Performance among credit card-backed securities deteriorated again in March as the charge-off rate and the delinquency rate increased to its highest level ever. As a result the charge-off rate index is expected to peak in the second quarter of 2010 at about 12%. According to “Moodyâs Credit Card Index” charge-offs for March hit 9.30%, compared to 8.82% in the prior month. Delinquency rose to 6.40% compared to 6.14% in February. Other performance metrics improved. The yield index increased for the third consecutive month in March to 18.25%, aided in large part by card companies’ proactive measures to bolster the yield of their respective trusts. Also, as expected, the payment rate index bounced back from last month’s low rate to 16.46% in March. This improvement was mostly attributable to the technical issues related to the number of collection days in the relatively short month of February rather than any fundamental improvement in obligor payment behavior.
Los Angeles-based online lead generator LeadPoint reports a 70% revenue
increase for Q1, due in large measure to “Voice Direct” lead transactions.
LeadPoint’s Voice Direct leads deliver buyers
interested consumers who call toll-free numbers to inquire about
receiving an advertised service. Buyers place weekly orders in advance
enabling direct marketers to plan their media purchases to match
marketplace demand. Buyers are able to access these leads without the
commitment of creating their own commercials or bearing the upfront risk
of purchasing media. Demand for Voice Direct leads has grown so rapidly
that LeadPoint has
established waiting lists for lead buyers in both its Credit Card Debt
and Tax Debt products.
A new report predicts that revolving debt has finally leveled off after 40 years of continuous growth and 2009 will be the first year when total revolving debt decreases, due to tighter credit, rising unemployment and a less confident consumer. A new report released from TowerGroup indicates that the credit card crisis is due to outdated
models used to measure risk. The report, “After Boom and Bust: Navigating the Credit Card Industry into the Next Economic Cycle,” examines the card issuers and the standard measurements in place such as credit scores often neglect to examine the big picture of consumers’ creditworthiness realistically. To measure credit portfolios successfully, issuers must take a more holistic view of their customers, looking not only at their credit scores but also their past payment history, credit line management, debt burden, cross-sale potential and the duration of the customer relationship. After considering these factors, an issuer must utilize a methodology that parses its consumer accounts into retention, modification and exit categories, based on the cardholders’ profile results.
Among prime credit card asset-backed securities the average monthly payment rate declined 137 basis points in February to 15.78%. Portfolio yields improved to 16.83% from 16.00%. Retail credit cards showed similar trends for the February collection month. According to Fitchâs “Retail Cards Index,” the gross yield for February jumped 384 basis points over the prior month. The gross charge-offs registered a record high of 12.31% in February, surpassing the last record reading of 12.25% set in December 2004. The “Monthly Payment Rate Index” for retail cards continued to trend down and stood at 12.95% in February. It was, however, 13% lower than the same period a year earlier.
American Express has introduced new features to its “Delta SkyMiles Credit Cards” and is set to launch a new marketing campaign for former Northwest hubs. The cards enable cardholders to earn and redeem
miles in more ways and places, including the ability to earn Double Miles on all Delta-and Northwest-operated flights: “Gold” and “Platinum” Delta “SkyMiles” credit cardholders and Delta “Reserve” cardholders, who currently enjoy double miles on virtually every dollar of spend with Delta, can also earn double miles on all purchases made with Deltaâs wholly-owned subsidiary, Northwest. Cardholders earn one mile for every eligible dollar of spending everywhere else; redeem for any seat anytime on all Delta-and Northwest-operated flights and redeem for award tickets with no redemption fees: American Express is waiving fees associated with award ticket redemptions on all Delta-and Northwest-operated flight and is launching a “Switch to the Official Card of the Worldâs Largest Airline” advertising campaign to reinforce the fact that the “Delta SkyMiles Card” is the official, exclusive card of Deltaâs “SkyMiles” program within the U.S. and that “WorldPerks” members who wish to continue to combine miles earned from flying with miles earned on co-branded card purchases will need to take action and switch to a “Delta SkyMiles Credit Card”.
NCR’s “Aptra Passport” is now integrated with Mitek’s
“ImageNet Mobile Deposit” software for check deposits with data-enabled mobile phones.
The new “NCR APTRA Mobile Passport” solution compliments the APTRA
Commercial Passport, remote deposit capture software that allows
deposits using check scanners from their businesses directly to the
financial institution or via online banking web site.
The software enables customers to deposit checks by using
their mobile phone’s camera as a scanner, capturing an image of both
sides of the check and transmitting those images to their financial
institution for deposit.
