TAXIS & CARDS

Nagoya taxi operators will begin offering passengers the option of using a
credit card next month. Toyota Finance Co has teamed with Nagoya Railroad
Co to provide the service to taxi operators affiliated with the railroad.
Meitetsu Kotsu taxi operators will be the first to offer the service.
According to Kyodo News, all 35 operators affiliated with Nagoya Railroad
across Japan will eventually offer the credit card option.

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Oberthur 2002

Oberthur Card Systems released final 2002 figures yesterday that show the company returned to profitability in the second half of last year. Oberthur says it cut debt by 40% last year, and is now positioned for increased profitability in 2003. In 2002, all smart card segments kept on growing in volumes, with 689 million units delivered versus 599 million the previous year, showing a 15% increase. On a full year basis, Oberthur delivered 99.1 million smart cards in 2002, an increase of 8.4% over 2001. However the average selling price dropped by 16.7% in 2002. The payment market accounted for 54% of Oberthur sales in 2002 (versus 52% in 2001) due to its strong positions in both the United Kingdom and Benelux smart card migration programs and in the French banking card renewal program. For complete details on Oberthur’s latest results visit CardData ([www.carddata.com][1]).

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

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US$1.99 MULTOS CARD

Sydney-based Keycorp has unveiled a low cost smart card in conjunction
with MasterCard. The deal offers a 16k “MULTOS” multi application-capable
smart card, embedded in plastic and incorporating “M/Chip,” “Mondex”
(e-purse system) and PKI for US$1.99. The US$1.99 card has been made
possible by support from the full range of vendors in the delivery chain,
including chip and smart card manufacturers. All “MULTOS” smart cards
include an RSA (Rivest Shamir Adleman ­ the major cryptographic system)
co-processor to ensure the EMV transaction is fast and secure, reducing the
risk for the issuing bank.
Besides Keycorp, supporters of the MasterCard smart card program include
Infineon, VCT, ID Data, AMS, KBC Corp, TNP, Foongtone, DZ Card, Toppan Form
HK, Kyodo, Security Plastics and Shoei Printing Company.

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Delinquency 4Q/02

Credit card delinquency, based on the number of accounts 30+ days past due, hit an all-time high of 4.07% in the fourth quarter. Based on total dollars outstanding, bank card delinquencies rose to 4.63%, compared to the previous quarter’s 4.45%, but slightly lower than the fourth quarter of 2001. According to the American Bankers Association’s latest “Consumer Credit Delinquency Bulletin,” delinquencies, based on outstandings, last reached 4.63% in the third quarter of 1998, and hit a record 5.45% in the fourth quarter of 1996. The ABA blames anemic job growth for the current rise in delinquency. CardData ([www.carddata.com][1]) says that discounting the delinquency rates of sub-prime specialists Capital One, Providian, Household, and Metris, the average delinquency rate among the nation’s top issuers, based on outstandings, would have declined 20 basis points during 2002, from 5.23% to 5.03%. On average, the top 10 issuer delinquency rate for 4Q/02 is 6.62%, compared to 6.44% in the prior quarter, and 6.17% one year ago.

4Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
2003: NA 1999: 4.28% 1995: 4.45% 1991: 4.61% 1987: 3.65% 1983: 2.74%
2002: 4.63% 1998: 4.62% 1994: 3.20% 1990: 4.46% 1986: 4.80% 1982: 3.57%
2001: 4.67% 1997: 5.38% 1993: 3.64% 1989: 3.22% 1985: 3.88% 1981: 2.26%
2000: 4.25% 1996: 5.45% 1992: 4.11% 1988: 3.40% 1984: 2.85% 1980: 3.00%

Source: American Bankers Association Delinquency Bulletin

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

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VISA QSR

VISA reported this week that quick service restaurant volume grew by 65% during 2002, to $3.2 billion. The figure is significant considering that slightly less than 15% of QSRs currently accept cards. VISA released a study of 100,000 QSR transactions that showed the average transaction for credit customers was 20% to 30% higher than for cash customers. VISA also reported this week that overall performance in new and emerging categories increased by 23% to $95.8 billion in 2002 volume. Recurring payments volume topped $39.9 billion, an increase of 26% and the e-commerce category grew nearly 60% to $42.5 billion in volume. VISA says significant gains were also made in the movie theater, toll and bridge fee, and charitable organization segments. In 2002, the number of VISA-branded credit, debit, commercial, prepaid and smart cards in the USA rose to 386 million. In addition, VISA processed more than 14.4 billion transactions, a 9.1% increase over 2001.

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Credit Card Test

The utility of a payment card has been expanded as Mercedes-Benz credit has come up with a novel use. The company upgraded its Web site this week and add a new function that enables lease customers to evaluate the difference between normal wear and tear and actual damage. Mercedes-Benz says if the exterior or interior damage can be hidden with a credit card, it passes the test and is not chargeable damage. The company is offering a online demo. DaimlerChrysler offers a “Mercedes-Benz VISA” card in the USA through Columbus Bank and Trust Company.

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Card Protest

The petroleum station members of the Figisc/Anisa, Faib/Aisa, and Fegica unions in Italy will refuse to accept credit cards and debit cards for several days this month in a protest action. According to today’s edition of the weekly The RAM Report (www.ramreport.com), the stations will refuse to take cards between April 9-11 and again between April 16-22. The members are protesting a new 25 cents surcharge being imposed by Cogeban on each ATM transaction payment. The gas station members also say that credit card fees of 1.2% of the transaction plus a flat fee of 83 cents is wiping out their profits. The group is threatening to cancel their payment card merchant agreements if the fees are not reduced.

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