Card Solicitations Hit an 18 Month High in February

Direct mail volumes for credit card offers increased by 36% in February, compared to January, with an estimated 347 million offers sent out. Mail volume in the credit card sector has not been that high since October of 2002, when mail volume reached 366 million, according to MINTEL’s Comperemedia. Of the top ten credit card mailers, nine of them increased mail in February compared to January. Comperemedia says for the past three months, 53% of all card offers came with a reward program, compared with 45% and 30% in 2003 and 2002, respectively. Cash back is by far the most popular reward with approximately 90% of reward cards offering cash back or a cash rebate.

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Citigroup’s Card Profits Rise 35% in the First Quarter

Citigroup reported this morning that profits for its credit card business in North America increased 35% in the first quarter to $832 million, as revenues for the quarter increased 43%. The gain was driven by its recent acquisition of the Sears store and bank card portfolio and the Home Depot portfolio. Credit card outstandings for North America increased 23% over 1Q/03 to $142.3 billion, which includes $28.1 billion in private label card outstandings. Charge volume increased 19%, from $57.1 billion to $67.8 billion. Citi’s account base at the end of first quarter was 125.6 million accounts, a 45% gain over 1Q/03. However, the number of accounts dropped 3.6 million during the quarter. Citi’s charge-offs increased from 6.25% in the fourth quarter to 6.99% for 1Q/04. Charge-offs for bank credit cards was 6.60%, compared to 5.74% one-year ago. Delinquency (90+ days) dropped slightly from 2.18% for 4Q/03 to 2.10% for the first quarter 2004. Delinquency for bank credit cards was flat year-over-year and down 5 basis points from the fourth quarter. For complete details on Citigroup’s 1Q/04 performance visit CardData ([www.carddata.com][1]).

CITIGROUP
North American Credit Card Net Revenues
1Q/03: $635 million
2Q/03: $659 million
3Q/03: $819 million
4Q/03: $1017 million
1Q/04: $832 million
Source: CardData (www.carddata.com)

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

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Debit Cards Outpace Credit Cards in the UK

Debit cards continued to outpace the growth of credit cards in the United Kingdom, as February’s volume rose more than 15% to GBP 10.5 billion. The monthly average of credit card volume for the year ending February 2004 was GBP 9.2 billion, compared to GBP 8.6 billion for the year ending February 2003. The Association for Payment Clearing Services also reported that credit card repayments grew faster than borrowing over the past twelve months. Repayments grew by 12.5% against a 7.3% growth in spending. APACS also reported that compared to January, plastic card expenditure in February remained flat, from GBP 20.07 billion to GBP 20.10 billion, reflecting the typical annual pattern. Month-on-month transaction volume grew by 2.1% to 431.2 million.

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AMEX BLUE

The first ever American Express credit card billed in bahraini dinars has been launched. The new “Blue” credit card, issued by American Express Middle East and North Africa, offers a 1% rebate on all card purchases. Cardholders may pay as little as 5% of the outstanding balance per month. The “AmEx Blue” card carries an annual fee of BHD12, and a monthly interest rate of 1.95%, compounded daily. AmEx also issues a gold credit card in Bahrain, which offers a 1% rebate on all purchases, plus access to Middle East airport lounges. American Express Middle East and North Africa issues cards denominated in United Arab Emirates dirhams. For example, the “Dubai Duty Free American Express Credit Card” offers a 10% discount on a range of over 15,000 items at Dubai Duty Free. The UAE card also offers chances to win the “Millennium Millionaire” and “Finest Surprise” sweepstakes.

