Cardholders of the “United Mileage Plus VISA” will automatically be entered into the “Million Mile Giveaway” for purchases made between August 16th and September 30th. Bank One and United Airlines,announced yesterday, they have teamed to award a daily prize of 25,000 miles to 50 winners during the contest period. The daily prize of 25,000 is enough for a free round-trip ticket within the continental U.S. or Canada. A total of 1.25 million miles will be awarded as part of the “More Miles” program. As part of the “More Miles” program, cardholders can continue to earn additional miles by upgrading their existing “United Mileage Plus VISA” cards to higher-level cards such as the “Gold Class VISA” card; by referring a friend to apply for the card; or by choosing Sprint for their residential long-distance service.Details
Capital One posted its second straight profitable quarter for its international credit card portfolio on June 30th. The issuer posted 2Q/03 net income of $13.6 million, compared to an $18.1 million profit in the first quarter, and a $19.8 million loss in the second quarter of last year. Since the second quarter of 2002, Capital One’s international portfolio outstandings have grown 22%, from $5.0 billion to $6.1 billion. Charge-offs for the second quarter of this year was 4.48%, compared to 4.28% in the first quarter, and 3.91% one year ago. International delinquency for the second quarter of this year was 3.92%, compared to 4.22% in the first quarter, and 3.78% one year ago. Capital One previously reported that its UK operations became profitable for the first time in 2002. At the end of 2002, the U.K. Bank had 2.8 million accounts and $3.9 billion in credit card, revolving loan, and installment loan assets.The UK Bank has been operating independently in France since 2000. Besides the UK, the issuer also has operations and activities in Canada, South Africa and France.Details
This past June, MasterCard and Visa signed a historic settlement of a class action lawsuit brought on by Wal-Mart and five million other merchants. Under the terms of the settlement, Visa and MasterCard agreed to:
1) Reduce interchange fees for signature debit;
2) Compensate retailers for $3.05 billion for additional fees charged for signature debit programs;
3) Provide distinct branding on all card products;
4) Eliminate the “Honor All Cards” rule for retailers.
While the resolution is not “catastrophic” to the credit card companies or their banks, TowerGroup believes that it will have a considerable impact on all stakeholders and the future of debit cards in the US.
In this research, TowerGroup closely examines the future of debit for all parties: the credit card companies, their member banks and their customers, the merchants and the electronic funds transfer (EFT) networks. The research also looks at the potential impact of the pending acquisition of STAR (the largest EFT network) and its parent company, Concord Group, by First Data Corporation–making it a major player in the overall debit market.
The research note is titled: “After the Wal-Mart Settlement: The Future of Debit in the US.”Details
Co-operative Bank has selected Fair Isaac’s “Blaze Decision System” software to design and deploy business strategies that help improve profitability in its origination and account management operations. The bank is currently utilizing the company’s “TRIAD” adaptive control system at First Data Europe to process its card portfolio of 1 million accounts. “Blaze Decision System” is a key component of Fair Isaac’s “Business Science” suite of enterprise decision management tools. By automatically applying rules, scores and other decision-making criteria, businesses can make real-time decisions that reflect their business priorities.Details
Outstandings among the nation’s top VISA and MasterCard issuers are growing at the rate of 5.4%, compared to a 9.0% growth rate for all of 2002. Sears National Bank and Bank of America have emerged as the market leaders with growth rates exceeding 13%. MBNA and Capital One, long-time growth engines, have slowed to an annual growth rate of 6.6% and 4.7%, respectively. Providian continued to shed sub-prime loans to improve its risk factor and Fleet’s card business, formerly run by Providian’s current CEO, has slightly contracted over the past twelve months. Meanwhile, the “Sears Gold MasterCard” continues to post industry records, gaining nearly 50% since June 2002. For complete details on the top U.S. issuers for the second quarter visit CardData ([www.carddata.com]).
