The FTC has expanded the number of defendants in its pending case against Merchant Processing, Inc. Last week the FTC added Karely McCarthy and PPI Services Inc. as defendants in the case. The original complaint in this case, announced in April, alleged the defendants used deceptive tactics to sell credit- and debit-card processing services to thousands of small businesses across the county. The FTC says MPI’s sales representatives promised small businesses savings of hundreds to thousands of dollars a year in processing fees by offering lower rates than the merchants’ current credit card processing service. The FTC said they told merchants that the credit card swipe equipment they currently are using is outdated or incompatible with their systems, or that the merchants will need to replace their systems in order to get the special low rate. (CF Library 4/16/07)Details
Wells Fargo is now offering text-based account access or “SMS” as part of its “Wells Fargo Mobile” service. Wells was the first financial institution to introduce access to banking accounts on the Internet in 1995. The new “SMS” service enables customers to connect to their Wells accounts from a mobile phone through text messaging. Customers first enroll online to activate the text banking service and then simply send a text message to a Wells Fargo-specific short code number, 93557. After sending one of the “Wells Fargo Mobile” text banking shortcut commands, they will then receive a reply with the requested information. Account numbers are never displayed via text banking, but are represented by the mobile account nicknames that a customer specifies during enrollment.Details
KY-based Humana has teamed with Republic Bancorp to launch a new health care card to be issued to a select set of Humana’s employer group customers beginning this month. The “HumanaAdvance VISA” can be used only at hospitals, doctor and dentist offices, drug stores and other locations that sell and provide health related products and services. The card features a fixed 0% APR on all purchases, which are automatically paid back over six months. The card’s payroll deduction option is made possible by E-Duction, and allows a consumer to have access to a low cost and interest free credit line for health care expenses. Humana has approximately 11.3 million medical members.Details
Capital One’s third quarter U.S. credit card profits increased nearly 22% year-on-year and about 4% sequentially due to revenue growth and reductions in non-interest expenses. Purchase volume in the U.S. was flat while U.S. managed card outstandings decreased 3% from the year-ago quarter. The number of U.S. card accounts declined by about 100,000 during the quarter, and remained down from the year-on-year figure of 37.5 million accounts. U.S. card net income was $560.8 million, compared to $538.3 million in the prior quarter and $461.6 million for 3Q/06. U.S. managed card outstandings were $49.6 billion for 3Q/07 compared to $51.1 billion one-year ago and $50.0 billion in the previous quarter. Cap One says loan growth was affected by a reduction in marketing of prime customers and teaser rate offers, and a $600 million portfolio sale in the first quarter. Purchase volume hit $21.5 billion for 3Q/07, compared to $21.8 billion for 2Q/07 and $21.4 billion for 3Q/06. The managed delinquency rate (30+ days) for U.S. credit cards was 4.46% for the third quarter, compared to 3.41% for 2Q/07 and 3.53% for the third quarter of 2006. The net charge-off rate for U.S. credit cards was 4.13% for the third quarter, compared to 3.73% for the second quarter and 3.39% one-year ago. For complete details on Capital One’s third quarter performance, visit CardData ([www.carddata.com]).
COF U.S. CARD NET INCOME
3Q/06: $461.6 million
4Q/06: $337.2 million
1Q/07: $495.3 million
2Q/07: $538.3 million
3Q/07: $560.8 million
Source: CardData (www.carddata.com)
CyberSource reported that third quarter revenue rose 53% to $26.5 million. CyberSource’s total customer count increased to approximately 22,000 at the end of September. Customers added during the quarter include Beach Camera, Diane Von Furstenberg, Magellan Navigation, Perry Ellis, Silversea Cruises, Tibco Software, and Underwriters Laboratories. BidPay has acquired approximately 483,000 customers since its launch in June of 2006, up from 410,000 at the end of the second quarter. Approximately 150 customers selected CyberSource for global acquiring services during the period. CyberSource now has over 1,800 global acquiring customers, now supports over 25 international payment types and processed transactions in over 65 different currencies in the third quarter. CyberSource’s European operations contributed a record 55.1 million transactions in the third quarter, approximately 19% of total transaction volume. For the fourth quarter, total revenue is expected to be $31.5 million. For complete details on CyberSource’s latest results visit CardData ([www.carddata.com]).
