Rahaxi Poised for Rapid Growth in 2005

FreeStar Technology says next year looks like a banner year for the firm as it places it primary focus on its wholly owned subsidiary Rahaxi Processing Oy. Rahaxi has relationships with Euroline (Sweden), Luottokunta, CEKAB (Sweden), Aktia Bank (Finland), Oko Bank (Finland), estcard PKK Estonia and Nordea Bank (Sweden). The firm also has a distribution agreement with Hypercom to deploy the “ICE” family of terminals, bringing fully EMV compliant terminals to the Finnish market.
In August, Rahaxi was chosen by IKANO Rahoitus Oy, a member of The IKANO Group, as the transaction management provider for the “IKEA Hei Card.”

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Dividend Miles Co-Brand Contract Modified

A federal bankruptcy court has cut the number of annual miles US Airways has to fund to Bank of America for its co-branded credit card program. Last week the court reduced the annual funding from one billion miles to 200 million miles for the “Dividend Miles” program. The change applies to the second and third anniversaries of the contract which expires year-end 2008. In return US Airways agreed not to change its redemption schedule. US Airways is currently operating under Chapter 11 bankruptcy protection. Nationsbank, now Bank of America, introduced the “Dividend Miles” co-branded program more than a decade ago.

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Black Friday Retail Card Volume Up 10-12%

VISA reported that overall retail volume on credit and debit cards for November 26th was up 12%. MasterCard processed over 35.1 million credit transactions on “Black Friday,” a 10% growth over the same day in 2003. VISA says the increase in sales volume for “Black Friday” was largely driven by a 20.9% increase in Discount, Mass Retailers and Drug Store purchases, a 15.7% growth in Department and Apparel purchases, and, a 15.6% rise in Home and Garden purchases. Specialty Retail, Gift and Hobby purchases remained relatively flat. Overall, sales volume on VISA-branded payment cards on November 26th totaled more than $4.1 billion, a 15.5% increase over the same day last year. For “Black Friday,” consumer spending on VISA credit cards exceeded $2.1 billion while debit spending grew to more than $1.7 billion, a 10.0% and 21.6% increase from the same time in 2003, respectively.

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National City Launches a Bear of a Card

Cleveland-based National City has launched a co-branded card with PA-based The Boyds Collection Ltd. The new “Boyds Bears VISA Platinum” credit card offers one collectible bear for the first card purchase or balance transfer, and “Paw Points” for each transaction thereafter. The “Paw Points” can be exchanged for additional bears each year. Founded in 1979, the Boyds Collection is a designer and manufacturer of branded, high quality, handcrafted collectibles and other specialty gift products. Based in Gettysburg, Pa., the Company was acquired by Kohlberg Kravis Roberts in 1998 and is traded on the NYSE. This year, National City introduced the “Uniformed Firefighters Association of Greater New York Gold MasterCard” and a program to offer agent banks instant-issue VISA gift cards. (CF Library 1/15/04 and 9/29/04)

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Americans-Out of Cash, Into Debt Repayment

A new survey suggests that Americans are strapped for cash this holiday season, nearing a financial breaking point, pointing to at least a moderate holiday selling season this year. The ACNielsen found that of the 28 markets around the world surveyed by ACNielsen, the U.S. had the highest percentage of consumers (28%) who say they have no extra money to spend. Furthermore, the percentage of U.S. consumers choosing debt repayment (33%) was significantly higher than that of consumers in Europe or Asia-Pacific. In the U.S., women were more likely than men (30% vs. 22%) to say that they have no spare cash, while men were more likely than women (36% vs. 32%) to say that they use such money to pay off debts.

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GLOBAL E-VISA

Payment card transactions via the Internet will celebrate its tenth anniversary this month. VISA says its on track to top $150 billion in e-commerce sales for this year, a five-fold increase since 2001. VISA says its global Internet volume is up 56% over 2003. Online VISA sales originate in over 90 countries, purchased with VISA cards issued in over 150 countries. VISA notes that a secure foundation coupled with increased demand for specialized products not offered in local markets continues to drive cross-border transaction volume growth. Cross-border transactions now represent 16% of all VISA e-commerce transactions, up from 15.2% a year ago. Average e-commerce transaction value at $107 versus $70 in the physical card acceptance environment.

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Global Payments Renews its Canadian Funding

Atlanta-based Global Payments has renewed its US$146 million Canadian revolving credit facility agreement for its Canadian merchant settlement process. The term of the credit agreement is 364 days and can be extended for another 364 days if both parties are in agreement. Global Payments, Inc. is a chief provider of electronic processing services to consumers, merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies, and multi- national corporations in the U.S., Canada, Latin America, and Europe.

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