VISA Inc. reached a $2.25 billion settlement with American Express over a 2004 antitrust lawsuit that claimed VISA and MasterCard illegally blocked AmEx from the bank-issued card business in the USA. The heat is now on MasterCard to settle as AmEx said yesterday that as sole remaining defendant, MasterCard would be liable for the full amount that could run into billions of dollars. Under the proposed agreement, AmEx will receive $945 million from VISA and an additional payment from the bank defendants by March 15th and no later than March 31st. Beginning March 31st, VISA will pay AmEx an additional amount of up to $70 million a quarter for 16 quarters, based on quarterly performance criteria within the U.S. network services business of AmEx. The maximum payout to American Express would be $2.25 billion. In return AmEx has agreed to drop its potential claims against US Bank, Wells Fargo, Washington Mutual, JPMorgan Chase and Capital One. The proposed settlement agreement is contingent upon VISA USA member approval.Details
Washington, DC-based Blackboard and Sony have teamed to integrate Sony’s “FeliCa” contactless technology in Blackboard’s “Commerce Suite,” a suite of applications supporting one-card transactions on-campus, off-campus and online and allowing for identification, payment and access. Sony said it is anxious to bring its “FeliCa” technology to the U.S. following its success in Japan. There are more than 250 million “FeliCa’ cards and chips embedded in mobile phones in circulation. In addition to meeting ISO standards, “FeliCa” provides a supportive layer of user credentials which can be integrated with NFC-enabled devices including door access readers, point of sale terminals, mobile phones and a variety of attended and unattended devices. Blackboard products are used by millions of people at academic institutions worldwide.Details
eTelecare has announced its new business process outsourcing contract
managed from its Philippines center to launch this month. The company
that signed the contract for eTelcare’s services is a major credit card
and will be outsourcing its sales program for its customers. eTelecare’s has
been honored with 65 awards since 2000, including 6 2007 “Top 50” awards,
2006 “Top Outsourcer” and “Best of Show: Best Outsourcer”. The
outsourcing service provides technical support, customer service, sales,
customer retention, chat and email in the Philippines and North America.
A new report concludes that Americans are using credit cards to bridge the gaps created by stagnant wages and higher costs of living. The research by NYC-based Demos suggests that cardholders are trapped in a cycle of debt with unnecessarily punitive fees and interest rates. From 1989 to 2004, the percentage of cardholders incurring fees due to late payments of 60 days or more increased from 4.8% to 8.0%. Demos also says 46% of very low-income credit card-indebted households spent more than 40% of their income to pay off debt. About 84% of African-American households and 79% of Latino households carried credit card debt compared with 54% of white households. Additionally, since 1989, Americans over 65 have experienced the greatest increase in the amount of credit card debt carried. The average balance for this age group increased 194% from $1,669 in 1989 to $4,906 in 2004.Details
Insight Sports has granted Capital One sponsorship for the “Grand Slam
of Curling”, one of Canada’s most popular sports. Capital One sponsorship
will contribute to the Capital One “School of Rock” community program to
be in conjunction with Capital One Grand Slam of Curling events which will
take place November 28 to December 2 and from December 20 to 23.
Insight Sports is a sports media and entertainment company which creates
and distributes sports and entertainment content across multiple
platforms while Capital One Canada is a division of Capital One Bank.
Atlanta-based sub-prime card specialist CompuCredit reported a net GAAP loss for the third quarter of $53.2 million, compared to a net loss of $11.0 million in the second quarter and net income of $38.8 million for 3Q/06. However, total managed receivables soared by 52% year-on-year for the third quarter ending at $4,173,979,000. CompuCredit cited a $21 million after-tax ABS loss as the reason for the decline in net income. As of September 30th, CompuCredit had 5,528,000 accounts, compared to 3,773,000 in 3Q/06. The card issuer says it added over 500,000 net new customer accounts during the quarter through a variety of distribution channels. The adjusted charge-off rate was 10.2% in the third quarter, as compared to 9.2% for 2Q/07 and 9.4% in the year ago quarter. As of September 30th, the 60-plus day delinquency rate was 14.6%, as compared to 13.2% for 2Q/07 and 14.0% for 3Q/06. For complete details on CompuCredit’s third quarter performance, visit CardData ([www.carddata.com]).
