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

Details

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.

Details

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.

Details

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)

Details

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.

Details

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.

Details

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.

Details

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.

Details

Equitex Launches CreditGuard

CO-based Equitex says it has successfully completed the development of a quasi-cash credit card cash advance product called “CreditGuard.” CreditGuard is a proprietary credit/debit card advance system that allows patrons to access their card limits with or without a PIN number. Equitex says last year it processed approximately $174 million in quasi cash transactions. The Company anticipates that implementation of the quasi cash credit card cash advance product will commence next month with rollout completion expected by the second quarter of 2004.

Details

Encore Merchant Services Signs WV CU

WV-based Star USA Federal Credit Union has signed an agent contract with MA-based Encore Merchant Services. Encore Merchant Services will handle account application and establishment, point-of-sale terminal deployment, product development, customer service, and risk management services. Encore is a division of Primax Payment Systems. Primax has over 5,000 merchants located in 48 states. ENCORE was organized to provide ATM/Debit card routing and other electronic services for the credit union community. Currently ENCORE has in excess of 6 million transactions monthly.

Details

VISA Holiday Volume Up 14%

VISA USA reports that December 26th produced more than $1 billion in retail spending on VISA credit and debit cards, a 16.1% increase over the same day last year. VISA says “Black Friday,” or November 28th, was its biggest retail day, with nearly $2 billion in card volume, followed by December 20th with more than $1.9 billion in retail spending. Overall, U.S. spending on VISA debit and credit cards during the holiday season increased 14.2% to $97.9 billion. The highest grossing retail sectors were Department Stores, Apparel, and Mail and Phone Order sales, for a total of over $10 billion from November 28th to December 28th. Spending in the Specialty Retail and Hobby category grew the most among retail sectors, with dollar volume increasing 13.5% from 2002. During the same period, online purchases on VISA cards increased 48.9% compared to the 2002 holiday season. The total dollar volume for VISA purchases online exceeded $7.6 billion, the highest four-week amount in VISA’s history. Regionally, the West posted the largest increase in card spending this holiday season with a 17.22% gain over 2002.

Details