Toronto-based Hudson’s Bay Company reported that its financial division posted a 22% gain in first quarter credit card outstandings to $478 million. HBC says the increase in credit card receivables reflects the higher credit card blend at the Bay and Zellers stores and additional third party volumes. As of April 30th, there were 1.4 million active Bay credit card accounts and 1.4 million active Zellers credit card accounts. The current and 30 days past due balance represented 94.5% of the receivable portfolio, compared to 94.9% at April 30, 2002. During the first quarter, the number of charge-off accounts decreased by 8%. Of the dollars charged-off, the value of bankrupt accounts increased from last year by $1.7 million. Net bad debt expense in 1Q/03 of $22.2 million was $4.6 million higher than 1Q/02.Details
A new study has found that bankruptcies as a percentage of credit card charge-off dollars increased to 32% last year compared to 29% in the previous year. BenchMark Consulting International and the Consumer Bankers Association also found that overdraft protection had the highest dollar delinquency rate, at 2.8%, compared to the lowest, home equity lines of credit, at 0.7%. The study encompasses consumer loan and credit card portfolios. Last year, delinquencies were the highest they had been in the past ten study periods at 1.86%. BCI and CBA said this year’s study unveils the 1.34% delinquency rate as the lowest it’s been since 1999.Details
Denver-based BSI2000 has received a purchase contract for a bankcard project in South Africa to test its “Transact 2000” optical card financial transaction unit along with associated software and “LaserCards.” One thousand “eUnity” bank debit cards are planned to be issued and two “Transact 2000” optical card transaction units will be involved in the initial pilot period. The technology is intended to be proven by the partner company in association with a South African organization with two million private members.Details
When it comes to payroll debit cards, state laws requiring free-and-clear access to payroll funds have become a compliance challenge for organizations with employees in multiple states. This morning, Houston-based FSV Payment Systems and Washington, DC-based ATM National have struck a deal to provide surcharge-free ATM access for payroll debit cards, in all 50 states, by mid-July. ATM National is the operator of the new “Allpoint” ATM network which links 23,000 surcharge-free ATMs nationwide. WI-based Fiserv said this morning that it currently offers its payroll debit card program through a relationship with FSV Payment Systems. With the addition of the “Allpoint” network, Fiserv and FSV card programs will deliver more than 37,000 touch points to cardholders. The “Allpoint” network is comprised of ATMs operated by E*Trade Access and Cardtronics. Fiserv already has a relationship with “Allpoint” through its Fiserv EFT/CNS unit, which provides turnkey back-office processing services to the network.Details
American Express has launched its first credit cards in Pakistan via a partnership with Union Bank. The new “Green” and “Gold” credit cards will be targeted at affluent Pakistani consumers. Cardholder benefits include: revolving facility at a service fee of 27%, balance transfer facility at an 18% interest rate, and, an exclusive ÂFounder MemberÂ offer with special recognition and benefits. Union Bank has been managing the American Express cards business in Pakistan by offering AmEx “Personal” and “Gold” charge cards as well as “Corporate Cards. In June 2001 American Express and Union Bank signed an “Independent Operator” agreement allowing Union Bank to conduct American Express Card Service in Pakistan. American Express has established more than 70 card-issuing partnership arrangements in close to 80 countries.Details
Online bill payment exploded in the first quarter as more than $48 billion in payments were made via the ACH. NACHA says the first quarter activity is half of the amount of $96 billion for all of 2002. At the current growth rate, the amount would exceed $200 billion for all of 2003. NACHA noted that in contrast, a recent survey estimated online sales figures of $76 billion for 2002 and $96 billion for 2003. NACHA says credit card issuers have been the leaders in presenting consumer bills on their Web sites and accepting payments online. The ACH Network serves 20,000 financial institutions, 3.5 million businesses, and 135 million individuals. In 2002 there were almost 9 billion ACH payments made worth more than $24.4 trillion.Details
Virgin Mobile USA has inked a deal with four major prepaid wireless phone card distributors to expand its reach to 25,000 individual retail locations in the USA. A joint venture between Virgin Group and Sprint, Virgin Mobile USA, which launched last July, is the first mobile virtual network operator in the US. The Virgin Mobile card charges 25-cents per minute for the first ten minutes of each day, and then 10-cents for every minute thereafter. The “Virgin Mobile Top-Up” card will be available in $20, $30 and $50 denominations. The four new agreements were signed by CellCards, GTS Prepaid, PRE Solutions and InComm. “Virgin Top-Up” cards are now available in nearly 800 Hess gas station stores and CVS drug stores. Virgin Mobile phones and top-up cards are currently available at Best Buy, Circuit City, Media Play, Sam Goody, Target Stores and Virgin Megastores. “Top-Up” cards are also available at Circle K and 7-Eleven stores as well as online through Virgin’s Web site.Details
Fincentric Corporation announced the latest version of its retail banking system, Wealthview BankingTM 3.6. The new version delivers significant depth of functionality in the core banking, deposits and lending applications, providing financial institutions seamless integrated information across multiple delivery channels. With Wealthview Banking 3.6, financial institutions can analyze the value of each customer, formulate strategies to maximize their value, and increase customer retention.
