Chase Combines AARP Membership & Discounts

The AARP VISA will now become a membership card as well as a card offering automatic discounts. The AARP, Avis and Chase have teamed to combine the benefits of the AARP membership card with the “AARP VISA” card. The combined credit/membership card will also provide automatic discounts at the point of sale with Avis for AARP members. Avis is the first merchant to join the program and offer the technology, but additional partners will be forthcoming. The “AARP Platinum VISA” also offers a full one percent back on all card purchases.

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Equifax’s Direct Consumer Sales Climb 25%

Atlanta-based Equifax reported that its “Personal Solutions” business increased 25% in the fourth quarter to $23 million, and is up 38% for the year to $96 million. However, “Marketing Services” revenues in North America declined 11% last year to $236.1 million. “Information Services” in North America inched up by 4% to $707.1 million. Overall, for the fourth quarter, Equifax posted record revenue of $328 million, an increase of 12% from the same period last year. For the full year, revenues increased 5% to a record $1.27 billion. For complete details on Equifax’s fourth quarter performance visit CardData ([www.carddata.com][1]).

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

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Redskins Revise Card Policy to Take All MCs

After requiring season ticket holders to only use its co-branded credit card, the Washington Redskins backpedaled yesterday after a phone call from MasterCard. MasterCard reminded the merchant that the card’s acceptance is not designed to be that restrictive. The NFL team will now honor all MasterCards but will not accept VISA, American Express, or Discover as a payment option for season tickets. Last year, the team accepted all payment card brands. In a letter to season ticket holders last week the Washington Redskins said that to streamline the ticketing process it was now requiring fans to only use the MBNA-issued “Redskins Extra Points MasterCard.” According to the Washington Post, the Washington Redskins under the ownership of Dan Snyder has become on the most profitable NFL teams despite its lousy game winning record.

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ADS 04 Income Up 52%, as Revenues Rise 20%

Dallas-based Alliance Data Systems reported a 16% increase in revenues for the fourth quarter, ending the year with a 20% gain over 2003. Marketing Services revenues climbed 30% in 2004, while Credit Services and Transaction Services revenues increased 19% and 11%, respectively. Net income for the full year was up 52%, but declined 19% in 4Q/04 due to a stock compensation charge. Total fourth quarter revenue was $346.8 million, compared to $297.9 million 4Q/03. For the year, revenue increased to $1.26 billion compared to $1.05 billion for 2003. Net income for 2004 was $102.4 million, compared to $67.3 million the previous year. Net income for 4Q/04 was $16.0 million, compared to $19.8 million for 4Q/03. Transaction Services revenue increased to $681.7 million compared to $614.5 million for the year ended December 31, 2003. Credit Services revenue increased to $514.0 million, compared to $433.6 million for the prior. Marketing Services revenue increased to $375.6 million, compared to $289.8 million for 2003. For complete details on ADS’ fourth quarter performance visit CardData ([www.carddata.com][1]).

ADS HISTORICAL REVENUES
1999: $583 million
2000: $678 million
2001: $774 million
2002: $867 million
2003: $1049 million
2004: $1257 million
Source: CardData (www.carddata.com)

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

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ABS Monthly Payment Rate Hits a New Record

Monthly payment rates, among card-backed bonds, soared to the highest level ever in December, breaking through the 18% level. The strong consumer behavior is accompanied by a significant decline in both delinquencies and charge-offs. According to Standard & Poor’s “U.S. Bank Credit Card Quality Index,” December’s 18.2% monthly payment rate represents the 10th consecutive month that the payment rate has exceeded 17%, averaging 17.5% during this 10-month period. Citibank posted a 19.0% payment rate for December, the highest among the ABS followed by S&P. During December, the 30-day delinquency rate was 4.3% compared to 4.5% in November, and 5.0% one-year ago. After increasing over the course of the previous two months by 60 bps, charge-offs in December decreased by 20 bps to 6.3%. One-year ago charge-offs stood at 7.0%. Yield, which primarily consists of cardholder finance charges, decreased by 20 bps to 17.7% from a revised 17.9% in November. On a comparative basis, the 17.5% average yield for 2004 was 10 bps lower than the 2003 average of 17.6%.

