Chase 4Q/01

Chase reported Wednesday its operating earnings for its credit card division rose 33% in the fourth quarter and 16% for the full year. Credit card outstanding were up 12% for the year, ending at $40,811,000,000. On a managed basis, the credit card net charge-off ratio was 5.48% in the fourth quarter of 2001, compared to 5.64% for the third quarter of 2001 and 4.86% for the fourth quarter of 2000. For complete details on Chase’s 4Q/01 performance visit CardData ([www.carddata.com][1]).

CHASE U.S. HISTORICAL
3Q/01 2Q/01 3Q/00 Ann Chg
Recv: $38.2b $37.4b $33.0b +15.8%
Q Vol: $17.9b $17.7b $15.3b +17.0%
Accts: 23.0m 22.0m 19.7m +16.8%
Actives: 14.0m 13.8m 12.5m +12.0%
Cards: 32.1m 30.8m 27.6m +16.3%
b-billion m-million Source: CardData(www.carddata.com)

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

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Woodworkers Warehouse Card

Trend-Lines Inc. has tapped Shoppers Charge Accounts Co., a division of Hudson United Bank of Mahwah, N.J., to develop and administer a private label credit card program for its Woodworkers Warehouse chain.

Based in Lynn, Mass., Woodworkers Warehouse bills itself as America’s largest specialty discounter of top-quality, brand-name woodworking tools, accessories, and supplies. Its customer base includes consumers and professional contractors. The chain currently operates 99 stores throughout the Northeast, with units located in Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New York, New Jersey, Pennsylvania, Rhode Island, and Vermont. Plans call for opening an additional three to five stores each year, starting in 2002.

SCA services brick-and-mortar and catalog retailers, who also have e-commerce businesses, throughout the U.S. The company acquires retailers’ receivables or will develop private label credit card programs for merchants who currently don’t offer a house charge. In both situations, SCA assumes responsibility for generating customers’ billing statements; managing credit, collection, and lockbox functions; and creating customized marketing programs. Ranked among the nation’s largest private label credit card companies, SCA is a division of Hudson United Bank, a subsidiary of Hudson United Bancorp (NYSE: HU).

Hudson United Bancorp is a $6.7 billion asset company with over 200 branch offices in New Jersey, Connecticut, New York, and Pennsylvania. Hudson United Bancorp’s subsidiaries offer a full array of innovative products and services to commercial and retail accounts, including imaged checking accounts, 24-hour telephone and Internet banking, loans by phone, alternative investment products, insurance products, private label credit cards programs and a wide variety of commercial loans and services including asset based loans, SBA loans, international services and cash management services. Wealth management services are also provided to individuals and businesses. Public sector products and services are provided to local and state governments, municipalities, educational institutions, civic and not-for-profit organizations.

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AmEx Triple Delta Miles

American Express announced a nationwide promotion that will give classic, Gold, Platinum and Corporate Delta SkyMiles Credit Card members triple miles for every eligible dollar spent on Delta purchases with their Card* through February 28th.

“We’ve just made traveling with Delta more valuable by giving Delta SkyMiles Credit Card members triple miles,” said Richard Quigley, vice president, cobrand marketing at American Express. “This is in addition to our ongoing program, Always Double Miles, where Delta SkyMiles Credit Card members receive double miles at supermarkets, drug stores, gas stations, home improvement stores, the U.S. Postal Service and on wireless phone bill payments.” The Delta SkyMiles Credit Card allows Cardmembers to earn one SkyMile for every eligible dollar charged to a Delta SkyMiles Credit Card and is accepted everywhere American Express(R) Cards are welcomed. Delta SkyMiles Credit Card members also receive American Express Card features, including 24-hour customer service, Global Assist(R) Hotline, Purchase Protection Plan**, Buyers Assurance Plan** and more. For more information about the Delta SkyMiles Credit Card, visit: [www.americanexpress.com][1] or call 1-800-SKY-MILE. Delta SkyMiles members earn mileage by flying Delta, the Delta Connection carriers, Delta Express, Delta Shuttle and Delta’s airline partners, including Delta’s SkyTeam partners. The Delta SkyMiles program offers many other mileage-building opportunities, including the Delta SkyMiles Credit Card from American Express, MCI, participating hotels, car rental companies, cruise line, restaurants, home buying and selling, flower purchases, shopping and online investing with E*Trade.

