InterCept Merchant Services Attracts More Interest

Atlanta-based InterCept confirmed yesterday it is in discussions with two potential buyers for its merchant services division. The Company also reported that its overall fourth quarter revenues were flat at $65.1 million, however, revenues from its financial institution services segment rose 17% to $48.3 million. Last month, InterCept announced a pending sale of its entire merchant services division to an independent provider of merchant payment services for both traditional and Web-based merchants. But another independent bidder has entered the picture, and InterCept is now considering a separate sale of its iBill unit of the merchant services division. The Company says it believes breaking the sale into two pieces will boost the sales price for the entire division above the $37.4 million announced last month. During the fourth quarter, revenues from the merchant services division were $13.8 million, a 28.8% decrease compared with $19.4 million for the three months ended December 31, 2002. Revenues from the merchant services division were $61.4 million for full-year 2003, as compared with $54.7 million for 2002. InterCept has rescheduled its quarterly conference call to March 23. For complete details on InterCept’s 4Q/03 performance visit CardData ([www.carddata.com][1].)

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

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TNS IPO Prices at the Top of its Range

Reston, VA-based TNS, Inc. d/b/a Transaction Network Services, raised $80 million yesterday in an IPO, and is now trading as “TNS” on the NYSE. The shares are being offered by an underwriting group managed by JPMorgan Securities, Inc. and Lehman Brothers Inc. and co-managed by Credit Suisse First Boston LLC, William Blair & Company L.L.C., and SunTrust Capital Markets, Inc. TNS, Inc. has granted the underwriters an option to purchase an additional 663,000 shares of common stock to cover over-allotments. TNS, Inc.’s common stock will begin trading today on the NYSE under the symbol “TNS”.

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OBERTHUR 2003

Smart card manufacturer Oberthur Card Systems reported yesterday that 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 430.1 million euros, compared to 440.2 million euros in 2002, and 484.1 million euros in 2001. Smart payment card revenues climbed 9.4%, from 78.9 million euros in 2002, to 86.3 million euros in 2003. Smart payment cards revenues in 2001 were 43.9 million euros. During 2003, Oberthur Card Systems re-organized itself in order to better respond to its customers needs regardless of geographical location, market – Payment, Mobile Communications, Identity, Security, Transit and level of sophistication. The Company also transformed its industrial organization, making it more efficient and more flexible by homogenizing its different production processes. Oberthur Card Systems also increased its capacity with the expansion of its Chinese embedding and personalization site for mobile communications cards in Shenzhen.

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POS Terminal for Theatre Operators Unveiled

Atlanta-based Radiant Systems has introduced a rugged, small footprint POS terminal for theatre operators. The new “Radiant P1210” terminal is powered by the Intel “Celeron” processor and offers an open platform that runs virtually any POS software. The screen is a resistive touch screen, 12.1″ XGA, active matrix display. It has a three-track integrated magnetic stripe reader for credit, debit, loyalty, and employee ID cards. Radiant Systems provides store technology for the foodservice, petroleum and convenience store, and cinema industries.

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OFT Investigates Eight Card Issuers Over Penalty Fees

The Office of Fair Trading has confirmed it has made recent inquiry to eight card issuers for details on interest rates and fees triggered by default. The OFT is looking for revenue generated from penalties imposed on cardholders. The investigation came to light in response to a report by a parliamentary committee. In December, Parliament’s Treasury Select Committee ordered issuers to stop overcharging and misleading customers. Barclays 0% balance transfer credit card offer was criticized by the Committee as it requires cardholders to charge 50 pounds per month at a 17.9% rate, that cannot be repaid before the interest-free balance.

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Catuity Annual Revenues Up 68% But Target Impact to Follow

Catuity reported annual revenues of 2003 of nearly $5 million, a 68% increase over the prior year. Over the past five years, the Company’s losses have narrowed from $6.2 million in 1999 to just $595,000 last year. Last year was the first year Catuity earned a significant percentage of its total revenue from license fees. A total of approximately $1.75 million, or 35% of 2003 revenue came from license fees compared to $46,000 in 2002. License revenue in 2003 was primarily from its software installations at VISA USA and Target Corporation. As a result, of the increased revenues and on-going cost control efforts, the Company’s loss in 2003 was reduced to approximately $600,000 from a loss of approximately $2.8 million in 2002. However, in February, Target Corporation advised Catuity that it intends to phase out the use of smart chip technology over the next twelve months. As a result, the Company does not expect to record additional license revenue from the “smart VISA Rewards” platform in 2004 and beyond. Catuity says it hopes to continue to work with both Target and VISA as they each develop their future plans for the use of loyalty software. Catuity is a leading provider of loyalty program management and e-coupon software to merchants, card issuers and processors.

