Providian Card Fees Drop 23% in 2Q/03

Providian reported yesterday that its credit card fee income for the second quarter declined 23% to $219.6 million. Providian recently reported that its 2Q/03 outstandings declined 11%, compared to 2Q/02 due to the sell-off of some sub-prime accounts. The issuer said the sharp decline in fee income reflects lower average loans receivables and reflects lower late and overlimit fee income associated with its transition to higher quality credit card account originations. Providian fee income includes late fees, overlimit fees, returned check charges, annual membership fees, cash advance fees, cardholder service products, and, interchange fees received from bankcard associations. For complete details on Providian’s 2Q/03 performance visit CardData ([www.carddata.com][1]).

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

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VISA Introduces a Back-to-School Budget Calculator

VISA USA has added a”Back-to-School Budget Calculator” to its “Practical Money Skills” Web site. The Back-to-School Budget Calculator is designed to help families create a financial plan for back-to-school shopping. This free resource uses an interactive worksheet to help students of all ages plan for what school supplies they will need before they head back to class this fall. The calculator equips families with a smart budget by reminding families to consider all of their back-to-school expenses, and allows for any needed adjustments.

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U.S. Dataworks Restructuring Costs Boost 2Q Loss

Houston-based US Dataworks reported second quarter revenue of $486,763 and a net loss of $2,047,474. Results of operations without giving effect to financing costs and interest expense charges, the majority of which are non-cash items, show the loss from operations for the first quarter of fiscal year 2004 was $652,569 compared to a loss from operations of $319,832 for the corresponding period in the prior year. The Company’s efforts to restructure its balance sheet have continued to contribute to the losses shown in this quarter.

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Business Payment Systems to Offer Wireless Card Service

NY-based ISO Business Payment Systems has inked a deal to with NJ-based Comstar Interactive to offer Comstar’s “CHARGE ANYwhere” wireless credit card processing solution. The Comstar Gateway and Cingular Mobitex or Motient networks will connect BPS customers with National Processing, Inc., a leading provider of merchant credit and debit card processing, via a highly reliable and secure environment in which approvals are received by the user in less than 10 seconds. CHARGE ANYwhere features a wearable, state-of-the-art device that incorporates a patented magnetic card swipe reader with the popular BlackBerry-class RIM 850/950 Wireless Handheld featuring a full QWERTY keyboard.

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AmEx Signs Andre Agassi to Promote U.S. Open

American Express, the “Official Card of the US Open,” has signed Andre Agassi to promote the company’s sponsorship of the “2003 US Open Tennis Championships”. The campaign will also include new print creative featuring Monica Seles, James Blake and Daniela Hantuchova. For the past 10 years, American Express has served as the “Official Card of the US Open.” Through this year’s integrated campaign, the Company continues to provide unique experiences and special benefits for Cardmembers.

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Metris Companies Under Formal SEC Investigation

Metris Companies said yesterday that it received notification from the Securities and Exchange on August 5th, that it is the subject of a formal, nonpublic investigation. Metris says it believes the investigation relates primarily to the Company’s treatment of loan loss allowances in 2001 and subsequent years, the Company’s 2001 credit line increase program and other related matters. The Company noted that the SEC specifically advised it that this is a fact-finding inquiry and that it has not reached any conclusions related to this matter. The Internal Revenue Service recently completed its examination of Metris’ tax returns through December 31, 1998. The IRS proposed adjustments to increase the Company’s federal income tax by $42.9 million, plus interest of more than $15 million, pertaining to the Company’s treatment of certain credit card fees as original issue discount. Cumulatively through the year ended December 31, 2002, the Company has deferred more than $212 million in federal income tax under the OID rules.

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Maine’s Camden Sells Portfolio to U.S. Bancorp

ME-based Camden National Corporation has signed a definitive agreement to sell its consumer and business credit card portfolio to U.S. Bancorp’s Elan Financial Services. The sale is expected to be finalized in the fourth quarter of 2003. The Company estimates a positive impact to earnings of $0.02 to $0.05 per share during the fourth quarter. The Company has entered into this strategic partnership with Elan to offer a broader credit card product set to both consumer and business customers. The current credit card portfolios currently generate net annual earnings of approximately $200,000, or 1% of total net income for the Company.

