GPN Profits Up 36% in the First Quarter

Atlanta-based Global Payments reported reported that net income for the first quarter grew 36% to $16.5 million compared to the prior year quarter. Revenue for the quarter was up 30% to $162.6 million. The performance was primarily driven by high-teen transaction growth in the Company’s ISO and domestic direct distribution channels. GPN also says it continues to gain operating leverage through greater economies of scale and the ongoing consolidation of operating functions. As a result, the Company raised its fiscal 2004 annual revenue guidance of $597 million to $617 million, to a range of $610 million to $620 million, reflecting growth of 18% to 20%. GPN noted that $18.3 million in first quarter revenues were due to recent acquisitions, which primarily consists of DolEx and, to a lesser extent, the MUZO acquisition which was announced on February 20th. The MUZO acquisition marked the Company’s official entrance into the European payments market. For complete details on Global Payments first quarter performance visit CardData ([www.carddata.com][1]).

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

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Cap One Promotes McFarland to Controller

Capital One has named Susan McFarland to the post of Corporate Controller. McFarland will be responsible for overseeing corporate accounting and reporting functions for the company, as well as corporate tax and the financial control environment. In her previous two years at Capital One, McFarland has been serving as CFO for Capital One’s largest business line, US Card, and has provided support to the company’s various corporate infrastructure groups including IT and Human Resources. Capital One Financial Corporation is a holding company whose principal subsidiaries include: Capital One Bank and Capital One, F.S.B., which offer consumer lending products, and Capital One Auto Finance, Inc., which offers primarily automobile financing products.

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Oberthur’s EBITDA Grew 49% Last Year

Smart card manufacturer Oberthur Card Systems reported this week that its EBITDA increased 49% to $69.4 million last year, and that its EBIT was almost five times higher than the previous year, representing the Company’s best net profit since its creation. Oberthur also reported it delivered 127.8 million smart cards last year, a 29% increase compared with the prior year. The Company says smart payment cards represent its most important market, poised to take advantage of the coming huge renewal market in Europe. However, Oberthur remains in a difficult environment as the average selling prices of its products declined by 11.1% last year at constant exchange rates. Gross sales for the full year of 2003 hit $531 million, compared to $544 million in 2002, and $598 million in 2001. Smart payment card revenues climbed 9.4%, from $97.5 million in 2002, to $106.6 million in 2003. Smart payment cards revenues in 2001 were $54.2 million. For complete details on Oberthur’s 2003 performance visit CardData ([www.carddata.com][1]).

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

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AmEx Offers to Settle Currency Exchange Suit

American Express has made a $66 million settlement offer to settle class actions regarding its foreign currency conversion practices. The Company also agreed to make certain changes to the disclosures in its cardholder agreements and billing statements. The motion, filed in February, also asked the court to enjoin all other proceedings related to the matter. The motion was approved by the Court however, the proposed settlement remains subject to final approval which is expected to be considered by the U.S. District Court for the Southern District of Florida later this year. American Express also reported that a purported class action lawsuit filed during June 2003 in the Circuit Court for Davidson County, Tennessee was remanded to the State Court on plaintiff’s motion and was dismissed voluntarily without prejudice in January. The suit alleged an unlawful antitrust tying arrangements among the Company’s charge cards, credit cards and “debit cards”. AmEx has been named in a number of class actions in which the plaintiffs allege an unlawful antitrust tying arrangement between the Company’s charge cards, credit cards and debit cards in violation of various state and federal laws.

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Postal Service Investigates Providian Mailings

Providian reported that it is under investigation by the Civil Division of the U.S. DOJ and U.S. Postal Service over allegations it received discounted bulk mail postage rates on certain mailings between 1997 and 2001 that were not eligible for a discount. The issue has received a subpoena from the U.S. Postal Service. Providian says to the best of its knowledge, the allegations involve claims that such mailings were not eligible for bulk mail postage rates because requirements relating to the updating of mailing lists were not satisfied. The Company says if they were not entitled to receive the discounted rates, it could be subject to treble damages, penalties, and other relief. Providian also confirmed it has been sued California in January over its minimum payment calculation which, allegedly results in improper over-limit fees. The lawsuit also challenges Providian’s payment posting practices which result in alleged improper interest charges and late fees. Last month another lawsuit was filed in Orange County, California alleging that a cardholder’s APRs were increased improperly without proper notice. Providian also noted it is continuing to have settlement discussions with its former CEO, Shailesh Mehta.

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Chockstone Meets VISA CISP

Stored value card processor, Chockstone, announced it has fully complied with “VISA CISP.” As Visa CISP compliant, Chockstone is certified under Visa to be up to date with the utmost security regulations assigned by 3rd-party assessors as well as Visa itself to ensure protection of sensitive cardholder information. Chockstone is the Technology Behind Stored Value(TM). As the leading stored value card processor, Chockstone focuses on integrated gift, loyalty, and marketing card programs for multi-unit QSR and retail organizations. Chockstone’s services enable retailers to strengthen their relationships with their customers and drive incremental profits.

