HSBC’s 2005 Card Profits Top $700MM

HSBC Finance reported that fourth quarter U.S. bank credit outstandings rose 21% to nearly $27 billion for its 17 million active cardholders. However, the issuer had to set aside more than $100 million in additional funds to cover losses from the fall bankruptcy surge. Globally, interest earned from credit card receivables increased $705 million last year. Average credit card receivable balances were $12 billion higher for 2005. Total private label receivables increased to $15 billion at year-end. The average yields for credit card receivables and total loans were reduced in 2005 as a result of amortization of premiums paid for various credit card portfolios. For complete details on HSBC’s fourth quarter performance, visit CardData (www.carddata.com).

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Signature Debit Card PDV Slows in Q4

Signature debit card purchase volume in the USA is now growing at an annual pace of 21%, compared to 23% in the prior quarter. During the fourth quarter, consumers and businesses charged $151.6 billion to their off-line debit cards for purchases. Year-over-year, MasterCard’s signature debit card purchase volume is growing at a 25% clip, compared to VISA’s 19%. VISA posted $119.5 billion in fourth quarter signature debit card purchase volume, with $111.2 billion coming from consumer debit cards. MasterCard reported $32.1 billion in off-line PDV for 4Q/05. For complete current and historical statistics on the U.S. signature debit card market, visit CardData ([www.carddata.com][1]).

U.S. SIGNATURE DEBIT SNAPSHOT
(Purchase Volume Only)
4Q/04 4Q/05 Y/Y CHANGE
VISA $100.2b $119.5b +19%
MasterCard $ 25.6b $ 32.1b +25%
TOTAL $125.8b $151.6b +21%
Source: CardData (www.carddata.com)

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

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AmEx and Clinton Boost Women-Owned Businesses

Count Me In for Women’s Economic Independence” and “OPEN” from American Express were joined this week by Senator Hillary Rodham Clinton (D-NY) to rally one million women entrepreneurs across America to declare their intention to grow their businesses to million-dollar enterprises.Count Me In and OPEN introduced the program to help women entrepreneurs achieve necessary growth to build sustainable enterprises, create jobs and develop innovative products and services. In last year’s Make Mine a $Million Business pilot program, 23 women entrepreneurs from across the country received one-on-one mentoring, marketing assistance and money in the form of Count Me In loans to fund their growth.

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GPN Expands VIP LightSpeed in US and Canada

Atlanta-based Global Payments has signed agreements to provide nine U.S. and Canadian casinos with its “VIP LightSpeed” suite of cash access products. VIP LightSpeed is an Internet-accessible, PC-based platform that provides cash access services for traditional and electronic check cashing, ATM check cashing, credit and debit card cash advances, player histories and credit reports. In addition, VIP LightSpeed provides high-speed processing of cash access transactions, reduction of risk associated with check-cashing and cash advance services, and a full spectrum of management reporting tools.

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CPI Card Offers Biodegradable Cards

CO-based CPI Card Group will soon offer a biodegradable “Rigid PVC” card. The card was developed by Reno Plastics. Using a trade secret component, a formula has been created for Reno’s standard PVC products. This new formula will biodegrade in six months to five years. Testing from two separate sources has confirmed the biodegradation for the new “Rigid PVC” card. CPI’s two ISO 9001:2000 certified sites include CPI Card Group – Colorado, Inc. in Littleton, Colorado and CPI Card Group – Nevada, Inc in North Las Vegas, Nevada.

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United Bank Card Upgrades to Vital’s DialPay

New Jersey-based United Bank Card is replacing its current voice authorization service with “DialPay,” an advanced payment processing technology from Vital. DialPay is an Automated Response System, which can be used when a merchant requires a voice authorization for Visa and MasterCard transactions. This system enables merchants to utilize a touch-tone telephone in the same way they would use a POS terminal by following voice prompts and entering the appropriate information on the telephone’s keypad. United Bank Card processes in excess of $3.5 billion payment dollars annually.

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Bank Buana Selects Gemplus EMV DDA Cards

Gemplus International has delivered the first advanced
security EMV “Dynamic Data Authentication” cards to Bank Buana. The implementation of the cards is in line with Bank Indonesia’s recommendation to banks to migrate to chip based EMV cards in 2006. Bank Buana plans to migrate its entire credit card base to the DDA EMV cards from this year. DDA credit cards offer a sophisticated authentication scheme whereby unique transaction signatures are generated by the cryptographic processor on the card for each individual transaction. As each signature is computed based on random data provided by the point-of-sale terminal, this makes them difficult to duplicate, thus offering a significantly higher level of security than the more commonly used “Static Data Authentication” cards.

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More Evidence of Jan’s Charge-Off Collapse

Fitch Ratings concurs with the findings of Moody’s Investor Services that charge-offs plunged during January. The Fitch “Credit Card Index” for January shows charge-offs, among securitized credit card outstandings, declined by 359 basis points to 3.29%. Fitch says last fall’s spike in personal bankruptcy filings has finally worked its way through U.S. credit card master trusts’ performance measures. The outlook for charge-offs is positive over the near term and master trusts should benefit from increased levels of excess spread going forward. Personal bankruptcy filings have declined significantly, with a weekly average of 6,000 filings observed since Oct. 17. The weekly average for 2005 before the new bankruptcy law went into effect was 47,000 filings, with peak volume of 315,000 filings the week of Oct. 17. Year-over-year bankruptcy filings are down 75.8% through Jan. 31.

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