Delinquencies (60+ days) for card-backed bonds in the U.K. remained stable in the fourth quarter ending the year at approximately 2.5%. Thirty day delinquency ended 2004 at 3.9%, 20 basis points below the third quarter. According to Fitch’s “Credit Card Movers & Shakers,” charge-offs ended the year at 4.5%, its third consecutive quarterly decline. Fitch expects charge-offs to drop to 4.2% by mid-year. Unlike the U.S. card ABS, the monthly payment rate has been dropping. During the fourth quarter the MPR declined to 16.7% compared to 17.7% for the third quarter.
Non-farm payroll employment increased by 262,000 in February and the unemployment rate edged up to 5.4 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job growth occurred in both goods-producing and service-providing industries. A quick review of the report reveals the following:
– Both the number of unemployed persons, 8.0 million, and the unemployment rate, 5.4 percent, returned to their December levels after dipping in January.
– The number of long-term unemployed–those unemployed for 27 weeks and over–remained at 1.6 million.
– Total employment was about unchanged at 140.1 million,seasonally adjusted. The employment-population ratio–the proportion of the population age 16 and over with jobs–was little changed over the month at 62.3 percent.
– Over the year, the number of persons who held more than one job increased by 432,000 to 7.7 million, not seasonally adjusted. These multiple jobholders represented 5.5 percent of total employment in February, up from 5.3 percent a year earlier.
– Construction employment rose by 30,000 in February. Since its most recent low point in March 2003, the industry has added 458,000 jobs.
– Manufacturing added 20,000 jobs, with motor vehicles and parts accounting for about half of the job gain. While total manufacturing employment edged up over the year, it has shown little net change since mid-2004.
– Employment in a number of service-providing industries grew over the month. Professional and business services employment expanded by 81,000 in February. Within this sector, sizable increases occurred in employment services (38,000), services to buildings and dwellings (14,000), and architectural and engineering services (7,000). Within employment services, temporary help services added 30,000 jobs in February and 207,000 jobs over the year.
– Retail trade employment increased by 30,000 in February, with small gains distributed throughout this industry. Over the year, retail trade has added 135,000 jobs. Wholesale trade employment was essentially flat in February; employment in the industry has been trending upward, however, and has grown by 94,000 since its most recent low in August 2003.
– Within the financial activities sector, employment growth continued in credit intermediation and related activities. The industry added 11,000 jobs in February, with commercial banks accounting for about 5,000 of the gain.
– Health care employment rose by 23,000 over the month. Since February 2004, this industry has gained 262,000 jobs. Over the month, employment increased in ambulatory health care services (12,000) and in hospitals (6,000).
– In the leisure and hospitality sector, food services and drinking places added 27,000 jobs in February. Over the year, leisure and hospitality employment increased by 268,000, with strong gains in both food services and accommodations.
– The average workweek for production or nonsupervisory workers on private, non-farm payrolls was unchanged in February, at 33.7 hours, seasonally adjusted. The manufacturing workweek declined by 0.2 hour to 40.5 hours, the same level as in November and December.
– Average hourly earnings of production or nonsupervisory workers on private, non-farm payrolls were unchanged over the month at $15.90, seasonally adjusted. This followed a 5-cent increase in January. Average weekly earnings also were unchanged in February at $535.83. Over the year, average hourly earnings grew by 2.5 percent and average weekly earnings increased by 2.2 percent.
GLS Global Assets and Beanstream Internet Commerce have partnered to support the “eStorebuilder” product. “eStorebuilder” enables a fully functional online store to be set up in five easy steps without the use of a Web designer or programmer. British Columbia-based Beanstream Internet Commerce provides merchant account enablement, credit card processing, electronic funds transfer, and risk management services for both e-commerce and retail businesses. Beanstream has 3,500 merchant clients. GLS Global owns 30% of Excalibur Communications and 50% of Media Games.
New York Attorney General Eliot Spitzer shed more light on the Simon “VISA Giftcard” settlement reported on earlier this week in CardFlash. Under terms of the settlement, Simon agreed to pay to the state $100,000 in penalties and $25,000 in costs. Simon also has agreed to comply with New York’s law that requires it to disclose on its gift card the five dollar fee it charges to replace a lost or stolen card and the $7.50 fee it charges to reissue an expired card. These fees are not prohibited by law but must be conspicuously disclosed on the card itself. Additionally, Simon agreed not to assess a service fee on any card unless it has been unused for twelve consecutive months. New York State’s gift card law took effect on October 18, 2004 and applies to all cards purchased after that date. Attorneys General from Massachusetts, New Hampshire and Connecticut have also filed lawsuits claiming the “Simon VISA” card program violated local consumer protection laws.
MasterCard International announced the results of its “MasterIndex of Travel” report, forecasting solid growth of outbound travelers from across the Asia/Pacific region in the first half of 2005. Of the 12 key markets covered, outbound travel from China, Japan and Indonesia are predicted to show the strongest year-on-year growth at 33.6%, 19.8% and 18.9% respectively. Double digit growth is also expected for the rest of the markets, with the Philippines following closely at 9.8%. MasterCard found that Singapore Airlines has consistently been identified as the most preferred airline for both personal and business travels since the inauguration of the “MasterIndex of Travel” in 2003. This trend continues in the latest report as Singapore Airlines (15%) remains the most preferred airline for business travel in Asia/Pacific, followed by Cathay Pacific Airways (13%), Japan Airlines (9%) and China Airlines (9%). For personal travel, Singapore Airlines (11%) was also the most preferred, closely followed by Cathay Pacific Airways (10%).
