Paymentech Invades Europe with a Dublin Office

Texas-based Paymentech is opening its first European office in the Eastpoint Business Park in Dublin. Several of Paymentech’s major merchants, including America Online, Symantec, Lands End and Amazon.com, already conduct business in Europe. Paymentech says a number of new product and technology initiatives are already in progress that will benefit European merchants. John Shirey, Paymentech Managing Director, will head the company’s European office. Privately-held Paymentech and its Canadian affiliate, processed 4.2 billion transactions and $123 billion in bank card sales in 14 currencies during 2002.

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SchlumbergerSema Deploys CreditCall’s EmvX to Speed Compliance

CreditCall’s software is to be deployed in handheld and cashier ticketing terminals across the UK rail network through a major deal with SchlumbergerSema. The Company’s EMV software kernel will be deployed to make SchlumbergerSema’s 4,500 “Tribute” and “AVANTIX” mobile ticketing terminals, deployed in the UK rail network, EMV compliant. The terminals are expected to be “Chip and Pin” enabled by the end of this year. SchlumbergerSema has deployed CreditCall’s pre-built EMV Toolkit, which consists of two core products: “EmvX” and “EMV.LIB.” The product being used by SchlumbergerSema, “EmvX,” provides devices based on the Windows platform with a simple method of adding the EMV functionality. Since it uses an architecture that is native to the Windows platform it is faster and more reliable than solutions based on interpreted languages such as Java. “EMV.LIB” is a portable version of the EMV kernel designed for use in proprietary embedded systems where memory footprint and CPU usage are critical issues. CreditCall develops diverse applications including card-based telephony solutions, pay & display car parking, vending, ticketing and pay TV.

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Strong Bidding on the Egg Card Portfolio Pushes Price Above GBP1.6 Billion

There is speculation that more issuers are lined up to take a crack at bidding on Prudential’s 79% stake in the “Egg” credit card portfolio. The mad scramble reportedly includes MBNA, Royal Bank of Scotland, Capital One, GE Consumer Finance, Barclays, Citigroup, HSBC, BNP Paribas, and National Australia Bank. The strong interest in purchasing the three million account portfolio is pushing up its potential price to more than £1.6 billion. Prudential put its stake on the sale block three months ago after “Egg” lost nearly £70 million in the first three months of 2003 in regard to its business in France. Egg produced a profit in the U.K. of £56.7 million during the same period. The issuer ended up with an overall pre-tax loss of about £25 million through the third quarter. Egg launched the “la Carte Egg VISA” card in France during November 2002 after purchasing Zebank, a local Internet bank for £5 million. Since its launch in France it has signed up less than 60,000 cardholders. In the U.K. Egg has signed up 3.1 million cardholders since its launch in October 1998.

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Sears Q4 Profits Double Thanks to its Credit Card Sale

Following its exit from the credit card business in the fourth quarter, Sears, Roebuck and Co. reported yesterday that its net income more than doubled over the year- ago quarter to $2.7 billion. The profit surge was primarily due to a pretax gain of $4.1 billion on the sale of its Credit and Financial Products business to Citigroup. The purchase price of $31.8 billion, at the November 3rd closing, included a 10% premium on Sears private label and bankcard credit card receivables of $28.6 billion or $2.9 billion, and $300 million for other assets, business facilities and employees. Included in the purchase price was the assumption of $10.4 billion in securitized debt and other liabilities. For the fourth quarter, through November 2nd, Sears Credit and Financial Products unit reported an operating loss of $645 million, compared with operating income of $363 million for the prior quarter. The current year quarter operating loss includes a $791 million loss related to the early retirement of debt. Fourth quarter domestic Credit and Financial Products revenues were $526 million in the current year, compared with $1.4 billion in the prior year. For complete details on Sears’ fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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Travelers Express/MoneyGram Money Transfer Volume Up 31%

Phoenix-based Viad reported Thursday that Travelers Express/MoneyGram revenues for the fourth quarter were $205.2 million, up 4.1% compared to fourth quarter 2002. Payment Services’ operating income was up 12.1% to $34.8 million. In the fourth quarter, money transfer transaction volume grew 31%, and revenues grew 18.2% in comparison to the prior year fourth quarter. The worldwide agent base grew nearly 11% in comparison to the prior year quarter, and now stands at approximately 63,000. Viad expects Payment Services segment revenue to increase at a mid to high single-digit rate in comparison to first quarter 2003 revenue of $189.0 million. Operating income is expected to increase to between $28 million and $30 million in comparison to first quarter 2003 segment operating income of $20.1 million. Viad is in the process of spinning off Travelers Express and plans to operate the business under the MoneyGram International, Inc. corporate name. For complete details on Viad’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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RETAIL 1H/04

MasterCard’s “MasterIndex of Retail” for Asia/Pacific shows robust potential growth in retail sales during the first half of 2004. All 12 Asia/Pacific markets included in the forecast are predicted to see positive expansion, with China maintaining its lead with an anticipated 14.0% year-on-year growth. Thailand takes the number two spot in the retail sales growth predictions with 10.8% year-on-year growth, followed closely by two other South East Asian markets which also show impressive growth prospects: Malaysia (9.2%), Indonesia (8.0%). While not as bullish, the Philippines (5.6%) and Singapore (3.9%) are also indicating positive year-on-year growth prospects. Korea shows strong recovery, driven by particularly rapid expansion in exports. With domestic consumption starting to recover going into 2004, retail sales growth is predicted to hit 8.2% year-on-year, up from its 2003 year-on-year contraction of 0.7%. Hong Kong and Taiwan show post-SARS retail recovery forecasts at a healthy year-on-year growth of 6.8% and 5.5% respectively. Japanese consumers are also reasonably positive; retail sales are anticipated to grow by 4.5% over the previous year. The Australian and New Zealand retail sectors are both optimistic with anticipated 4.5% and 5.0% year-on-year growth respectively. The analytical foundation of the “MasterIndex of Retail” is based on the development of a set of techniques that have successfully linked MasterCard’s “MasterIndex of Consumer Confidence” with retail sales statistics. The survey findings of the “MasterIndex of Consumer Confidence” are used as a leading indicator of how consumers may act in terms of retail spending over the six-month period ahead. Thus, a link is made between consumer sentiment and actual consumer behavior.

