Prepaid & Debit Take-Off in Latin America

VISA International reports that debit and prepaid card sales volume has risen sharply in the Latin America and Caribbean region. Also, the number of debit and prepaid cards crossed the 150 million card milestone in 2005. VISA has 63 million credit cards in the region. Debit and prepaid card sales volume rose 50% during 2005, while credit card sales volume rose 39%. Total volume at the POS was $83 billion with more than 2.6 billion transactions.

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Security & Privacy Initiative Launched

The Council of Better Business Bureaus and Privacy & American Business has launched a new national education initiative to help small business owners improve their data security and privacy compliance. The national program includes free, security and privacy toolkits. The CBBB plans to distribute the toolkits through 116 local BBBs reaching a potential audience of 380,000 small businesses. The “Made Simpler” initiative is currently supported by IBM, Visa U.S.A., Equifax, Verizon Wireless, The Wall Street Journal, eBay and PayPal. The program will also feature a downloadable “webinar” featuring key topic experts, plus ongoing updates about new security and privacy developments that affect small businesses.

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Americans Want to Pare Down Debt

The quarterly A.G. Edwards “Nest Egg Score” found that more than half of all U.S. adults listed reducing overall household expenses as a high priority in the next 90 days, followed by paying down credit card debt (47%) and paying more often with cash (45%). The A.G. Edwards Nest Egg Score is a single, quarterly, three-digit numerical rating that represents a measure of the relative strength or weakness of Americans’ wealth-building performance, similar to the scoring systems used to evaluate creditworthiness.

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ANZ VISA DEBIT

ANZ has launched a debit card with VISA that offers unlimited transactions via the bank’s ATM network, EFTPOS, phone, Internet banking and branches. The new “ANZ Everyday VISA Debit” card carries a A$6 per month fee and offers three card designs. The new card is also offering direct salary deposit and the ability to set up automatic payments with third parties. ANZ notes that all transactions on the card will have the protection of “ANZ Falcon” and ANZ’s “Online Guarantee” which will provide greater protection on Internet purchases. ANZ has 756 branches in Australia and more than six million personal, private banking, small business, corporate, institutional, and asset finance customers worldwide. VISA is accepted at 555,000 merchant locations and 13,600 ATMs in Australia. At the end of January there were 25.4 million debit card accounts in Australia among all banks according to the Reserve Bank of Australia.

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Contactless Drives OTI 2005 Revenues

NJ-based On Track Innovations posted revenues for the fourth quarter of $9.3 million, a 19% jump over the same period of last year. The Company says the increase in revenues represents the rapid advancements in the contactless market around the world and in particular the U.S. market, where it delivered contactless solutions for more than ten million payment cards in 2005. The net loss for the quarter was $2.3 million. Revenues for 2005 increased by 54% to $35.7 million compared to 2004. Net loss for the year decreased by 2% to $9.1 million from the same period in 2004. During the fourth quarter, OTI signed a deal to provide smart card technology to Scheidt & Bachmann for the Massachusetts Bay Transportation Authority. The Company along with STMicroelectronics announced that their contactless solution is the first solution approved by VISA International for use in its “VISA Contactless” program in the USA. Also during the quarter, Ingenico announced it will install the “eN-Touch 1000” with contactless reading technology from On Track Innovations at all Duane Reade locations by the end of 2005. OTI’s international headquarters are located in Rosh Pina, Israel. For complete details on OTI’s fourth quarter performance, visit CardData ([www.carddata.com][1]). (CF Library 10/19/05; 11/14/05: 12/21/05)

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

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U.K. Banks to Guarantee Intl Purchases

The U.K. Court of Appeal last week ruled that local credit card issuers must guarantee purchases made on international transactions. According to guidelines by the Office of Fair Trading, such guarantees can cover single purchases worth between GBP 100 and GBP 30,000, even if the card is only used for a deposit. The court’s decision overturned a November 2004 High Court ruling that “Section 75” of the “Consumer Credit Act of 1974” did not apply to overseas purchases. “Section 75” covers foreign transactions including where a consumer uses a U.K. credit card to buy goods while abroad; a consumer orders goods from a foreign supplier while abroad for delivery into the U.K.; a consumer in the U.K. buys goods which are delivered to a U.K. address from overseas by telephone, mail order or over the Internet; and there is face-to-face pre-contract dealings with a foreign supplier temporarily in the U.K., or with a U.K. agent of a foreign supplier, but the contract is not completed in the U.K. Brits spent almost GBP 123 billion on domestic credit card transactions in 2004, and a further GBP 12.5 billion on overseas transactions.

