Bauer Debt Formed

NY-based The Bauer Partnership confirmed plans this morning to enter the debt purchasing market with the formation of a wholly owned subsidiary, Bauer Debt Purchasing Corp. The new entity will seek to acquire large non-performing debt portfolios, including credit card debt. Bauer plans to acquire these large portfolios by utilizing its common stock as a currency and acquiring such debt at large discounts in bulk amounts. Bauer Debt will then enter into revenue sharing agreements with various national collection agencies in order to convert such portfolios into performing debt. The value of purchase debt is currently estimated at $2.4 billion. The prime debt share of the market is the largest with 40%, followed by fresh (33%), secondary (14%) and tertiary (13%).

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ACE & NC

ACE Cash Express and the State of North Carolina have settled a legal dispute over payday loans after ACE agreed to withdraw its lawsuit against the State over a federal preemption matter and the State agreed to end its suit against ACE. ACE will continue to provide check cashing, bill payment, wire transfers and money orders to meet the needs of consumers. The Company will continue to operate its check cashing business in compliance with the state law as it has in the past.

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FREESTAR & RAHAXI

Dublin-based FreeStar Technologies and its Rahaxi Processing
subsidiary have signed a processing agreement with Settlement Services
Limited for US$200 million in monthly transaction volume. Rahaxi Processing
Oy, acquired by FreeStar Technologies from Heroya Investments in September,
is a payment service provider based in Helsinki, Finland, offering full,
card present, payment processing; transaction authorization, data capture
and settlement facilities for VISA, MasterCard, American Express, Diners
Club and all bank-issued domestic debit cards. Rahaxi also provides
specialist value-added processing applications for fleet, fuel and loyalty
card schemes. Approximately US$10 million has been invested in the
development of Rahaxi’s hardware, software and brand name, to date.
FreeStar says the deal will contribute approximately US$1.6 million to
FreeStar’s gross revenues per month.

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Zebeck Fired

The board of directors of Metris Companies (Direct Merchants Credit Card Bank) announced over the weekend the termination of Ronald Zebeck, former chairman and CEO of Metris. The board also announced the appointment of David Wesselink to the position of chairman and CEO. Metris has been struggling in the wake of the acute fallout in the sub-prime credit card market. For the third quarter, Metris reported a net loss of $1.3 million following a second quarter loss of $36.4 million. The managed net charge-off rate was 15.1% for the third quarter, compared to 15.0% for the prior quarter and 10.7% for the third quarter of 2001. The managed delinquency rate was 10.8% for the third quarter, compared to 10.2% at June 30th, and 8.9% one year ago. Before joining Metris, Wesselink was with Advanta, which he joined in 1993 as SVP/CFO. Prior to Advanta, he spent more than 20 years at Household. He was named HFC’s CFO in 1982 and a SVP in 1986. Zebeck was named Metris chairman in May 2000. He became President and CEO of Metris Companies when the company went public in October 1996. Prior to joining Metris, Zebeck created and launched the General Motors credit card in 1992. Before General Motors, he served as director of marketing at Advanta Corporation and Colonial National Bank USA, and spent 10 years with Citicorp in New York. Metris’ stock has collapsed to $3 per share from its year ago price of $28 per share. For complete details on Metris’ latest financials visit CardData ([www.carddata.com][1]). (CF Library 5/10/00)

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

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FDC Chairman

First Data announced this morning that Charles Fote will take over as Chairman of the Board on January 1st, replacing Ric Duques, who will remain a member of the board. Fote currently serves as President and CEO of FDC. He joined the company in 1975 and was named president and COO in 1998. He was named CEO in January of this year. Duques has served as chairman of the First Data Board of Directors since the company’s IPO in 1992. First Data reported 13% revenue growth in the third quarter, and a doubling of earnings per share compared to last year. Last week, Morgan Stanley raised its long term growth forecast for FDC from 12% to 15%. The company’s stock is trading around $36 per share, in the middle of its 52-week high and low. First Data serves approximately 2.8 million merchant locations and 1,400 card issuers. For complete details on FDC’s latest financials visit CardData ([www.carddata.com][1]).

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

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Dismissal Request

MasterCard and VISA asked Judge John Gleeson on Friday to dismiss the Wal-Mart antitrust litigation asserting the retailers’ claims are legally and factually deficient, and do not merit being presented to a jury. The card associations provided evidence to show they have not conspired nor stunted the growth of online debit in the USA. The networks also asked the court to throw out the retailers’ request for billions of dollars in damages saying it is not based on any facts. VISA and MasterCard cited recent statistics which show the number of PIN pads in U.S. stores has grown by more than 30% each of the last two years, and the number of times consumers used PIN debit grew by 32% from 2000 to 2001, and by 39% from 2001 to 2002. VISA and MasterCard say the STAR, PULSE and the other PIN debit networks now handle more than 40% of debit card sales. A trial is set for April 2003 before Judge John Gleeson.

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LABOR STRIKE

The banks in Cyprus decided to stop all card transactions, regardless of
brand, following a labor strike at JCC Payment Systems Ltd. MasterCard
said it does not know when acceptance will resume. MasterCard said the
stoppage is due to a continuing labor strike within the data center of JCC.
MasterCard cardholders only will still be able to access cash at the 19
National Bank of Greece (Cyprus) ATMs that are available throughout the
country since NBG does not have its card transactions processed by JCC.
Cardholders with MasterCard and Maestro cards, issued by Bank of Cyprus,
Popular Bank, Hellenic Bank, National Bank of Greece (Cyprus), Federal Bank
of the Middle East will also be able to withdraw money from the ATMs of
these banks.

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JCB DEAL

Turkiye Garanti Bankasi A.S. has inked a deal with JCB International Co.
to represent the JCB brand in merchant acquiring operations and processing
in Turkey, beginning this month. JCB has had an agreement with Anadolu
Kredi Karti Turizm since 1993, and through this new partnership with
Turkiye Garanti Bankasi the number of merchants accepting the JCB card will
eventually increase by 38,000.
Turkiye Garanti Bankas has 297 branches, and is number one in terms of
volume of international credit card transactions and number three in
affiliated merchants with a total of 60,500 POS terminals. JCB’s merchant
network includes 9.28 million merchants and spans 189 countries and
territories. JCB cards are now issued in 18 countries and territories, with
42 million cardholders.

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