Overall Delinquency

An annual study shows that the dollar delinquency rate of 1.86% at year-end 2001 is the highest delinquency rate reported by respondents in consumer lending over the last ten study periods from 1993 to 2002. Atlanta-based BenchMark Consulting International says this is the most significant increase in 10 years of the study. The study, which also encompasses consumer loan and credit card portfolios, found the overall consumer loan dollar charge-off rate (i.e., dollars charged off divided by delinquent dollars) has raised slightly from 5.1% to 5.5% yearly. Other findings include: the composite average consumer loan dollar and account portfolio is approximately 24% larger than that of 2001. An analysis of repeat participant data validates both the portfolio dollar size increase (22% larger for repeat participants) and the delinquent dollar size increase (31% rate rise for repeat participants); an analysis of repeat participant data substantiates the trend as their cumulative charged off dollar increase (44%) is slightly higher than the delinquent dollar increase (39%) resulting in a slight rise in the dollar charge-off rate year-over-year; and bankruptcies as a percent of charge off dollars are slightly higher this year than those levels reported by last year’s respondents (27% vs. 22%). Consumer loan dollar recovery rates are continuing a three-year pattern of decline.

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USWD & NYCE

U.S. Wireless Data and NYCE have agreed to work together to provide “Synapse” wireless technology as an optional service to NYCE’s ATM terminal deploying clients. By replacing the dial-line connection, it simplifies ATM installation and relocation and helps reduce operating costs for NYCE’s ATM deploying clients. USWD now handles more than 600 million transactions each year through its centralized computer center and nationwide network.

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Direct Connection

MasterCard International announced it has established automatic data feeds from its Global Data Repository in St. Louis to six leading travel expense management solution providers. The direct connections enable organizations using MasterCard commercial cards to access their employees’ transaction data anytime, anywhere, helping to auto-populate and reconcile expense reports while enhancing productivity and control over general business expenses. MasterCard’s participating solution providers include: Captura, Concur, Extensity, Gelco Expense Management, Necho, and SPS International.

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RSS Gift Card

RI-based Retail Store Systems launched an electronic gift card payment system running on the IBM “eServer pSeries,” for Bob’s Stores throughout Connecticut, Massachusetts, New Hampshire, New York, Rhode Island and New Jersey. Bob’s electronic gift card system runs on the IBM eServer pSeries, and communicates with the IBM POS 4694 in each of Bob’s 37 stores. The IBM POS 4694 sends requests to the pSeries in order to sell, redeem, and inquire about electronic gift certificate accounts. Electronic Gift Cards are available online and in all of Bob’s Stores locations.

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Diners & MasterCard

The Citigroup and MasterCard relationship deepens as MasterCard International announced this morning that Diners Club cardholders will soon have access to cash through its Cirrus ATM Network. Beginning in late August, most Diners Club cardholders with ATM PINS will be able to get cash with their Diners Club cards at ATMs in the global Cirrus ATM Network. Diners Club cardholders around the world will soon be receiving announcements about this expanded cash access through statements, newsletters and a global advertising campaign that includes in-flight magazines and airport signs in key international markets. New cards will start to carry the Cirrus logo on the back as the program rolls out. The Cirrus network has more than 790,000 ATM locations in more than 100 countries.

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Shift4 & Planet Payment

Shift4 has inked a deal with Planet Payment to provide unique multi-currency and international payment processing products and services for merchants worldwide. Customers from Canada, the United Kingdom, Japan, Australia and the Euro-zone countries will be able to pay in their local currency at Shift4’s merchants with their Visa or MasterCard — while the merchant gets paid the full amount of the transaction in U.S. Dollars as it does today. Powered by Planet Payment, transactions are converted from U.S. Dollars into the cardholders’ local currencies based upon an exchange rate that is competitive to that which is used by the card associations and issuing banks, as well as other payment methods popular for international travel and purchases.