Delta Air Lines, the world’s second largest carrier and the leading U.S. airline across the Atlantic, offers more than 5,350 flights each day to 414 destinations in 73 countries on Delta, Delta Express, Delta Shuttle, Delta Connection carriers and Delta’s worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please go to delta.com.

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.

* Enrollment required. Qualifying transactions include all Delta purchases posted 1/15 – 2/28/02. Please allow 8 to 12 weeks after the promotion for bonus SkyMiles to be posted to your Delta SkyMiles account. Delta purchases made from 1/15 – 2/28/02 are only eligible for one bonus mile offer. This offer is available to Corporate, classic, Gold, and Platinum Delta SkyMiles Credit Cardmembers only. In each year of Cardmembership, your points are limited to $60,000 of eligible spending ($100,000 for Gold Delta SkyMiles Credit Cardmembers, unlimited for Platinum Delta SkyMiles Credit Cardmembers) not including bonuses. Always Double MilesSM offer applies at qualifying stand-alone supermarkets, drugstores, gas stations, home improvement and hardware stores, the U.S. Postal Service and on wireless phone bill payments. Not valid in the departments of superstores or warehouse clubs. American Express Cards are not currently accepted for bulk mail. Offer applies for wireless phone bill payments only. To pay your wireless phone bill automatically using your Delta SkyMiles Credit Card, please call your wireless service provider. All standard Delta SkyMiles program rules and conditions apply. (c)2002 American Express.

** Underwritten by AMEX Assurance Company, Administrative Office, Greenbay, WI. Coverage is subject to the terms, conditions and exclusions of Policy AX0951 / AX0953.

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

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Charge-Offs Moderate

Charge-offs fell by 40 bps during November among credit card backed-bonds but remain 100 bps higher than 2000. Delinquency rates for November held steady at 5.2%, but remain 40 bps higher than levels a year ago. According to Standard & Poor’s ‘Credit Card Quality Index’ the monthly charge-off rate among $365 in card securitizations dropped to 6.3% in November from 6.7% in October. This decrease followed a 20 bp uptick in loss rates for October. After steadily declining for most of 1999 and 2000, charge-off rates began increasing at the beginning of 2001 before reaching a peak level of 6.9% in May, the highest point since early 1997 when losses topped 7.0%. For the top major trusts, with more than $5 billion in receivables, 60% reported declines in the 30 bp-90 bp range during November. Of the five largest master trusts, with more than $20 billion in receivables, Chase, First USA, Citibank and MBNA experienced lower losses.

Credit Card Quality Indexes
Nov 99 Nov 00 Sept01 Oct 01 Nov 01
Yield (%) 19.6 19.4 18.9 20.0 18.8
Charge-offs (%) 5.7 5.3 6.5 6.8 6.3
Delinquencies (%) 4.8 4.8 5.1 5.3 5.2
Payment rate (%) 16.1 15.7 14.8 16.2 15.6
Source: Standard & Poor’s

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Cyota VbV

NYC-based Cyota yesterday launched First USA’s ‘Verified by VISA” program. Cyota launched the first commercial ‘Verified by VISA’ program in the world late last year with Bank of America. ‘SecureVbV’ is part of Cyota ‘SecureSuite’, an integrated online payment security platform designed to seamlessly integrate a wide range of authentication and credit card security products including ‘Verified by VISA’, MasterCard ‘SPA’ and Cyota’s surrogate number solution, ‘Cyota SecureClick’ into a single user experience. First USA cardholders only need to register their VISA card account once and the ‘VbV’ service is available immediately upon registration. Once registered, cardmembers can shop online at participating retailers using password protection.

