Target’s Q1 Credit Card Revenues Soar 20%

Target reported that its total credit card revenues for the quarter ending May 3rd increased nearly 20% over the year-ago quarter as late fee and other revenue soared 22% and finance charge revenues increased 20% while third party merchant fees rose 13%. Earlier this month, Target and Chase announced a deal under which Chase will invest in Target’s credit card receivables. Credit card outstandings for the quarter increased 29% year-on-year, topping $8.42 billion. Delinquency (60 days+) for 1Q/08 increased to 4.2%, compared to 4.0% in the previous quarter and 3.2% one-year ago. Charge-offs, as a percentage of period-end receivables, decreased to 7.0% for 1Q/08, compared to 6.4% in the prior quarter, but down from 7.7% one-year ago. For complete details on Target’s latest performance, visit CardData ([www.carddata.com][1]). (CF Library 5/6/08)

TARGET CARD LOAN HISTORICAL
1Q/07: $6.510 billion
2Q/07: $6.906 billion
3Q/07: $7.652 billion
4Q/07: $8.624 billion
1Q/08: $8.420 billion
Source: CardData (www.carddata.com)

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

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LEVEL FOUR

Level Four, an open standards ATM software developer, conducted a survey
of 50 attendees at the European ATMs show in mid-April 2008
demonstrating nearly 22% of European banks intend on alleviating ATM
downtime over the next 12-18 months. Among problems contributing to ATM
downtime is unreliable network availability, resulting from changes to
the network such as migration to the Windows operating system, and
lacking customer services, which 21% of respondents intend to address
over the next 18 months. Additional findings of the survey show 17% will
be pursuing/executing a multi-vendor strategy, 16% plan to upgrade to
new IT infrastructures and 16% plan to integrate their ATM channel with
other banking channels. In response, Level Four encourages the banks to
better manage/control their networks with intelligent ATM monitoring.

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FNIS and Elan Financial Services Team

Fidelity National Information Services has signed an agreement with Elan Financial Services to provide its cardholders of both MoneyPass and FNIS’s Intercept with access to nearly 15,000 ATMs across the U.S. Fidelity National Information Services is a provider of core processing for financial institutions; card issuer and transaction processing services. MoneyPass is a network of Elan Financial Services, a provider of complete outsourced solutions, with a focus on payments and ATM and debit card processing for financial institutions, independent sales organizations (ISO) and retailers.

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BORDERLINX & CITI

The Borderlinx e-commerce organization has signed a 5-year partnership
agreement with Citibank Singapore and DHL Express providing a customer
inlet to U.S. e-commerce. With this, Citibank customers in Singapore
will have improved access to the U.S. eTail market with its
“GlobeShopper” service while DHL is now allowed to provide its services
on a global basis. “GlobeShopper” provides Singapore consumers with
convenient access to US commerce websites which, otherwise, do not
accept foreign payment cards nor ship internationally. Borderlinx
eCommerce management solutions enable U.S. eTailers to sell to a global
marketplace, Citi provides financial services to 200 million customers
in over 100 countries while DHL links over 225 countries with fast,
reliable services through its 300,000 employees.

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Auriemma Consulting Names a UK Director

Auriemma Consulting Group has selected Matt Simester, previously with Barclaycard and Affinion International to serve Director of the UK Office. The management consulting firm, which caters primarily to the payments and lending industry, has been doing an increasing amount of international business over the past several years, particularly in the United Kingdom where it already works with the majority of the leading issuers.

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Parcxmart Card Enters Fort Lauderdale

Parcxmart electronic payments has signed a 5-year contract with the City of Fort Lauderdale to issue the “Fort Lauderdale City Parcxmart Card.” The card will be issued by Parcxmart beginning August 2008, streamlines operating expenses and increases revenues for municipal parking operations. The “Fort Lauderdale City Card”, additionally, will generate revenue for local participating merchants and provides the commuting public with a convenient one card solution for all types of parking meters. Based on the Federal ACH payment system, the card uses smart card technology for security purposes, provides users with its “Instant Cool Rewards” loyalty program and the ability to load up to $300 of value onto the card at each participating merchant.

