Major CUs Outpace the Top Ten & Industry Growth

Credit unions with at least $100 million in outstandings posted an average gain of 9% during the second quarter, compared to a 5% average gain reported by the top ten issuers, and a 4% increase industry wide. The Navy FCU and Pentagon FCU, each with outstandings over $500 million, posted gains of 8.8% and 9.2%, respectively. Sacramento, CA-based Golden 1 Credit Union posted the strongest gain, nearly 28%, growing from $148 million in 2Q/03, to $188 million in 2Q/04. For complete details on second quarter performance by credit unions visit CardData ([www.carddata.com][1]).

Major Credit Union Outstandings >$100MM
($ millions)
CREDIT UNION 2Q/04 2Q/03 CHANGE
Navy 1615.0 1484.0 +8.8%
Pentagon 535.0 490.0 +9.2%
Boeing Employees 247.6 233.0 +6.3%
Pa. State Employees 213.1 198.9 +7.1%
Golden 1 188.3 147.6 +27.6%
America First 143.0 135.4 +5.6%
NC Employees 135.0 123.0 +9.7%
Security Service 128.7 117.5 +9.5%
Redstone 115.4 106.9 +7.9%
Delta Employees 100.0 99.3 +0.7%
TOTAL 3421.1 3135.6 +9.1%
INDUSTRY +3.8%
TOP TEN +4.7%
SOURCE: CardData (www.carddata.com)

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

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Dialect Receives J/Secure Certification

Sydney-based Dialect Solutions Group has received “J/Secure” certification from JCB. “J/Secure” is a protocol that adds a secret password identification step to the traditional online shopping process.
Launched in April 2004, “J/Secure” is JCB’s proprietary authentication
program that uses the 3-D Secure protocol to secure online credit card
payments. Dialect delivers payment technologies and secure payment-processing solutions to a number of the world’s leading financial institutions, card associations and corporations.

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iBiz Software Enters the Japanese Market

Texas-based iBIZ Software has added JCB’s “J/Secure” to the list of programs that it is compliant for “3-D Secure Payer Authentication.” iBIZ Software is also entering the Japanese market with the local representation from MRS Corporation. The Company will be focus on enabling merchants to become compliant with “J/Secure” as well as other “3-D Secure” programs from VISA and MasterCard. In doing so, iBIZ will be working aggressively to help JCB implement payer authentication for their millions of cardholders who conduct online transactions. In other parts of the Asia Pacific region iBIZ is working closely with local iBIZness Partners to answer the needs of issuers and acquirers for comprehensive, robust and cost effective online authentication solutions.

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Chip and PIN Launches a Memory Campaign

Chip and PIN 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%.

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MasterCard and Canadian Tire Launch a Hockey Promotion

MasterCard Canada and Canadian Tire have launched a promotion to give away tickets to an upcoming “World Cup of Hockey 2004” game in either Toronto or Montreal. The “MasterCard Ticket Team” will be at randomly selected participating Canadian Tire locations looking for shoppers who made a purchase with their MasterCard card. One lucky eligible shopper will be selected in each city each day to win a pair of tickets to an exciting “World Cup of Hockey” game. The promotion continues to August 30th in Quebec and September 13th in Toronto and surrounding areas.

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Nishe Media Licenses Smart Chip Technologies’ Loyalty Solution

Nishe Media, a multinational media and advertising firm specializing in vertical market communications, has signed an agreement to license Smart Chip Technologies’ loyalty program management solution.
Smart Chip Technologies’ turnkey customer retention solution, including
loyalty, pre-paid stored value, and gift cards, was co-developed with
the Airos Group and IBM. The software solution enables customers to take advantage of click-and-mortar, real-time programs running on their existing cards and POS systems, including bar code, magnetic stripe, RFID, or smart cards, laptops, PDAs such as Palm or Windows devices, TV set top boxes, or mobile phones.

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Small CU Card Deals On Track to Top 2003 Sales

While the number of credit union card portfolios sold during the second quarter declined, the average deal nearly doubled from the first quarter. During 2Q/04, 11 portfolios, with more than $1 million in outstanding balances, changed hands compared to 19 in the previous quarter. The average deal size for the second quarter was $11.5 million compared to $6.1 million in 1Q/04, driven by three large deals above $10 million. According to NH-based Brookwood Capital total balances sold year-to-date have been approximately $240 million. Brookwood says the number of sales is on pace to exactly equal last year’s 60 portfolios, though the total dollar value of the transactions is on pace to surpass last year’s $420 million. Portland, OR-based AssetExchange reports that the penetration of credit cards among credit union members declined to 17.9% in June, compared to 19.1% in March. AssetExchange recently released a survey that showed credit unions selling their credit card portfolios in 2001 or 2002 posted higher growth in both membership and loans-per-member than credit unions that did not sell their portfolios. (CF Library 8/16/04)

Credit Card Portfolio Sales
1Q/04 2Q/04
# Sold 19 11
Avg Size $6.1mm $11.5mm
Tot Bal $116mm $126mm
Penetrate 19.1% 17.9%
SOURCE: AssetExchange; Brookwood Capital

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ViVOtech Combines RFID and IR on One Platform

ViVOtech has, for the first time, combined the leading contactless payments technologies, radio frequency and infrared, on to a single platform. The combined capabilities enable consumers to make payments with either RFID-enabled key fobs or cards, or IR-enabled mobile phones and PDAs. ViVOtech products that have combined RFID and IR capabilities include “ViVOpay 3000,” “ViVOplatform,” “ViVOpay Dine” and “ViVOwallet.” There are more than 30 million users of Infrared-enabled devices in North America.

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VFJ Technology Holdings Posts a Profitable Quarter

VFJ Technology Holdings Limited, a contactless smart card
technology specialist, reported a profit before finance costs and taxation of A$138,832 during the second quarter versus a loss of A$148,237 one-year ago. The profit represented the completion of the restructuring and consolidation of the division. During the period under review, VFJ focused in the RPC market where the company has an excellent track record, while the Australian and European operations were substantially cut back. The inauguration of the VFJ’s Automatic Fare Collection on Beijing Metro Line 13 in December has become the key platform for the city of Beijing to spread and promote the use of contactless smart cards. It also marked another milestone achievement for VFJ in the PRC, after the installation of the first AFC system for Shanghai Metro in the PRC in March 1999. VFJ has also received initial orders for the ticket vending machinery from the Shanghai Metro line after almost one year prototype testing. Omnitech Holdings Limited is the parent company of VFJ Technology Holdings Limited.

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Contactless to Drive Smart Card Shipments

A new study reveals that unit shipments in the total smart card industry totaled 2.02 billion cards last year, and is projected to reach 3.11 billion cards by 2008. Frost & Sullivan says contactless technology, which has been fairly successful in applications such as banking, transport, and security, is leading the growth. However, future expansion is likely to be threatened by the multiplicity of protocols. If contactless technology is to move forward, interoperability must be achieved, as in the case of contact cards where the standards are clearly defined at every level. Meanwhile, EMV migration in many parts of Asia-Pacific, Latin America, Brazil, and parts of Mexico is also expected to boost the uptake of smart cards. Smart card adoption is also likely to receive a boost from the growing demand for government IDs, especially in Asia-Pacific and North America.

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Notre Dame VISA Offers New Cardholder Incentives

Bank One and the University of Notre Dame have beefed up their “Notre Dame Platinum VISA” by offering new cardholders a Notre Dame sweatshirt, giving away items at events and at the University’s bookstore, and adding the “Flexible Rewards Select” option. This is a rare opportunity for Fighting Irish alumni and fans to access so many exclusive experiences.

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