Top 5 Issuers Control 63% of the U.S. Market

Consolidation in the bank credit card industry has given the top issuers control of more than 60% of the U.S. market. At the end of the third quarter, the top five issuers held $430.9 billion in U.S. card loans in a market of approximately $680 billion. Over the past five years, the market share of the top five issuers hovered around 53%. In 2000, the top five held $295 billion in card loans in a market of $569 billion. The recent merger of Chase and Bank One created the nation’s largest issuer with $131.5 billion in credit card outstandings. The Bank of America and FleetBoston merger also added more share to the top five issuers. At the end of the third quarter the top five U.S. issuers are: Chase, Citibank, MBNA, Bank of America, and Discover. For complete details on the third quarter performance of U.S. issuers, visit CardData ([www.carddata.com][1]).

TOP 5 – 3Q/04
Rank/Issuer Receivables
1. Chase $131.5 billion
2. Citi $117.2 billion*
3. MBNA $ 79.7 billion
4. BofA $ 55.4 billion
5. Discover $ 47.1 billion**
TOTAL $430.9 billion
*includes some non-U.S. accounts within North America
** as of August 31st

Top 5 Historical – Third Quarter
YEAR RECEIVABLES
2000: $295.0 billion
2001: $330.6 billion
2002: $352.7 billion
2003: $362.7 billion
2004: $430.9 billion
SOURCE: CardData (www.carddata.com)

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

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MODUS MASTERCARD

Xbox Live, Microsoft, Maybank, and MasterCard have teamed to introduce a prepaid card to offer Singaporeans an alternative payment method to register for the Xbox Live service and to purchase premium content. The “Xbox Live Modus MasterCard by Maybank,” a “MasterCard Electronic Card,” is the first prepaid card to be launched in the country. The card can be used at all merchant establishments worldwide that are equipped with EDC terminals and display the “MasterCard Electronic” brand mark. The card carries a $19.90 fee and cardholders can limit the spending limit from as low as $500, up to $3,000 per
day. The new card will be available at 120 authorized Xbox retail outlets and Maybank branches next month.

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PayPal Volume Climbs 7% Sequentially

eBay reported that gross payment volume for its PayPal business increased 52% year-on-year during the third quarter, and 7% sequentially. The payment service also signed up 6.3 million net new accounts and the number of active accounts posted its highest level to-date. During the third quarter, PayPal handled $4.64 billion of gross payment volume, compared to $4.35 billion in the prior quarter, and $3.04 billion for 3Q/03. At the end of the third quarter, PayPal had 56.7 million accounts, compared to 50.4 million in 2Q/04, and compared to 35.2 million one-year ago. PayPal produced $172.0 million in transaction fees for 3Q/04, a 57% jump over the year-ago quarter. During the third quarter, PayPal handled 83.4 million payments, a 7% increase over the prior quarter, and up 45% from 3Q/03. PayPal captured 56% of eBay’s total $8.3 billion in total sales volume during the quarter. PayPal’s transaction revenue rate was 3.59%, compared to 3.49% one-year ago. The processing expenses rate for the third quarter was 1.30%, compared to 1.25% for 3Q/03. PayPal’s transaction loss rate came in at 22 basis points, the same as one-year ago. For complete details on eBay/PayPal’s third quarter performance, visit CardData ([www.carddata.com][1])

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
3Q/03 $3.0 billion 35.2 million
4Q/03 $3.7 billion 40.3 million
1Q/04 $4.3 billion 45.6 million
2Q/04 $4.3 billion 50.4 million
3Q/04 $4.6 billion 56.7 million
SOURCE: CardData (www.carddata.com)

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

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MBNA Adds Another “Independent” Director

MBNA has named Thomas Murdough, chairman and CEO of the Step2 Company, to MBNA Corporation’s Board of Directors. Mr. Murdough will serve on the Audit and Compensation Committees. In 1991, Murdough launched Step2 hoping to go “a step beyond” in developing and manufacturing products for the family and home. He is a graduate of the University of Virginia and is the founder of The Little Tikes Company, which was sold to Rubbermaid in 1984. MBNA is the largest independent credit card lender in the world and is recognized as a leader in affinity marketing. It provides lending, deposit, and credit insurance products and services.

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Fiserv Net Income Rises 15% in 3Q/04

Fiserv reported that processing and services revenues were $866.3 million, a 23% increase over 3Q/03. Operating income for processing and services was $160.7 million, an 18% increase over the year ago quarter. Net income rose 15% to $92.4 million. During the quarter, Fiserv completed two acquisitions: Results International Systems, a provider of outsourced solutions for the property-and-casualty insurance industry and Pharmacy Fulfillment, a provider of mail-order prescription services. Fiserv recently announced it has purchased CheckAGAIN. For complete details on Fiserv’s third quarter performance, visit CardData ([www.carddata.com][1]).

