MasterCard Launches SideCard

MasterCard International last week launched a miniature card in Asia-Pacific that is capable of using contactless chip technology. The new “MasterCard SideCard,” which appears similar to the “Discover 2GO” card, flips out from its ergonomic plastic casing, and it can be swiped through any point-of-sale terminal. MasterCard says the product is available to all of its members worldwide. The network has also filed for patents to cover the card’s design. The “Discover 2GO” card, issued in the USA and patent-pending, is not smart card or contactless card ready. Also, the U.S.-issued Bank of America “Mini VISA” card is not smart card ready but patent-pending. MasterCard says it has received significant interest from members to launch the “SideCard” across the Asia/Pacific region.

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Credit Card Standards Not Tightening

A survey on lending practices shows that no banks have tightened standards on credit card loans, while some banks reported having eased spreads on these loans, over the past three months. The “August 2003 Senior Loan Officer Opinion Survey on Bank Lending Practices” found that a significantly larger percentage of banks indicated that they were more willing to make consumer loans in the current survey than had been the case since 1999. However, the survey also found that 5% of banks, on net, tightened standards for consumer loans other than credit cards, down from 12% in April. In addition, a few banks, on net, reported that they had narrowed spreads and had extended maturities on these loans. Reported demand for consumer loans jumped in the current survey; about one-third of respondents, on net, indicated an increase in demand, compared with a small reported net decrease in demand during the previous survey period.

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Affinity Technology Group Post 2Q Loss

SC-based Affinity Technology Group reported a second quarter net loss of $197,000 as the firm continues to focus on patent licensing efforts in the credit card market. Second quarter 2002 revenues from continuing operations were $39 thousand and the Company reported a net loss of $368 thousand or $0.01 per share. The weighted average number of shares outstanding during the three months ended June 30, 2003 was 41.5 million, compared to 40.8 million for the same period in 2002. For the first six months of 2003, revenues were $9 thousand, with a net loss of $433 thousand, or $0.01 per share. Revenues for the comparable period in 2002 were $109 thousand, with a net loss of $769 thousand, or $0.02 per share. The weighted average number of shares outstanding during the six months ended June 30, 2003, was 41.4 million, compared to 40.5 million for the same period in 2002.

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MasterCard Launches SideCard in Asia-Pacific

MasterCard International has launched a miniature card in Asia-Pacific that is capable of using contactless chip technology. The new “MasterCard SideCard,” which appears similar to the “Discover 2GO” card, flips out from its ergonomic plastic casing, and it can be swiped through any point-of-sale terminal. The “Discover 2GO” card, issued in the USA, is not smart card or contactless card ready. Also, the U.S.-issued Bank of America “Mini VISA” card is not smart card ready. MasterCard says it has received significant interest from members to launch the “SideCard” across the Asia/Pacific region.

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MBNA Charge-Offs Dip Below 5.00% in July

MBNA reported Thursday that charge-offs for its credit card portfolio continued to decline for the third consecutive month, while delinquency edged up slightly in July. It was the first time delinquency increased in six months. The nation’s second largest bank credit card issuer reported that charge-offs dipped to 4.95% in July, compared to 5.01% for June. Charge-offs started the year at 5.15%. Delinquency increased to 4.35% in July, from 4.34% for June. MBNA also reported that managed credit card outstandings for the end of July were $96.5 billion. MBNA also holds more than $14.1 billion in other consumer loans.

MBNA 2003
Month Outstandings Charge-offs Delinquency
Jan 03 NA 5.15% 4.85%
Feb 03 NA 5.10% 4.91%
Mar 03 $92.9 b 5.05% 4.62%
Apr 03 $93.9 b 5.02% 4.49%
May 03 $95.3 b 5.04% 4.36%
Jun 03 $96.4 b 5.01% 4.34%
Jul 03 $96.5 b 4.95% 4.35%
Source: CardData (www.carddata.com)

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Providian Card Fees Drop 23% in 2Q/03

Providian reported yesterday that its credit card fee income for the second quarter declined 23% to $219.6 million. Providian recently reported that its 2Q/03 outstandings declined 11%, compared to 2Q/02 due to the sell-off of some sub-prime accounts. The issuer said the sharp decline in fee income reflects lower average loans receivables and reflects lower late and overlimit fee income associated with its transition to higher quality credit card account originations. Providian fee income includes late fees, overlimit fees, returned check charges, annual membership fees, cash advance fees, cardholder service products, and, interchange fees received from bankcard associations. For complete details on Providian’s 2Q/03 performance visit CardData ([www.carddata.com][1]).