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iGames Still Pursues a Deal with Equitex

After an acquisition deal between iGames and Equitex came apart last week, iGames followed up with a merger offer this morning after releasing its fourth quarter earnings report. This offer replaces the proposed acquisition by iGames of Chex Services, Inc. from Equitex under the November 3, 2003 stock purchase agreement with Equitex, Inc. that was terminated by iGames on March 12, 2004. iGames Entertainment, Inc. provides cash access and financial management systems for the gaming industry, focusing on specialty transactions in the cash access segment of the funds transfer industry through its Money Centers of America, Inc. and Available Money, Inc. subsidiaries.

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Card ABS Yield Hits a Record Low in January

Gross revenues, or yield, from securitized credit card portfolios continued to follow a long-term trend of decline and fell to a record low during January. According to Moody’s “Credit Card Credit Indexes” yield, the annualized percentage of income, primarily finance charges and fees, collected during the month as a percent of the total loans, fell to 16.29% during January compared to 17.23% one-year ago. On a year-over-year basis, the yield has fallen for 30 consecutive months. Most of the drop in yield is attributable to the low interest rate environment as well as issuers’ aggressive promotional and low, fixed rate offers. For the month of January, cardholders paid back, on average, 16.02% of their credit card debts, above the rate of 15.68% recorded in January 2003. The chargeoff rate fell to 6.54%, down from 6.59% a year ago, marking the second month in a row in which the charge-off rate improved after over a year of nearly uninterrupted deterioration. The January delinquency rate fell to 5.08% from 5.49% a year ago, the sixth consecutive month of improvement.

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British Cardholders Want Card T&C Clarity

The U.K. Office of Fair Trading yesterday released a report on credit card disclosure and found that three-quarters of British cardholders do not know what APR applies to their card, despite being aware that this is the key piece of comparative cost information. The research also revealed that 60% of consumers have a “very good understanding” or “understands a fair bit” as to credit card terms and conditions, but they couldn’t generally answer specific questions or extract key information. The OFT found that 21% of those surveyed who did not pay off the balance in full each month have credit card balances of £1,000 or more. Also, brand loyalty is an important factor, with many consumers simply taking cards from their own bank. Consumers say key financial information must be displayed prominently and separately from the general terms and conditions of agreement if consumers are to use it effectively.Additionally, consumers like the concept of a simple summary box, containing the APR charged, details of any additional charges, the interest rate, the minimum payment to be made, the interest free period, the period over which interest is charged and the credit limit. The research involved interviews with a representative sample of 1,890 consumers. Based on the responses, the survey found that over 70% of people surveyed have at least one credit card, with 37% of cardholders having two or more credit cards.

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Pipeline/SecurePay Offers WAY Systems

MA-based Pipeline Data’s SecurePay subsidiary has signed a deal to distribute WAY Systems’ mobile POS solution to the US market. The SecurePay / WAY Systems partnership provides the industry’s first truly turnkey mobile POS solution that includes a mobile transaction terminal “MTT,” mobile thermal printer, an activated wireless data plan and merchant payment processing using SecurePay’s payment gateway. The MTT solution is delivered to the merchant immediately ready for payment processing, with no additional hardware, software or activation required. Pipeline Data Inc. provides integrated transaction processing services for all major credit cards.

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Smart Transaction Systems Certifies Hyperware

CO-based Smart Transaction Systems has certified Hypercom’s “T7Plus” and “ICE” card payment terminals for gift and loyalty programs that run on “HyperWare 08A” transaction software solution. Hypercom’s modular, multi-function and multi-faceted HyperWare supports the STS turn-key gift card program which, when combined with a loyalty program, allows merchants to segment their customer base and manage different types of rewards programs for each type of customer. Smart Transaction Systems provides card-based payment systems, customer loyalty and CRM programs to a wide variety of companies throughout the United States. Hypercom Corporation is a leading global provider of electronic payment solutions that add value at the point-of-transaction for consumers, merchants and acquirers, and yield increased profitability for its customers.

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Certegy Signs Processing Deal with AA FCU

Certegy has inked a five-year agreement to provide American Airlines FCU credit card processing, card loyalty, business development and consulting services for AA Credit Union’s new VISA card program, which is scheduled to launch mid-year. With more than 200,000 members and $3.9 billion in assets, AA Credit Union is the largest credit union in Texas, and the seventh largest credit union in the United States. AA Credit Union was founded in 1936 by a small group of American Airlines employees at Midway Airport in Chicago. Certegy provides credit and debit processing, check risk management and check cashing services, merchant processing and e-banking services to nearly 7,000 financial institutions, 117,000 retailers and 100 million consumers worldwide.

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