Through the first quarter, 22 credit unions with card portfolios of over $1 million in outstanding balances sold their credit card portfolios, for total balances sold year-to-date of about $147 million. According to NH-based Brookwood Capital, four of the portfolios had balances exceeding $10 million. On average, the size of the portfolios sold this year has decreased slightly from last year’s average of $6.9 million to this year’s average of $6.7 million. Brookwood says the dollar value of the 1Q/05 sales, and the number of transactions to-date, are set to out pace last year’s 67 portfolios sold with $459 million in associated outstandings.Details
Online sales rose nearly 24% last year reaching $141 billion and are expected to rise about 22% this year to $172 billion. Based on total retail sales, online sales captured 6.5% of the market last year and may capture as much as 7.9% in 2005. The findings come from the National Retail Federation’s Shop.org annual online sales study conducted by Forrester Research. The research predicts that the Internet will be used for 48% of computer hardware and software sales, 28% of ticket sales, and 26% of travel sales this year. Retailers reported that search engine marketing is delivering 43% of overall customers to their sites. The study also found that 45% of retailers allowed consumers to purchase and redeem gift cards online and in stores, up from 30% in 2003.
ONLINE RETAIL SALES
2002 2003 2004 2005
Volume: $75.0b $114.0b $141.4b $172.4b
Share: 3.6% 5.4% 6.5% 7.9%
Source: Shop.org/Forrester Research
The percentage of credit union members that have credit union credit cards has tumbled to 18.1% from 18.4% in December, and 18.8% one-year ago. Four years ago the figure stood at 20.8%. Total card assets for portfolios over $1 million also continued their decline as a percentage of assets, falling to 3.96% from 4.22% in December. According to Portland, OR-based AssetExchange, total card assets for portfolios over $1 million increased by less than 1% in inflation-adjusted dollars. AssetExchange also found that the percentage of portfolios that grew more than the rate of inflation during the previous 12 months fell from 46% in March 2004 to 44% in March 2005. AssetExchange’s study is based 2,100 credit unions with credit card portfolios of $1 million and larger.
CU CARD PENETRATION
Wincor Nixdorf has signed a deal to offer its retail customers mobile and wireless terminals from the PSC “Falcon” “Microsoft Windows CE.NET family.” The move expands the 22-year partnership between PSC and Wincor Nixdorf. To date, the partnership has focused on scanner solutions. The PSC “Falcon” family of mobile terminals includes a range of devices designed for retail in-store and warehouse applications.
The “Falcon 4220” is PSC’s latest generation PDA device, designed for retail, warehousing and logistics applications. The “Falcon 4400” series combines the flexibility of the “Microsoft Windows CE.NET” operating
system with wireless data communications, bar code scanning and the Intel “PXA255 XScale” microprocessor. PSC’s headquarters and major
manufacturing facility is located in Eugene, Oregon.
