GPN’s Yellowlees Departs Board and Trapp Joins Board

Atlanta-based Global Payments announced Robert Yellowlees’ retirement from the board of directors effective after the October shareholders’ meeting with William Jacobs succeeding Yellowlees as lead director, and also announced the election of Michael Trapp, a retired Managing Partner of Ernst & Young, to its board. Trapp is a member of the board of directors of the Ann Taylor Company and The North Highland Company, as well as an active board member of numerous civic organizations. Yellowlees’ retirement follows his 18 years as a director of the company and its predecessor, National Data Corporation, now NDCHealth. Yellowlees served as the initial board chairman for Global and subsequently as lead director.

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Fiserv Consolidates ATM/POS Network Branding

Fiserv confirmed Thursday it is consolidating its “ACCEL,” “Exchange,” “MPACT,” “TX” and “Instant Teller” regional EFT network brands into a single ATM/POS brand called “ACCEL/Exchange,” with “ACCEL” being the POS mark and “Exchange” the ATM mark. When the merger is completed, ACCEL/Exchange will have approximately 4,000 member financial institutions, allowing participating cardholders to gain access to their funds at more than 30,000 automated teller machines (ATMs) and over 180,000 merchant locations. In 2002 alone, more than 1,400 financial institutions with over 30 million cards added access to the ACCEL POS network. Fiserv serves more than 13,000 clients worldwide, including banks, broker-dealers, credit unions, financial planners/investment advisers, insurance companies and agents, self-insured employers, lenders and savings institutions.

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Sears Card Revenues Decline and Charge-Offs Rise

Sears reported yesterday that its domestic Credit and Financial Products division posted a 46% increase in operating income but a 4% decline in revenues. However, the second quarter operating income of $355 million included a $93 million gain on the sale of previously charged-off accounts. Second quarter domestic credit revenues decreased to $1.27 billion due to a lower yield. Sears says the lower yield is attributable to the lower interest rate environment, reduced late fees, and an increase in the size of its MasterCard portfolio, which carries a lower yield than Sears private label card. Since the prior quarter, Sears’ credit card outstandings have declined slightly from $29.5 billion to $29.4 billion, due to a contraction in its private label portfolio. The “Sears Gold MasterCard” increased from $12.4 billion in first quarter outstandings to $12.6 billion in 2Q/03 outstandings. The “Sears Card” declined from $17.2 billion in 1Q/03 outstandings to $16.8 billion in second quarter outstandings. In the second quarter, net charge-offs declined to 4.57% due to the sale of charged-off accounts, otherwise the charge-off rate for 2Q/03 would have been 6.71% compared to 6.11% in the first quarter. Delinquency declined from 7.87% for the first quarter to 7.41% for 2Q/03 but is significantly higher than last year’s 2Q rate of 6.87%. Sears also reported that its 2Q/03 net interest margin dropped to 13.25% compared to 13.75% in the prior quarter. Sears announced this week the sale of its domestic Credit and Financial Products division to Citigroup. For complete details on Sears second quarter performance visit CardData ([www.carddata.com][1]).

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

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Providian’s Charge-Offs Drop but Delinquency Rises

Providian reported this week that charge-offs for its securitized card loans plummeted during June to 16.76%. However, Providian’s delinquency rate inched up for the first time this year. Providian says the sharp decline in charge-offs from last month’s 20.40% was due to higher sales of charged-off assets in a favorable market. Providian’s delinquency rate for June increased 6 basis points to 11.98% compared to 11.92% in May, and 13.26% in January. On a reported basis, Providian’s charge-offs dropped to 12.85% in June from 15.16% for May. Reported delinquency declined from 8.68% in May to 8.31% in June. Providian is scheduled to release its second quarter earnings report on July 28.

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%

Source: CardData ([www.carddata.com][1])

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

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GPRS TOP-UP OMNI 3750

Lyfra-Partagro has begun supplying its customers with a new GPRS-enabled electronic top-up service based on VeriFone’s “Omni 3750.” The project, which began with an initial order for 650 terminals, is expected to reach several thousand units by next year and is currently being rolled out in retail outlets across Belgium following a successful pilot in January. The “Omni 3750” interfaces with an external GPRS modem to connect to the wireless network. Androme, who developed the e-voucher application and server software, played a key role in the selection of the terminal platform.

