Gottschalks Card

Gottschalks, the western regional department store chain, announced Monday it has completed the sale of its private label credit card operations to Household’s retail services business. The sale agreement includes the servicing of the Company’s more than one million credit card accounts that generate annual credit card sales of more than $300 million. Gottschalks currently operates 69 department stores and thirteen specialty apparel stores in California, Washington, Alaska, Oregon, Nevada, and Idaho. At the end of 2002, Household has $14,916,700,000 in private label credit card outstandings. Household’s private label credit card portfolio has grown 8% over the past twelve months.

Details

BLUE ID KEEPER

Datacard’s “Affina Life Cycle Management System” is being used to
provide the Internet download capability for the new smart card application
announced by American Express. The AmEx “Blue” smart card is now offering
the “ID Keeper” application which stores multiple Web sites, online IDs,
and passwords. The free application can be obtained by going to a special
Web address, inserting the “Blue from American Express” card into the smart
card reader, and then downloading the software. AmEx introduced the “Blue”
card in September 1999, becoming the first major credit card issuer to
launch a smart card in the USA. In 2000, AmEx launched a “Code Blue”
contest for technology developers to create new “Java Card” technology
applications for the “Blue” credit card. A German developer won first place
in the “Code Blue” contest for his “Pass Keeper” application. The “Blue”
card is also issued in Australia, Austria, France, Germany, Italy, the
Netherlands, Spain, Sweden, and the United Kingdom.

Details

Card Bond Charge-Offs

Standard & Poor’s reported yesterday that charge-offs among $420 billion of receivables held in trusts of rated credit card-backed securities hit the second highest recorded rate since their “Credit Card Quality Index” was introduced in 1992. Like the charge-off rate for managed card loans, the charge-off rate for securitized card loans is driven by unprecedented sub-prime losses which have never been recession-tested. S&P says its calculations show an average loss rate of 7.50% in December, a 100 bps climb since early September. The Metris Master Trust reported the largest increase among all credit card trusts with losses increasing 270 bps, moving up to 21.3% from 18.6% during December. Of the five largest master trusts, three reported an increase in their December loss levels. Increases were posted by the Chase Credit Card Master Trust of 110 bps; Discover Card Master Trust I by 40 bps, and MBNA Master Credit Card Trust II by 20 bps. First USA Credit Card Master Trust’s loss rate held steady at 6.0%, while Citibank Credit Card Master Trust I reported a 30 bps decline. Meanwhile, the delinquency rate dropped to 5.4% in December from 5.5% in November and in October. Also, more than 70% of the trusts tracked by the indexes reported month-to-month declines in 30- and 60-day delinquency numbers. Ninety-day delinquency numbers remained elevated, with 55% of the trust participants reporting delinquency rates higher in December compared with November.

Details

NCE Goes Live

The National Check Exchange, a new check exchange business recently formed by The Clearing House and 35 banks, operated its first exchange Monday. A clearinghouse allows its members to exchange checks among themselves to reduce costs and increase the efficiency of the check clearing process. The National Check Exchange, which is owned and led by its 35 members, has standardized rules, allows sharing of common functions such as a transportation network, and will be attractive to new participants because it provides cost effective clearing methods as alternatives to those of other check clearing venues.

Details

PegaCARD Customer Care

MA-based Pegasystems has released “PegaCARD Customer Care,” that provides differentiated customer service and automation capabilities by integrating front- and back-office processes for card issuing organizations. PegaCARD Customer Care is an evolution of Pegasystems’ card services technology that includes solutions extending from customer service into collections, dispute and chargeback management, credit, fraud and correspondence management. Built on the company’s patented rules architecture, PegaCARD Customer Care embeds best practices for consistent customer interactions.

Details

AFFINA-POWERED

Luottokunta’s new multi-application smart card will be powered by the
Datacard “Affina” life cycle management system. Two weeks ago, Luottokunta
announced that it selected LogicaCMG as the primary contractor to provide
the national implementation of a new end-to-end card processing solution,
enabling the issuance of multi-application smart cards. LogicaCMG selected
Datacard as a partner to implement a life cycle management system to
provide all the card management needs for the initial launch, and
ultimately manage the life cycle of the card population, including adding,
deleting or modifying applications to any issued card. The application will
support 1.5 million cards, which will be issued in two phases. The first
phase will be launched in the third quarter with completion projected in
January 2004. The Luottokunta card is Finland’s first national smart card
payment program.

Details

NYCE Beefs-Up Web Services

NYCE is migrating its “InfoManager” administrative workstation application to the “Stratus ftServer” platform to beef-up access to its Web-based application which provides reports, transaction histories, technical operations bulletins and manuals, as well as other data and services to NYCE 2,200 members. The Stratus ftServer family is the computer industry’s first line of 1- to 4-way SMP fault-tolerant Intel(R) processor-based servers for Microsoft(R) Windows(R) Advanced Server computing environments. ftServer systems are simple to deploy, operate and maintain, and they provide the highest level of reliability for applications where business continuity and continuous processing are critical. The product family includes a range of models, configurations, and price points to meet departmental- to data-center application requirements.