Rainier Pacific Bank, headquartered in Tacoma Washington, was instrumental in the development of Wealthview Banking 3.6. “We worked very closely with Fincentric throughout the product development phase from requirements to design and most recently, in functionality testing,” said John Hall, CEO of Rainier Pacific Bank. “The new 3.6 version of Wealthview Banking will have a great impact on our ability to better service our clients.” Rainier is currently in the system integration phase of its implementation and is on schedule to go live in Q3.
As a customer-focused company, said Lyle Wharton, Fincentric s president and CEO, we re collaborating with clients like Rainier Pacific Bank to deliver technology that can help them build stronger relationships with their customers. The delivery of 3.6 is a great testament of the teamwork and synergy between Rainier Pacific Bank and Fincentric.
Wealthview Banking 3.6 introduces many automated features that enable financial institutions to provide superior customer service. Said Shirley Sellers, Fincentric s Wealthview Banking Product Manager, It represents the most feature-rich, large scale application we have developed towards supporting the next generation in banking. Its deep functionality and robust integration enables unprecedented capabilities, delivered across all service touchpoints including Internet, wireless and traditional channels.
A few highlights of the numerous enhancements in Wealthview Banking 3.6 include:
* Automatic Event Notice Wealthview Banking automatically delivers event notifications through any channel (email, letter, PDA, cell-phone, personal portal). This reduces the manual processes necessary to contact customers and facilitate follow-up on cross-selling opportunities.
* Automatic Benefit Changes Wealthview Banking automatically updates customer and account benefits once a customer reaches the age threshold for a benefit-type set by the financial institution. This ensures appropriate product offerings, pricing programs, service charges, interest rates, and fees are applied to each customer.
* Automatic Pay/No-pay Decisions – Wealthview Banking automatically makes pay or no-pay decisions on insufficient fund items coming in from batch or on-line channels, based on criteria set by the financial institution. This reduces manual processes and improves customer service.
* Automatic Renewal of Discontinued Term Products Wealthview Banking automatically sets term renewal options across the product-line for that discontinued product. This lowers manual intervention costs.
* Dealer Lending Opportunities – This allows financial institutions to support dealer lending contracts and business opportunities. By supporting this business channel, financial institutions can extend their business reach with little or no overhead, add to their bottom line, and gain new customers.
Wealthview Banking is a complete front-to-back office banking system for financial institutions, offering comprehensive applications for deposits, payments, and consumer lending. Wealthview Banking features Customer Value Management” capabilities and integration across multiple delivery channels, including Internet banking. An online transaction processing (OLTP) engine, designed for high performance and high availability, completes the retail core processing system.
Fincentric is a leading provider of core banking and wealth management software to the global financial services industry. Fincentric’s Wealthview suite of products include next generation core banking, consolidated customer view, data aggregation, Internet and wireless financial portals, and full multi-channel support. Its revolutionary Customer Value Management” capabilities enable an institution to recognize the value of each customer, and drive incremental revenue through intelligent product recommendations, offered across the appropriate touchpoints. Fincentric’s products help financial institutions increase customer retention and develop more profitable customer relationships. Fincentric has strategic alliances with Microsoft, HP, and other international partners. For more information, visit Fincentric’s home page at [www.fincentric.com], or call (604) 278-6470.
eFunds Corporation through its wholly-owned subsidiary Deposit Payment Protection Services, Inc., announced the renewal of its agreement to provide SCAN and SCAN Online risk management services to stores owned by The Kroger Co.. The contract renewal will provide Kroger-owned stores with continued point of sale access to the SCAN and SCAN Online services, the largest check verification services in the nation, helping them to reduce losses caused by consumer transactions that may be fraudulent or that have unacceptable payment risk.
