Metris Chargeoffs

Metris Companies/DirectMerchants Bank reported this morning that charge-off figures for the company’s consolidated loan portfolio were 10.3% in January and 11.1% in February. In the Metris Master Trust, the charge-off figures were 12.7% in January and 13.5% in February. Metris said February’s loss figures appear to be higher than in other months based on the fact that February has only 28 days. Looking at these numbers on a normalized basis, February charge-off rates would be 12.2% in the Master Trust and 10.0% in the consolidated portfolio. In its most recent earnings release, Metris reported charge-off expectations of 10.0% to 11.0% in 2001, with rates in the high end of the range during the first half of the year, and decreasing in the second half of the year.

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Bankruptcy Reform

Following a cloture vote on Wednesday, the U.S. Senate overwhelmingly approved the bankruptcy reform bill S.420 yesterday by a vote of 83-15. Thirty-six Democrats backed the legislation which tightens the bankruptcy rules for consumers seeking Chapter 7 relief. President Bush has already indicated he will sign off on the legislation. The U.S. House passed its version of the legislation on March 1. The House approved the H.R.333 by a 306 – 108 vote which included 93 “yes” votes from Democrats. The new bankruptcy laws will require an income test and credit counseling for all individual filers. The law will also set a $125,000 cap on the amount of home equity that can be exempted from liquidation. It is expected that bankruptcy filings will soar before the law is enacted. (CF Library 3/2/01)

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Gift Card Award

Standard Register was honored this week by Intele-Card News at the seventh annual Prepaid Excellence Awards. Standard Register received the Best Packaging award for a gift card package developed for Mimi’s Cafe. The innovative package was cited for creative graphic design and functionality designed specifically for the retail food environment. Intele-Card News also honored Standard Register in 1999 for outstanding gift card packaging and in 1998 for a prepaid phone card program.

This year’s winning package design features an artist’s cartoon used by Mimi’s as part of its identity campaign. The gift card integrates with the look of the package. A die-cut within the package provides a consistent graphic theme when the card is removed from the package. The card allows buyers to customize the amount, while the unique tri-fold carrier contains “To”, “From” and “Initial Value” lines for additional customer personalization. A magnetic stripe, scanned at the time of purchase, allows Mimi’s employees to designate the card’s value.

“Our goal is to produce secure, creative packaging that helps gift cards stand out in a busy retail store,” said Beverly Humphrey, Product Support Director at Standard Register’s Imaging Services Group. “We appreciate the opportunity to partner with Mimi’s on this card program and are proud to be recognized with this prestigious industry award.”

Sponsored by Intele-Card News, the Prepaid Excellence Awards recognize the exemplary efforts of companies that conceive, design, implement and market prepaid products. Winners were recognized in 22 different categories at the Intele-Card News Expo 2001 earlier this week.

About Standard Register:

Dayton, Ohio-based Standard Register (NYSE:SR) is a nationwide leader in delivering customized document management and workflow solutions to healthcare, financial and general business markets. Serving as a strategic partner under its Less Paper Strategy(R), Standard Register helps transaction-intensive businesses reduce costs and increase revenue. Offerings range from traditional forms manufacturing to commercial and digital on-demand printing; e-documents and related desktop printing and processing solutions; plastic card imaging, packaging and distribution; Internet and paper-based billing services; and labeling solutions. Standard Register reported 2000 revenues of $1.266 billion. For more information, call 800/755-6405 or visit [www.standardregister.com][1].

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

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Bankruptcy Climbs

As a percentage of credit card chargeoffs, bankruptcy has continued a steady climb since August. According to CardData ([www.carddata.com][1]) bankruptcy related chargeoffs hit 38.9% in February compared to 36.8% for August. Among card issuers with less than $100 million in card loans, the figure has grown from 33.4% in August to 35.0% in February. Meanwhile other performance indices for February show that delinquency, chargeoffs and attrition are heading upward.

FEBRUARY PERFORMANCE STATS
Delinquencies: 4.89%
Chargeoffs: 4.70%
Bankruptcies: 38.9%
Attrition: 9.00%
Fraud: 0.19%
Yields: 14.86%
For explanation of measurements visit CardData (www.carddata.com)

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

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Alldays ATMs

Euronet Worldwide , a leading provider of secure electronic financial transaction solutions, announced it has been selected to provide ATMs and other value-added ATM services at Alldays convenience store locations in the United Kingdom.

