Government Loosens Credit Card Rules Next Month

The Monetary Authority of Singapore is implementing three modifications to its credit card rules for financial institutions. The new rules will go into effect on February 19th. Card issuers will be permitted to mail out
unsolicited upgraded credit cards in the mail to existing customers. The MAS is also ending its limit on the number of supplementary cards that can be linked to one account. The current limit is two supplementary cards. In the third new modification, young Singaporeans who are under the age of 21 and studying overseas will be able to use a supplementary credit card. The total number of cards in the country at mid-year was 3.3 million, which included 2,295,027 primary cards and 992,555 supplementary cards.

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Strategy Science Empowers the New Marks & Spencer Money MasterCard

The new “Marks & Spencer Money &more Credit Card” has successfully applied Fair Isaac’s new “Strategy Science” methodology. Marks & Spencer Money utilized “Strategy Science” to develop optimal customer treatment strategies while migrating more than two million charge card holders to its newly launched credit card. The new Fair Isaac technology improved the customer acquisition process by allowing the issuer to prioritize thousands of combinations of marketing ideas quickly and efficiently, determine the best offer for each customer, assign the optimal initial credit lines and meet overall business objectives. Marks & Spencer Money has also signed an agreement to utilize the “Strategy Science Pre-Configured Application” for ongoing credit line management on their portfolio. “Strategy Science” is currently in use in more than 50 projects at 30 financial institutions throughout the world. Fair Isaac says that to date, six of the top 10 North American credit card issuers and three of the top five United Kingdom banks have already achieved significant bottom-line benefits through the use of “Strategy Science.”

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FIRSTBANK & MBNA

FirstBank Puerto Rico sold its $175 million bank credit card portfolio to MBNA and entered into a long-term agent contract. There are approximately 1.8 million credit card users in the country which has a total population of 3.9 million. The average annual charge volume per account in Puerto Rico is $1,600. Cardholders in the country owe nearly $4 billion on their card accounts, with the average balance of about $2,200. FirstBank will become the only Puerto Rico-based financial institution whose credit cards will be issued by MBNA. FirstBank, operates 96 financial services facilities throughout the country, and is the second largest bank in Puerto Rico, with assets of more than $12 billion. MBNA also issues credit cards in the United Kingdom, Ireland, Canada, and Spain.

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BCGI Releases Version 10 of Prepaid Wireless

Boston Communications Group has released “Prepaid Wireless v10” which now provides enhanced support for the creation of flexible payment profiles, allowing carriers to configure the payment options available to subscribers, including support for cash, debit, and credit card payments, and manage all customer payment profile information within a single solution. With these enhancements, Prepaid Wireless version 10 gives carriers and resellers/MVNOs the ability to deliver multiple differentiated, high-value offerings within a single market and target new customer segments. bcgi Prepaid Wireless provides industry-leading support for prepaid services through real-time network control of voice and data sessions and events, and real-time transaction-based subscriber management capability. Boston Communications Group, Inc. is a leader in transaction processing solutions for real-time wireless subscriber management, payment services, billing and customer care.

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Pilot Launched for Contactless Credit Card Payments via Mobile Phones

For the first time, a credit card payment service has been made available for mobile phones with a contactless chip in Japan. JCB is offering a trial service for “Mobile Offica,” a contactless chip and mobile solution that offers corporations cashless payment and office access control functions through NTT DoCoMo’s “i-mode FeliCa Preview Service” for mobile phones. Built around Sony’s widely-used “FeliCa” contactless IC chip technology, “Offica” offers a diverse menu of functions including office access control, employee attendance tracking and network authentication as well as a cashless purchasing function that is more advanced than older prepaid card systems. The “Offica” solution also offers postpayment capabilities, linking the employee’s spending at the office to his or her own credit card account. This allows employees to earn loyalty points on office-related purchases, and eliminates the burden on companies of administering cash and equipment to load value onto cards.

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Travelocity and MasterCard Renew Cruise Promotion

Travelocity and MasterCard have renewed their winter promotion offering up to $400 cash-back in the form of a “Prepaid MasterCard Gift Card” for cruises booked through February 26th. From the sandy beaches in Mexico, to the snow-capped mountains of Alaska to the romantic coastal locales of Europe, Travelocity’s fifth annual Cruise Super Sale has affordable cruise vacations for all cruisers — from rookies riding the high seas for the first time to the seasoned cruising pro looking for a new adventure. Travelocity pioneered the online travel space and continues to be the most popular travel service on the Web, giving consumers access to hundreds of airlines, thousands of hotels and cruise, last-minute and vacations packages, and best-in-class car rental companies, all backed by 1,000 customer service representatives staffed to provide 24- hour assistance. MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs.

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Diebold Gets New President/COO Next Week

Diebold has named Eric Evans, formerly of Emerson, as president/COO, effective January 26th. As president and COO, Evans will be responsible for the company’s global operations in financial self-service and security, including all related functions in sales, service, and manufacturing. Evans spent 16 years at Emerson, most recently leading a $1.2 billion business group at Copeland in Emerson’s Climate Technologies business. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security solutions and services. Diebold employs more than 13,000 associates with representation in more than 88 countries worldwide and is headquartered in North Canton, Ohio, USA.