SCAN and SCAN Online risk management services help retailers to significantly reduce costs caused by check fraud and transaction losses, and their associated payment processing and servicing costs by providing technology solutions that assist retailers in preventing bad checks from being accepted at the register.
“Kroger has a long history of providing superior value and service to their customers and eFunds is pleased to be a part of helping the company maintain their market leadership by providing the data and services they need to make informed choices about transaction risks,” said Rahul Gupta, senior vice president of eFunds Risk Management Solutions. “We look forward to a continued partnership with Kroger and are committed to supporting their business with industry-leading check authorization resources.”
Headquartered in Cincinnati, Ohio, Kroger is one of the nation’s largest retail grocery chains. At the end of fiscal 2002, the Company operated (either directly or through its subsidiaries) 2,488 supermarkets and multi- department stores in 32 states under approximately two dozen banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith’s, Fry’s and Fry’s Marketplace, Dillons, QFC and City Market. Kroger also operated (either directly or through its subsidiaries) 784 convenience stores, 441 fine jewelry stores, 376 supermarket fuel centers and 41 food processing plants. For more information about Kroger, please visit .
Headquartered in Scottsdale, Ariz., eFunds Corporation (Nasdaq: EFDS) is an industry leader with nearly 30 years of experience and expertise in electronic payments. eFunds provides electronic transaction processing, ATM solutions, risk management, professional and outsourcing services to financial institutions, electronic funds transfer networks, government agencies and retailers around the world.
Committed to providing excellent customer service and award-winning products, eFunds enables their clients to reduce transaction and infrastructure costs, detect potential fraud and enhance relationships with customers. eFunds is one of the largest third-party processors of EFT, is the largest non-bank deployer of ATMs in North America, and is the provider of the world’s largest debit database. .Details
Credit card direct mail volume in January dipped to 293 million pieces, the lowest in over two years. For the first quarter a total of 915 million credit card solicitations were mailed out, compared to 965 million for 1Q/02, and 883 million for 1Q/01. Mintel’s Comperemedia says over 90% now offer a 0% introductory rate, compared to 60% last year. The tracking firm says first quarter default rates ranged from 19 to 26%. Based on first quarter mailings, late fees ranged between $31 and $40 while over-limit fees ranged between $21 and $30.Details
The Board of Directors of Incurrent, the leading provider of online account management solutions for the credit card industry, announces that Ross Longfield, who personally led Beneficial National Bank USA from a startup to a $4-billion credit card management enterprise in just seven years, has been chosen as Incurrent’s Chairman of the Board.
“This is an exciting time for everyone at Incurrent, as enrollment continues to grow at an unprecedented rate and we concentrate on expanding services,” Dave Hickey, CEO, said. “Ross has served on the board for the last two years and his contributions were instrumental to this success.” Hickey explained that during Longfield’s two year stint on Incurrent’s board, it became obvious that he was enthusiastic about the company’s leading-edge positioning.
“We were thrilled when Ross expressed interest in taking a more proactive part in the company’s future plans,” Hickey said. “With 40 years in retail credit card and financial services, first as the leading force at Beneficial, then as managing director and CEO of Household Retail Services USA, his wealth of knowledge and experience will help elevate the company to the next level.”
“I’ve watched the company grow from a little over 50,000 enrolled card members in June 2001 to more than four million last January,” Longfield said. “You just didn’t see many companies grow at 27% per month during that period.” Longfield added that Incurrent has enjoyed five years of success around self-service, statement presentment, and bill payment.
“Now we’re developing deeper capability in the use of web technologies to enhance the relationship between the card issuers and cardmembers,” he said. “The needs of issuers and cardmembers extend well beyond self-service and EBP&P and are now evolving into areas like legally-compliant e-statements, collections, promotions, product marketing, loyalty, and disputes.”
“There have not been fundamental changes in the way credit card relationships are managed in quite some time. I think these technologies are showing that potential and I’m extremely excited to be a part of it,” concluded Longfield.
