Delinquency Continues South as the MPR Heads North

Delinquency (60+ days), among “prime” card-backed securities, dropped to 3.20% in April, from 3.35% in the prior month, and is the third consecutive monthly decline. However, prime charge-offs edged upward by 2 basis points from March’s 6.75%. Sub-prime charge-offs fell to 17.16%, an 11 basis point decline from March, and 54 basis points below one-year ago. According to the latest “Fitch Credit Card Index,” yield, after reaching an all-time low in February, slid 14 basis points in April to 16.96% after rebounding in March to 17.10%. Excess spread declined 2 bps to 6.39%, but, 33 bps above the year-ago level. The monthly payment rate registered its largest one-month gain since April 2003, rising 136 basis points to 17.31%. The MPR figure was up 128 basis points over April 2003. Bankruptcy filings reported for the month of April totaled 145,543. Year-to-date bankruptcy filings were 537,566, down 1.8% from the same time last year.

Details

Electronic Loyalty Program and Platform Unveiled for Nonprofits

Northern California-based Nietech Corporation has launched “COMMUNITYsmart,” the first automated loyalty, rewards and philanthropy program that electronically collects and distributes cash for schools and nonprofits from transaction data generated from debit, credit or cash purchases. A first of its kind card-based loyalty and rewards program, COMMUNITYsmart gives retailers a performance-based, measurable marketing tool directly tied to increased traffic and sales, while supporting schools and nonprofits and rewarding consumers. Through the Nietech Administrative System transaction and payment platform developed by Nietech, COMMUNITYsmart purchases are tracked electronically, and cash contributions based on a percentage of the purchase total are distributed electronically. Nietech Corporation is a marketing and payments technology company headquartered in Santa Rosa, Calif.

Details

Caesars Entertainment’s Connection Card Gets New Utility

Caesars Entertainment has taken its “Connection Card,” comp/loyalty card, online, to enable members to access balance information. That means customers can see instantly how many comp dollars are available to them to redeem for luxurious hotel rooms, fine meals, great entertainment and exciting shopping at Caesars Entertainment’s domestic resorts. Players may earn comp dollars in a variety of ways. Connection Card members are not only rewarded with comp dollars based on slot and table game activity, but also on their hotel cash folio. Caesars Entertainment, Inc. is one of the world’s leading gaming companies.

Details

VeriFone Introduces a RFID Add-On Module for its 7000MPD Family

VeriFone has introduced a contactless reader module, which supports RFID contactless smart card payments, that can be added to base model “Omni 7000MPD” and “Omni 7100MPD” terminals at purchase or after the terminals are put into use, without returning the terminals to the manufacturer. With its new contactless module, VeriFone is targeting the growing market of retailers moving to contactless payment programs that use chips with radio-frequency technology, such as MasterCard® PayPass(TM) from MasterCard International and ExpressPay from American Express. The contactless module will be on display at VeriFone’s booth (#1135) at the Retail Systems 2004 show being held May 17-19 at the McCormick Place in Chicago. VeriFone, Inc., recognized worldwide as the trusted leader in secure electronic payment technologies, provides expertise, solutions and services for today with a smart migration strategy for tomorrow.

Details

VISA Introduces the Commercial Consumption Expenditure Metric

VISA has introduced the first financial metric to standardize how business and government spending is tracked within the USA, assisting its members measure and forecast the actual and future penetration of commercial payments products. The new “Commercial Consumption Expenditure” is comprised of four key data elements including intermediate inputs, wholesale and retail purchases, private fixed investment and government spending. “Intermediate inputs” calculate the annual dollar value of purchases made from one business to another by capturing the money spent to acquire the materials and services used in production, as well as most business expenses. “Wholesale and retail purchases” are added to the CCE equation because they are not captured through intermediate inputs as these industries are handling final goods and not intermediate goods. “Private fixed investment,” or capital business expenditures such as computers and office equipment that are not captured through intermediate inputs or purchases. “Government spending” is split into two categories to account for both durable and non-durable goods. VISA will update its “CCE” forecast once a year, with the next analysis to be published in July. Using “CCE,” VISA estimates that total business and government spending will reach $14.3 trillion by the end of 2004, a more than 13% increase over 2000 spending.

Details

ADS Renews The Buckle for Five More Years

The Buckle, a specialty retailer, has renewed its long-standing agreement with Alliance Data for the next five years. Under terms of the five-year renewal, Alliance Data will continue to provide an integrated private label credit card program for Buckle’s multi-channel business operations, which include more than 320 retail locations nationwide and a website. Alliance Data Systems is a leading provider of transaction services, credit services and marketing services. The Buckle, Inc. is a leading specialty retailer of medium- to better-priced casual apparel, footwear and accessories for fashion-conscious young men and women.