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MBNA Enters its Fifth International Market

FirstBank Puerto Rico sold its $175 million bank credit card portfolio to MBNA and entered into a long-term agent contract. There are approximately 1.8 million credit card users in the country which has a total population of 3.9 million, according to CardFlash International (www.cardflashinternational.com). The average annual charge volume per account in Puerto Rico is $1,600. Cardholders in the country owe nearly $4 billion on their card accounts, with the average balance of about $2,200. FirstBank will become the only Puerto Rico-based financial institution whose credit cards will be issued by MBNA. FirstBank, operates 96 financial services facilities throughout the country, and is the second largest bank in Puerto Rico, with assets of more than $12 billion. MBNA also issues credit cards in the United Kingdom, Ireland, Canada, and Spain.

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Hispanic Ministry to Market PayCard MasterCard

Las Vegas-based PayCard Solutions has signed a joint marketing agreement with La Economma de Dios to offer the prepaid “PayCard MasterCard” to 15 million Hispanic domestic viewers and 180 million international viewers of the Hispanic Ministry. PayCard offers prepaid and stored value products. The PIN-based cash-value cards can be loaded with a cash value and used as a safe way for carrying funds for vacations, business trips and other travel. PayCard Solutions, Inc. is an up-and-coming industry leader in designing, implementing, marketing and providing high-tech solutions for stored value products, prepaid products and co-branded electronic paycards. La Economma De Dios is an International Hispanic Christian Ministry. Dr. Juan Bruno Caamano, founder and president of La Economma De Dios and Almavision, broadcasts through television and radio stations across the globe.

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Providan’s Securitized Charge-Offs Jump in December

Providian reported this week that charge-offs for its securitized card loans increased during December. However, delinquency decline 33 basis points during the month. For December, Providian posted a charge-off rate of 17.55, compared to 16.16% for November, 17.19% in October, and 15.65% in September. Providian’s delinquency rate dropped to 11.94%. compared to 12.27% for November, 12.38% for October, and 12.17% in September. During November, Providian began processing account reages during the month in which a qualifying payment is made instead of in the following month. Providian also made an adjustment to the delinquency status of certain past due customers enrolled in debt management arrangements in November. Earlier this week, Providian reported net income for the fourth quarter of $67.1 million, a five-fold increase over one-year ago, but down from the third quarter’s $85.3 million. For complete details on Providian’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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SECURITIZED PVN 2003
Month Charge-offs Delinquency
Jan 03 19.38% 13.26%
Feb 03 18.23% 12.89%
Mar 03 19.89% 12.46%
Apr 03 19.80% 12.27%
May 03 20.40% 11.92%
Jun 03 16.76% 11.98%
Jul 03 17.39% 11.96%
Aug 03 17.04% 12.12%
Sep 03 15.65% 12.17%
Oct 03 17.19% 12.38%
Nov 03 16.16% 12.27%
Dec 03 17.55% 11.94%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com
[2]: http://www.cardweb.com/images/c/charts1/securitized_dec03.jpg

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Capital One Profits Up 11%, U.S. Cards Up 13%

Capital One reported that its profits declined for the fourth consecutive quarter, however, compared to 4Q/02 the issuer’s profits are up 10.8%. For the fourth quarter, Capital One posted net income of $265.7 million, compared to a revised $275.5 million in the third quarter, $286.8 in the second quarter, and $309.1 million in the first quarter of 2003. During the fourth quarter, Capital One grew its managed loan portfolio by $4.0 billion and its domestic card loans by nearly $2.0 billion, compared to the previous quarter. Year-over-year, Capital One’s managed loans have increased 19.3%, and U.S. card loans have risen 13.3%. Marketing expenses for the fourth quarter declined $25.9 million since the third quarter to $290.1 million. One year ago, Capital One spent $210.8 million in marketing expenses. Capital One added 632,000 net new accounts, ending the quarter with 46.7 million accounts. The managed charge-off rate declined to 5.32% in the fourth quarter, from 5.44% in the previous quarter, and 6.21% for 4Q/02. The net charge-off rate for U.S. credit cards was 6.16% for both the fourth and third quarters, and 6.90% one-year ago. The managed delinquency rate (30+ days) declined to 4.46% from 4.65% at the end of the previous quarter. One year ago delinquency was 5.60%. The managed delinquency rate (30+ days) for U.S. credit cards was 4.60% for the fourth quarter and 4.88% at the end of the previous quarter. One year ago delinquency was 6.07% for U.S credit cards. At the end of the fourth quarter Capital One had $46,279,000,000 in U.S. card loans. For complete details on Capital One’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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Acxiom Holds Steady, Signs a Chase Card Deal

AR-based Acxiom reported fourth quarter revenue of $255.2 million, a slight decline from one-year ago. However, net earnings inched up slightly to $19.9 million. During the fourth quarter, Acxiom expanded its services agreement with JPMorgan Chase to include the financial institution’s credit card customer database. Other contracts completed during the quarter included Equifax in the United Kingdom and AutoNation, Bank One, and Microsoft. For the first calendar quarter, the Company expects revenue of $265 million to $270 million. For complete details on Acxion’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

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

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