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Household 4Q/01

Household reported a very small increase in fourth quarter VISA and MasterCard receivables from $17,303,700,000 for the third quarter to $17,395,200,000 for 4Q/01. For the full year, Household’s bank credit card outstandings were down 1.1%. Meanwhile HH’s private label credit card portfolio was up 15.1% for the year, to end at $13,813,900,000. During the quarter, the company purchased a private label credit card portfolio totaling approximately $725 million and the company sold approximately $1 billion in MasterCard/VISA receivables in the United Kingdom to Centrica, its former partner in the ‘Goldfish Card’ program, as part of a settlement agreement. Bank credit card charge-offs dipped slightly to 6.69% for the fourth quarter compared to 6.75% in the previous quarter. Delinquency (60+ day) was up significantly from 3.91% in the third quarter to 4.10% for 4Q/01. Charge offs within the private label portfolio were 5.40% and delinquency was 5.48%. For complete details on Household’s 4Q/01 performance visit CardData ([www.carddata.com][1]).

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

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CREDIT CARD BONDS

Standard & Poor’s recently completed a
review of two rated Turkish credit card future flow transactions and found
that they are performing as expected despite a significant deterioration in
the flow of tourists to Turkey in recent months.

“Our heightened surveillance effort reflects the close link between the
dollar value of credit card vouchers generated by the two Turkish bank issuers
and the health of the Turkish tourism industry,” Kevin Kime, a director in
Standard & Poor’s International Structured Finance group, wrote in a report
released today titled “Turkish Structured Transactions Perform Despite
Downturn in Tourism.”

The Turkish transactions under review, Credit Card Receivables Trust
1998-1 (issued by Turkiye Garanti Bankasi, T.A.S.) and Akbank 2001-A
Receivables Trust (issued by Akbank, T.A.S.), are securitizations of U.S.
dollar reimbursements payable to the issuing banks by several international
credit card companies, including MasterCard, Visa, and American Express. Both
transactions carry a full financial guarantee insurance policy from MBIA
Insurance Corp.. (triple-‘A’ financial enhancement rating) and are rated
triple-‘A’ by Standard & Poor’s.

“Evidence available to date indicates that Turkey’s tourism sector
suffered a significant drop in the number of arrivals shortly after the
September attacks on the U.S.,” Mr. Kime wrote.

The report points out that the decline has been accompanied by an increase
in the proportion of travelers from countries that are less economically
advanced. “The combination of a smaller and less affluent tourist pool
resulted in a significant decline in voucher generation by the issuing banks,
although coverage levels in both transactions currently remain adequate,” Mr.
Kime added.

Standard & Poor’s expects Turkey’s tourism sector-and with it the
performance of the two securitizations-will fully recover once meaningful
economic growth resumes in the U.S. and Europe and fears concerning air travel
and political volatility in the Middle East subside.

“Turkish Structured Transactions Perform Despite Downturn in Tourism” is
available on RatingsDirect, Standard & Poor’s Web-based credit analysis
system, at
http://www.ratingsdirect.com. It is
also available on Standard &
Poor’s Web site at
http://www.standardandpoors.com.

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Receipt Manager

Interlink Electronics, Inc., the world’s leading developer of intuitive interface technologies and solutions for home and business applications, and Bluepoint Solutions, developer of high performance document management software, announced an e-signature-enabled transaction solution for cash transaction applications. Called Receipt Manager, the new paperless solution integrates Interlink’s ePad electronic signature pad with Bluepoint’s document management software to electronically receive, process, sign and store teller-based transactions.

Bluepoint Solutions’ Vice-President of Sales, Chuck Bromley, explained, “As a teller initiates a new transaction, Receipt Manager also launches on the workstation to capture the transaction details, the member’s information and a hand-written electronic signature. The completed transaction is then processed and stored in a paperless process.

