Charge-Offs Show Upward Momentum in November

Charge-offs for managed outstandings edged up again in November by 10 basis points after a rocky year following the implementation of new bankruptcy rules last fall. The charge-off ratio has oscillated much of this year but seems to be on an upward trend as delinquency points north. According to CardData ([www.carddata.com][1]), charge-offs for November rose to 4.19% of managed outstandings, versus 4.09% in October and 7.03% one-year ago. According to FitchRatings, “prime” charge-offs for October were 3.78%, 10 basis points lower than the prior month but up 59 basis points since May. The “prime” 60-plus day delinquency index for October was 2.40%, compared to 2.33% in September.

CHARGE-OFFS 2006
Jan 06: 6.05%
Feb 06: 4.73%
Mar 06: 3.75%
Apr 06: 3.95%
May 06: 4.24%
Jun 06: 4.19%
Jul 06: 3.99%
Aug 06: 3.95%
Sep 06: 4.15%
Oct 06: 4.09%
Nov 06: 4.19%
Source: CardData (www.carddata.com)

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

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Comerica Bank Pilots Voice-Guided ATMs

Detroit-based Comerica Bank is piloting voice-guidance ATMs for the visually impaired. With the voice-guidance ATMs, customers simply plug a standard set of headphones into the ATM’s headphone jack to hear instructions in English or Spanish. Comerica worked with representatives from Leader Dogs for the Blind to make the new ATMs as “user friendly” as possible for the visually impaired. Instructions will be provided for any ATM transaction being conducted, such as a deposit, withdrawal, balance inquiry or payment. Comerica Bank has 240 banking centers and 379 ATMs in metropolitan Detroit, Ann Arbor, Battle Creek, Grand Rapids, Jackson, Kalamazoo, Lansing, Midland and Muskegon.

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Kabira Boosts its High Availability Platform

CA-based Kabira Technologies announced the second generation of the “Kabira High Availability Platform” for disaster-tolerant real-time applications. Kabira HA has been enhanced to achieve higher throughput and increased speed, reducing the amount of network traffic between highly available nodes by almost 50 percent and achieving approximately 75 percent increase in throughput. In addition, the solution now supports multiple network connections between highly available nodes to enable network redundancy. Kabira provides high performance transaction processing software for global enterprises to manage high volumes at a substantially lower cost.

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Chase/Marriott Rewards VISA Heads North

Chase and Marriott have launched the “Marriott Rewards Platinum VISA” in Canada. Cardholders can use their card for their daily purchases and earn three “Marriott Rewards” points for every Canadian dollar spent at Marriott locations worldwide and earn one point per Canadian dollar for all other daily card purchases. In addition to earning “Marriott Rewards” points by using the card, cardholders receive 5,000 bonus points after their first card purchase. Cardholders will also be automatically upgraded to “Silver Elite” membership in the Marriott Rewards program. Cardholders can redeem points for more than 250 rewards options including free stays at more than 2,600 Marriott hotels worldwide, theme parks, cruises, airline miles, electronics and more.

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I4 Commerce Picks Up a Major Credit Line

MD-based I4 Commerce has secured $640 million in a corporate debt financing from Citigroup’s Corporate and Investment Banking division. Since its introduction three years ago, I4 Commerce has become the leading provider of alternative payment solutions for multichannel retailers. Almost two million consumers have used I4 Commerce’s Bill Me Later to shop at more than 425 retailers, including Walmart.com, Apple, US Airways, OfficeMax, Brookstone and PETCO. Citigroup Corporate and Investment Banking is the most complete financial partner to corporations, financial institutions, institutional investors and governments in the world. I4 Commerce is a rapidly growing technology company helping to connect leading retailers with high value customers by improving the purchase experience.

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First Equity Joins Mall Networks for Biz Cards

PA-based First Equity has selected Mall Networks to build and manage a customized online shopping mall for its business credit card holders. First Equity card holders will be able to shop easily and securely at hundreds of their favorite name-brand merchants while earning points for everyday purchases. In addition to funding the points for shopping through the mall, merchants will also offer special offers and promotions. First Equity Card Corporation, located in Blue Bell, Pa., specializes in the provision of business credit solutions, including a highly innovative credit card program designed around the needs of small businesses. Mall Networks offers custom online malls for card issuers, loyalty programs, clubs, professional organizations and non-profit organizations to increase revenue and keep members engaged.

