USA Technologies Expects Revenues to More than Triple

PA-based USA Technologies projects that its revenues for the year ending June 30th will fall between $8 million and $10 million, and that revenue for the 2005 fiscal year will come in between $25 million and $30 million. USA Technologies also announced financial expectations for its fiscal 2005 year, which begins on July 1, 2004. In fiscal year 2005 the Company expects to generate $25 to $30 million in revenues. USA Technologies is a leader in the networking of distributed assets, wireless non-cash and m-commerce transactions, associated financial/network services and interactive media technology and energy management.

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Consumers More Concerned about Off-line Fraud

A new survey has found that Americans are less concerned about online credit card fraud than offline credit card fraud. The study, conducted last week by Ipsos-Insight, found that 76% of respondents said credit card fraud is either a moderate or major concern, while only 69% of respondents felt the same way about online credit card fraud. Only 4% of the Ipsos-Insight survey respondents reported having been the victim of credit card fraud as a result of using their credit card online. However, about 18% of Americans reported being a victim or knowing someone who had been the victim of online credit card fraud. Ipsos-Insight says the perception that online is safer may be derived from the fact that, up to this point, less people have been the victim of online fraud.

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MBNA Profits Up 30%; Delinquency & C-Os Drop

MBNA reported that net income for the fourth quarter increased to $703.5 million, an increase of 30% compared to the fourth quarter of 2002, and a gain of 7% over the prior quarter. Managed loans for 4Q/03 were up 10.5%, and charge volume was up 14%. Total managed loans at the end of the fourth quarter were $118.5 billion, and charge volume was $50.1 billion. Domestic credit card loans were up 8% year-over-year to come in at $85.8 billion. Managed charge-offs dropped to 4.97%, from 5.13% in the previous quarter, and 5.04% one year ago. Delinquency on managed loans also dropped, to 4.39%, compared to 4.48% in 3Q/03, and 4.88% in 4Q/02. Managed charge-offs for credit cards dropped to 4.66%, from 4.82% in the previous quarter, and 4.72% one year ago. Delinquency on credit card also dipped, to 4.28%, compared to 4.36% in 3Q/03, and 4.72% in 4Q/02. During the quarter MBNA added 1.9 million new domestic accounts and 620,000 foreign accounts. The issuer signed 74 new affinity card deals during the quarter. The issuer also renewed about 500 affinity group contracts during 4Q/03. For complete details on MBNA’s fourth quarter results visit CardData (www.carddata.com).

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Advanta Nears $3B as Performance Metrics Improve

Business card specialist, Advanta, reported that charge volume approached $2.0 billion for the fourth quarter, a 7% gain over the third quarter, and a 14% increase over 4Q/02. Managed loans also neared $3.0 billion at year-end, a 15% increase over the year-ago quarter, and a 3.7% gain sequentially. Net income for the fourth quarter of $11.6 million represented an increase of 2.7% over 4Q/02. The issuer ended the quarter with managed receivables of $2,958,835,000. Card volume for the fourth quarter was $1,944,617,000. Charge-offs on managed receivables dropped to 7.31% on an annualized basis, as compared to 8.27% for the quarter ended September 30th, and 7.89% one-year ago. Over 30 day delinquencies on managed receivables also declined, to 5.82%, compared to 6.15% in the prior quarter, and 6.15% in 4Q/02. For complete details on Advanta’s 4Q/03 performance visit CardData (www.carddata.com).

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Alliance Reservations Network Integrates GE’s vPayment

Alliance Reservations Network has integrated GE Corporate Payment Services’ “vPayment” electronic settlement tool in their hotel booking process providing a virtual credit card solution for merchant model hotel transactions, that enables hotels to collect payment on the date of checkout. Some large online agencies even pay hotels 90-120 days later. With a reservation guaranteed by vPayment, the hotel collects payment on the date of checkout. Alliance Reservations Network (ARN), a Phoenix Arizona based company founded in 1996, owns and manages over 300 destination Web sites including their flagship site and an extensive network of affiliate sites. GE Corporate Payment Services, the corporate card unit of GE Consumer Finance, develops and markets corporate bank cards and e-settlement tools designed for small-, medium- and large-sized companies and organizations.

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Retailers Offered a Complete Java-POS Based Solution

Wincor Nixdorf, Sun Microsystems, and Retek announced the availability of an integrated solution that enables retailers to easily acquire and implement end-to-end “JavaPOS-based” technology at the POS and on store servers. The solution enables retailers to easily acquire and implement end-to-end JavaPOS-based technology — at the point of sale and on store servers. Retek Inc. is the leading provider of mission-critical software and services to the retail industry. Wincor Nixdorf Inc. is one of the fastest-growing providers of IT products and solutions for the retail and banking industries. Wincor Nixdorf’s offerings include hardware, application software, professional services and a complete range of multi-vendor service programs including on-site support, depot service, advanced exchange and performance-guaranteed supplies procurement.

