Pay By Touch Buys Rival BioPay for $82MM

San Francisco-based Pay By Touch has inked a deal to acquire rival VA-based BioPay for $82 million in stock and cash. Pay By Touch has 55 of the top 100 retailers as customers with 7,000 retail stores under contract for biometric payments. BioPay has 1,600 retail implementations. BioPay also has two million enrolled consumers in 42 states and more than $7 billion in transactions processed. Under the terms of the agreement, Pay By Touch expects to acquire all assets of BioPay, including its patent portfolio. Pay By Touch expects to complete the acquisition within the next few weeks.

Details

Sub-Prime Cardholders May Impact Card ABS

Higher interest rates and an uncertain housing market will likely challenge the stability of the U.S. subprime consumer in 2006. Fitch Ratings says the coming problem could amplify losses. Fitch says mid/subprime borrowers may be forced to draw on previously unused revolving credit lines at a time when household leverage is near all time highs. In addition, these conditions may also serve to intensify competition among lenders. Fitch recently reported that “Sub-prime” charge-offs fell by 43 basis points to 10.73% in September. One-year ago, “sub-prime” charge-offs stood at 15.13%. “Sub-prime” delinquency (60+days) for September fell slightly to 6.53%, but continues to hover at the lowest level in four years. (CF Library 12/01/05)

Details

E*Trade Program Targets Airline Cardholders

E*Trade Financial has introduced a proprietary, automated credit card balance transfer system which enables customers who are loyal to their branded airline mileage rewards credit cards to enjoy mileage earning benefits without paying interest rates on the balances they carry. The new “E*TRADE Mileage Maximizer Account” program is linked to a competitively priced E*Trade credit account carrying a prime +1.9% APR. The online set-up process provides customers with the opportunity to set their payment preference — pay off the entire balance, a pre-set amount, or a percentage of the new statement balance. Once enrolled, E*Trade’s proprietary balance transfer system monitors the customer’s airline rewards card balance on a daily basis to determine the payment due date. When the system learns of a new payment due date, it schedules a transfer and sends the customer an electronic notification of the planned transfer. Customers may edit or cancel a particular transfer up until the date it is completed. Once the transfer is complete, the system sends the customer an electronic confirmation.

Details

MC and Peppercoin Gear Up for Micropayments

MasterCard and Peppercoin have signed a LOI to work towards an alliance to accelerate card usage for small payments at the physical point of sale and online. Peppercoin emables consumers to use their credit and debit cards for purchases, including those for $5 or less. MasterCard says consumers in the U.S. make more than 350 billion transactions of less than $5 each year, representing $1.32 trillion in total spending. As part of the deal, merchants who enroll in the Peppercoin micro and small payments program will receive a reduction in Peppercoin fees for their MasterCard transactions.

Details

Minimum Payment Consumers Double Since 04

About 68% of consumers say they are optimistic about their financial situation in the coming year, including 30% who are “very” optimistic. According to the latest “Experian-Gallup Personal Credit Index” survey, 38% of consumers anticipate paying off all their debt next year. The poll also found that 14% of consumers who have a credit card pay only the minimum amount, in effect using the card as a high-interest loan. In a similar Experian-Gallup poll last December, just 7% of consumers used their credit card that way. Additionally, 36% hope to earn a higher credit score, while just 2% think their score may decline in 2006.

Details

Gemplus and Axalto Merge to Form Gemalto

The boards of smart card specialists Axalto and Gemplus have unanimously approved a merger of equals to create Gemalto. The $1.1 billion transaction will create a company with annual revenues of $2.1 billion and 11,000 employees. Management of the companies expect to realize joint annualized net operational synergies of approximately $100 million by the third year after closing on a fully phased basis. Alex Mandl, the President & CEO of Gemplus, will assume the position of Executive Chairman and Olivier Piou, CEO of Axalto, will be the CEO of Gemalto. Mr. Mandl and Mr. Piou will jointly constitute the Office of Chairman. Frans Spaargaren will assume the position of Chief Administrative Officer with responsibility for integration, procurement, supply chain and IT and Charles Desmartis will be the CFO of Gemalto. The Board of Directors of the combined entity will be comprised of 11 members, 5 proposed from the current Axalto Board, 5 proposed from the current Board of Gemplus and 1 other independent member will be jointly nominated. Deutsche Bank acted as financial advisor to Axalto and Morgan Stanley as financial advisor to Gemplus.

