Ahold Unloads Brazil’s Hipercard

The Netherlands-based Ahold sold its Brazilian credit card operation Hipercard to Unibanco S.A. in Brazil for $217 million. Hipercard is the leading credit card in Northeastern Brazil with more than 2 million cardholders. Unibanco, the third largest private-sector Brazilian financial group, focuses on retail and wholesale banking, and insurance and pensions and wealth management. Ahold also sold its Brazilian retail chain Bompreço to Wal-Mart Stores last week. Bompreço and Hipercard employ more than 20,000 people, according to CardFlash International ([www.cardflashinternational.com][1]).

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


Spirit of America Card Offends New Yorkers

MBNA has reportedly withdrawn a new affinity card issued with NYC-based The Bravest Fund. The “Spirit of America” MasterCard card uses a photo showing three New York firefighters hoisting an American flag at “Ground Zero.” The New York Daily News ran a front-page story on Friday about the card with the headline “Profits of Doom.” The story produced a outrage by 9/11 victims’ families. MBNA says it issued less than 500 cards to-date and is pulling the plug. The newspaper also raised questions about the charity fund. The Bravest Fund was apparently operating without the proper registrations. The fund reportedly raised $750,000 to-date and distributed about $72,000 to-date to families in need. MBNA says it has contributed more than $5 million to 9/11 causes.


Viad and Certegy Conclude GFC Deal

Viad’s Travelers Express Company completed the sale Friday of Game Financial Corporation to a subsidiary of Certegy for $43 million in cash. As a result of the sale, Viad Corp expects to record an after-tax gain of approximately $11 million ($0.13 per diluted share) in the first quarter of 2004. In addition, Viad may record future gains of up to $4 million, after-tax, based on contingencies in the contract. Viad is a $1.6 billion revenue S&P MidCap 400 company. Major subsidiaries include Travelers Express/MoneyGram of Minneapolis, GES Exposition Services of Las Vegas, Exhibitgroup/Giltspur of Chicago, Brewster Transport Company Limited of Banff, Alberta, Canada, and Glacier Park, Inc. of Phoenix.


Firm Seeks to Patent Debit Card Bill Payment

San Antonio-based Payment Data Systems has filed for patent protection for a system that enables a cardholder to use their stored-value debit or ATM card to pay local, national, or international bills with the card from their electronic balance. Because it does not require linkage to a traditional checking or savings account, this new debit technology is unique in that it allows for use by ‘unbanked’ consumers. Payment Data Systems, Inc., is an Integrated Payments Solution Provider delivering comprehensive, cost-effective solutions to billers and retailers for the processing and management of electronic payments via the Internet, point of sale, or payments taken by Customer Service Representatives or an Interactive Voice Response. Secure Cash Network, Inc. is a Consumer Products and Financial Services company specializing in Stored-Value Debit/ATM products for unbanked consumers.


Late Fees Slow After a Growth Decade

The increase in late payment fees slowed last year to its lowest level in more than a decade. During 2003, the average late payment fee of $31.44 was up 4.7% over 2002. Over the past five years, late payment fees have risen 23%, compared to a 104% increase between 1994 and 1999. The largest single year gain in late fees occurred during 1997, when average fees rose from $14.21 to $19.24, a 35.4% increase, according to CardData ([www.carddata.com][1]). During 2003, the most common late fee among major issuers was $35. Some issuers have pushed the fee to $39, with some experimentation at the $49 level, according to CardWatch ([www.cardwatch.com][2]).

Year Average Y/Y CNHG
1994: $12.55 +4.8%
1995: $13.25 +5.6%
1996: $14.21 +7.2%
1997: $19.24 +35.4%
1998: $22.10 +14.9%
1999: $25.61 +15.9%
2000: $27.10 + 5.8%
2001: $28.29 + 8.1%
2002: $30.04 + 6.2%
2003: $31.44 + 4.6%
Source: CardData (www.carddata.com)

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


VeriFone Installs Payment Solution Across an Oil Retail Network

VeriFone announced the roll-out of a project for a major oil industry leader in France, Italy, UK, Ireland, Austria and Belgium. The solution is based on VeriFone’s “Omni 3740” terminal and “SC 5000” EMV programmable smart card PINpad. Over 1500 units of each product will be shipped to the oil company’s retail sites in total throughout the countries planning to implement the solution, which will include fleet card transactions and credit and debit payments. The “Omni 3740” is equipped with the option of different “plug-and-play” communications modules – including high-speed modem, ISDN and ethernet. In the UK, the “Omni 3740” will allow the oil company to communicate over its VSAT satellite network. The “SC 5000 PINpad” is PED compliant and supports multiple value-added applications including EMV smart card, enabling
VeriFone’s customer to be ready for Europe-wide migration to EMV compliance and the move from signature-based authorization to PIN verification.


