Target’s Q1 Credit Card Profits Leap 59%

Target reported that its pre-tax credit card profits for the quarter ending April 29th increased 59% over the year-ago quarter. Credit card outstandings for the quarter increased 11% year-on-year, exceeding $5.8 billion. Target’s first calendar quarter pre-tax credit card profits were $162 million, compared to $192 million in the prior quarter and $102 million one-year ago. Target reported that its total credit card receivables, which include its VISA and “Guest” cards, were $5.844 billion as of April 29th, compared to $5.251 billion one-year ago. Delinquency (90 days+) for 1Q/06 increased to 3.0%, compared to 2.8% in the prior quarter, but level with one-year ago. Charge-offs were 4.3% for 1Q/06 compared to 6.5% in the prior quarter and 7.4% one-year ago. Target’s credit card unit had revenues of $259 million in 1Q/06, a 26% increase over 1Q/05. For complete details on Target’s latest performance, visit CardData ([www.carddata.com][1]).

TARGET CARD LOAN HISTORICAL
(Excludes Mervyn’s & Marshall Field’s)
1Q/05: $5.251 billion
2Q/05: $5.421 billion
3Q/05: $5.544 billion
4Q/05: $6.177 billion
1Q/06: $5.844 billion
Source: CardData (www.carddata.com)

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

Details

Major Company is Exploring GreenZap Options

San Diego-based GreenZap says a “Fortune 100” company is looking to acquire its proprietary electronic payment system. GreenZap and the Company have entered into mutual non-disclosure agreements, allowing both parties to share current and developmental system architecture plans, as well as other proprietary information regarding security applications, payment processing partners, and fraud prevention tools.GreenZap enables any business or individual with an email address to send and receive money securely and cost-effectively online and reports over 100 million users and a 2005 total dollar volume of payments of $27.5 billion.

Details

NBG Selects Welcome’s XLS for its GO NATIONAL Card

The National Bank of Greece has chosen Welcome’s
“XLS” solution to boost their “GO NATIONAL” payment card launch.
“GO NATIONAL” cardholders get instant cash back when they use
their card in the “GO NATIONAL” network of participating merchants. In
addition, the program will soon be enriched with merchant promotions
such as surprise gifts, frequent shopper offers and VIP Service
Vouchers. Welcome’s software combats fraud as well as fight commoditization, for essentially the same cost as fraud.

Details

CitiBusiness Adds Pharmacy Discount Benefit

Citibank has added a free prescription discount benefit program to its “CitiBusiness MasterCards” for small business. However, cardholders will be solicited to upgrade their prescription discount benefits at an additional cost, add other employees who are not cardholders for $10 per year and add a vision and dental discount program for about $9 per month. The basic program claims 10% to 60% savings on prescriptions from 48,000 pharmacies nationwide plus mail order pharmacies. Health Access Services and New Benefits, Ltd. are the firms providing the new card benefits. Citi says a recent survey showed that 65% of small businesses do not offer healthcare benefits.

Details

Underground Gets Unattended Chip and PIN Terminals

Cubic has completed one of the first unattended “Chip and PIN” terminal
networks in the UK. The network of unattended units on the Underground
and some Docklands Light Railway (DLR) stations throughout London’s
Oyster card transport system enable Transport for London’s customers to
purchase travel tickets with debit or credit cards using “Chip and PIN”
technology, without the need for a staff member to be present. The
unattended payment devices have now been installed in 491 passenger
operated ticket machines. In addition, Cubic also carried out
a wider program of upgrading terminals across the Transport for London
network. This included installing 600 “PIN Entry Devices” on ticket
office machines at all 275 ticket offices in Tube stations. Cubic
Transportation Systems is a full-service systems provider of automated fare collection systems.

Details

Portfolio Returns Hit an Artificial High

The return on average credit card assets has rebounded to record levels after the industry digested the fall explosion in personal bankruptcies. After dipping below 100 basis points in November the ROAA has steadily surged, reaching 246 basis points for March 2006. The ROAA is determined by dividing the after-tax return by the average managed card outstandings and then annualizing. The figures do not include the impact of American Express and Discover performance. While returns have been pumped up by a sharp fall-off in charge-offs, issuers are reporting that delinquency is rising again. Rising interest rates, higher minimum payments and increasing energy costs appear to be pushing delinquency upward. Therefore, the record ROAA for March may simply be an aberration.

