Credit Uptick

Americans added $2.4 billion to revolving credit during May compared to $1.4 billion for May 2001, and the annual rate of increase was slightly off this year. The brisk expansion in revolving credit, mostly credit card debt, flies in the face of other recent economic barometers which point to a decline in consumer confidence, travel plans, and overall spending. The May recovery may reflect some pent-up demand from April when revolving credit grew at half the rate of one year ago. According to figures released Monday afternoon by the Federal Reserve, revolving consumer credit is growing at an annual rate of 4.1% compared to 4.5% for May 2001. Since the first of this year, Americans have added $19.8 billion to revolving credit, to hit a record $712.2 billion. At the end of May 2002, American consumers were $1.706 trillion in debt, exclusive of home mortgages.

May 02 Apr 02 Mar 02 Feb 02 Jan 02 Dec 01 Nov 01
GRWTH: 4.1% 7.5 4.8 2.2 1.8 -9.7 12.7
$OWED: $712.2 709.8b 705.4 705.0 702.4 692.4 698.0

Oct 01 Sep 01 Aug 01 Jul 01 Jun 01 May 01 Apr01
GRWTH: -7.1% 0.6 -2.2 -3.7 2.1 4.5 14.2
$OWED: $686.4 692.7 693.5b 698.1 700.3 699.0 697.6

Source: Federal Reserve; revised figures as of 07/08/02; For complete historical data visit CardData ([][1]).




Korea Exchange Bank Credit Service announced it will use “divine Conversations” outbound call management solution for approximately 250 agents serving more than 5 million credit card users in the KEBCS’s National Collection Center. Developed by U.S.-based divine, inc., “divine Conversations” is an intelligent, CTI-enabled, blended Inbound/Outbound contact management solution that combines predictive dialing with campaign management capabilities, enabling call centers to connect with more customers, reduce nuisance calls and reduce idle time. Since launching Master Card in 1993 and JCB card in 1997, KEBCS now issues all three major international brands (VISA, Master, and JCB), and also Local Card for domestic use.


Experian Account Aggregation

Experian has agreed to offer Yodlee’s permission-based account aggregation service and will incorporate Experian’s credit management tools into its network of account aggregation services. In the first phase of this partnership, Experian will offer Yodlee’s account aggregation solution to its existing direct-to-consumer services at their website and its affiliate sites. Yodlee will also integrate and market Experian’s credit management services into its network of aggregation services with many financial institutions and portals.



Rehovot-based T.V.G. Technologies Ltd. announced that its German subsidiary, Secure2net GmbH, entered into an agreement with Comcard GmbH, a German smart card manufacturer and distributor, providing cooperation in the production and marketing of smart card technology applications. The Israeli-based seller of smart card technology applications also announced consolidated financial results for its fiscal years ended December 31, 1999 and 2000. For the year ended December 31, 2000, revenue decreased to approximately $133,000, down from approximately $1.235 million for the year ended December 31, 1999. The Company reported a net loss for the same time period of approximately $6.275 million, or $0.79 per share, compared to a net loss of approximately $4.147 million, or $0.62 per share, for the year ended December 31, 1999.


Paymentech Connectivity

Paymentech has partnered with ThruComm to provide “Online, All the Time” connectivity for merchants nationwide. ThruComm is a key component of Paymentech’s Advanced Data Communication solutions and establishes a managed enterprise network connection between a merchant location and Paymentech. ThruComm Integrator can cut processing to 3-5 seconds and achieve online connections at or below dial-up costs without expensive upgrades in either hardware or software. ThruComm’s network service options include a low cost frame relay, satellite and fixed wireless connectivity to support POS or back-office applications.


Precidia Gets Vital Certification

Precidia Technologies has received Class B Certification of its EtherDial product with Vital Processing Services. This certification with Vital is the result of rigorous development and laboratory testing over the last few months, which will benefit US merchants looking to migrate debit/credit transactions to a LAN/WAN environment. Precidia’s EtherDial migrates transaction data from a dial-based infrastructure to a TCP/IP network, while maintaining the merchant’s investment in existing POS equipment. The EtherDial acts like the telephone network, answering the terminal’s call. It is the ideal solution for merchant locations with access to a router-based WAN and are currently using dial lines for POS transactions.


Student Cards

The number of undergraduate college students with credit cards has hit 83%, a 24% increase since 1998. A new study also found that 54% of freshmen students own a credit card while only 23% have a student loan. Nellie Mae’s “Undergraduate Students and Credit Cards: An Analysis of Usage Rates and Trends” also found the average number of credit cards per student grew from three cards to 4.25 cards in one year. Other findings: the percentage of students with four or more credit cards nearly doubled in three years to 47% in 2001; 92% of sophomore students own at least one card; average credit card debt per student fell from $2,748 in 2000 to $2,327 in 2001; median credit card debt per student rose 43%, from $1,236 in 2000 to $1,770 in 2001; more than one quarter of students with credit card debt have balances in excess of $3,000, compared to 22% last year; and 6% of students have balances of more than $7,000, which has decreased steadily since 1998 when 10% had balances at least that high. For the 2001 study, Nellie Mae randomly selected data for 600 undergraduate students, aged 18 to 24, attending four-year public and private institutions that applied for a credit-based loan with Nellie Mae during the summer and fall of 2001.



Dhahran-based The King Fahd University of Petroleum and Minerals has sealed a deal with Bell ID, a subsidiary of London-based Bell Group, for a campus smart card solution. The new card will include applications for access control system, digital fingerprints, electronic purse, library applications, and use of the University’s medical center. The e-purse function will provide payment for, amongst others, cafeteria and vending machines. The program expects to enroll 20,000 students, staff, and visitors for the ID card. By year’s end, the campus card solution will secure access to the 900 acres of the University, 28 buildings, and 375 entrances.


BofA Collections

Bank of America said this weekend that $3 million in delinquent payments have been received through May via its Web site that enables delinquent cardholders to work out a payment plan online. The BofA was designed and developed by Douglas-Danielle, Inc., a Chicago-based direct marketing solutions provider. The site was launched in December 2001. Only customers with decent payment histories and bills that are slightly overdue are directed to the Web site. Upon logging in, they are taken through a fast, focused process. Customers are asked to indicate the reasons behind their delinquency and agree to recommended alternate payment terms. They can make a payment over the Web site via electronic check transfer or specify the day on which payment will be made.



London-based Loyalty Management UK announced it has received a major investment for the upcoming launch of a new consumer loyalty program. Warburg Pincus has agreed to put up US$40 million in equity financing for LMUK’s “Nectar” program. Sainsbury’s, Barclaycard, BP, and Debenhams have joined with LMUK to create Nectar, which will launch in the fourth quarter. The program will offer consumers the ability to collect points from more than 1,800 Sainsbury’s, Debenhams and BP outlets and with all Barclaycard purchases. Points collected in the Nectar programme will be exchangeable for a wide range of rewards such as grocery discounts, consumer goods, flights, holidays, restaurant meals, family days out and cinema tickets. Nectar will target the more than 12 million consumers who are members of points and rewards programmes currently operated by the four partners.