“Receipt Manager with ePad is already being deployed in credit unions across the country,” Bromley continued, “with the goal of giving them direct local control over their data. The key, however, to keeping transactions paperless is the electronic signature. Now that e-signatures are legally binding, selecting and integrating Interlink Electronics’ ePad was a natural step. It’s intuitive and requires very little training to successfully deploy. Other credit union applications for ePad include electronic signatures associated with consumer loan, member application and signature card documents.”

“Bluepoint’s e-signature-enabled Receipt Manager allowed the Arizona Central Credit Union to reduce teller workload significantly while simultaneously cutting transaction and IT storage costs,” commented Adam Jones, Arizona Central Credit Union’s IT Manager. “Because the Receipt Manager system with ePad is a paperless solution, it gives us the flexibility to access and summarize member transactions in real time, simply with the click of a mouse.” “With more than 20,000 banks and credit unions in the U.S. alone, the immediate market for Bluepoint’s e-Pad-enabled Receipt Manager solution is significant,” added Rod Vesling, Vice President of Marketing and Sales, Electronic Transactions, Interlink Electronics. “Our relationship with Bluepoint is consistent with our strategy to enable industry applications providers who are spearheading the transition from ink and paper to electronically-signed forms.”

About ePad

Interlink’s ePad captures the handwritten signature and converts it to a biometrically secure e-signature for use in B2B, point-of-sale, Internet and end user applications. ePad e-signatures may be permanently bound into Microsoft(R) Word(R) documents, Outlook(R) e-mail messages, Adobe Acrobat(R) files, Internet documents, and many proprietary forms and transactions. ePad e-signatures contain a biometric handwriting profile that may be used to authenticate the identity of a signer. The ePad writing surface, which accepts signatures using any common stylus, has the natural feel of writing on paper.

About Interlink Electronics

Interlink Electronics, Inc. is the world’s leading developer of intuitive interface technologies and solutions for business and home applications. Products include electronic signature solutions for B2B, point-of-sale and consumer applications, interactive remote controls for business communications and broadband home entertainment markets, and integrated interface solutions for specialty and consumer electronics products.

Interlink’s customers include Compaq, SANYO, Sony, Microsoft, NEC, Sharp, Toshiba, Pioneer, Mitsubishi, and InFocus, worldwide. Within the electronic transactions market, the company’s industry partners include Cardiff, Communications Intelligence Corporation (CIC), Silanis Technologies, and Valyd Inc. Interlink Electronics maintains offices in Camarillo, California, Tokyo and Hong Kong, and is available online at [www.interlinkelectronics.com][1], or in Japan at [www.interlinkelec.co.jp][2].

About Bluepoint Solutions

Bluepoint Solutions supports the credit union industry with high performance software used for document imaging and management of electronic records. Its primary suite of applications consist of Receipt Manager, a digital signature capture and electronic receipt system; FASTdocs(TM), a document imaging and management solution which integrates directly into existing host data processing systems; imageABLE(R), a scalable, enterprise client/server system that allows users to utilize imaging, COLD and workflow management solutions; and ODOC, an object-oriented infrastructure that allows member information, records and document images to be easily retrieved on demand. Bluepoint can be reached online at [http://www.bluepointsolutions.com][3].

[1]: http://www.interlinkelectronics.com/
[2]: http://www.interlinkelec.co.jp/
[3]: http://www.bluepointsolutions.com/

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E-CHECK PATENTS

LML Payment Systems Inc. is pleased to
announce its subsidiary LML Patent Corp. has received a Notice of Allowance
from the United States Patent and Trademark Office for a new patent based upon
United States Patent Application Serial No. 09/851,609. The new patent
application contains seven new claims that address authorizing the debiting of
funds from bank accounts without the requirement of negotiating a paper
check.
The corresponding patent should be issued within the next few months.