Details

Cash Systems First Quarter Revenues Up 57%

Minneapolis-based Cash Systems reported that first quarter revenue increased 57% to $11 million from the first quarter of fiscal 2003. Income before tax increased to $507,000, compared to $482,000 in the prior year’s period. The Company recently closed a private placement which raised approximately $9.2 million. For 2004, the Company currently expects revenues of $46 million to $47 million, a 39% increase over 2003. The Company is one of four cash access companies serving the gaming industry. Last month, CO-based Equitex and its subsidiary, Chex Services, signed a “Settlement Agreement” with Cash Systems in regard to its termination of a stock purchase agreement signed in July, as well as termination of a contract to provide cash access services to the Seminole Tribe of Florida casinos. In December, MN-based Cash Systems terminated its deal to buy Chex Services from CO-based Equitex and has filed a lawsuit against both firms. In January, Native American Cash Systems of Florida abruptly kicked Chex Services out of its casinos and invited MN-based Cash Systems in. For complete details on Cash Systems’ first quarter results visit CardData ([www.carddata.com][1]).

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

Details

Open Mortgage is an Indicator of a Higher Credit Score

Experian Consumer Direct has discovered that the average credit score for consumers with at least one open mortgage is 716 versus 667 for consumers who do not have an open mortgage. The Index is formulated using Experian’s consumer credit score model, called the “PLUS Score.” Experian’s score is a numeric representation of financial behavior, which ranges from 330 to 830. Experian also found that the average mortgage amount is approximately $136,000 for U.S. consumers, with only 10% of consumer mortgages exceeding $250,000. Also, the average number of credit inquiries for home loans is highest in the month of July.

Details

Higher One Launches a Comprehensive Campus Card Program

CT-based Higher One has launched its comprehensive university-branded multi-purpose card under a contract with the University of Wisconsin La Crosse. The new “Tower OneCard” offers primary bank access, ATM cash access, POS on and off campus, EFT, and online account monitoring. Additionally, the “Tower OneCard” will enable students to choose any of three options to receive their financial aid and other refunds and sign up for payroll direct deposit with two-clicks. The choices for refunds include deposit to the “OneAccount” checking account, ACH to another bank checking account, or a paper check. Higher One’s services include “OneDisburse,” a completely new way of handling refund disbursements to students, and “OneFinance,” a suite of financial services including the “OneAccount” free checking account, the “OneCard,” and the “OneRewards” program that earns points for purchases at participating local merchants. In the first semester of 2004, Higher One processed over $50 million in financial aid and other refunds eliminating over 30,000 checks for its university clients. Higher One’s customers currently represent a community of over 150,000 students.

Details

Checks Decline 5% as ACH and Debit Cards Post Strong Gains

The latest government report indicates that check transaction volume declined by 4.7% last year to 39.5 billion checks, the steepest of the past four years, more than doubling the 2002 rate of decline of 1.9%. By contrast, signature debit card transaction volume increased 19% last year, from 2.7 billion to 3.2 billion transactions. In its “90th Annual Report to Congress,” the Federal Reserve System reported that it processed 15.81 billion checks in 2003, compared to 17.0 billion in 2002. The Federal Reserve’s commercial ACH volume increased by 12.1% last year to 5.59 billion payments. Commercial ACH payments include Direct Deposit of payroll, Direct Payment of consumer bills, business-to-business payments, and e-check payments such as online bill payments and accounts receivable check conversion. The unit cost to the Fed to process a check in 2003 increased by 13.3%, from 4.5 cents in 2002 to 5.1 cents in 2003. The Fed’s unit cost to process an ACH payment decreased by 15.4%, from 1.3 cents in 2002 to 1.1 cents in 2003. In 1995, the Fed’s unit costs for checks and ACH payments were virtually identical. In 1995, there was a record 49.5 billion checks written in the USA.

Details

The Children’s Place Gets ICEd by Hypercom

Hypercom and Tekserve POS announced that Tekserve will install Hypercom’s high speed, EMV-approved “ICE 6000Plus” with “HyperSafe” operating system security features in all 650 of The Children’s Place stores nationwide. The Children’s Place, a leading specialty retailer of high quality, value-priced clothing and accessories for children ages newborn to 10 years will use the Hypercom-Tekserve card pa6yment solution for a variety of customer benefits including the acceptance of debit, credit and gift cards. Tekserve POS is a leading supplier of POS hardware and services from IBM, NCR, Symbol, Epson and others. Hypercom Corporation is a leading global provider of electronic payment solutions that add value at the point-of-sale for consumers, merchants and acquirers, and yield increased profitability for its customers.

Details