TOP TEN VISA/MASTERCARD ISSUERS
(based on EOP 2Q/03 outstandings)
2Q/03 2Q/02 Y/Y CHG
1. Citigroup*: $113.3b $111.5b + 1.6%
2. MBNA: $ 80.8b $ 75.8b + 6.6%
3. Bank One: $ 73.0b $ 66.8b + 9.3%
4. Chase: $ 51.0b $ 49.5b + 3.0%
5. Cap One: $ 47.2b $ 45.1b + 4.7%
6. BofA: $ 30.8b $ 27.1b +13.7%
7. Providian: $ 17.8b $ 19.9b -10.6%
8. Household: $ 16.6b $ 15.4b + 7.8%
9. Fleet: $ 14.6b $ 14.7b – 0.7%
10.Sears Natl: $ 12.6b $ 8.5b + 48.2%
TOTAL: $457.7b $434.3b + 5.4%
* Citigroup includes Canada; SOURCE: CardData (www.carddata.com)
SOURCE: CardData (www.carddata.com)
Philadelphia-based International SOS, a concierge service provider of many credit card programs, has evacuated seriously injured members to Singapore following a bomb blast that occurred close to the Marriott Hotel in Jakarta. Patients have been evacuated by SOS air ambulance and a further SOS evacuation is currently underway using a “Hercules C130” airplane. The “C130” has been converted and fully fitted with medical equipment by SOS and will be capable of transporting up to 14 patients. International SOS is sending medical escort teams of doctors and nurses to accompany both flights to make sure the patients are stabilized and monitored closely during transit. International SOS has a full time staff of over 3,000 professionals including 250 physicians operating in 26 Alarm Centers and 21 International Clinics around the world.Details
Dallas-based ACE Cash Express has hired William McCalmont, formerly with HQ Global Workplaces, La Quinta Inns, and FelCor Suite Hotels, as EVP and CFO. Prior to his tenure with The Turtle Creek Group, McCalmont held executive positions as chief financial officer with HQ Global Workplaces, La Quinta Inns, Inc., and FelCor Suite Hotels. In each position, McCalmont was responsible for the company’s overall financial strategy, and while at La Quinta, successfully completed a $3 billion dollar merger.Details
CheckFree reported second calendar quarter revenue of $144.6 million and net income of $20.0 million, compared to revenue of $130.6 million and net income of $12.8 million, in the same period one-year ago. The net loss for the quarter of $17.0 million, compared to a net loss of $59.4 million, in 2Q/02. CheckFree processed about 120.2 million transactions in the quarter, an increase of 7% the 111.9 million transactions processed in the previous quarter, and a 37% increase over the 87.9 million transactions processed in the year-ago quarter. Transactions in the Payment Services category were up 3% from the previous quarter. CheckFree processed 32.7 million transactions and recorded revenue of $12.3 million in the quarter, compared to 31.6 million transactions and revenue of $12.8 million for the prior quarter. As of June 30th, consumers were able to both view and pay bills through 949 Consumer Service Providers using CheckFree’s services, compared with 842 at the end of the previous quarter, and 584 at the end of the year-ago quarter. For complete details on CheckFree’s 2Q/03 results visit CardData ([www.carddata.com]).
KY-based National Processing Company has signed a multi-year online debit processing agreement with ShopKo Stores, which operates 360 stores in 23 states throughout the Midwest, Western Mountain and Pacific Northwest. NPC currently provides authorization and settlement services for all of ShopKo’s MasterCard and VISA transactions. In addition, NPC has been named ShopKo Vendor of the Year. ShopKo honors strategic business partners who have demonstrated exceptional ability to partner in driving sales, reducing costs and delivering customer satisfaction.Details
Capital One announced that Robert Crawford, currently VP/Controller of Capital One, will depart the company on August 31st. The issuer says that Aubrey Thacker, Director, Finance and Accounting, will serve as a replacement until a new executive is appointed. Cap One also announced that Gary Perlin, former CFO of the World Bank, has joined the company on July 29th, as previously announced. David Lawson, who is currently serving as interim CFO for the company, will now resume his responsibilities as President and CEO of Capital One Auto Finance.Details
OH-based Fifth Third Bank has signed a contract with TN-based National Commerce Financial Corporation for check card processing services. NCF will take advantage of Fifth Third’s gateway and debit card processing services for over 800,000 cards. National Commerce Financial Corporation is a sales and marketing organization that delivers select financial and consulting services through a national network of banking and non-banking affiliates. With $22 billion in assets, NCF operates almost 500 branches in 14 of the nation’s fastest growing metropolitan areas throughout the Southeast.Details
NY-based Change Sciences Group released a report yesterday showing that more than nine million U.S. consumers applied for credit cards online during 2002. The company says that recent forecasts indicate that more than 50% of all credit cards will be obtained exclusively through an online channel in the next year. The top five credit card Web sites, based on ease of use, according to Change Sciences Group are Discover, National City, Chase, Fleet, and Bank of America. Change Sciences uses a benchmarking process which allows for the empirical comparison of Web sites across more than 30 usability metrics.Details