PAYSTAR DEAL

Madrid-based Xtra Telecom S. A. has signed an agreement with PayStar Corporation whereby Xtra Telecom will market PayStar SHS’ “Application Development Software” and new “Server View 1.4 Advantage” VRU software to European customers. PayStar Corporation is comprised of three fully integrated divisions: PayStar GLOBALCash, Inc. supplying prepaid ATM and MasterCard card products and services, PayStar InfoStations, Inc. providing Internet enabled single and multi-use kiosks and PayStar SHS, Inc. providing commercial telephony hardware and software switch services.

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GM Cards

The pioneer of co-branded reward credit cards has launched a new credit card for small businesses nationwide, and a new personal credit card for GM employees retirees, GM Dealers, qualified suppliers and their relatives. General Motors announced Thursday it has teamed with Chase to offer the business card and has expanded its relationship with Household to develop the new personal card for GM family members. However, both of the new cards feature a pared-down rewards structure compared to rewards offered on the “GM MasterCard” that was first issued in September 1992. Both of the new cards offer a 1% rebate on all card purchases compared to the 5% rebate offered on the current “GM MasterCard.” The new “GM Business MasterCard from Chase” also offers an additional 1% for GM parts and service purchases at authorized GM vehicle dealers. While there are earnings limits on the current “GM MasterCard,” the new cards have no annual limits on earnings, or limits on the amount of earnings that can be redeemed toward the purchase of eligible GM vehicles. Earnings are valid for up to five years. With the new “GM Business Card from Chase” all earnings from employee accounts roll-up to the business owner’s account, for personal or business redemption. GM and Chase are also offering a special promotion on balance transfers. Meanwhile, the new “GM Extended Family MasterCard” from Household permits members of the “GM Family” to combine their MasterCard earnings with the “New Vehicle Purchase Program” discounts and use them toward the purchase or lease of a new GM vehicle. In addition, cardholders will have a cash back option on earnings accumulated on purchases made with the new “GM Extended Family MasterCard.” The “GM Extended Family MasterCard” will be available in July to current GM family members and to new consumers in September.

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Target 1Q/03

Target Corporation reported yesterday that it experienced its first contraction in bank credit card receivables in the three month period ending May 3rd. The signs of maturation were also evident in Target’s delinquency and charge-off figures for the first quarter. As of May 3rd, Target had $3,751,000,000 in “Target smart VISA” receivables compared to $3,774,000,000 three months ago. Target’s net charge-off rate for its VISA program was 8.5%, compared to 7.3% in the fourth quarter, and 6.9% in the third quarter. Net write-offs for its store credit card program were 8.2%, compared to 8.4% for 4Q/02, and 7.9% in 3Q/02. The 90-day+ delinquency rate for “smart VISA” was 3.3% compared to 3.1% for the prior quarter, and for its “Guest Card” program the figure was unchanged at 5.1%. Target’s profits from its credit card operations was $151 million, slightly above the $150 million profit recorded in the fourth quarter, but well above 1Q/02 profits of $115 million. Totally, Target earned $349 million in 1Q/03. Target also noted yesterday that it was happy with the recent proposed VISA/MasterCard debit card settlement as approximately 25% of its in-store sales are on debit cards. Target says about 50% of its debit card transactions are non-PIN transactions. For complete details on Target’s 1Q/03 performance visit CardData ([www.carddata.com][1]).

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

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PVN April

Providian reported Thursday that its charge-off rate among its securitizations declined to 19.80% for April, compared to 19.89% for March. However, the figure is up compared to February’s 18.23%, and January’s 19.38%. Delinquency (30+ days) for its securitizations also dropped from 12.46% for March, to 12.27% for April. Previous delinquency was 12.89% for February, and 13.26% for January. The loss rate on reported card loans declined from 15.91% in March to 14.50% in April. Reported delinquency also declined from 8.76% in March to 8.34% in April. Providian ended the first quarter with $18,470,000,000 in card outstandings and 11.7 million accounts, acoording to CardData ([www.carddata.com][1]).

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

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Catuity 1Q/03

Loyalty software specialist Catuity reported its first profitable quarter with earnings of $305,000 in 1Q/03, as compared to a net loss of $355,000 one year ago. Catuity, Inc. is a leading provider of application software that allows merchants, transaction processors and card issuers to establish and administer customer loyalty programs integrated to the payment system at the point-of-sale.

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THINK WESTERN MASTERCARD

Edmonton-based Canadian Western Bank has joined with MBNA Canada Bank to issue a new suite of MasterCards for business and personal use. The “Think Western MasterCard” will be offered in a business version and three personal credit cards. Under terms of the agreement, MBNA Canada Bank will provide the marketing and operational expertise including card delivery and fulfillment. Canadian Western Bank has 27 branch locations and is the largest “Schedule I” chartered bank headquartered in and regionally focused on Western Canada.

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COF Marketing

Capital One says its “What’s in Your Wallet” campaign has resulted in the card issuer achieving brand awareness and brand equity scores among the highest in the credit card industry. The company expects its marketing expense to gradually increase this year from the $242 million it spent in the first quarter. Even though the issuer will expand its marketing investments the Company expects little or no account growth this year. However, the Company expects managed loans outstanding to increase by approximately 15%-20% in 2003, with more of the growth comprising “super-prime” and “prime” accounts rather than “sub-prime” assets. Cap One has previously held as much as 40% of its managed loans in the “sub-prime” or under FICO 660 market. The company’s managed loan balances ended the first quarter at $59.2 billion, a 21.9% increase over 1Q/02. U.S. consumer loans, mostly credit cards, accounted for $46 billion of the total.

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LML & CARD-PAYMENT

Vancouver-based LML Payment Systems and Global eTelecom have renewed their processing agreement with ISO CardPayment Solutions. Under terms of the contract, Global eTelecom will continue to provide complete back engine processing and support for the CardPayment Solutions’ Electronic Check Conversion programs. Global eTelecom’s Electronic Check Services include: Electronic Check Conversion (Point-of-Purchase), Electronic Mail Order / Telephone Order Checks (MOTO), ARC Lockbox Conversion, Electronic Recurring Debit, Electronic Represented Check Collection (RCK), Electronic Check Image Capture, and Secure Web Based Check Image Retrieval.

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