Lloyds TSB is buying the “Goldfish Credit Card,” personal loan business, and associated business assets of Goldfish Bank Ltd for a 14% premium or Â£112.5m. At the end of the second quarter, the Goldfish credit card portfolio had 1.18 million cardholders, 11,000 personal loan accounts, and 17,000 retail savings accounts. However, during the first six months of this year, Goldfish Bank had an operating loss of Â£30 million. Centrica currently owns 70% of Goldfish Bank while Lloyds TSB owns the rest. The “Goldfish Credit Card” was developed as a loyalty program for Centrica’s energy supply business. Since then, Centrica has retained its position as the UK’s leading household gas supplier and transformed itself into the leading domestic electricity supplier, with an overall household energy market share of around 41%. Goldfish cardholders will continue to be able to redeem their loyalty points against British Gas bills.Details
Cardholder abuse of purchasing cards in the nation’s capital also includes problems with school officials. Washington, D.C. is currently embroiled in a bitter battle in addressing solutions for the recently discovered widespread abuse of p-cards by city employees. A new investigation has found that six school principals and six school business managers allegedly used their cards to rack up more than $250,000 in bogus charges over the past 18 months. Most of those involved in the alleged DC school abuse have been placed on administrative leave. The D.C. school system has also cut the credit limits on all 246 school-issued credit cards to $1 while the investigation continues. Earlier this week, the Mayor of D.C. vetoed a bill that would have prohibited city employees from using government-issued credit cards to make business purchases until card abuse problems are cleared up. However, his veto was subsequently overridden by the D.C. Council in a vote of 11 to 0. A recent city audit turned up 1,200 incidents, involving $5.5 million of questionable charges. However, city officials say that the 790 government-issued VISA cards in use have saved the city $2 million last year in processing costs.Details
WA-based Coinstar reported 2Q/03 revenues of $43.1 million and net income of $4.2 million, an increase over 2Q/02 of 13.7% and 560%, respectively. During the second quarter, the company signed up approximately 200 clients for its new program that offers customers of its supermarket-based self-service coin counting machines, a prepaid “Truth MasterCard.” The company piloted the prepaid MasterCard program in the first quarter with 50 locations. Coinstar says it expects to add another 150 -200 locations for the new program by year end. Coinstar also said Thursday that due to the successful results from pilots in rural markets, the company believes the consolidated viable universe for Coinstar machines is now between 16,000 and 18,000, an increase of 2,000 machines over previous projections. The company currently has 11,053 machines linked by an interactive network throughout the USA, Canada and the UK. The company also confirmed yesterday that its nine-year relationship with Safeway ended in July, after renewal talks broke down. Safeway represented approximately 9.5% of Coinstar’s revenue in the second quarter. For complete details on Coinstar’s 2Q/03 performance visit CardData ([www.carddata.com]).
Peterborough, NH-based Brookwood Capital, a firm offering brokerage and advisory services to credit card issuers nationwide, has brokered a card portfolio sale and an agent bank agreement between DE-based Artisans’ Bank and Elan Financial Services.Details
IL-based APAC Customer Services, a telemarketing specialist for credit card issuers, reported net 2Q/03 income of $1.4 million, compared to net income of $2.1 million in the first quarter, and $1.5 million in the same period a year ago. Revenue decreased roughly $4 million from the first quarter of 2003 to $82.1 million. The company says the revenue decline is primarily due to reductions in marketing programs by several financial services clients as the economy remains soft. However, the company also noted that the regulatory environment is creating significant challenges for APAC and the industry. In the fourth quarter, the FTC and FCC will begin enforcement of the new Do-Not-Call National Registry of consumer telephone numbers. For complete details on APAC Customer Services’ 2Q/03 performance visit CardData ([www.carddata.com]).