Longfield served as Executive Vice President at Beneficial Management Company, where he oversaw all card programs in the US, as well as the UK, Germany and Canada. He then spearheaded the integration of Beneficial and Household International to form the second largest private-label credit card operation in the US, now valued at more than $11-billion. Under his tutelage, the new entity owned and operated retail credit card portfolios such as Best Buy, K-Mart, Comp USA, Levitz Furniture, and Costco Warehouse stores. He received his undergraduate degree from Farleigh Dickinson University, and has completed several graduate management programs, including Columbia University’s School for Consumer Credit Management.
Selected as New Jersey’s “Growth Company of the Year,” in 2002, and surpassing the four million-cardmember enrollment mark in January 2003, Incurrent continues to evolve and lead the industry in delivering innovative two-way communications capabilities between card issuers and cardmembers. Among Incurrent’s clientele are: MBNA Business Lending, Metris, Certegy, First USA, Fiserv, Sears, and Target.
Incurrent develops, licenses and operates advanced customer self-service and electronic billing (EBPP) systems for financial institutions in the global payment card industry. Founded in 1997, the Company numbers among its clients leading institutions such as MBNA Business Lending, First USA, Certegy, Fiserv, Metris, Sears, and Target. With 4 million enrolled and active cardholders, Incurrent’s platform is among the most widely adopted electronic banking systems in use today. Incurrent clients are consistently placed in the top of industry rankings based on site performance, stability, features, and ease of use.
Distinguished by its rich data warehouse and leading edge self-service and billing features, Incurrent has set an industry standard, enabling client financial institutions to enroll and service more users, with greater levels of satisfaction than competing platforms or in-house solutions. Fully integrated with all leading back-office accounts receivable systems, including First Data, Total Systems, Certegy, and PaySys, Incurrent represents a fast, cost-effective and low-risk means of acquiring, servicing, cross-selling and billing cardmembers through multiple contact channels. This in turn drives customer adoption, leading to enhanced brand loyalty and service delivery cost reductions for Incurrent’s clients.Details
mbi, the leading provider of health care debit cards for pre-tax benefits administration, announced it has received a $5 million financing commitment from private equity funds managed by Mesirow Financial, a Chicago-based diversified financial services firm. mbi will use the proceeds to further enhance its leadership position in the employee benefits marketplace. Terms of the financing were not disclosed.
“We are thrilled to have a leading institution like Mesirow Financial as a financial partner,” said Rob Butler, vice-president of sales and marketing for mbi. “We intend to direct the proceeds toward increasing sales, marketing and technology initiatives that will allow mbi to accelerate its growth rate and better serve its customers. As a result of the recent IRS ruling affirming debit cards for use with health reimbursement arrangements (HRAs), we have an even more compelling reason to further invest in and improve what is already a great tool.”
Health care debit cards, introduced to the marketplace by mbi in 1998, allow employees to pay for eligible health care expenses with a card that looks and acts like a debit card, rather than submitting claims and being reimbursed.
“We are excited to be partnering with mbi,” said Josh Daitch, vice president of Mesirow Financial. “By all measurements, they are clearly the market leader with the best technology platform and a highly skilled and seasoned team. In a high-potential market such as this for health care debit cards, it was important for us to invest in the leading company with the strongest upside. In mbi, we’ve done that.”
mbi has been funded to date with capital contributed from Wind Point Partners, a leading middle market private equity firm. Jim Forrest, Managing Director at Wind Point, states, “Mesirow Financial is a terrific partner to assist mbi in further enhancing its strong market leadership position. We look forward to great things ahead.”
About mbi ()
Founded in 1995, mbi introduced the first debit card to the healthcare industry for pre-tax benefit administration of FSAs, HRAs, Transit, Dependent Care and other defined contribution plans. The mbi Flex Convenience(R) Card enables employees using health reimbursement arrangements to pay for eligible healthcare expenses wherever MasterCard(R) is accepted, including physician and dental offices, pharmacies and vision service facilities. More than 200 Third-Party Administrators offer the mbi Flex Convenience(R) card to provide over 4000 employers, such as BellSouth, CompUSA, eBay and SC Johnson, and close to 300,000 employees enjoy the advantages of mbi’s system.
About Mesirow Financial ()
Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an employee-owned, private company with more than 700 employees in 12 offices across the country. The firm is well capitalized with more than $5 billion in assets under management and fiscal 2003 revenues over $200 million.Details