In another sign that the sub-prime credit card market is gearing up for a revival, Citibank announced this morning it is reentering the secured card segment. The new secured “Citi MasterCard” is linked to an 18-month CD and requires annual income of at least $8,000. The interest-bearing CD deposit has a $200 minimum and a maximum of $5,000. Citibank says accounts kept in good standing for a full 18 months may be eligible for an unsecured credit card or other financial products. Resident and non-resident applicants must be at least 18 years of age and have a valid SSN or TIN. Non-residents can apply by completing a W-8BEN Form and by providing a copy of a government issued ID, such as an “I/94” Immigration form, passport or national identification card as well as proof of an existing banking relationship. The secured card has an APR of prime + 9.99%, and a $29.00 annual fee. The collapse of the sub-prime market in the 2001 recession was driven by high priced, unsecured sub-prime credit cards. Most sub-prime issuers were wounded or shifted to higher credit quality. Providian, Metris and Spiegel’s First Consumers National Bank were deeply impacted. Capital One, which had as much as 40% of its portfolio in sub-prime, has pulled back, shifting to the middle and super-prime markets. Regulators clamped down on nearly all sub-prime issuers. However, the worst appears to be over as the economy slowly rebounds.Details
OR-based Chockstone and Vesta have teamed to expand the functionality of retail-branded stored value cards by adding prepaid long distance and/or wireless minutes to existing cards. The partnership brings together the leader in integrated gift and loyalty card programs for retailers with the leader in stored value recharge services. The integration of these services will allow retailers to generate additional revenue by increasing the utility of their stored value programs. Chockstone is the Technology Behind Stored Value”. As the leading stored value card processor, Chockstone focuses on gift, loyalty, and marketing card programs for multi-unit QSR and retail organizations. Vesta is the leader in stored value recharge services.Details
Fraud committed on U.K. payment cards declined 5% last year to $739.4 million, the first decline in eight years. Counterfeit card fraud saw the largest reduction, down by 28% to $196 million in 2003. Fraud on lost and stolen cards also dropped, by 2%, to $195 million, due primarily to neural fraud intelligence systems. Cardholder-not-present fraud is now the biggest fraud type in theUK according to CardFlash International (www.cardflashinternational.com). However, it only increased by 6% last year rising to $214 million according to the Association for Payment Clearing Services. The largest percentage increase in fraudulent activity was in identity theft which grew by 45% to reach $54.5 million, while fraud at UK cash machines grew by 34% to $72 million. Together, fraud on lost and stolen cards and counterfeit fraud accounted for more than half of all plastic card fraud. They remain a critical issue in the UK. However, the introduction of chip and PIN, the system which replaces signatures with PINs for verifying payments, will directly tackle these fraud categories. The UK chip and PIN rollout is currently underway..Details
Provo International and MD-based Humana Trans have rolled-out the “Provo Paycard”. With the Provo Paycard, employers electronically deposit an employee’s pay directly on to their card, which can be used as a debit and/or cash transfer card. The Provo Paycard offers employers and employees many advantages over paper paychecks. Provo International Inc. has two operating divisions, Provo Mexico and Provo US. The Provo Mexico division, acquired in April, 2003, is a Mexican corporation which maintains a dominant position within the prepaid calling card and cellular phone airtime markets in Mexico. The Provo US division provides a revolutionary solution for cash disbursements of employee’s payroll, commission, and other expenses with the use of the Provo Paycard.Details
e-Smart Technologies and Samsung SDS have teamed to produce a biometric national ID card. The deal will bring e-Smart’s “BVS2,” “Super Smart Card,” and related technologies together with Samsung SDS’s systems, software and integration expertise. Samsung SDS said that despite the clear need to protect the Korean public from identity theft and other ID related crimes, the notion of a national ID card with a biometric system has stirred controversy regarding privacy amongst both legislators and privacy groups. Samsung says that e-Smart’s biometric system, when configured as a multi-application national ID
card, provides both the identity verification necessary to protect society and the identity verification necessary to prevent ID theft crimes, all while uniquely protecting the privacy and civil rights of each and every person
