TIO Prepaid MasterCard Gains U.S. Traction

The “TIO Prepaid MasterCard” program offered to 75 EWIZ stores has met the pilot criteria and will be rolling out to all 400 EWIZ stores across the United States and another 300 stores scheduled for future deployment. TIO also announced a new initiative to make NetSpend’s National Savings Program available to TIO prepaid MasterCard cardholders. NetSpend cardholders can earn up to 5.00 percent interest on an annualized basis by linking their MetaBank-issued prepaid cards to an interest-bearing savings account. There is no minimum deposit to enroll in the program, no minimum monthly balance to maintain and no additional monthly service fees. NetSpend Corporation is one of the premier providers of innovative, accessible prepaid debit cards that enable financial freedom for under-banked consumers.

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American Express Fashion Network is Launched

American Express has announced plans to launch the “American Express Fashion Network” to provide exclusive, never-before-seen, live access to Mercedes-Benz Fashion Week. The Network launches on Friday, February 1st and will stream live throughout the duration of Mercedes-Benz Fashion Week and capture archived video footage for fashion fans to enjoy in the weeks to follow. In addition, American Express will drive further attention to the designers’ shows and will promote the Network by syndicating video clips to targeted fashion, lifestyle and news websites. Also launching is Fashion 360 Presented by American Express, the first dedicated fashion channel on YouTube that will have highlights from the American Express Fashion Network including live runway shows and insider-interviews as well as content from fashion partners and publishers that will include daily party and trend fashion reports.

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Alliance Data Systems’ Q4 Up 15% to $603B

Dallas-based Alliance Data Systems reported that fourth quarter revenue increased 15% to $603 million. The “AIR MILES Reward Program” in Canada continued its over-performance, driven by strong double-digit growth in “AIR MILES” reward miles issued and solid operating leverage. U.S. Marketing Services (Epsilon) posted the Company’s highest growth rates. Marketing spend continues to shift away from traditional media channels and into specific, highly targeted ROI-based efforts. Additionally, the Company’s private label business also continued to post solid results with better than expected new wins further driving growth. Epsilon, ADS’s U.S. platform for Marketing Services, had another outstanding quarter, posting double-digit growth fueled by escalating global demand from new and existing clients. During the quarter Epsilon announced it had signed a multi-year agreement with Berkshire Hathaway subsidiary Helzberg Diamonds, a fine jewelry retailer operating 269 stores throughout the United States, pursuant to which the Company will manage Helzberg Diamonds’ marketing database and provide data and analytical support for customer cross-sell and acquisition marketing efforts. In addition, during the quarter Epsilon announced it had signed a multi-year agreement to provide loyalty marketing and database services, analytics, permission-based email communications and strategic consulting.

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Advanta’s Q4 Charge-Offs & Delinquency Rise

Business credit card specialist Advanta posted a 22% rise in managed outstandings during the fourth quarter to $6.35 billion. During the fourth quarter, the issuer opened more than 22,000 net new business card accounts and ended the quarter with a record 1,316,523 gross accounts. Advanta’s Business Card unit earned net income of $12.2 million as compared to $22.1 million in the prior quarter due to VISA Inc. litigation and rising loan-loss reserves. Transaction volume increased 8% to $3.76 billion during the fourth quarter. Charge-offs, on averaged managed receivables, increased from 4.13% in the fourth quarter to 3.87% for the third quarter and are higher than 4Q/06’s 3.40% figure. Over 30-day delinquencies on managed receivables rose 114 basis points to 4.29% from the prior quarter. Over 90-day delinquencies on managed receivables also rose by 56 basis points to 1.97%, compared to the fourth quarter of 2007. For complete details on Advanta’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

ADVANTA’S CARD PORTFOLIO SNAPSHOT
Period Card Loans
4Q/06: $5.21 billion
1Q/07: $5.59 billion
2Q/07: $5.99 billion
3Q/07: $6.21 billion
4Q/07: $6.35 billion
Source: CardData (www.carddata.com)

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

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AMEX 4Q/07

American Express reports that its International Card Services unit reported a fourth-quarter net loss of $68 million, compared with net income of $99 million a year ago. The lower net income was attributed to the increased expense related to “Membership Rewards” and increased investments in business-building initiatives. The gross dollar volume on its international cards rose 24% and its international cardbase expanded 14% during the fourth quarter, compared to the year ago quarter. International card volume rose to $54.5 billion. The total number of international cards-in-force grew to 34.1 million. During the quarter GNS announced a new card issuing partnership with AB Parex Bankas in Lithuania, and issued the first card products, denominated in the Litas currency, in both “Gold” and “Platinum” versions; also launched a new partnership with Banco Privado in de Inversiones in Argentina to issue American Express-branded “Standard,” “Gold” and “Platinum” cards; launched Brunei’s first airline co-brand card; and launched the “ICBC Staples Corporate American Express Card,” the first American Express branded co-brand corporate card in China. For complete details on American Express’ fourth quarter results, visit CardData (www.carddata.com).

