The adoption of cashless payment technology is accelerating, with USA Technologies having increased the number of devices connected to its network by approximately 9,000 during 2Q/10 to more than 82,000, compared to approximately 52,000 in 2Q/09. In addition, USA Technologies added approximately 150 new customers to its ePort Connect Service for the quarter and is now up to approximately 1,050. Results from 41,000 traditional vending machines (beverage, food and snack) connected to the USALive Network over the latest 18-month period, showed that vending machines were averaging $1,508 in annual credit/debit card purchases, and that the top 10,000 vending machines were averaging $2,973 in cashless sales annually. Various vending operators and bottlers have indicated that total sales revenue has grown by 15 percent per machine within a year or two after installing cashless payment terminals in that machine.
First Data 2Q/10 consolidated revenue was up $2.6 billion was up 18% since the year ago period thanks in great part to the Bank of America Merchant Services alliance. Adjusted revenue was $1.6 billion, up 4% thanks to merchant acquiring growth in the Retail and Alliance Services segment, while EBITDA was $513 million, compared with $589 million in the second quarter of 2009. Retail and Alliance Services segment revenue for the first quarter was $737 million, up 7%, while transaction growth was 9% and segment EBITDA was $249 million, compared to $265 million in 2Q/09. For the quarter, the net loss attributable to First Data was $171 million.
FIRST DATA REVENUE
Among automated clearing house (ACH) processors, 63.4% have seen transaction dispute volumes increase in 2009, 27.2% of which having indicated less than a 5% rate of growth. However, 25% indicated a transaction dispute volume grew between 5 and 10% while 6.7% reported an increase of 11 to 20% and 4.5% saw disputes grow by more than 20%. These findings, according to the results of survey conducted by eGistics information management solutions, result in higher operations costs and more write-offs and losses for many of the processors. Additional findings show 29.5% believe higher ACH transaction dispute volumes are a function of higher overall ACH volumes; 9% cite increasing customer familiarity with ACH payments; and 11.3% indicate their volume of ACH transaction disputes declined in 2009 while 15.9% saw no change.
With U.S. online gift card sales projected to hit $5.86 billion in 2014, Blackhawk Network prepaid eGift Cards through GiftCardMall.com has expanded to include The Home Depot, Sephora, Legal Sea Foods and Justice. Company research indicates almost 50% of these gift card shoppers wait until the last minute to purchase a gift. Additional eGift Cards are slated to be available later this year in time for holiday shoppers, which are received by email and can be printed out and redeemed in-store at participating retailers or redeemed online. Blackhawk Network prepaid and financial payments products offers popular prepaid gift card and telecom products.
Marvell Semiconductors has deployed the Model N “High Tech Revenue Management” Suite to boost gross margins and market share in an increasingly global and competitive semiconductor marketplace. Marvell is leveraging Model N’s integrated Revenue Management platform to streamline and automate previously manual and error-prone pricing processes; enhance visibility into global demand by tracking direct and channel leads and opportunities through to the end customer; and increase revenue by improving management and control over contractual obligations.
Currently, 72% of debit card issuers indicate the performance of their debit portfolios as a top priority this year, mostly through instant issuance. In 2009 alone, 35% offered instant issuance in either some or all of their branches, up from 28% in 2008, while those considering implementation of instant issuance increased to 36% from 26%, also in 2008. This, according to the “2010 Debit Issuer Study” commissioned by PULSE, also found 58% of financial institutions currently offer a rewards program, up from 53% in 2008 while only 17% are considering launching a rewards program this year, compared to 24% in 2008.
