Top Ten Volume Up 13.5% in the First Quarter

Half of the top ten U.S. credit card issuers posted above average gains in credit card volume during the first quarter. As a peer group the top ten averaged a 13.5% gain in first quarter gross dollar volume. Bank of America, the top issuer with the highest organic growth, posted a 28% increase in credit card volume during the first quarter. Citigroup, American Express, and Household posted healthy 19% gains in 1Q/04 volume. MBNA volume was up 15%, as Capital One climbed 6%. Collectively, the top issuers generated card volume of $330.8 billion for the first quarter, compared to $291.4 billion for 1Q/03, according to CardData ([www.carddata.com][1]). VISA and MasterCard’s combined U.S. gross dollar volume was $444.7 billion for the first quarter.

Top Ten U.S. Bank Credit Card Issuers
(Ranked by 1Q/04 Volume)
RANK/ISSUER 1Q/04 1Q/03 CHNG
1. AmEx $70.1b $58.9b +19%
2. Citigroup 67.8b 57.1b +19%
3. MBNA 47.2b 41.1b +15%
4. Bank One 42.2b 38.3b +10%
5. Discover** 24.2b 26.1b – 7%
6. JPM Chase 22.0b 20.7b +1%
7. Cap One 18.6b 17.0b +6%
8. BofA 16.0b 12.5b +28%
9. US Bancorp 12.7b 11.3b +12%
10. HSBC/HH*** 10.0b 8.4b +19%
TOTAL: $330.8b $291.4 +13.5%
*Citigroup includes some non-US cards.
** Discover data as of 2/29/04 ***HSBC/HH
is preliminary
Source: CardData (www.carddata.com)

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

Details

FreedomPay Picks Up $7MM in New Funding

PA-based FreedomPay, a pioneer of cashless payment and loyalty solutions, has received $7 million in funding from affiliates of Goldman Sachs Group and previous investor Nokia Venture Partners. FreedomPay, Inc. is the world leader in business process outsourcing to the global food service market delivering front of the house and back office applications built on a world class payment, loyalty and settlement services infrastructure. Goldman Sachs is a global leader in corporate equity and mezzanine investing. Nokia Venture Partners is a leading global venture capital firm based in Menlo Park, California.

Details

Hitachi-Omron Terminal Solutions Takes Shape

Hitachi and Omron have decided to start their new Company on October 1, 2004, and name it: Hitachi-Omron Terminal Solutions, Corporation. The new concern will be responsible for the planning, development, manufacture and sales of ATMs and other self-service machines, terminal systems and other information equipment as well as for the modules and solutions businesses. Under the joint venture, Hitachi will receive 55,000 shares of common stock to be issued by the new company. Omron will receive 45,000 shares of common stock to be issued by the new company. The Chairman of the Board of the new firm will be Kunihiro Kamiya, currently General Manager, E-Solutions Division of Hitachi’s Information & Telecommunication Systems. The President & CEO of the new company will be Akihiko Otani, currently Senior Managing Officer of Omron, President of Financial Systems Business Company.

Details

First Gulf Bank Launches Three VISA Products

First Gulf Bank has launched three, new VISA cards, and a promotional sweepstakes offering new cardholders the chance to win an Audi A4 automobile. FGB says its existing credit cards have among the highest spend per card in the market. It will issue its new “VISA Platinum” card by invitation only. The bank plans to target business owners and senior corporate executives for the Platinum product. The Standard and Gold cards will be offered to the general public. FGB is waiving annual fees for the first year on all three new products. All cardholders will be automatically entered into a sweepstakes to win one of three Audi A4s for each purchase made with the card. The automobiles will be awarded on July 31st, October 2nd, and November 30th of this year. First Gulf Bank was established in 1979 with headquarters in Abu Dhabi provides financial services to Abu Dhabi, Dubai, Sharjah, Ajman, and Al Ain. The bank is listed in Abu Dhabi Securities Market with a share capital of AED 374,400 million and equity of AED 668,614 in 2002.

Details

Multilateral Interchange Fees

The European Commission announced that VISA International and MasterCard International have agreed to publish multilateral interchange fees paid transactions in Europe. The EU says the move is intended to enhance retailers’ ability to negotiate the fees with the banks that are part of the VISA and MasterCard card systems. In accordance with the Commission’s decision of July 24th 2002, VISA had already allowed its member banks to reveal information about the “MIF” levels for consumer cards and the relative percentage of the cost categories composing the benchmark, at which the “MIF” has to be capped. However, merchants have repeatedly complained to the Commission that their banks are reluctant to give full information on the “MIF,” although VISA allowed them to do so. VISA has now published the “MIF” for consumer cards and the weight of the relevant costs components on its website. MasterCard Europe offered to publish on its website some of its “MIFs” and, for some cards, the relative weight of the cost elements composing these fees, and recently confirmed to the Commission its intention to do so. The EC says it will continue to monitor how VISA complies with its commitments under the exemption decision. The Commission is also investigating MasterCard’s rules and agreements, in particular those on the “MIF.”

Details

OfficeMax Selects BEETLE/M POS

OfficeMax has selected Wincor Nixdorf’s “BEETLE/M” POS systems for its 945 stores nationwide as well as Wincor’s comprehensive services solutions. The new systems allow OfficeMax to improve customer service through faster checkout times and CRM (Customer Relationship Management) capabilities at the point of sale. Wincor Nixdorf has installed 2,000 BEETLE /M systems to date, and will install approximately 2,000 additional units in 2004. Wincor Nixdorf’s BEETLE family is the most prolific open POS platform in the world. Wincor Nixdorf Inc. is one of the fastest-growing providers of IT products and solutions for the retail and banking industries.

Details

Navigating the Payments Landscape Released

The CO-OP Network has released its latest white paper, “Navigating the Payments Landscape,” which outlines the legislative developments, competitive pressures, consumer preference shifts and technology advances that are challenging credit unions’ current payments business models. The paper, produced in cooperation with WesCorp and the Applied Research Institute, was presented to Conference attendees by its authors, Tony Hayes of Dove Consulting and John MacAllister of Benton Consulting Partners. CO-OP Network, established in 1981 and located in Ontario, Calif., is wholly-owned by its credit union shareholders and provides volume discounts on products and services that include risk management as well as debit and deposit access.

Details

NetSpend Gets a Recapitalization

Prepaid debit card specialist, NetSpend has closed a recapitalization offering with Oak Investment Partners. There is enormous opportunity in the prepaid debit card marketplace. said Ann Lamont, General Partner at Oak Investment Partners. There are over 50 million Americans who are un-banked or under-banked, that generate an estimated $170 billion in annual aggregate income. NetSpend Corporation is a proven leader for prepaid debit processing platforms, offering an end-to-end approach that is unique in the prepaid payments industry. Oak Investment Partners is a growth-oriented private equity firm focused on global information technology and services with a total of $4.2billion in committed capital.

Details

Pipeline Data Snags a Former Concord SVP

MA-based Pipeline Data has hired former Concord SVP, Kevin Smith, as COO, effective May 13th. Smith will launch Pipeline Data Processing, the company s new Independent Sales Organization division and will serve as its president. Smith s primary objective will be to aggressively grow the number of merchant accounts serviced. During his four year tenure at Concord EFS, Smith was responsible for the wholesale credit card processing division, which included both operations and sales. Pipeline Data Inc. provides integrated transaction processing services for all major credit cards.

Details