FCC Goes After AT&T for Call Violations

The Federal Communications Commission announced Monday it is seeking a $780,000 fine against AT&T for calling consumers who previously requested to be placed on AT&T’s in-house do-not-call list. The Commission found that AT&T apparently made telephone solicitation calls to 29 consumers on 78 separate occasions after those consumers had requested that AT&T not call them again. The Commission proposed a forfeiture of $10,000 for each of the 78 apparent violations.

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MasterCard Advisors & Purchase Street Research Launch

MasterCard International has launched an expert consulting organization with deep roots in the payments industry. MasterCard says the new unit was created to help clients improve profitability of their card portfolios by providing highly focused payments expertise in consulting, outsourcing, and information services. The Company’s main focus is cardholder services, customer relationship management, information technology, marketing, operations, research, rewards programs, and risk management. The “MasterCard Advisors” team is made up of 160 professionals that has completed 1,000 client projects to-date. G. Henry Mundt III, is President of MasterCard Advisors. Ruvan Cohen is SVP of the North America unit. “MasterCard Advisors” also runs Purchase Street Research, a research and advisory firm covering payments, related credit, payments-oriented corporate services, customer relationship management and the technology. Karen Cohen is GM and Walter Kitchenman is VP/Research and Manager-in-Charge of Purchase Street. Ted Iacobuzio, former director of TowerGroup’s Consumer Credit practice, is also VP/Research at Purchase Street Research.

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Continental and MasterCard Launch a Promotion

Continental Airlines is now awarding customers 2,000 “OnePass” bonus miles for tickets purchased at continental.com with a MasterCard through December 31st. The offer is valid for OnePass members residing in the 50 United States and subject to additional terms and conditions. Continental Airlines is the world’s seventh-largest airline with more than 2,200 daily departures to 127 domestic and 96 international destinations throughout the Americas, Europe and Asia. With 42,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 41 million passengers per year. MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs.

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Cap One’s Mascot Promotion Draws 2MM Votes

Capital One reported yesterday that nearly two million votes have been cast in its “National Mascot of the Year” college football promotion since September 4th. While pundits babble on about political strategy and candidates make promises, these furry dozen are already at the center of one of America’s greatest electoral races — the quest to be named Capital One Mascot of the Year. Capital One is one of the largest providers of MasterCard and Visa credit cards in the world.

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Electronic Exchange Systems Moves Downtown

Processor Electronic Exchange Systems has opened a sales and marketing headquarters in the metro Atlanta area. The new space will serve as the sales and marketing headquarters and will offer a more convenient and centralized locale location for both company employees and clientele. Electronic Exchange Systems is a national supplier of merchant transaction processing services. With a network of over 150 affiliated offices, EXS has grown substantially by providing solutions for small and large businesses, major and minor league sports stadiums, nationwide chain outlets, software providers, banks and associations.

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Top 10 Issuers Q3 Growth Ranges from -14% to +20%

Bank of America has emerged as the fastest growing issuer among the nation’s ten largest general purpose credit card firms, while marketing powerhouses MBNA and Capital One have downshifted. For the third quarter BofA posted a sequential gain of 9% and a year-over-year increase of nearly 20%. Compared to the second quarter Capital One posted the largest increase, but since 3Q/02 the issuer is up 16.7%, according to CardData (www.carddata.com). Meanwhile, American Express ranks as the third fastest growing major issuer, although their portfolio was flat compared to 2Q/03. Providian, still shedding bad accounts, is down 14% from last year and nearly 5% since the prior quarter. Chase and Discover have both experienced flat growth over the past twelve months. For complete details on third quarter portfolio results plus historical quarterly data since 1994, visit CardData ([www.carddata.com][1]).

RANK/ISSUER 3Q/03 Q/Q Y/Y
($ billions of bank credit card loans)
1. Citigroup $117.4 3.6% 2.9%
2. MBNA $ 81.8 1.2% 7.8%
3. Bank One $ 74.2 1.6% 7.2%
4. Cap One $ 52.5 11.2% 16.7%
5. Chase $ 50.3 -1.4% -1.6%
6. Discover $ 50.0 -1.6% 0.5%
7. AmEx $ 35.9 -0.2% 11.5%
8. BofA $ 33.6 9.1% 19.9%
9. Household $ 17.6 5.7% 10.9%
10. Providian $ 17.0 -4.8% -14.1%

All data represent U.S. card loans except Citigroup which includes other North American cards.
Discover data as of 8/31/03, all others as of 9/30/03.
Q/Q: % change from second quarter 2003; Y/Y: % change from third quarter 2002
Source: CardData (www.carddata.com)

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

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CompuCredit Posts Fifth Straight Profitable Quarter

