New research reveals that consumer confidence and spending began slowing about eighteen months ago. The analysis, based on data from Experian’s ‘”Simmons” and “Hitwise,” found that from Spring 2007 to Summer 2008, the percentage of U.S. adults who felt they would be financially better off in the next year dropped from 46% to 37%. Not only did the percentage of confident consumers slump, but the number of adults who felt they would be worse off in the coming year grew by 9% to 22%. Other findings: between October 2006 and October 2008, overall visits to retail Web sites declined 4% year-over-year; overall visits to Web sites in the travel category dropped 10%; and online searches for major electronic items saw significant, year-over-year decreases, with “televisions” down 33%, “laptops” down 48% and “computers” down 57%. Experian also found that households earning $250,000 or more were the fastest to abandon the notion they would be somewhat or significantly better off in the coming year, dropping by 40% from Spring 2007 to Summer 2008.
The first naira denominated internationally functional Visa cards have been introduced. Lagos-based Diamond Bank has launched a “Classic,” “Gold” and “Platinum” Visa card that employs the EMV application and will soon offer “Verified by Visa.” The credit cards are also linked to the bank’s “Diamond Gems Reward” program. The bank’s first partner under the rewards program is Virgin Nigeria, the flag carrying Nigerian airline. “Diamond Gem Reward” points can also be converted to “Virgin Nigeria Eagle Flier” points on a one for one basis.
The new cards also feature a 5% monthly minimum payment and free SMNS alerts for all transactions. The cards carry a range of fees including monthly service fees of 500 naira for the “Classic Visa,” 750 naira for the “Gold Visa,” and naira 1000 for the “Platinum Visa.” Interest rates vary from 2.5% per month for the “Platinum” card to 3.00% per month for the “Classic” card.
Thanks to its recent settlement with Visa and MasterCard, Discover Financial Services posted a $646 million pre-tax profit for the quarter ended November 30th for its U.S. Card Segment. During the quarter Discover received an $863 million payment as the first installment of its $2.75 billion settlement of an antitrust lawsuit with Visa and MasterCard. The remaining proceeds in equal $472 million installments will be paid over the next four quarters. Fourth quarter managed loans hit $51 billion, up 6% from last year and 1% from last quarter. Discover says decreased consumer spending and balance transfer activity were offset by lower cardholder payments and growth in installment loans. Fourth quarter sales volume decreased 2% year-on-year to $22.0 billion. The managed over 30 days delinquency rate of 4.56% was up 71 basis points from the prior quarter, and 98 basis points from last year. The managed net charge-off rate increased to 5.48% for the fourth quarter, up 28 and 163 basis points, respectively, from last quarter and last year. Discover says it expects the managed net charge-off rate in the first quarter will exceed 6%. The Third-Party Payments segment transaction volume was a record $125 billion, up 36% from last year, reflecting the addition of Diners Club International volume of $13 billion, as well as increased volumes on the PULSE and Discover networks. Pretax income of $81 million was up $44 million from 2007 including $11 million related to Diners Club International, which was acquired in June 2008. Revenue increased $61 million due to increased volumes and fee revenues as well as a $28 million contribution from Diners Club International. Expenses increased $17 million due to the inclusion of Diners Club International. For complete details on Discover’s latest performance visit CardData ([www.carddata.com](http://www.carddata.com)).
U.S. CARD PRE-TAX PROFITS
4Q/07: $320.8 million
1Q/08: $375.4 million
2Q/08: $309.1 million
3Q/08: $245.2 million
4Q/08: $646.4 million
Source: CardData (www.carddata.com)
Prepaid product provider Mint Technology has entered into an agreement with
Silverback Media to introduce mobile payments. Mint’s customers
will initially have the ability to load their prepaid MasterCard or check
their balance using their mobile phone – easily and effortlessly.
Ultimately, the collaboration will result in the rollout of other mobile capabilities.
Silverback will provide the technology to manage all aspects of the mobile
connectivity and user-experience. As a MasterCard Member Service Provider, Mint works with business
partners to customize prepaid credit card programs that are tailored to meet a
company and its card holder’s needs.
British credit card issuers have agreed to give their troubled cardholders “breathing space” to establish a debt repayment plan with a debt advice agency. Customers will have a minimum of 30 days to set-up a repayment plan, during which time the credit card issuer will suspend collection activity. If discussions remain ongoing after 30 days, there is an option of extending this by an extra 30 days. Card issuers have also agreed to increase transparency for risk-based repricing. Under the new practice customers will be notified when their interest rate is being changed as a result of risk-based repricing, and if their interest rate goes up they will be given sufficient time to close their account or be offered an alternative product. Credit card issuers have also agreed that they will not increase the interest rate on a card on the basis of risk during its first twelve months, or more often than six monthly thereafter. APACS says the two changes will likely be built into “The Banking Code.”
