PELORUS STV Conference Set for March

NJ-based The PELORUS Group is hosting a special conference about stored value payments on March 2nd and 3rd in New Orleans. There will be numerous issues address during the exclusive “Stored Value: Challenging The Credit Card Paradigm” conference. This is not a trade show. It is a special event dedicated to sharing the vision of stored value, and realizing the opportunities springing from current and future initiatives.

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Online Transactions Range from 7 sec to 15 sec

During the last holiday shopping week for 2003, the overall average response time for completing an online retail transaction was 13.86 seconds, while the success rate for completing a transaction was 97%. Keynote Systems says its tracking shows the best performing sites on the index the Week of December 22nd had average response times of 7.26 and 8.49 seconds, and success rates of 99.73% and 99.47%. The worst performing sites on the index had average response times of 24.71 and 24.14 seconds, and success rates of 93.43% and 94.54%. A transaction is defined as a Web site’s ability to allow a consumer to click through a number of pages and successfully make a purchase. Keynote says the low point for response time during the 2003 online holiday shopping season occurred the week of December 8th when the average response time was 15.03 seconds. The low point for success rate occurred the week of December 1 when the average success rate for completing a transaction was 93.68%.

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eFund’s ATM Branding Program Tops 7,500 Machines

AZ-based eFunds, the largest provider of off-premise ATMs, says that the addition of North Valley Bank Corporation to its ATM branding program has increased the number of ATMs included in this program to more than 7,500, and that it now has more than 17,200 ATMs under management throughout the USA and Canada. eFunds’ branding program enables financial institutions to increase their brand presence and the availability of surcharge-free ATM access to their customers. North Valley Bancorp is a multi-bank holding company headquartered in Redding, Calif. North Valley Bank operates thirteen commercial banking offices in Shasta and Trinity Counties in Northern California including two in-store supermarket branches and a Business Banking Center. Headquartered in Scottsdale, Ariz., eFunds Corporation is an industry leader with nearly 30 years of experience and expertise in electronic payments.

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Spartanics Launches a Consulting Service for Manufacturers

IL-based Spartanics is launching a consulting service specifically designed for card manufacturers that will allow them to achieve the greatest through put with 6, 8, and 10-up layouts. This new service from Spartanics will provide gratis consultations to card manufacturers on the types of card punching systems with the flexibility to handle different die configurations and a wide range of materials while maintaining high throughput to give them the edge they need in an increasingly competitive market. Spartanics ([www.spartanics.com][1]) manufactures best-in-class technology for inspection, card punching, die cutting, counting/batching, and special material handling systems for worldwide card manufacturers, among others.

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

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Korean Delinquency Heads North; LG Card Seeks Bailout

South Korea’s Financial Supervisory Service last week reported that overall credit card delinquency increased during November to 13.50%, compared to 11.74% for October. Meanwhile, creditors of LG Card are expected to pony up $4.3 billion today to bailout the issuer. Woori Card reported the highest delinquency, at 30.8%, and LG Card’s delinquency rate rose from 11.4% in October to 14.7% for November. Shinhan Card reported the lowest delinquency rate at 8.2%. The Financial Supervisory Service says that total defaults increased to 7.7 trillion won for November compared to 6.9 trillion won for October. This is the fifth consecutive month of increases for delinquency.

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RBS Changes Card Name from Advanta to MINT

Royal Bank of Scotland is in the process of replacing the Advanta name on its credit cards with a new brand name. The change-over to the “MINT” name came after the RBS Advanta relationship expired. RBS currently offers four credit cards under the Advanta brand. The RBS Advanta portfolio includes the “RBS Advanta VISA Classic,” “RBS Advanta VISA Gold,” “RBS Advanta Platinum MasterCard” and “RBS Advanta mc2 MasterCard.” The cards currently offer a 0% intro rate on purchases and balance transfers through October 1, 2004. The go-to interest rates are currently 12.9% for all four card products. The RBS Advanta cards were first issued in 1996.