First Data announced that TeleCheck will now use “STAR CHEK Direct” to verify funds availability and checking account status in real-time during a transaction. TeleCheck will also support real-time check debits later this year. First Data Corp. provides electronic commerce and payment solutions to 4.1 million merchant locations, 1,400 card issuers and millions of consumers. The company’s STAR Network offers PIN-secured debit acceptance at 1.6 million ATM and retail locations.Details
Dallas-based TNB Card Services has released its second white paper to assist credit unions with improving their card program’s financial performance. The paper, titled Six Habits of Highly Effective Card Programs: A Best Practices Approach to Effectively Marketing Credit Cards for Credit Unions is a 20-page report that addresses six major card marketing considerations, such as portfolio management, pricing, promotion, and loyalty and reward programs. The document examines each subject and gives solid, proven advice on how to improve the card program’s financial performance. TNB Card Services provides full-service credit and debit card processing and serves more than 450 financial institutions, managing more than 1.6 million cards.Details
Rosh Pina-based On Track Innovations reported that revenues for the first quarter rose 24%, driven by orders delivered in the payments market. The Company, a partner in the MasterCard “PayPass” program, says revenues from the payments market constituted 49% of its first quarter
revenues. Revenues for the quarter were $6.55 million compared to $5.30 million for 1Q/04. Net loss for the period decreased by 16% to $1.67 million from $1.99 million in the first quarter of last year. During the quarter, OTI’s “EasyPark” parking payment system reached more than 166,000 subscribers in 25 cities in Israel. Also, Hypercom ordered its first commercial quantities of OTI’s contactless reader solutions, which are compliant with MasterCard’s “PayPass” and American Express’ “ExpressPay.” OTI specializes in the three key vertical markets – payments for small ticket items, smart ID for verification of individuals, and petroleum payments. For complete details on OTI’s first quarter performance, visit CardData (www.carddata.com). (CFI Library 2/25/05; 3/1/05)
Minneapolis-based Cash Systems posted a 24% increase in first quarter revenue to $13.7 million, however, net income slipped by 22%. A highlight of the quarter was the announcement of new contracts with Chickasaw Nation Tribal and Deadwood Casinos. Cash Systems, Inc.is a cash access company serving the gaming industry.Details
A new report from SourceMedia’s (f/k/a Thomson Media) “Credit Card Management” (s/k/a Cards & Payments) magazine has found that large issuers posted a collective after-tax return on assets of 3.7% or $21.44 billion last year, up from 2.5% in 2003. Issuers had low funding costs, saw a greater consumer use of plastic and timelier payments from cardholders and sought to expand their markets, such as the $125 billion quick service restaurant arena. Credit Card Management is a monthly publication that reports on the electronic transactions industry and is published by SourceMedia, Inc., a provider of information, data and software tools for 750,000 clients and subscribers in financial services and related technologies markets worldwide.Details
LYCOS Europe has selected GlobalCollect to process the payments for its Web hosting, communication, community and access services. LYCOS Europe has already implemented the GlobalCollect online payment platform in Germany and the Netherlands and will roll out France, The United Kingdom, Denmark, Spain, Sweden and Austria in the coming weeks. GlobalCollect is the international Payment Service Provider
offering the largest number of local payment options worldwide, enabling
among other options bank transfers in over 50 countries and Direct
Debits in 10 countries.
Six-year old Givex continues to expands its gift card programs in the USA. Last week, the Company announced the integration of the its “Gift Card Program” into Dinerware’s “Easy System” software. Dinerware provides technology to independent restaurants and restaurant chains of all sizes. Givex also announced the integration between the its “Gift Card Program” and SpeedLine’s pizza-specific POS system. SpeedLine is the number one most recommended POS of the top 100 pizza companies. Givex offers gift cards, multi-merchant cards, coupons, e-gift certificates, prepaid/stored value cards, loyalty programs, payroll card programs as well as credit/debit card management services. The firm is privately held corporation with operating offices in the U.S., Canada, U.K, and the Bahamas.Details
The number of credit and debit cards-in-force in the USA grew by 64.6 million over the past twelve months, surpassing the 900 million card mark in the first quarter. MasterCard lead the four U.S. networks posting a nearly 10% increase in its card base compared to 1Q/04. MasterCard had 346.9 million credit and off-line debit cards-in-force at the end of March, compared to 316.4 million one-year ago. American Express added 3.3 million cardholders in the USA since 1Q/04, for a 9% increase. VISA ended the first quarter with 463.4 million credit and offline debit cards-in-force, for a 7% gain. Discover was flat at 50.7 million. At the end of 1Q/05, there were 901.3 million credit and debit cards in use in the USA, compared to 836.7 million one-year ago. For complete details on network performance in the first quarter, visit CardData ([www.carddata.com]).
CREDIT/DEBIT CARDS-IN-FORCE (millions)
NETWORK 4Q/04 1Q/05 Y/Y CHNG
VISA 458.0 463.4 +7.0%
MasterCard 337.8 346.9 +9.6%
American Express 39.9 40.3 +8.9%
Discover 50.8 50.7 +0.4%
TOTAL 886.5 901.3 +7.7%
Source: CardData (www.carddata.com)