FleetBoston’s Portfolio Edges Upward in 3Q

FleetBoston reported yesterday that credit card outstandings edged up slightly during the third quarter to $14.8 billion, but remain down $700 million compared to 3Q/02. Since the first of this year Fleet’s outstandings have declined due to portfolio sales, lower balance transfers, a decline in cash advances, and other normal seasonal factors. For the third quarter, the delinquency rate increased to 3.91% compared to 3.89% for 2Q/03, and compared to 3.83% one year ago. Delinquency at the end of the first quarter was 3.83%. Charge-offs for the third quarter hit 6.80% compared to 6.56% in the prior quarter, and compared to 5.25% one year ago. Charge-offs for the first quarter were 5.16%. Fleet has about 9.4 million accounts. For complete details on FleetBoston’s third quarter results visit CardData ([www.carddata.com][1]).

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

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BofA Leads the Pack of ACH Payment Recipients

The Electronic Payments Association has released its first ever list of the top 50 largest receiving financial institutions of ACH payments which shows Bank of America topping the list with more than 507 million payments. A significant finding of the NACHA survey is that the receipt of ACH payments is much less concentrated than origination. The top 5 institutions accounted for 22 percent of ACH volume, compared to 49 percent on the origination side. NACHA is the leading organization in developing electronic solutions to improve the payments system.

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Vital Takes Control of Charge-back Specialist

AZ-based Vital Processing Services has acquired a majority interest in MD-based Merlin Solutions for an undisclosed amount. Merlin is focused on providing chargeback dispute resolution and related outsourcing services to acquirers, ISOs and merchant processors. Its full capabilities extend from sales draft retrieval requests through chargebacks, reversals, representments to compliance, arbitration, collection services and customer support. Vital estimates that acquirers spend approximately two dollars on back-office operations for every one-dollar spent on processing transactions. Vital’s strategic vision is to become the leading provider of back-office support services for their clients. For the next few months, it will be business as usual as Vital prepares a seamless transition of their clients’ OFS business to Merlin. Vital is planning the transition to close in early 2004.

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Pepsi-Cola Inks Major Deal with U.S. Wireless Data

Pepsi-Cola North America has inked a deal with U.S. Wireless Data to purchase a minimum of 10,000 “Synapse Enablers” for vending. U.S. Wireless Data provides wireless transaction delivery and gateway services to the payments processing industry. Our customers include credit card processors, merchant acquirers, banks, ATM distributors and their respective sales organizations, as well as certain businesses seeking new solutions to make it easier for their customers to buy their products or services.

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Experian Launches PLUS Score for Consumers

Experian has introduced their new “PLUS Score” that enables consumers to make judgements about their credit decisions, based on a distillation of many credit scores. The PLUS Score was developed in response to the need we saw for American consumers to better understand the world of credit and how they might lower their credit risk and improve their chances for obtaining credit. Experian provides strategic support to organizations around the world. It helps its clients target, acquire, manage and develop profitable customer relationships.

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PayPal Income Up 83% as Volume Tops $3B

eBay reported Thursday that its PayPal business handled $3.0 billion of gross payment volume during the third quarter, a 70% increase over 3Q/02. PayPal produced $106.4 million in transaction fees for 3Q/03, an 83% jump over the year-ago quarter. At the end of the third quarter PayPal had 35.2 million accounts, compared to 19.7 million one year ago. During the third quarter, PayPal handled 57.4 million payments, an 83% increase over 3Q/02. PayPal captured 67% of eBay’s total $5.8 billion in total sales volume during the quarter. PayPal’s transaction revenue rate was 3.49%, and the processing expenses rate was 1.25%. PayPal’s transaction loss rate came in at 22 basis points compared to 42 basis points one year ago. For complete details on eBay/PayPal’s third quarter performance visit CardData ([www.carddata.com][1])

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

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SCM Delivers 24,000 Additional Smart Card Readers to DoD

SCM Microsystems and RMW Enterprises have provided 24,000 additional smart card readers for use by the Defense Finance & Accounting Service. One of the most advanced smart ID card programs in the U.S., the CAC smart card serves as the standard identification and physical access credential for military personnel. RMW Enterprises is a premier provider of smart card technology solutions to the Federal government in support of a broad range of security, e-commerce and information technology solutions. SCM Microsystems is a leading supplier of solutions that open the Digital World by enabling people to conveniently access digital content and services.