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Business APRs Decline and Student Rates Climb in 2003

Offered interest rates on classic, platinum, business and reward credit cards fell during 2003. However, APRs on gold, student, co-branded, and sub-prime cards increased last year. Initial rates on business credit card showed the biggest change, from 9.72% in 2002 to 8.29% during 2003. By contrast, student card rates increased from an average of 11.29% in 2002, to 12.46% last year.

CARD PRODUCT 2002 2003 CHNG
Classic or Standard: 9.47% 9.00% -47 bps
Gold 9.60% 10.53% +93 bps
Platinum 8.37% 8.44% -7 bps
Business 9.72% 8.29% -143 bps
Rewards 9.68% 9.48% -20 bps
Co-Branded 10.62% 11.07% +45 bps
Student 11.29% 12.46% +117 bps
Unsecured Sub-Prime 19.74% 19.79% +5 bps
Secured Sub-Prime 14.65% 15.52% +87 bps
Source: RAM Research’s Bankcard Barometer (www.ramresearch.com)

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Record Holiday Card Volume in Canada

December 23rd was once again the single busiest shopping day across Canada. The country’s largest processor of debit and credit card transactions reported that it handled a record 8.490 million transactions on December 23rd, compared to 8.375 million on the same day last year. Moneris Solutions says its processing system handled 607 transactions per second during December 23rd’s peak time period of 3:00 pm EST. This represented a 10% increase from 2002’s peak of 550 transactions per second. Moneris processes credit and/or debit card payments for more than 350,000 merchant locations.

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Card Portfolio Premiums Rise 20 BPS in 2003

More than $40 billion in credit card assets were sold during 2003 with an average premium of 18.6% above book value for “Prime” and “Super-Prime” portfolios. Nearly 200 portfolios changed hands last year, a 60%+ increase over 2002. R.K. Hammer Investment Bankers says 61small-mid-and-large size credit card portfolios were sold last year, and 130 other very small, mostly Credit Union portfolios changed ownership during 2003. While the range of premiums was between 2.5% and 26.5%, the average was 18.6%. “Sub-Prime” portfolio sales (<660 risk score) priced in the Hammer model ranged from 20 cents to 63 cents on the dollar, while prices for charged off debt sales ranged from 2 cents to 5 cents on the dollar. Hammer says much of the selling was centered on sellers who needed the earnings boost, or capital, or both. During 2003, though, card portfolio selling was more of a quality service calculation, as opposed to a purely financial gain matter. Sellers are looking for buyers who can offer their card members better products with a wider array of features and benefits than they are able to supply themselves. The trend now is for savvy portfolio buyers to allow sellers to partially participate in future earnings as well.

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Boxing Day Draws Large Canadian Crowd

The day after Christmas or “Boxing Day” attracted 5.9 million Canadian shoppers this year. VISA says that 26% of Canadians planned to shop December 26th, representing a 3% increase over last year. The VISA study found that Canadians expect to spend an average of $293 on gifts for the 2003 holiday season on “Boxing Day.” VISA says it expects to process more than 2.3 million credit card transactions totaling approximately $280 million in sales volume for December 26th. During the busiest hour, VISA will process more than 297 thousand transactions, valued at approximately $35 million. Earlier this month, VISA also revealed that 22.6 million Canadians expect to spend a total of $18.2 billion on holiday season gifts this year. Through December 21st, VISA processed 80 million credit card transactions, totaling $8.8 billion in sales volume, representing an increase of 7.7% over 2002.

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Continental to Offer Western Union Cash Payment Service

Western Union and Continental Airlines have signed a deal to enable travelers to pay for their airfare using cash instead of credit cards using “Blue Quick Collect”. The collaborative service offering, provided by Western Union and Continental Airlines, will broaden consumer payment options and convenience for those who choose to send cash payments. Western Unionand its subsidiary, Orlandi Valuta, together make up one of the world’slargest money transfer networks with approximately 169,000 Agent locations inmore than 195 countries and territories. Continental Airlines is the world’s seventh-largest airline and has more than 2,200 daily departures. With 127 domestic and 96 international destinations, Continental has extensive service throughout the Americas,Europe and Asia.

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