Payments performance for both networks and issuers are poised to face the profitability challenges of 40 years ago as the coronavirus impacts rage through all levels of life. The likely impact of the first two quarters of this year will wipe out profitability for 2020 and if COVID-19 extends into the third quarter, the impact will extend for many years to come. Obviously a steep decline in purchase volume following the steady decline in 2019 will affect far more than just the networks and issuers. However, the surge in consumer debt in late 2019 and the rapid rise in coronavirus-driven unemployment will likely produce higher delinquency and charge-offs says PYRPTS.
Little wonder why JPMorgan CEO, Jamie Dimon, had chest pains this week, requiring emergency heart surgery.
Payments Performance & Consumer Confidence
All eyes will be focused on the preliminary findings of the March consumer confidence survey to be released by the University of Michigan on March 13th. The NFIB business confidence survey is due out on March 10th. In late February the University Michigan Survey of Consumers found coronavirus was mentioned by 20% of those interviewed notes CardTrak.
Payments Performance & Investors
Robert McKinley, Senior Analyst for CardWeb, RAM Research, Ruebud and Robear’s, says investors are in a COVID-19 funk and did find some certainty with the recent “Super Tuesday Bump,” but largely discounted the emergency rate cuts by the Fed and other countries. More certainty will emerge with a “Nomination Bump” and a “Election Bump” and most importantly if the COVID-19 peaks and goes into remission this summer without re-emerging in the fall. He also notes all eyes will also be focused on revised forecasts by the OECD, FRB and other central banks over the next six weeks. Analyst McKinley further noted the strong job numbers and rising wage figures for February, pre-COVID-19, had no impact on the stock market whatsoever.
Trillions of dollars has been wiped from global equity markets on the back of coronavirus-related fears, with it now spreading throughout mainland Europe. The entire market cap of cryptocurrencies has decreased by $40 billion in light of the recent sell-off. Several cryptocurrency analysts have been scratching their heads wondering why Bitcoin failed to form a higher high when assets like gold continue to impress. While the slump in the price of cryptocurrencies has been devastating, it pales into insignificance when compared with the decline in stock markets. Nonetheless, major analysts have always been convinced cryptocurrency has no intrinsic value, according to CardBuzz and CardData.
Payment Conferences Hammered
Payments conferences are being impacted by Covid-19, especially in Asia wherein Money 20/20 Asia has been moved to August and RISE has been cancelled for this year, according to PYVNTS.
Connect ID: Conference
ISMG Fraud Summit
Legal & Compliance Summit
ProcureCon Indirect East
Biometrics Institute U.S. Conference
ABA Risk Management Conference
Enterprise Connect Conference/Expo
March 30- April 2
Digital Signage Expo
March 31 – Apr 3
SK ID Solutions has created a new biometric registration method for Smart-ID, which enables those who do not have access to other electronic authentication tools to create a Smart-ID account without having to visit a bank branch. As a result, users can use a secure electronic identity solution that enables them to authenticate their identity and to give digital signatures that are equivalent to handwritten signatures. If up until now, Smart-ID accounts could only be created via a physical identification in a bank branch or via Mobile-ID or ID-card, then now, SK ID Solutions has added another option to the list – biometric identification.
The vulnerability exists in Wi-Fi chips made by Cypress Semiconductor and Broadcom, the latter a chipmaker Cypress allows nearby attackers to decrypt sensitive data sent over the air. The affected devices include iPhones, iPads, Macs, Amazon Echos and Kindles, Android devices, and Wi-Fi routers from Asus and Huawei, as well as the Raspberry Pi 3. Eset, the security company that discovered the vulnerability, said the flaw primarily affects Cypress’ and Broadcom’s FullMAC WLAN chips, which are used in billions of devices. Eset has named the vulnerability Kr00k, and it is tracked as CVE-2019-15126.
Visa Accor Partnership
Accor, a global hospitality group, and Visa, have signed a global partnership to bring new payment experiences to ALL-Accor Live Limitless loyalty members. The partnership will bring together Accor’s loyalty program and Visa’s global payment capabilities to create the new ALL Visa card. Members who apply for the new Visa card will be able to use it for everyday purchases everywhere Visa is accepted. Accor will be collaborating with Visa partner financial institutions and banks in key markets across Europe, North and South America, Middle East and Asia Pacific to issue the new ALL Visa card. It will offer members tailored rewards based on customer preferences and the ability to earn more loyalty points when staying at an Accor property or when making purchases, according to Bankcenter.
Jumo Gets Gassed-Up
South African fintech startup Jumo closed a $55 million round from a diverse group of investors. Founded in 2015 and based in Cape Town, the venture offers a full tech stack for partners to build savings, lending, and insurance products for customers in emerging markets. With its latest raise, the company plans to move into new markets and launch new products in Asia and Africa. Jumo is active in six markets and plans to expand to two new countries in Africa (Nigeria and Ivory Coast) and two in Asia (Bangladesh and India).
American Express – Good & Bad News
After launching a major campaign in 2019 to increase merchant acceptance, American Express claims 99% of credit-card accepting merchants in the U.S. can now accept American Express, including almost a million new U.S. locations added to our network in 2019 alone. The Nilson Report, a California newsletter estimates American Express had 10.6 million U.S. merchant locations at the end of 2019.
Meanwhile, current and former employees say dodgy sales tactics date to at least 2015, when American Express was scrambling to retain Costco Wholesale small-business customers after the warehouse club ended their long-running partnership. The deal’s demise was a huge blow to AmEx. For 16 years, the warehouse club didn’t accept credit cards in its stores from any company but AmEx. AmEx also issued credit cards branded with the Costco logo that offered special perks. The potential revenue hit from the loss of the Costco customers was enormous, so AmEx launched an aggressive campaign to keep them. The push ushered in an era of escalating sales goals and hefty commissions that persists today, says CardBuzz.
King of Personal Financial Management
Intuit, of TurboTax, QuickBooks and Mint fame, has agreed to acquire Credit Karma, the consumer technology platform with more than 100 million members in the U.S., Canada and U.K., for approximately $7.1 billion in cash and stock. By agreeing to acquire Credit Karma, a company with nearly $1 billion in unaudited revenue in calendar year 2019, up 20% from the previous year, Intuit accelerates its mission of powering prosperity around the world.
Swisscard & FICO
Swisscard AECS, a credit card company in Switzerland, has optimized its early collections using FICO analytics leading to a 50% increase in revenue from billable collection expenses, a 40% reduction in net credit losses, a 30% reduction in account terminations whilst also lifting its Net Promotor Score for customers in collections by 11 points through improved customer interactions.
Discover has selected Grey New York will serve as the company’s new creative agency of record, following a competitive review. Grey will be responsible for developing creative and strategic work across media and partnership platforms.
Payments Performance 2020-2025 Forecast
RAM Research’s 2020 U.S. market report has been delayed due to forecast revisions from COVID-19. The report will now be released on March 24th. The report will be available from $4,999 per copy.
U.S. Major Payment Networks & Issuers Market Analysis, Performance & Trends – Quarterly Review (2015-2019) and Annual Historical & Forecast (2015-2025) [42 Parts + 310 Exhibits + 5005 Data Points + 404 Pages)
Cardworthy will resume production in late-March after payment projections have been revised. Professor Cardworthy has several podcasts and videocasts recently posted. This is in addition to the Professor Cardworthy blog.