Online Credit Card Marketing Begins to Heat Up

Research conducted by Keynote Systems, Inc. has found competition to acquire credit card customers online has heated up over the past few months. The study found that prospective customers visiting the Bank One site were 11% more likely to apply for a card online now than they were just six months ago, when the last Keynote study of prospective credit card customers was conducted. Prospective customers visiting the Citibank site were 19% more likely to apply for a card now than they were just twelve months ago. Keynote reports that Discover and American Express provide the best online experience for consumers as measured by the overall Keynote rankings, but the five leading card sites are closely grouped together in terms of customer experience appeal. Discover, MBNA and American Express were rated as having the best online application processes. Keynote found that most consumers (53%) start their search for a credit card at a search engine and then follow a link to a specific credit card or bank site, 47% type in a bank or credit card company’s URL directly into their Internet browser. 60% of consumers use a search engine at some point in their search and evaluation process, with Google, Yahoo! and MSN being the top search destinations.

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FTC Offers Consumers an International ADR Directory

The FTC and consumer protection agencies worldwide have opened “The International Alternative Dispute Resolution Directory” to help consumers resolve problems with foreign sellers. The directory was unveiled today on econsumer.gov, a joint Web site operated by consumer protection agencies in 20 countries. When consumers file cross-border fraud complaints on econsumer.gov, they reach all the participating agencies simultaneously. This enables international law enforcers to cooperate on investigations, share information and fight fraud more efficiently. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.

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Sears to Restate Cash Flows from Card Operations

Sears announced the company is filing amended SEC documents to correct an error related to the classification of cash flows generated in connection with the company’s domestic credit card business, which was divested in November 2003. Sears noted that the change does not affect the results of operations, net income, financial condition or net changes in cash and cash equivalents for any of the periods presented. The domestic credit card business and related receivable portfolios consisted primarily of the proprietary “Sears Card” and “Sears Gold MasterCard.” Historically, the company presented the aggregate cash flows generated from both the “Sears Card” and “Sears Gold MasterCard” as cash flows from operating activities in the consolidated statements of cash flows. As a result of the discussions with the SEC, the company has changed the classification of cash flows from the “Sears Gold MasterCard” portfolio from operating activities to investing activities within the consolidated statements of cash flows, as the loans generated were predominantly related to activities external to Sears’ merchandise and services. Sears also announced a restatement for the fourth quarter to correct its accounting for the amortization of construction allowances.

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Providian’s Metrics Post Sharp Declines in Jan

Providian’s managed charge-off rate declined 144 basis points, while its 30+ day delinquency ratio dropped 55 basis points, during January, compared to the prior month. Over the past thirteen months, Providian’s managed charge-off ratio has plummeted nearly 600 basis points, and managed delinquency has collapsed by more than 350 basis points. However, losses for Providian’s credit card ABS edged up slightly by 2 bps in January, as delinquency edged down by 5 bps. On a managed basis, charge-offs for January came in at 8.54% while delinquencies came in at 5.61%. During January, Providian’s managed credit card portfolio seasonally contracted by $300 million to $18,198,593,000. The Company’s managed 30+ day delinquency rate at the end of the fourth quarter was 6.16%, compared to 6.27% at the end of the third quarter. The managed net credit loss ratio for the fourth quarter was 9.98%, compared to 10.39% in the third quarter. For complete details on Providian’s latest performance, visit CardData ([www.carddata.com][1]).

PROVIDIAN MONTHLY ABS METRICS
Month Charge-Offs Delinquency
Jan 04 17.36% 11.48%
Feb 04 16.08% 11.07%
Mar 04 17.17% 9.56%
Apr 04 15.84% 9.09%
May 04 14.82% 8.68%
Jun 04 14.44% 8.40%
Jul 04 13.17% 8.42%
Aug 04 12.39% 8.37%
Sep 04 12.45% 8.30%
Oct 04 12.11% 8.48%
Nov 04 12.14% 8.27%
Dec 04 11.73% 8.06%
Jan 05 11.75% 8.01%
Source: CardData(R) (www.carddata.com)

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

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Mashboxx Goes Peppercoin’s Small Transaction Suite

Mashboxx, the first peer-to-peer file-sharing network authorized by major record labels, has selected the Peppercoin “Small Transaction Suite” to enable P2P consumers to purchase high-quality, legal digital downloads for $0.99. via credit and debit cards. Mashboxx intends to capitalize on the 2.2 billion music files that are traded monthly through the P2P networks and is the first to employ Snocap’s digital licensing and copyright management system. Mashboxx is scheduled to launch in the first quarter of 2005. Peppercoin enables profitable new business models for low-priced digital content and physical goods.