The new patent will result in an improvement to the Company’s existing
intellectual property estate which includes US patents 5,484,988, 6,164,528
and
6,283,366, all of which describe the electronification of paper checks,
sometimes referred to as check truncation, check conversion, electronic check
acceptance and electronic check presentment.

In April, 2001, US BankCorp Piper Jaffrey reported that electronic checking is
in their opinion, the fastest growing retail payment method addressing the
largest potential untapped electronic payment opportunity in the United
States. The Federal Reserve study on checks vs. ePayments conducted in 2001
estimated that almost 50 billion paper checks were presented at retail
establishments last year. Recently released statistics regarding electronic
check transactions processed through the Fed’s ACH network (POP transactions)
indicate over 15 million electronic check transactions occurred in the 3rd
quarter of 2001 bringing the total transaction volume between January and
September, 2001 to over 38 million.

“We are encouraged by these numbers. 50 billion paper transactions annually
represents a very large market, while we believe the 38 million electronic
check transactions are beginning to reflect merchant acceptance and adaptation
of Electronic Checking technology. Naturally, our aim is to convert as many
paper transactions to electronic transactions as possible and, clearly,
this is
the driving force behind our comprehensive investment in related intellectual
property,” explained LML President and CEO, Patrick H. Gaines. “A patent
is a
government grant to exclude others from making, using or selling an invention
as claimed in the patent for a fixed number of years. We are pleased with the
development of our intellectual property estate which will shortly include
four
patents describing electronic checking. In light of market developments and
dynamics, we are at this time exploring licensing and other business
relationship opportunities. The allowance of this fourth patent strengthens
our ability to enforce our intellectual property rights,” added Gaines.

The Corporation, through its subsidiary LML Payment Systems Corp., is a
financial payment processor providing check processing solutions including
Electronic Check Conversion (whereby paper checks are converted into
electronic
transactions), electronic check verification, electronic check re-presentment
(whereby returned paper checks are re-presented for payment electronically),
and primary and secondary check collection to supermarkets, grocery stores,
multilane retailers, convenience stores and other national, regional and local
retailers. We also specialize in providing selective routing, including
real-time monitoring of check, debit, credit and EBT transactions for
authorization and settlement through our flagship transaction processing
product REPS (Retail Electronic Payment System). The Corporation’s
intellectual property estate, owned by subsidiary LML Patent Corp, includes
U.S. Patent No. 6,283,366 regarding corporate checks and electronic fund
transfers (EFT), in addition to U.S. Patent No. 6,164,528 regarding Internet
checking transactions, and U.S. Patent No. 5,484,988 which describes a
“Checkwriting Point of Sale System” which, through a database and
authorization
system, provides and administers various electronic payment services for
customers and businesses.

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WILDCARD & VISA

WildCard Systems, the leader in delivering stored-value e-payment solutions
today announced it has entered into a three-year global strategic alliance
with
Visa International. This alliance facilitates additional product development
opportunities for Visa International utilizing WildCard Systems’ expertise in
electronic host-based stored value cards, virtual stored value accounts,
Internet payment systems and Web-based applications for the mutual benefit of
Visa and Visa member banks.

Under the alliance, Visa and WildCard Systems will explore opportunities to
work together to develop and deploy applications and programs to enhance and
extend Visa’s consumer product offerings. Using WildCard’s technology and
systems, this may include development and deployment of Visa pre-paid cards,
including those designed to serve the teen market, gift cards, affiliate
program payment cards, identification cards, automobile insurance cards,
payroll cards, fuel cards, shopping mall cards, and other special purpose and
incentive-based cards. Examples of areas in which WildCard’s technology may be
used include:

— Enabling pre-paid accounts to be set up, including value loading, card
issuance and reporting for Visa and Visa members through a variety of
channels,
including web-based applications.

