PayPal Launches PayPal Web Services

PayPal introduced a set of application programming interfaces to its payments platform based on open standards. The new “PayPal Web Services” is comprised of four new informational and transactional APIs and includes PayPal’s “Instant Payment Notification” service. In its initial release, the service will provide access to “TransactionSearch” (based on specified search criteria such as payment date or customer name, returns a set of matching transaction IDs and basic transaction details); “GetTransactionDetails” (for a given transaction, returns all details associated with the transaction, such as customer email address, time of payment, and purchase details); “RefundTransaction” (for a given transaction, reverses the transaction and issues a refund or partial refund to the purchaser); and, “MassPay” (transfers funds to one or many recipients by providing an automated alternative to cutting paper checks or manually initiating individual payments).PayPal has more than 45 million member accounts globally.

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More MBNA Board Changes May be Forthcoming

TIAA-CREF’s proposal that at least two-thirds of MBNA Corporation directors be independent received 56% of the votes cast Monday at MBNA’s annual meeting of shareholders. MBNA shareholders also withheld 36% of their votes for Randolph Lerner, board chair, and 35% for Bruce Hammonds, CEO. The disputed independents, Benjamin Civiletti and James Berick, had 41% and 47% of withheld votes, respectively. Last week, MBNA announced two new independent directors. TIAA-CREF says the appointment of the two new directors was a step in the right direction, but MBNA still has not reached the two-thirds independent majority it requested in its proposal. Also, questions about the composition and independence of the board’s audit, compensation and nominating committees remain to be settled, the TIAA-CREF said yesterday. MBNA is not required to follow yesterday’s vote.

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MasterCard GDV Picks Up; Credit Card Base Declines

MasterCard International yesterday reported that its U.S. gross dollar volume for the first quarter increased 7.3% over 1Q/03 to $157.5 billion, compared to a 4.1% annual growth rate for the prior quarter. However, the number of U.S. credit card accounts declined 3.9 million, and the number credit cards decreased 10.6 million, compared to year-end 2003. MasterCard added 2.1 million debit card accounts during the first quarter. Credit card volume was up 8.0% to $126.7 billion, and debit card volume increased 4.6% to $30.8 billion. Combined purchase volume for U.S. credit and debit cards in the first quarter increased 12.5% to $102.8 billion, compared to one-year ago. At the end of the first quarter, MasterCard had 211.8 million credit card accounts representing 262.0 million cards. Debit card accounts stood at 49.6 million representing 54.4 million cards. During the quarter MasterCard processed 1.2 billion credit card transactions and more than 600 million debit card transactions in the USA. For complete details on MasterCard’s 1Q/04 results visit CardData ([www.carddata.com][1]).

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

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Diebold and Bosch Security Ink a Partnership

Diebold announced it will take on the full line of CCTV products from Bosch Security Systems, and has signed a re-seller agreement to offer Bosch’s GSA-approved alarm and CCTV products for the government market. Bosch has a wealth of product knowledge and expertise in addition to its commitment and relationships with those in the government market. Diebold is proud to be a GSA Federal Supply Schedule Contractor, and can provide a total solution for any size government application from initial site surveys through the installation phase. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security and services.

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CO-OP Network & Ingeniux Form ResolverGroup

The CO-OP Network has teamed with Ingeniux to form ResolverGroup LLC and offer “Check Management Solutions.” To bring Check Management Solutions to the marketplace, CO-OP Network partnered with Ingeniux, a leading provider of XML-based Web content, and attorneys specializing in check training, business analysis and process improvement to form ResolverGroup LLC. The result of this partnership is a Web-based product that interactively leads credit unions through an online interview process to identify their particular check issue. CO-OP Network (www.co-opnetwork.org), 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.

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Top Ten Post 11% Increase in First Quarter Card Loans

Four of the top five U.S. credit card issuers posted single digit gains in credit card outstandings during the first quarter, but as a group the top ten averaged an 11% increase. Citigroup, the nation’s largest issuer, escaped the distinction due to its fourth quarter acquisition of the Sears card portfolio. Bank of America, the top issuer with the highest organic growth, posted a 28% increase in credit card loans during the first quarter. Marketing powerhouse, Capital One, was only up 17% in the first quarter. Collectively, the top issuers held card loans of $553.9 billion at the end of the first quarter, compared to $499.2 billion as of EOY 2003, according to CardData (www.carddata.com).