Euronet is the first independent ATM operator selected by Alldays as an ATM provider. Euronet will provide Alldays with ATM site identification, installation, monitoring, dispatch, maintenance, telecommunications, cash delivery, authorization and customer support.

Alldays, headquartered in Eastleigh, England, is considered one of the most dynamic convenience store groups in the U.K. Alldays management is very enthusiastic about providing their customers with convenience ATMs in their stores, as well as new ATM services, including prepaid mobile phone airtime “top-up,” vouchering, advertising, ticketing and coupon issuing. Initially, 40 Euronet ATMs will be installed by the end of April 2001, with an additional 60 to be installed by the end of the year.

“We are very pleased to be selected by Alldays to supply convenience ATMs for their store locations,” said Michael Brown, Euronet Worldwide CEO and Chairman. “When Alldays decided to provide additional ATM convenience for their customers, they needed an ATM provider with the requisite experience and total commitment to customer service and the ability to provide additional value-added ATM services.

“These machines will offer more services than traditional ATMs — from mobile phone “top-up” to couponing. This program is yet another example of the secure financial transaction flexibility our company provides to retail businesses, financial institutions and mobile operators on a global basis.”

As a global provider of secure financial transactions, Euronet continues to expand its geographic and marketplace presence throughout Europe, the Middle East, Africa, the Americas and Asia/Pacific. This expansion enables our customers to provide their consumers a wide array of transaction touchpoints and provides Euronet continued transaction volume growth.

About Euronet Worldwide

Euronet Worldwide is an industry leader in providing secure electronic financial transaction solutions. The company offers financial payment middleware, financial network gateways, outsourcing and consulting services to financial institutions and mobile operators. These solutions enable their customers to access personal financial information and perform secure financial transactions — any time, any place. The company has processing centers located in the United States, Europe and Asia, including owning and operating the largest independent ATM network in Europe. Euronet was recently ranked number two on the Deloitte & Touche Technical Fast 500, a ranking of the fastest-growing technology companies in North America. With corporate headquarters in Leawood, Kansas, U.S.A., and European headquarters in Budapest, Hungary, Euronet serves more than 200 clients in 60 countries. Visit our web site at [www.euronetworldwide.com][1].

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

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FDR Renews Servicecorp

Electronic commerce and payments leader First Data Corp. today announced its card-processing subsidiary, First Data Resources, has signed a five-year renewal agreement to provide bankcard and debit card processing services to Indianapolis-based ICUL Services Corporation (Servicecorp).

First Data will provide processing and other card portfolio management services, including plastics, statements and risk management, to Servicecorp, which serves more than 140 credit unions nationwide.

“We’re pleased to extend our strategic partnership with an industry leader,” said Connie Curtis, chief operating officer of Servicecorp. “First Data’s economies of scale and advanced technology allow us to serve our clients’ processing needs with the best tools available.”

First Data has provided processing services to Servicecorp and its credit union partners since 1995.

“The partnership we have with Servicecorp reinforces our commitment to help ou customers use the latest technology to navigate the ever-changing payments industry,” said Eula L. Adams, executive vice president, First Data Corp. and head of worldwide card operations. “First Data has partnered with clients over three decades to deliver the tools that empower card issuers to sucessfully manage and grow their card portfolios.”

First Data processes for more than 310 million accounts on file around the world. For more than 30 years, First Data has offered products and services which enable clients to enhance their portfolio growth, increase market share, reduce risk and improve profitability.

About ICUL Services Corporation (Servicecorp)

Servicecorp is a credit union-owned cooperative organization that exist solely to benefit credit unions. In addition to offering health insurance, IRA programs and other business products, Servicecorp operates Card Services — one of the largest credit union card centers in the country. Since its inception in 1984, Card Services has become the card processor for more than 140 credit unions with more than one-quarter of a million Visa and MasterCard accounts. Servicecorp’s SYSTEM/2 card program offers complete, turnkey operations — everything from licensing with Visa/MasterCard to processing and administration.

About First Data Corporation

Atlanta-based First Data Corp. helps move teh world’s money. As the leader in electronic commerce and payment services, First Data serves more than two million merchant locations, 1,400 card issuers and millions of consumers, making it easier, faster and more secure for people and businesses to buy goods and services using virtually any form of payment. With more than 27,000 employees worldwide, the company provides credit, debit, and stored-value card issuing and merchant transaction processing services; Internet commerce solutions; Western Union money transfers and money orders; and check processing and verification services throughout the United States, United Kingdom, Australia, Mexico, Spain and Germany. It’s money transfer agent network includes approximately 101,000 locations in more than 185 countries and territories. For more information, please visit the company’s Web site at [www.firstdata.com][1].

