Signature Captures the New Affluent Market

VISA’s six-year old “Signature” credit/charge card has quietly been stealing affluent cardholders from American Express, racking up approximately $80 billion in transaction volume, more than AmEx “Gold” and “Platinum” combined. VISA estimates it now has 16 million cardholders with annual incomes of more than $100,000, compared to 5 million for American Express. A recent study also showed that VISA has a 37% share of general purpose card dollars spent annually by “New Affluent” individuals, as compared with AmEx’s 19%. To bolster its efforts to capture more share in the affluent market segment, VISA kicked-off an extensive marketing program offering special “VISA Signature” events at select airports and restaurants, leading into a print, television and radio advertising campaign in August. The affluent segment is defined as individuals, 35 to 54, with household incomes of $125,000 and higher who typically are employed as professionals and managers. While the new affluent segment comprises only 7% of all U.S. households today, it accounts for 15% of U.S. spending. On average, these affluent cardholders spend 2.5 times more each month on their credit cards than average cardholders. VISA says the “Signature” card program represents less than 3% of VISA cards in U.S. circulation, but accounts for 17% of VISA USA’s total credit volume.

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MERRILL+ VISA Offers a Mortgage Promotion

Merrill Lynch has launched a limited promotion to reward cardholders of its “MERRILL+ VISA” or “VISA Signature” with points if they finance or refinance their home through Merrill Lynch Credit Corporation. “MERRILL+ VISA” cardholders are eligible to earn up to 45,000 points and either a $250 or $500 credit toward closing costs when they complete a Merrill Lynch mortgage. “VISA Signature” cardholders are eligible to earn up to 15,000 points. The offer is valid on financing closed after July 1st and applications received by December 31st; closing must take place by February 28th. Merrill Lynch and MBNA launched their co-branded credit cards in April, offering rewards tiered to card volume. The new “Merrill+ VISA” offers a credit limit up to $250,000, free nights at The Ritz-Carlton, and free upgrades on international tickets with British Airways. The benefits are tiered with “+Benefits” available to all cardholders; “+2 Benefits” for those charging $20,000 or more annually; and, “+3 Benefits” for those charging $50,000 or more annually. (CF Library 4/27/04)

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CheckFree Wins the Wachovia EBP Contract

CheckFree has signed a five-year contract extension with Wachovia Corporation to provide fully outsourced electronic billing and payment services to Wachovia’s entire online banking customer base. With this agreement, Wachovia will leverage CheckFree’s high-quality electronic billing and payment processing capabilities and CheckFree Web, its consumer-centric user interface, to deliver industry- leading capabilities to Wachovia’s online customers. The contract includes provisions to ensure mutual success and provides access to the entire CheckFree infrastructure. CheckFree is a provider of financial electronic commerce services and products.

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PSECU Posts Strong Q2 Gain in Outstandings

The Pennsylvania State Employees Credit Union posted a strong 7%+ gain in outstandings during the second quarter. Over the past five years the PSECU credit card portfolio has grown 27% and nearly 300% since 1994. MO-based Anheuser-Busch Employees Credit Union also posted a significant gain in the second quarter, growing more than 11% year-on-year. Since 1998, the ABECU credit card portfolio has had a loyal cardbase of approximately 26,000 accounts. TX-based Randolph Brooks FCU and CA-based Vista FCU also produced decent second quarter gains of 4.4% and 9.4%, respectively. CA-based Travis FCU posted a contraction in 2Q/04 outstandings as its account base shrunk by 3.4%. For complete details on second quarter results for the nation’s leading issuer visit CardData ([www.carddata.com][1]).