Top Ten U.S. Bank Credit Card Issuers
RANK/ISSUER 1Q/04 1Q/03 CHNG
1. Citigroup* $142.3b $108.6b +31%
2. MBNA 82.9b 78.3b +6%
3. Bank One 74.2b 72.8b + 2%
4. JPM Chase 51.0b 50.6b +1%
5. Discover** 47.3b 51.8b – 9%
6. Cap One 45.3b 38.7b +17%
7. AmEx 38.1b 34.6b +10%
8. BofA 37.3b 29.1b +28%
9. HSBC/HH*** 18.8b 16.2b +16%
0. Providian 16.7b 18.5b -10%
TOTAL: $553.9 $499.2 +11%

*Citigroup includes some non-US cards, possibly $5 billion
** Discover data as of 11/30/03 ***HSBC/HH is preliminary

Source: CardData (www.carddata.com)

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Chase – Bank One Merger to Close Mid-Year

JPM Chase and Bank One announced yesterday that their merger will close mid-year and that the combined company will have 16 board members, consisting of eight Directors from each company, with fourteen independent directors except for William Harrison, who will be Chairman and CEO, and James Dimon, who will be President and COO. The Directors elected at the annual meetings on May 25 will serve until the merger is completed. Bank One Corporation ( ) is the nation’s sixth-largest bank holding company, with assets of $320 billion. J.P. Morgan Chase & Co. ( ) is a leading global financial services firm with assets of $801 billion and operations in more than 50 countries.

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VeriFone Lands Top QSR Chains

VeriFone reports that its IP-enabled payment terminals have been selected by eight of the top QSR chains in the USA. VeriFone’s growing list of QSR customers includes many of the industry’s biggest names, such as McDonald’s, BURGER KING, Taco Bell, Pizza Hut, and KFC restaurants, which are in a heated race to offer the speed and convenience of electronic payment at their restaurants nationwide. VeriFone, Inc., (http://www.verifone.com) recognized worldwide as the trusted leader in secure electronic payment technologies, provides expertise, solutions and services for today with a smart migration strategy for tomorrow.

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NOVA Pounces on European Outsourcing Opportunities

Atlanta-based NOVA Information Systems, a subsidiary of U.S. Bancorp, made a major expansion into Europe last week with deals to purchase Alliance & Leicester Commercial Bank’s merchant acquiring business, euroConex Technologies, and CardPoint. The Alliance & Leicester deal, announced Friday, gives NOVA more than 27,000 merchants in the UK. On Thursday, NOVA purchased the remaining 50% shareholding position of euroConex from Bank of Ireland. The previous Friday it purchased Polish card processor CardPoint from Bank Zachodni WBK, a subsidiary of AIB Group. In addition to the three European deals, NOVA signed a deal to acquire Union Bank of California’s merchant accounts and will provide processing services, customer service and support operations to the bank’s 10,000 merchants. NOVA provides credit and debit card processing services, software applications, electronic check conversion, gift card solutions and other value-added services to more than 650,000 merchant locations in the USA and Europe. The processor handles about $110 billion in annual credit and debit card transaction volume. (CF Library 4/28/04; 4/29/04)

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Asset Acceptance Revenues Up 43% in the First Quarter

Asset Acceptance Capital reported net income, exclusive of special items, for the first quarter of $10.9 million, a 73% increase compared to $6.3 million for the same period last year. The purchaser and collector of charged-off consumer receivables, also reported a 48.1% increase in cash collections to $65.2 million and a 43.1% increase in total revenues to $49.7 million. AAC took a one-time compensation charge of $45.0 million due to the vesting of share appreciation rights, together with $0.7 million of related payroll taxes which occurred upon the initial public offering and the deferred income tax charge of $19.3 million as a result of the reorganization in anticipation of the IPO. During the first quarter, the Company paid $12.4 million to purchase consumer debt portfolios with a face value of $514.1 million, for a blended rate of 2.42% of face value. Purchases during the first quarter consisted of 17 portfolio pools from 14 sellers. This compares to the first quarter of last year, when the Company purchased consumer debt portfolios with a face value of $897.9 million for $23.1 million for a blended rate of 2.57% of face value. For complete details on Asset Acceptance Capital’s first quarter performance visit CardData ([www.carddata.com][1]).

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

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Cubic Card Services Group Nets an Oyster Card Executive

San Diego-based Cubic Transportation Systems has landed Nicole Carroll, former marketing director for the Oyster Card, as VP of Card Services. Carroll will have global responsibility for identifying and evaluating new smart card applications that can evolve from Cubic’s core transportation-related customer base including market analysis, proposal development, and participation in industry meetings and conferences through speaking opportunities and committee memberships. Cubic Transportation Systems, Inc. is the world’s leading turnkey solution provider of automated fare collection systems for public transport, including bus, bus rapid transit, light rail, commuter rail, heavy rail, ferry and parking.

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Citigroup Targets Latin America for Commercial Cards

Citigroup Global Transaction Services last week confirmed it is launching multiple commercial payment and information management VISA card programs in Latin America and the Caribbean. Citigroup estimates the annual card spend will reach $1.4 billion by 2008. The commercial card programs will be launched initially in Argentina, Brazil, Chile and Mexico. Citibank currently offers commercial cards in over 30 countries and has more than one million corporate and government cardholders. In the last four years, the number of VISA cards for businesses and public sector institutions in Latin America grew at a compounded annual growth rate of 27% and VISA commercial cards generated $1.5 billion in annual sales volume.

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