Top Ten Outstandings Grew 3.7% in 2004

Bank credit card outstandings, managed by the nation’s ten largest issuers, grew a modest 3.7% during 2004, ending the year at $581.1 billion. MBNA, the nation’s third largest issuer, posted a decline of nearly 5%, and Discover was flat year-over-year, while the other eight issuers posted gains ranging from 3% to 17%. The biggest gain was produced by Wells Fargo Card Services and Wells Fargo Financial Bank, which together held $8.8 billion in outstandings at the end of 2004 compared to $7.5 billion one-year ago. Chase, which merged with Bank One last year to become the #1 U.S. issuer, posted an above average gain of 5.3%, according to CardData ([www.carddata.com][1]). Bank of America, which merged with Fleet in 2004 to become the #4 U.S. issuer, turned out a 9.3% gain. Turnaround issuer, Providian, reported a 9.5% increase to $18.5 billion for 2004. Capital One, the former powerhouse of double-digit growth, reported a middling gain of 5% in the USA for 2004. However, Capital One edged by Discover to become the nation’s #5 ranked issuer based on outstandings.

CARD LEADER SCOREBOARD
(EOP Managed Outstandings)
ISSUER EOY-03 EOY-04 CHNG
1. Chase $128.6 $135.4 + 5.3%
2. Citi* $117.7 $121.7 + 3.4%
3. MBNA $ 84.1 $ 80.2 – 4.6%
4. BofA $ 53.6 $ 58.6 + 9.3%
5. Cap One $ 46.3 $ 48.6 + 5.0%
6. Disc** $ 48.4 $ 48.3 – 0.2%
7. AmEx $ 38.5 $ 40.1 + 4.1%
8. HSBC*** $ 18.8 $ 20.9 +11.1%
9. Prov $ 16.9 $ 18.5 + 9.5%
10.Wells $ 7.5 $ 8.8 +17.3%
TOTAL $560.4 $581.1 + 3.7%
* Citi includes approx. $2 billion in non-U.S. card loans.
** Discover’s fourth quarter ended 11/30/04.
** HSBC (f/k/a Household) is estimated; no Q4 report issued to-date.
Source: CardData (www.carddata.com)

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

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iMergent Net Income Doubles in Q4

UT-based iMergent, a purveyor of proprietary online store software, reported that total revenue for the quarter ending December 31st rose 78% to $31.4 million from the same quarter in 2003. During the fourth calendar quarter, the company hosted 177 workshops, of which 51 were international, compared to 116 workshops, 13 of which were international, in the year ago quarter. iMergent typically reaches its target audience through a concentrated direct marketing effort to fill preview sessions, followed by workshop conferences. Net income for the quarter was $3.1 million, compared to net income of $1.5 million for the comparable quarter of the prior year. During the quarter, the Company introduced “The Power of eBay” workshops and began offering a “Links4Trade” partnership option. For complete details on iMergent’s latest results visit CardData ([www.carddata.com][1]).

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

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OBERTHUR 4Q/04

Oberthur Card Systems reported that fourth quarter revenues hit a
record high of e132.1 million, driven by an all-time record shipment of
44 million smart cards. Sales of payment smart cards were e29.6 million
in 4Q/04, a nearly 20% increase over the year ago quarter. For the full
year, payment smart card sales topped e117.1 million, a 35% increase
over 2003. Meanwhile, sales of “Other Cards,” including magnetic stripe
cards, loyalty cards, scratch cards and memory cards, declined 12%, from
e19.3 million for 4Q/03 to e17.0 million. The expected decrease is
directly linked to the U.K. migration from magnetic stripe cards to
smart cards. Microprocessor cards account for nearly two thirds of
Oberthur’s total revenues. In 2004, the Americas region contributed 22%
of the card manufacturer’s total sales. For complete details on
Oberthur’s fourth quarter performance visit CardData (www.carddata.com).

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Financial Services Phishing Takes-Off in Dec

Phishing attacks on the financial services sector continued to rise in December, now making up 85% of all such attacks. The Anti-Phishing Working Group reported this week that the number of active phishing sites reported in December was 1707. The APWG report also suggests that the proliferation in the number of attack targets continues to rise, running from 44 in October, 51 in November to 55 in December. The APWG says it is interesting to note that the concentration on phishing attacks against financial institutions actually increased to a new high during a time when many were concerned that opportunistic phishers would spoof retail sites, using consumers urgency to keep their e-commerce accounts in order to complete their holiday shopping in time.