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

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Cash Tech Deals

Cash Technologies, Inc. announced that it has signed a software licensing and payments-gateway agreement with transaction processor Premier Processing Alliance, LLC (Premier), a joint venture of ATM network operators Community Merchant Services, Inc. (CMS) and Welch Systems, Inc., credit card processor Nobel Electronic Transfer, LLC and Quad Cities Bank. This installation will be the first of its kind, incorporating software distributed by Cash Tech under its previously announced agreement with TII Smart Solutions. Through this arrangement, Cash Tech will gateway all of Premier’s nearly 1,000,000 transactions per month. In addition, Cash Tech’s EMMA (E-commerce Message Management Architecture) system will enable Premier’s 2,500 managed sites to take advantage of value added applications, such as check cashing, bill payment, Internet applications and other advanced services.

Cash Tech will be integrating the traditional ATM and POS processing capabilities of TII’s software with the advanced functionality of EMMA. According to Bruce Korman, CEO of Cash Technologies, “This is the first example of our cookie-cutter plan to roll out EMMA transactions throughout the ATM industry. The approach offers a cost effective path for ATM network operators to migrate from conventional to advanced function transactions. EMMA provides access to conventional EFT networks as well as the Internet and a wide variety of advanced function hosts.”

The implementation plan calls for the system to be driving its first revenue-generating transactions by May 31, 2001.

Bob Miller, Marketing Director of Premier and Senior Vice President of CMS, added, “Cash Tech’s solution allows us to reduce costs by bringing our conventional ATM transaction processing in-house, while EMMA’s functionality puts us ahead of the curve in the marketplace by enabling new services — the best of both worlds.”

About Premier

Illinois-based Premier Processing Alliance, LLC, offers debit and credit card transaction processing and settlement to the ATM and retail industries. Premier is a newly formed joint venture of transaction processor Nobel Electronic Transfer, LLC ([http://www.nobel-net.com][1]), Quad Cities Bank and ATM network operators Community Merchant Services, Inc. ([http://www.cms2000.com][2]) and Welch Systems, Inc. ([http://www.welchsystems.com][3]). CMS and Welch operate nearly 2,500 ATMs in 48 states. Nobel provides credit card acquirer and cardholder processing and authorization for 73 banks serving more than 14,000 merchants in the U.S. and internationally.

About Cash Technologies

Cash Technologies, Inc. ([http://www.cashtechnologies.com][4]) develops and markets innovative e-commerce systems, including the EMMA(TM) transaction processing software and the multifunction ATM-X(TM) and POS-X(TM) client software. Through EMMA, consumers and businesses may access a wide variety of financial services via ATMs, POS terminals and the Internet. Check cashing, electronic bill payment, event ticketing, interactive advertising, traditional ATM cash dispensing Internet-based products and other functions will be offered at retail locations and on ATMs using a variety of payment methods, including ATM cards, credit cards, checks and cash.

[1]: http://www.nobel-net.com/
[2]: http://www.cms2000.com/
[3]: http://www.welchsystems.com/
[4]: http://www.cashtechnologies.com/

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Household Image

As sub-prime credit issuers have come under scrutiny for predatory lending practices, Household International has been trying to clean up its image. Yesterday, Household launched a new Web site which combines credit education, e-commerce and customized news and services. Earlier this week Household applauded the Federal Reserve Board’s proposed amendments to Regulation Z to curb predatory lending. The Company sent a letter of March 9 to FRB supporting the efforts. The new consumer Web site, YourCreditCounts.com was created in partnership with Verilytics and is designed for middle-market consumers. Visitors to the new Web site get free credit reports, plus information from industry experts on how to monitor, read and understand credit ratings; online bill payment services and other information on how to repair or maintain a credit record; calculators for credit card paydown and debt consolidation information; online communities for discussing personal finance issues; and details on trusted sources for financial products and services, including credit cards, home equity loans and auto loans.