COMPUCREDIT NET INCOME SNAPSHOT
3Q/06: $38.8 million
4Q/06: $ 9.7 million
1Q/07: (-$ 2.5 million)
2Q/07: (-$11.0 million)
3Q/07: (-$53.2 million)
Source: CardData (www.carddata.com)
American Express has signed partnership agreements with Kingfisher
Airlines, in association with Airtel, to introduce the “American Express
Kingfisher First Credit Card.” The new card will allow customers to
earn free flights with its rewards program in providing the growing
demographic of travelers with its frequent flyer program. The program has
been designed to provide travelers with 2 or more round trip flights
with no more than everyday spending on the card. According to Kingfisher,
this is a perfect time to introduce this product to an Indian market that is
currently experiencing growth in affluence and domestic air travel
FL-based ATM specialist Global Axcess reported third quarter revenues of $5.5 million, compared to revenues of $5.6 million in the prior quarter and the year ago quarter. The quarter represented the fourth consecutive quarter of positive earnings since the Company announced its re-structuring plan in the third quarter of 2006. During the third quarter, the Company noted it recorded approximately $2.6 million of impairment and restructuring charges. The Company says it continues to shut down unprofitable ATM locations and is being very selective with respect to which ATMs to “Triple DES” upgrade. Through its wholly owned subsidiary, Nationwide Money Services, it owns and operates 4,400 ATMs in its national network spanning 44 states. For complete details on Global Axcess’ third quarter performance visit CardData ([www.carddata.com]).
Far EasTone has chosen INSIDE Contactless’ “MicroRead” platform
as the NFC mobile phone chip for its “Beep ‘N Go” pilot. The pilot will
be available to a local panel of 200 and is set to be fully launched next
year. With the INSIDE solution, the Far EasTone project can provide
NFC mobile phones with a multi-usage personal tool through the
“Universal Subscriber Identity Module”. Also beneficial to the “Beep’N Go”
project, “Microread” implements the SWP protocol and allows the “battery
off’ mode, using power generated from the antenna RF field. “MicroRead”
operates the NFC platform over secure connections for mobile payments,
transport ticketing, service discovery and access control.
The New England Bankcard Association’s member, PA-based Somerset Trust Company, is launching “MasterCard PayPass” contactless payment technology on its current portfolio of MasterCard credit cards. In October, Somerset Trust Company began replacing all existing customers’ credit cards with “PayPass”-enabled credit cards. The “PayPass”-enabled cards offer Somerset Trust Company’s cardholders a faster, secure way to pay and a more convenient shopping experience by enabling “Tap N G” payments. Somerset Trust Company is an independent community bank.Details
According to MoneyExpert.com, the number of British consumers whom
have been recently denied credit for which they applied is skyrocketing.
The number of applicants that have been rejected credit
over the past 6 months is up 17%, equating to 10% of the total population,
over the previous 6 months. Experts blame this, and the conjunctive rise in
fees and rates, on a global “credit crunch”. Additional industry statistics
show that 125 credit card fee and rate increases have been implemented
since the beginning of September, 69 credit cards had increased the fees
they charged for cash withdrawals over the past 2 months, 25 cards charge
higher interest on cash withdrawals, 10 cards increased fees on balance
transfers (some charging up to 3%), 3 cards have increased interest on
purchases and 18 have higher foreign usage charges.
The PCI Security Standards Council is adding a new standard for payment application software. The new standard, called “Payment Application Data Security Standard” (PA-DSS), is based on VISA’s “Payment Application Best Practices” (PABP). VISA created the “PABP” to help software vendors and others develop secure payment applications that do not store prohibited data, such as full magnetic stripe, CVV2 and PIN data, and support compliance with the “PCI DSS.” Internally developed applications by merchants and others are not subject to “PCI PA-DSS” but are subject to “PCI DSS.” Approximately 200 products used by a large number of merchants around the globe have already been validated against VISA’s “PABP” and this number is expected to continue growing with the Council’s adoption of “PA-DSS.” The “PA-DSS” is endorsed by all five global payment card brands.Details