Credit card issuers have agreed to give their troubled cardholders “breathing space” to establish a debt repayment plan with a debt advice agency. Customers will have a minimum of 30 days to set-up a repayment plan, during which time the credit card issuer will suspend collection activity. If discussions remain ongoing after 30 days, there is an option of extending this by an extra 30 days. Card issuers have also agreed to increase transparency for risk-based repricing. Under the new practice customers will be notified when their interest rate is being changed as a result of risk-based repricing, and if their interest rate goes up they will be given sufficient time to close their account or be offered an alternative product. Credit card issuers have also agreed that they will not increase the interest rate on a card on the basis of risk during its first twelve months, or more often than six monthly thereafter. APACS says the two changes will likely be built into “The Banking Code.”
Prepaid card provider FNDS3000 has appointed John Hancock, previously
with British American Business
Council as CEO/Director and John Watson, previously with Howdens
Millwork, will serve as EVP/Director. Hancock presently serves as
Chairman of the British American Business Council, the
premier transatlantic trade group, with some thirty chapters in the USA
and the UK and over 3000 Corporate Members. He has spent most of his
career in the Retail Services industry in Europe, Asia and North
America. Watson served as EVP/CAO of Howdens Millwork and was
responsible for planning, administration and financial management.
FNDS3000’s focus has been on the development and implementation of a
variety of prepaid card programs outside the USA, including services to
individuals who lack access to debit cards or advanced banking services.
Barclays has partnered with
e-payment provider TimesofMoney to launch “Barclays Online Money
Barclays Online Money Transfer will enable the bank’s customers in the
UK to transfer money online directly to any Barclays account anywhere in
India. The services will be extended in the near future to customers in
other countries who wish to send money to India. With the availability
of the latest technology from TimesofMoney for the Barclays Online Money
Transfer remittance service, customers can now transfer their money
conveniently and in a secure environment. Remittances ranging between
ÃÂ£250 and ÃÂ£3,000 can be made through this platform. TimesofMoney is a
leading services provider of online remittances that provides money
into India spanning 23 countries, 6000 locations and 16000 banks to
Barclaycard US has christened the “Holland America Line
Rewards Visa.” It is Carnival’s Holland America Line first co-branded credit card. For every $1 spent on Holland America Line purchases, cardholders earn two Holland America Points. For all other purchases, cardholders earn one point. Cardholders earn 5,000 points upon first use and can accrue an additional 5,000 points for balance transfers completed within the first 30 days of account opening. Points can be redeemed for various cruise packages and onboard services and amenities.
The card is available as a “Visa Signature” and “Visa Platinum” card.
Last year Barclays launched the “Princess Rewards VISA Signature” card with Carnival. (CF Library 11/06/07)
NEOVIA Financial Plc will acquire IDT Corporation’s European
Prepaid Payment Services Division for total cash consideration of US$ 15.05 million to be paid to IDT
Corporation on completion Ã¢ÂÂ this includes US$ 10 million of banking regulatory capital.
The agreement includes the purchase the entire issued share capital of IDT
Financial Services Holdings Limited and certain other assets which together provide prepaid MasterCardÃÂ® products
in the UK market under the IDT “Prime Card” brand. Also included is the key strategic acquisition for
NEOVIA, adding new product lines and distribution based on the IDT Prime Card, accelerating the development
of NEOVIA’s prepaid Net+ card business and rapidly increasing the Company’s active
NETELLER e-wallet customer base. In combination with NEOVIA’s Net+ card services, the acquisition creates one of
Europe’s largest independent prepaid debit card businesses.
LML Patent filed suit in the U.S. District Court for the Eastern District of Texas seeking damages,
injunctive and other relief for the alleged infringement of their patents against
JP Morgan Chase, Wells Fargo, Wachovia, Citigroup, Bank of New York Mellon, HSBC
Holdings, Capital One Financial, ABN AMRO Holding N.V., Northern Trust, Regions Financial Corp.
National City, Fifth Third Bank, Citizens Financial Group, M&T Bank, UnionBanCal,
First National of Nebraska, Deutsche Bank Trust Company Americas and PayPal
In the suit, LML alleges that the defendants infringe U.S. Patent No. RE40220 which relates
to electronic check processing methods and
Prepaid processor eCommLink and mobile payment platform provider
Monitise Americas have teamed to jointly offer
mobile money applications to the prepaid debit card industry.
The companies will market prepaid debit cards that are closely
integrated with a cardholder’s mobile phone. This will allow customers
to manage their cards, reload their accounts, pay bills, transfer money
to another person and make international remittances directly from the
mobile handset, regardless of the
carrier or financial institution involved. Clients can select from
either a SMS based interface or a simple to use, easy to download mobile
application to allow cardholders to manage their prepaid accounts and