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Solvport to Support WRG’s Genesis and Vision ATMs

Ohio-based Western Reserve Group has partnered with Solvport LLC for technical support of their “Genesis” and “Vision” ATMs, as well as all other machines processed through WRG. Solvport will offer on-going phone support for WRG customers. Solvport provides superior, cost-effective technical service and outsourced solutions to its customers in order to ensure optimal results and functionality of their Information Transaction Machines (ITM). WRG manufactures ATM devices, software application products and provides transaction processing and financing services for the ATM industry.

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BARCLAYCARD 4Q/04

Barclay’s reported that profits from its Barclaycard division rose 5.3% last year, compared to 2003. Since 1998, Barclaycard’s profits have more than doubled, from GBP 374 million to GBP 801 million. Barclaycard assets grew 13.1% last year to GBP 23,019 million. The issuer noted that the modest profit increase was due to higher volumes that more than offset margin pressure, and the impact of considerable investment in both the U.K. and the international card businesses. The international business performed well in core markets – Spain and Germany – and the Juniper acquisition in the U.S.A., although small, is strategically significant. In the U.K., Barclaycard manages the Barclaycard branded credit cards, Barclays branded consumer
loans, mostly Barclayloan, and also comprises FirstPlus, Clydesdale Financial Services and Monument credit cards. Outside the UK, Barclaycard International is in the United States, Germany, Spain, Greece, Italy, Portugal, Republic of Ireland and across Africa. The acquisition of the U.S. credit card issuer, Juniper Financial Corporation, was completed on December 1st. Juniper provides a platform for the expansion of Barclaycard’s international business into the U.S. credit card market and specializes in partnership card issuance programs. For complete details on Barclaycard’s fourth quarter performance visit CardData (www.carddata.com).

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TNB Adds Three More CU Credit Card Portfolios

Dallas-based TNB Card Services has purchased the credit card portfolios of three credit unions and entered into agent relationships with Mizzou CU in Missouri, Sentry FCU in Pennsylvania, and Marshfield Medical Center CU in Wisconsin. TNB Card Services, owned and directed by credit unions since 1976, provides full-service credit and debit card processing as well as an agent issuing solution for credit unions nationwide and has bought more than 50 portfolios since it began its agent issuer program in late 2002.

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Top 5 Delinquency Drops 53 BPS in 2004

Average 30+ day delinquency declined 53 basis points last year for the top five issuers with aggregate managed U.S. credit card outstandings of $444 billion. Delinquency declined steadily all year except for a slight bounce in the third quarter, before ending the year at 4.16%. Discover posted the largest drop, from 5.97% to 4.55%. Delinquency at Chase dropped 98 basis points, while Bank of America and Capital One dropped 44 bps and 49 bps, respectively. MBNA reported a 19 bps decline in delinquency during 2004. For complete details on delinquency and charge-offs by the top ten issuers visit CardData ([www.carddata.com][1]).

TOP FIVE DELINQUENCY HISTORICAL
4Q/03: 4.69%
1Q/04: 4.44%
2Q/04: 4.21%
3Q/04: 4.24%
4Q/04: 4.16%
Source: CardData (www.carddata.com)

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

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bcgi Payment Manager Offers Real-Time Processing

Boston Communications Group announced the availability of “bcgi Payment Manager,” a platform that gives wireless operators greater control over their payment processes for both prepaid and postpaid accounts. Easily integrated into any operator network, bcgi Payment Manager supports real-time payment processing and allows operators to quickly roll out new payment options to give customers additional payment flexibility. Boston Communications Group, Inc. (Nasdaq: BCGI), develops products and services that enable wireless operators to fully realize the potential of their networks. bcgi’s access management, billing, payment and network solutions help operators rapidly deploy and manage innovative voice and data services for subscribers.

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BSP Rewards Network Expands with a Cruise Deal

MediaNet Group Technologies has signed an agreement with Cruises One, Inc. and Cruises, Inc. to become a “give and redeem” merchant in the “BSP Rewards Network”. BSP Rewards is a unique, private branded Rewards and Loyalty Program that offers members up to 15% rewards added to any rewards already associated with their credit cards. This one-of-a-kind program allows participating merchants, manufacturers and service organizations the opportunity to become redemption centers and enjoy their full retail margins on redemptions and an override on all purchases made by their members. MediaNet (OTCBB:MEDG) encompasses an integrated group of operating divisions that revolve around the many aspects of media and technology, including software, Web portal programs, branded rewards programs, television and video production and intellectual properties.

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