AMEX INTL 2Q/03

American Express’ international card volume is growing at an annual rate of 11%, slightly faster than the growth in domestic
card volume. Also, during the second quarter, AmEx added 500,000 new cards-in-force to its international card portfolio compared to 300,000 new cards-in-force for the USA. At the end of the second quarter, AmEx had 22.9 million cards-in-force outside the USA, an 8.2% increase over 2Q/02, while the domestic cards-in-force of 35.7 million were up 2.8% over last year. The international card growth is driven by growth in both proprietary and network partnership cards. During 2Q/03, AmEx launched the “Centurion Card” in Mexico, and issued the “Union Bank American Express Green” and “Gold Credit Cards” through a network agreement with Union Bank in Pakistan. The issue also signed an agreement with Consors Discount Broker AG in Germany, a subsidiary of the French Bank BNP Paribas and the leading direct broker in Europe, that will allow Consors to sell American Express Cards and to become an integrated “Membership Rewards” partner. Closer to the USA, AmEx signed a partnership with Air Canada to have Aeroplan become a partner in the “Membership Rewards” program and to develop a range of co-branded charge cards for consumers and corporations.

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CLEARjet Smart Cards Enter the USA

Austria-based CLEARjet GmbH has teamed with Kanematsu USA to market is thermo-re-writable printer for smart cards in the USA. The CLEARjet products allow for the reuse of smart cards, contactless cards, or magstripe cards. CLEARjet PVC cards are made with a special rewritable film that is activated by the printer and can be reprinted up to 500 times. The printer offers resolution of 300dpi and can be used to print text information, pictures, and barcodes. CLEARjet produced the “Kepler Card” student ID in Austria which also functions as a bankcard. The company also produced electronic ticketing smart cards for the Rhine-Rhur transport association, one of Europe’s largest Transport Authorities. More than 1.6 million of these rewritable smart cards are in use which are targeted at different demographics. For example, the “Firmen Ticket” for companies, the “Young Ticket” for apprentices and young people, the “Chocolate Ticket” for school kids. Kanematsu USA Inc is a supplier of ID card printing products since 1994.

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Equifax Settles Over Violations of a FTC Consent Decree

Equifax agreed to pay $250,000 to settle FTC charges that its blocked-call rate and hold times violated provisions of an FTC consent decree that settled a 2000 lawsuit for violations of the FCRA. That lawsuit settled charges that Equifax did not have sufficient personnel available to answer the toll-free phone number provided on consumers’ credit reports. The FCRA is designed to promote accuracy, fairness, and privacy of information in the files of every consumer reporting agency.

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VISA Merges Consumer Credit Cards

VISA this morning announced it is merging its “Classic,” “Gold,” and “Platinum” cards into one consumer credit card platform governed by one set of operating rules. The move will give VISA issuers complete latitude in differentiating their card products, and will extend some upgraded benefits to all VISA consumer credit cardholders. For example, in an industry first, VISA will now provide “Auto Rental Insurance” coverage to all consumer credit cardholders. The move will give ARI coverage to 110 million additional VISA cardholders. The merger of the products will also give issuers the advantage of not having to change card numbers whenever upgrading a customer’s card. VISA will continue to offer its issuers a menu of 16 managed enhancements. The convergence of the “Classic,” “Gold,” and “Platinum” VISA cards will become effective March 1, 2004. The lines between the card products have become more blurred over the past three years as some sub-prime issuers, such as Capital One, now offer “Platinum” cards with $300 credit lines. The penetration of “Platinum” cards in the USA has now reached 62 million households, nearly 60% of all households. MBNA and First USA pioneered the “Platinum” cards among VISA and MasterCard issuers in 1996. (CF Library 2/29/96)

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Bank One Merges Borders and Waldenbooks Cards

Bank One this morning announced it is combining the Borders and Waldenbooks VISA programs. The new “Borders and Waldenbooks VISA” enables cardholders to earn two points for every dollar in purchases at Borders and Waldenbooks stores, and one point for every dollar in all other purchases. After accumulating 500 points, cardholders automatically receive a $5 “Store Reward Certificate” valid at any Borders or Waldenbooks store. Under the previous programs, “Borders VISA” cardholders could only earn double points for their purchases at Borders, and “Waldenbooks VISA” cardholders could only earn one point for every $5 in card purchases. In addition, consumers had to be enrolled in the Waldenbooks “Preferred Reader Program” to be eligible for the Waldenbooks credit card product. Borders Group operates over 420 Borders domestic superstores and approximately 760 Waldenbooks stores.

