Australian Fees

Credit card fees paid by Australian consumers increased a record 30% last year. According to the Reserve Bank of Australia, credit cards fee grew from $339 million in 2001 to $440 million in 2002. Since 1997, credit card fees generated from Australian households have increased 25%. Card fees are expected to surge this year as merchants are now permitted to surcharge customers for credit card transactions. The record increase in 2002 was driven by card issuers jacking up annual fees and other card fees in anticipation of the January 1, 2003 RBA regulation, which permitted merchants to pass along their card fees to consumers. For example, ANZ raised annual fees on all its credit cards by nearly 150% in December 2002. ANZ is currently considering raising annual fees further. ANZ may increase the basic “Qantas VISA” from $40 to $120, and increase annual fees for the “Qantas VISA Gold” from $95 to $285.

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GLOBAL REPOSITORY

Citigroup’s Global Transaction Services has launched a global data
repository enabling commercial card clients insight into their corporate
spending patterns on a global basis. The “Citibank Global Data Repository”
currently consolidates data for reporting and file delivery from 15
countries, growing to a total of 30 countries projected by year-end. In
addition to consolidating clients’ data from their commercial card
transactions, the “Citibank Global Data Repository” incorporates enhanced,
line-item detail, as well as data from other sources such as account
administration. This consolidated global data is provided back to the
client via file delivery and can be integrated with a wide variety of
financial systems. Previously, this information was consolidated at the
country level and was not available to clients at a global level without
extensive data re-keying and file manipulation.

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Morris Leaving

Capital One’s President and COO is setting the stage for a departure from an executive management role at the company by the end of this year. After 15-years of building Cap One with long-time business partner and CEO Richard Fairbank, Nigel Morris will become Vice Chairman of the Board of Directors, effective May 1st, stepping down as President and Chief Operating Officer. Morris says he wants to spend more time with his family and to pursue personal interests. As Vice Chairman, Morris will continue to be responsible for the company’s international business and its enterprise-wide risk management activities as well as communicating to the company’s external audiences. In addition, the company announced the creation of an Executive Committee comprised of the heads of key business lines and principal operating and functional groups, which will take on the company’s key cross-functional management and operating responsibilities. Morris will serve on this committee in his new role. The Executive Committee will be chaired by CEO/Chairman Richard Fairbank.

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CARD FEES

Credit card fees paid by Australian consumers increased a record 30% last
year. According the Reserve Bank of Australia, credit cards fee grew from
$339 million in 2001 to $440 million in 2002. Since 1997, credit card fees
generated from Australian households have increased 25%. Card fees are
expected to surge this year as merchants are now permitted to surcharge
customers for credit card transactions. The record increase in 2002 was
driven by card issuers jacking up annual fees and other card fees in
anticipation of the January 1, 2003 RBA regulation, which permitted
merchants to pass along their card fees to consumers. For example, ANZ
raised annual fees on all its credit cards by nearly 150% in December 2002.
ANZ is currently considering raising annual fees further. ANZ may increase
the basic “Qantas VISA” from $40 to $120, and increase annual fees for the
“Qantas VISA Gold” from $95 to $285.

Details

Cap One 1Q/03

Capital One yesterday reported strong profits in the first quarter of $309 million, compared to $188 million one year ago. However, the steep rise in profits was accompanied by a $112 million decline in quarterly marketing expenses. Marketing expense for 1Q/03 was $241.7 million compared to $353.5 million in the same period of the prior year. As the issuer shifts its focus up-market, away from the sub-prime market, the number of accounts have declined. Cap One reported it lost nearly one million accounts during the first quarter, ending at 46.4 million. The company’s managed loan balances ended the 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. The managed charge-off rate increased to 6.47% in the first quarter, compared to 6.21% in the previous quarter, and 4.70% one year ago. The managed delinquency rate declined to 4.97% for 1Q/03, from 5.60% in 4Q/02, but remained higher than 1Q/02’s 4.80%. For complete details on Cap One’s first quarter performance visit CardData ([www.carddata.com][1]).

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

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Diebold 1Q/03

Diebold reported first quarter net income of $25.9 million on revenue of $410.2 million. ATM product and service revenues declined 1.1% to $291.1 million. However, on a fixed exchange rate basis, ATM revenues increased 0.7%. During the quarter, Diebold signed five significant ATM orders totaling more than $24 million including orders for 700 new ATMs from two banks in India; an $8 million order for the new “Opteva” and other self-service solutions from a large bank in the USA; orders valued at more than $8 million from three financial institutions in Brazil; and an ATM order for nearly $5 million from a large bank in China. For complete details on Diebold’s first quarter performance visit CardData ([www.carddata.com][1]).

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

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CSP Bill-Paying

A new study has been released on the behavior of consumers who paid electronic bills at consumer service provider sites that offer “pay anyone” services, such as banks, credit unions, brokerage firms and portals. The research from CheckFree Research Services found that CSPs, whose subscribers have activated electronic bills, experienced higher customer retention, product usage and payment volume rates, and enjoyed significantly lower customer care support costs associated with electronic billing and payment transactions. EBP customers who activate an e-bill are 86% more active than subscribers who simply make bill payments online. Customers who use e-bills make 37% more payments than their online bill payment counterparts. E-bill subscribers have a cancellation rate that is 38% lower than other electronic bill pay customers. Payments associated with e-bills are processed at a higher electronic rate than non-e-bill payments. This is a primary contributor to e-bill payments generating 43% fewer claims than non-e-bill payments.

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GE and Lowe’s

GE Consumer Finance inked a seven-year extension to its private label credit card agreement with Lowe’s Companies. GE and Lowe’s have partnered for 23 years. Lowe’s Companies serves approximately nine million customers a week at more than 850 home improvement stores in 45 states. During the first quarter, GE inked a deal to buy Conseco’s retail sales finance business and launched a new private-label credit card program with Meijer Stores. GE reported earlier this month that its credit card profits dropped 13% in the first quarter to $181 million, compared to $209 million one year ago. Revenues for GE’s credit card business were also down, slightly, from $903 million for 1Q/02 to $893 million for 1Q/03. (CF Library 4/11/03)

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