Wal-Mart Suit

VISA and MasterCard’s settlement in the Wal-Mart class action debit card lawsuit will be executed in early June and completed by September. However VISA and MasterCard still face debit card lawsuits from those opting out of the class action. Last week’s Wal-Mart settlement includes slightly more than $3 billion in refunds, a 35% reduction in interchange rates, and an untying of debit card acceptance from credit card acceptance. Separate lawsuits from Home Depot, Toys R Us, Meijer Stores and Giant Eagle have not been settled.

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Saks Cash

Saks credit cardholders are now limited to paying a maximum of $350 per month in cash towards their credit card account. The cash limit is the result of a cease-and-desist order issued by the OCC last month under the Bank Secrecy Act covering money-laundering. Saks’ former bank subsidiary, National Bank of the Great Lakes, was late in filing a few reports about cardholders making large cash payments on their credit-card accounts. Saks sold the assets of National Bank of the Great Lakes on April 15 to Household International of Prospect Heights, and no longer owns its stores’ private-label credit cards. Saks stores include Carsons, Younkers, Boston Store, Bergner’s and Herberger’s.

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LML PATENT

Vancouver-based LML Payment Systems has received notification from
the U.S. Patent and Trademark Office that its patent application for the
electronification of checks has been approved. LML is a financial payment
processor providing check processing solutions including electronic check
authorization, electronic check conversion and primary and secondary check
collection including electronic check re-presentment to national, regional
and local retailers. The company also provides selective routing of debit,
credit and EBT transactions to third party processors and banks for
authorization and settlement.

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Top Ten Charge-Offs

Charge-offs among the top ten U.S. VISA/MasterCard issuers rose 91 basis points during the first quarter compared to one year ago. Charge-offs stood at 8.11% compared to 7.20% one year ago. The increase was driven by the huge increases in losses by sub-prime issuers. All but three issuers reported up-ticks in charge-offs. Citibank, Bank One, and Bank of America reported decreases in first quarter charge-offs, according to CardData ([www.carddata.com][1]).

TOP TEN VISA/MC ISSUER CHARGE-OFFS
1Q/03 1Q/02 ANN CHNG
1. Citigroup: 6.04% 6.41% – 37 bps
2. MBNA: 5.04% 5.00% + 4 bps
3. Bank One: 5.29% 5.69% – 40 bps
4. Chase: 5.75% 5.82% + 19 bps
5. Cap One: 6.21% 4.70% + 179 bps
6. Providian: 17.34% 15.05% + 256 bps
7. BofA: 5.25% 5.43% – 18 bps
8. Fleet: 6.13% 5.42% +71 bps
9. Sears Natl: 6.11% 5.43% +68 bps
10. Metris: 17.90% 13.00% + 490 bps
AVERAGE: 8.11% 7.20% +91 bps

* does not include Household which is now part of HSBC

Source: CardData ([www.carddata.com][2])

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

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Supermarket Reaction

The National Supermarkets Association said Friday it remains wary of what Wal-Mart will do with its market power. The group said it wants to assure consumers that if Wal-Mart chooses not to accept certain debit cards then they will be able to use those cards to make their purchases in local community stores. The NSA says its chief concern about the Wal-Mart debit card lawsuit was the threat Wal-Mart poses to local community stores which it has been systematically eliminating all across America.

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CUBIC NEXT GEN

Cubic will introduce its new all-in-one bus driver control platform and
Internet ticketing solution this week in Madrid at the UITP “Mobility &
City Transport Exhibition.”
The company will introduce the “Cubic Driver Control Unit,” an on-bus
processing platform that creates a single interface for driver log-on,
magnetic and smart card fare collection, and management of all bus
equipment. Also, Web-enabled technology is viewed as the next step for
customer services and agency management in the areas of revenue management,
ticket distribution, and the development of integrated regional systems.
Cubic’s “Nextfare Web Services” technology allows riders to load their
smart cards with value anytime from the convenience of their desktop
computers, laptops, phones or handheld devices. It distributes purchases by
electronically delivering the value to the smart card the next time the
customer presents his or her card to a reader at the ticket vending
machine, gate or bus smart card validate. The new products have been
developed to meet European requirements.

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ATM Rebates

North Dallas Bank & Trust has unveiled the industry’s first automatic ATM surcharge rebate program. “Relationship Plus” account customers can now enjoy the benefits of ATMs anywhere and without the paperwork of mail-in rebates. Under the program, the system automatically refunds the amount of the ATM surcharge to the customer’s account on the same day the transaction is charged. North Dallas Bank & Trust has more than $830 million in assets and is a locally owned bank with four locations in the Dallas area.

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