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

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VISA to Promote Disney’s National Treasure

VISA USA is teaming up with Walt Disney Pictures to launch a major marketing campaign for the upcoming “National Treasure” movie, beginning November 1st. Visa’s marketing program will include a multi-million dollar advertising campaign, online interactive elements, and various events associated with the movie’s theme of treasure. Among the elements contained in the campaign are the “Year of Treasure” sweepstakes, which automatically enters cardholders who use their Visa card in November and December for an opportunity to win the amount of their Visa purchases made on their winning card from January 1st to December 31, 2004. 25 winners will be randomly selected at the conclusion of the promotion. Visa will also feature “Reveal the Treasure”, and online instant win game that uses eDecoder game pieces to reveal prizes including AAA vacations valued at $4,000 each and Visa AAA prepaid gift cards ranging from $100 to $500. To access the game, cardholders can visit www.Visa.com/treasure. eDecoder game pieces can be obtained from Visa’s Member financial institutions as well as AAA branches nationwide, select college campuses, movie theatres, and grass roots events. Visa is the world’s leading payment brand and largest payment system. Cardholders in over 150 countries have over 1 billion Visa branded cards, which are accepted at millions of locations all over the world.

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AmEx Signs JetBlue to Membership Rewards

JetBlue Airways has inked its first “TrueBlue” program partner. The carrier has joined the American Express “Membership Rewards” program. Beginning December 8th, AmEx cardholders enrolled in the “Membership Rewards” program will be able to transfer points directly into JetBlue’s loyalty program. JetBlue and AmEx are also launching a special sweepstakes to give 50 enrollees a chance to win the “Ultimate Reward,” a Bahamas flyaway vacation for two, with a live performance by recording artist Seal. JetBlue serves 29 destinations in 11 states, Puerto Rico, the Dominican Republic, and the Bahamas. AmEx has 23 “Membership Rewards” airline partners, 13 of which allow enrollees to transfer points directly into individual airline loyalty programs for travel.

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Benny MasterCard Signs 1-800 CONTACTS

1-800 CONTACTS Inc. has signed with Evolution Benefits for its “Benny MasterCard”-linked FSA/HRA program. Benny, a debit MasterCard(R) or Visa(R) card, enables employees who access 1-800 CONTACTS to give out their Benny card number, which will automatically draw the amount from the appropriate tax-advantaged account. Employees accessing 1-800 CONTACTS no longer have to pay with a retail credit or debit card, file claims, and wait to be reimbursed. All transactions can be performed electronically, in compliance with IRS regulations. 1-800 CONTACTS sells over 150,000 replacement lenses per day. Contacts can be ordered by phone, fax, mail, or Internet. Evolution Benefit’s Benny™ debit card applies advanced payment technologies and pioneering electronic substantiation methodologies to FSAs, HRAs, QTAs, and HSAs. Evolution Benefits currently powers the programs of almost 40 managed care organizations and over 1250 employers, which includes 30 of the nation’s top-ranked companies and hundreds of thousands of employees.

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Certegy Plans to Sell Merchant Acquiring

Certegy reported that its third quarter revenues increased 13% year-over-year to $262.7 million. The Company also announced a plan to sell the Company’s retail merchant acquiring business. Card Services generated revenue of $149.5 million in the third quarter, an increase of 6.7% above 3Q/03. The Company’s North American card issuing operation posted revenue growth of 5.2%, while international card issuing revenue increased by 26.0%. Check Services generated revenue of $113.1 million in the third quarter, an increase of 23.3% over 3Q/03. Certegy says it expects revenue growth of 14% to 16% in the fourth quarter. For complete details on Certegy’s third quarter performance, visit CardData ([www.carddata.com][1]).

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

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Affinity Card with Travel Rewards Launched

U.S. Bank has launched an affinity card that generates contributions based on activation and volume for the non-profit group, as well as rewards for the cardholder. The new “Pheasants Forever VISA” is aimed at the 2.5 million pheasant hunters across the country. The card is available as a regular “Platinum” card, or as the “Travel Rewards VISA Platinum” card. Both cards offer a 0% six-month introductory rate on purchases and balance transfers. The “Platinum” card carries an ongoing interest rate of prime +3.99% to prime +12.99%, depending on credit risk. The “Travel Rewards” version carries an ongoing interest rate of prime +5.99% to prime +14.99%, depending on credit risk. Under the “Travel Rewards” program, cardholders earn one free reward point with every net purchase dollar charged, up to 10,000 points a month. Points can be redeemed for free tickets on any airline, no blackout dates, seating restrictions, or zone restrictions. Points can also be used for merchandise and gift certificates. Pheasants Forever has more than 108,000 members in over 600 local chapters across the continent.

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Three Major Retailers Select Clearingworks

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.

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