A new sub-prime VISA card has been introduced in the U.K. by Provident Financial PLC, offering an interest rate as high as 69.5%. Provident’s Vanquis Bank division will now offer the credit card to credit-challenged U.K. families with rates averaging 49.9% per annum with a maximum credit limit of GBP 150 (US$285). Applicants have to have annual incomes of at least GBP 5,000 (US$9,464) to qualify. The new “Vanquis Bank VISA” has outraged consumer advocates and led some British politicians to label the issuer as a “vulture” and “rogue.” The current Bank of England base rate is 4.75%.Details
VA-based Online Resources posted fourth quarter revenues of $11.4 million, a 17% increase over 4Q/03. Net income nearly tripled to $400,000. During the fourth quarter, Online Resources signed an agreement to acquire NJ-based Incurrent Solutions for $15 million in cash and stock. During 2004, ORCC crossed the one million end-user threshold for its banking services by increasing the adoption rate 45%, bolstered by over 8,000 consumer marketing programs. The Company also signed 128 new clients (offset by 45 departures), bringing total client base to 723 with no continuing client contributing more than 4% of revenue. ORCC also increased electronic remittance rate by 11%. For complete details on ORCC’s fourth quarter performance, visit CardData ([www.carddata.com]).
Gomez, Inc. launched a new financial services industry benchmark that compares the application performance of the eight largest U.S. credit card issuers from a consumer perspective. The new “Gomez Performance Index for Credit Cards” measures the speed and availability of card issuers’ highly critical “view transaction history” applications. Performance of the “view transaction history” application will be measured from 10 locations throughout the country using real consumer accounts managed by a third-party company. The 3 step performance test will log into the benchmarked website from either the home page or a bookmarked link, navigates to or accesses the account holder’s summary information page and log out of the application. The Gomez “GPI” will be published bi-weekly in American Banker.Details
Providian has inked a deal to unload a $477 million portfolio of non-core, higher risk credit card loans, with FICO scores below 600. The Company expects that the sale of these loans will improve the credit quality of its portfolio by significantly reducing reported loans having FICO scores below 600. The sale is expected to have a modestly beneficial impact to earnings in the first quarter. Providian Financial Corp. (www.providian.com) is a leading provider of credit cards to mainstream American consumers throughout the United States.Details
Transaction Systems Architects, Inc. said yesterday that the company is not for sale and will continue with its stock repurchase program. TSA is in the process of executing its strategy of building a premier electronic payments software company. In the course of executing that strategy, management has improved the TSA’s financial results from an operating loss of $56.1 million, or $(2.35) per diluted share for fiscal 2001, to operating income of $54.8 million, or earnings per diluted share of $1.23, which included a net one-time tax benefit of $.28 for fiscal 2004. TSA’s software facilitates electronic payments by providing consumers and companies access to their money and provides solutions used on more than 1,740 product systems in 78 countries on six continents.Details
Chicago-based Rewards Network posted operating revenues for the fourth quarter of $22.6 million, a decrease of 8.2% compared with the same period last year. Sales for the quarter amounted to $82.0 million, an 8.1% decrease from 4Q/03. Declines in the restaurant merchant count, the number of dining transactions and the average dining transaction amount contributed to the decline in sales for the fourth quarter of 2004. Net income for 4Q/04 was $2.5 million, compared $3.9 million for 4Q/03. As of year-end 2004, Rewards Network had 3.8 million active member accounts, 10,514 restaurants and 11,321 hotels participating in its rewards programs. For complete details on the Rewards Network fourth quarter performance, visit CardData ([www.carddata.com]).
First Data has extended its processing agreement with TIB – The Independent BankersBank through 2011 for its 678,000 credit cards and 320,000 signature debit cards. In addition, First Data has extended its agreement with TIB for merchant processing services. The combined TIB and BBCS merchant portfolio represents more than 30,000 active merchants on file. First Data Corp. (NYSE: FDC), with global headquarters in Denver, helps power the global economy. TIB is one of the nation’s largest bankers’ banks, providing correspondent banking services to over 1,100 independent community financial institutions in more than 40 states across the country.Details
Marriott is planning to participate in MasterCard’s enhanced hotel folio data program. Effective this April, corporations whose business travelers pay with eligible “MasterCard Corporate Cards” will for the first time receive line item expense data for stays at approximately 1,500 Marriott-branded hotels in the USA and Canada. Under the program, corporations will have access to room, tax, meal, telephone and business center fees, among other itemized expense details. Marriott’s participation extends MasterCard e-Folio’s reach to more than 7,000 hotel properties in North America. With Marriott signed-on, approximately 40% of “MasterCard Corporate Card” transactions in North America will take place at enrolled hotel properties. MasterCard corporate card issuers including Citibank, GE’s Corporate Payment Services unit, JPMorgan Chase and Wells Fargo will be the first to offer the Marriott enhanced folio data service to their customers.Details
NOVA Information Systems has acquired SouthTrust Bank’s existing payment processing portfolio from Wachovia Bank and has simultaneously renewed and extended a long-term marketing alliance agreement for Wachovia Bank’s merchant referral business. New merchant services referrals will be marketed through Wachovia Bank’s 3,100 branches. The credit and debit card processing volume from the existing SouthTrust portfolio is expected to generate an additional $2.3 billion annually.Details
A Canadian version of the “Starbucks Duetto VISA” has been introduced by RBC Royal Bank. The card, a first in Canada, combines the re-loadable “Starbucks Card” with a general purpose credit card. When cardholders use the VISA account of their “Duetto Card,” they earn one per cent of their purchase back in “Duetto Dollars” which are loaded into a “Duetto Dollars” account at the end of each billing cycle. New cardholders also receive a one-time pre-load of $10 to their “Starbucks Card” account after their first “Duetto Card VISA” purchase. Starbucks will also contribute five dollars to Frontier College for adult and youth literacy after the first VISA purchase made on each new “Starbucks Duetto VISA.” Bank One introduced a U.S. version of the card in October 2003. (CF Library 10-14-03)Details
The number of credit and debit cards-in-force in the USA, grew by 43.9 million last year, or at a 5.2% annual growth rate. American Express posted the strongest growth, adding 3.5 million cards for a 9.6% gain over 2003. VISA, the largest U.S. network, added 28.7 million cardholders for a 6.7% gain, while MasterCard and Discover posted gains of 3.6% and 0.2%, respectively. At the end of 2004, there were 886.5 million credit and debit cards in use in the USA, compared to 842.4 million one-year ago.
NETWORK 2003 2004 CHNG
VISA 429.3 458.0 +6.7%
MasterCard 326.0 337.8 +3.6%
American Express 36.4 39.9 +9.6%
Discover 50.7 50.8 +0.2%
TOTAL 842.4 886.5 +5.2%
Source: CardData (www.carddata.com)
Wright Express yesterday announced that the IPO of 40 million shares of its common stock was priced at $18.00 per share. The Company’s common stock has been approved for listing on the New York Stock Exchange under the ticker symbol “WXS.” As previously announced, JPMorgan, Credit Suisse First Boston and Merrill Lynch & Co. are the joint book-running managers of the offering. Wright Express is a leading provider of payment processing and information management services to the U.S. commercial and government vehicle fleet industry.Details