Axalto’s Bank Card Revenues Rises 19% in Q4

Smart card specialist Axalto posted fourth quarter revenue of $267 million, a 5% decline over the prior year quarter, which was the strongest quarter in the Company’s history. The cards segment revenue amounted to $250 million compared to $269 million in the year-ago quarter and $207 million in the third quarter of 2005. During the fourth quarter, Axalto delivered more than 130 million microprocessor cards. In financial cards, Axalto’s revenue rose 19% year-over-year to $52 million with about 22 million cards delivered. The POS Terminals segment revenue decreased by 20% year-on-year. For complete details on Axalto’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

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

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Arthur Blank to Unveil a Talking Gift Card

Boston-based Arthur Blank & Co. is unveiling a “Talking Gift Card” at next week’s Marketechnics Show in San Diego. The “Talking Gift Card” uses a chip to record a 10-second message, powered by “Voice-Express.” The new card is part of Blank’s patented “RAC Card” series. Arthur Blank & Co.’s products include private label loyalty, gift, phone, credit, debit, membership, security I.D., and access cards as well as complete card numbering and personalization.

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Hypercom Shareholder Lawsuit Dismissed

A U.S. District Court has entered an order dismissing the amended class action complaint that was initially filed in 2005 alleging securities violations by Hypercom and two former executives. In dismissing the complaint, the court stated that the plaintiffs failed to plead particularized facts establishing a strong inference that the Company and the other defendants acted with scienter, as required by the Private Securities Litigation Reform Act of 1995. Hypercom Corporation provides a full suite of high security, end-to-end electronic payment products and services.

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VASCO Unveils a New Product Strategy

VASCO Data Security International unveiled a new product that enables
companies to use every authentication technology
on one platform delivered by VASCO. VASCO calls it “Full Option,
All-Terrain Authentication.” “Full Option” stands for VASCO’s ability to
support and deliver authentication technologies. “All-Terrain” stands
for vertical applications/markets. The core of VASCO’s authentication
offerings is “VACMAN Controller.” VASCO has established itself as a
world-leader for strong User Authentication with over 420 international
financial institutions and approximately 2,100 blue-chip corporations
and governments located in more than 100 countries.

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Alliance Signs Renewal With Safeway

Alliance Data Systems has signed a multi-year renewal agreement with
Canada Safeway as a sponsor in Alliance Data’s Canadian “AIR
MILES Reward Program.” Canada Safeway has been a partner in the loyalty and marketing program since its inception in 1992. The “AIR MILES Reward Program” is Canada’s premier coalition loyalty program. More than 70% of Canadian households, representing more than 15.4 million Canadians, actively collect “AIR MILES” reward miles at more than 100 brand-name sponsors representing more than 14,000 retail and
service locations across Canada. “AIR MILES” reward miles can be redeemed for more than 800 different rewards, such as travel, movie passes, entertainment attractions, electronic merchandise and more. Alliance Data is a leading provider of transaction, credit and marketing services.

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CARD APPLICATIONS

More than 3.5 million credit card applications were processed last year, a 16% rise over 2004. Credit card solicitations offering zero interest on balance transfers produced the biggest response. According to the Baycorp Advantage “Quarterly Credit Demand Index,” a total of 3,527,981 applications were made last year, up 495,944 from 2004. The “Index” shows there were 884,642 applications for new credit cards in the December quarter, a 12.65% increase on the same quarter in 2004.
Baycorp Advantage’s “Credit Demand Index” measures the demand for credit, both in credit cards and personal loans, in terms of inquiries to Baycorp Advantage’s database. Baycorp is the custodian of credit files for almost 14 million Australians. There are currently 12.4 million credit card and charge card accounts in Australia, compared to 11.5 million one-year ago.

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First Data to Spin-Off Western Union

First Data has decided to spin-off its Western Union consumer payments business into an independent publicly traded company. Last year, Western Union money transfer revenue grew 14% to $3.8 billion and produced an operating profit of $1.3 billion, up 18% year-on-year. FDC also announced that it will retain its domestic Card Issuing business and will organize and report its businesses after the spin-off in three primary segments: First Data Financial Institution Services, First Data Commercial Services and First Data International. First Data Financial Institution Services, with annual revenues of $1.9 billion, will include Card Issuing, Debit, REMITCO and Output Services units and will be led by David Bailis. First Data Commercial Services, with annual revenues of $3.8 billion, will include the Merchant Domestic, Merchant Debit, TeleCheck and Prepaid units, will be led by Ed Labry. The Western Union business, which includes Orlandi Valuta and the recently acquired Vigo business, will continue to be led by Christina Gold. Gold will become CEO of the Western Union spin-off.

