HBC Financial Services Q1 Revenues Decline 6.5%

Revenue for Hudson Bays’s Financial Services division declined 6.5% in the first quarter to $76.4 million due to a reduction in
service charge revenue from lower credit card receivables. Credit card receivables dropped 23.8% over the past year from $443.8 million for 1Q/04 to $337.8 million in 1Q/05. The decrease in credit card receivables reflected the impact of lower store sales and higher customer payments, offset partly by a higher credit blend. The average balance per active customer account was down 9% to $417 but, the average volume per active customer account increased 2.2% to $183. As of April 30th, there were 2.9 million active Hbc customer accounts (1.6 million Bay cardholders and 1.3 million Zellers cardholders). For complete details on HBC’s first quarter performance visit CardData (www.carddata.com).

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CO-OP and Instant Cash Open a Gateway

CO-OP Network and Wells Fargo’s Instant Cash ATM network have opened a gateway link enabling credit unions that use ICS as their EFT processor to join the CO-OP Network for surcharge-free nationwide ATM access. Instant Cash Services serves the credit union community with advanced payment processing solutions. CO-OP Network is wholly-owned by its credit union shareholders with more than 1,770 credit union members, 19,500 surcharge-free ATMs, 80 million plus monthly transactions and 20 million cardholders.

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VISA T&E Rises Despite Lower Tickets

VISA reports that travel and entertainment spending volume on its payment cards from January 1st through mid-May has increased by 15%, compared to the same period in 2004. During the first quarter, VISA racked up approximately $58.8 billion in US T&E spending, about 17% of the network’s overall volume. The VISA T&E gain comes amidst a general decline in the average ticket price in most categories. Dining volume on VISA payment cards increased 21% this year, but the average ticket price has dropped 10% to $24.36. Airline tickets on VISA cards is up 11% and car rental card volume is up 9%, however the average individual transaction for both airline tickets and car rentals declined 3% to 7% across the board. Unlike the other major T&E categories, the average lodging ticket has increased almost 4% this year to $195.76. VISA’s lodging volume is up 9% year-to-date. VISA predicts a strong gain in T&E volume during the summer.

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Internet/Phone Payments to Get Faster

The Payment Systems Task Force has asked British banks to create an infrastructure to speed up Internet payments, phone payments and standing order payments by 2007. The Payment Systems Task Force expects to set up a working group to examine issues relating to cheques starting in October. In response, APACS has established an Implementation Group to ensure the technology is suitably robust, secure and efficient with the capacity to meet longer-term requirements, and to seek agreement with the participating banks, who inevitably will need to undertake significant work to make their own systems compatible. Internet payments, phone payments and standing order payments currently make up 7% of all automated payments.

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NOVA Buys Certegy’s Acquiring Biz

Certegy’s search for buyer for its merchant acquiring business is officially over as U.S. Bancorp’s NOVA Information Systems inks an agreement to purchase the 14,000 merchant locations portfolio. The credit and debit card processing volume from the Certegy portfolio is expected to generate approximately $3.0 billion in additional volume annually. As part of the joint marketing agreement, NOVA will sell Certegy’s regional check products through its merchant sales force and Certegy will provide NOVA with new merchant referrals through its domestic sales representatives. Certegy serves 6,500 financial institutions and 100,000 retailers. NOVA serves more than 850,000 merchant locations in the USA, Canada and Europe. Merchant conversions are expected to be completed by the end of 2005.

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Atlanta is the First to Get Blinked

Chase this morning announced that Atlanta will be the first market to receive its new “blink” contactless credit cards. Next month the issuer will deliver nearly one million to cardholders in Atlanta. Chase says there is an initial base of more than 400 metro Atlanta merchant locations capable of accepting the new RFID cards. Chase first announced the new “blink VISA/MasterCards” last week. The card will phased-in market-by-market in tandem with merchant acceptance. In Atlanta, Chase plans to run print, broadcast and billboard advertising in June to support the “blink” launch. (CF Library 5/19/05)

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VISA Incentive Network is Set to Roll

VISA is set to launch its new “Incentive Network” next month, that will effectively emulate the merchant benefits of a closed-loop network. Under the program, VISA will offer merchants details on “VISA Signature” and reward cardholders. VISA began requiring issuers of these cards on April 1st to provide data on the cardholder’s spending habits. The new VISA program could put pressure on the merchant value offered by American Express and potentially by Discover. Howard Mason, an analyst at Sanford Bernstein, noted in a report issued last week, that the “VISA Signature” program, with an AmEx competitive interchange rate of 1.99%, generates twice the average annual spend/card as AmEx and has volumes of over $100 billion. Mason says AmEx will face increasing pressure to reduce merchant fees if it is to continue to build its everyday-spend merchant network.

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Cathay Pacific and Air China Partner

Air China and Cathay Pacific Airways have formed a partnership to enable members of their frequent flyer programs to accrue and redeem miles on flights operated by both carriers. The Air China “Companion” program has more than 2.4 million members. It also offers a co-branded Air China “Companion” credit card with a number of banks. Cathay Pacific’s “Asia Miles” frequent flyer program has more than 230 partners in 15 categories. U.S. passengers on qualifying Cathay Pacific flights have the option of earning frequent flyer miles in either the “Asia Miles” or American Airlines “AAdvantage” program.

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AmEx Consumer Travel Network Adds Rewards

American Express has beefed-up its “Consumer Travel Network,” now offering double points in “Membership Rewards” for cardholders and other new services and benefits. The site has been redesigned for easier navigation and offers a private label version of the easy-to-use booking tool developed by Travelocity, along with its low fares and rates. It also offers customized booking tools for cruises and packages, last minute bargains and special promotional offers. American Express Company is a diversified worldwide travel, financial and network services company founded in 1850.

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National City Introduces Identity Protect

Ohio-based National City has introduced “Identity Protect,” a new product providing customers with unlimited access to their credit report from all three credit bureaus, weekly credit monitoring, quarterly credit alerts, identity theft insurance coverage and identity theft resolution services. National City is a founding member of the Identity Theft Assistance Corporation and maintains a dedicated Identity Theft Unit to help victims. National City Corporation core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management.

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