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Aite Group Releases a U.S. Contactless Report

A new report by MA-based Aite Group estimates that merchant penetration of contactless payment will only increase from 0.5% today to 2.5% by 2014, unless there are stronger incentives presented by card networks. Although initial pilots for contactless payment cards have indicated a significant value proposition for issuers, merchants and consumers, cash is still the preferred mode of payment in the US, due in large measure to merchant’s avoidance of interchange costs on low-value transactions. Card networks have provided little incentive for merchants to implement contactless payment technology, and have failed to remove the financial barriers that make accepting contactless payments costly to merchants.

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Davidson Companies Database is Compromised

MT-based financial services provider Davidson Companies announced that a database containing certain personal information of its current and past clients may have been breached. The company recently became aware of the intrusion and immediately took its public Internet site offline. The company has contacted law enforcement and its regulatory authorities, notified the three credit reporting bureaus, and retained an information technology security and forensic firm to review the incident to assist the company in its response. Based on the company’s review, there is no evidence the unauthorized access enabled the third party to affect or alter client accounts through company systems.

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CU HERE Premium ATM Program Hits 45K ATMs

FL-based Credit Union 24 has announced that during the initial opt-in period for the “CU HERE Premium” program, more than 130 credit unions have signed up to participate. Credit Union 24 announced the creation of the “CU HERE Premium” program, which is the largest surcharge-fee free ATM network in the country with more than 45,000 ATMs, in December 2008 and since then has received overwhelmingly positive feedback from its member credit unions. The program will go live on February 6, allowing member credit unions to opt into the program through 2008.

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Gemalto’s Fourth Quarter Revenues Jump 10%

Smart card specialist Gemalto reports that overall fourth quarter revenue rose 10% to $696 million. Revenues for the “Secure Transactions” unit, which includes smart payment cards, rose 4% to $161 million compared to 4Q/06. The Company says the EMV roll-out in emerging markets and renewals in more mature markets continue to generate robust market demand. Steady growth of personalization services and contactless payment activities did offset the disturbance induced early in the quarter by the restructuring program in Western Europe. Overall the segment demonstrated good resilience under a severely constrained operating environment. For complete details on Gemalto’s latest performance visit CardData ([www.carddata.com][1]).

GEMALTO REVENUE HISTORICAL
4Q/06: $631.6 million
1Q/07: $495.9 million
2Q/07: $544.8 million
3Q/07: $588.0 million
4Q/07: $696.0 million
Source: CardData (www.carddata.com)

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

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Cardtronics Adds Two Board Members

Cardtronics announced the appointment of Dennis Lynch, CEO of RightPath Payment and Tim Arnoult, previously with Bank of America as its two newest members to the Board. Lynch is currently the Chairman and CEO of RightPath Payment, a company providing business-to-business payments via the web. From 1996 to 2004, he served as CEO of NYCE Corporation. Prior to NYCE, Mr. Lynch served 13 years at Fleet Financial group in a variety of information technology and product roles, ultimately managing Fleet’s consumer payments portfolio. Arnoult retired from Bank of America in 2006 after having spent 27 years with the organization. During his tenure at Bank of America and several of its predecessor banks, Arnoult served as President of Global Treasury Services, President of Global Technology and Operations, and President of Central U.S. Consumer and Commercial Banking.

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Wachovia Extends its VISA Debit Card Deal

Wachovia Bank and VISA have signed a partnership agreement, renewing their long-standing relationship. Under terms of the deal, Wachovia will continue to offer Visa-branded credit and debit products to its customers as a major component of its consumer and small business payments business. As part of the agreement, Wachovia will issue the VISA check card for consumer and small business customers and will issue the majority of the bank’s consumer credit and small business credit products with the VISA brand. In addition, VISA will continue to offer debit processing to Wachovia through Visa Debit Processing Service.

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SMART PILOT

Western Union and Smart Communications (SMART) have partnered
for the launch of the Mobile Money Transfer pilot, targeting the more than
8 million overseas Filipino workers. SMART currently has more than
30 million subscribers and service agreements with five Philippine
commercial banks to provide pilot users with cash access at over
7,000 ATMs nationwide, in addition to its “Wireless Centers” and various
third-party fulfillment agents. Given the Philippines is currently the
fourth-largest receiver of remittances in the world, with an estimated
USD$17 billion in 2007, and 80% of the global population has mobile
phone service, the partner organizations are projecting a fruitful return
with this venture. The mobile pilot will connect users to WU’s
“mobile wallet” software for person-to-person mobile money transfers
on the Company’s cross-border remittance network. GSM
trade association represents over 700 mobile phone operators for cross-
border mobile money transfer services and will be lending its services
for the pilot. Western Union serves remittance customers around the
world from its 320,000 locations in over 200 countries and territories.

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