Capital One Charge-Offs Hit a Five-Year Low

Capital One’s charge-off ratio dropped for the ninth consecutive month, but delinquency has been creeping upward for the fifth straight month. During August, the issuer added $1.18 billion in managed outstandings. Cap One reported that managed charge-offs dropped to 3.87% for August, compared to 4.10% in July, and 5.34% one-year ago. In June 2003, Cap One’s managed charge-off ratio stood at 6.20%. Delinquency slipped up to 3.80% for August, compared to 3.77% for July, 3.76% in June, 3.73% in May, and 3.69% in April. Delinquency one-year ago stood at 4.74%. At the end of August, Capital One had $75.2 billion in global oustandings. At the end of the second quarter, Cap One had $45.2 billion in U.S. card loans, compared to $45.3 billion in the first quarter. COF’s global managed loan portfolio grew by $1.6 billion to $73.4 billion in 2Q/04. For complete details on Capital One’s monthly metrics and 2Q/04 performance, visit CardData ([www.carddata.com][1]).

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Capital One 2003-2004
Month Charge-offs Delinquency
Aug 03 5.34% 4.74%
Sep 03 5.24% 4.65%
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Feb 04 4.75% 4.14%
Mar 04 4.74% 3.80%
Apr 04 4.70% 3.69%
May 04 4.40% 3.73%
Jun 04 4.17% 3.76%
Jul 04 4.10% 3.77%
Aug 04 3.87% 3.80%
Source: CardData (www.carddata.com).

[1]: http://www.carddata.com
[2]: /images/g/graphs/cofperformance_aug04.jpg

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First Data’s VisionPLUS to Support JCB

JCB has inked a product development deal wherein First Data will enhance its “VisionPLUS” card processing system to support JCB products, and enable FDC clients to issue and acquire JCB cards. First Data Japan Co., formed in early 2003, has been promoting “VisionPLUS” within the region. However, FDC has been present in Japan since 2001 via a joint venture alliance with NTT Data, DC Card, and Diamond Computer Services Co; referred to as Nihon Card Processing Co. Ltd. Currently JCB has 49.6 million card members. JCB cards are accepted at 11.42 million associated merchants and supported by close ties with more than 320 financial institutions worldwide.

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APACS to Have a New Chief Executive by Jan

London-based APACS has named a new chief executive following the departure last month of Chris Pearson, the chief executive for the past eight years. Paul Smee, currently Director General at the Association of Independent Financial Advisers, will take over the position by the end of the year. Smee held his post at AIFA since September 1999.APACS is the UK trade association for payments.

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VISA Launches Get Ready for the Game NFL Promotion

VISA USA has launched the “Get Ready for the Game” promotion offering trips to the “Super Bowl” or one of sixteen $500 VISA gift cards. Visa is celebrating pre-game rituals practiced by NFL fans, players, coaches, and mascots at their Web site www.visa.com/nfl. Fans can email their pre-game stories to Visa and read about how other NFL fans prepare for the big game. Ten pre-game stories will be featured in Visa national advertisements on television. Each commercial will be posted on the Visa NFL Web page and visitors can vote on the one they like the most. Fans who use their Visa card during the NFL season will be automatically entered for an opportunity to win a trip to the Super Bowl. 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 Launches a Magazine for Centurion Cardholders

American Express is launching an exclusive custom magazine, with no name or logo, for its “Centurion” cardholders. The Centurion card is designed to provide benefits and services to people who frequently travel and entertain. “The Magazine” was made to enhance the luxury lifestyle magazine “Departures”, which covers travel, food, shopping, arts, and culture for American Express Platinum Card and Centurion Card members. Centurion membership is only offered by invitation and the annual fee is $2,500. American Express is a diversified worldwide travel, financial, and network services company and a world leader in charge and credit cards, Travelers Cheques, travel, financial planning, business services, insurance, and international banking. “Departures” was created for American Express Platinum Card(R) and Centurion Card members and is published seven times a year by American Express Publishing.

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Carreker Puts Top EDS Former Executive on its Board

Dallas-based Carreker Corporation has named Coley Clark, retired former head of EDS Global Financial Industry Group, to its board of directors. Mr. Clark joined EDS in the Systems Engineering Development Program in 1971. In 1986, he became responsible for the Financial Industry Group and was appointed as a corporate officer in 1989. In 1996, he became a senior vice president and served on the top executive team. Clark also serves on the board of FundsXpress, Inc. and BancTec, Inc. He is a former chairman of the combined Financial Services and Insurance Commission of the International Chamber of Commerce. Clark also serves several organizations in his community. He graduated from the University of Texas at Austin and attained the rank of captain in the U.S. Army, where he served for three years. Clark says he looks forward to assisting Carreker in making sales successes. Carreker Corporation improves earnings for financial institutions worldwide. It provides services to over 250 clients.