Credit Card Quality Index
Performance Month Dec02 Dec 03 Oct04 Nov04 Dec04
Yield 18.2% 17.6% 18.0% 17.9% 17.7%
Payment rate 15.8% 16.7% 17.1% 17.4% 18.2%
Charge offs 7.5% 7.0% 6.4% 6.5% 6.3%
Delinquencies 5.4% 5.0% 4.5% 4.5% 4.3%
Source: Standard & Poor’s

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BB&T to Participate in FDC’s STAR CHEK Direct

BB&T has signed a deal to participate in First Data’s “STAR CHEK Direct,” a direct check debit and verification service. BB&T will use STAR CHEK Direct to help reduce its check fraud losses and processing costs, streamline check processing administration and generate income. First Data Corp. (NYSE: FDC), with global headquarters in Denver, helps power the global economy. BB&T Corporation is the nation’s 11th largest financial holding company with more than $97 billion in assets.

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Advanta Gets $64 Million Returned from BofA

Advanta is receiving $64 million from Bank of America after the IRS approved the settlement in regard to Advanta’s card portfolio sale to FleetBoston. Consistent with the terms of the settlement, all outstanding litigation between the two companies is being dismissed. The settlement results in a net after-tax gain of approximately $61 million and an increase in book value of approximately $2.45 per share, as previously outlined. Advanta focuses on the small business market and related community, providing funding and support to the nation’s small businesses through innovative products and services.

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Micropayments Go to a New Level

MA-based Peppercoin, a micropayments company, has launched version 3.0 of its “Small Transaction Suite” for FSIs and merchants. The “Small Transaction Suite” core technology provides an “Intelligent Aggregation” platform for all payments. It supports the pay-as-you-go, subscription, pre-paid, and post-paid business models. “Peppercoin 3.0” even enables merchants to experiment and tune their offerings over time. The platform also abides by all the rules and regulations of the credit card associations, and is compliant with the all of the data security requirements. Peppercoin also announced this week that its “Small Transaction Suite” has been authorized for sale by First Data’s merchant acquiring partners.

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LaserCard’s Optical Card Sales Up 24% Y/Y

LaserCard reported that optical memory card revenues for the fourth quarter were $3.6 million compared with $2.9 million one-year ago. Revenues from LaserCard(R) read/write drives, drive accessories and maintenance were $279,000 for the third quarter compared with $155,000 in the prior quarter and $2.5 million for the same period last year. LaserCard Corporation (www.lasercard.com) manufactures and markets LaserCard(R) optical memory cards, chip-ready Smart/Optical(TM) cards and other advanced-technology secure identification cards.

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Axalto’s Financial Smart Card Revenues Up 22%

Axalto, formerly Schlumberger Smart Cards, reported that fourth quarter
revenue for financial cards rose 22% to $51.7 million. Microprocessor
card sales were also up 22% to 18.6 million cards for 4Q/04. Overall
revenues for the quarter were $291.5 million, a 30% increase over the
year ago quarter. POS terminal revenues for 4Q/04 rose 43% to $22.4
million, but down 15% from the prior quarter. Axalto says the terminal
growth is driven by strong sales in the EMEA region, derived from a
growing number of EMV-related supply contracts. For the full year, POS
terminal sales were up 66% in the EMEA region. During the fourth
quarter, Axalto joined the “Visa Smart Breakthrough” card program. For
complete details on Axalto’s fourth quarter performance, visit CardData
(www.carddata.com).

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AssetExchange Brokers Ten CU Card Sales

OR-based AssetExchange reports it recently brokered the sales of ten credit union credit card portfolios. Atlanta-based InfiCorp signed purchase and agent deals with TN-based Old Hickory CU, CA-based Sun Community FCU, NH-based Triangle CU, CO-based Community Financial FCU, and, WI-based Guardian CU. Dallas-based TNB Card Services purchased and formed partnerships with ID-based Advantage Plus FCU and CT-based Windsor Locks FCU. AssetExchange would not disclose the buyer of the other three portfolios. AssetExchange recently released a report that showed the penetration of credit cards among credit union members has declined 19.0% to 18.5% year-on-year. (CF Library 11/30/04)

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