&I) loans were further eased by domestic banks and U.S. branches and agencies of foreign banks over the past three months.

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Catuity Revenues Deeply Impacted by Target

Catuity reported second quarter revenue of US$135,000 compared to US$1.7 million for 2Q/03. The second quarter net loss was US$1.1 million, compared to a net loss of US$15,000 for 2Q/03. The decline in revenue was anticipated and was principally due to US-based Target’s decision to discontinue deployment of smart chip technology. Catuity recently said it would no longer pursue the stalled U.S. smart card market and would focus on the real time loyalty opportunity with merchants that have fully integrated systems and on existing point of sale business service requirements for which retailers, merchant services companies and financial institutions have existing budgets. For complete details on Catuity’s second quarter performance visit CardData (www.carddata.com).

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NOVA Purchases SEB Kort and Norge’s Acquiring Business

SEB Kort AB and Europay Norge AS have signed a definitive agreement for the sale of their merchant acquiring business to a Norway-based affiliate of NOVA Information Systems. EuroConex Technologies will manage the processing services for all new and existing merchant customers, and will market merchant services under the
euroConex brand. SEB Kort’s portfolio in Euroline Norge (owned by
Europay Norge) consists of more than 45,000 points of sale for
MasterCard and VISA in Norway. Europay Norge established its financial services in 1972, and the acquiring business was renamed Euroline after it was purchased by SEB Kort AB in 2003. Europay Norge currently has approx. 50 percent market share of the international card market (merchant volume) in Norway. In 2003 the overall acquiring market in Norway amounted to NOK 42 billion (Euro 5 billion) distributed over 93 million transactions, and the use of cards is increasing steadily.

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VASCO Launches Digipass Host Authentication

VASCO Data Security International launched “Digipass
Host Authentication” to tackle the phishing schemes. “DHA” allows an end-user to check whether a bank’s or a merchant’s Web site is genuine.
The entire Digipass product range is available with the “DHA” functionality, including “Digipass GO3.” When visiting a Web site, a Digipass user can send a 7 or 8 digit, time based one-time password to the host server. The host server will respond with a time based 4-digit host authentication code. When the 4-digit code matches with the 4-digit code generated by the Digipass, the end-user knows that he is visiting a valid Web site.

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