Portfolio Recovery Associates 4Q/02

VA-based Portfolio Recovery Associates reported that fourth quarter revenue rose to $15.7 million from $9.4 million in the year-ago period, and that pro forma net income increased to $3.3 million from $805,000 one year ago VA-based Portfolio Recovery Associates reported that fourth quarter revenue rose to $15.7 million from $9.4 million in the year-ago period, and that pro forma net income increased to $3.3 million from $805,000 one year ago. Portfolio Recovery Associates is a full-service provider of outsourced receivables management. Portfolio Recovery Associates purchases, collects and manages portfolios of defaulted consumer receivables. Defaulted consumer receivables are the unpaid obligations of individuals to credit originators, including banks, credit unions, consumer and auto finance companies, retail merchants and other service providers.

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TSYS Debt Management Chairman

TSYS Debt Management announced Wednesday the retirement of its Chairman of the Board, Richard de Mayo, effective March 31st. Before his appointment at TDM, de Mayo began practicing law with the law firm of Howard, Wiggins & Smith in Atlanta, where he worked for five years. As a part of his early practice of law, he represented creditors as well as a large collections agency, and thus he made appearances in the state courts throughout Georgia for the first five years of his practice.

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Gemplus 4Q/02

Gemplus reported a fourth quarter operating loss, excluding extraordinary costs, of $18.0 million, a 43.5% decline from 4Q/01. For the year 2002, Gemplus posted a net loss of $347.3 million compared to $108.4 million for 2001, according to this week’s The RAM Report ([www.ramreport.com][1]). Net loss for 4Q/02 was $104.8 million compared to $41.8 million for 3Q/02. However, operating expenses for 4Q/02 were down 24.3% due to restructuring. Net income for the fourth quarter was affected by a provision for restructuring ($20.9 million), foreign exchange losses ($12.6 million), deferred tax assets write-down ($44.8 million) and goodwill write-off ($6.9 million). Contactless card revenues were down 3.2% compared to the third quarter, because of lower shipments which were down 2.9%. Gemplus says pricing pressure remains substantial, but eased during the fourth quarter in Europe and in the Americas. The smart card manufacturer says there is still a need to further reduce costs. Gemplus said it could not provide any guidance for 2003 due to uncertainty as to costs and revenues. For complete details on Gemplus’ 4Q/02 results visit CardData ([www.carddata.com][2]).

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

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MOBILE PAYMENTS

Mobile payments revenues are projected to hit $US20 billion by 2005 worldwide following an annual growth rate exceeding 100%. ARC Group says current forms of mobile payments include premium SMS messages, which can be reverse billed or easily charged to subscribers’ accounts along with airtime. These will be followed by prepaid top up services, either direct from linked accounts or from ATM networks. Virtual payments are the next generation of mobile payments, and will be used for a wide variety of digital content which is purchased remotely online. Finally, as the retail infrastructure is built out, proximity payments will begin to develop, allowing mobile users to pay for goods and services in retail outlets and at vending machines. Longer term, ARC Group sees the option of being able to use a virtual credit card as offering significant potential in the macropayments sector.

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Supermarket Speedpass

ExxonMobil has taken the “Speedpass” wireless payment device into its first supermarket chain with the launch of the service in three Greater Boston Stop & Shop supermarkets. ith one simple wave of the Speedpass device, Stop & Shop customers can now check out and get the store’s card savings instead of swiping both credit and membership cards. For those who prefer paying by check or debit card, Stop & Shop customers can now link their checking account to their Speedpass with the added security of requiring customers to enter a PIN.

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APAC 4Q/02

IL-based APAC Customer Services reported a 21% decline in fourth revenues from $111 million in 4Q/01 to $87.7 million, and a net income decline of 86% in the fourth quarter from $3.0 million in 4Q/01 to $400,000. APAC Customer Services, Inc. is a leading provider of customer interaction solutions for market leaders in financial services, insurance, telecommunications, healthcare and logistics. APAC partners with its clients to deliver custom solutions that enhance bottom line performance.