In addition to integrating mobile deposit functionality to APTRA
Commercial Passport, NCR will also offer ImageNet Mobile Deposit as a
Software as a Service (SaaS) within the APTRA Passport Validation
The Smart Card Alliance reports a growing use of contactless electronic
systems and building interest in mobile NFC fare payments. This news
and more came out of the 2009 Payments Councils Summit in Salt Lake City,
Utah, attended by over 120 Smart Card Alliance members.
The Summit coincided with the Utah Transit Authority’s (UTA) launch of
their system-wide implementation of contactless electronic fare
collection system, where they will accept contactless third party paid
passes and contactless credit and debit cards from American Express,
Discover Financial Services, MasterCard and Visa. MTA New York City
Transit (NYCT) is collaborating with the New York Port Authority, New
Jersey Transit, and the Port Authority Trans-Hudson (PATH) on the second
phase of their open payment system pilot where all types of contactless
payment cards will be accepted, NYCT’s Steve Frazzini told attendees.
Jerry Kane of the Southeastern Pennsylvania Transportation Authority
(SEPTA) in Philadelphia and Jenny Sirnio of SunTran in Tucson spoke of
their plans for contactless fare collection systems.
A new report has found that credit card issuers only reduced direct mail offers to prospective Canadian cardholders by 8%. However in the U.S., they cut such mailings by 50%. Mintel Comperemedia attributes this difference to a less severe financial crisis in Canada during 2008. Though Canada’s economy was fairly stable last year, economists predict a slowdown during 2009. Mintel Comperemedia expects credit card mailings to follow suit and drop as well. A 20% decline in solicitations is projected for Q1 2009 in Canada (from Q4 2008). However, this reduction still pales next to the 47% drop projected in US mailboxes.
Brookstone, Davidâs Bridal and The Metropolitan Museum of
Art Store are now using the McAfee “SECURE” to ensure their websitesâ security.
Displaying the McAfee “SECURE” trustmark allows e-tailers to provide
customers with the assurance that their Web site has passed rigorous
daily tests for vulnerabilities that pose a threat to sensitive customer
information. The trustmark also appears in McAfee “SiteAdvisor” search
results allowing merchants to stand out in those results, further
extending their reach. In addition, McAfee “SECURE” e-tailers can get
additional exposure in McAfeeâs secure shopping portal at
www.mcafeesecureshopping.com and only features
e-tailers who have been certified McAfee “SECURE” and directly reaches
security-conscious shoppers. The services combine daily network perimeter scanning, testing
for more than 10,000 network and Web application vulnerabilities,
rigorous security testing to ensure against malware, and business
practice review for Web site owners and online retailers. E-commerce merchants can also demonstrate
PCI-compliance, the standard for the payment card industry. On average,
McAfee “SECURE” sites also see an 11% increase in online sales conversions.
Consumer confidence improved considerably in April. The Conference Board “Consumer Confidence Index” now stands at 39.2, up from 26.9 in March. The “Present Situation Index” increased to 23.7 from 21.9 last month. The “Expectations Index” rose to 49.5 from 30.2 in March. The employment outlook was also considerably less pessimistic. The percentage of consumers anticipating fewer jobs in the months ahead decreased to 33.6% from 41.6%, while those expecting more jobs increased to 13.9% from 7.3%. The monthly survey is conducted for The Conference Board by TNS.
Hypercom, Ingenico and
VeriFone have joined forces to create the “Secure POS
Vendor Alliance”, a non-profit business organization chartered with
implementing common payment security standards. The “SPVA” will
increase awareness of security issues, encourage adoption
of best practices and ease consistency among standards that govern
disparate components and participants in the payment environment. The
SPVA will encompass the companies that provide the key security
elements among consumers, merchants and transaction acquirers and
issuers. The SPVA encourages general membership among all vendors that
develop secure POS payment systems, and associate membership among
organizations who sell or utilize products or solutions that interact
with secure POS payment devices: retailers, acquirers, software vendors,
ECR vendors, banks and other standard setting associations.
NJ-based loyalty program provider TD Retail Card has rolled out the
L.J.C. Card tailored to luxury retailers. The “L.J.C. Card” is a
revolving private label consumer credit card that can be used for
purchases of products or services at any merchant participating in the
program. Merchants opening the individual consumer’s account can have
store’s name embossed on the card. The Card program provides independent
retailers with the ability to increase sales and long-term loyalty by
giving customers the
purchasing power to buy now and in the future; drive traffic year-round
with a wide range of special promotional
offers and flexible financing options; offer instant credit, with
uncomplicated in-store applications processed in
minutes and process transactions instantly using TD Retail Card
online web services. Retailers in the program will be able to offer
their customers a variety
of special financing options, including three-, six- and 12-month
payment plans,as well as two additional low-APR programs.