Details

CompuCredit 4Q/02

CompuCredit, issuer of the “Aspire” and “Emerge” sub-prime VISA cards, reported yesterday that outstandings dropped nearly 8% during the fourth quarter to $2.8 billion. The Atlanta-based issuer also reported a decline in the gross number of accounts from 4.0 million to 3.5 million. During 3Q/02, CompuCredit added 2.3 million accounts from Providian. During the fourth quarter, CompuCredit opened 53,000 new accounts. The adjusted net charge-off rate was 9.2% in the fourth quarter, as compared to 8.3% for the third quarter of 2002. At year-end 2002, the 60+ day managed delinquency rate was 13.9% as compared to 12.3% for 3Q/02, and 11.1% one year ago. For the fourth quarter, CompuCredit posted net income attributable to common shareholders of $16.7 million. For complete details on CompuCredit’s 4Q/02 performance visit CardData ([www.carddata.com][1]).

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

Details

Intelli-Check Board

NY-based Intelli-Check announced Monday it has appointed former U.S. Assistant Secretary of Defense and Defense Department CIO Arthur Money to its Board of Directors. Mr. Money, who has more than 40 years of management and engineering experience with the defense electronics and intelligence industry, currently serves as a member of the advisory board of several corporations including the Boeing Company. He also serves on the Board of Directors of numerous companies including Silicon Graphics, Inc. and CACI International and has been recognized for his vision, leadership and commitment to excellence in systems and process re-engineering.

Details

SOSPITA E-GATE

Mandal-based Sospita has signed an agreement with SchlumbergerSema to
jointly provide the software industry with a high security smart card
license protection solution.The combined solution will employ the Sospita
security hardware license protection solution along with the new
“SchlumbergerSema e-gate” token to decrypt parts of the digital content in
real-time, allowing a level of security far above anything that exists
today. The secret keys protecting the content will be held within the
tamper-proof e-gate device and not on the hard disk, making the task of
hacking the software extremely difficult. Industry analysts say that 37% of
software is pirated on average worldwide each year. In China the piracy
rate is over 90%. The software protection market in China is currently
doubling annually and growth rates are high in Asia and other emerging
countries where piracy is a serious problem.

Details

Top Ten Charge-Offs

Charge-offs among the top ten U.S. VISA/MasterCard issuers rose 55 basis points during the fourth quarter, ending the year at a level 129 basis points above the EOY 2001. However, discounting the impact of the sub-prime portfolios of Metris and Providian, the charge-off rate among the nation’s top issuers is only up a modest 23 bps. Furthermore discounting the impact of Capital One, which has between a 35% and 40% exposure to sub-prime, would make the charge-off rate among the top issuers flat since 4Q/01. The rapid deterioration in the sub-prime portfolios of Metris and Providian has been nothing less than stunning. Metris losses are up 640 bps over last year and Providian’s loss rate has climbed 464 bps. Capital One experienced a 179 bps rise in charge-offs since 4Q/01. Meanwhile, Citigroup, Bank One, and Fleet reported declines in their credit card loss rates. For 4Q/02, Discover reported a charge-off rate of 5.96%, compared to 6.02% in the previous quarter, and 5.85% one year ago. For American Express, losses slowed from 5.6% in 3Q/02 to 5.50% in the fourth quarter. During 4Q/01, American Express experienced a charge-off rate of 5.90%. For historical data on charge-offs visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MC ISSUER CHARGE-OFFS
4Q/02 3Q/02 2Q/02 1Q/02 4Q/01 ANN CHNG
1. Citigroup: 5.85% 5.86% 6.50% 6.41% 5.91% – 6 bps
2. MBNA: 5.04% 4.84% 5.09% 5.00% 4.86% + 18 bps
3. Bank One: 5.13% 5.00% 5.62% 5.69% 5.59% – 46 bps
4. Chase: 5.75% 5.59% 6.41% 5.82% 5.56% + 19 bps
5. Cap One: 6.21% 4.96% 4.98% 4.70% 4.42% + 179 bps
6. Providian: 17.34% 16.71% 17.53% 15.05% 12.70% + 464 bps
7. BofA: 4.99% 5.13% 5.59% 5.43% 4.90% + 9 bps
8. Household: 6.98% 6.81% 7.54% 7.17% 6.69% + 29 bps
9. Fleet: 5.16% 5.25% 5.81% 5.42% 5.38% – 22 bps
10. Metris: 18.20% 15.10% 15.00% 13.00% 11.80% + 640 bps
AVERAGE: 8.07% 7.52% 8.01% 7.37% 6.78% + 129 bps
Source: CardData (www.carddata.com)

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

Details

FDC & ClearCommerce

First Data says it will offer ClearCommerce’s online payment and risk management platform to its alliance channels, building on an agreement to use ClearCommerce’s software to power its “LinkPoint Secure Payment Gateway”. The new agreement will extend that offering as the LinkPoint gateway is rolled out to First Data’s channel partners and clients that use First Data’s transaction processing services.

Details