Iraq Effect

Eighty four percent (84%) of Americans say that the recently-concluded war with Iraq had no impact on their willingness to use credit cards or take on other types of debt, according to the Cambridge Consumer Credit Index. 13% of those surveyed said they decreased their use of credit during the war, while 3% increased their use of debt.

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[1]: http://www.cardweb.com/images/c/cambridgeconsumerindex/may03chart.jpg

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Top 10 Delinquency

Delinquency rates among the top ten U.S. issuers edged up during the first quarter, thanks largely to the Metris/Direct Merchants portfolio. All three of the nation’s top issuers report declines of about 20 basis points over the first quarter of 2002. Providian, which has been dogged by soaring delinquencies over the past two years, reported a modest uptick in first quarter delinquency. Fleet and Sears National Bank reported significant increases in first quarter delinquency. For more historical information on delinquency rates visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 1Q/03 1Q/02 Y/Y CHG
1. Citigroup: 90+ 1.91% 2.13% -22 bps
2. MBNA: 30+ 4.74% 4.97% -23 bps
3. Bank One: 30+ 4.08% 4.27% -19 bps
4. Chase: 30+ 4.59% 4.58% +1 bps
5. Cap One: 30+ 4.97% 4.80% +17 bps
6. Providian: 30+ 10.31% 10.22% + 9 bps
7. BofA: 30+ 6.09% 6.11% – 2 bps
8. Fleet: 30+ 4.37% 3.97% +40 bps
9. Sears Natl 30+ 7.87% 7.37% +50 bps
10. Dir Merch: 30+ 11.50% 9.80% +170 bps
30+ DAY AVG*: 6.50% 6.23% +22 bps

NR- not reported * 90+ day is not meaningful

* does not include Household which is now part of HSBC

SOURCE: CardData (www.carddata.com)

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

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CARD LIMITS

The Financial Supervisory Service reported this week that credit card
volume dropped nearly 14% in the first quarter. The FSS says the lower
volume was driven by the lowering of credit limits in the wake of spiraling
delinquencies. Cardholders charged 116.3 trillion won on credit cards in
the first quarter, including credit purchases and cash advances, down 13.7%
from the fourth quarter. Card usage at LG Card declined 8.5% in the first
quarter, while Samsung Card dropped 9.2%. Shinhan Card saw a drop of 36.2%
in 1Q/03 while Kookmin Credit Card volume declined 21.7%.

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HYPERCOM INTL

The Industrial and Commercial Bank of China has selected Hypercom as its
preferred provider for card payment terminals and technology for 2003, the
second year running. China UnionPay also recently selected Hypercom
networking technology to enable cross-city and cross-bank transactions in
40 cities and, by 2005, enable more than 400 million bank cardholders in
100 cities to use their cards at any payment terminal in
China. Additionally, Hypercom has also recently created and installed
customized networks for the Taiwan Lottery, the Western Canada Lottery
Corporation, and is also providing support to the Moscow Lottery and Fubon
Bank, one of Asia’s leading financial conglomerates.

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JCB Smart Card Chief

JCB has named a new top executive to oversee smart card migration, secure e-commerce, contactless payment, as well as other emerging technologies, both domestically and internationally. Masahiro Omoto, who spent 16 years of his 18-year career with JCB in the International Department, has been appointed EVP/GM of the Advanced Technologies Department. Omoto is succeeded by Hitoshi Shioda, SVP, overseeing advanced technology for JCB’s International Department. JCB’s payment card network has 10.43 million merchants and over 45 million card members worldwide.

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ECHO 1Q/03

Electronic Clearing House reported record first calendar quarter revenue of $9.8 million, an increase of 16.5% over last year. 1Q/03 net income was $268,000, as compared to a net loss of $1.9 million in the same year-ago quarter. For the quarter, gross margin from processing and transaction revenue increased to 34.6%, from 30.5% in the year-ago quarter, and from 32.4% in the prior quarter. ECHO says the reduction of its charge-back losses accounted for approximately 1.1% out of the 4.1% of the gross margin improvement for the quarter over the same period last year. Additionally, the 30.5% increase of the check services revenue this quarter also contributed to the higher gross margin, since check services normally generates a higher gross margin than bankcard processing revenue. Bankcard processing and transaction revenue increased 13.4% to $7.8 million for the quarter. Check-related revenues increased 30.5% to $2.0 million. For complete details on ECHO’s latest performance visit CardData ([www.carddata.com][1]).

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

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