Consumers Creating Delinquency Budgets

A new survey has found that if forced to chose between which bills to pay, 98% of households would likely pay their mortgage first; while credit cards would be among the groups of bills that are least likely to be paid. The research by VA-based Online Resources also found that one out of four households report being delinquent on at least one bill, by 30 days or more. ORCC also surveyed a cross-section of clients from its 2000+ strong biller end-point network of banks, credit unions, utilities, healthcare companies, card issuers, receivables management and mortgage companies. The biller survey reveals that a majority reported feeling a negative impact from the consumer credit crunch already. Only two percent expect it to be easier to collect payments in 2008, and 84% expect to spend more on collections in 2008.

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Small Business Owners Stay Pessimistic

Economic confidence among small business owners slipped slightly in December for the fifth consecutive month, falling to its lowest point in 2007. Small business owners expressed less confidence that economic conditions are getting better, either in the general economy or with their own businesses. The “Discover Small Business Watch” index dipped to 92.7, down half a percentage point from November’s 93.2. The index is down a full 17 points than at the same time a year ago. Discover also found that 65% of small business owners feel that economic conditions in the U.S. are getting worse, slightly fewer than the 68% who felt that way in November. The number who believe it is getting better remained the same. About 42% said they have experienced cash flow issues over the last 90 days, an increase from 38% in November but even with 42% from December 2006.

Discover Small Business Watch
Nov 06: 114.6
Dec 06: 109.7
Jan 07: 114.3
Feb 07: 113.4
Mar 07: 117.7
Apr 07: 110.3
May 07: 110.0
Jun 07: 102.5
Jul 07: 107.3
Aug 07: 102.4
Sep 07: 99.2
Oct 07: 96.8
Nov 07: 93.2
Dec 07: 92.7
Source: Discover Business Card

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AmEx Launches a Gift Card Awareness Campaign

American Express has launched a consumer gift card awareness campaign in select markets. Print advertisements with usage tips will run in the New York and Washington, DC metro areas. Tips include reminders to pay attention to the balance and to use the gift card as soon as possible. Recipients of the American Express Gift Cards can also take advantage of special offers when redeeming the Gift Card at retailers, restaurants and merchants.

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Credit Card Deals Declined Sharply

The number of “Prime Performing” credit card portfolio acquisitions tumbled last year to $9.4 billion versus more than $90 billion in 2006. According to card industry broker expert R.K. Hammer, the number of deals, excluding small credit union portfolio sales, declined from 83 in 2006 to 51 for 2007. (There were about 80 credit union card portfolio sales in 2007.) However, there are still approximately $48.4 billion in the possible deal pipeline, which would shrink the reported deal trend deficit considerably. Hammer says the range of sale premium prices for prime performing card deals varied widely last year, from 8.5% to over 35% over face value. The 2007 range was up 3% from the prior year.

Card Deals Historical
2003: $40.5 billion
2004: $30.6 billion
2005: $44.3 billion
2006: $90.3 billion
2007: $ 9.4 billion
Source: R.K. Hammer

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GPN 4Q/07

Atlanta-based Global Payments reported that revenues for the quarter ended November 30th increased 18% to $308.8 million, compared to one-year ago. Net income for the quarter rose 13% year-on-year to $38.3 million. GPN says the revenue gain was driven by growth in its merchant services segment, a strong Canadian currency exchange rate and its Asia-Pacific JV with HSBC. Sequentially, revenues declined $2.2 million and net income slipped $5.3 million. During the quarter, GPN completed the integration of Discover Network card transaction processing and support services for the majority of its merchants; activated the first of its ISOs relationships to acquire Discover Network merchants; announced an agreement to provide its “VIP LightSpeed” suite of cash access products and services to the Mount Airy Casino Resort in Paradise Township, Pennsylvania as well the Mystic Lake Casino Hotel and Little Six Casino in Minneapolis/St. Paul, Minnesota; and licensed Hypercom’s “SmartPayments Server and Client” software products as key technology components of its host electronic transaction processing platform. GPN updated its annual fiscal 2008 revenue guidance to range between $1,231 million and $1,257 million, reflecting a 16% to 18% growth versus fiscal 2007. For complete details on Global Payments latest results, visit CardData (www.carddata.com).

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December 18th Produces Green Tuesday

Holiday online sales data from Chase Paymentech show that Tuesday, December 18th was a record setting day. The “Chase Paymentech Pulse Index” posted a high of $169 million in sales and more than 3 million orders. The spike was more than 42% higher than Friday, December 15th, the peak “Pulse” shopping day in 2006. The index tracks online holiday spending at 10 of the top 30 online retailers as ranked by Internet Retailer magazine. To date, more than $4.7 billion has been spent online with these merchants, totaling 91 million orders. The index for 2007 found that online retailers consistently see higher sales volumes on Tuesdays and Wednesdays compared to previous years.

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Cigarette Gift Cards Banned in California

A California bill barring the use of gift cards to encourage cigarette use has gone into effect January 1. AB 1585 prohibits the use of coupons, gift certificates, gift-cards and similar offers, credits, and proofs-of-purchase in California by including these forms of advertising in the definition of ‘non-sale distribution’ of tobacco products. In addition, the bill clarifies that tobacco companies that engage in non-sale distribution by mail must verify that the recipient of the product is 18 years of age or older. California joins Massachusetts as the only other state to outlaw these sample offers.

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CASHBOX FUNDING

Cashbox has secured an investment of GBP 1 million from MBC Investments to
be allocated over 2 disbursements. The first of the fund distributions
will take place immediately while the second is to be disbursed before
April of next year. This development comes at a time in which the ATM
deployer is to reschedule the opening of its Scotland facility, reassess
the cost of its establishment and extend the facility’s draw down
period.

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DataPipe Joins PCI Security Standards Council

DataPipe has joined the PCI Security Standards Council as a new Participating Organization and will work with the Council to evolve the PCI Data Security Standard and other payment card data protection standards. As a Participating Organization, DataPipe will now have access to the latest payment card security standards from the Council, be able to provide feedback on the standards and become part of a growing community that now includes more than 350 organizations. In an era of increasingly sophisticated attacks on systems, adhering to the PCI DSS represents an entity’s best protection against data criminals. DataPipe provides managed hosting & security services.

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INDIA ATM VOLUMES

Based on BancNet research, experts are predicting the days of Friday,
December 21 and Friday, December 28 to reflect record ATM withdrawal
volumes. This research includes data that shows record ATM transactions on
December 22, 2006, December 29, 2006, August 31, 2007 and October 31,
2007, all of which were Fridays. In addition, the organization found that
on December 15 2006, there were 849,255 ATM transactions conducted by
Malaysian consumers. In response to these findings, bank experts are
recommending that consumers conduct purchases with their debit cards
rather than withdrawing funds for cash transactions. Heeding this advice,
consumers will put less strain on the ATM cash supply and face less risk
of losing money.

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