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PBS/FRONTLINE Documentary Re-Airs Next Week

PBS is re-airing its one-hour FRONTLINE documentary, the “Secret History of the Credit Card,” on Tuesday, February 1st. In “Secret History of the Credit Card,” FRONTLINE(R) and The New York Times join forces to investigate an industry few Americans fully understand. In this one-hour report, correspondent Lowell Bergman uncovers the techniques used by the industry to earn record profits and get consumers to take on more debt. Millions of American families use their personal, general-purpose credit cards such as Visa, Mastercard, American Express and Discover to make ends meet; credit cards have been a discreet lifeline for families in financial straits.

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Pay By Touch Acquires a Check Cashing Patent

San Francisco-based Pay By Touch has acquired a new patent portfolio for additional biometric payment solutions, including a U.S. issued patent for biometric authentication for check cashing. The newly acquired portfolio includes a U.S. issued patent for biometric authentication for check cashing and adds to Pay By Touch’s more than two dozen issued U.S. patents. Pay By Touch is a free consumer payment service that allows shoppers to pay for purchases and cash checks using a finger scan linked to their financial accounts and loyalty programs. With Pay By Touch, the checkout process is faster, more convenient, and more secure than other payment methods.

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Paymetric Moves and Picks Up More Funding

Commercial card specialist, Paymetric, has moved to new headquarters in Houston and picked up $7 million in new funding, led by Austin Ventures. Paymetric will use the funds to support continued product innovation, sales growth and market expansion. Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. Paymetric enables organizations to benefit from payment cards by integrating payment card buying and selling functions directly into the financial supply chain.

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FDC to Process the New Wal-Mart Discover Card

First Data confirmed yesterday it has signed a contract to process transactions for the new “Wal-Mart Discover” card. FDC becomes the first certified third-party credit card processor to process transactions utilizing the Discover network. FDC will provide authorization and settlement as well as producing and mailing cards and statements. Last week, Wal-Mart announced it has teamed with GE Consumer Finance and Discover Financial Services to launch a new credit card on the Discover Network. This is Discover’s first credit card issuing partnership outside its network. The new “Wal-Mart Discover” cards will be available by March. Under the program the card will carry no annual fee and offer up to 1% back from GE on all purchases. GECF says the deal will expand its Wal-Mart relationship, enabling it to offer both a Wal-Mart store card and a general purpose “Wal-Mart Discover” card. GECF’s current private label card contract runs through 2009.

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Fiserv Profits Rise 19% in the 4Q/04

WI-based Fiserv reported that processing and services revenues rose 20% in the fourth quarter to $866.1 million. Net income for the quarter rose 19% to $97.5 million. Revenues for financial institution outsourcing, systems and services hit $596.7 million in the fourth quarter compared to $566.1 million for 4Q/03. During the fourth quarter Countrywide Bank chose Fiserv CBS as its new core processing platform and WA-based Columbia Bank chose Fiserv for a technology package including the “PCS Vision” system from Information Technology and electronic funds transfer services from Fiserv EFT. Fiserv closed four acquisitions last year including CheckAGAIN. The Company is currently negotiating a 12-year contract with three Australian banks for electronic check settlement services. For complete details on Fiserv’s fourth quarter results visit CardData ([www.carddata.com][1]).

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

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Q4 Bankruptcy Filings Drop More than 7% Y/Y

Consumer bankruptcy filings during December were flat compared to one-year ago following a sharp decline in the prior month. However, for the fourth quarter, filings were down 7.4%, and for the full year, filings declined nearly 4%. During December, 113,957 consumer Chapter 7 and 11 filings were made, compared to 113,383 for December 2003. During the fourth quarter, there were 364,313 consumer bankruptcy filings, compared to 393,348 for 4Q/03. In the third quarter there were 366,837 consumer bankruptcy filings. Year-to-date bankruptcy filings were 1,552,967. The decline for 2004 is the first drop in consumer bankruptcy filings since 2000.

Monthly Filings Historical
Dec 03: 113,383
Jan 04: 114,737
Feb 04: 124,719
Mar 04: 152,567
Apr 04: 145,543
May 04: 136,509
Jun 04: 127,742
Jul 04: 133,390
Aug 04: 125,783
Sep 04: 127,664
Oct 04: 133,404
Nov 04: 116,952
Dec 04: 113,957
Source: CardData (www.carddata.com)

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