China Merchant Bank has launched the first VISA platinum debit card in Asia Pacific. The new card is targeted at high net worth individuals as well as business travelers. CMB is also launching a VISA gold debit card. CMB’s VISA platinum debit card is a dual currency US dollar and local RMB debit card which can be used both domestically within China, and internationally. Customers with a minimum of RMB 500,000 in their deposit and investment accounts are entitled to apply. Those with a minimum balance of RMB 50,000 can apply for the VISA gold debit card. The card will be issued in all 350 branch outlets across over 30 major cities in mainland China.In Asia Pacific, VISA has 86 member financial institutions who issued 38.4 million debit cards at the end of 2003.


On Track Innovations Sells Interest in e-Smart System

On Track Innovations has sold its 50% stake in the e-Smart System joint venture to its partner. The sale of OTI’s interest in the
e-Smart System joint venture is expected to result in multiple strong marketing channels for OTI’s products in the Asian market by enabling OTI to
focus on directly selling its SmartID products while e-Smart continues to distribute OTI’s micropayments and other products on a non-exclusive basis. For 2003, and the three-month period ended March 31st, the e-Smart Systems joint venture accounted for approximately 1% and about 0.6% of OTI’s total revenues on a consolidated basis, respectively. OTI designs, develops and markets secure contactless microprocessor-based smart card technology to address the needs of a wide variety of markets.


LEGIC Teams with UK-based Total Security Protection

Contactless smart card specialist, LEGIC Identsystems, has named Total Security Protection as its latest license partner in the United Kingdom. TSP handles the installation, maintenance and support of biometric access control, CCTV and electronic security systems for a wide range of commercial organizations throughout Europe in including credit card companies. TSP says the new LEGIC System Integrator’s license will be a great asset to the company and will allow them to incorporate LEGIC based readers and cards into customers access control systems to provide a total security solution.


Mosaic Supports the New Hypercom Terminal

Mosaic Software has certified the Hypercom “L4100” interface to Mosaic’s “Postilion” transaction processing software. Together, the Postilion solution and the L4100 terminal offer retailers the most secure, flexible, and efficient authorization system. Mosaic Software is a global EFT software company with over 200 customers in more than 40 countries. The Company’s Postilion represents the forefront of next-generation payment processing software. Hypercom is a chief provider of electronic payment solutions. Their comprehensive card payment terminals, network, and server solutions help merchants and financial institutions create revenue and increase profits.



The National Bank Of Kuwait SAK has launched the first “SideCard” in the Middle East, North Africa and Pakistan Region. The new “NBK Mini MasterCard” is 33% smaller with smoother and sleeker lines then the “Classic MasterCard” and can be attached to a keychain. The card is issued as a supplementary card and cannot be used at ATMs. NBK is the largest financial institution in Kuwait. In 2003, NBK reported a record net profit of $412 million (a 14% increase over the prior year) with a return on average equity of 27.7%, a return on assets of 2.27% and total assets of $18.4 billion.


Fair Isaac Beefs-Up LiquidCredit

Fair Isaac has released the latest version of its “LiquidCredit” decision engine, a browser-based instant credit decisioning solution that combines advanced analytics and process automation to help lenders evaluate consumer and small business loan applications and make more informed lending decisions. The tool is used by more than 300 financial institutions worldwide. “LiquidCredit v6.3” incorporates additional bureau-delivered credit risk scores, including Equifax’s “BEACON 5.0” and the companion industry option models, which offer more refined risk prediction and are more consumer-friendly due to improved inquiry logic. Additionally, the enhanced bureau data is available in a parsed format, giving users access to the specific data fields that bureaus return. These latest enhancements provide lenders with more flexibility in servicing their customers and determining the proper credit/pricing offer while effectively managing risk. Several new Fair Isaac clients have already chosen “LiquidCredit 6.3” as their credit decision engine, including Houston-based Sterling Bank.