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National City Card Volume Up 17%; Loans +7.5%

OH-based National City reported that its first quarter credit card outstandings rose 7.5% year-over-year to $2,443,320,152. However, card volume rose nearly 17% to $1.3 billion for the quarter, according to CardData (www.carddata.com). Sequentially, the issuer’s outstandings posted a 4.7% seasonal contraction. At the end of the first quarter, National City had 1,854,645 gross accounts and 1,123,106 active accounts. During the first quarter, National City and the Uniformed Firefighters Association of Greater New York launched an affinity “Gold MasterCard.” For complete details on National City’s 1Q/04 performance visit CardData ([www.carddata.com][1]). (CF Library 1/15/04)

NATL CITY CARD LOANS
1Q/03: $2,271 million
2Q/03: $2,417 million
3Q/03: $2,179 million
4Q/03: $2,558 million
1Q/04: $2,443 million
Source: CardData (www.carddata.com)

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

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TransFirst Launches New Division to Target ISOs/ISCs

Dallas-based TransFirst has launched its Independent Sales Services division focused exclusively on ISO/ISC and agent partnerships and has picked Nancy Newton to serve as the president. As president of TransFirst Independent Sales Services, Newton is tasked with developing, implementing and managing growth strategies that focus on expanding TransFirst’s existing ISO program into this new stand-alone division that will support national third party sales organizations and agents, as well as TransFirst direct sales. A premiere provider of transaction processing services and payment technologies, TransFirst offers a first-rate suite of merchant products and flexible, industry-specific services uniquely tailored for the special business needs of financial institutions, ISO’s, health services, e-government, online and other direct marketing retailers, as well as brick and mortar retailers.

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FTC to Hold a RFID Workshop in June

The Federal Trade Commission has scheduled a workshop, “Radio Frequency Identification: Applications and Implications for Consumers,” for June 21st. According to the Federal Register Notice, the workshop “will provide an opportunity to learn about how RFID works and to highlight its numerous and rapidly growing applications. It will also address the privacy and security concerns associated with RFID use, particularly on an item-level basis.

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National Processing Q1 Net Income Rises 40%

Louisville-based National Processing reported first quarter revenues of $122.2 million, a 15% gain over one-year ago. Net income rose 40% to $12.0 million. Merchant Card Services dollar volume processed was $44.5 billion for the first quarter, representing an increase of 13% over the first quarter of 2003. MCS transactions processed were 1.1 billion for the first quarter, an increase of 17% over 1Q/03. The Company raised its revenue forecast for 2004 to a range of $500 million to $530 million. During the quarter, Retail Ventures, which operates 116 Value City Department Stores, 21 Filene’s Basement stores, and 142 DSW stores in 29 states, renewed its credit card processing. Borders Group signed a multi-year credit card processing agreement for its 445 Borders stores and 700 Waldenbooks stores in the USA. Kwik Trip and its 350 convenience stores. And, Mimi’s Cafe and its 82 bistro-like dining establishments inked a multi-year credit card processing agreement. For complete details on NPC’s 1Q/04 performance visit CardData ([www.carddata.com][1]).

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

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SEC Ends the TSAI Restatement Investigation

Omaha-based Transaction Systems Architects has been notified that the SEC has terminated its investigation into the company’s restatement of prior period financial statements and that no enforcement action has been recommended. The company announced on August 8, 2003 that it was informed that the SEC had issued a formal order of private investigation relating to the company’s restatement of prior period financial statements. Transaction Systems Architects, Inc.’s software facilitates electronic payments by providing consumers and companies access to their money.

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TNB Signs Three More Agent Deals with CUs

Dallas-based TNB Card Services has signed agent issuing agreements with the Spirit of St. Louis Credit Union, North Alabama Educators Credit Union, and the Southside Credit Union (Texas). TNB Card Services launched its agent issuing business a year ago, and in that time more than 30 credit unions have either moved their existing card portfolios to TNB management or have begun issuing cards for the first time through TNB. 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.

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Baja Beach Club in Barcelona Deploys the Implantable VeriPay

The Baja Beach night club in Barcelona is now using the “VeriPay System” developed by Applied Digital’s VeriChip Corporation, at a night club in Spain. The system is a new syringe-injectable microchip implant for humans, designed to be used as a fraud-proof payment method for cash and credit-card transactions. The chip implant is an advance over credit cards and smart cards, which, absent biometrics and appropriate safeguard technologies, are subject to theft, resulting in identity fraud. Baja Beach Clubs International says customers like the fact that they do not have to carry a credit card or ID card with them.

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