Holiday Cards

Six out of ten Americans said they used their credit cards less this holiday season compared to last year, while 16% indicated they used credit cards more. The pull-back in holiday credit card use is reflected in the puny growth of retail sales, verifying the continued malaise of the U.S. economy. According to a CardWeb.com homepage poll of nearly 1,000 consumers, only 22% of consumers kept their credit card usage the same as last year. The one bright spot in this year’s holiday spending and credit card usage is online retail sales. Since November 1st, online shoppers have spent between $8 billion and $11 billion. According to com-Score Networks, online sales are up 19% this year. BizRate says online sales have climbed 40%. Meanwhile overall holiday sales are only expected to be 1% to 2% higher this year. Credit card volume has been growing between 13% and 14% this year, driven somewhat by strong balance transfer activity.

Provident POS

Provident Bank announced last week it is partnering with Visa U.S.A. to launch a new POS check acceptance system. Provident Bank is one of the first eight banks to pilot the Electronic Check Conversion service, which provides direct online access to consumer checking accounts for authorization on checks drawn on Visa member banks, similar to debit card transactions. The deduction to the account will be more accurate, quicker and require fewer steps than the traditional process. To date, 380 merchants in 44 states have signed up for Visa’s service. However, paper checks still account for about 50 percent of all personal consumption expenditures in the nation. VISA launched the Electronic Check Conversion system in December 1999.

Greedy Issuers

A new study has found that 70% of Americans believe credit card companies are “too greedy.” Two-thirds said that “the government lets credit card companies get away with murder,” and over half felt that credit card companies try to manipulate both current and new customers. The findings come from a study released this month by Buzzback, an online research firm, and Wharton Strategic Services, a marketing consulting firm. The survey revealed other problems with the credit card industry. Seventy-nine percent of respondents said they get too much junk mail from credit card companies, and 77% feel issuers are too aggressive in their sales tactics. Of the more than 1,000 consumers surveyed, 32% of all consumers and 41% of young adults admitted they don’t know the interest rates on any of their credit cards. In addition, 81% felt the credit card companies should do a better job of educating customers.

JCB Payments

JCB has revised its credit card payment program to enable its cardholders to choose the amount of money to pay on their credit card each month. Under the new “Maximum Monthly Payment Option” the card balance may be cleared in one month, or if purchases and other amounts due exceed the maximum, the remainder is rolled into the card’s revolving balance. More importantly, with existing cards any unpaid amount is subject to finance charges from the closing date, but under the new option no charges apply until after the date of the first monthly payment. The maximum monthly payment amount may be set in increments of 5,000 yen (approximately USD40.00), which can be registered and changed via telephone or Internet as well. The Japanese banking settlement system is unique in that it relies on automatic transfers rather than personal checks for credit card payments,utilities, loans, and other payments.

MONDOCARDS

Santiago-based Radiotronica has agreed to distribute the first
500,000 “MondoCards” from Miami-based Mondopolitan. Radiotronica is a large
constructor and owner of cellular towers in the Mercosur region with access
to a targeted database of prepaid cellular and long distance card users.
The company plans are to replace 500,000 cards currently held by users
based on tracked usage of long distance calls to the U.S. from the Mercosur
region. The re-issuance of cards would be directed at countries in the
region receiving larger proportionate amounts of the U.S. remittances being
mostly in Peru, Argentina and Bolivia. The new cellular calling cards
would be more useful to the consumer in that the card will gain three extra
functions. The stored value card will now serve as a remittance tool, a
debit platform for all the pre-paid services and a safe harbour where the
stored value on these cards would be held in U.S. dollars and not subject
to the volatile currency fluctuations in each of those countries.

BillingZone Sold

eONE Global, a California based subsidiary of First Data Corp, announced this morning that it has acquired BillingZone from PNC Bank, National Association and Perot Systems Corporation. BillingZone, formed in 2000, offers market-leading solutions to help transform accounts payable and accounts receivable processes from manual to fully electronic and automated. The company’s apConnect and arConnect solutions helps BillingZone’s customers streamline the complexity of invoicing and payment transactions, realize cost savings through the elimination of paper and manual practices, and enhance trading partner relationships.

OBERTHUR OUTLOOK

Smart card specialist Oberthur Card Systems says it expects second
half revenue to be in the range of 218 million Euros, which brings the full
year figure to approximately 435 million Euros. Second half EBITDA
(earnings before interest, tax, depreciation and amortization) is estimated
to be above 22 million Euros, to be added to the 7.9 million Euros EBITDA
of the first half. Oberthur says this enables the company to post positive
EBITDA for the full year.

Loyalty Agreement

SHCDirect and Smart Chip Technologies announced an agreement to co-market, link, and bundle each other’s loyalty systems in order to offer a new business model for coalition style, smart card-based consumer rewards programs featuring open and real-time redemption. SHCDirect, the high-tech descendant of S&H Citadel, has roots leading all the way back to S&H Greenstamps, one of the first loyalty currencies. SHCDirect designs and manages successful rewards programs for many of the largest credit card issuers.

Holiday Spending

A survey by debit card “Switch” projects holiday spending to hit £862 this year, an increase of £36 over 2001. In November 2001 like-for-like sales were already up 5.8% on the previous year. With figures up only 2% as at November this year, “Switch” projects a spending spree in the final days leading up to Christmas. The survey found that presents will be the biggest expense. Indeed, over a third of those surveyed (34%) said they will spend £500 or more on gifts alone, buying for between 8 and 20 of their family and friends. The study found that 56% will fund their Christmas expenditure from normal savings, although almost a quarter (23%) ignore advice and fail to budget for Christmas at all. While cash is still top choice on the high street, “Switch” and “Solo” debit cards are the next most popular way to pay (one in five opting for Switch/Solo).

HOLIDAY SPENDING

A survey by debit card “Switch” projects holiday spending to hit £862 this
year, an increase of £36 over 2001. In November 2001 like-for-like sales
were already up 5.8% on the previous year. With figures up only 2% as at
November this year, “Switch” projects a spending spree in the final days
leading up to Christmas. The survey found that presents will be the biggest
expense. Indeed, over a third of those surveyed (34%) said they will spend
£500 or more on gifts alone, buying for between 8 and 20 of their family
and friends. The study found that 56% will fund their Christmas expenditure
from normal savings, although almost a quarter (23%) ignore advice and fail
to budget for Christmas at all. While cash is still top choice on the high
street, “Switch” and “Solo” debit cards are the next most popular way to
pay (one in five opting for Switch/Solo).

InterCept Appointment

Atlanta based Intercept announced today the addition of John M. Perry to its executive team. Perry, a former executive at NOVA Corporation, will focus on InterCept’s merchant services business. Prior to joining InterCept, Perry served as the Chairman and CEO of Spectrum EBP, LLC, a company specializing in electronic bill presentment and payment that was acquired by Metavante in August 2002. InterCept’s products and services include core data processing, check processing and imaging, credit and debit card processing, electronic funds transfer, data communications management, and related products and services.