The May Department Stores Company, Price Chopper Supermarkets, and Cabela’s have each selected U.S. Dataworks’ “Clearingworks” to support their payment processing infrastructures. The May Department Stores Company will expand its use of UDW’s Clearingworks technology for over 1,000 department and specialty stores affiliated with May. Price Chopper Supermarkets has used UDW’s Clearingworks Point of Purchase technology to replace its former outsourced electronic check conversion processing. Clearingworks determines best-fit clearing and least-cost routing of check payments, enabling Price Chopper to reduce their check tender costs. Cabela’s, a world outfitter of hunting, fishing, and outdoor gear, has chosen the Clearingworks solution to process electronic check conversion for its store, catalogue, and online sales. US Dataworks develops software designed to help organizations transition from traditional paper-based payment and billing processes to electronic solutions that automate end-to-end processes for accepting and clearing checks.Details
I.C.E.’s Neos Merchant Solutions is teaming with Fifth Third Bank Processing Solutions to roll out its smart card based loyalty program to Fifth Third’s merchant customers nationwide. Neos began working with Fifth Third earlier this year and has been training Fifth Third’s Bank Processing Solutions’ Sales and Relationship Management teams about how Neo’s program can provide loyalty solution to merchants, leading to successful implementation of turnkey programs to their customers. Neos offers gift and loyalty card services and designs, encodes, prints, and fulfills all of its customer orders. Fifth Third Bank Processing Solutions is one of the largest providers of credit, debit, EBT, ACH, and check acceptance services in the nation. It processes nine billion ATM and POS transactions per year for over 207,000 merchant locations and 1,350 financial institutions worldwide. International Card Establishment, Inc., (I.C.E.), is a growing provider of products and services for the electronic transaction processing industry.Details
KeyBank launches the “Key Possibilities MasterCard Gift Card” in denominations from $25 to $2,500. The card enables people to give any gift, providing recipients with something they truly want. The Key Possibilities card is a prepaid debit card and may be used where MasterCard debit cards are accepted. If the card is lost or stolen, remaining value on the card can be refunded.Details
The Northern Trust Company has chosen Elan Financial Services to create and operate its branded credit card program for high net worth clients. The new program will offer Northern Trust clients a prompt, responsive service and enhanced program options and features such as a valuable rewards program. Northern Trust Corporation provides investment management, asset and fund administration, and fiduciary and banking solutions for corporations, institutions, and affluent individuals around the world. It has offices in 15 U.S. states and international offices in six countries. Elan Financial Services supports over 7,800 ATMs, 15 million ATM/POS cards, and 2 million credit cardholders with a range of products and services such as credit card issuing, ATM, debit card, and merchant processing.Details
Capital One’s third quarter U.S. card profits ramped up by 50% year-over-year, as delinquency and charge-offs headed south. U.S. card outstandings of $46.1 billion are up 4% compared to one-year ago and 2% since the previous quarter. For the third quarter, COF posted net income for U.S. cards of $414.4 million, compared to $384.1 million in the second quarter, and $276.2 million one-year ago. The managed delinquency rate (30+ days) for U.S. credit cards was 4.14% for the third quarter, compared to 3.95% for 2Q/04, and 4.88% for the third quarter of 2003. The net charge-off rate for U.S. credit cards was 4.68% for the third quarter, compared to 5.19% for the second quarter, and 6.16% one-year ago. The overall managed revenue margin increased to 13.03% in the third quarter from 12.53% in the previous quarter. During the third quarter of 2004, Capital One grew its overall managed loan portfolio by $2.1 billion to $75.5 billion. The Company noted that it continues to diversify its business as 39% of total loans and 29% of earnings are now generated from businesses beyond the U.S. credit card segment. During the third quarter, Cap One sold its interest in a South African joint venture. This month, the Company sold its French loan portfolio. For complete details on Capital One’s third quarter performance visit CardData ([www.carddata.com]).
COF U.S. CARD NET INCOME
3Q/03: $276.2 million
4Q/03: $322.7 million
1Q/04: $386.8 million
2Q/04: $384.1 million
3Q/04: $414.4 million
Source: CardData (www.carddata.com)
MBNA reported that net income for the third quarter rose 10% to $728.3 million as the issuer prepares to launch American Express cards next month. Managed loans for 3Q/04 were slightly down sequentially but up 4.5% year-over-year. Third quarter charge volume was up 11% compared to 3Q/03. Total managed loans at the end of the third quarter were $117.8 billion, and charge volume was $53.0 billion, including $17.7 billion in cash advances. Managed charge-offs decreased slightly to 4.61% compared to 4.95% in the previous quarter, and 5.13% one year ago. Delinquency on managed loans increased slightly to 4.11%, compared to 4.08% in 2Q/04, and 4.48% in 3Q/03. During the quarter, MBNA added 2.3 million new accounts. MBNA indicated future growth drivers will be its new rewards program, international card business, the launch of the AmEx credit card, and its expansion into professional practice financing and insurance premium financing. For complete details on MBNA’s third quarter results visit CardData ([www.carddata.com]).
