For the first time, debit cards have overtaken cash as the most popular way to pay for retail purchases in the UK. Based on figures for 2005, debit cards captured 37% of the GBP 240 billion in total retail spending. Cash usage for retail purchases dropped 4% from 2004 to GBP 81 billion, according to APACS, the UK payments association. Credit card retail spending remained flat last year at GBP 61 billion. Overall, plastic card retail spending rose 5% over the past year capturing 71% of the total pie. The use of checks dropped 14% last year. Retail spending includes all transactions on the high street and online.
Smart card specialist Gemplus International reports a 19% jump in net sales for the first quarter driven by robust revenue growth in the Financial Services and ID & Security units. First quarter revenues climbed to 230.3 million euros, compared to 262.0 million euros in the prior quarter and 193.1 million euros for 1Q/05. Payment microprocessor card shipments soared 75%, to 22.3 million units as EMV roll-outs gained further momentum in Latin America, Southern Europe and Japan. Payment microprocessor card revenue rose 55% year-on-year. During the quarter,
Gemplus launched “Plastic Fantastic,” which is designed to help banks and financial institutions set themselves apart from the competition. The cards range from unusual shapes, perfumed, tactile and even glow in the dark, and will support customers in their branding and customer segmentation. The “GemSense Instant Issuance,” also won an award from the ECPA/ ECR (European Payments Consulting Association / European Card Review) “Payment Innovation Awards” in the category for the most innovative and advanced payment software/hardware product. This is a personalization and card issuance solution which allows banks and retailers to deploy or replace cards on the spot. For complete details on Gemplus’ first quarter performance visit CardData (www.carddata.com).
Hypercom unveiled a new company logo on Friday while ringing the “Closing Bell” at the New York Stock Exchange. CEO and President William C. Keiper rang the Bell to mark the introduction of the global palm-sized 32-bit mobile wireless credit/debit and general purpose terminal. Keiper was joined by other company executives to officially ring in the new era for the electronic transaction industry.
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Massachusetts-based Peppercoin has hired Charles Caserta, former president and co-founder of IFS International, as VP of sales and market development. Caserta has more than 20 years of sales experience. Prior to joining Peppercoin, Caserta served as executive vice president of business development and chairman of the board at Thornebrook Associates, a strategic consulting firm specializing in financial services and technology. He also served as president and CEO of Livewire, a leader in kiosk solutions technology, where he increased sales 380 percent within the first eight months. Caserta earned a BA in English Literature from Villanova University.
Wisconsin-based Kohl’s has closed the sale of its proprietary credit card business to JPMorgan Chase for $1.6 billion. As previously reported, Kohl’s plans to use the net proceeds to repurchase its common stock, to fund store expansion and for general corporate purposes. Additionally, the companies have entered into a multi-year agreement that provides for Kohl’s to receive ongoing payments related to the profitability of the credit card portfolio. Kohl’s will maintain its current credit operations and will continue to handle all customer service functions and be responsible for all advertising and marketing related to its credit card customers.
Austin, TX-based NetSpend has signed former University of Texas football great and sought-after NFL quarterback prospect Vince Young to endorse its prepaid debit cards. As a first step in their new partnership, Young joined NetSpend CEO Rick Savard and founders Roy and Bertrand Sosa to present a giant $10,000 NetSpend All-Access debit card to the University of Texas College of Communication to establish an Advertising and Sports Marketing Scholarship Fund at the school. NetSpend Corporation has grown to a national leader in the prepaid debit category processing close to $3 billion in funds loaded on its cards.
The Federal Reserve Board announced the consolidation of two internal advisory committees on payments system matters with the duties of the “Payments System Policy Advisory Committee” being expanded to encompass the responsibilities and activities of the “Payments System Development Committee.” In particular, the committee will advise the Board on The Federal Reserve’s Policy on Payments System Risk with a focus on these systems’ risk management policies and processes and the relationship between payment and settlement systems and financial markets, including financial stability issues.
Dallas-based TNB Card Services reports that its first sweepstakes for the company’s agent issuing credit union clients and their cardholders was a success. The “Cruise for Cards” promotion for personnel at the credit unions where TNB owns and manages the credit card portfolio, generated 68% more new accounts, compared with the same two months of 2004. The “Give Me Five” sweepstakes for cardholders produced more than 6,500 entries. TNB serves more than 450 financial institutions and manages more than 1.6 million cards.
eBay reported that PayPal had 105.0 million total accounts at the end of the first quarter, a 47% increase from one-year ago. Total payment volume rose 41% to a record $8.8 billion which includes payments initiated through the PayPal system but excludes its payment gateway business. The number of active accounts hit 29.2 million as of March 31st, its highest level to-date. During the first quarter, PayPal handled 149.2 million payments, a 7% increase over the prior quarter and up 35% from 1Q/05. PayPal’s 1Q/06 transaction revenue rate was 3.74%, up ten basis points from one-year ago. The processing expense rate for the first quarter was 1.04%, compared to 1.15% for 1Q/05. PayPal’s transaction loss rate came in at 29 basis points, up one basis point from one-year ago. For complete details on eBay/PayPal’s first quarter performance, visit CardData ([www.carddata.com]).
1Q/05 $6.2 billion 71.6 million
2Q/05 $6.5 billion 78.9 million
3Q/05 $6.7 billion 86.6 million
4Q/05:$8.1 billion 96.2 million
1Q/06:$8.8 billion 105.0 million
SOURCE: CardData (www.carddata.com)
MasterCard has filed a complaint seeking an injunction against the Federation Internationale de Football Association (FIFA), the governing body of the “FIFA World Cup” to prevent FIFA from moving forward with an agreement with VISA International to sponsor the 2010 and 2014 “FIFA World Cups.” MasterCard’s complaint states that after a period of negotiation in which FIFA assured MasterCard that it was not going to enter into an agreement with a third party, it proceeded in doing so. FIFA did this despite the fact that it had already provided MasterCard with a written contract – including all terms – which MasterCard signed and returned to FIFA, which then advised MasterCard that a deal with VISA was completed. VISA announced earlier this month that it inked a partnership with FIFA. (CF Library 4/10/06)
The Association of Credit and Collection Professionals says it intends to analyze the FTC’s “2006 Annual Report” to Congress on the “Fair Debt Collection Practices Act” ACA was instrumental in developing the FDCPA nearly 30 years ago, because its members support strong consumer protection and continues to work with policymakers to ensure that consumers’ rights and collectors’ responsibilities are clearly defined in an ethical and highly regulated collection industry that serves credit grantors and consumers alike.