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FleetBoston and Diebold Launch Paycheck Anytime Pilot

FleetBoston has deployed six check-cashing machines to process payroll checks for non-customers in three pilot sites in Connecticut and Massachusetts. The “Paycheck Anytime” machines from Diebold, cash “on-us” payroll checks, to the penny, written against the accounts of Fleet commercial customers. To conduct transactions, consumers are issued a “Paycheck Anytime” card with a PIN. The service is free and Fleet is offering a $5 bonus reward automatically added to each of the first four payroll transactions conducted by participants. The “Paycheck Anytime” uses Diebold’s self-service terminals equipped with an “Intelligent Depository Module” and a coin dispensing module. Fleet is using Diebold Transaction Services’ real-time “WEB” interface to enroll check cashers, perform transaction research, download management reports, and check the current status of the check cashing terminal.

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Invoicing and Processing Costs $14+ Per Item

AZ-based EZPaymentservices has released an analysis showing that the cost of producing and delivering a paper invoice and processing the resulting payment from a bank is $14.37 ($1.50 for printing the invoice, $2.10 for printing and stuffing the envelope, $1.50 for mailing the envelope, $0.37 for postage, $5.00 for a reminder call, $1.75 to record the incoming check, $2.05 to deposit the check, and $0.10 for the deposit fee). Besides saving the $12 to $17 that the Gartner Group, a top research firm, estimates that it costs to send a paper bill and process a manual check, the time from when the customer makes the payment until the funds are available for use is reduced by one to two weeks. It’s also worth noting that online payment with electronic funds transfer, the same method used by Fortune 500 companies, eliminates the need to pay the discount rate associated with credit card payment.

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First Data and Concord Move Bank Assets

First Data said yesterday it is still unable to assess the potential impact of the VISA/MasterCard debit card settlements on the “NYCE” debit network, majority owned by the Company, and the “STAR” debit network, owned by Concord. FDC did not shed any new light on the potential Concord merger. However, it noted in June that FDC’s Colorado industrial bank subsidiary, First Financial Bank, along with Concord and its Concord EFS National Bank, filed applications with the FDIC and the Colorado Division of Banking to transfer to First Financial Bank, certain assets and certain deposit and other liabilities of Concord EFS National Bank. Once all other conditions to the completion of the merger between the Company and Concord have been satisfied, Concord EFS National Bank will merge into a newly formed interim Colorado industrial bank subsidiary of Concord, thereby terminating the charter of Concord EFS National Bank. Upon completion of the merger between the FDC and Concord, the newly formed interim Colorado industrial bank will transfer certain assets, certain deposits and other liabilities to First Financial Bank and then merge into a nonbank affiliate. First Data has named EVP Scott Betts to lead the FDC integration effort. FDC also said if the Concord merger falls through it is required to pay Concord $25 million.

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Hypercom Founders to Sell 14 Million Shares Monday

Hypercom announced this morning that its founder George Wallner sold 7 million shares of his personal holdings in the Company to institutional investors. Paul Wallner, George Wallner’s brother, and also a founder of the Company who left the Company in 1999, also sold 7 million shares to institutional investors. Settlement for the 14 million shares is expected to take place on Monday. Hypercom also noted that George Wallner resigned from the Board of Directors, will no longer act as a consultant to the Company, and entered into a non-competition agreement. Hypercom also announced this morning a stock repurchase program of up to $10 million in common stock.

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Q1 & US-OUTSOURCING

Vancouver-based QI Systems has signed a sales and marketing alliance with USOutsourcing of Dallas, Texas.
USOutsourcing will target, prospect, pre-qualify, process and close sales for QI Systems in the USA for the beverage and snack food vending business. QI’s “SmartVend” technology enables debit card purchases by consumers from a wide range of vending machines types. The “SmartVend” system is currently being used in conjunction with many card schemes, including VisaCash, Mondex (Multos), CANTV (Venezuelan phone card), Telus SmartONE card and others.

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