The Internal Revenue Service yesterday asked seven U.S. District Courts to permit it to serve “John Doe” summonses on airlines, hotels and other business for details on MasterCard credit card transactions that may involve tax evaders. The IRS has been investigating the use of payment cards issued through offshore banks by U.S. residents seeking to evade taxes or launder money. The “John Doe” summonses requested yesterday involve more than 40 companies in San Francisco, Atlanta, Chicago, Seattle, Dallas, Newark, and Alexandria, VA. The IRS hopes to match an address or name with data it has already received from MasterCard. The IRS estimates as many as 2 million U.S. citizens may have used payments cards issued through banks in tax haven countries while less than 200,000 Americans file annual reports on foreign bank account activity. Earlier this year, following an IRS suit filed in Miami, MasterCard agreed to produce more than 1.7 million records, involving over 230,000 accounts, in response to a “John Doe” summons. In April, a federal court in San Francisco issued an order authorizing the IRS to serve a summons on VISA International for offshore credit card records. American Express also agreed to turn over records relating to people who may be subject to United States income taxes and who have credit card accounts with addresses in Antigua and Barbuda, the Bahamas or the Cayman Islands. (CF Library 4/2/02)Details
American Express announced that Kinko’s has joined its “OPEN: The Small Business Network” and that AmEx business cardholders will now receive an automatic 10% discount at the point-of-sale and the opportunity to earn double “Membership Rewards” points between Sept 1 and Nov 30th.Details
BabyMint announced Wednesday it will give away up to $10 million in scholarship credits during September to celebrate “National College Savings Month.” A $100 scholarship will be made available to every family that joins the company’s savings program during the month of September. The “Tuition Rewards” scholarships are redeemable at nearly 150 colleges and universities nationwide. The BabyMint program enables consumers to receive up to a 20% rebate on every-day purchases made through the company’s network of more than 700 retailers. Retailer and product rebates are automatically tracked and deposited in the consumer’s college savings plan. The “BabyMint MasterCard,” issued by MBNA, was launched in May. (CF Library 5/2/02)Details
Ireland-based Trintech reported that revenues for the quarter ending July 31 fell 41% from $18.4 million for last year to $10.9 million. However the company reported its sixth consecutive quarter of declining pro forma operating expenses, which fell strongly by 44% in 2Q/02, compared to the corresponding period last year. Trintech is seeking to reach pro forma break-even by the end of its fiscal year in early 2003. Second quarter product revenue decreased 72% to $1.8 million for the quarter. Product revenue shortfall for the first half and second quarter can be attributed to an ongoing general weakness in the Company’s POS business line, due mainly to a fall off in new IT investment at retail level in the German market. Second quarter service revenue fell 8% from $3.5 million for the second quarter last year to $3.2 million for the second quarter ended July 31, 2002. For complete details on Trintech’s latest results visit CardData ([www.carddata.com]).
The nation’s top twelve issuers, based on outstandings, now comprise 81% of the U.S. bank credit card business and as a group grew 8% over the past twelve months. Capital One remains the fastest growing top issuer, driven by a $1 billion annual marketing budget and a focus on sub-prime prospects, which now make up at least 40% of its portfolio. Among issuers with less than $10 billion in outstandings, Target’s “smart VISA” and Sears National Bank’s “Gold MasterCard” have exploded over the past year signing up more than 16 million (net) new cardholders. Chase racked up a 32% growth rate at mid-year, primarily due to its acquisition of part of the Providian portfolio. Meanwhile, Providian declined 33% as it overhauls its business. MBNA, once a growth machine that rivaled Cap One, has slowed to a 7.5% annual growth rate. MBNA has distanced itself from the sub-prime market but continues to deliver solid profits. MBNA reported 2Q/02 profits of $457.8 million, a 21% increase over 2Q/01. Capital One’s profits were up 37% over the same period to $213.1 million. For complete details on 2Q/02 performance on the nation’s top 250 issuers visit CardData ([www.carddata.com]).
Top Bank Credit Card Issuers in the U.S.