MBNA TRACK RECORD
3Q/03: $658.8 MM $112.8 B
4Q/03: $703.5 MM $118.5 B
1Q/04: $519.7 MM $117.6 B
2Q/04: $660.3 MM $118.2 B
3Q/04 $728.3 MM $117.8 B
Source: CardData (www.carddata.com)
Dallas-based Alliance Data Systems posted third quarter revenue of $298.9 million, a 15% increase over one-year ago. Net income rose 23% to $26.0 million. Transaction Services revenue increased 11% to $169.4 million. Credit Services revenue increased 14% in the third quarter to $121.4 million. Marketing Services revenue increased 18% to $85.0 million. The growth in Marketing Services revenue was driven by strong “AIR MILES Reward Miles” redemption growth, which increased 17%, and “AIR MILES Reward Miles” issuance growth, which increased 8%. During the quarter, ADS launched its first commercial credit card client with American TV and Appliance, signed Rona, Canada’s largest distributor and retailer of hardware, home renovation and gardening products, to become a national sponsor in Canada’s “AIR MILES Reward Program”, and acquired Epsilon Data Management. For complete details on ADS’ third quarter performance as well as prior quarters visit CardData ([www.carddata.com]).
Providian reported net income for the third quarter of $109.1 million, a sharp increase from last quarter’s $70 million profit, and up 28% year-on-year. During the quarter, the issuer signed up about 538,000 new accounts but lost just as many, ending the quarter at approximately 10.3 million accounts. The Company’s managed 30+ day delinquency rate at the end of the third quarter decreased to 6.27% from 6.44% at the end of the second quarter, and down significantly from last year’s 9.68%. Managed net credit losses in the third quarter were $453.8 million, resulting in a managed net credit loss rate of 10.39%, compared to 12.53% in the second quarter, and 14.37% for 3Q/03. The net interest margin on average managed loans in the third quarter was 13.48%, compared to 13.75% in 2Q/04, and compared to 14.79% for 3Q/03. Managed loans receivable as of September 30th, increased to $17.9 billion compared to $17.2 billion at the end of the prior quarter and $16.9 billion one-year ago. For complete details on Providian’s third quarter performance as well as prior quarters visit CardData ([www.carddata.com]).
Providian Net Income Track Record
3Q/03 $85.3 million
4Q/03: $67.1 million
1Q/04: $101.7 million
2Q/04: $69.7 million
3Q/04: $109.1 million
Source: CardData (www.carddata.com)
Cleveland-based KeyCorp has signed its first surcharge-free ATM deal in West Virginia with WesBanco Bank. Key’s agent bank program enables banks, credit unions, and other financial services companies to provide customers and members surcharge-free access to Key’s ATM network without the investment needed to manage their own ATM system. Key’s nationwide network of almost 2,200 ATMs can be accessed by institutions. WesBanco’s customer service capabilities are significantly enhanced by the partnership with Key. Customers now have easy access to their accounts and can conduct business with WesBanco at home or while traveling. WesBanco, Inc. is a $3.9 billion multi-state bank holding company that provides retail and commercial, trust, investment, and insurance products and services. KeyCorp has assets of roughly $88 billion, making it one of the nation’s largest bank-based financial services companies.Details
Metris Companies (Direct Merchants Credit Card Bank) returned to profitability in the third quarter after a $70 million loss in the second quarter. One-year ago, Metris posted a $75 million loss. Metris says that positive trends in delinquencies, default rates, payment rates, as well as improved cash and liquidity will enable the issuer to rev up its marketing and partnership engine. During the third quarter, Metris added 118,000 new accounts, ending the quarter with 2.2 million gross active accounts. The managed net charge-off rate for the third quarter was 14.6%, compared to 17.0% in the previous quarter, and 22.9% for 3Q/03. The managed delinquency rate was 9.7% as of September 30th, compared to 9.4% at the end of the second quarter, and 11.1% one-year ago. The Company’s managed credit card loans for 3Q/04 were $6.8 billion, compared to $7.1 billion in 2Q/04, and $8.1 billion as of December 31, 2003. For complete details on Metris’ third quarter results visit CardData ([www.carddata.com])
CompuCredit, J.C. Watts Companies, and three historically black colleges and universities have announced a strategic partnership for financial literacy. The memorandum of understanding outlines activities that focus on formulating initiatives that will educate consumer advocates, government officials, and the general public about financial services that are accessible to under-served consumers. The J.C. Watts Companies HBCU Collaborative has enlisted three of its member to conduct research projects and create a financial literacy program for elementary, high school, college, and freshman orientation programs. The partner colleges will receive resources to establish endowments to support continuing education in financial literacy. CompuCredit is also committed to create employment opportunities for college students and post-graduate job placement. The J.C. Watts HBCU Collaborative is a unique partnership formed to encourage and facilitate the use of HBCU faculty, staff, and student expertise to provide services to government agencies and private sector companies. CompuCredit Corporation provides financial services to under-served consumers.Details
Citigroup has supplied 200 company volunteers to participate in the American Bankers Association Education Foundation’s “Get Smart About Credit Day”. Over 200 Citigroup volunteers will join thousands of other bank employees by visiting various colleges, schools, and youth groups to teach students how to manage their finances and build a positive payment history. Presentations will include videos, handouts, and exercises on budgeting, saving, credit use, and how to prevent identity theft. Teenage Research Unlimited has found that teenagers spent $175 billion last year. According to ABA president and CEO, Donald G. Ogilvie, that spending comes without having any financial literacy education. The ABA Education Foundation is a non-profit subsidiary of the American Bankers Association and is committed to providing programs to educate individuals on financial literacy. Citigroup is the preeminent global financial services company with 200 million customer accounts. Citigroup conducts business in over 100 countries, providing a broad range of financial products and services to consumers, corporations, governments, and institutions.Details