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Strong Growth for ATM Mobile Phone Top-Ups

TowerGroup has released research projecting that ATM-initiated mobile top-ups will account for 7% of all top-ups in 2007, generating $124 million in annual revenues for ATM operators. While the ATM will not become the dominant channel for a payment mechanism like mobile top-up over the next few years, it’s still a critical venue to explore. TowerGroup is the leading research and advisory firm focused on the global financial services industry.

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Q1 SYSTEMS CAPITAL

Vancouver-based QI Systems has signed a deal for Atlanta-based MidSouth Capital, to serve as the company’s investment banker and financial adviser. MidSouth Capital will assist QI Systems in meeting its short and long-term capital requirements for growth, expansion and acquisition. QI Systems designs hardware and software for the expanding cash card industry. QI’s “SmartVend” technology is currently being used in conjunction with “VisaCash,” “Mondex” (Multos), CANTV (Venezuelan phone card), Telus “SmartONE” card and others.

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TSYS Technology Center Opens

TSYS has opened its new subsidiary, TSYS Technology Center, Inc., in Boise, ID. TTC team members will support technology efforts throughout the company. Most of the TTC team members were senior software application developers formerly employed with Sears, Roebuck and Co. at its Application Development Center at the Morrison-Knudsen office complex in Boise. With more than 264 million accounts on file, TSYS makes it possible for millions of consumers to use their credit, debit, stored value, commercial, smart and retail cards anytime, anywhere through any medium or portal.

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MAGIC MONEY MASTERCARD

A combined prepaid calling card and MasterCard and Maestro debit/credit card is set to launch in Mexico, Venezuela, Germany and in the USA. GlobeTel Communications and Grupo Ingedigit have teamed to launch the “Magic Money Card.” GTEL says there is an opportunity to add the MasterCard features to more than 300,000 prepaid cards currently issued in Mexico, and to the over 100,000 MasterCard Debit/Credit Card customers Grupo Ingedigit is supporting in Venezuela, and Germany. The new card also offers financial services such as domestic and foreign money remittances. Cardholder accounts will be accessible through the company’s Web site.

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Chase Card Loans Up 3%, Volume Up 6%

J.P. Morgan Chase reported that its credit card outstandings increased 3% in the second quarter to $51.0 billion. Charge-offs inched up 14 basis points over the prior quarter to 6.01%, but remain 40 basis points lower than year-ago levels. Delinquency (30+ days) declined 19 basis points over the first quarter to 4.40%, but was up 23 basis points over 2Q/02. Charge volume for the second quarter was up 6% to $22.2 billion. Chase’s account base increased by 500,000 accounts in the second quarter to end at 30.3 million. However, active accounts declined from 16.5 million in 1Q/03, to 16.4 million for the second quarter. For complete details on Chase’s second quarter performance visit CardData ([www.carddata.com][1]).

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

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PROTON PRISMA VISA

CSOB Bank in the Czech Republic and Kredyt Bank Poland are set to roll-out VISA cards based on the “Proton Prisma” smart card platform. Following the certification from VISA of the personalized “Proton Prisma” card, Kredyt Bank started in June to issue chip-based “VISA Classic” and “VISA Gold” credit cards. In a later phase, Kredyt Bank also plans to replace its present “VISA Electron” and “Maestro” debit cards by “Proton Prisma”-based EMV cards. CSOB Bank has also installed “Proton Prisma’s Matrix” card lifecycle management and personalization system and has started the migration of its “VISA Electron” debit card base to chip technology. Other CSOB card products will be gradually converted to the same “Proton Prisma” EMV multi-application platform such as CSOB’s Post Savings Bank debit cards. Proton World International was acquired by STMicroelectronics in April.

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Magic Money MasterCard Set to Roll

Miami-based GlobeTel Communications is launching its “Magic Money MasterCard.” The Magic Money Card is a prepaid calling card and MasterCard and Maestro Debit/Credit Card all rolled into one with a host of additional stored value services. As a MasterCard, the Magic Money Card enables the customer to shop in all the 20 million places that accept MasterCard and Maestro Debit/Credit Cards. Consumers will also have access to any of the 1 million ATMs worldwide that have the Maestro and Cirrus logos.

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