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

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VISA Introduces a Back-to-School Budget Calculator

VISA USA has added a”Back-to-School Budget Calculator” to its “Practical Money Skills” Web site. The Back-to-School Budget Calculator is designed to help families create a financial plan for back-to-school shopping. This free resource uses an interactive worksheet to help students of all ages plan for what school supplies they will need before they head back to class this fall. The calculator equips families with a smart budget by reminding families to consider all of their back-to-school expenses, and allows for any needed adjustments.

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U.S. Dataworks Restructuring Costs Boost 2Q Loss

Houston-based US Dataworks reported second quarter revenue of $486,763 and a net loss of $2,047,474. Results of operations without giving effect to financing costs and interest expense charges, the majority of which are non-cash items, show the loss from operations for the first quarter of fiscal year 2004 was $652,569 compared to a loss from operations of $319,832 for the corresponding period in the prior year. The Company’s efforts to restructure its balance sheet have continued to contribute to the losses shown in this quarter.

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Business Payment Systems to Offer Wireless Card Service

NY-based ISO Business Payment Systems has inked a deal to with NJ-based Comstar Interactive to offer Comstar’s “CHARGE ANYwhere” wireless credit card processing solution. The Comstar Gateway and Cingular Mobitex or Motient networks will connect BPS customers with National Processing, Inc., a leading provider of merchant credit and debit card processing, via a highly reliable and secure environment in which approvals are received by the user in less than 10 seconds. CHARGE ANYwhere features a wearable, state-of-the-art device that incorporates a patented magnetic card swipe reader with the popular BlackBerry-class RIM 850/950 Wireless Handheld featuring a full QWERTY keyboard.

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AmEx Signs Andre Agassi to Promote U.S. Open

American Express, the “Official Card of the US Open,” has signed Andre Agassi to promote the company’s sponsorship of the “2003 US Open Tennis Championships”. The campaign will also include new print creative featuring Monica Seles, James Blake and Daniela Hantuchova. For the past 10 years, American Express has served as the “Official Card of the US Open.” Through this year’s integrated campaign, the Company continues to provide unique experiences and special benefits for Cardmembers.

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Metris Companies Under Formal SEC Investigation

Metris Companies said yesterday that it received notification from the Securities and Exchange on August 5th, that it is the subject of a formal, nonpublic investigation. Metris says it believes the investigation relates primarily to the Company’s treatment of loan loss allowances in 2001 and subsequent years, the Company’s 2001 credit line increase program and other related matters. The Company noted that the SEC specifically advised it that this is a fact-finding inquiry and that it has not reached any conclusions related to this matter. The Internal Revenue Service recently completed its examination of Metris’ tax returns through December 31, 1998. The IRS proposed adjustments to increase the Company’s federal income tax by $42.9 million, plus interest of more than $15 million, pertaining to the Company’s treatment of certain credit card fees as original issue discount. Cumulatively through the year ended December 31, 2002, the Company has deferred more than $212 million in federal income tax under the OID rules.

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Maine’s Camden Sells Portfolio to U.S. Bancorp

ME-based Camden National Corporation has signed a definitive agreement to sell its consumer and business credit card portfolio to U.S. Bancorp’s Elan Financial Services. The sale is expected to be finalized in the fourth quarter of 2003. The Company estimates a positive impact to earnings of $0.02 to $0.05 per share during the fourth quarter. The Company has entered into this strategic partnership with Elan to offer a broader credit card product set to both consumer and business customers. The current credit card portfolios currently generate net annual earnings of approximately $200,000, or 1% of total net income for the Company.

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