Retailers and restaurants experienced the 11th consecutive quarter of year-over-year credit and signature debit card sales declines since 3Q/08 for restaurants and 2Q/07 for retailers. Year-over-year declines were 9.16%, 12.21% and 14.84% in Q1 2010, Q4 2009 and Q3 2009, respectively. Consumer Credit published on July 8, 2010 which reported consumer credit is down at an annual rate of 4.5%. This, according to the Capital Access Network Data Services Division “2Q/10 Small Business Credit Sales Report” (SBCS Report), also shows there is a trend toward greater consumer usage of cash, prepaid cards, and PIN debit. As reported by Visa and Mastercard in their 2009 public filings, there was a 7% increase in debit card usage and a 7% decrease in credit card usage between June 30, 2008 and June 30, 2009 and debit card usage up 6.5% in the United States, while its credit card usage dropped 16.8% for the full year of 2009, respectively. Since Q4 2008, each quarter averaged year-over-year card sales declines of 13.56% until this period. This sector seems to be moderating its year-over-year card sales declines which are now in the high 5% range versus lows of nearly 17% in Q3 2009. Slowing rates of year-over-year decline continued in both the Restaurant Sector and Retail Sector (which includes service providers), with decreases in credit sales of 1.21% and 9.27%, respectively, from Q2 2009 levels, marking the first time both sectors have had single digit declines since Q3 2008.
National retail merchants have increased what they charge consumers whose checks are returned insufficient funds (NSF) by 20% to a median $30. This, compared to $25 in 2009, is the highest percent increase and surpasses banks and credit unions median fee of $27 for an NSF. Why merchants are increasing fees, according to the latest annual survey by Moebs $ervices, has much to do with the economic recession, as the fee increase offsets costs for a more profitable bottom line. They also must offset the cost of e-check use where the paper check is swiped. E-checks went from 6.3 percent in 2009 to 12.6 percent. National retail merchants that do not accept checks as a form of tender remained flat at 31.4 percent.
ViVOtech NFC mpayments and loyalty applications is implementing a Voltage-powered end-to-end encryption POS solution in its ViVOpay line of industry-leading contactless NFC payment terminals. ViVOtech has joined the Voltage SecureData Open License Program as it dramatically lowers the barrier to implementing end-to-end encryption on POS devices, Electronic Cash Registers, mobile payment devices and eCommerce Payment platforms. By using Voltage SecureData, ViVOtech solutions will provide merchants with a wider set of data protection solutions, incorporating end-to-end encryption and tokenization that significantly reduces the PCI DSS audit scope and meets or exceeds the recently published Visa Best Practices for Data Field Encryption and Tokenization.
Based on transaction volume, Citi has been ranked the number one Corporate bank card issuer in the U.S. by The Nilson Report. Citi Commercial Cards offer clients a comprehensive package that takes program and report management to a higher level, providing a superior quality business intelligence engine –supporting the need for consolidated data and card-level administration and information. Citi’s commercial card programs increase control and transparency, offering greater visibility into what and where organizations are spending as a pre-eminent commercial cards provider to large and multi-national organizations. Nearly 500 multinational corporations use its commercial cards programs at the core of their expense management strategy, making Citi a premier card issuer in terms of technology, innovation and volume.
Diana Berman has been appointed Senior VP, Stratus Rewards Visa White Card division with Stratus Media Group. Berman will oversee the launch of the Stratus Rewards Visa White card in Europe and the strategic development and expansion of the Stratus Rewards business worldwide. She was most recently with Quintessentially, as President of the Americas, where she directed strategic development and expansion throughout North, Central and South America. Berman was also with Sony Corporation of America, where she managed campaigns and digital content services. Her education includes degrees in Psychology from University of New South Wales and Marketing from University of Technology Sydney.
Mocapay has inked a strategic partnership with eNational Payments mobile and contactless electronic commerce and payment processing services. With this, eNational Payments merchants and retailers can take advantage of Mocapayâs patented secure mobile payments solution and mobile marketing engine to reach customers in real-time. eNational Payments offers retailers and merchants a blend of electronic payments and services that reduces the time spent handling payments, allowing merchants and retailers to spend more time serving customers. eNational Payments provides financial services, including check warranty and back office conversion, to more than 2,800 non-banking financial services businesses, collectively processing over nine billion dollars.