Two-Card Money Transfer Program Launched

Ft. Lauderdale-based Access Card Systems has launched “ACCESS MoneyNow,” a two-card money transfer program using an ACS-branded ATM Card and a branded “Gold Debit MasterCard,” enabling consumers to load cash onto one card and transfer money worldwide to another person holding the second card. Consumers purchasing the two-card program receive an ACS branded ATM Card and a branded Gold Debit MasterCard. Both cards can be used to purchase goods and services and withdraw cash at any ATM worldwide that displays the MasterCard, Plus, Star and NYCE logos. ACS specializes in branded Stored-Value card products including ATM, Debit and Payroll cards. ACS is a registered MasterCard Membership Service Provider (MSP) and develops partnerships with leading MasterCard Issuing Bank Members.


Off-Line Debit Grows 16% During 2003

Growth in off-line debit card volume continued to downshift slightly last year as Americans used VISA- and MasterCard-branded debit cards for more than $576 billion in purchases and cash advances, a 16% increase over the previous year. Since 1998, consumers have racked up more than $2 trillion in signature debit card transactions. However, the signature debit card market is growing less than half the annual rate of the 1999 to 2001 period, when gross dollar volume increased 37% or more. VISA continues to dominate the off-line debit market with its “Check Card.” VISA’s signature debit card volume last year of $454 billion, represented nearly 79% of the market.

In 2003, debit represented 41% of VISA volume, and 59% of total VISA transactions

1999: $218.8 billion +37.0%
2000: $301.8 billion +37.9%
2001: $420.7 billion +39.4%
2002: $496.4 billion +18.0%
2003: $576.3 billion +16.1%
Source: CardData (www.carddata.com)


Canada Gets Private Merchant Processing IP Network

Moneris Solutions has launched Canada’s first private merchant processing IP network, and a portfolio of IP solutions for debit and credit card payment processing. The Company says merchants have been dependent on legacy data and voice networks to handle card payment processing, but that has changed as these systems are outdated and costly. According to CardFlash International (www.cardflashinternational.com), Moneris’ private IP network offers an added layer of segregation of traffic dedicated to POS transactions that ride over a partitioned, protected IP connection that is monitored 24 hours per day. Moneris says IP networks deliver transaction times equal to, or faster than, the best networks in the market today.


Cap One’s January Metrics Continued to Improve

Capital One reported that its delinquency rate for January hit the lowest level in at least four years and that charge-offs dipped to their lowest level in more than a year. With $71.1 billion in managed loans, and approximately $46 billion in U.S. credit card loans, the issuer reported that charge-offs dropped to 5.00% for January, compared to 5.10% in December, 5.57% in November, and 5.30% in October. Delinquency dropped to 4.39% for January, after leveling off in December at 4.46%. At the end of fourth quarter, Cap One had 46.7 million accounts, including domestic and international credit cards and auto loans. For complete details on Capital One’s 4Q/03 performance visit CardData ([www.carddata.com][1]).

Capital One 2003
Month Charge-offs Delinquency
Apr 03 6.36% 4.86%
May 03 6.40% 4.82%
Jun 03 6.20% 4.95%
Jul 03 5.75% 4.92%
Aug 03 5.34% 4.74%
Sep 03 5.24% 4.65%
Oct 03 5.30% 4.52%
Nov 03 5.57% 4.46%
Dec 03 5.10% 4.46%
Jan 04 5.00% 4.39%
Source: CardData (www.carddata.com)

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


Hypercom Profits Rise 600%+ in the Fourth Quarter

Hypercom reported net income of $8.7 million in the fourth quarter, a six-fold increase over the year ago quarter, driven by its focus on gross margin and operating expense. Revenues for the final quarter were $63.4 million, a 2.4% gain over 4Q/02. Hypercom’s gross margin improved from 35.1% one-year ago to 42.4% for 4Q/03. The Company says it improved its manufacturing, labor and overhead efficiencies, re-engineered its product designs, and renegotiated component costs during 2003. During the quarter Hypercom launched “Optimum”, a portfolio of 32-bit, high security, multi- application POS products including the “T2100” PIN-entry hand-over version and the “M2100” wireless mobile version. The firm also released the “S9”, a high security payment device that reads both smart and magnetic stripe cards and can be used as a hand-over or countertop PIN-entry device to enable merchants to take advantage of increased PIN-based card transactions. Additionally, Hypercom formed a strategic partnership with Diebold to distribute its outdoor payment technology to drive-up pharmacies in the U.S. and Canada. The Company projects 2004 revenue between $254.0 and $266.0 million and income from continuing operations of $21.0 to $25.5 million. For complete details on Hypercom’s latest performance visit CardData (www.carddata.com).

Revenues Profits
4Q/02: $61.9 million $1.2 million
1Q/03: $55.7 million ($1.1 million)
2Q/03: $64.4 million $4.8 million
3Q/03: $60.2 million $4.2 million
4Q/03: $63.4 million $8.7 million
Source: CardData (www.carddata.com)


LEGIC Identsystems and Nedap Partner

LEGIC Identsystems has named Nedap N.V. its latest license partner. LEGIC provides secure platforms for contactless smart card technology. Nedap is one of the Netherlands leading specialists in access control, time and attendance and parking systems applications involving the use of the latest contactless smart card technologies. LEGIC currently works with over 140 external co-operation partners world-wide who offer compatible LEGIC based applications including access
control, cashless payment, parking, e-ticketing and other multiplication’s in both workplace and leisure applications.