RETURN ON AVERAGE ASSETS
Mar 05: 1.24%
Apr 05: 1.20%
May 05: 1.17%
Jun 05: 1.19%
Jul 05: 1.28%
Aug 05: 1.39%
Sep 05: 1.46%
Oct 05: 1.40%
Nov 05: 0.84%
Dec 05: 0.81%
Jan 06: 1.11%
Feb 06: 1.98%
Mar 06: 2.46%
Source: CardData (www.carddata.com)

Details

TSAI Acquires Germany’s eps for $36 Million

Transaction Systems Architects and Electronic Payment Systems AG announced they have entered into an agreement for TSA to acquire the outstanding common shares of eps for an aggregate purchase price of 28.2 million euros. Frankfurt-based eps has operations in Germany, the United Kingdom, Romania and Switzerland and is a major provider of electronic payment systems in Germany and Switzerland. Key customers for eps include ATOS Worldline Processing, CardProcess, Citibank, Commerzbank, Citibank Card Acceptance Germany, BNP Paribas, Credit Suisse, Deutsche Bank, Pluscard, UBS and VISA International. The deal is expected to fully close on October 31st. Germany is the third largest electronic payments market in the world.

Details

TSAI Acquires Germany’s eps for $36 Million

Omaha-based Transaction Systems Architects has sealed a deal to acquire Germany’s Electronic Payment Systems AG for $36.4 million in cash and stock. Frankfurt-based eps has operations in Germany, the United Kingdom, Romania and Switzerland and is a major provider of electronic payment systems in Germany and Switzerland. Key customers for eps include ATOS Worldline Processing, CardProcess, Citibank, Commerzbank, Citibank Card Acceptance Germany, BNP Paribas, Credit Suisse, Deutsche Bank, Pluscard, UBS and VISA International. The deal is expected to fully close on October 31st. Germany is the third largest electronic payments market in the world.

Details

Attorneys Fight the New Bankruptcy Law

The Connecticut Bar Association and the National Association of Consumer Bankruptcy Attorneys have filed suit in the federal court challenging several key provisions of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” The CBA says the new law creates requirements for “debt relief agencies” that prohibit lawful legal advice. The U.S. Justice Department has taken the position that attorneys are “debt relief agencies.” The CBA asserts that these provisions impair the constitutional rights of attorneys and their clients under the First and Fifth Amendments to the Constitution. The Attorneys’ Group says some attorneys are being deterred from representing any individuals in bankruptcy, even pro bono, because they are afraid of being classified as “debt relief agencies.” In other cases, attorneys will not even talk to clients on the telephone for fear of violating these provisions or feel they are restricted in giving legal advice.

Details

CO-OP Network Distributes Record Patronage

Ontario, CA-based CO-OP Network announced a patronage distribution of $10.4 million for 2005, as transaction volumes topped 1.1 billion last year. All CO-OP Network member-shareholders receive a portion of the patronage distribution. The payout represents nearly one-cent per ATM and point-of-sale transaction. The distribution to member-shareholders establishes a new CO-OP Network standard for the tenth straight year.

Details

48% of Consumers Do Not Check Credit Reports

A new research report has found that 48% of consumers never check their credit reports and 19% say they check their reports less than once a year. The study by Roper Public Affairs for Trans Union’s “TrueCredit” service also found that those with household incomes of $50,000 or greater are more than twice as likely to know their credit score as those who make less (34% vs. 15%). Additionally, 69% of those making less than $20,000 never check their credit reports, compared to 33% of those making $50,000 or more per year.

Details

GPN Inks Diversified Acquiring Solutions

Global Payments has inked a deal with NY-based Diversified Acquiring Solutions Sales Corp. to provide end-to-end processing services and an integrated gateway solution for Diversified’s retail and restaurant merchants. Diversified Acquiring Solutions specializes in providing customized marketing and payment solutions for community banks and merchants across the country and process nearly $1 billion in transaction volume.

Details