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Pegasystems Automates Dispute/Chargeback Process

Pegasystems has launched a new product that automates the resolution of disputes and the processing of chargebacks with minimal human intervention. “PegaCARD Smart Dispute” is built on the Java-compliant “PegaRULES Process Commander” platform and facilitates straight-through processing. On the front end, the software guides dispute and customer service staff through intricate dispute regulations, reason codes and procedures to help provide a low error rate without expert training and more efficient customer service. On the back end, rules-based BPM and IT integration manages complex accounting and processing tasks, enabling consistent service with little to no manual input. Unlike point solutions for card disputes, Smart Dispute is an enterprise system that can be extended to address related business issues and deployed across different geographies, divisions and channels, including the Web. The company says the new product is being implemented at one of the nation’s top card-issuers.

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Merchant Services Adds Web Site to Fuel Sales

Merchant Services, a NJ ISO, has acquired and launched merchantservices.com to compliment its April launch of 1-800-BANKCARD. The new sites’ objective is to generate a high volume of quality leads for the nationwide MSI sales organization. The company also plans to promote the site through search engine optimization techniques that will direct merchants seeking information about credit card processing services to merchantservices.com. Sales leads arriving through the website will go to the same proven MSI organization that handles all of the company’s current business.

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EURONET 2Q/03

Euronet Worldwide reported second quarter consolidated revenues of $48.1 million, a 175% increase over the second quarter 2002, driven by its new e-pay prepaid processing segment. Second quarter revenues for prepaid processing segment were $32.2 million. Total transactions processed in the second quarter were 22.8 million. e-pay processes electronic prepaid transactions at more than 50,000 point-of-sale terminals located in the U.K., Australia, Malaysia and New Zealand. The EFT processing segment posted second quarter revenues of $12.2
million, a 5% decline over 2Q/02. The decrease reflects the January sale of the the U.K. ATM network. The EFT processing segment processed 27.1 million transactions in the second quarter, compared to 18.7 million transactions for the same period last year. At the end of the second quarter, Euronet had 3,120 ATMs owned and/or operated as compared to 2,840 ATMs at the end of the second quarter of last year. Euronet owns and/or operates ATMs in Hungary, Poland, Germany, Croatia, the Czech Republic, the U.K., Greece, Kosovo, Slovakia, Egypt and India.

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Oberthur Ships 22.2 Million Smart Payment Cards This Year

The top supplier of VISA and MasterCards reported this morning it delivered more than 28 million microprocessor cards during the second quarter including 11.2 million smart payment cards. Oberthur Card Systems reported total 2Q/03 revenues of $111.1 million, a 5.6% decline over 2Q/02 (at constant exchange rates). Second quarter revenues for smart payment cards increased 5.4% to $22.3 million. However, sales of banking magnetic stripe cards, loyalty cards, scratch cards and memory cards declined 29.7% to $19.9 million. Sales of SIM and ID cards for the second quarter totaled $42.9 million. Oberthur says the decline was due to its voluntary withdrawal from memory card activities as well as from the decrease in the value of the dollar versus the euro. But, sales of magnetic stripe cards has been stable despite the migration towards smart cards. Obethur’s revenues from the Americas region represented 28% of its global revenues. For complete details on Oberthur Card Systems’ second quarter results visit CardData (www.carddata.com).

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DINERS & ATG PORTAL

Diners Club International Ltd. has selected Art Technology Group’s “ATG Portal” to facilitate the exchange of information among its 83 franchises, sub-franchises and agencies around the globe. The new “Diners Club InfoNet” portal, will serve as a secure, single access point to existing and future applications, including business-critical reporting systems. Through InfoNet, Diners Club will be able to provide a user-friendly environment where franchises can turn to gain information and insight about programs other franchises are executing as well as corporate customer information from individual regions.

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Metris Unloads Membership and Warranty Products Business

Metris Companies confirmed yesterday the sale of its membership and warranty products, and operations of Metris’ enhancement services business, to the privately owned UK-based CPP Group. Metris will retain its credit protection and insurance business under the terms of the agreement. Under terms of the deal, CPP will be the preferred provider of enhancement services to Metris going forward. During the second quarter Metris reported revenues from its enhancement services of $85 million, compared to $96 million one year ago. According to CardData, Metris had $46 million in credit protection revenues, $29 million in membership products revenues, and $10 million in warranty product revenues, during the second quarter. CPP Group has a worldwide base of more than 8.3 million customers.

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