Card Awards

The International Card Manufacturers Association recently recognized five winners and ten finalists for “Outstanding Card Design,” “Technical Achievement” and “People’s Choice” at the “Sixth Annual Élan Awards for Card Manufacturing Excellence” held in Vancouver. Winners included Drexler’s Canadian Permanent Residential Card for “Best Non-Financial Card Design” and “Technical Achievement”; Discover’s 2GO card for “Best Financial Card Design” and “People’s Choice”; and, Continental Plastic Card Co.’s “Think” (Outside the Box) for “Best Phone Card Design.” The ICMA also awarded its “Spiritus Award” to Giesecke & Devrient Systems Canada and to Allegheny Printed Plastics.

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ICMA AWARDS

The International Card Manufacturers Association recently recognized five
winners and ten finalists for “Outstanding Card Design,” “Technical
Achievement” and “People’s Choice” at the “Sixth Annual Élan Awards for
Card Manufacturing Excellence” held in Vancouver. Winners included
Drexler’s Canadian Permanent Residential Card for “Best Non-Financial Card
Design” and “Technical Achievement”; Discover’s 2GO card for “Best
Financial Card Design” and “People’s Choice”; and, Continental Plastic Card
Co.’s “Think” (Outside the Box) for “Best Phone Card Design.” Judges of the
Élan Awards were Annich McIntosh, editor, C&M Publications; Joseph
Naujokas, ICMA’s official standards representative, Naujokas and
Associates; and Fredy Yiap, editor, CardsNow!Asia magazine.

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AMEX CUTS

American Express says it will cut up to 100 employees as a result of the
merger with the Company’s consumer card and personal financial services
businesses. The credit quality of the Hong Kong consumer market has been
deteriorating this year with record bankruptcies and losses. Charge-offs
have risen nearly 50% this year, and by year’s end, the number of
bankruptcies in 2002 is expected to more than double, compared to 2001. The
AmEx cuts represent 12% of the Company’s Hong Kong work force. There are
nearly ten million credit cards in-force in the country.

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Coinstar 3Q/02

WA-based Coinstar reported third quarter revenues of $42.9 million and net income of $8.8 million compared to third quarter of 2001 revenues of $35.2 million and net income of $1.6 million. Over the past year, Coinstar added an estimated 2.8 million new users, as trial usage increased to 17.5%, up 2.8 percentage points from the third quarter of 2001. Coinstar noted this morning it as narrowed its estimate of the viable universe of high-traffic supermarkets in the USA from 15,000 to 13,000. Earlier this month, Coinstar and Prizm Technology announced a pilot to test consumer acceptance of a service that will allow prepaid wireless phone users to recharge their account balances at Coinstar Centers. Coinstar Inc. owns and operates the only nationwide network of 10,000 supermarket-based machines that offer coin counting and other electronic services. For complete details on Coinstar’s latest quarterly performance visit CardData ([www.carddata.com][1]).

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

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Egg France

London-based Egg plc, a pioneering online bank, announced it will launch an international VISA card in France this weekend. The “la Carte Egg” card will be the first VISA card in France to offer cashback. The new french Egg VISA will offer 1% cash back on all purchases, as well as a 12.99% APR. Consumers applying before the end of the year will have their annual fee waived for the first year (normally Euro 35) and 5% cash back on purchases up to the year-end. Egg says it will target an upmarket customer base, aged 25-49 with above average income. The “Egg France Index” shows that 32% of French adults (15 million) are using technology – be it Internet, Digital TV or WAP. About 26% of French consumers (12 million) are using the Internet, with the geographic majority of users residing in Paris. Approximately 24% of French Internet users are now banking online, and this is expected to grow to over 7 million by the end of 2004. The company will begin taking applications online, from France, on Saturday, November 2nd. Launched in October 1998, Egg is an e-commerce company created by Prudential.

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3Q Delinquency

Delinquency rates among the top U.S. issuers took a turn upward during the third quarter, indicating that a rise in charge-offs is not far behind. During the quarter, 30+ day delinquency among the top ten VISA and MasterCard issuers rose 37 bps since the second quarter, and 51 bps since last year. However excluding Providian and Direct Merchants, delinquency increased only 19 bps on average since 2Q/02, and actually declined 16 bps compared to 3Q/01. On average, 30+ day delinquency increased 8.5% during 3Q/02 compared to the same quarter one year ago. Among the top VISA and MasterCard issuers, MBNA, Bank One, Chase, BofA, and Fleet reported lower delinquency rates this year than 3/01. Meanwhile, Discover reported a 30+ day delinquency rate of 5.72% for the quarter ending 8/31/02, compared to 6.31% for the year-ago quarter. American Express delinquency rate stood at 3.2% for 3Q/02, compared to 3.1% for 2Q/02, and 3.2% one year ago. For more historical information on delinquency rates visit CardData ([www.carddata.com][1]).

