The UK’s “Chip and PIN” program has introduced its campaign to help people memorize their PINs. Most consumers have no trouble forgetting their pinch but for those who do struggle with their four-digit PINs, a guide featuring hints, tips and memory tricks is now available from the chip and PIN Web site. Recent research reveals that Brits find remembering people and important days more difficult than remembering PINs, with 43.8% struggling with names, 36.7% with birthdays and anniversaries, and 28.7% with PINs and code numbers. More than two in five UK cardholders has been issued a “chip and PIN” card by the end of May. The card requires a PIN for debit and credit transactions. When a similar system was introduced in France, card fraud fell by 80%.Details
China Unionpay’s subsidiaries have signed a deal with World Trade Link Limited to develop a loyalty program for all bank card holders in Guangdong Province. The program will reward consumers and merchants for using debit and credit cards and is the first rewards program offered in the province. China Unionpay is the one and only settlement platform of all banks in China. Most bank cards are enabled by China Unionpay for cross bank transactions and most POS are enabled by China Unionpay. As a result, China Unionpay will be the only one to have the capacity for developing the bonus system for all bank card holders covering all merchants with POS machine.Details
Delinquency and charge-offs for credit card-backed securities, during the second quarter in the UK, remained steady sequentially, but are noticeably higher than one-year ago. Yields have steadily declined over the past twelve months as interest rates have edged up, and the monthly payment has headed north. Delinquency (60-180 days) ticked upward to 2.60% in the second quarter, compared to 2.50% in the first quarter of 2004, and in the second quarter of last year. According to FitchRatings, charge-offs remained at 4.40% for the first two quarters of this year, but are significantly higher than 2Q/03’s 4.00%. Yield dropped to 18.17% in the second quarter, compared to 19.18% in the previous quarter, and 20.10% one-year ago. The monthly payment rate increased to 17.88% in the second quarter, compared to 17.50% one-year ago,and 17.30% in the first quarter of this year. For the Royal Bank of Scotland yield decreased during the second quarter, falling to 17.2% in June from 18.9% in the previous quarter. MBNA’s yield stayed stable around 20.5% but delinquencies increased to 3.0% and charge-offs rose to
4.1%. For Egg, delinquencies and charge-offs were slightly higher during the second quarter than in the beginning of the year. Capital One’s yield remained steady above the 22% level for the second quarter, the highest level for UK ABS. Capital One’s delinquency and charge-off rates fell to 3.1% and 4.9% from 3.4% and 5.3%, respectively, between the first and second quarters of this year.
Grupo Financiero Uno reports it has achieved a six-fold improvement in cycle times by using the Ultimus “BPM Suite.” Grupo Financiero Uno began automating its credit card processes a few
years ago. A credit card approval process initially took 15 days due to paperwork. Through the use of the Ultimus “BPM Suite,” Grupo Financiero Uno eliminated much of the paperwork and brought that process down to less than 3 days. In fact, today Grupo Financiero Uno is able to process 470% more credit card applications and credit card disputes with the same number of staff per year while client growth continues 30% year
over year. There are more than 15 companies under Grupo Financiero Uno with locations in seven Latin American countries, including Mexico, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. Its consumer credit card arm has over a million credit card holders and is Central America’s largest issuer of VISA credit cards. The company employs more than 4,000 people.
Miami-based GlobeTel Communications and Grupo Ingedigit have teamed to create a Miami switch for transaction processing services. Both parties are contributing equally to the venture. The venture will be managed by GTEL operating from its facilities in Miami, and will mirror Grupo Ingedigit’s successful operations in Venezuela. GTEL will expand its capabilities to profit from the electronic processing of financial transactions with this venture. When completed, the Miami switch is expected to be certified to process MasterCard, VISA, Cirrus and other independent ATM transaction networks.Details
A Federal District Court in California has ruled that Teleflora cannot block local retail florists using its software from processing their credit card sales through other vendors. Florists’ Transworld Delivery (FTD) brought the action after Teleflora modified its “RTI” software in 2002 to prevent florists from using any vendor other than Teleflora for credit card processing. The Court stated that users of “RTI who are licensed to use the prior versions of the software are free to reinstall the prior versions of the software and begin clearing credit cards with vendors other than Teleflora, including FTD. FTD primarily markets floral products and services to approximately 20,000 FTD members and other retail locations in the USA.Details
United Airlines has followed American Airlines’ recent decision to offer special lower mile redemptions for short-haul flights. The two airlines have the two largest co-branded bank credit card programs in the USA. United announced Tuesday it will now offer free roundtrip economy travel on flights under 750 miles for 15,000 miles, if the flights are booked on its Web site. Roundtrip domestic economy tickets generally require 25,000 redeemable miles, under United’s “Saver Award” rules. United is also offering free first-class and business-class short-haul tickets in exchange for 30,000 redeemable miles instead of the usual 40,000 miles. The updated program for United will go into effect September 1st and expires at year-end. American Airlines’ reduced award travel program, announced August 8th, will run from September 1st to February 28th. (CF Library 8/9/04).Details
Dallas-based Alliance Data Systems has signed a five-year agreement with American TV and Appliance of Madison to provide a business credit card program for American TV’s commercial customers. The full-service commercial credit card program provided by Alliance Data will include account acquisition and activation, receivables funding, card authorization, card issuance, statement generation, marketing services, remittance processing, and customer service functions.Details
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.Details
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.Details
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
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]). 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)
New York $7,986
Source: CardData (www.carddata.com)