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Diversinet Passport ONE Powers Chinese M-Certs and M-Commerce

Guangdong Electronic Certification Authority and Diversinet have signed a cooperative agreement to work together to stimulate China’s emerging m-commerce and m-certs market. Using Diversinet’s “Passport ONE” security infrastructure software to implement the m-cert system, Guangdong CA will operate the system and issue the m-certs, and the two entities will engage in joint sales and marketing activities to promote m-certs and m-commerce solutions. “Passport ONE” is a standards-based security solution for wired platforms and wireless devices, such as personal computers, smart cards, PDAs and mobile phones. “Passport Certificate Server” allows the deployment of secure applications such as e-mail, messaging, secure ID, and information delivery to any mobile device including Palm, Windows Mobile Pocket PC, Symbian and Blackberry wireless handhelds. The software complies with the Chinese digital certificate standard, which enables it to be the first foreign product that can deliver a viable mobile business solution. China now has more mobile phones than landlines, according to recent data from the China Ministry of Information Industry. Mobile subscribers in China increased by more than 30% in 2003 to 269 million, versus 263 million fixed-line phones. Analysts expect mobile handsets and high-bandwidth wireless networks to pave the way for rapid adoption of data applications and services.

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Automated Reg E Card Dispute Solution Released

TX-based VECTORsgi has released “VECTOR:Resolve-RegE” which addresses the resolution of ATM and debit disputed transactions, covering more than 20 different claim types, including those originating from bank’s proprietary ATMs, national and regional ATM networks, POS debit card claims, and ACH unauthorized and revoked claims. The widespread use of electronic transaction methods has drastically increased payment disputes, and banks are hard pressed to track and monitor the claims before the mandated deadline for chargebacks, re-presentments and requesting sales drafts. Difficulty in managing that workload is a key contributor to incurring losses, which cost the banking industry millions of dollars annually. The solution for banks in the past has been to hire more people to address e-payment disputes. VECTOR:Resolve-RegE will not only help banks meet the Reg E mandated timeframe for dispute settlements, but will also reduce the manual research and monitoring involved. VECTORsgi is a leading provider of financial transaction processing, image exchange, item processing, dispute resolution, and e-commerce solutions to financial institutions around the world since 1977.

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UK’s LINK Interchange Network Deploys Integrated Research’s PROGNOSIS

Sydney-based Integrated Research’s “PROGNOSIS” has been selected to manage the UK’s LINK Interchange Network business-critical transaction management systems. “PROGNOSIS” gives LINK a geographical view of ATM states to diagnose faults and monitor the health of the network. The solution enables LINK to publish any of its information screens to its extranet, so customers can securely access their own accounts and track the performance of their ATM networks in real-time, even drill-down to the various components that make up their service. LINK processes over two billion ATM transactions per year. “PROGNOSIS” is currently in the final stages of deployment at LINK, with a full operational roll-out scheduled this month.

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IDT Calling Card Revenues Up 6% Year-Over-Year

NJ-based IDT Corporation yesterday reported that its IDT Retail Telecom division posted profits of $25.4 million for the quarter ending January 31st, a 21% increase year-over-year. Revenues for the quarter of $329.1 million were flat sequentially and up 7% compared to one-year ago. Calling card revenues increased 6.1% year-over-year, but decreased 2.4% sequentially. About 16% of calling card revenues in the quarter were derived from its international divisions, compared to 13.8% in the prior quarter. For complete details on IDT’s latest performance visit CardData ([www.carddata.com][1]).

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

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AmEx Europe Signs Hotel Commission Processing Contract with Pegasus

American Express Europe has signed a hotel commission processing contract with Pegasus Solutions. AmEx Europe will use Pegasus’ hotel commission processing and reconciliation functions for its travel offices in Africa, Australia, Europe, the Middle East and New Zealand, which includes approximately 1,200 agency locations in about 34 countries. Pegasus monitors and reconciles bookings and commissions from hotels in delivering its commission processing service. Pegasus collects commissions from the hotels, ultimately sending detailed reconciliation reports by hotel brand, along with consolidated commission payments, to American Express in its choice of currency. Dallas-based Pegasus Solutions is a leading provider of hotel reservations-related services and technology.

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MBNA Metrics Stable Despite the Seasonal Contraction

MBNA yesterday reported that its outstandings declined $1.8 billion during February, a seasonal contraction. The “denominator effect” pushed up delinquency while charge-offs dipped slightly. Delinquency increased to 4.46%, from 4.32% in January. However, the ratio is significantly lower than the 4.91% for February 2003. Charge-offs decreased to 4.70%, 6 bps lower than January and 40 bps lower than one-year ago. MBNA’s managed credit loans declined from $103.1 billion in January to $101.3 billion in February. MBNA recently reported that domestic credit card loans for the fourth quarter were up 8% year-over-year to $85.8 billion. For complete details on MBNA’s fourth quarter results visit CardData ([www.carddata.com][1])

MBNA 13-MO SNAPSHOT
Month Outstandings Charge-offs Delinquency
Feb 03 NA 5.10% 4.91%
Mar 03 $92.9 b 5.05% 4.62%
Apr 03 $93.9 b 5.02% 4.49%
May 03 $95.3 b 5.04% 4.36%
Jun 03 $96.4 b 5.01% 4.34%
Jul 03 $96.5 b 4.95% 4.35%
Aug 03 $96.8 b 4.81% 4.38%
Sep 03 $98.7 b 4.70% 4.36%
Oct 03 $98.8 b 4.61% 4.35%
Nov 03 $99.3 b 4.71% 4.44%
Dec 03 $104.2b 4.66% 4.28%
Jan 04 $103.1b 4.76% 4.32%
Feb 04 $101.3b 4.70% 4.46%
Source: CardData (www.carddata.com)

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[1]: http://www.carddata.com
[2]: http://www.cardweb.com/images/m/mbna/13trendline_feb04.jpg

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