Acacia’s Financial Systems Innovation has inked non-exclusive licenses covering a patent that applies to credit card fraud protection technology with 7-Eleven, Academy and Michaels Stores. The system includes an electronic card reader and the generation and use of a transaction number, which specifically identifies each transaction processed within the system, eliminating the need to print detailed information concerning the cardholder’s identity or account number on the customer’s receipt. The Acacia Technologies group develops, acquires, and licenses patented technologies.Details
A new report has found that one of the “Single Euro Payments Area” has thrown the European debit card business into turmoil. As an initial lever to move European banks toward implementation of “SEPA,” the EU instituted “Regulation 2560/2001.” It mandated that cross-border cash withdrawals or card payments below EUR12,500 cannot cost more than in-country cash withdrawals or card payments of the same amount. At the start of 2006, that threshold shifts upward to EUR50,000. TowerGroup estimates that cross-border debit card transactions cost 4% in fees, while the cost of debit card transactions domestically within eurozone countries tends to fall below 4% of transaction value. Therefore, “Regulation 2560/2001” has effectively mandated the creation of a cross-border debit network to replace in-country debit networks currently in existence across the eurozone and across the whole EU. This raises the issue of who will own that Pan-European Debit Network and how it will relate to the Pan-European Direct Debit System and the Pan-European Automated Clearing House.Details
California-based LaserCard reported second calendar revenue of $7.0 million, compared with $8.7 million in the same quarter a year ago and a net loss for the quarter of $1.7 million, compared with a net loss of $1.5 million for 2Q/04. LaserCard Corporation manufactures and markets LaserCard optical memory cards, chip-ready Optical/Smart cards and other advanced-technology secure identification cards and has sold over 28 million secure ID cards for border security, immigration and national identification globally.Details
Charge-offs among credit card-backed securities headed north again in June while delinquencies, in both prime and sub-prime portfolios continued a downward spiral. Charge-off ratios will likely trend up through January 2006 as last minute personal bankruptcy filings make their way into the courts thru mid-October. For June, charge-offs in the “prime” asset-backed credit card securities market increased 21 basis points to 6.41%. “Sub-prime” charge-offs nose-dived again by 72 basis points to 12.70%. One-year ago, “prime” charge-offs were 6.84% and “sub-prime” charge-offs stood at 17.02%. According to the “Fitch Credit Card Index,” “prime” delinquency (60+ days) fell to 2.61% in June, the lowest level since July 2002. “Sub-prime” delinquency (60+days) for June declined to 6.45%, the lowest level since June 2001.
ABS CHARGE-OFF HISTORICAL
Month Prime Sub-Prime
Jun 04: 6.84% 17.02%
May 05: 6.20% 13.42%
Jun 05: 6.41% 12.70%
Source: Fitch Ratings
First Data has formed First Data Prepaid Services which includes ValueLink and Money Network. The Company released a survey today that indicates of the companies offering some form of customer incentive, 40% are using gift cards most often, second only to product or service discounts at 52%. Twenty-nine percent said that their primary use of gift cards was for the consumer market, while roughly the same number (28%) said their primary audience for gift card incentives was for the business-to-business market. The remaining 43% split their use of gift cards as incentives among consumers and other businesses equally.Details
Wachovia Corporation has selected “CardWizard” software from Colorado-based Dynamic Card Solutions to enable the instant issuance of an all-in-one campus card that students can use as a student ID card, ATM and VISA debit card. Wachovia will pilot two programs at the University of North Carolina at Chapel Hill and the University of North Carolina at Greensboro. CardWizard instant issue software provides full reporting, card inventory, security and monitoring features required for instant issue. Dynamic Card Solutions is a developer of instant issuance and PIN selection solutions for banks, credit unions and retailers.Details
Atlanta-based RBS Lynk has teamed with ATM USA to introduce Internet ATM transaction processing services. The internet protocol solution will be targeted to convenience stores in the United States. To deploy the service an Internet payment gateway is installed at the site of the convenience store merchant’s Internet connection. Several store locations may be supported by a single payment gateway, depending on transaction volume. ATM USA, LLC is one of the nation’s largest and fastest growing ATM distribution and service providers with more than 2,500 ATMs throughout the United States. RBS Lynk is a single-source provider of electronic payment processing services.Details
The Consumer Education Research Society has been asked by
the Reserve Bank of India to rate the services provided by credit card
issuers. The Ahmedabad-based consumer rights organization has protested
the unilateral and unfair terms and conditions made by some
card-issuing banks. In January, the RBI constituted a Working Group to
promote and protect consumer interest in the matter of credit cards by
banks and credit card companies. The CERC was invited to participate.
