Bank Renaissance Capital Deploys Capstone

Bank Renaissance Capital is now using Fair Isaac’s “Capstone Decision Manager” to automate credit risk decisions for its consumer loan portfolio. This marks the first implementation of Fair Isaac’s high-performance platform for new account decisions and processing in Russia. Renaissance Capital currently offers its financial solution in more than 27 cities across Russia focusing on marketing, risk and service delivery. The bank chose “Capstone” to support its new consumer finance initiatives, including the processing of remote applications for installment credit on unsecured merchandise, such as electronics products, credit cards, auto loans and general purpose loans.

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PayPal Volume Soars 49%; Nears 80MM Accts

eBay reported that gross payment volume for its PayPal business increased 49% year-on-year during the second quarter and 4% sequentially. The payment service also signed up 7.3 million net new accounts and the number of active accounts hit 22.9 million, its highest level to-date. During the second quarter, PayPal handled $6.47 billion of gross payment volume, compared to $6.23 billion in the prior quarter, and $4.35 billion for 2Q/04. PayPal produced $243.9 million in transaction fees for 2Q/05, a 51% jump over the year-ago quarter. At the end of the second quarter, PayPal had 78.9 million accounts, compared to 71.6 million in 1Q/05, and compared to 50.4 million one-year ago. During the second quarter, PayPal handled 113.2 million payments, a 3% increase over the prior quarter, and up 46% from 2Q/04. PayPal captured 60% of eBay’s total $10.9 billion in total sales volume during the quarter. PayPal’s 2Q/05 transaction revenue rate was 3.67%, compared to 3.64% one-year ago. The processing expense rate for the second quarter was 1.08%, compared to 1.34% for 2Q/04. PayPal’s transaction loss rate came in at 19 basis points, down 6 basis points from one-year ago. For complete details on eBay/PayPal’s second quarter performance, visit CardData ([www.carddata.com][1]).

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
2Q/04 $4.3 billion 50.4 million
3Q/04 $4.6 billion 56.7 million
4Q/04 $5.6 billion 63.8 million
1Q/05 $6.2 billion 71.6 million
2Q/05 $6.5 billion 78.9 million
SOURCE: CardData (www.carddata.com)

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

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McDonalds Confirms the Cashless Ticket Lift

McDonald’s confirmed this week on its analyst call that payment card options have been a driving force behind increased revenue, higher than average ticket-lift and faster service at the checkout. The fast-food leader has increased payment credit acceptance from 3,000 location last year to 13,000 this year. According to VISA USA, spending on VISA-branded cards at fast food restaurants during the month of June soared to $1.5 billion with consumers spending an average of $11.18 per transaction. CardData projects that QSR payment card volume will top $30 billion this year. The QSR market is estimated to produce $140 billion in annual sales.

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Wright Express Business Card Introduced

Maine-based Wright Express has introduced the “Wright Express Business Card” offering the traditional benefits of a fleet card along with reward points. The card also features a roadside assistance program and online pre-employment screening services to verify information on employment applications and is accepted at a network of over 180,000 fuel and service providers. Wright Express is a leading provider of payment processing and information management services for over 285,000 commercial and government fleets containing more than 3.9 million vehicles.

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Capital One Delinquency Inches Up in June

Capital One’s managed delinquency ratio inched up by another 6 basis points last month. For June, Cap One also reported that managed charge-offs decreased to 3.96% compared to 4.10% in the prior month and 4.17% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency increased to 3.49% in June compared to 3.43% for May, 3.37% for April and 3.84% in January. Delinquency one-year ago stood at 3.76%. At the end of June, Capital One had $83.0 billion in global outstandings. At the end of the second quarter, U.S. card outstandings of $46.4 billion were up 2.7%, compared to one-year ago. For complete details on Capital One’s monthly metrics and 2Q/05 performance, visit CardData ([www.carddata.com][1]).

Month Charge-offs Delinquency
Jun 04 4.17% 3.76%
Jul 04 4.10% 3.77%
Aug 04 3.87% 3.80%
Sep 04 4.18% 3.90%
Oct 04 4.10% 3.94%
Nov 04 4.35% 3.87%
Dec 04 4.63% 3.92%
Jan 05 4.19% 3.84%
Feb 05 3.96% 3.65%
Mar 05 4.35% 3.45%
Apr 05 4.22% 3.37%
May 05 4.10% 3.43%
Jun 05 3.96% 3.49%
Source: CardData (www.carddata.com)

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

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CardSystems Wants a Second Chance with VISA

[Mr. Joshua L. Peirez, Senior Vice President & Associate General Counsel, Law Department, Mastercard International][1]

[Mr. Steve Ruwe, Executive Vice President, Operations & Risk Management, Visa U.S.A. Inc.][2]

[Mr. Zyg Gorgol, Senior Vice President, Fraud Risk Management, American Express][3]

[Mr. Carlos Minetti, Executive Vice President, Cardmember Services, Discover Card][4]

[Mr. David B. Watson, Chairman, Merrick Bank][5]

[Mr. Mallory Duncan, General Counsel, National Retail Federation][6]

[Mr. John M. Perry, President and Chief Executive Office, CardSystems Solutions, Inc.][7]