CompuCredit reported third quarter profits of $56.5 million, a gain of 169% over 3Q/02, marking its fifth consecutive profitable quarter. The sub-prime issuer’s outstandings increased 12% over the second quarter, but remain 16% lower than one year ago. At the end of September, CompuCredit had $2.5 billion in outstandings and 2.6 million accounts, for an average balance per account of $955. On August 1st, Providian sold approximately $824 million in credit card receivables, representing about 435,000 credit card accounts, to CompuCredit and Merrill Lynch. The net charge-off rate for the third quarter was 15.5%, compared to 20.9% in the previous quarter, and 9.3% in 3Q/02. However, the adjusted charge-off rate for the third quarter was 8.9%, compared 11.0% in the second quarter, and 8.3% one-year ago. The 60-plus day delinquency rate for the quarter was 10.9%, compared to 10.5% in the prior quarter, and 12.3% for 3Q/02. The net interest margin was 20.9% in the third quarter, as compared to 21.4% for the third quarter of 2002. In September, the OCC turned down an application from CompuCredit to take over a South Dakota bank to issue its own cards. Currently, credit cards marketed by CompuCredit are generally issued by Columbus Bank and Trust Company. This week, CompuCredit became a component of the “NASDAQ Financial-100 Index.” For complete details on CompuCredit’s third quarter performance visit CardData ([www.carddata.com][1]). (CF Library 10/16/03; 10/27/03)

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

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NCR Lands Another ATM Deal with China Construction Bank

China Construction Bank has signed a $17 million contract with NCR for security-enhanced ATM hardware and software solutions, including the encrypting pin pad module. Last year, NCR landed a $28 million ATM contract from CCB. The “Personas 77,” “Personas 84,” and “Personas 86” ATMs to be installed in CCB’s branch network throughout China by the end of this year are manufactured in NCR’s ATM factory in Beijing. China Construction Bank is one of the big four state banks in China, with an extensive network of more than 20,000 branches.

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VISA Launches Personal Helper Holiday Promotion

VISA USA launched its ninth annual holiday promotion this weekend, which is expected to generate as much as $3 billion in incremental income in the fourth quarter. The “VISA Personal Helper” promotion offers VISA users the chance to win some extra help and cash during the holidays. VISA cardholders are automatically entered each time they use their card between now and December 31st. A new winner is selected each day. Each winner will have 24-hour access to dedicated “VISA Personal Helper” services through toll-free number, plus $20,000 in cash. Services include access to a wide variety of concierge products and services, such as cooking, cleaning, shopping, travel planning, gift arrangements and more. “Personal Helper” will be supported by an integrated marketing campaign, including advertising, point-of-sale signage, public relations, e-marketing materials, statement inserts, and direct mail. VISA will also display a staff of “personal helpers” in downtown San Francisco’s Union Square as a grassroots effort to support the promotion. VISA says that during the 2002 holiday shopping season it processed more than $119 billion in retail transactions.

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MULTePAY Limited Targets Small Retailers for its MULTePAY Direct Terminal

MULTePAY Limited has launched a new “Partner Promotion Program” to help small retailers tap in to the lucrative mobile data market. The promotion includes point of sale materials and in-store advertising. The “MULTePAY Direct” payment terminal delivers access to PIN codes through the terminal and onto a receipt which the customer keys in to their mobile phone. With “MULTePAY Direct,” retailers can earn margins of up to 5.5% on electronic top-ups on all major mobile networks, and 20% on mobile content sales. The “MULTePAY” terminal is “Chip and PIN” compliant and can provide credit and debit card facilities through all acquiring banks. The “MULTePAY” terminal is deployed by Food Brokers Limited and is being stocked by cash & carry outlets throughout the UK, including Batleys, Blakemores, United, Sher Bros and JW Grays.

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First Bank Unveils Debit MasterCard BusinessCard

St. Louis-based First Bank has launched the “Debit MasterCard BusinessCard.” The card program includes access to MasterCard’s “Working for Small Business” program. The card also extends manufacturer warranties, car rental and purchase insurance, and offers value-added travel planning and emergency cash replacement services. First Bank is one of the largest privately owned banks in the country with more than $7 billion in assets and nearly 150 locations in Missouri, Illinois, California and Texas.

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JCB MARUKAI CARD

JCB has teamed with California’s largest Japan-affiliated membership-only supermarket to launch a co-branded credit card. The new “Marukai JCB Card,” to be launched November 8th, will function as both a membership ID card as well as a credit card. The Marukai membership bar-code information is built-in on the back of the new card. JCB piloted the card in Hawaii one year ago. The issuer says the Hawaii program generated over 10,000 co-branded “Marukai JCB Cards” within a six-month period. The new no annual fee card offers cardholders up to 3% cash back on purchases made at Marukai, and up to 1% cash back on purchases made anywhere else. Upon signing up for the “Marukai JCB Card,” the Marukai membership fee is waived for one year. And all subsequent payments of the Marukai membership fee are automatically billed to the card account. Marukai Corporation, founded in 1965, opened it’s first “Marukai” membership-only supermarket in Gardena, Los Angeles in 1982, and currently operates four store locations in Southern California. Marukai currently has over 90,000 household members, making it the largest Japan-affiliated supermarket in the state.

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