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AmEx Central/South America Promotion

American Express and Six Continents Hotels Latin America have launched a promotion through May 31st to offer a free weekend night at any participating hotel in Central and South America to “Priority Club” members who spend any five nights at any participating hotel in Central and South America and pay with their American Express card. Priority Club Rewards is Six Continents Hotels’ loyalty program, where members can redeem points for hundreds of rewards including more free hotel nights, free flights, vacation packages, retail and dining certificates and brand-name merchandise.

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RONA VISA

Hardware specialist RONA has signed a ten-year partnership agreement with Desjardins Group to offer VISA cards. Under the agreement, RONA will offer its customers the new “RONA VISA Desjardins” in Québec and “RONA Community VISA” in the rest of Canada. The card comes with the point-of-sale “FINANCEMENT accord D” (installment credit) program in Québec, offered as “Community Retail FINANCING” in the rest of Canada. Two other RONA store credit cards will be available for construction companies and institutions. All the cards will carry no annual fee. RONA operates a network of some 540 franchised, affiliated and corporate stores of various sizes and formats under various banners across Canada.

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Concord Execs

Concord EFS announced this morning it has realigned its senior management team in advance of the release of its fourth quarter earnings report slated for next week. The Board of Directors named Dan Palmer, current chairman and CEO, as director and co-CEO, and Bond Isaacson, current EVP, as director and co-CEO. Richard Kiphart, a director since 1997, was appointed chairman of the board. Paul Finch, who joined Concord in January, was named SVP and president of Risk Management Services. Finch was EVP of systems and operations for eFunds prior to joining Concord. Edward Labry, a director since 1993 and Concord president since 1994, will continue to serve as director and president, and Miles Kilburn, SVP of business strategy and corporate development since 2001, also continues in that role. The company announced this morning that diluted earnings per share was $0.175 for the fourth quarter and $0.57 for the full year 2002. Excluding acquisition, restructuring and write-off charges, and litigation settlement charges, diluted earnings per share was $0.68 for the full year 2002.

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Gaming & Cards

The New York Attorney General announced this week that ten additional banks have signed agreements to block cardholders from using their credit cards for transactions identified as online gambling. The initiative began in June of 2002 when the Attorney General obtained Citibank’s agreement to block such transactions. The ten new banks have agreed to block these transactions, and have agreed to pay a combined total of $335,000 in costs to New York State. Among the ten banks announced this week: OR-based First Consumers National Bank; SD-based First Premier Bank; UT-based Merrick Bank; CT-based Peoples Bank; TX-based USAA Federal Savings Bank; US Bank; and Wells Fargo. Meanwhile, a Tennessee a state committee passed an amendment this week to ban the purchase of lottery tickets with a credit card. The Tennessee lottery implementation committee, made up of members from both the House and Senate, voted to remove language that would have permitted charging lottery tickets. A amendment had been attached to the lottery legislation that required consumers to buy at least $10 in other retail goods to be eligible to charge a lottery ticket. Members of the committee noted the rising number of bankruptcy filings. Bankruptcies in Tennessee are up about 7% this year.

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TRUSTED VISA

Reader’s Digest Canada announced that VISA has ranked at the most “Trusted Brand” in credit cards. Respondents to the national survey were asked to name the brand they most trusted in 35 product categories and then to rate the brand’s performance in five key areas: quality, innovation, customer service, advertising and value for money. In the “Bank/Trust Company” category, it was a tie between RBC Financial Group and TD Canada Trust. Almost one-third of Canadians polled in the survey strongly agreed with the statement “It is more difficult to trust products and brands today than it was twenty years ago.”

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Online Behavior

Nearly 60 million Americans sought loan, credit card, insurance and investment information online last year. Of this total, 63%, or 36.8 million, followed up by applying offline for loans, credit cards, and insurance or investment products, compared to only 21.8 million who applied for similar products online. The data were developed from a survey conducted by Milwaukee-based The Dieringer Research Group, which compared the online and offline behaviors of 4,000 U.S. adults. About 24 million consumers sought product information for credit cards and investment purposes. Dieringer says financial service consumers who use the Internet as a shopping tool are about 70% more likely to apply for services offline than online. Although the demographic and life stage characteristics of online financial service shoppers varied significantly by the types of products sought, the survey found surprisingly little difference between shoppers who applied online or those who applied offline.

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