Credit Rebound

Driving by historically low credit card rates, Americans use of credit is slowly returning to normal patterns. During June, consumers added nearly $4 billion to revolving credit at annual growth rate of 6.5%. During June 2001, U.S. consumer credit increased by $1.3 billion for a 2.1% annual growth rate. The seesaw pattern over the past twelve months appears to validate the recession. Consumer credit began to soften in June 2001 with little growth, or negative growth, until November. Following an unexpected November surge, the credit retreat resumed through March. Since the first of this year consumer credit has grown by $22.5 billion. According to figures released Wednesday afternoon by the Federal Reserve, revolving consumer credit now stands at $714.9 billion. At the end of June 2002, American consumers were $1.713 trillion in debt, exclusive of home mortgages.

REVOLVING CREDIT HISTORICAL
($billions)
Jun 02 May 02 Apr 02 Mar 02 Feb 02 Jan 02 Dec 01
GRWTH: 6.5% 4.1 8.0 4.8 2.2 1.8 -9.7
$OWED: $714.9 711.1 708.7 705.4 705.0 702.4 692.4

Nov 01 Oct 01 Sep 01 Aug 01 Jul 01 Jun 01 May 01
GRWTH: 12.7% -7.1 0.6 -2.2 -3.7 2.1 4.5
$OWED: $698.0 686.4 692.7 693.5b 698.1 700.3 699.0

Source: Federal Reserve; revised figures as of 08/07/02;
For complete historical data visit CardData (www.carddata.com).

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CUSTOMIZED CARDS

Competition in the UK credit card market has become increasingly intense over the last five years. One result of this trend has been the emergence of flexible card issuers such as Virgin, Accucard and Cahoot who allow customers to determine the features of their credit card from the color to the interest rate. However, flexible credit cards are not unique to the UK and different forms have been launched in markets such as Belgium and Canada. Datamonitor has released a new report which analyses the key market trends in the UK credit card market over the last few years and the strategies and product offerings of the companies that have issued flexible credit cards in the UK, Belgium, Canada and South Africa.

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VISA DPS Milestone

Within six years of operation, VISA Debit Processing Service has hit the 11 billionth transaction mark. VISA DPS said this morning it processes over a billion debit transactions every 60 days. VISA DPS has also become the largest volume check card processor in the U.S., providing support for over 43 million check cards. VISA DPS is integrated with VISA’s global product development resources, and provides processing support for “Verified by Visa,” “Host-Based Stored Value” products, and the “Visa POS Check Service.” Visa DPS provides processing support for four of the six largest VISA check card issuers, including Bank of America, Wachovia, Washington Mutual, and Bank One. VISA DPS also provides processing support for 24 of the Top 100 credit unions in the country, including Navy Federal Credit Union, State Employees Credit Union, United Airlines Federal Credit Union, and Suncoast Schools Federal Credit Union.

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LINK CERTIFICATION

Wincor AutoTell has received formal notice of certification for two ATM applications from the UK’s Link Interchange Network. The two applications are AT LINK, Wincor AutoTell’s dial-up Triton emulation, and Wincor Nixdorf’s ProCash NDC with Wincor AutoTell’s Dial-Up Extensions, both running on a “ProCash 1500.” These are the first LINK certifications to be issued for the “ProCash 1500” ATM. Massachusetts-based Wincor AutoTell, a majority-owned subsidiary of Wincor Nixdorf, specializes in the development of applications and complementary management tools for the domestic and international self-service industries.

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Midwest MasterCard

Juniper Bank announced this morning the acquisition of the Midwest Express Airlines co-branded credit card portfolio from US Bank. The deal will double Juniper’s credit card account base to about 600,000. Juniper will continue to issue the Midwest Express MasterCard exclusively. Juniper says the deal is an example of its commitment to building a long-term market presence. Indeed airline portfolios are among the most lucrative segments in the credit card business since they generate exceptionally high charge volume and balances coupled with low attrition and defaults. This profitable mix of such products is largely attributed to the underlying loyalty of the airline brand. Midwest Express Airlines is currently the top-rated airline in the nation, offering jet and turboprop travel to 50 U.S. cities. The credit card portfolio acquisition is expected to close in November. At the end of 2001, Juniper had approximately $425 million in credit card outstandings and 130,000 active accounts, according to CardData ([www.carddata.com][1]).

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

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Fujitsu Selects CyberSource

Fujitsu PC Corporation has selected the CyberSource transaction management solution to improve its disparate payment, fraud and order processing systems. The transaction automation platform allows merchants, such as Fujitsu, to automate the process of deciding to accept, reject or review an order. Its Web-based graphical user interface allows business managers to easily apply and change business rules and adjust processes to optimize sales results.

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WorldPay UCAF

UK-based WorldPay has launched a global program using MasterCard’s “UCAF” authentication infrastructure which shifts the liability of online transactions away from the online merchant and its acquirer. The implementation of MasterCard UCAF will enable WorldPay’s 17,000-plus multi-currency merchants in 115 countries to accept cardholder authentication information from MasterCard issuers following successful verification of the cardholder’s identity by password, PIN, or other issuer approved authentication techniques. As a result, WorldPay merchants will benefit from MasterCard rule changes that shift liability for fraudulent transactions not authorized by the cardholder away back to the issuer. As WorldPay’s European-based merchants are enabled, they will benefit from this liability shift immediately for all intra-European MasterCard transactions. Subsequently, all of WorldPay’s merchants are positioned to benefit from a MasterCard global liability shift, planned for November for fully authenticated transactions.

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Motel 6 Acceptance

TN-based Fleet One announced Wednesday that its “Over The Road” card can now be used at 850 Motel 6 locations across the country. Fleet One’s partnership with Motel 6 allows drivers to book a room without additional information by simply swiping the card. Payment is drawn from the cash advance balance of the driver’s card or from the driver’s payroll card account. Earlier this year, Fleet One enhanced the “Over The Road” card program by partnering with a “Plus Network” of more than 3,000 truck stops and travel centers that now accept the card with no fuel transaction fees. The “Over The Road” card is used by Class 7 and 8 long-haul truckers. Fleet One is a subsidiary of National Commerce Financial Corporation.

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e-Port Goes WAN & Wi-Fi

PA-based USA Technologies has added WAN and Wi-Fi capabilities to its “e-Port” credit card vending product line. In addition to processing credit card transactions in vending, USTT wireless networking services could also process transaction made with RFID’s, Smart Cards, cell phones and other forms of cashless payment in several industries. USTT’s wireless e-Port and associated network and financial services are currently being used by some of the world-leading brands including Kodak, Marriott, Maytag, and Kraft Foods.

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HoneyNet Project

Houston-based PentaSafe Security Technologies has named Ralph Logan to the HoneyNet Project to assist in threat identification research. Capitalizing off the intelligence and threat analysis activities of VITAL, Logan will support the ongoing research activities and mission of the HoneyNet project on a consultative basis. Logan will play a pivotal role in digital forensics and analysis on the data extracted from the ongoing HoneyNet.

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