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BELGIUM

There are indications this week that MasterCard and Europay are planning to
merge to form the world’s largest debit card network. Europay, which has
exclusive rights to distribute MasterCards in Europe, and MasterCard, which
owns about 12% of Europay, previously formed a joint venture to offer the
‘Maestro’ global debit card. According to the London-based Financial Times, the
Board of Directors of MasterCard and Europay have agreed in principle to the
merger which is expected to be formally announced this summer. Reportedly, the
terms of the all-stock deal will give the European bank owners of Europay
between 25% and 33% ownership of MasterCard International. Europay will also
receive an unspecified number of board seats.

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US Dataworks Gov Contract

US Dataworks, Inc., which signed a definitive agreement to be acquired by Sonicport, Inc., confirmed Wednesday it has been selected by a division of the US Government to provide transaction processing.

Terms of the agreement were not disclosed, however, the Company expects further information on this contract in the coming months.

John Cooper, CEO and Director of US Dataworks commented, “Due to the upcoming acquisition of our company by Sonicport, Inc., we are not at liberty to discuss the negotiations or details of this contract, however, it is an extremely important point to make that the US Government has chosen our products to service this particular branch. Once we are able to divulge the actual government entity that will be utilizing our transaction processing services, it will be illustrated further as to the magnitude of this contract. We are extremely pleased to have secured this agreement and look forward to continuing to develop additional contracts with other large-scale entities, both in the public and private sectors.”

About US Dataworks

Established in 1997, US Dataworks develops, markets and supports transaction processing software for Windows NT computer systems. Its customer base includes many of the largest financial institutions as well as credit card companies, government institutions and high volume merchants in the U.S. It also has a strategic alliance with CheckFree Corporation (Nasdaq:CKFR) to license US Dataworks software for its banking customers and Thomson Financial Publishing, a unit of Thomson Corporation (TSE:TOC), to incorporate their EPICWare database into US Dataworks products.

About Sonicport, Inc.

Sonicport, Inc. is a financial services company specializing in integrating transaction-processing software, supported by ASP services, IT expertise and customer service. Additional value-added services include web design and development, customer software development, strategic marketing and planning.

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CAYMAN islands

American Express announced a strategic alliance that will significantly
increase the number of
Automated Teller Machines in the Caribbean that can be used by its
Cardmembers to withdraw cash. The company plans to expand the number of ATMs
that welcome the Card in this region to over 700 machines, through an
agreement that has been signed with TCS (Canada) Ltd., a major provider of
financial system solutions to the banking community throughout the Caribbean
and Canada.

TCS has considerable experience in the Caribbean having implemented
national debit systems for Jamaica, Trinidad and Barbados and switching
products to individual banks in the Bahamas, Bermuda and Grand Cayman.
American Express will tap into TCS’ existing and future client base and
leverage TCS’ local market knowledge and contacts to negotiate acceptance of
American Express Cards.

Through the agreement TCS will, on behalf of American Express, initially
approach banks on the islands of Trinidad, Jamaica, Barbados, Bahamas and
Grand Cayman. Once banks agree to accept American Express Cards in their ATMs,
TCS will then create the processing infrastructure to connect these banks to
American Express via TCS’ data processing centre in Oakville, Ontario.

“This ground-breaking agreement is another example of how American
Express is growing its ATM coverage globally,” explained Doria Camaraza,
Senior Vice-President, Establishment Services, American Express Latin America
and Caribbean. “Our partnership with TCS will help us to ensure that our
Cardmembers can use their American Express Cards for all of their cash needs
in the Caribbean’s most popular business and tourist destinations.”
American Express Cardmembers can now withdraw local currency from more
than 500,000 ATMs around the world, each displaying the recognised American
Express Blue Box symbol.

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Next Gen Vending

USA Technologies and Marconi Online Systems have joined up to create a comprehensive end-to-end technology solution for the vending industry by bringing together Marconi Online’s ‘Intelligent Vending’ service with USA Technologies’ cashless payment and interactive multimedia capabilities delivered through its ‘e-Port’ technology. The combined product will enable vending machines to become intelligent, wireless networked machines, handling many forms of cashless payments, communicating with other pervasive computing devices, enabled to conduct e-commerce and m-commerce transactions and opening up new opportunities in advertising and promotions through interactive media services. The ‘e-Port’ technology provides consumers the ability to make vending purchases with the swipe of a major credit card or bank debit card. USA Technologies specializes in processing transactions under $10, to as low as $1. Last year, Marconi Online became the exclusive provider of intelligent vending technology to the Coca-Cola Company.

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