(ranked by outstandings)
ISSUER 2Q/02 2Q/01 CHNG
1. Citibank* $108.2b $103.9 +4.1%
2. MBNA $ 75.8b $ 70.5b +7.5%
3. Bank One $ 66.8b $60.3b +10.8%
4. Chase $ 49.5b $37.4b +32.4%
5. Discover $ 49.4b $50.2b – 1.6%
6. Cap One* $ 45.1b $29.9b +50.8%
7. AmEx $ 31.6b $31.2b + 1.3%
8. BofA $ 27.1b $24.9b + 8.8%
9. Providian $19.9b $29.8b -33.2%
10. Household $15.4b $14.9b +3.4%
11. Fleet $14.7b $14.5b +1.4%
12. Metris $11.7b $10.1b +15.8%
TOTAL: $515.2b $477.6b +7.9%
*Citibank includes Canada and Mexico as the company no longer discloses
its domestic portfolio; Cap One may include some international accounts
as the company no longer discloses its domestic portfolio
Source: CardData (www.carddata.com)
Faced with a possible bankruptcy this fall, United Airlines has launched a major campaign to assure its “Mileage Plus” and “Mileage Plus VISA” cardholders that earned air miles are safe and secure. The company has also gone to great lengths to assure cardholders that award travel will continue to be available despite cutbacks. United said yesterday that during 2001 it processed nearly two million awards for free travel on its airline and nearly 400,000 awards for free travel on partner airlines. United also reported it processed 1,185,966 upgrade requests involving “Mileage Plus” points last year. Totally, the nation’s second largest airline, redeemed more than 3.5 million “Mileage Plus” awards. The redemptions in 2001 were involved in 8% of total passenger miles flown last year. Bank One/First USA issues the “Mileage Plus VISA” for United. In June, the companies introduced a business card version of the program which enables business owners to accrue up to 150,000 air miles per year from all card purchases, including those made to employee cards. In November, First USA and United introduced a “VISA Signature” version of the “Mileage Plus VISA” card which offers a no pre-set spending limit above the credit line. United’s “Mileage Plus” program has more than 40 million enrolled members. (CF Library 11/29/01; 6/13/02)Details
PayStar Corporation has joined the “Community Technology Network Project” to offer its prepaid ATM and MasterCard products to HUD “Section 8” participants. The company will be offer its “First1stResident Card’ prepaid ATM card to low to moderate income residents living in subsidized housing. Other participating companies in the “CTNP” include Worldwide Communications Group, CoreComm, The New Internet Company, Oracle, Virtual Money and HP. The “CTNP” project-based initiative was developed to bridge the digital divide and deliver cost savings that are associated with the online processes.Details
TX-based Billserv has received a letter from the Nasdaq National Market, advising it may be delisted due to its share price. he letter also stated that Billserv could apply to transfer its common stock to the Nasdaq SmallCap Market, which makes available an extended grace period, up to an additional 270 days, for the minimum $1.00 bid price requirement.Details
The Department of Defense yesterday marked a milestone in its military smart card personnel identification program. Service personnel from the Navy and Air Force received “Common Access Card” numbers one million and one million one. This marks approximately 25% completion of the largest U.S. smart card identification program, which ultimately will involve issuing of smart cards to more than 4 million employees (civilian, military and certain contractors) of the DoD. The program began rolling out in October 2001. SchlumbergerSema uses Infineon chips to produce the smart cards provided to the DoD by Electronic Data Systems Corporation under a contract awarded as part of the Defense Manpower Data Center’s “CAC” program. In addition to the security microcontroller, the card contains a photograph, magnetic stripe, linear bar code, 2D bar code and several other anti-counterfeit security features.Details
Household International, Inc. announced that its independent auditor, KPMG LLP, has completed its audits of Household International and its wholly- owned subsidiary, Household Finance Corporation, for each of the years ended December 31, 1999, 2000 and 2001, and has rendered unqualified opinions for both entities.
In connection with the completion of these audits Household International and Household Finance Corporation have filed with the SEC amended Forms 10-K as of December 31, 2001, which include financial information for each of the years ended December 31, 1999, 2000 and 2001. As a result, both entities are now able to issue debt and/or equity securities under their respective, effective registration statements.
Household Finance Corporation expects to re-enter the debt markets next week with Inter Notes (retail placed medium-term debt). Household International will resume the issuance of equity securities through its employee benefit plans and its dividend reinvestment plan.
Household’s businesses are leading providers of consumer loan, credit card, auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household’s largest business, founded in 1878, operates under the two oldest and most widely recognized names in consumer finance- HFC and Beneficial. Household is also one of the nation’s largest issuers of private-label and general-purpose credit cards, including The GM Card(R) and the AFL-CIO’s Union Plus(R) card. For more information, visit the company’s Web site at .Details
U.S. Bank says its “Campusbank Card” program is now offered at ten colleges and universities. The U.S. Bank Campusbank Card allows students as well as faculty and staff to use photocopy machines, laundry facilities and the library, have door and dorm access and purchase meals without cash.Details