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Linux Security Appliance Protects Windows-Based ATM Terminals

St. Louis-based JBM Electronics has introduced the Linux-based “Gateway 300” and “Gateway 400” security appliance to protect Windows-based ATM and POS terminals from hackers and viruses. The Linux based Gateway 300 or 400 can now offer IT managers a low cost solution for protecting their most important assets. The hardware based Gateway s provides Virtual Private Network (VPN), 3DES encryption, SSL, Transparent Bridging, In-line Intrusion Protection, Network address translation (NAT), Stateful inspection, and an extremely flexible firewall. JBM Electronics offers 28 years of experience and is the industry leader for ATM/POS connectivity and security solutions. Our flexible networking solutions for mission critical transaction data provides connectivity from any ATM/POS device to any Legacy or IP-based host or transaction switching system.

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MasterCard and VISA Debut TV Spots in Super Bowl XXXVIII

MasterCard will unveil a new 30-second “Priceless” ad during this weekend’s “Super Bowl XXXVIII” that will feature characters from TV’s “The Simpsons.” VISA is also debuting a new 30-second commercial this weekend, called “Snowball,” featuring members of the U.S. women’s beach volleyball team who will compete in this summer’s “Olympic Games.” More than 90 million viewers are expected to tune in to “Super Bowl XXXVIII” on February 1st. Ad prices this year are running about $2.3 million for 30-seconds. The new MasterCard commercial features a day in the life of the short-tempered Homer Simpson where he attempts to get some errands done early to spend more time with his family, but strays along the way and ends up at his favorite watering hole, Moe’s Tavern. Creative for spot was handled by McCann-Erickson/New York. (CF Library 1/28/04)

[Click Here To View The Commercial in Quicktime Format.][1]

[Click Here To View The Commercial in Windows Media Format.][2]

[1]: http://www.cardweb.com/cardflash/2004/january/simpson_superbowl.mov
[2]: http://www.cardweb.com/cardflash/2004/january/simpson_superbowl.wmv

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Consumers Say Prepaid Cards Give Spending Control

The “6th Annual Coinstar National Currency Poll” has found that 32% of respondents said they have used prepaid cash cards for purchases and transactions, with 34% citing spending control as a reason why they prefer this form of payment, and, 19% felt prepaid cards were good for teens. or the millions of consumers that use prepaid debit and wireless/cellular services, a new, ultra-convenient option for replenishing prepaid accounts can be found at a place the average American visits 2.2 times per week — the supermarket. Over the past decade, Coinstar Inc. developed a multi-million dollar business by mainstreaming consumer coin-counting services at more than 10,000 supermarkets nationwide. Coinstar uses technology to deliver time and money saving services to consumers in their local supermarkets. Coinstar’s network of more than 10,000 machines is currently available to 160 million consumers in 48 states and the District of Columbia, as well as in Canada and the United Kingdom.

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MBNA-AmEx Deal Provokes VISA and MasterCard Comment

Yesterday’s blockbuster announcement that MBNA plans to issue American Express cards by year-end, produced a measured response by VISA and MasterCard. MasterCard said the announcement presumes that the Supreme Court will not overturn the lower court decision on MasterCard’s “Competitive Programs Policy.” MasterCard noted that American Express’ smaller acceptance network, and higher fees to merchants for acceptance, would benefit only American Express, and not consumers. VISA said that unlike American Express, VISA is a bank-governed payment association that partners with, rather than competes against issuers. VISA noted it values its relationship with MBNA and will continue to vigorously compete for their business. While the Second U.S. Circuit of Appeals unanimously rejected VISA’s and MasterCard’s request for a review of the lower court’s October 2001 decision, the stay has not been lifted. However, the DOJ is requesting the immediate lifting of the stay, even though VISA and MasterCard are heading to the Supreme Court to request a review of the lower court decision. VISA and MasterCard say the core issue is how joint ventures are treated under the antitrust laws. In October 2001, U.S. District Court Judge Barbara S. Jones’ ruled that VISA’s bylaw “210(e)” and MasterCard’s “Competitive Programs Policy” violated the “Sherman Antitrust Act.” (CF Library 10/10/01; 1/29/04)

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Prestige International Opens Concierge Services to Employers

Japan’s Prestige International, a provider of concierge services to MasterCard and other card issuers, has launched its concierge service to the corporate sector as an employee benefit and retention tool. Concierge as an employee loyalty tool is an extension of Prestige’s existing business model, to provide concierge as a customer loyalty tool to banks and credit card companies. Prestige International offers value-added call center and enhancement services to almost 100 multinational corporations, including Mastercard International, J.Crew and Cartier. Its concierge service is available to millions of consumers worldwide.

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