2Q/04 SNAPSHOT
ISSUER OUTSTANDINGS Y/Y ACCOUNTS Y/Y
PA State Emp CU (PA) $213,114,518 +7.1% 112,794 +1.1%
Randolph Brooks FCU (TX) $ 90,829,473 +4.4% 76,081 +10.3%
Travis FCU (CA) $ 74,886,665 -1.1% 40,653 -3.4%
Anheuser-Busch Emp CU (MO) $ 38,823,716 +11.1% 26,021 -1.9%
Vista FCU (CA) $ 31,402,304 +9.4% 14,468 +8.2%
Source: CardData (www.carddata.com)

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

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TNB Signs Four Processing Agreements

Dallas-based TNB Card Services has signed four more card processing partnerships, representing a total of 7,000 accounts. The new processing clients are University & Community Federal Credit Union, Southwest Oklahoma Federal Credit Union, and Western Sun Federal Credit Union, all in Oklahoma, and Community First Credit Union in California. TNB Card Services, owned and directed by credit unions since 1976, provides full-service credit and debit card processing, as well as an agent issuing solution for credit unions nationwide. Serving more than 400 credit unions and managing more than one million cards, Dallas-based TNB enables credit unions to enhance member loyalty through credit union-branded card products.

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BP Signs Dresser Wayne for POS Dispensers

TX-based Dresser Wayne has inked a five-year POS global dispenser sole supply agreement with BP. The relationship is intended to challenge both parties to develop innovative business solutions that will create significant improvement in overall performance and benefit both BP and Dresser Wayne. Dresser Wayne, a business unit of Dresser, Inc., is a technology leader in the manufacture, supply and service of retail and fleet petroleum fuel dispensers, dispenser control systems, credit/debit card processing terminals, and point-of-sale systems.

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MBNA Stock Rating Cut as Loan Growth Slows

Raymond James cut its rating on MBNA from “strong buy” to “outperform.” RJ says it has concerns about weak asset growth in the overall credit card market. RJ says it anticipates that bottom-line results for MBNA over the next couple of quarters will be solid, but the company needs loan growth to grow its bottom line, as lower loss levels only make a modest contribution to the company’s earnings heading into 2005. MBNA’s credit card outstandings declined for four consecutive months after peaking at $104 billion in December. In May, the trend reversed as MBNA added $500 million. However, May’s outstandings were $100.3 billion, down nearly $4 billion since December. MBNA recently reported that domestic credit card loans for the first quarter were $82.9 billion. MBNA’s stock is trading down today, around $24.64 per share. (CF Library 6/15/04)

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Diebold Lands a Chinese ATM Management Deal

China’s Bank of Communications has awarded its first contract for managed ATM services to Diebold. According to the agreement, Diebold’s will provide comprehensive managed services, including content distribution, event monitoring, and transaction processing data collection based on Web technology. Diebold will manage BoCOM’s ATM network of more than 5,000 terminals across more than 2,000 business outlets. The project is the first nationwide large-scale managed services deal in the self-service industry within the China market, according to CardFlash International. In October 2003, BoCOM initiated its nationwide “ATMnet Managed Services” project.

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Rewards Network Adds Canadian Restaurants

Chicago-based Rewards Network has expanded its dining
rewards program into Canada. The company launched its Canadian presence
in the Southern Ontario marketplace, including the Greater Toronto area, adding new restaurants to its U.S. roster of more than 10,000 establishments. The firm plans to expand with additional restaurants in the Southern Ontario market as well as other Canadian cities in the near future. Rewards Network is also scheduled to launch Rewards Network Canada with two major Canadian corporate partners, with operations from coast to coast. Additionally, Rewards Network will expand its “Hotel Rewards” program into Canada by late summer.

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Rewards Network Heads North of the Border

Chicago-based Rewards Network has expanded its dining rewards program into Canada. Additionally, Rewards Network will expand its Hotel Rewards program into Canada by late summer. Rewards Network, headquartered in Chicago, provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform. Incentives are offered through the Rewards Network branded program, airline frequent flyer dining programs, club memberships and other affinity organizations.

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Canada Post Acquires the BCE Emergis’ webdoxs

Canada Post’s epost has acquired BCE Emergis’ online bill delivery
service. The acquisition of webdoxs cost epost $14.5 million.
epost will combine the existing epost and webdoxs business-to-consumer
services to provide Canadians with a single, EBPP service. Once
combined, the enhanced epost service will represent a single and
comprehensive electronic document delivery network that connects
Canadian businesses and consumers online. Available through the online
banking Websites of Canada’s top financial institutions, and epost’s
additional access channels, the combined service will have more than one
million registered consumer users, and will be available to the almost
10 million Canadians now banking online. The new combined service is
scheduled to be available to Canadian consumers in approximately six months.

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