— Extending access to Visa-branded cards, based on WildCard’s stored value
technology, to individuals who do not have access to traditional banking or
credit card services.

— Building additional functionality into Visa product platforms.

— Enabling pre-paid capabilities within devices that are nontraditional
credit/debit card structures, i.e. Personal Digital Assistants (PDAs), mobile
phones, etc.

“The growth in new payment products and services is a key element in our
vision
of universal commerce, the ability for buyers and sellers to conduct
transactions anywhere, anytime and any way. This alliance with WildCard
provides us with an opportunity to examine the enormous potential of pre-paid
card products and technology,” said Sarah Perry, senior vice president,
Strategic Alliances and Investments at Visa International.
The three-year alliance also allows for exploration of ideas for introducing
new electronic commerce, mobile commerce and payment technologies to the
marketplace; exploration of opportunities to work together on marketing,
promotion and/or sponsorship programs; and exploration of ways to bring
WildCard Systems technology, products and systems to an international
audience.

“We have had an ongoing, successful relationship with Visa for many years,”
said Larry Park, President and CEO of WildCard Systems. “While we have
initially focused on the U.S. market with Visa, specifically with the rollout
of Visa TravelMoney, Visa Buxx, and other stored-value products such as gift
cards, payroll cards and incentive/promotional cards, we look forward to
joining with Visa International to introduce and expand its stored value
product offerings in select international markets.”

WildCard Systems is the technology leader in complex stored-value financial
transaction processing, web-based applications and custom software
development.

In the relationship it has with its bank customers, WildCard Systems serves as
the issuing processor, hosts the Internet applications, and provides online,
real-time authorization, as well as all settlement functions, can coordinate
card production/fulfillment activities and can handle all customer servicing.

The WildCard Systems-Visa History

In 1999, WildCard Systems was chosen by Visa USA to be the Visa TravelMoney
processor and work with Visa to develop stored value cards for Visa members to
capitalize on the multi-billion dollar stored value market. Early U.S.
examples
include the AAA National Stored Value program featuring a card-based
alternative to traveler checks and cash when traveling abroad; Visa-branded
gift and incentive card; and in South Africa the launch of Visa TravelMoney
with Thomas Cook through Standard Bank of South Africa. In 2000, WildCard
Systems and Visa launched the first Visa Buxx programs with Bank of America,
U.S. Bank, National City, Capital One and Wachovia. Throughout 2001, WildCard
has further expanded into additional strategic markets with Visa including
payroll cards, promotion cards and other solutions based on WildCard’s
proprietary stored value platform, including the introduction of insurance
ClaimCards(TM) to several of the largest U.S. insurers.

About Visa International

Visa is the world’s leading payments brand and the largest payments system
worldwide. Visa branded cards generate almost US $2 trillion in annual volume
and are accepted at over 22 million locations around the world. The Visa
organization plays a pivotal role in advancing new payment products and
technologies to benefits its 21,000 member financial institutions and their
cardholders. Visa is a leader in internet-based payments and is pioneering the
creation of u-commerce, or universal commerce – the ability to conduct
commerce
anytime, anywhere, over any type of device.

About WildCard Systems

WildCard Systems is an e-payments company that is the technology leader for
electronic stored-value accounts and related Web-based software. Stored-value
(prepaid) type products, particularly those designed to make purchases on the
Internet, represent one of the biggest untapped markets for consumer payments.
WildCard’s secure e-transaction platform is supported by a full range of
services to deliver a complete host-based stored-value solution for a wide
range of vertical markets. The company has been selected by Visa, USA as a
Preferred Processor for stored-value payment systems. WildCard’s clients
include leaders in each of its vertical markets and some of the top financial
institutions in the country. Founded in 1997, WildCard Systems is a privately
held, venture capital backed company. The company is headquartered in Sunrise,
Fla. with offices in Silicon Valley, Orlando and Atlanta. For more
information,
visit
http://www.wildcardsystems.com.

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