Certegy Completes Saks Installation

Certegy has completed the installation of its check authorization platform at 62 Saks Fifth Avenue stores and 54 Off 5th stores. Certegy’s ability to manage risk under the current check services agreement with the Saks Department Store Group influenced Sak’s decision to convert its SFAE stores to the Certegy platform. Certegy serves over 329,000 retail outlets in North America, Europe, and Asia Pacific, making it the world’s leading provider of check risk management solutions. Saks Incorporated operates Saks Fifth Avenue Enterprises as well as its Saks Department Store Group, which includes 241 department stores.


VeriFone Names a New CFO

VeriFone has named Barry Zwarenstein as SVP/CFO, effective today. Mr. Zwarenstein’s responsibilities will include finance, investor relations, legal, human resources, and IT functions. Zwarenstein held various positions such as CFO for FMC Corporation, Logitech S.A., Acuson Corporation, and Iomega Corporation. He holds a Bachelor of Commerce degree from the University of Natal, South Africa and a MBA from the Wharton School of Business at the University of Pennsylvania. VeriFone, Inc. delivers solutions for the financial, retail, petroleum, government, and heathcare markets. The Company has shipped over 11 million electronic payment systems.


Carreker Hires Buglioli for GPC

Dallas-based Carreker Corporation has hired Lou Buglioli for its Global Payments Consulting division. Mr. Buglioli has 34 years of experience in financial services and consulting. He will be advising Carreker clients on payments strategy, operations, and technology infrastructure and implementation. He will also serve as a leader to the GPC division. Carreker Corporation helps financial institutions improve their earnings.


VISA to Launch New Business Ads

Seeking a higher slice of business and government spending, VISA USA is rolling-out a completely new print advertising campaign to support its commercial offerings. The new campaign, which will begin at the end of this month, is designed to demonstrate a different way of thinking about the business of paying and being paid. The new ads will feature a new tagline that reads ‘It’s everywhere you want your company to be’, and an image of the “Swan Chair,” designed by Fritz Hanson, to symbolize a platform from which businessmen and women can voice their aspirational business goals and desires. The new ads will also incorporate a more bold use of color using a black, gold and white theme that clearly differentiates from VISA’s consumer image, and a series of icons to represent core components of VISA’s commercial offerings, including “Information Management” and “Knowledge” services. VISA’s new CCE metric estimates total business and government spending of $14.3 trillion by the end of this year, nearly twice that of the $8.2 trillion consumer spend predicted by the governments “Personal Consumption Expenditure.” (CF Library 5/19/04)


Record ROA to Deteriorate Slowly

As soon as the stock market closed yesterday banks across the country began raising the prime rate from 4.00% from 4.25% following the Fed decision two hours earlier to raise the federal funds rate by 25 basis points to 1.25%. Six of the nation’s largest issuers will apply the new prime rate to their variable rates beginning in July. Chase, Discover, Bank of America, and Household Bank use the last business day of the month as rate adjusting dates. American Express uses the higher of the 1st or the 20th of each month. Citibank, sets its rates two days prior to the closing date of the billing cycle. Historically, a rising prime rate has dampened credit card profitability. Variable rate cards did not become popular until 1993 following the introduction of the General Motors MasterCard in the fall of 1992. Since then a high prime rate, which generally trends with the cost-of-funds, has correlated with weak profits. In 1998 when the prime rate held at 8.50%, the average pre-tax

ROA dropped to 2.5%. Last year, with the prime rate hovering between 4.00% and 4.25%, marked a record year for card profits as the average pre-tax ROA hit 4.4%.


Profitability vs Prime Rate
1992 3.1% 6.29%
1993 3.3% 6.00%
1994 3.9% 7.04%
1995 3.6% 8.85%
1996 3.3% 8.27%
1997 2.6% 8.44%
1998 2.5% 8.38%
1999 3.1% 7.98%
2000 3.6% 9.21%
2001 4.0% 7.02%
2002 4.2% 4.67%
2003 4.4% 4.12%
Source: CardData (