The fastest growing sub-prime credit card portfolio in the nation continues to defy the fall-out in the sub-prime market with its success in offering cards with high fees and low credit limits. SD-based First Premier Bank reported a 21% gain in its cardbase, an 18% increase in outstandings, and a 13% increase in volume for 2Q/03 compared to one-year ago. Over the past twelve months the issuer has added nearly 500,000 cardholders to bring its total of cards to 2,874,705. First Premier offers credit cards with initial fees exceeding $200 and credit limits under $400. At the end of the second quarter First Premier had $717,270,874 in card outstandings. The average balance per account is $255 and the average volume per card for the second quarter is $82. For complete details on First Premier’s 2Q/03 performance visit CardData ([www.carddata.com]).
VA-based Portfolio Recovery Associates, a firm that manages portfolios of defaulted consumer receivables, reported second quarter net income of $5.2 million, an increase of 18%, or 93% on a pro forma basis, from the year-ago quarter. Total revenue for 2Q/03 rose 60% to $21.4 million. PRAA says it purchased $698 million of face-value debt during the second quarter for $20.8 million, representing a blended rate of 2.98%. The debt was purchased in 22 transactions from 9 different sellers. For complete details on Portfolio Recovery Associates’ 2Q/03 performance visit CardData ([www.carddata.com]).
NY-based Intelli-Check and Ontario-based E-Certify have formed a deal under which E-Certify will integrate its “Embedded Certificate Authority” components with Intelli-Check’s “ID-CHECK” identification and verification system. Under terms of the agreement, the two companies will combine their industry-leading technologies to create a comprehensive security solution, as well as jointly pursue sales and marketing initiatives. The proposed integrated system offers protection to the information infrastructure of high-profile businesses and governmental organizations by preventing economic loss and resultant fraud caused by the utilization of fake identification, and by providing enhanced security at access control points, including border entry points, airports, seaports and bus and rail terminals.Details
Paragon Application Systems has introduced the first Web-based, automated self-certification tool for transaction processing. The Holly Springs, NC-based company says it has more than 300 Concord EFS clients already using the test file generator to re-confirm their hosts’ processing capabilities following technology changes and upgrades. PAS expects that more than 2,000 of Concord’s full-service and processing clients will eventually use the tool. Using Paragon’s web-based test file generator, file creation and delivery is one simple process, which can be performed without the involvement of Concord technicians. Concord clients can create their own unique processing test files, and can conduct repeat testing using various settings to forecast different processing scenarios. Users can even begin testing the processing of next generation file types that they have not yet implemented.Details
MN-based Datakey, a smart card technology developer, reported that revenues from continuing operations for the second quarter were down 45% to $1.0 million due to softness in the global PKI market, reduced IT spending and significantly extended program implementations. The second quarter loss from continuing operations was $872,000, or $.09 per share, compared to a loss of $528,000, or $.05 per share, in the year-earlier period. Revenue for the six-month period ended June 30, 2003 was $1,827,000 compared to $4,362,000 for the same period last year.Details
Atlanta-based NOVA Information Systems has signed a long-term joint marketing agreement with Cincinnati-based The Provident Bank to provide merchant processing services to Provident Bank’s 3,000 active merchants that are expected to generate $900 million in VISA and MasterCard volume annually for NOVA. Provident and NOVA will jointly market merchant processing services to new customers. The Provident Bank provides a diverse line of banking and financial products, services and solutions through retail banking offices located in Southwestern Ohio, Northern Kentucky and the West Coast of Florida, and through commercial lending offices located throughout Ohio and surrounding states.Details
VA-based Network 1 Financial, a subsidiary of Verus Financial Management, has promoted Bob Bennett, who joined the firm 18 months ago, to president. Mr. Bennett has more than a decade of experience at the top echelons of high-growth companies where he also successfully accelerated revenue and earnings growth. Verus is a consolidator of mid-sized payment processing companies and merchant portfolios. Network 1 Financial is a leading provider of electronic payment solutions and cash advances.Details