The International Card Manufacturers Association (ICMA) will hold their annual Spring Academy workshops in 2 locations in the United States and Europe. The first workshop will be held on May 4-5, 2005, in Dallas, Texas. Chaired by Tim Wright of Gemplus, this workshop will address advances in personalization, engineering design, card materials challenges, magnetic stripe technology, contactless cards, reducing manufacturing costs to remain competitive and challenges and benefits in the substrate market. The second workshop will be held June 1-2, 2005, in Amsterdam, Netherlands. In addition to addressing similar issues as the US-based workshop, this will highlight issues such as e-passports, tachograph technology, biodegradable card material and the European drivers license card. Alan Scott of ID Data will serve as the workshop chairman. Based in Princeton Junction, NJ, ICMA is a non-profit association comprised of plastic card manufacturers, personalizers and related industry participants. With more than 220 members globally, representing more than 35 countries, ICMA acts as a clearinghouse for industry issues, including the production,technology, application, security and environmental issues of plastic cards. Visit the ICMA website at www.icma.com.
Banque pour le Commerce Exterieur Lao and Thai Military Bank have launched the MoneyGram service. MoneyGram has 75,000 locations in over 170 countries worldwide. In Thailand, MoneyGram service is provided by Thai Military Bank & Siam Commercial Bank with an extension of more than 700 locations nationwide. In Canada, MoneyGram service is provided by Canada Post, with an extensive network of more than 1,000 locations nationwide. In Italy, service is provided through Poste Italiane, the Italian post offices.
It appears that the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” will shortly pass in the House and the Senate and be signed by the President before May. Yesterday, the Senate rejected five amendments by Democrats. Senator Charles Schumer was defeated in an amendment to limit the use of asset protection trusts to assets up to $125,000. Senator Mark Dayton’s amendment to limit credit card interest rates to 30% was voted down. The Senate also rejected an amendment by Senator John Rockefeller to permit employees of Chapter 11 companies to collect up to $15,000 in back pay. Senator Richard Durbin’s proposal to reign in abusive practices of executives who cash out before their company files for bankruptcy protection was also defeated. Senator Bill Nelson amendment to exempt debtors from the “means test” if their problem was caused by identity theft was voted down too.
Le Meridien Hotels & Resorts announced an exclusive offer for “Premium MasterCard” cardholders to enjoy VIP treatment at Le Meridien properties worldwide. Benefits include a complimentary guaranteed room upgrade to a suite, daily breakfast buffet for up to two people and 3 pm late check out every time they book a two-night “Weekend Break” package from now until December 31st. To receive these special benefits, “Premium MasterCard” cardholders need to book and pay for their “Weekend Break” package with a “Gold,” “Platinum,” or “World MasterCard.” London-based Le Meridien is a global hotel group with a portfolio of more than 130 luxury and upscale hotels in 56 countries worldwide.
VISA’s cut of the U.S. pie expanded by 100 basis points last year as gross dollar volume rose 15% to nearly $1.3 trillion. The lift came at the expense of MasterCard and Discover, who lost 100 bps and 50 bps in market share, respectively. American Express, the fastest growing U.S. network, gained 40 bps in share during 2004. AmEx posted $305 billion in U.S. GDV, a 16.3% increase over the prior year. In total, Americans used the top four networks for $2.365 trillion in credit card and off-line debit transactions last year, a 12.8% gain over 2003.
U.S. GROSS DOLLAR VOLUME
Network 2004 2003 CHANGE SHARE
VISA $1265.2 $1100.3 +15.0% 53.5%
MasterCard $ 695.9 $ 636.9 + 9.3% 29.4%
Am Express $ 304.8 $ 262.1 +16.3% 12.9%
Discover $ 99.6 $ 97.9 + 1.7% 4.2%
TOTAL $2365.5 $2097.2 +12.8%
Source: CardData (www.carddata.com)
Sumitomo Mitsui Card unveiled a new service in which millions of full-color, personalized credit-card statements will be printed on-demand on 24 Xerox “iGen3” digital production presses. Sumitomo Mitsui Card was first in Japan to issue the “VISA” card, and it
has more than 13 million members. The new service enabled by the Xerox
“iGen3” will provide the latest information on products and services
tailored to the individual needs of each cardholder based on information
such as gender, address and past credit-card usage. The service is
scheduled to start with statements issued on March 28. Fuji Xerox is a 25/75 joint venture with Xerox Corporation and Fuji Photo Film and it markets the Xerox brand in Japan, the Pacific Rim and most of Asia.
Smart card manufacturer Axalto reported that it sold 72 million microprocessor banking cards last year to financial institutions. Within the Cards segment, which achieved revenue increase of 23%, all major product lines contributed to the growth, led by the strength of the Mobile Communication and Financial Services product lines and an excellent performance by the Public Sector and Other products line that includes in particular the patent licensing activity. The Point-of-Sales Terminals segment achieved the strongest growth: + 52%. For the full-year Axalto reported full-year revenue of $960 million, an increase of 25% versus 2003. Net income more than doubled to $59.1 million. For complete details on Axalto’s fourth quarter and full-year performance, visit CardData ([www.carddata.com]).