American Express Gets Blue Over ExpressPay

American Express has started issuing its “Blue” card with the “ExpressPay” option nationwide. Also, 7-Eleven announced yesterday it will accept the AmEx contactless solution in its 5,300 U.S. stores by early 2006 following a test of “ExpressPay”-enabled readers in 170 stores in a test market. Additionally, AmEx will add contactless payment options to several card products including: “Blue Cash,” “Blue for Students,” “Blue for Business” credit cards, and “Blue Cash for Business.” AmEx has been testing “ExpressPay” since 2002. In March, AmEx announced the signing the nation’s largest photographic chain and one of the fastest growing convenience store chains in the mid-Atlantic region. Ritz Camera and Sheetz agreed to add 1,500 locations for “ExpressPay.” In December 2004, the CVS pharmacy chain inked a deal to make a full roll-out of “ExpressPay” to its entire fleet of more than 5,300 stores by mid-year. (CF Library 12/16/04; 3/23/05)

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CO-OP Network and Alaska Option Partner

CO-OP Network and Alaska Option have opened a gateway link between the two organizations. Under the agreement, credit unions that use Alaska Option’s EFT services can sign with CO-OP Network for surcharge-free access to 20,000 ATMs nationwide. More than 98 percent of the debit cards issued within the state carry the Alaska Option logo. CO-OP Network has more than 1,770 credit union members, 20,000 surcharge-free ATMs, 80 million plus monthly transactions and 20 million cardholders.

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Black Platinum Cards Arise in the Mid-East

UAE-based Mashreqbank has launched its first “Black Platinum VISA/MasterCard” credit cards geared towards senior businessmen, according to this week’s issue of CardFlash International. New cardholders receive a a complimentary Mont Blanc “Meisterstuck” pen as a welcome gift and the first 500 cardholders also receive a free stretch limo ride anywhere in the UAE. Additionally, “Black Platinum” cardholders receive exclusive vouchers for shopping at Mont Blanc stores as well as special treats for dining at fine UAE restaurants. Plus, all cardholders receive complimentary valet parking at all Valtrans locations across the country. The new card carries a $150 annual fee and cardholders must have an annual income of $39,205. In 1982, Mashreqbank became the first bank to introduce credit cards in the UAE.

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TNB Adds 4 More CU Credit Card Portfolios

Dallas-based TNB Card Services has acquired four credit union credit card portfolios, and has inked all four to its agent program. The portfolios include: Delaware First FCU of Wilmington; County CU of Clayton, Missouri; Cosden FCU of Big Spring, TX; and Texas Health Resources CU of Dallas. TNB was doing card processing for Texas Health Resources, Cosden, and Delaware First Federal, prior to the deals. TNB has bought more than 60 portfolios since it began the agent issuer program in late 2002. At the end of 2004, TNB had approximately $80 million in outstanding balances in its agent issuing portfolio, a 200% increase over 2003. TNB currently manages more than 1.6 million cards. (CF Library 2/8/05)

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BLACK PLATINUM

Dubai-based Mashreqbank has launched the UAE’s first “Black Platinum VISA/MasterCard” credit cards geared towards VIPs, senior businessmen and other affluent professionals. New cardholders receive a
a complimentary Mont Blanc “Meisterstuck” pen as a welcome gift and the
first 500 cardholders also receive a free stretch limo ride anywhere in the UAE. Additionally, “Black Platinum” cardholders receive exclusive vouchers for shopping at Mont Blanc stores as well as special treats for dining at fine UAE restaurants. Plus, all cardholders receive complimentary valet parking at all Valtrans locations across the country. The new card carries an AED550 (US$150) annual fee, but additional cards on the same account are free. Cardholders must have an annual income of AED144,000 (US$39,205). In 1982, Mashreqbank became the first bank to introduce credit cards in the UAE.

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Electracash Affiliate Program Launched

California-based Electracash has launched an “Affiliate Program” for retailers, B2B service providers and recurring billers. The market demand for eCheck acceptance from both consumers and merchants is proven: NACHA (the organization that governs ACH in the U.S.) reports nearly one billion ACH debit Internet payments totaled over $300 billion in 2004. Electracash, Inc. is a provider of Internet payment processing services, offering businesses the ability to accept eChecks and make Direct Deposits in the US and Canada, and to initiate wire transfers around the globe, for both business and consumer transactions.

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Online Credit Card Use in Europe Slows

Credit cards remain the most important e-payment method in Europe, but its share of all online purchase transactions is declining, from 93.0% in 2003 to 81.5% last year. On the other hand direct debiting processes, especially the electronic direct debit in Germany, have increased market share strongly from 6.5% in 2003 to 17.0% in 2004. A new study to be released by Pago next week also shows that offline payment methods (invoice purchases, cash on delivery and pre-payment) still have only a single digit share but the online bank transfer, a new payment method available to German consumers, has taken more than 0.5% of market share from scratch. Pago research also found that UK consumers and those from Non-European countries continue to use credit card payment for 100% of their transactions, but credit card share for consumers from the rest of Europe, excluding Germany and the UK, amounts to 88.6%. Pago says it is proving difficult for the credit card to really conquer the German consumer: only 28.7% of transactions were made using a credit card versus 35.0% in 2003 while electronic direct debit has grown from 56.7% in 2003 to 64.0% last year. The research was based on an analysis of 20 million purchase transactions processed through the Pago platform. Pago is a Deutsche Bank and Beisheim Holding Schweiz company.

