The number of Americans paying off credit card balances in full each month jumped higher than expected in 2004 to 44.7%, compared to 38.3% in 2003 and 39.1% in 2002. Cardholders who avoid paying credit card interest charges, peaked in 2000 at 44.4%, according to CardData. Throughout the 1990s, the number of convenience users steadily increased, rising from 28.6% in 1990. The decline in the early 2000s is attributed to both the sluggish general economy and historically low interest rates. Some consumers switched back to revolving credit as personal income dropped, while others find 0% APRs and other super low interest rates provide little incentive to pay off in full each month. Overall, Americans pay back an average of 17% to 18% of their credit card balances each month, historical highs.Details
Target reported that its pre-tax credit card profits for the quarter ending April 30th increased 28% over the year ago quarter and 6% sequentially. Excluding the disposition of its Mervyn’s and Marshall Field’s card portfolios, Target’s credit card receivables increased 12% compared to 1Q/04. Target’s first quarter credit card profits were $142 million, compared to $134 million in the prior quarter, and $111 million one-year ago. Target reported that its total credit card receivables, which include its VISA and “Guest” cards, were $5.25 billion as of April 30th, compared to $4.69 billion one-year ago. Delinquency (90 days+) for 1Q/05 was 3.0%, compared to 3.5% in the fourth quarter, and 3.9% one-year ago. Charge-offs were 7.4% for 1Q/05 compared to 7.6% in the prior quarter, and 9.5% one-year ago. Target’s credit card unit had revenues of $279 million in 1Q/05, an 11.1% increase over 1Q/04. For complete details on Target’s latest performance, visit CardData (www.carddata.com).
TARGET CARD LOAN HISTORICAL
(Excludes Mervyn’s & Marshall Field’s)
1Q/04: $4.688 billion
2Q/04: $4.716 billion
3Q/04: $4.914 billion
4Q/04: $5.456 billion
1Q/05: $5.251 billion
Source: CardData (www.carddata.com)
Flash Foods, a convenience store chain in Georgia and North Florida, has rolled-out NCR “RealPOS 70” POS terminals and NCR “RealPOS” thermal printers in its 180-plus stores. Flash Foods managed the installation of the new POS solution and services its store-automation technology. NCR Corporation is a global technology provider of ATMs, retail systems, Teradata(R) data warehouses and IT services.Details
Virginia-based Transaction Network Services has acquired the assets of FusionPoint Technology Solutions from TechLAN, a specialist in convenience store and service station markets, including customer and vendor contracts, inventory and equipment, certain intellectual property rights and four employees. FusionPoint designs and installs turn-key solutions that integrate legacy devices found in today’s convenience stores and service stations onto an IP network, providing a single point of communication. TNS designs and implements multiple data networks, each designed specifically for the transport of transaction-oriented data.Details
San Francisco-based Pay By Touch has inked a major marketing deal with VeriFone, a development partnership with Cogent Systems, and a storewide expansion by Piggly Wiggly Carolina. Under the VeriFone agreement, both companies will work together to enhance the security, encryption and compatibility of each other’s solutions as well as offer an integrated solution. Under the Cogent Systems deal, the companies will focus on joint development to reduce the cost and simplicity of the installation of biometric payment solutions. Piggly Wiggly has decided, after a successful six-month pilot program, to deploy a storewide expansion of the Pay By Touch consumer biometric payment service in its grocery stores throughout South Carolina and Georgia. By the beginning of June, Piggly Wiggly shoppers across the two states will be able to pay for groceries with the touch of a finger.Details
Wisconsin-based Fiserv Credit Processing Services has expanded its loyalty program capabilities with the introduction of the “PLUS One Rewards Program” from ESC Loyalty. Branded credit cards will automatically earn points for every dollar spent. Those points then go into a PLUS One Rewards account that can be used to redeem a wide selection of rewards. Cardholders can start redeeming for rewards with as little as 1,500 points. ESC Loyalty is a provider of technology-based loyalty marketing solutions, specializing in applications for the credit- and debit-card industry. Fiserv reported $3.4 billion in processing and services revenues for 2004Details
Washington-based HIMC Corporation has signed a new client merchant services agreement with Azure Standard to provide its complete suite of “PayByCheck” services and credit card processing services. Azure Standard is a distributor of naturally grown foods and ships to western and mid-western states. HIMC Corporation, a wholly owned subsidiary of ITI Internet Services Inc. is a leading provider of payment services to over 25,000 customers.Details
Portland, OR-based TRM reported that first quarter net sales rose 127% to $58.8 million, driven by its ATM business, which quadrupled in gross sales to $48.1 million. The increase in net sales reflects the addition of approximately 15,700 ATM’s from the acquisition of the eFunds ATM network. TRM now has 21,672 ATMs compared to 3,597 in 1Q/04. The average fee per withdrawal was $2.33 for the first quarter, compared to $2.80 one-year ago. However, the average sales per ATM decreased 34% in Q1 to $713. The number of withdrawals per ATM also declined, from 388 in 1Q/04 to 306 in 1Q/05. TRM says the decreases in average monthly withdrawals per unit, average sales per withdrawal and average monthly sales per unit are an expected result of the higher percentage of merchant owned ATMs, which are at lower transaction and surcharge levels leading to lower sales per unit. For complete details on TRM’s first quarter performance, visit CardData ([www.carddata.com]).
Germany’s Infineon Technologies opens its Asia Pacific headquarters building at Kallang Sector today. The two 10-story towers house Infineon’s regional headquarters functions in the Asia Pacific, including production, logistics, sales and marketing and R&D. Besides having an Integrated Circuits Design center, Infineon Technologies Asia Pacific is also the global testing hub for its logic IC products. Infineon in Singapore has a total staff strength of approximately 2,350 in Singapore.Details
China UnionPay reports that cross-bank transactions by bank
cardholders reached 16.6 billion yuan (US$2 billion) for the first week of May, an increase of about 52% from last year. China UnionPay says that more than 5.5 million yuan was spent by traveling cardholders.
The seven-day “May Day” holiday is typically a busy consumer period. China currently has about three million credit cardholders.
A new survey has found that the biggest challenge for small businesses, regardless of size, is receiving and collecting payments. Small business owners’ ability to manage and move funds is the second highest ranked issue at 22%, followed by their concern about making payments. The VISA USA “Small Business Cash Management Survey” also found that 29% said card-based payments provide greater efficiency in receiving and collecting payments. Additionally, 26% found these products offer greater ease in making payments, as well as managing and moving funds. Nearly half of the respondents stated they would make all of their company’s payments on a payment card, if all of their vendors and suppliers accepted electronic payments. More mid-sized small businesses say they use business credit cards as a type of payment than any other category of small business, although 56% use business payment cards to make a percentage of their payments. The survey found that nearly 30% use business debit cards for core services and 20% report using business credit cards. For travel and entertainment expenditures, 82% of businesses use credit cards and 53% use debit cards. Nearly 40% of those surveyed reported making payments for maintenance and operating supplies on business credit cards and 42% reported using business debit cards. About 30% reported using business credit cards and 37% reported using business debit cards to make payments for raw materials.Details
Ohio-based KeyBank is reducing its card issuance fee for its “Key Possibilities MasterCard Gift Card” from $3.95 to $2.00, through June 30th, and donating the entire $2.00 to the American Heart Association’s “Go Red For Women” campaign. In the first four months of 2005, Key raised more than $53,000 for the Go Red For Women campaign.Details