NFCC CEO

The National Foundation for Credit Counseling has named Charles Brown, former head of consumer banking and credit at JC Penney, as President and CEO. Charles Brown was an active member of NFCC’s Board of Trustees from 1996 to 1999, and has an extensive career in financial services management. His tenure of more than 34 years at JC Penney concluded with his last appointment as Corporate Vice President/Director of Credit and Consumer Banking. While serving in this position, he was responsible for leading a $5 billion retail credit portfolio, annual credit sales of more than $13 billion, and 2,800 employees. He also led service to 25 million cardholders from eight national call centers and two processing centers.

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Wells to EPN

Wells Fargo has begun moving volume over to the Electronic Payments Network private sector electronic payments system. The ongoing conversion by EPN member banks from the Federal Reserve to EPN’s ACH system fueled a 110 percent increase in transaction volume since June of last year. Even before Wells Fargo initiated transactions this week, EPN hit a record volume of more than 167 million transactions in May. EPN expects to process more than 1.8 billion transactions in calendar year 2002, up from 1.02 billion transactions in 2001.

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EBPP Incentives

The postal rate increase, which goes into effect next week, may be another incentive to push consumers into electronic bill presentment and payment services. In a recent Yankee Group survey, the firm found that among consumers showing interest in using EBPP services, 15% paid their bills online to save money on stamps. The research also found that people using online billing said their primary reasons were: convenience of eliminating writing checks every month (22%); to save time (19%); and, view bills online and keep a record of their bill (18%). Yankee says 8.9 million households pay bills online and it expects this number to nearly double by 2004. Yankee says it also found that a broadband-enabled household is almost two times more likely to pay bills online than a dial-up household.

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Single Source/CardReady

Los Angeles-based Single Source Financial Services Corporation reported a $290,000 loss for the quarter ending April 30th, and is preparing to finalize its acquisition of CardReady International, a bankcard processsor, on Sept 1st. Reportedly, the decrease in reported revenues was primarily due to the termination of a relationship with a former employee and revenues do not include the results of CardReady’s operations. After the acquisition, the company projects revenues for first quarter of fiscal 2003 to be approximately $1.8 million, with a net profit before tax of approximately $600,000.

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FDC & ECG

First Data has finalized its purchase of E Commerce Group Products Inc., an electronic bill payment company based in New York, which will operate as part of the Western Union family of businesses. The addition of ECG and its Speedpay service complements existing bill payment services within Western Union’s Commercial Services division will allow Western Union to expand into new market segments.

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Card Bond Pulse

The unexpected decline in economic conditions could exacerbate pressure on the credit card bonds as charge-offs may continue to grow through 2002. Currently, “prime” credit card asset-backed securities are benefiting from healthy levels of excess spread even though charge-offs have risen consistently for more than a year. However, credit deterioration and regulatory concerns have heightened concern within the sub-prime sector as there are few signs of relief evident, according to Fitch Ratings. Fitch’s charge-off index for May declined 21bps to 6.41% from the month earlier, yet increased against May 2001’s 6.04%. Fitch’s delinquency index declined 19 bps from April’s level to 3.29%, an improvement over May 2001 levels that snapped a 28-month string of year-over-year increases. Monthly payment rates slipped to 15.58% for May, versus 16.25% for April, and 15.59% one year ago.

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S2 Nabs Hollis

S2 Systems announced the addition of Donald Hollis, president of DRH Strategic Consulting, to its board of directors. Mr. Hollis brings to S2 Systems over 42 years of industry leadership in the areas of banking and technology. He is now president of DRH Strategic Consulting, Inc. As president of DRH Strategic Consulting, Hollis assists clients in developing strategies for leveraging technology and quality practices to improve payments related transaction processing products as well as finding appropriate acquisitions. His clients have included NCR, Tandem, Unisys, Cash Station, First National Bank of Chicago, S.W.I.F.T., Edify Corporation, SAIC, and others.

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Late Fees

The increase in credit card late payment fees slowed in May, as most of the issuers raising such fees had an effective date of April 1st. Since the first of this year, late payment fees among issuers with at least $100 million in outstandings, jumped from $28.29 to $29.88, according to CardData ([www.carddata.com][1]). During May, late fees inched up by 4 cents on average. Many top issuers this year have moved late payment fees to $35 for balances of more than $1,000, and tiered down the fee for smaller balances. Providian, the nation’s second largest sub-prime card issuer, recently raised late fees to $35 for balances over $200. The issuer does not charge a late fee for lower balances. Providian also eliminated its over-limit fee for cardholders exceeding the balance by less than 2%. A $35 over-limit fee applies for cardholders exceeding their credit line by 2%, according to CardWatch ([www.cardwatch.com][2]). The average over-limit fee now stands at $27.40. Most top issuers have not raised over-limit fees this year.

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

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DataTran & Givex

Datacap Systems announced Friday the certification and availability of Givex Corporation’s Gift card and Loyalty programs on DataTran, Datacap’s e-payment appliance. Givex services are now accessible via any DataTran-ready ECR/POS system that includes gift commands in their application. Datacap’s Givex implementation enables merchants to process gift and loyalty transactions using the same DataTran that handles bank card and check authorizations.

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CARD PRODUCTION

Datacard Group unveiled two new systems that offer magnetic stripe encoding and inkjet printing of bar codes, logos and alphanumeric characters on preprinted loyalty or phone cards at speeds of 10,000 cards per hour. The E6200 Card Personalization System is designed for loyalty card production while the E8200 is designed for telephone scratch-off cards. One configuration prints alphanumeric characters lengthwise on a card, while the other prints data in multiple print fields in any location on a card. Datacard says the E6200 can produce cards at a cost as low as $0.0033 per card while the E8200 can produce cards at $0.006 per card.

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TORONTO MASTERCARD

The Toronto Entertainment District Association and MasterCard International have sealed a joint partnership to promote Toronto as a tourist destination. As part of the partnership, MasterCard becomes the
official credit card of the Entertainment District and will be featured prominently at member businesses and in district events. Located in the heart of downtown Toronto, the Toronto Entertainment District encompasses eight square blocks bordered by Queen Street West, York Street, the Gardiner Expressway/Lakeshore Blvd., and Spadina Avenue.

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