TOP TEN VISA/MASTERCARD ISSUERS –
QUARTERLY DELINQUENCY

DAYS 3Q/02 2Q/02 1Q/02 4Q/01 3Q/01 Y/Y CHG
1. Citigroup: 90+ 1.88% 1.84% 2.13% 1.98% 1.82% +3.3%
2. MBNA: 30+ 4.79% 4.80% 4.97% 5.09% 4.90% -2.2%
3. Bank One: 30+ 4.05% 3.83% 4.27% 4.46% 4.25% -4.7%
4. Chase: 90+ 1.93% 1.98% 2.29% 2.22% 1.95% -1.0%
5. Cap One: 30+ 5.36% 4.54% 4.80% 4.95% 5.29% +1.3%
6. Providian: 30+ 11.23% 10.16% 10.22% 8.81% 8.66% +29.7%
7. BofA: 30+ 5.29% 5.54% 6.11% 5.87% 5.63% -6.0%
8. Household: 60+ 4.14% 3.90% 4.39% 4.10% 3.91% +5.9%
9. Fleet: 30+ 3.89% 3.74% 3.97% 4.05% 4.13% -5.8%
10. Dir Merch: 30+ 10.80% 10.20% 9.80% 9.70% 8.90% +21.3%
30+ DAY AVG*: 6.48% 6.11% 6.30% 6.13% 5.97% +8.5%
NR- not reported * 60+ day and 90+ day are not meaningful
SOURCE: CardData (www.carddata.com)

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

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CHIP-PURSE

St.George Bank, Australia, has gone live with “ChipPURSE,” the “VISA Cash”
electronic purse processing solution, which supports St.George’s existing
“VISA Cash” payment and Worldsmart Technologies loyalty program. Developed
by CardBASE, the “VISA Cash” modules are part of “MASCOT,” the company’s
multi-application smart card management solution, and provides St.George
with complete issuing, acquiring and local “VISA Cash” processing enabling
the bank to completely support the existing smart card products. The
solution, endorsed by VISA International, is a result of two years close
co-operation between VISA and CardBASE. CardBASE has delivered more than 45
smart card solutions and provides services to Wells Fargo Bank, VISA
International, Europay International, and ValuCard Nigeria.

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VISA Management Rating

CoreBrand’s “Brand Management Index” found that VISA’s management rating declined 9.3% during the second quarter of this year compared to 2Q/01. Of the over 500-company universe, just under 25% of the companies studied exhibited declining management ratings during the second quarter of 2002 compared to their standing during the second quarter of 2001. On the other hand, over 75% exhibited positive increases.

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Euronet 3Q/02

Euronet Worldwide reported revenues of $17.9 million for the third quarter 2002, an increase of 20% over 3Q/01. The Company posted an operating loss of $615,000 in the third quarter compared to an operating loss of $1.1 million in 3Q/01. The Processing Services segment posted third quarter revenues of $13.8 million, a 23% increase. These processing revenues represent a 6.5% increase over the prior quarterâ¤_s revenues of $12.9 million. At the end of the third quarter, Euronet owned and/or operated a total of 2,951 ATMs compared to 2,840 ATMs in the prior quarter, a 4% quarterly increase. Quarterly transactions on the network reached 22.3 million in the third quarter 2002, a 48% increased over 15.1 million in the third quarter 2001. Third quarter transactions improved by 3.6 million compared to the prior quarter. Euronet owns and/or operates ATMs in Hungary, Poland, Germany, Croatia, Serbia-Montenegro, the Czech Republic, the U.K., Greece and Egypt. For complete details on Euronet’s latest quarterly performance visit CardData ([www.carddata.com][1]).

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

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Fair Isaac 3Q/02

Fair, Isaac reported revenue for the third calendar quarter of $129.3 million, an increase of 50% compared with $86.5 million reported in the same period a year ago. Excluding the impact of its recent merger with HNC, quarterly revenues for increased 6% to $92.0 million. However, Fair, Isaac reported a net loss for the quarter of $24.2 million, compared with net income of $14.3 million in same quarter last year. During the quarter, Fair, Isaac took a charge of $47.4 million consisting primarily of merger-related and restructuring expenses. The charges included $5.0 million in restructuring charges related primarily to facility shut-downs and severance costs associated with a reduction in force; $2.2 million in other non-recurring merger-related charges; and a $40.2 million charge related to in-process research and development. For complete details on Fair, Isaac’s latest quarterly performance visit CardData ([www.carddata.com][1]).

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

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CardLogix & Atmel

CardLogix has agreed to expand its integration of Atmel’s “CryptoMemory” products into its smart cards and software. Atmel’s new encryption-based high density circuits can now provide CardLogix with many of the same features found in microprocessor-based systems. With the addition of these higher densities, items such as photos and biometric information can be added for extra security.

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