RBS WorldPay to Process NPCA Debit Cards

RBS WorldPay payment processor has inked processing agreements with the
National Payment Card Association (NPCA) to process its debit cards.
NPCA offers merchants a card acceptance solution with significantly
lower transaction fees than traditional credit or debit cards and first
introduced its alternative payment solution in June 2006. NPCA’s ACH
card solution has proven to be a beneficial alternative to traditional
card acceptance in primarily the petroleum industry. The NPCA PIN based
payment system processes transactions through the Federal Reserve
Automated Clearing House (ACH), resulting in lower merchant fees and a
self-funded loyalty program that provides immediate savings to consumers.

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TMG Lands Two New Clients and Renews Two

TMG (The Members Group) has added VA-based Belvoir FCU and FL-based
ECOM Financial Corp for processing of prepaid cards.
TMG has also renewed its credit card processing partnership with CA-based
Oakland Municipal Credit Union and Meriwest Credit Union has
chosen to renew its debit card processing contract with TMG. TMG is dedicated to
providing innovative and flexible card processing and payment solutions
to credit unions and financial institutions across North America.

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Improving Metrics Drive AmEx Q3 US Card Profits

American Express reported a $109 million third quarter profit for its
U.S. card services business, following a $200 million loss in the second
quarter. Charge-offs retreated for the first time during the recession,
dropping 110 basis points sequentially, as delinquency also edged down
by 30 basis points. U.S. Card revenue declined 16% to $2.9 billion,
largely due to lower volume and balances. Marketing, promotion, rewards
and cardholder services expenses decreased 16% from the year-ago period,
reflecting lower rewards costs and reduced investments in marketing and
promotion. Charge-offs on managed U.S. card loans dropped to 8.9%,
compared to 10.0% for 2Q/09 and 5.9% for 3Q/08. Delinquency (+30 days)
dropped to 4.1%, compared to 4.4% in the prior quarter and 3.9% one-year
ago. U.S. card loans declined 19% from 3Q/08 to $51.9 billion, and are
$2.1 billion lower than the prior quarter. For complete details on
American Express’ third quarter results, visit CardData (www.carddata.com).

American Express U.S. Card Metrics
Charge-Offs Delinquency Net Income
3Q/08: 5.9% 3.9% +$244 million
4Q/08: 6.7% 4.7% +$ 4 million
1Q/09: 8.5% 5.1% (-$ 25 million)
2Q/09: 10.0% 4.4% (-$200 million)
3Q/09: 8.9% 4.1% +$109 million
Source: CardData (www.carddata.com)

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Higher Revenue Margin Delivers a Cap One Profit

Capital One posted a third quarter $290 million profit for its U.S.
Card business. The issuer delivered the significant profit in the face
of rising delinquency and charge-offs, coupled with declining balances
and volume. The profits was driven by an improving revenue margin. COF’s
revenue margin rose 230 basis points from the second quarter to 16.76%.
Purchase volume of $23.8 billion for 3Q/09 was off 10% from the year ago
quarter, but flat compared to the second quarter. U.S. managed card
outstandings declined to $61.9 billion for the third quarter, compared
to $64.8 billion in the previous quarter and $69.4 billion for 3Q/08.
The managed delinquency rate (30+ days) for U.S. credit cards was 5.38%
for the third quarter, compared to 4.77% for 2Q/09 and 4.20% for the
third quarter of 2008. The net charge-off rate for U.S. credit cards was
9.64% for the third quarter, compared to 9.23% for the second quarter
and 6.13% one-year ago. During the quarter Cap One changed its reporting
structure, dividing its business into three segments: Credit Card,
Commercial Banking and Consumer Banking. For complete details on Capital
One’s third quarter performance, visit CardData (www.carddata.com).

COF U.S. CARD NET INCOME
3Q/08: $344.2 million
4Q/08: $-176.3 million
1Q/09: $0.7 million
2Q/09: $166.9 million
3Q/09: $289.8 million
Source: CardData (www.carddata.com)

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Retailers to Use Social Media this Holiday

Thanks to the growing popularity of Facebook and Twitter, 47.1% of
retailers plan to increase their use of social media for the holiday
season while 60.3% have added or improved their Facebook page and 58.7%
have added or improved their Twitter pages. More importantly, 34.3% are
preparing to offer holiday deals earlier in the year; 79.4% will offer
free shipping with conditions; 57.4% plan to offer free shipping without
conditions; 35.7% have higher budgets for free shipping Y/Y; and 30.0%
are offering free shipping earlier in the year. This, according to
results of Shop.org’s eHoliday Study conducted by BIGresearch, also
shows 45.8% of online retailers expect their holiday sales to increase
at least 15% Y/Y while 33.9% expect sales to grow up to 14% while only
20.3% expect sales to be flat or decline. Additionally, 26.7% of online
shoppers plan to spend a larger portion of their holiday budget online
this year; 1.1% are hesitant to shop online due to concerns about
security, credit card theft (0.6%), privacy
(0.1%) or concerns about retailers tracking online activity (0.1%).

