Nomad and Ie Partner on Prepaid Cards

Intelligent Environments Group has signed a partnership agreement with
Nomad Software to offer iE’s “NetFinance” software to Nomad’s prepaid card
issuing clients, including Building Societies. iE has integrated its
card online apply and account servicing modules of its NetFinance platform
into “Nomad’s CORTEX” system, the outsourced prepaid and debit card
service and is expected to be live in May 2006. The cards offer a payment
solution for a broad cross-section of people and purposes from teenagers
to un-banked adults and from gift to corporate payroll without requiring
credit checks. Funds can be transferred directly to the card using a
top-up facility and spending is limited to the prepaid balance.

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Federated Says May Card Sale On-Track

Federated Department Stores reiterated its plans to sell the May Company credit card portfolio to Citigroup in two separate transactions before August 30th. The first transaction, planned for this quarter, would comprise about 40% of the May Company portfolio and produce pre-tax proceeds of about $800 million to which the credit systems conversion has already occurred. The second transaction, planned for late July or August, would cover the remainder of the portfolio after the requisite credit systems conversion has occurred. Last June, Citi and Federated signed an agreement for the portfolio sale at a premium of approximately 11.5%. In total, the transactions are expected to produce after-tax proceeds of approximately $4.6 billion. Citi first acquired Federated’s $3.2 billion owned proprietary and VISA receivables, then last month acquired $1.2 billion in Federated card receivables currently owned by GECC. (CF Library 6/2/05; 5/2/06)

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VISA A/P EMV

VISA Asia Pacific reports that the number of EMV-compliant chip
cards issued in the region grew more than 43% last year to 43 million
while the number of EMV chip terminals in the region has doubled to more
than one million. Totally, VISA has 277 million cards in the region
compared to 238 million at the end of 2005. VISA’s EMV chip cards are in
use in 18 markets across the region. Four of the markets Japan, Taiwan,
South Korea and Malaysia have national migration programs underway.
Malaysia was the first country to complete a national EMV chip-card
adoption program, converting all credit cards to EMV chip by December
2004 and all card terminals by December 2005. Taiwan has more than five
million EMV chip cardholders and more than 162,000 EMV terminals. Japan
has issued more than 27 million VISA chip cards as of December 2005.

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Encore Revenues Up 20%; Profits Down 37%

San Diego-based collection specialist Encore Capital Group reported first quarter revenues of $60.5 million, a 20% increase over the same period of the prior year. However, net income dropped 37% to $4.7 million during the same period. The decline was blamed on a lower revenue recognition rate; investments in new portfolio liquidation strategies; adoption of SFAS 123; and the impact of the Ascension Capital bankruptcy services business. Gross collections were $87.6 million, a 33% increase over 1Q/05. During the quarter, Encore invested $27 million to purchase $560 million in face value debt. For complete details on Encore’s first quarter performance, visit CardData ([www.carddata.com][1]).

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

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Four Medical Associations Renew Scotiabank Alliances

The Canadian Psychological Association, the Canadian Pharmacists
Association, the Canadian Psychiatric Association, the
Canadian Association of Optometrists and Scotiabank announced a
three year renewal of their strategic alliances to offer enhanced
financial services to their respective members. Under terms of the
agreements, members will benefit from the preferred “Scotia Professional
Plan” products and services including: “ScotiaGold Preferred VISA”
cards, lines of credit, term loan services, special account plans and
preferred wealth management investment services. Scotiabank has $325
billion in assets (as of January 31, 2006).

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PSCU Signs Catholic FCU for Processing

Michigan-based Catholic FCU has signed a long-term credit card processing contract with PSCU Financial Services for its 5,600 credit card accounts. PSCU Financial Services’ CreditAbility credit card processing and servicing program marries responsive service with efficient transaction processing, credit card monitoring, and risk management as well as portfolio support and consultative advisory services.

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Debt Purchase Prices May Have Plateaued

A new report estimates that debt buyers bought an estimated $3 billion in bankruptcy receivables last year. Kaulkin Ginsberg’s “The Global Debt Buying Report” says U.S. debt buyers are now active in the purchase of an estimated $100 billion in face value of delinquent credit card debt, taking into account primary sales from credit issuers as well as subsequent reselling on the secondary market. By the end of 2005, pricing increases led many debt buyers to contract their expected returns on investments from 3X to 2.5X of purchase price or lower over five years. Kaulkin Ginsberg says the consensus is that prices have plateaued for the foreseeable future. Larger and specialized debt buyers in the U.S. have begun to search for alternative debts that allow them to diversify their portfolios. The report says healthcare debt is currently considered to be the big prize of the debt buying market.

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CompuCredit’s NIM Hits All-Time High

Atlanta-based sub-prime specialist CompuCredit reported that GAAP net income returned in the first quarter to more than $30 million after a $3 million fourth quarter whipped by bankruptcies. Managed earnings for the quarter were $54.8 million, compared with $38.5 million for the first quarter of 2005. CompuCredit noted that its net interest margin reached an all-time high of 25.0% in the quarter, as compared to 20.8% for the first quarter of 2005 and 22.4% in the previous quarter. Net charge-offs, based on average credit card loans, declined to 8.5% from 13.4% in 4Q/05 and 9.2% in the first quarter of last year. Delinquency (60+ days) increased to 10.6 in 1Q/06%, compared to 9.3% in the prior quarter. One-year ago delinquency stood at 8.7%. Total managed receivables for the first quarter were $2,511,588,000, a 10% increase compared to one-year ago. As of March 31st, CompuCredit had 3,781,000 accounts, compared to 3,588,000 at the end of 2005. For complete details on CompuCredit’s first quarter performance, visit CardData ([www.carddata.com][1]).

COMPUCREDIT NET INCOME SNAPSHOT
1Q/05: $49.2 million
2Q/05: $66.5 million
3Q/05: $52.7 million
4Q/05: $ 3.0 million
1Q/06: $30.7 million
Source: CardData (www.carddata.com

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

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FDC Deploys Fair Isaac’s Blaze Advisor

First Data is now using Fair Isaac’s “Blaze Advisor” business rules management system. Blaze Advisor system is part of Fair Isaac’s software and solutions for Enterprise Decision Management, which combines data analytics, modeling and policy-level control to let companies define and manage their automated business systems for improved efficiency and greater profitability. First Data can easily add additional scoring models, such as those developed with Fair Isaac Model Builder, which allows the company to deploy customized and finely segmented customer management strategies.

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