The major card networks spent approximately $3.7 billion last year in global marketing and business development expense, about 25% more than 2002. American Express lead the charge with a 43% increase as MasterCard followed with a 23% increase. In February, AmEx Travel Related Services reported it spent $1,141 million during 2003 on marketing, promotion, rewards and cardmember services compared to $796 million in the previous year. Last week, MasterCard reported that advertising and market development expenses rose 23% last year to $851 million. In 2002, MasterCard’s marketing expenses rose $188 million or 37%. MasterCard noted that the acquisition of MasterCard Europe accounted for $70 million or 45% of the increase in advertising and market development expenses in 2003. VISA and Discover do not officially release marketing figures but it is estimated by CardWatch (www.cardwatch.com) that VISA’s spending on marketing rose 18% last year to $1.3 billion, and Discover’s increased 10% to $363 million. Yesterday, TNS Media Intelligence/CMR reported that total advertising spending in the U.S. rose 6.1% to $128.3 billion in 2003. The research firm says Internet advertising increased 15.7% to $6.5 billion during 2003. TNS/CMR says network-TV ad outlays grew only 1.8% last year due to higher rates for spots. The firm says American Express has recently expressed some dissatisfaction with buying network TV time, which has seen prices increase even as rating performances have been lackluster.Details
Mitsubishi Electric has developed a new technology that is capable of detecting and tracking human faces, and automatically selecting the most appropriate images to record for storage and retrieval purposes.
The new “Best Appearance Facial Recognition Technology” is also capable of detecting not only frontal views but also facial profiles in real-time video data. The high-speed detection process is a base technology that can be applied to many other problem areas in the security business, such as attribute determination (gender, age), suspicious person detection and individual authentication. The solution may also have application to ATMs and branch banking.
Capital One reported Friday that even though its managed consumer loan income rose 13% last year, the Company’s yield, revenue margin, and net interest margin dropped to its lowest level in five years. Cap One’s account base also contracted last year from 47,369,000 accounts to 47,038,000. Cap One reported managed consumer loans income of $8.7 billion for 2003, compared to $7.7 billion in 2002. Managed yield dropped to 13.88% from 14.64% in 2002 and 17.91% in 1999. Managed revenue margin dropped to 14.65% from 16.93% in 2002 and 19.59% in 1999. Managed net interest margin dropped to 8.64% from 9.23% in 2002 and 9.40% in 1999. For complete details on Capital One’s 2003 results please visit CardData ([www.carddata.com]).
Geneva-based STMicroelectronics has introduced a complete low-cost analog interface chip for asynchronous 3V and 5V smart cards. It is designed for use in set-top boxes and IC card readers for banking and identification. The new “ST8004” performs all supply protection and control functions when placed between a smart card and a microcontroller. The interface includes a supply supervisor to control transients, enhanced ESD protection on the card side and both thermal and short-circuit protections on all card contacts. STMicroelectronics is a leader in “System-on-Chip” technology.Details
Boston-based The Tabb Group has released: “Pushing the Envelope: Redefining Real-time Transaction Processing in the Financial Market” which examines the impact increasing transaction and data speeds are having on the industry. Specifically, financial engineering, FIX connectivity, algorithmic trading and black box models are dramatically changing the way that sophisticated traders and market participants are forced to address the markets, as lower costs and higher compute and networking speeds are enabling the creation of automated model-based trading. The Tabb Group is a financial markets technology strategy and planning consultancy focused on helping financial services firms, vendors and technology integrators better understand, create, align and execute their business technology visions.Details
Gemplus International has hired industry veteran Jean-Pierre Fantin as the new Asia Pacific Manufacturing Director. He will be based in Singapore and will be responsible for developing and
enhancing the company’s regional manufacturing capabilities, and consolidating key partner relations. Prior to his current position, Mr. Fantin was a strategy and project development consultant for several international groups such as Telecom Development, the Tonna Group and the Medco Group. In Asia Pacific, Gemplus has several manufacturing and personalization facilities – in Tianjin, Zhuhai, Melbourne, Tokyo, Malaysia and Singapore. The clean room at Singapore’s Ayer Rajah Crescent produces 80% of the company’s high value microprocessor modules for its global smart card embedding plants. This is an average production capacity of 37 million units per month.