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U.S. Credit Cardbase Grows 5% in 2005

The growth in general purpose credit cards in the USA picked up some momentum last year expanding by 5%. At the end of 2005 there were 690.2 million U.S. credit cards active on the VISA, MasterCard, American Express and Discover networks. This compares to 657.5 million in 2004. Over the past decade the number of bank credit cards has increased more than 30% from slightly more than 500 million cards, according to CardData ([www.carddata.com][1]). VISA reported a 8.3% gain in credit cards for 2005, ending the year with 319.8 million cards. MasterCard posted a 2% increase from 271.5 million credit cards to 277.0 million. American Express says its U.S. card base grew 7.8% to 43.0 million cards, which includes revolving cards and 30-day credit or charge cards. Discover, which does not officially publish card totals, is estimated to have 50.4 million cards in-force at year-end 2005, a slight decline over the 50.8 million in 2004. For complete details on the performance of all four major networks, visit CardData ([www.carddata.com][2]).

U.S. CREDIT CARD GROWTH HISTORICAL
2000: +7.3%
2001: +7.0%
2002: +6.3%
2003: +5.2%
2004: +2.2%
2005: +5.0%
Source: CardData (www.carddata.com)

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

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Retalix Revenues Rise 52% in 4Q/05

Dallas-based Retalix reported that fourth quarter revenues reached a record $54.5 million, up 52% year-over-year. Fourth quarter GAAP net income was up 205% to a record $6.3 million. During the quarter, a fuel provider at a premier U.S. discount retailer selected the “Retalix POS” solution; Australia’s Woolworths deploys “Retalix POS” in 1,400 stores; and inked a deal with Japan’s Zen Nippon Shokuhin supermarkets. The Company projects 2006 revenues to be between $215 million and $225 million and GAAP net income between $16 million to $20 million. Retalix is a point of sale software provider for huge multi-national food retailers and most of America’s leading grocery retailers. The international headquarters are located in Ra’anana, Israel. For complete details on the Retalix fourth quarter, visit CardData ([www.carddata.com][1]).

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

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GPN Signs Advanced Payment Solutions

Atlanta-based Global Payments has signed a deal to provide Nashville-based Advanced Payment Solutions with authorization, capture and settlement processing services, as well as BIN sponsorship. Advanced Payment Solutions is an ISO that offers payment processing services for an array of merchant businesses. Global Payments is a provider of electronic transaction processing services.

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WhyLabs Attacks Affiliate Web Fraud

Naples, FL-based WhyLabs has launched an “Affiliate Fraud Prevention System” as part of its credit card fraud solutions. The Company said the solution groups the transactions initiated by every affiliate and compares them with a view similar to some essential transaction’s parameters, alerting that all these transactions were made by one person. The system indicates suspicious adverts and gives a merchant the ability to shut their accounts off at the early stage. WhyLabs says it found that about 5% of e-business utilizing the “affiliate” method of advertising deal with affiliate fraud and that 10% of merchant accounts out of this number were deactivated for exceeding chargeback limits. WhyLabs say it applies a full spectrum of 18 anti-fraud modules and more than 70 rules to detect even the most sophisticated fraudulent attempt.

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Chapter 7 Filings Top 2 Million in 05

As expected, consumer and business bankruptcy filings exploded during the fourth quarter, hitting a record 667,431 petitions. The figure was nearly 70% higher than any previous fourth quarter. The tidal wave was driven by new bankruptcy laws which took full effect in mid-October. Year-to-date consumer and business bankruptcy filings were up 30% to 2,078,415 compared to 2004. Annual consumer bankruptcy filings topped two million for the first time. According to the Administrative Office of the U.S. Courts, Americans filed 1,659,017 Chapter 7 petitions and 412,130 Chapter 13 petitions during 2005.

Q4 FILINGS
(Years Ended Dec 31)
1995: 244,494
1996: 311,131
1997: 347,685
1998: 353,108
1999: 318,634
2000: 310,169
2001: 364,921
2002: 395,129
2003: 393,348
2004: 371,668
2005: 667,431
Source: U.S. Courts

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