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Online Purchasing to Peak This Afternoon

Online purchasing activity is predicted to peak today for major retailers between 2:00PM and 3:00PM EST. Retail Decisions says it is expecting to identify and stop greater volumes of attempted fraud this year. On a like for like basis, ReD saw volumes increase by 109% on “Black Friday” for its U.S. clients. The top categories of products purchased fraudulently this year were gift cards, electronics, tools, jewelry and apparel. ReD says attempted fraudulent transactions for one online mass merchant in November included 930 tool sets (valued at total $32,836), 738 gift cards (valued at total $26,895), 70 home theatres (valued at total $22,986) and 58 LCD widescreens at $59,983 total value. 89% of attempted fraudulent purchases were below $1000. ReD’s clients include, Federated Department Stores, Walmart.com, Travelocity, and The Finish Line.

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Feds Likely to Pause Again This Week on Rates

The Federal Reserve will likely tomorrow takes its fourth straight pause this year. LendingTree says with the cross-currents of core inflation on the one hand and the housing and auto sectors in a downdraft on the other, they will likely want to collect more data points before making a move in either direction. The Federal Reserve raised interest rates 17 straight times from June 2004 to June 2006. Meetings from August to October 2006 have resulted in a halt in rate moves, allowing previous hikes to work into the system and take affect. The current prime rate is 8.25%.

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Chase and Marriott Launch the Marriott Rewards VISA

Chase and Marriott have launched the “Marriott Rewards Platinum
VISA” in Canada. Cardholders can use their card for their daily
purchases and earn three “Marriott Rewards” points for every Canadian
dollar spent at Marriott locations worldwide and earn one point per
Canadian dollar for all other daily card purchases. In addition to earning “Marriott Rewards” points by using the card, cardholders receive 5,000 bonus points after their first card purchase. Cardholders will also be automatically upgraded to “Silver Elite” membership in the Marriott Rewards program. Cardholders can redeem points for more than 250 rewards options including free stays at more than 2,600 Marriott hotels worldwide, theme parks, cruises, airline miles, electronics and more.

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VeriFone Q3 Revenue Rises 20% Year-on-Year

VeriFone reported that its revenues rose 20% year-on-year to $156.6 million for the three months ending October 31st. Profits for the quarter were up 15% to $13.9 million compared to one-year ago. The increase was driven by a 30% increase in net revenues from VeriFone’s International business and a 14% increase in net revenues from VeriFone’s North America business. During the quarter VeriFone said its multi-lane retail business was up, driven by the “MX870,” the only large screen solution currently in the market for customers seeking to meet upcoming PCI deadlines. VeriFone also benefited in Mexico from strong FIMPE activity. In the U.K., the Company continued to make good progress in the UK market with its competitive win of CardNet, a joint venture between Lloyds and First Data. CardNet chose VeriFone as its primary supplier for desktop and mobile payment systems, offering an end-to-end service. For complete details on VeriFone’s latest performance, visit CardData ([www.carddata.com][1])

REVENUE HISTORICAL
3Q/04: $108.6 million
4Q/04: $111.3 million
1Q/05: $117.9 million
2Q/05: $125.7 million
3Q/05: $130.5 million
4Q/05: $134.6 million
1Q/06: $142.2 million
2Q/06: $147.6 million
3Q/06: $156.6 million
Source: CardData (www.carddata.com)

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

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NBPCA Names a Government Relations Advisor

MA-based The Network Branded Prepaid Card Association has added Dan McDermott, a Washington, D.C.-based attorney and government relations specialist, as the Association’s Government Relations Advisor. McDermott has led an accomplished career in the field of government relations. After practicing law, with a specialty in federal litigation, he became Legislative Counsel to the Financial Services Council in 1987. In 1990, McDermott joined Capital Holding Corporation, later Providian Financial, as Director of Federal Government Relations. For the next two decades, as Vice President and Senior Vice President, he was responsible for overseeing Federal and State government relations programs. Beginning in 2006, McDermott became associated with The Center for Regulatory Effectiveness as Executive Vice President. The Network Branded Prepaid Card Association (NBPCA) is a nonprofit, inter-industry trade association that supports the growth and success of network branded prepaid cards and represents the common interests of the many players in this new and rapidly growing payments category.

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Teen Spirit is Major Online Shopping Influence

A new survey has found that even though teens account for only three percent of online sales right now, they can be very influential on overall household buying. JupiterResearch found that one in four teens say their parents always take into account their opinion about household purchases. Of teens who make purchases online, 83% still make purchases with their parents present, via their parents’ credit or debit card. However, alternative methods of payment, such as PayPal and gift certificates, have grown in popularity and allow teens to make purchases by themselves. The JupiterResearch report concludes that teenagers are Internet-savvy and retailers must understand their characteristics and behaviors to catch them as them as they begin making their first independent online purchases.

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