Online Banking Usage Doubles Among Tiny Business

A new research study shows that online banking usage has doubled in the micro market and grows by 26% in the small business market. Micro market companies are defined as businesses with annual revenue between $50K and $1 million, while the small business market is defined as those with annual revenue between $1 million and $20 million. The study by Informa Research Services also found that 44% of companies in the small business market now use online banking. As recently as 12 months ago, only 12% of all businesses with less than $1 million in annual revenue used the online channel for routine banking. That figure is now 24%. Informa says what makes this trend even more significant is that adoption increased during a downturn in technology spending.

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Alliance Data Systems Closes Stage Stores Card Deal

Alliance Data Systems has completed the acquisition and conversion of approximately $224 million associated with Stage Stores’ portfolio of approximately 800,000 active private label credit card accounts, and has assumed overall operation of Stage Stores’ private label credit card program. ADS’s bank subsidiary will also own the new accounts and balances generated during the term of the 10-year alliance. At closing, Stage Stores received consideration of approximately $239 million from ADS and expects to record a pretax gain in the third quarter of approximately $12 million, or approximately $7.6 million after tax. About 220 associates currently employed at Stage Stores’ Credit Support Center in Jacksonville, Texas, have been employed by ADS. Stage Stores operates a total of 366 stores in 13 states under the Stage, Bealls and Palais Royal names. (CF Library 5/22/03; 8/21/03)

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Providian’s Securitized Charge-Offs Down 234 bps Since January

Providian reported Monday that charge-offs for its securitized card loans headed south during August to 17.04%, and remain substantially lower than levels posted for the first five months of this year. However, Providian’s delinquency rate edged up to 12.12%, from 11.96% in July. On a reported basis, Providian’s charge-offs dropped to 10.42% for August, compared to 12.05% in July, 12.85% in June, and 15.16% for May. Reported delinquency declined to 7.68% in August, compared to 7.70% for July, and 8.31% in June. 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%
Source: CardData (www.carddata.com)

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ENCORE Card Services Launched for Credit Unions

The ENCORE Cooperative and T.K. Keith Company, a member of the NEBA, have joined together to launch ENCORE Card Services to manage credit union credit card portfolios. The new company will offer two service options, including one service to provide application processing, 24/7 customer service, risk management services for one all-inclusive price, and a second option geared towards larger credit unions that might want to keep various aspects of their credit card program in house. ENCORE Electronic Services Cooperative, formed in 1982, is 100% credit union owned and operated and provides ATM/Debit card routing and other electronic services for 113 member CU’s in eight states. Encore Merchant Services is a division of Primax Payment Systems, and has 5,000 merchants in 48 states. Encore Merchant Services targets new business through credit unions to offer full service credit and debit card acceptance services to credit union member businesses nationwide. In addition to standard credit and debit card processing, Encore Merchant Services offers check guarantee, electronic check conversion, Internet processing solutions, and private label card support.

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PCBB Details ATM Cash Advantage Program

Pacific Coast Bankers’ Bancshares is pioneering a new program to allow smaller banks to provide cash to non-bank ATM networks. The “ATM Cash Advantage” program enables banks to earn 50 bps above the Fed Funds rate and helps banks reduce reserve levels at the Fed. The innovative program may also give banks credit under the “Service Test Provision” of the CRA. The program’s risk is similar to bank in-house ATM programs. PCBB said yesterday that ten banks are currently using the product. PCBB is the holding company for one of the nation’s largest bankers’ banks, serving more than 230 financial institutions in seven western states. Palm Desert National Bank, a PCBB partner, operates a major non-bank ATM network and provides ATM cash and management services to over 10,500 ATMs nationwide.

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National Bank of Oman and Oman Air Launch Co-branded Card

National Bank of Oman and Oman Air have teamed to launch a “Gold” and “Silver” MasterCard. The new co-branded cards offer special discounted fares and double points for Oman Air tickets purchased at the airline’s ticket offices. Cardholders will also be priority wait listed.
“Gold” cardholders will have complimentary access to lounge facilities at Seeb International Airport.

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