CIBC Unloads Global Payment Stock and Makes a Derivative Transaction

CIBC Investments Limited has completed the sale of a total of 2.3 million shares of Global Payments common stock. In addition, CIBC announced that it entered into a derivative transaction with an affiliate of Citigroup Global Markets consisting of 6 million shares of Global Payments common stock, involving a series of 5 equal
sized collars of 1.2 million shares each, maturing between March 2006 and April 2007. To hedge its exposure under the derivative transaction, the affiliate of Citigroup Global Markets borrowed and sold 5,600,000 shares of Global Payments common stock in an underwritten public offering. CIBC acquired its stake in Global Payments in 2001 as consideration for the sale of CIBC’s merchant acquiring business.

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Lloyd’s Asks Cyota to Add MasterCard SecureCode with VISA’s VbV as it Prepares a National Roll-Out

Lloyds TSB announced that following a successful six-month “Verified by Visa” pilot, it has selected Cyota to add “MasterCard SecureCode” to the service and roll it out in a phased basis to Lloyds TSB’s 15 million credit, debit and charge card holders. The service is managed from Cyota’s local facility in London. Cyota currently powers systems for 3 of the top UK issuers, 7 of the top 10 issuers in the US, and 4 of the top 10 issuers in Japan, as well as multiple small to mid-size issuers, supporting over 350 million cardholders worldwide. Lloyds is the third largest UK credit card issuer by cards-in-force.

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Bank of East Asia to Install TRIAD and StrategyWare

The Bank of East Asia will use Fair Isaac’s portfolio management and account origination solutions to improve risk assessment and enhance portfolio profitability. As a result,
BEA will become the first Hong Kong-based bank to use Fair Isaac’s “TRIAD” adaptive control system for credit card portfolio management. The bank also selected Fair Isaac’s “StrategyWare” decision engine for account origination and plans to utilize the software solutions to manage its credit card and consumer loan portfolios in Hong Kong.
The Bank of East Asia is the largest independent local bank in Hong Kong with total assets of HK$198 billion.

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Sasol and Excel to Use OTI’s Fuel Payment Solution

On Track Innovations/Africa has signed an agreement with Sasol Oil to create a network of on-road retail convenience centers and sites equipped with OTI’s petroleum payment solution to service both the oil-company contracted and bank-contracted fleet market and the private motorist sector. The OTI solution will be implemented at Sasol and Exel branded sites. The agreement with Sasol is expected to double the number of gas stations using OTI’s petroleum payment solution in South Africa. Sasol Oil is the largest oil company in South Africa.

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Royal Bank of Scotland Launches a Top-Up Promotion

Royal Bank of Scotland has launched a new promotion for its top-up service, offering top-up customers who use any of the Bank’s 1,359 cash machines over the next month a chance to win one of six prizes worth GBP150 of mobile phone air time. RBS customers who use the service between May 17th and June 11th will automatically be entered. The top-up service, which has been available since April, is free of charge. The service enables customers with a pre-pay mobile phone on Orange, Vodafone, O2, T-Mobile and Virgin Mobile networks, to “top-up” direct from their bank account. Amounts between GBP10 and GBP50 can be credited to a mobile phone at one time at any RBS cash machine.
There are 34 million UK mobile phone top-up users.

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Card Tech Limited Opens Dubai Office

UK-based Card Tech Limited has opened its fifth country office worldwide with the opening of its new Dubai office. The region currently accounts for almost 25% of CTL’s client base. Located in Dubai Internet City, the office will serve as the central point of access to CTL’s technical support personnel, but will not deny clients the benefit of business services extended from the nearby Cyprus office. More than 150 banks from 60 countries use CTL software. CTL’s solutions include card issuance, merchant acquiring, authorization, message switching, encryption key and PIN management, e-commerce and fraud management.

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Ingenico Recognizes NCR’s Signature Capture Patents

Ingenico has inked a license for NCR’s signature capture patents. This license agreement, which contains a cross-license provision, will enable Ingenico and its customers to continue incorporating NCR’s signature capture features into its touch screen based payment and electronic signature capture terminals. Ingenico is a leading provider of smart card secured transaction products and systems with subsidiaries and partnerships all over the world and customers in over 80 countries and territories.

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Ingenico’s Pay@table Program Accelerates Globally

Ingenico has launched the “Pay@table” program utilizing its “i7000” family of portable terminals. The new program comes on the heels of the success of the “i5100,” which
recently became the fastest selling payment terminal in payment industry history. The “Pay@table” program encompasses the “i7300” and the “i7310” off-line portable products that allow customers to pay at ANY distance from the counter as well as the “i7770” and the “i7780” on-line portable products that allow customers to pay at the table using an on-line connection to the merchant’s authorization center. The “i7000” family is based on Ingenico’s exclusive “UNICAPT 32” architecture. Ingenico is rolling out the “Pay@Table” program worldwide, beginning initially in the following countries and regions: UK, Spain, Italy, Brazil, Argentina, Canada, USA, and South East Asia.