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VISA Survey Reveals Security Top Concern of Consumers

A global survey of consumer attitudes released by VISA International
reveals that the theft or loss of personal and financial information is
the No. 1 concern of consumers worldwide (64%), surpassing environmental
degradation (62%) and terrorism (58 %). Additionally, 62% of online
shoppers are more discriminate about the sites at which they make
purchases with 24% reporting shopping less online and 26 percent less via
the telephone.

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Asian Banks Poised Explosive Growth

A new report shows huge new opportunities for Asian banks to grow over
the next decade as some Asian economies are expected to more than double
in size in the next ten years. The latest MasterCard “Insights Report”
concludes that the secular growth in loan demand is likely to be strong
particularly in countries with favorable demographics, such as Malaysia,
where higher rates of household formation will raise the demand for
mortgages and other retail loans. In consumer banking, the prospect for
growth is especially striking in China, India and Indonesia. According
to some estimates, demand for loans from poor but creditworthy people in
India, for example, could amount to $40 billion, or 40 times the current
supply. Islamic banking is another emerging trend that will be fast
growing in countries like Malaysia and Indonesia.

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First Data Profit Falls 14% in Q4

First Data reported this morning that fourth quarter net income dropped by 14% to $398 million even though total revenues increased 3% to nearly $2.8 billion, compared to one-year ago. Payment Services generated revenue of $1.2 billion, a 13% increase from 4Q/04 and an operating profit of $375 million, up 24% year-over-year. Merchant Services reported Q4 revenue of $1.1 billion and an operating profit of $283 million. Transactions were up 13%. Card Issuing Services revenue was $568 million, down 7% and operating profit was $112 million, down 8%. North America merchant transactions were up 13% to 6.35 billion while issuer transaction rose 8% to nearly two billion for the fourth quarter. As of December 31st, accounts on file were 415.3 million domestic and 45 million international. Of the 460.3 million card accounts on file, 89.5 million were bank card accounts, 258.4 million were retail accounts and 112.4 million were debit accounts. For complete details on FDC’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

FDC NET INCOME
4Q/04: $465.1 million
1Q/05: $374.5 million
2Q/05: $391.9 million
3Q/05: $421.5 million
4Q/05: $397.9 million
Source: CardData (www.carddata.com)

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

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Wells to Issue ABC Appliance Store Card

Iowa-based Wells Fargo Financial Retail Services is providing a new private label credit card program to Michigan’s ABC Appliance and its four chains with 60 retail stores in Michigan, Ohio and Indiana.The programs include a dedicated, revolving line of credit for qualified customers, enabling them to make larger item purchases without tying up other lines of credit or reducing their cash flow. A menu of special-terms promotions, including no interest option plans with and without payments, gives customers purchasing convenience and flexibility to make their initial purchase and defer or make minimum monthly payments. Retailers will experience include fast, easy customer application and transaction processing, quick funding, one-on-one account management and customized marketing materials. Wells Fargo Financial Retail Services specializes in providing private label and dual-line credit card programs to retailers in North America.

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Advanta Biz Card Loans Up 14% in Q4

Business card specialist Advanta posted a 14% rise in managed outstandings during the fourth quarter to nearly $3.8 billion. However, net income for its business card unit during the fourth quarter was flat at $13.2 million, compared to the year-ago period. During the fourth quarter Advanta opened 64,206 business card accounts and ended the quarter with 877,114 gross accounts. About 71% of the accounts were active. Transaction volume increased 22% to $2.7 billion during the fourth quarter. There was a 64 basis point increase in net principal charge-offs on average managed receivables to 6.68% on an annualized basis, as compared to 6.04% for 4Q/04. But charge-offs rose 153 basis points from the prior quarter. Over 30 day delinquencies on managed receivables declined 116 basis points to 2.96% and over 90 day delinquencies on managed receivables decreased 60 basis points to 1.36%, each as compared to the fourth quarter of last year. For complete details on Advanta’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

ADVANTA’S CARD PORTFOLIO SNAPSHOT
Period Card Loans
4Q/04: $3.29 billion
1Q/05: $3.35 billion
2Q/05: $3.51 billion
3Q/05: $3.60 billion
4Q/05: $3.76 billion
Source: CardData (www.carddata.com)

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

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