Navy Federal FCU Renews the TSYS Contract

TSYS has renewed its agreement with Navy Federal Credit Union to support more than 1 million credit card accounts for an additional five years. The Navy FCU is the world’s largest credit union with more than 2.5 million members and $24.4 billion in assets and has been a client of TSYS since 2000. TSYS provides outsourced payment services for financial institutions and retail companies worldwide.

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Dress Barn and Maurices Renew ADS Contract

Alliance Data Systems has signed a multi-year renewal agreement to continue providing private label credit card services for The Dress Barn and Maurices. Both have been clients of Alliance Data Systems since 1993 and 2001 respectively. Under terms of the agreements, Alliance Data will continue providing a full range of services, including private label credit card issuance, marketing services and customer service functions. Alliance Data Systems is a leading provider of transaction services, credit services and marketing services and manages approximately 95 million consumer relationships. The Dress Barn, Inc. is a national specialty apparel retailer offering quality career and casual fashion apparel through the dressbarn and maurices brands. The Company operates 787 dressbarn and 477 maurices stores.

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Gemplus Launches GemInstant PayPass

Gemplus International has unveiled its solution for contactless payment. “GemInstant PayPass” achieved all of the MasterCard PayPass approval requirements on June 30th, bringing to the banks a contactless solution compliant with the MasterCard “PayPass” specifications and testing requirements. The cards will be produced at Gemplus’ recently enhanced card manufacturing facility in Pennsylvania, starting in July. 7-Eleven agreed to accept “MasterCard PayPass” in its 5,300 U.S. locations by early 2006. In April, MasterCard and MD-based Ritz Camera Centers expanded MasterCard “PayPass” acceptance to each of the more than 1,100 Ritz Camera Centers and 114 Boater’s World Marine Centers. PA-based c-store operator, Sheetz, deployed “PayPass” system-wide in March of this year. In August 2004, McDonald’s inked a deal to accept MasterCard “PayPass.”

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Payment Rates Head Higher and Approach 19%

The monthly payment rate for credit card-backed securities hit its second highest level during the May performance period reaching nearly 19%. Among the three largest trusts, Citibank reported a MPR of 19.1%, while the MBNA trust posted 18.1% and the First USA trust came in at 16.2%. The Citi trusts include $74.8 billion in outstandings while the MBNA trusts have $66.7 billion and the FUSA trusts hold $44.0 billion. According to Standard and Poor’s “Credit Card Quality Index,” the spike in payment rate during May of 18.9% wiped out most of April’s decline of 120 bps. Over the past six months the MPR has topped 18% in four of the months. May 2005 also represents the 15th consecutive month in which the payment rate has exceeded 17%. S&P says the recent increases to minimum payments by several issuers may explain the recent increase. The May payment rate is 170 bps higher than the comparable period in 2004, 150 bps higher than the 2004 average of 17.4% and 250 bps higher than the 2003 average of 16.4%.

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RBS Lynk Lands a Prepaid Card Veteran

Atlanta-based RBS Lynk has re-hired Jerry Uffner, formerly with TenderCard and InComm, as Director of Sales for the Prepaid Products Division. In this role, Uffner will be responsible for developing sales strategies to market innovative prepaid stored-value card products to banks, community financial institutions, businesses, retailers and consumers. RBS Lynk is a single-source provider of electronic payment processing services and a member of The Royal Bank of Scotland Group.

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Amerada Hess Renews Wright Express Contract

Maine-based Wright Express has renewed its fleet card agreement with Amerada Hess Corporation. Wright Express has administered and offered a proprietary branded fleet card for Amerada Hess for almost ten years. Amerada Hess is a global integrated energy company. Wright Express is a 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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MasterCard’s Premium Collection Expands

Hideaways International has been selected to be featured in the 2005 MasterCard “Global Premium Collection.” Sixteen hand-selected properties will be featured on the cards. MasterCard’s has about 250 million cardholders in its “Global Premium Collection,” which includes “Gold,” “Platinum” and “World” cards. MasterCard reported that the number of “Premium MasterCard” cardholders increased by 15 million last year, adding an additional $30 billion in spending volume. As part of their luxe travel benefit, premium MasterCard cardholders receive a one-year membership in the Hideaways Aficionado Club ($185/year) when they book a stay at one of the escapes through the Hideaways International Travel Agency. (CF Library 3/24/05)

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Charge-Offs Inch Up but Stay Under 03-04

Charge-offs, among $391 billion in credit card-backed bonds, increased 30 basis points in May, following the 10 bps increase in April. Despite the increase, charge-off rates continue to remain at levels that have not been experienced since early 2001. In fact, according to Standard and Poor’s latest “Credit Card Quality Index,” the May charge-off rate of 6.5% represents a 50 bps improvement over the rate during the same period last year. Furthermore, the May ratio was 10 bps lower than the 2004 average of 6.6% and 70 bps lower than the 2003 average of 7.2%. During the first five months of 2005, the charge-off rate has averaged 6.2%. S&P noted that during May, the unemployment rate improved further to 5.1% and was down 0.5% year-over-year.

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Top 3 to Control 75% of V/MC Volume in 06

The Bank of America and MBNA combination will increase the U.S. VISA/MasterCard market share of the top three issuers, based on gross dollar volume, to 75% next year. In early 2006, the top three issuers will each have at least $100 billion in credit card outstandings and $300 billion in annual gross dollar volume. Last year, Chase posted $346 billion in gross dollar volume, while Citi reported $302 billion. MBNA reported $206 billion for 2004 as BofA posted $93 billion, according to CardData. VISA and MasterCard reported a total of $1269 billion in U.S. gross dollar volume on credit cards in 2004.

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TransUnion’s TrueCredit Earns Telly Awards

TransUnion’s TrueCredit subsidiary has earned “Telly Awards” for three television commercials. Launched in collaboration with Chicago-based agency TargetCom in early 2005, the commercials form the “True Stories” campaign. Each features the real-life story of a TrueCredit customer dealing with financial challenges such as identity theft, homeownership and debt management. TargetCom’s client roster includes Discover Card. TrueCredit’s online products include credit reports and credit scores, as well as debt management and identity theft insurance services.

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American Express Offers a UK Nectar Card

American Express and Loyalty Management UK are planning to launch the first co-branded “Nectar” card product in September. The new “Nectar Credit Card from American Express” offers collectors double points at Nectar retailers and 1 point per GBP1 spent everywhere else, according to this week’s issue of CardFlash International. Nectar is the largest loyalty program in the UK with 50% of all UK households participating. From mid-September, those holding the Nectar card will be able to double dip at Nectar retailers such as Sainsbury’s, Debenhams, adams kids and ebookers by paying with the credit card and presenting their Nectar card to earn 4 points for every GBP1 spent. In addition to financial services, Nectar collectors can now earn points on 40% of their total household purchases, including groceries, petrol, department store purchases and utilities. LMUK anticipates that this figure will rise to 70% as additional partners are signed up. Since launch, Nectar has increased its penetration of the UK market to 50% of all households, grown from four to 17 sponsors and given out over GBP 450 million worth of rewards.

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