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Pipeline Data to Acquire COCARD Marketing

MA-based Pipeline Data inked a “Definitive Merger Agreement” with TN-based COCARD Marketing Group last week. Pipeline will pay $79.5 million in cash for COCARD plus future considerations based on performance. COCARD processes over $3 billion of credit card transactions annually from its base of over 26,000 merchants. At this time, Pipeline has elected to defer its previously announced merger with Innovative Resource Alliance. Pipeline Data has received a senior secured debt proposal of $90 million for the funding of the transaction led by a Fortune 10 financial institution, of which approximately $70 million will be available to support the purchase. Pipeline has also received a proposal for the equity component of the transaction in the amount of approximately $50 million.

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Credit Card ABS Charge-Offs Breach a High

U.S. credit card charge-offs continued to grow in 1Q/08, which averaged a quarterly rate of 4.54%, reached a total rate of over 5.71%- 125 basis points higher than that of the year ago rate – and breached the 5.5% historic high. The charge-off rate is now at its highest level since the 1Q/04 with projections of peaking in 2009 at over 7%, given the percentage cardholders now pay each month fell to 18.10% in 1Q/08 from 19.27% in 1Q/07. These dismal figures, however, are met with findings that credit card debt is generating robust, healthy excess spreads of a 7.65% average-up from a 7.57% average in 1Q/07- and a yield increase of 0.02% in 2007 to 18.77%. Moody’s Credit Card Indexes track key performance metrics on the $440 billion of US bank credit card loans backing securities.

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FrontStream Payments Acquires Direct Tech

Payment solution provider FrontStream Payments has acquired Direct Technology Innovations. DTI is a recognized industry leader in providing advanced technology solutions and services. DTI has also cultivated numerous and substantial preferred vendor relationships, as well as a solid Agent/ISO sales channel. Their three primary business offerings are “Swipe N’ Go”, DTI’s exclusive program that speeds up transaction time at the register by allowing the merchant to process credit cards without the need of a customer signature for any purchase under $25. There is also no liability to the merchant for any transaction under $25; “Mobile Ticketing Solutions” which delivers Real Time Inventory Control and Payments capability, enhanced customer loyalty and reductions in fraud and theft with more than 100,000+ transactions per month in the ground transportation segment and “Click to Go” online ordering that enables customers, via a laptop, PDA or cell phone, to place orders for pick-up at a select time and at a specific location. This capability enables a restaurant to maximize its efficiency & capacity while increasing the accuracy of orders and improving customer loyalty.

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FDC 1Q/08

First Data reported first quarter consolidated revenues of $2.13 billion, a 16% increase as EBITDA rose 8% to $586 million, over 1Q/07. Effective January 1st, FDC revised its segment reporting structure into Merchant Services, Financial Services, International, Prepaid Services and Integrated Payment Systems. Card Services revenue rose 10% to $506.5 million, compared to 1Q/07. Merchant Services generated revenues of $926 million, a 10% gain over the prior year quarter. Financial Services revenue inched up by 1% to $706 million. International revenues rose 23% to $445 million. International revenue growth on a constant currency basis, excluding acquisitions and divestitures, was 5%, negatively impacted by price compression and lost contracts primarily in its Western European and Asia Pacific businesses. Prepaid Services was flat at $46 million. Integrated Payment Systems soared 139% to $45 million, compared to the year ago quarter. On April 28th FDC reached an agreement to acquire prepaid card specialist InComm for $980 million, plus contingent future payments of up to $250 million over a three year performance period. The acquisition is expected to close in the second half of this year. For complete details on First Data’s first quarter performance visit CardData (www.carddata.com) (CF Library 4/28/08)

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TRINTECH & MICROSOFT

Trintech has been awarded Microsoft Competency in ISV/Software
Solutions, achieving “Gold Certified Partner” status in the Microsoft
“Partner Program”, declaring a Microsoft “ISV/Software Solutions”
Competency. With this recognition comes Trintech’s confirmed expertise
with Microsoft technologies, access, training and support for a
competitive advantage in the “ISV/Software” channel. Additionally, the
company’s declaration of an “ISV/Software Solutions” competency helps
differentiate its capabilities among others for customers seeking
particular solutions. Trintech provides over 600 global organizations
with financial governance and performance management using configurable,
scalable solutions while the Microsoft Partner Program was launched in
October 2003 representing Microsoft’s commitment to the success of
partners worldwide.

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