3Q/06: $17.4 million
4Q/06: $20.9 million
1Q/07: $20.7 million
2Q/07: $22.9 million
3Q/07: $26.5 million
Source: CardData (www.carddata.com)
AT&T announced a contract with PSCU Financial Services to provide communications equipment and services to enhance the reach and reliability of the CUSO’s network services. The new contract with AT&T establishes an Ethernet private line between PSCU’s St. Petersburg headquarters and the company’s Phoenix-area data center. This communications link facilitates data replication for business-critical information between St. Petersburg and Phoenix. The instantaneous mirroring of data across the network further establishes needed redundancy to secure company information and maintain active lines of communication. PSCU Financial Services serves more than 1,100 financial institutions nationwide and is owned by more than 500 member credit unions representing over 11 million cardholder accounts and more than 500,000 online bill payment subscribersDetails
AmEx’s “Platinum Travel Service” team of specialists reports that a growing number of affluent travelers are seeking private, luxurious getaways, booking more private yachts, villas and jets than ever before. Platinum Travel Service villa specialists report that the requests for private villas are at an all-time high, especially from multi-generational families or groups of friends looking for privacy, space and a “home away from home” with additional comforts. Specialists report that Italy, France and the Caribbean – particularly St. Barts – are among the most popular destinations for private villa vacations, which, like private yachts, are often six-night/seven-day vacations booked six to nine months in advance .Private jets are becoming central to the vacation itself, especially for families. Jet specialists are increasingly booking private jet charters for customers to hop from city to city within European countries and Asia.Details
South Korea-based Mobilians International fraud management is implementing its mobile online payment method in the U.S. The new “MobiCash” online payment method enables consumers to purchase retail items and services with the use of a mobile phone over a secure platform that does not require the transmission of any personal account information, such as card or account numbers. Mobilians executive team includes seasoned executives from Sprint Nextel, CyberCash, CyberSource, Transaction Network Services, and Mobilians of South Korea. The company expects to commence active payment transactions with online merchants using its core systems in first quarter of 2008.Details
TX-based Austin Logistics has hired David Diehl, formerly with Fair Isaac, as COO. At Fair Isaac as Vice President, Global Fraud Solutions, he led that organization’s payment card fraud detection, identify theft and telecommunications fraud and risk management efforts. Prior to that, he was vice president, Product Engineering, where he directed a team of 150-plus scientists and software engineering professionals. In addition to his tenure at Fair Isaac, Diehl has held a series of increasing responsible positions at a number of software companies serving the financial services market, where he helped develop credit card processing, consumer lending and consumer financing systems. Austin Logistics is a leading provider of event based analytic solutions.Details
NV-based Western Alliance Bancorporation reported third quarter net income of $11.1 million, up 39.5% from 2Q/07, but down 4.2% from 3Q/06. The Bank also announced that Kenneth Vecchione has been elected a Director. He is the former Vice Chairman and CFO of MBNA with prior work experience at AT&T Universal Card, First Data Corp and Citicorp Credit Card Services. He will commence his new responsibilities as CFO of Apollo Global Management on October 29th. Western Alliance Bancorporation is the parent company of Bank of Nevada, First Independent Bank of Nevada, Alliance Bank of Arizona, Torrey Pines Bank, Alta Alliance Bank, Miller/Russell & Associates, Shine Investment Advisory Services, Premier Trust, and PartnersFirst. For complete details on Western Alliance’s third quarter performance visit CardData ([www.carddata.com]).
San Diego-based Kyocera Wireless reports the successful field-testing of handsets used in a “WirelessWallet” consumer trial by Cellular South. Cellular South conducted the three-month trial in Jackson, Miss. and Memphis, Tenn. with partners Bank of America, ViVOtech and Mpact, Inc. A post-trial survey found that 87% of “WirelessWallet” testers are interested in using the mobile payment technology when it becomes commercially available. The survey, conducted by Insights Research Group, also revealed that more than 75% of testers were satisfied with their “WirelessWallet” transactions.Details
For its 32,000 bank branches, China Postal Savings Bank (CPSB) has
signed agreements with Nautilus Hyosung for the deployment of
“NH 5050” ATMs. Nautilus Hyosung plans to deploy 3,000
“NH 5050” ATMs this year which have been recognized at the China
International Exhibition on Financial Banking Technology & Equipment in
2006. Despite the company’s late 1997 market debut, Nautilus Hyosung
has been able to succeed with innovative designs and are intent on
expanding their presence in the financial industry.