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Outstandings Flat Y/Y with a Strong Q1 Dip

The seasonal contraction in bank credit card outstandings was unusually strong this year compared to prior years, as 1Q/05 outstandings of $658.9 billion were exactly the same as one-year ago. Compared to the fourth quarter, this year’s contraction was 3.8%, compared to 2.7% in 1Q/04. The slowdown is evident in monthly payment rates which are hovering at record levels of 18%+. Home equity loans and rising debit card use are siphoning off much of the growth. For the first quarter of this year, VISA’s credit card outstandings were $290.8 billion, followed by MasterCard at $281.1 billion. American Express reported first quarter U.S. credit card outstandings (card loans) of $39.3 billion, which excludes about $26 billion in charge card outstandings. Discover posted $47.7 billion in outstandings for the quarter ending February 28th. For complete details on credit card outstandings, visit CardData ([www.carddata.com][1]).

BANK CREDIT CARD OUTSTANDINGS
4Q/03: $677.0 billion
1Q/04: $658.9 billion
2Q/04: $672.1 billion
3Q/04: $662.0 billion
4Q/04: $684.9 billion
1Q/05: $658.9 billion
note: excludes AmEx 30-day or charge card outstandings
Source: CardData (www.carddata.com)

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

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Ingrian Offers a PCI Compliance Solution

Ingrian Networks has launched a new program in conjunction with AmbironTrustWave to assist merchants and card processors achieve PCI compliance, offering a 30-day free trial of the “DataSecure Platform”. The PCI Data Security Standard outlines best practices for securing credit card data that is stored, processed and transmitted. PCI is a consolidated security standard backed by American Express, Discover, MasterCard, and Visa, among other card issuers. PCI lists 12 guidelines that many retailers, online merchants, data processors, and other businesses that handle credit card data will have to meet by June 30. Ingrian Networks provides complete data privacy through DataSecure, featuring a dedicated security appliance and specialized software that enables organizations to encrypt critical data in applications and databases. AmbironTrustWave provides data security and compliance services to businesses that process, store and/or transmit credit card data, serving more than 25,000 clients.

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7-Eleven to Offer MasterCard PayPass by 06

7-Eleven has agreed to accept “MasterCard PayPass” in its 5,300 U.S. locations by early 2006. The world’s largest convenience retailer has already deployed “PayPass” readers in 170 test-market stores. Last month 7-Eleven announced an agreement to accept “VISA Contactless” payments at all of its U.S. stories. 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 February, MasterCard teamed with MBNA, the Seattle Seahawks and Baltimore Ravens Football Clubs to integrate its “PayPass” contactless payment technology into the Seahawks and Ravens “Extra Points” credit card programs. In August 2004, McDonald’s inked a deal to accept MasterCard “PayPass.” (CF Library 1/4/05; 2/22/05; 4/26/05; 5/19/05)

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WaMu to Acquire Providian for $6.45 Billion

Providian, the nation’s 9th largest general purpose credit card issuer with an $18 billion card portfolio, is being acquired by Seattle-based Washington Mutual for $6.45 billion. After nearly collapsing in 2001 with a $55 million loss, Providian has reinvented itself from a major sub-prime issuer to a significant middle-market player, doubling its profits over the past three years. Under terms of the deal announced this morning, WaMu will pay 89% in stock and 11% in cash. Providian will become WaMu’s fourth major business unit and will continue to operate out of in San Francisco. Joseph Saunders, who led the Providian turnaround since November 2001 as chairman and CEO, will continue to run the credit card business after the merger. WaMu also indicated it plans to retain all of Providian’s management team and infrastructure. In the first quarter, Providian posted a 41% increase in net income to $133.0 million. Last year, Providian posted net income of $381.2 million, compared to $219.4 million in 2003 and $179.7 million in 2002. Prior to its near collapse in 2001, Providian posted net income of more than $600 million in 1999 and 2000. According to CardData, Providian had $18,089,000,000 in credit card outstandings as of March 31st, and 9.9 million accounts. WaMu currently has assets of $319.7 billion. The PVN/WaMu deal is expected to close in the fourth quarter. (CF Library 11/26/01; 4/26/05)

PROVIDIAN NET INCOME HISTORICAL
1999: $614.5 million
2000: $667.4 million
2001: -$54.6 million
2002: $179.7 million
2003: $219.4 million
2004: $381.2 million
Source: CardData (www.carddata.com)

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5MM Web-Driven Businesses Now in the USA

A new joint study from MasterCard and Warrillow has found that Web-driven businesses now represents 25% of the U.S. small business market, accounting for more than 5 million businesses. When compared to their traditional counterparts, Web-driven entrepreneurs are more likely to be women and university educated. Warrillow says Google is a big key to the success of these Web-driven businesses when it enables tiny businesses to buy a sponsored link. The report is being released today in conjunction with the “The Warrillow Summit,” which gets underway this morning in Chicago.

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