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FRB Wants Input on Prescreened Credit Card Solicitations

The Federal Reserve Board is seeking public comment for a report to Congress on consumers’ ability to block prescreened credit card solicitations. The FRB says its study must cover the current statutory or voluntary mechanisms that are available to a consumer to notify lenders and insurance providers that the consumer does not wish to receive prescreened solicitations; the extent to which consumers are currently utilizing existing statutory and voluntary mechanisms to avoid receiving prescreened solicitations; the benefits provided to consumers as a result of receiving prescreened solicitations; whether consumers incur significant costs or are otherwise adversely affected by the receipt of prescreened solicitations; and, whether further restricting the ability of lenders and insurers to provide prescreened solicitations would affect (1) the cost consumers pay to obtain credit or insurance; (2) the availability of credit or insurance; (3) consumers ‘ knowledge about new or alternative products and services; (4) the ability of lenders or insurers to compete with one another;and (5) the ability to offer credit or insurance products to consumers who have been traditionally underserved. Public comments are due by July 23rd and the report to Congress is due December 4th.

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PAYMENT HABITS

More than half of British consumers consistently pay-off their credit card balances each month, compared to less than 40% in the USA. Additionally, more than 10% usually paid in full. According to the Association for Payment Clearing Services’ “2003 Consumer Payments Survey,” based on dollars charged to credit cards, 77% of last year’s credit card expenditure was incurred by people who always repaid in full in the next billing period, and a further 8% was incurred by those who usually repaid in full. Based on cardholders, APACS found that in a typical billing cycle 54% of credit card holders always repaid in full; 11% usually paid in full; and only 12% made the minimum payment. The remaining 23% consisted of cardholders who carried a balance forward but made more than the minimum repayments. There were a total of 30.35 million credit cardholders in 2003. In the twelve months to March 2004, average monthly plastic card expenditure grew by 12.2% to £19.9 billion per month, shared evenly between debit cards (up 15.4% to £10.6 billion) and credit cards (up 8.7% to £9.3 billion). Monthly average transaction volumes grew by 7.5% to average 432 million card purchases per month, with debit card use up by 22.6 million to 276.1 million and credit cards up by 5.2 million to 156.0 million. Debit cards were used for 65% of all plastic card transactions during March 2004. The “2003 Consumer Payments Survey” based on a sample of 4,000 people and was surveyed by market research firm Ipsos UK last year.

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MasterCard Launches an Aggressive Effort to Build Biz Debit

MasterCard International this week added three new features to drive expansion of its “Debit MasterCard BusinessCard.” The new programs include a turn-key rewards platform called “Preferred Rewards,” a direct mail “Cash Rewards” activation campaign, and a “Sales Incentive” program for the employees of MasterCard financial institutions who secure new commercial debit card holders. “Preferred Rewards” enables “Debit MasterCard BusinessCard” holders to earn one reward point for every $2 in signature debit purchase transactions which can be combined with purchases made with personal MasterCard signature debit cards. Redemptions can be done online, and offer free air travel on any airline with no blackout dates, free merchandise, hotel stays, travel packages, and discounts at participating retailers. The “Cash Rewards” program utilizes proven direct mail pieces and cash-back offers to support small business debit cardholder activation efforts, while also providing usage-incentives for infrequent card-users. MasterCard will fund development of customized direct mail packages, handle rewards fulfillment and cover postage costs. The promotional effort also includes targeted discounts at a number of leading business merchandise providers such as Office Depot, Pennywise.com, The New York Times and IBM. The “Sales Incentive” program includes a series of sweepstake incentive promotions aimed at rewarding the internal personnel of financial institutions for acquiring small business debit cardholders. During scheduled “Debit MasterCard BusinessCard” sales drive periods, the participating institution’s sales-force will have opportunities to win valuable prizes such as a trip for two to the “Major League Baseball 2004 World Series” or the “MasterCard Alamo Bowl,” as well as Hollywood and Orlando experiences at Universal Studios Theme Parks. MasterCard reports that its “Debit MasterCard BusinessCard” experienced a 36% increase in issuers, 58% increase in cards, 67% increase in transaction volume last year, and includes more than 60 principal issuers.

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Pipeline Revenues Up 30% as the Firm Tops 10,000 Accounts

MA-based Pipeline Data reported first quarter revenues of $2.9 million, a 30% increase from the first quarter 2003. Gross profits from operations increased 21% to $521,199. The company also announced yesterday the purchase of a 1,500 merchant account portfolio from Millennium Merchant Services. The all-stock transaction represents approximately $840,000 in annual net operating income to Pipeline. The deal brings Pipeline’s merchant portfolio above 10,000 accounts. Under terms of the deal, Kent Stiritz, owner of Millennium, will receive a $500,000 line of credit to be used towards further development of Millennium. In addition to the purchase, Pipeline will become a preferred merchant processor for Millennium and will continue to provide Millennium with Pipeline’s suite of merchant processing tools. The transaction also allows Pipeline the right to purchase certain of Mr. Stiritz’s other portfolios at a predetermined price. For complete details on Pipeline’s latest performance visit CardData ([www.carddata.com][1]).

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

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