Equitex Launches CreditGuard

CO-based Equitex says it has successfully completed the development of a quasi-cash credit card cash advance product called “CreditGuard.” CreditGuard is a proprietary credit/debit card advance system that allows patrons to access their card limits with or without a PIN number. Equitex says last year it processed approximately $174 million in quasi cash transactions. The Company anticipates that implementation of the quasi cash credit card cash advance product will commence next month with rollout completion expected by the second quarter of 2004.

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Encore Merchant Services Signs WV CU

WV-based Star USA Federal Credit Union has signed an agent contract with MA-based Encore Merchant Services. Encore Merchant Services will handle account application and establishment, point-of-sale terminal deployment, product development, customer service, and risk management services. Encore is a division of Primax Payment Systems. Primax has over 5,000 merchants located in 48 states. ENCORE was organized to provide ATM/Debit card routing and other electronic services for the credit union community. Currently ENCORE has in excess of 6 million transactions monthly.

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VISA Holiday Volume Up 14%

VISA USA reports that December 26th produced more than $1 billion in retail spending on VISA credit and debit cards, a 16.1% increase over the same day last year. VISA says “Black Friday,” or November 28th, was its biggest retail day, with nearly $2 billion in card volume, followed by December 20th with more than $1.9 billion in retail spending. Overall, U.S. spending on VISA debit and credit cards during the holiday season increased 14.2% to $97.9 billion. The highest grossing retail sectors were Department Stores, Apparel, and Mail and Phone Order sales, for a total of over $10 billion from November 28th to December 28th. Spending in the Specialty Retail and Hobby category grew the most among retail sectors, with dollar volume increasing 13.5% from 2002. During the same period, online purchases on VISA cards increased 48.9% compared to the 2002 holiday season. The total dollar volume for VISA purchases online exceeded $7.6 billion, the highest four-week amount in VISA’s history. Regionally, the West posted the largest increase in card spending this holiday season with a 17.22% gain over 2002.

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Credit Card Delinquency Hits 13.50% in November, the Fifth Straight Monthly Increase

The Financial Supervisory Service reported that overall credit card delinquency increased during November to 13.50%, compared to 11.74% for October. Woori Card reported the highest delinquency, at 30.8%, and LG Card’s delinquency rate rose from 11.4% in October to 14.7% for November. Shinhan Card reported the lowest delinquency rate at 8.2%. The Financial Supervisory Service says that total defaults increased to 7.7 trillion won for November compared to 6.9 trillion won for October. This is the fifth consecutive month of increases for delinquency. LG Card has been put on the sale block but as of today has received no interest from potential bidders. The government and the creditor banks are reportedly considering some significant changes in the deal.

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ECHO Revises Diluted Earnings/Loss Per Share

Electronic Clearing House announced a recalculation of the diluted earnings/loss per share amounts previously reported. On December 16th, the Company announced that for the fiscal year ended September 30, 2003, it earned $0.23 per basic and diluted share on revenue of $40,636,000 before the cumulative effect of an accounting change to record the impairment of goodwill. This compared to a loss of $0.41 per share on revenue of $33,291,000 for the fiscal year ended September 30, 2002. The revisions show the Company earned $0.23 per basic share and $0.22 per diluted share for the fiscal year ended September 30, 2003, on revenue of $40,636,000 before the cumulative effect of an accounting change to record the impairment of goodwill.

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Card Use and ATM Visits May Decline in 2004

A new survey shows that eight out of ten consumers expect to have less debt next year. Of those surveyed, 72% plan to limit credit card usage while 40% expect to limit ATM visits during 2004. The survey, conducted by CoolSavings, also found that 57% expect to put more money away in savings in the new year. According to the survey, strategies for saving more are varied: consumers will track spending manually or with a computer program (44%), sign up for direct deposit to savings account (39%), contribute to tax free account through payroll deduction (37%) and still many will keep cash in a savings/checking account (36%). The survey was conducted between December 12th and 16th, and included 1,328 unique responders.

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MasterCard Launches a Chicago Promotion

MasterCard has teamed with the Greater North Michigan Avenue Association to launch a promotion to promote Chicago’s “Magnificent Mile.” Between January 3rd and February 29th, MasterCard carrying visitors to the strip will be able to take advantage of special discounts. The fourth annual “Light Nights on The Magnificent Mile” will feature special MasterCard discounts and incentives at more than 50 Michigan Avenue restaurants, shops and hotels.

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VISA’s Boxing Day Volume Approaches $300 Million

The day after Christmas or “Boxing Day” attracted 5.9 million Canadian shoppers this year. VISA says that 26% of Canadians planned to shop December 26th, representing a 3% increase over last year. The VISA study found that Canadians expect to spend an average of $293 on gifts for the 2003 holiday season on “Boxing Day.”
VISA says it expects to process more than 2.3 million credit card transactions totaling approximately $280 million in sales volume for December 26th. During the busiest hour, VISA will process more than 297 thousand transactions, valued at approximately $35 million. Earlier this month, VISA also revealed that 22.6 million Canadians expect to spend a total of $18.2 billion on holiday season gifts this year. Through December 21st, VISA processed 80 million credit card transactions, totaling $8.8 billion in sales volume, representing an increase of 7.7% over 2002.

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Starbucks Brews Up a Card Promotion

Starbucks has launched a major campaign to promote its new “Duetto VISA” and its hugely successful Starbucks Gift Card. Between now and February 17th, Starbucks card users making a purchase with either card will automatically be entered to win prizes in the “Meet Your Friends at Any Starbucks” sweepstakes. Weekly prizes of $10 card loads will be awarded. After the contest period, two grand-prize winners will receive first-class international travel for four to any city or country where a Starbucks is located. Winners will receive deluxe accommodations for six nights in the city of choice provided by Hyatt or Westin Hotels & Resorts. The winners will also receive a “Starbucks Card” that is automatically reloaded every month with $50 for two years.

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MasterCard Holiday Volume Up 6.5%

MasterCard reported that holiday spending on its cards in the USA increased 6.45% over last year. Consumer Electronics and Appliance Stores produced the biggest gain at 6.7%. MasterCard also found that California led the charge in card spending with an 11.7% increase. The weakest area of growth was the Southwest with a 2.7% gain. Internet and Catalog (non-store) card volume increase 6.5% while Toy Store card volume dropped 7.7%. Department stores were off 1.4% this year for MasterCard.

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MINT CARDS

Royal Bank of Scotland is in the process of replacing the Advanta name on its credit cards with a new brand name. The change-over to the “MINT” name came after the RBS Advanta relationship expired. RBS currently offers four credit cards under the Advanta brand. The RBS Advanta portfolio includes the “RBS Advanta VISA Classic,” “RBS Advanta VISA Gold,” “RBS Advanta Platinum MasterCard” and “RBS Advanta mc2 MasterCard.” The cards currently offer a 0% intro rate on purchases and balance transfers through October 1, 2004. The go-to interest rates are currently 12.9% for all four card products. The RBS Advanta cards were first issued in 1996.

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Moneris Solutions Reports it Processed a Record 8.5 Million Card Transactions on December 23rd

December 23rd was once again the single busiest shopping day across Canada. The country’s largest processor of debit and credit card transactions reported that it handled a record 8.490 million transactions on December 23rd, compared to 8.375 million on the same day last year. Moneris Solutions says its processing system handled 607 transactions per second during December 23rd’s peak time period of 3:00 pm EST. This represented a 10% increase from 2002’s peak of 550 transactions per second. Moneris processes credit and/or debit card payments for more than 350,000 merchant locations.

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