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ATM Manager Pro Tops 110,000 ATMs

MA-based e-ClassicSystems has recently signed CGI DIRECT, Fastcash, FEDCorp, NationalLink, and Ronald Harman Associates to license its “ATM Manager Pro” which now manages more than 110,000 ATMs worldwide on a daily basis. The flexibility of ATM Manager Pro allowed each customer to acquire a license for the appropriate set of modules necessary to address their specific business needs. e-ClassicSystems, Inc., based in Norwood, Massachusetts, is a premier provider of software solutions to organizations that deploy or manage ATMs. Its product, ATM Manager Pro, is a first-of-its-kind solution for complete ATM business management.

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Cap One’s December Charge-Offs Hit Lowest 03 Level

Capital One reported that its delinquency rate leveled off in December after a six month decline. Charge-offs also declined during December to their lowest level for 2003. With $71.2 billion in managed loans, and approximately $46 billion in U.S. credit card loans, the issuer reported that charge-offs dropped to 5.10% in December, compared to 5.57% in November, and 5.30% in October. Delinquency stayed at 4.46% in December and remains at a 2003 low. Delinquency for October was 4.52%. At the end of fourth quarter, Cap One had 46.7 million accounts, including domestic and international credit cards and auto loans. For complete details on Capital One’s 4Q/03 performance visit CardData (www.carddata.com).

Capital One 2003
Month Charge-offs Delinquency
Apr 03 6.36% 4.86%
May 03 6.40% 4.82%
Jun 03 6.20% 4.95%
Jul 03 5.75% 4.92%
Aug 03 5.34% 4.74%
Sep 03 5.24% 4.65%
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Source: CardData (www.carddata.com)

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Credit Card Solicitations Fall 17% Last Year

Direct mail credit card solicitations declined 17% last year. MINTEL’s Comperemedia says consumers received almost 750 million fewer credit card offers in 2003 compared to 2002. This is despite the fact that credit card estimated mail volume increased by 4% in November compared to October. During November, Comperemedia found that the amount of time the introductory rate was applicable decreased compared to previous months and is more likely to be for six to seven months, compared to 12+ months as seen earlier in the year. Balance transfer offers continue to be prevalent as well, and some offers have rates that are applicable until the customer pays off the entire transferred balance. The interest rates on these balance transfers are higher, with the majority falling between 2.99 and 3.99%. Rates on life of balance offers have been lower over the past two months, falling to as low as 2.99, from up to 7.99%. Late fees increased over the past few months; 64% of all offers tracked in November had a late fee of $35 and 17% had a late fee of $39.

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Third-Party ACH Processors Bound by NACHA Rules

NACHA has approved an amendment to its “Operating Rules,” effective December 10th, which requires third-party processors to be bound by its rules. The new rule will require agreements that specifically bind third-parties to the NACHA Operating Rules when a third-party’s customer does not have such an agreement with the originating financial institution (ODFI). The rule becomes effective December 10, 2004. NACHA is the leading organization in developing electronic solutions to improve the payments system.

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NYCE Sues Concord EFS Over Routing Rules

NYCE has filed a lawsuit against Concord EFS for breach of routing agreement. NYCE charges that Concord violated a 1993 agreement and engaged in other unlawful conduct as a result of certain operating rules it has adopted and is attempting to enforce. Those rules generally require that POS transactions conducted with cards branded with NYCE and STAR at similarly branded POS terminals, be routed to Concord’s STAR-branded network, even if the card issuer has designated that the transaction be routed to the NYCE network. According to NYCE, the 1993 agreement obligates NYCE and the Concord entities to permit financial institutions that participate in both EFT networks to direct how POS transactions using their cards are routed. The agreement established a precedent for issuer designation and honoring of network priority routing. The complaint was filed in Superior Court of the State of New Jersey.

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Global Axcess Attracts New Funding

FL-based Global Axcess has completed a private placement of $2.4 million, instead of the $2.0 million it was originally seeking. The investor group was comprised of approximately 50% institutional and 50% accredited investors. The terms of the private placement provided for the sale of 4,800,000 units at a price of $.50 per unit. All common shares associated with this private placement are restricted in accordance with Rule 144 of the Securities Act of 1933, requiring a minimum holding period of 12 months. Global Axcess Corp. was founded in 2001 with a mission to emerge as one of the nation’s leading network-based electronic commerce and transaction processing companies.

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