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Experian Launches a National Score Index for Consumers

Experian has created a “National Score Index” for consumers, based on the new “PLUS Score,” that provides a picture of consumer credit worthiness by region, state, or metro area. The National Score Index gives consumers a gauge to help them understand how creditworthy they are relative to other American consumers, how their geographic region measures up against other regions of the country, and how their credit score affects their ability to obtain the best interest rates and most beneficial loan terms. Experian provides strategic support to organizations around the world. It helps its clients target, acquire, manage and develop profitable customer relationships.

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VISA Named World’s Leading Credit Card

For the sixth consecutive year VISA has won the World Travel Awards, being named the “World’s Leading Credit Card” earlier this week. The World Travel Awards honors leading travel-related organizations in worldwide and regional categories that range from airlines, hotels, beaches and cruise lines to credit cards, car rental companies and hotel reservation services. Visa International is a strategic partner with many of the leading global corporations and merchants, creating retail and T&E promotions that deliver extraordinary values to Visa cardholders worldwide. Visa is the world’s leading payment brand generating US$2.7 trillion in annual card sales volume. Visa has unsurpassed acceptance in more than 150 countries.

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Providian Charge-Offs Nose-Dive in September

Providian reported Wednesday that charge-offs for its securitized card loans dropped sharply during September to 15.65%, its lowest level this year. However, Providian’s delinquency rate edged up to 12.17%, from 12.12% in August and 11.96% in July. Providian will release its third quarter earnigs report on October 29th. On August 1st, Providian sold approximately $824 million in credit card receivables, representing about 435,000 credit card accounts, to CompuCredit and Merrill Lynch. (CF Library 8/14/03)

SECURITIZED PVN 2003
Month Charge-offs Delinquency
Jan 03 19.38% 13.26%
Feb 03 18.23% 12.89%
Mar 03 19.89% 12.46%
Apr 03 19.80% 12.27%
May 03 20.40% 11.92%
Jun 03 16.76% 11.98%
Jul 03 17.39% 11.96%
Aug 03 17.04% 12.12%
Sep 03 15.65% 12.17%
Source: CardData (www.carddata.com)

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MBNA Profits Soar 66% in the Third Quarter

MBNA reported that net income for the third quarter soared to $658.8 million, an increase of 66% compared to the third quarter of 2002, and a gain of 21% over the prior quarter. The 51-cents per share earnings beat analyst projections of 47-cents per share. Managed loans for 3Q/03 were up 10%, and charge volume was up 14%. Total managed loans at the end of the third quarter were $112.8 billion, and charge volume was $47.8 billion. Managed charge-offs were 5.13%, compared to 5.35% in the previous quarter, and 4.84% one year ago. Delinquency on managed loans was 4.48%, compared to 4.46% in 2Q/03, and 4.80% in 3Q/02. During the quarter MBNA added 2.7 million new accounts, compared to 3.0 million in the second quarter. The issuer signed 105 new affinity card deals during the quarter. The issuer also renewed more than 350 affinity group contracts during 3Q/03. For complete details on MBNA’s third quarter results visit CardData ([www.carddata.com][1]).

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

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Sears’ Card Profits Up 29% in 3Q/03

Sears reported this morning that its domestic Credit and Financial Products division posted a 29% increase in operating income while it experienced a slight decline in revenues to $1.3 billion. Since the prior quarter, Sears’ average credit card outstandings have declined from $29.4 billion to $29.2 billion, due to the continuing contraction in its private label portfolio. The “Sears Gold MasterCard” increased from $12.6 billion in the second quarter to $13.0 billion for 3Q/03. Since 3Q/02, Sears bank credit card portfolio has grown more than 35%. The “Sears Card” declined from $16.8 billion in 2Q/03 outstandings to $16.2 billion in third quarter outstandings. In the third quarter, net charge-offs rose to 7.55%, compared to 5.55% one year ago. Delinquency also edged up to 7.62%, compared to 7.41% for the second quarter, and 7.24% one year ago. Sears also reported that its 3Q/03 net interest margin increased to 14.10%, compared to 13.25% for the second quarter, but below 3Q/02’s 14.75% rate. Sears is in the process of selling its domestic Credit and Financial Products division to Citigroup. For complete details on Sears third quarter performance visit CardData ([www.carddata.com][1]).

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

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