The goal of the “Working Group for Regulatory Mechanism for Cards” was
to suggest the type of regulatory measures to be introduced for plastic
cards (credit, debit and smart cards), keeping in mind the need to
encourage their growth in a safe, secure and efficient manner. The
report was released on April 25.
The Federal Trade Commission has won a $10.2 million judgment against a debt-collection operation. The judgment against National Check Control represents the largest judgment in FTC history for violations of the “Fair Debt Collection Practices Act.” In a complaint filed in May 2003, the FTC alleged that the defendants violated the FDCPA by harassing and threatening consumers with claims that they owed money for checks returned for insufficient funds. The defendants made repeated phone calls, sent threatening letters and falsely threatened that consumers could face civil or criminal charges if they did not pay the debts. The FTC alleged that in many cases the consumers did not owe the money or owed far less than the defendants claimed.Details
Smart card specialist Gemplus reported that second quarter net sales were up 12% to $285.8 million and that gross profits rose nearly 18% to $96.8 million. The Company said it achieved its highest gross margin in four years and its ninth consecutive quarter of continuous strong progress during the quarter. In the financial services sector, Gemplus posted a 12% gain in sales to $60.8 million. In total, Gemplus shipped 16.8 million smart payment cards, up 30% year-on-year. Payment microprocessor card revenue rose 31% year-on-year. Bank cards continued to grow very strongly, driven by broad activity in EMV deployment across all regions, particularly in the UK and Turkey. The second quarter saw the first EMV shipments by Gemplus to the Netherlands, Italy and Japan. For complete details on Gemplus’ second quarter performance as well as prior quarters, visit CardData (www.carddata.com).Details
VA-based Portfolio Recovery Associates posted net income of $9.1 million, a gain of 34% year-over-year. Total revenue increased 28% to $35.9 million in the second quarter. During 2Q/05 the Company purchased $1.36 billion of face-value debt for $23.1 million. Cash collections rose 27% to a record $48.8 million in the quarter. Productivity, as measured by cash collections per hour paid, the Company’s key measure of collector performance, stands at a record $137.02 for the first six months of this year, compared with $117.59 for all of 2004 and $135.62 for the first quarter of 2005. The Company went public in November 2002. For complete details on PRAA’s second quarter results, visit CardData ([www.carddata.com]). (CF Library 2/13/03)
Home Capital Group reported that as of June 30th the gross credit card receivable balance totaled $86.0 million, comprised of $83.2 million, or 96.8% in accounts secured either by cash deposits or residential mortgage collateral, and $2.8 million, or 3.2%
which is unsecured. The total credit approved includes $131.1 million in
secured and $5.7 million in unsecured credit, as compared with $69.9 million in secured and $6.5 million unsecured at June 30, 2004. Home Capital does not accept new unsecured accounts. “Equity Plus VISA” credit cards are secured by a collateral residential mortgage, and this product amounted to $71.2 million of the credit card receivable balance as at June 30th, compared to $55.5 million at year-end 2004 and $36.5 million one-year ago. Cash security deposits on credit card accounts amounted to $20.5 million. For complete details on Home Capital’s second quarter performance visit CardData (www.carddata.com).