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CoLinear & I4 Commerce

CoLinear Systems has partnered with I4 Commerce to add the “Bill Me Later” payment option to CoLinear’s “Response” software. Because no application or account number is needed to complete a purchase, Bill Me Later is the first method of payment that addresses merchants’ and consumers’ needs for payment convenience and security. Customers receive instant purchase approval during the checkout process followed by a monthly bill that aggregates all purchases made at Bill Me Later Merchants.

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eCashPad Launch

Pacific Nakon is jointly working with eConnect to mass launch the eCashPad in conjunction with the ICasino Pay software to meet the needs of the present 6,000 Internet casinos to be paid with on-line cash. 1,000 eCashPads will be deployed at walk-in locations in major cities. Prepaid cards can then be purchased at these locations and the consumer can then use the eCashPad and the prepaid card to effect cash payments to a variety of recipients.

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MBNA 2Q/02

MBNA is bearing down on Citigroup’s leadership position in the card industry, as the affinity card king reported yesterday total managed loans of nearly $100 billion as of June 30th. MBNA tacked on $4.6 billion in outstandings during the second quarter, and signed up about 5 million new customers. At the end of the first quarter, Citigroup reported $105.4 billion in North America credit card loans. However, MBNA’s second quarter figures include approximately 8.0 million cardholders in the U.K., Ireland, Canada, and Spain. For 2Q/02, MBNA’s total managed loans grew at an annual rate of 10.6% and charge volume increased by 11.1%. MBNA also signed up 121 new affinity/co-branded card agreements during the second quarter. The company said it renewed more than 600 group contracts during the first six months of the year. The issuer also noted that its sports marketing sector has signed up more than 650 sports-related organizations in every major sport, and now has 9.1 million cardholders that carry nearly $10 billion in loan balances on MBNA sports-related products. MBNA’s delinquency and charge-offs are running between 5% and 6% higher than last year. For 2Q/02, MBNA’s delinquency rate was 4.80%, while charge-offs were 5.09%. For complete details on MBNA’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

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

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EMV TRANSACTIONS

Mexico City-based BBVA Bancomer has conducted Mexico’s first EMV transaction utilizing VeriFone’s “Omni 3750” terminal. The smart card transaction was conducted at La Casa del Fumador in Mexico City. BBVA Bancomer is lthe first bank in Mexico to issue EMV cards. The solution is currently installed in approximately 10 retail locations, supporting both mag-stripe and chip credit card transactions. The “Omni 3750”, running the Verix multi-application architecture and VeriFone’s EMV software, has achieved EMVCo Level 1 and Level 2 Type Approval.

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TS3 Cards

Toyota Motor and JCB reported it has signed up more than two million consumers in Japan for the Toyota TS Cubic smart card since the start of this year. At the end of 2001, the co-branded JCB card hit one million cardholders, according to The RAM Report ([www.ramreport.com][1]). The card, which offers J/Smart for credit/debit functions and loyalty functions for Toyota, was launched in April 2001. Toyota said this week that it projects five million cardholders by 2005. The company also indicated it is seeking a relationship with American Express.

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

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Workplace Solutions

MasterCard has entered the payroll card market with the launch this week of MasterCard Workplace Solutions. VISA introduced its payroll card program one year ago. The MasterCard Payroll Card integrates with current payroll processing systems managed by third-parties. Several MasterCard members are offering payroll cards using the MasterCard brand. These financial institutions include ABN AMRO, BANKFIRST, Citibank, Comerica, First Banks, Inc., J.P. Morgan Chase, and KeyBank. MasterCard says market research indicate that an estimated 15 million U.S. households, including approximately 7 million young adults between the ages of 16 to 19 receiving their first paycheck, have no banking relationships. MasterCard Workplace Solutions will also include additional programs designed to provide an ideal alternative to disbursements for employee incentives, meeting planning expenses, and travel per diems by interfacing with current company systems. The availability of MasterCard Workplace Solutions in each region, including Europe, Asia-Pacific and Latin America, is planned for year end.

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