[Mr. Evan Hendricks, Editor and Publisher, Privacy Times][8]

[1]: /cardflash/secure/oldstatic/2005/july/3c1.pdf
[2]: /cardflash/secure/oldstatic/2005/july/3c2.pdf
[3]: /cardflash/secure/oldstatic/2005/july/3c3.pdf
[4]: /cardflash/secure/oldstatic/2005/july/3c4.pdf
[5]: /cardflash/secure/oldstatic/2005/july/3c5.pdf
[6]: /cardflash/secure/oldstatic/2005/july/3c6.pdf
[7]: /cardflash/secure/oldstatic/2005/july/3c7.pdf
[8]: /cardflash/secure/oldstatic/2005/july/3c8.pdf

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Tax Windfall Drives Providian Profits Up

Providian posted a four-fold increase in net income to $225.3 million for the second quarter, boosted significantly by the resolution of two tax matters. Managed loans outstanding at quarter end, were $18.6 billion, up 8.1% year-over-year but essentially flat to the level at the end of the first quarter, including the higher-risk loans held for sale in early 1Q/05. The managed net credit loss ratio in the second quarter was 8.31%, compared to 12.53% in 2Q/04 and 8.43% in the first quarter. Providian’s managed 30+ day delinquency rate at the end of the second quarter was 4.84%, compared to 6.44% at the end of the second quarter of 2004 and 5.16% in the prior quarter. The Company reported it added 550,000 gross new accounts in the second quarter, for a net increase of 100,000 accounts for 2Q/05. For complete details on Providian’s second quarter performance as well as prior quarters, visit CardData ([www.carddata.com][1]).

Providian Net Income Track Record
2Q/04: $ 49.9 million
3Q/04: $ 93.1 million
4Q/04: $144.6 million
1Q/05: $133.0 million
2Q/05: $225.3 million
Source: CardData (www.carddata.com)

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

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Fiserv Revenues Climb 10% in 2Q/05

Fiserv reported that processing and services revenues were $913.1 million for 2Q/05, an increase of 10% over the year-ago quarter. The Company’s largest operating segment, the financial institution outsourcing, systems and services segment posted revenue growth of 9% and operating income growth of 15% compared to 2Q/04. Fiserv says its Financial segment revenues, primarily in 2006, will be negatively impacted by approximately $40 million due to changes affecting three client relationships. One client is in the process of being acquired, a second client transitioned from an outsourced solution to license Fiserv software and a third client plans to convert from an outsourced solution to an in-house solution. During the second quarter, Fiserv acquired Interactive Technologies, Administrative Services Group and the U.S. eLending operations of Emergis. Fiserv updated its revenue outlook for the third quarter to be approximately $905 to $925 million. For complete details on Fiserv’s second quarter results, visit CardData ([www.carddata.com][1]).

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

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PDS & XL Payment Systems Ink a Contract

Texas-based Payment Data Systems has signed a multi-year agreement with XL Payment Systems to provide payment services for debit card loading and risk management. The PDS solution provides payment origination for debit card loading that can come directly from an XL Payment Systems CSR or an XL Payment Systems branded website. XL Payment Systems also chose to utilize Payment Data’s IPS CSR View product for tracking and reporting as well as customer relationship management for their in-house call center. XL Payment Systems is a VISA ISO and is a leading provider of prepaid debit cards worldwide. Payment Data Systems, Inc., is an integrated payments solution provider delivering comprehensive, cost-effective solutions to billers and retailers for the processing and management of electronic payments.

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Global Payments Inc. Profits Rise 44%

Atlanta-based Global Payments Inc. reported that second calendar quarter revenues increased 14.2% to $207.7 million. Net income for the quarter ending May 31st soared 43.9% to $25.9 million. GPN says it continues to gain significant operating leverage from increased economies of scale and successful consolidation efforts. The processor says the revenue gains were primarily driven by its consumer money transfer business, re-pricing initiatives and ISO growth. During the quarter, Wynn Las Vegas selected GPN’s Gaming Division’s “VIP LightSpeed” suite of products for check cashing transactions. For the Company’s 2006 fiscal year, annual revenue is expected to fall between $839 million and $870 million or up 7% to 11% over its just-ended 2005 fiscal year. For complete details on Global Payments latest results, visit CardData ([www.carddata.com][1]).

GPN HISTORICAL
PERIOD REVENUES NET INCOME
2Q/04: $181.8mm $18.0mm
3Q/04: $192.6mm $24.2mm
4Q/04: $188.5mm $16.8mm
1Q/05: $195.5mm $21.6mm
2Q/05: $207.7mm $25.9mm
Source: CardData (www.carddata.com)

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

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Credit Card Security Hearing Slated Today

The House Financial Services Subcommittee on Oversight and Investigations is holding a hearing this morning titled “Credit Card Data Processing: How Secure Is It?” Top executives from VISA, MasterCard, American Express and Discover will testify. John Perry, President and CEO of CardSystems Solutions is also expected to testify. Other participants include the NRF, Merrick Bank and Privacy Times. Today’s hearing will be the third held this year by the Committee. Rep. Sue W. Kelly (NY) chairs the Committee.

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