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General Purpose STV Cards Load Up on Fees

The profitability challenge of prepaid cards is being overcome by levying a wide range of fees including fees for balance inquiries, per minute fees to talk to a customer service agent, fees for declined ATM and POS transactions, annual fees, monthly maintenance fees, and a cancellation fee. The new “Hello Kitty Debit MasterCards” issued by BANKFIRST and marketed by Legend Credit, charges a $1.00 per minute fee to speak to a live agent, a 50 cent fee anytime a transaction is declined at an ATM or at the point of sale, an annual fee of $14.95, a monthly maintenance fee of $2.95, and a $10.00 fee to cancel the card. Under the program, inquiry fees through an IVR are 25 cents each while inquiries via an ATM run 50 cents each. Cardholders are also charged a $5.00 fee for making a cash withdraw from a teller within a bank or for using an international ATM. BANKFIRST also charges a $15 fee to replace a card and $10 fee to reinstate an account.

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Marriott and AmEx Launch a Fall Points Promotion

Marriott Rewards is offering members 5,000 bonus points for every third stay paid for with an American Express Card through January 31st. Members must register to become eligible for the program by visiting MarriottRewards.com or by calling 1-888-MARRIOTT (1-888-627-7468) during the promotional period. Members must live in the U.S. or Canada. Marriott Rewards points can be used toward hotel stays, frequent flyer miles, car rentals, theme park passes, retail merchandise, and more. Marriott International, Inc. is a leading lodging company with approximately 2,800 lodging locations in the U.S. and 69 other countries and territories.

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SST to Acquire Emosyn for $19 Million

Silicon Storage Technology has acquired a majority ownership of privately-held smart card IC manufacturer Emosyn LLC for $19 million. SST will acquire 83.6% of Emosyn’s assets through its subsidiary, SST International. ATMI, Inc., Emosyn’s former parent company will retain 16.4% ownership of the company. Emosyn’s employees will from a subsidiary of SST and continue to operate as a separate entity, designing and developing ICs on SST’s SuperFlash technology for the smart card market. The subsidiary will continue to have an R&D center in Silicon Valley as well as marketing and application offices in the United Kingdom and Singapore. Emosyn is a fabless semiconductor manufacturer of integrated circuits, providing security of personal and portable information including cell phones, National ID card schemes, and bank cards. SST designs, manufactures, and markets a range of nonvolatile memory solutions based on SuperFlash technology for high volume applications in markets such as digital consumer, networking, wireless communications, and Internet computing.

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ADS Signs an AIR MILES Deal with RONA

Dallas-based Alliance Data Systems has partnered with a major Canadian retailer and distributor of hardware, renovation, and gardening products, to offer the “AIR MILES Reward Program.” RONA, a sponsor in Quebec since the launch of the “AIR MILES Reward Program” in 1992, extended its involvement in the established marketing program, with a national, multi-year contract. Effective immediately, collectors can earn one “AIR MILES” reward mile for every $20 spent at RONA and other RONA banners, cumulatively throughout a month. “AIR MILES” reward miles can be redeemed for more than 800 different rewards, such as movie passes, family attractions, CDs and DVDs, electronic merchandise, sports and recreation, travel, and more. RONA operates a network of some 530 franchise, affiliate, and corporate stores of various sizes and formats. The “AIR MILES Reward Program” has more than 15.4 million Canadian participants.

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MAESTRO 2Q/04

MasterCard added 21 million “Maestro” PIN-POS cards during the second quarter, bringing its global “Maestro” portfolio to 545 million cards. At mid-year, cards bearing the “Maestro” brand could be used to withdraw cash from more than 900,000 ATMs as well as to make purchases at more than seven million “Maestro” merchant locations worldwide. In the USA, “Maestro”-processed transactions grew 92% during the first six months of this year. In the U.S., new acquirer and major
merchant direct connections to the “MasterCard Debit Switch” and
“Maestro” issuer decisions to designate the “MDS” as their preferred
routing channel for online debit transactions fueled the increase.
Europe continued to be the largest cardholder base for “Maestro” with
253 million cards, a 10% increase over the same period in 2003. GDV for
online debit activity in the region for the second quarter was $274
billion. The number of “Maestro” cards issued in Asia/Pacific was 148
million with GDV of $34 billion for the second quarter. In Latin
America, “Maestro” card numbers grew 36% to 72 million cards, compared
to the end of the second quarter in 2003. GDV for online debit activity
in the region for the second quarter was $10 billion. The South Asia,
Middle East and Africa region also experienced exceptional card growth
with a 40% increase to 25 million cards at the end of the second
quarter, compared to the end of the second quarter of 2003. GDV for
online debit activity in the region for the second quarter of 2004 was
$16 billion.

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