HOW SHOPPERS WILL PAY
Credit Card 67.3%
Debit Card 35.6%
PayPal 33.9%
Gift Card 11.5%
SOURCE: SHOP.ORG

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Survey Says Savings Rate Poised to Head Up Again

In lieu of the recent drop in the national savings rate, there has been
a 3Q surge in positive financial intentions among middle-class
Americans. The personal savings rate fell for the third month in a row
to 3 percent of disposable income and there has been a marked decrease
in the amount of money Americans are able to put into short-term savings
throughout August and September. However, Americans have been able to
nudge the ‘First Command Financial Behaviors Index’ a point higher to
91, representing the highest quarterly finish of the past 15 months, 57%
plan to spend less on holiday gifts this year and 42% will set a maximum
dollar amount on gifts; 41% will buy fewer gifts 39% will buy for fewer
people. Regardless, the average amount of money placed in short-term
savings has dropped 33% from $1,169 in July to $787 in August, and it
remained low in September at $860 while in September only 25% without a
financial plan were confident with their ability to retire comfortably.

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PayPal Transaction Volume Soars 19% in 3Q/09

eBay reported that PayPal posted $688 million in net revenue for the
third quarter, an increase of 15% year-over-year driven in part by “Bill
Me Later” transactions and wider PayPal merchant adoption. Net total
payment volume for the quarter was $17.7 billion, an increase of 19%
year-over-year. Global active registered accounts increased to 78.0
million, representing 19% year-over-year growth. During the third
quarter, PayPal handled 273.9 million payments, a 6% increase over the
prior quarter and up 28% from 3Q/08. PayPal’s 3Q/09 transaction revenue
rate decreased to 3.67% from the prior quarter and is 22 basis points
lower than the previous year rate. The processing expense rate for the
third quarter edged up slightly to 1.16% which is lower than the prior
year at 1.20%. PayPal’s transaction loss rate went down five basis
points to 0.25%. For “Bill Me Later” credit transaction the delinquency
rate (90+ days) was 4.97% for the quarter, up from 4.64% in the second
quarter. The “Bill me Later” charge-off rate hit 11.53% in 3Q/09,
compared to 11.08% for 2Q/09. For complete details on eBay/PayPal’s
third quarter performance, visit CardData (www.carddata.com).

PAYPAL HISTORICAL
$VOLUME #ACCOUNTS
3Q/08: $14.8 billion 65.3 million
4Q/08: $16.0 billion 70.4 million
1Q/09: $15.9 billion 73.1 million
2Q/09: $16.7 billion 75.4 million
3Q/09: $17.7 billion 78.0 million
SOURCE: CardData (www.carddata.com)

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VeriFone Intros a New Fuel Pump System

VeriFone Holdings has introduced the “Smart Fuel Controller” POS fuel pump management system.
The “Smart Fuel Controller” eliminates POS
performance constraints inherent in some third-party pump interface
devices, so that systems such as VeriFone’s Ruby and Topaz XL systems
can execute forecourt transactions with the same level of performance as
in-store transactions. It integrates pay point management with
in-store POS systems, while eliminating the need for a separate pump
interface device and distribution box. The system provides improved site performance, including expedited price
changes, fuel pump authorizations and all end-of-shift and day closing
processes. Other benefits include improved cashier performance and
faster customer transactions. The “Smart Fuel Controller”
will support more than 32 fueling points and integrate fleet and retail
sales and reporting capabilities onto a single platform. Merchants using
fleet POS solutions for truck stop sales will be able to interface the
data directly into their VeriFone POS systems for integrated reporting.
The system is available now for Gilbarco fuel dispensers and support for
additional brands will be rolled out in the near future.

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GEMALTO 3Q/09

Smart card specialist Gemalto reported 401 million euros in revenue for
the third quarter, down 4% from one-year ago due to a cautious market
place. Secure Transactions revenue slipped 6% to 107 million euros as
banking customers maintained strict inventory and cash optimization
measures. Gemalto says the ST business was also due to lower demand in
parts of Central Europe and the Americas. However, deployments of
dual-interface contactless cards in Europe and Asia remained strong. In
the Security business unit revenue slipped by 1% to 53 million euros.
Government Programs revenue grew by 4% during the period, with double
digit growth in EMEA and Asia offset by low demand in the Americas.
Identity and Access Management (IAM) revenue lowered by 18% on the back
of weak enterprises demand, while online banking solutions sales were
stable compared with previous year. For more details on Gemalto’s third
quarter performance visit CardData (www.carddata.com).

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Partridge Replaces Morris as Visa President

Visa made it official that former COO John Partridge has been named President of the company. In July, Visa announced that President Hans Morris was stepping down after playing a major role in its 2008 IPO. At the same time Visa announced a new structure wherein Visa’s global sales, client service, marketing, product development and innovation functions would be consolidated under COO John Partridge. Morris will remain with the company until the end of the year. Morris joined Visa in September 2007. Joseph Saunders, Chairman and CEO of
Visa says Partridge will oversee all client, marketing and product functions globally, enabling Visa to more effectively and efficiently allocate resources among markets to enhance its service to clients and speed Visa’s growth. (CF Library 7/26/07; 7/28/09)

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Chase Sapphire to Hit Philadelphia

Philadelphia is the site selected for the “Chase Sapphire” multi-million dollar marketing campaign.
This campaign introduces Chase Sapphire, the new, next generation
rewards card designed for the affluent market. Chase will reach
Philadelphia-area residents through a variety of channels, from their
daily news source to their morning commute, to pique interest in Chase
Sapphire. Chase Sapphire launched nationally in August through an integrated
marketing campaign and partnership with the Travel Channel. The card has
been built from the ground up to address the needs of the top 15 percent
of U.S. households by income who expect premium rewards, outstanding
value, and exceptional service. Philadelphia is the sixth largest U.S.
city and has a significant affluent population.

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