VISA Asia-Pacific

VISA International this morning reported that card retail sales volume in Asia Pacific for the first half of this year hit US$113.5 billion, a 30% increase over the same period last year. With 76% growth and US$34 billion in retail sales volume, Korea has become VISA Asia Pacific’s number one market during the half year. Japan reported retail sales of US$32 billion, up 20%, and Australia reported US$20 billion, up 17%. Including cash withdrawals, total card sales volume for the same six-month period ended June 30th topped US$312 billion, a growth of 43% in constant dollars, compared to the first half of calendar year 2001. Strong performances in card sales volume were recorded by Korea (US$94 billion, up 69%), Australia (US$29 billion, up 32%) and Japan (US$42 billion, up 18%). The number of VISA cards in Asia Pacific reached almost 256 million, a growth of 26% over a year ago. In Japan, almost 70 million Visa cards are in circulation.

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SuperScrip Card

The National Scrip Center, Inc., a nonprofit fund-raising organization based in Santa Rosa, Calif., has teamed with American Express Incentive Services to launch the first multi-merchant stored-value card to assist nonprofit organizations raise money. The “SuperScrip Card,” will sell in denominations of $25, $50 and $100 to nonprofits at a 5% discount per card. Nonprofits then can sell NSC SuperScrip Cards at face value to their supporters, who can give the card as a gift or use it to purchase items online or in stores at almost 200 brand-name establishments nationwide. The card can also be branded with a nonprofit’s logo. NSC expects to sell 458,000 SuperScrip Cards resulting in $800,000 in charitable contributions the first year.

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Ad Spending 2002

U.S. issuers spent $442.7 million on ads to promote credit card products during the first half of this year. VISA led the pack, shelling out $145 million while Capital One plunked down nearly $95 million over the first six months of 2002. VISA spent $93 million promoting consumer credit cards and $49 million advertising debit cards, according to CMR. MasterCard spent $73 million on consumer credit card advertising and about $4.6 million for debit card ads. MasterCard also spent $24 million promoting its Web site, “Exclusives” program, and its business cards. Meanwhile, American Express shelled out approximately $28 million on consumer credit card ads in addition to $3.5 million to promote the “Delta SkyMiles” card and $2.1 million on the “Blue” smart credit card, during the first half of 2002. Discover spent $21.5 million on credit card ads in the first and second quarter of this year. CMR said yesterday that overall advertising spending for all media was down 0.2% for the first half of 2002 compared to first-half revenues in 2001.

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Major Off-Premise ATM Deal

Valero Energy Corporation, which owns Diamond Shamrock Corner Stores, Stop N Go, Ultramar, Valero, Beacon and Total retail outlets, announced yesterday it will install Wincor Nixdorf’s “ProCash 1500” cash dispensers in 1,200 company-owned gasoline and convenience store retail locations. he ATM machines will provide customers with conveniently accessed > electronic coupons and short, full-motion video programs about the store’s promotions.

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Point Psychology

Loyalty programs reveal a wide range of egos and attitudes among participating consumers. A first-of-its-kind member study of the “Priority Club Rewards” program has identified six distinct behavior patterns of people playing the loyalty game including, “Swinger,” “Shepherd,” “Stasher,” “Snob,” “Sherlock,” and “Slacker.” The “Point Psychology” defined a “Swinger” as someone who plays both sides – points and miles – to the best advantage. A “Shepherd” funnels everything – hotel, rental car, credit card miles – to fuel a free flight fixation. A “Stasher” matches every point and mile on statements against hotel receipts and boarding passes. A “Snob” piles and saves points for perks so as to be treated like royalty. A “Sherlock” seeks the biggest bang for the buck. A “Slacker” likes immediate perks such as a free in-room movie or weekday newspaper and doesn’t count points. The “Point Psychology” study was conducted for Six Continents Hotels which owns the Inter-Continental, Crowne Plaza, Holiday Inn, Staybridge Suites brands.

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Neoteris’ Partner Program

ActivCard, RSA Security, Secure Computing Corporation, and VeriSign have joined the Neoteris Technology Partner Program to promote interoperability among enterprise authentication products. Neoteris’ IVE products allow customers to cost-effectively provision instant, secure access to network resources and applications. Neoteris’ products reduce the cost, complexity and security risks associated with traditional access technologies such as VPNs and custom extranets.

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CREDIT CARD SECURITIZATION

Lan Chile, the country’s largest domestic and international airline, has raised US$40 million through the securitization of future credit card ticket sales in the United States. This operation follows LanChile’s first securitization for US$60 million completed in 1999. The certificates have a fixed-rate coupon with a final maturity of seven years and a four-year principal grace period. The transaction, coordinated by Merrill Lynch, priced at a coupon of 6.96% and was sold to three major North American institutional investors. Fitch rated the receivables BBB- based on the Company’s strong market position, its financial profile and its ability to adjust capacity and operating expenses in order to maintain profitability.

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SMART ID CARDS

Kuala Lumpur-based Iris Corp Bhd has signed a deal to provide 500,000 smart cards to Indonesia. The cards will be used for identification purposes, becoming the forerunner of the “Asean Travel Card”, which involves the management of travellers and workers within the 11-nation Asean region. The company estimates the market size for the Indonesian smart card is about 50 million. Earlier this year, Iris Corp signed an agreement with Indonesia for a pilot project for electronic passports similar to the “MEP” for Myanmar.

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Cross-Sell Triggers

The first fully FCRA-compliant daily cross-sell campaign capability that enables lenders to identify and respond quickly to credit active customers in their portfolios has been launched by Experian. “Cross-Sell Triggers” enables users to identify credit-related activity initiated by their customers on a daily basis then respond by sending firm offers of credit within just 24 hours of notification. Key features include the use of daily inquiry and trade triggers coupled with credit scoring models and attributes to identify highly responsive, credit-active customers seeking additional credit products. The solution also includes running all triggered consumers through Experian’s “Do Not Solicit” database to ensure appropriate consumers receive offers of credit. “Cross-Sell Triggers” has the additional capability of running multiple campaigns simultaneously. Last week, Experian introduced “Email Presecreen,” a new service which will enable credit card issuers to fine tune email solicitations based on credit risk. (CF Library 8/23/02)

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