Details

Citi and AA Offer Double Miles on AA Purchases

Citibank and American Airlines have launched a promotion to enable “AAdvantage” cardholders to earn double miles for every dollar spent on tickets, upgrades, vacation packages, and “Admirals Club” memberships purchased through American Airlines. AAdvantage program benefits for cardmembers include no blackout dates on AAdvantage award travel and miles that may never expire. In addition, cardmembers are eligible for Reduced Mileage awards, which allow members to redeem AAdvantage awards for fewer miles to select destinations and offers members Personal Business Assistant service, the ability to set spending limits on employee cards, Citi Identity Theft Solutions for small business and Fraud Early Warning.

Details

PRAA Lands a $75 Million Credit Line

Virginia-based Portfolio Recovery Associates has closed on a new $75 million bank credit line. Portfolio Recovery purchases and manages portfolios of defaulted consumer receivables and provides a broad range of accounts receivable management services. Terms of the new line, which is being led by Bank of America and Wachovia, are generally more advantageous to the Company than its prior line.

Details

First Premier Launches the Farrah Gray MasterCard

First Premier Bank and Diamond Financial Products have teamed to launch the “Farrah Gray Prepaid MasterCard.” The card enables cardholders to prepay or store money as a balance that can be accessed for purchases, bill payments, or ATM cash withdrawals. The cards can be used wherever MasterCard debit cards are accepted, including ATMs; with acceptance at millions of merchant locations worldwide. Cardholders can re-load the cards multiple times at various locations and by different payment types. The cards are prepaid so there are no credit checks, no interest payments and no monthly fee. Diamond Financial Products provides stored value products.

Details

RSB & AMEX

Russian Standard Bank and American Express have launched the first AmEx cards issued in Russia. RSB currently has more than 2.4 million credit cards in circulation and has a presence in more than 2,000 cities in Russia. The “American Express Green,” “Gold,” “Platinum” and “Centurion” Cards will be ruble and dollar denominated. RSB is responsible for issuing the cards, extending credit, managing accounts, marketing and customer service support. AmEx will provide its technical, operational and marketing experience in managing a global card business and access to its global network of millions of merchants. AmEx will also continue to manage relationships with merchants in Russia, including signing new merchants to accept the card. American Express currently has more than 90-partnerships in more than 100 countries around the world.

Details

Indala to Issue 22,000 Microsoft Cards

San Jose-based Indala Corporation has begun production of 22,000 “Multi-Technology SmartCards” for Microsoft which includes payment options. This was the second of four phases designed to replace older 32KB-chip cards used by all Microsoft employees and contractors. Indala Corporation is a security technology company that develops and distributes 125 kHz proximity; 13.56 MHz contactless and contact smart cards; and associated readers for physical and network access-control applications.

Details

GCA Renews John Ascuaga’s Nugget Casino

John Ascuaga’s Nugget Casino Resort in Sparks, NV has signed a contract to continue to use Global Cash Access'”Casino Cash Plus 3-in-1″ ATM, “QuikCash” cash advance kiosks and Central Credit services. QuikCash cash advance kiosks are customer-activated, touch screen terminals that provide casino patrons with POS debit and credit card cash advance transaction options. Available in countertop, wall-mount, free-standing and handheld models, QuikCash terminals can be installed virtually anywhere in a gaming establishment. Global Cash Access is a wholly-owned subsidiary of Global Cash Access Holdings, Inc. and is a provider of cash access products and related services to approximately 960 gaming properties and other clients in the United States, the United Kingdom, Switzerland, Canada and the Caribbean.

Details