In the wake of major credit card issuers dropping JAMS as an option for arbitration, the firm announced yesterday it is ending its class action arbitration waiver policy. In November, JAMS announced that it would refuse to honor class-action waivers in mandatory arbitration clauses. JAMS says the change was driven by its commitment to the core value of neutrality. JAMS says recent court decisions on the validity of class action preclusion clauses have varied by jurisdiction. JAMS noted that its attempt to bring uniformity to the administration of class wide arbitrations stemming from these clauses has created concern and confusion about how the policy would be applied. The ADR provider says it will always apply the law on a case by case basis in each jurisdiction.Details
NOVA Information Systems has teamed with Costco Wholesale Canada to market and support payment processing services to Costco
Canada’s “Business Executive Members.” NOVA has had a similar agreement
with Costco in the United States since 1997. Roll-out commenced in early
March. Costco currently operates 64 warehouse stores located in nine
provinces throughout Canada. NOVA Information Systems Canada has been processing transactions since October 2004.
The major card networks spent approximately $4.3 billion last year in global marketing and business development expense, about 14% more than 2003. American Express lead the charge with a 24% increase as Discover followed with a 20% increase. VISA and MasterCard advertising and marketing expenses rose 8% in 2004. AmEx Travel Related Services reported it spent $1,416 million during 2004 on marketing, promotion, rewards and cardholder services compared to $1,141 million in the previous year. Discover spent $577 million in marketing and business development expenses during 2004, compared to $480 million in 2003. MasterCard reported that its advertising and market development expenses rose 8% last year to $916 million. VISA does not officially release global marketing expense figures, however VISA USA reports that its expenses for advertising, marketing and promotion rose 8% last year to $441 million. It is estimated that VISA’s global marketing expense was also up 8% to $1,426 million.
GLOBAL MARKETING EXPENSE HISTORICAL
2003 2004 CHANGE
VISA $1426 $1320 8.0%
AMEX $1416 $1141 24.1%
MC $ 916 $ 851 7.6%
DISC: $ 577 $ 480 20.2%
TOTAL $4335 $3792 14.3%
Source: CardWatch (www.carddata.com)
There is a growing consensus within the banking industry to build a “Single European Payment Area” for debit cards. MasterCard estimates that SEPA could boost efficiency in the eurozone economy by driving down the cost of cash, currently estimated at up to 50 billion euros per year. Cash still accounts for more than 70% of transactions in Europe. The European Payments Council will deliver the industry’s proposal for the introduction of SEPA to the European Central Bank in just two months. SEPA is the logical next step in the single currency project. At present, consumers can use euro notes and coins in all eurozone countries as freely as in their own country. However, when they make debit card payments the experience remains fragmented. As most EU states have their own national debit card schemes with different brands, rules, standards, entry criteria and processing infrastructures the consumer is, in effect, faced with plastic DM, Francs and Guilders. The European Central Bank wants a payments system in place by 2008 that harmonizes all these issues so that consumers’ experience when making payments is the same wherever they are in the eurozone.Details
The FTC has settled a case involving an Internet company that provides shopping cart software to online merchants. The FTC says CartManager International rented personal information about merchants’ customers to marketers, knowing that such disclosure contradicted merchant privacy policies. The settlement bars disclosure of previously collected personal information and bars misrepresentations about the collection, use or disclosure of personally identifiable information. The settlement also requires that CartManager give up $9,101.63 it made by selling the information. CartManager International is a trade name of Vision I Properties, LLC.Details
VISA International released a new white paper entitled: “Financial Flows & Supply Chain Efficiency.” The paper focuses on the current state of financial flows and supply chain efficiency, noting that the two systems have developed independently over time, with improvements in financial flows trailing behind those in supply chain management. Unrealized savings exist in the supply chain system because many current systems do not adequately address the financial flow, but instead focus on the flow of goods. The paper was authored by Professor Warren H. Hausman of Stanford University.Details
Toronto-based Hudson’s Bay Company reported that its credit card receivables declined for the second consecutive year. After peaking at $465 million in 2002, HBC’s card portfolio has declined to $355 million as of January 31st of this year, a 21% decline compared to one-year ago. Revenue from HBC’s Financial Services division was $263 million in 2004, compared with $278 million in the prior year. For the fourth quarter Financial Services revenue was $65.0 million or 10.6% below the year ago quarter. The decrease in revenue reflected the reduction in store sales, the lower credit card blend at the Bay and Zellers, and a higher level of customer payments. As of January 31st, there were 3.1 million active HBC customer accounts, including 1.7 million Bay cardholders and 1.4 million Zellers cardholders. Active accounts remained steady at 2.9 million. The average balance per active customer account was declined 4.9% to $368 and the average volume per active customer account dropped 3.1% to $701. For complete details on Hudson’s Bay performance, visit CardData ([www.carddata.com]).
HUDSON’S BAY HISTORICAL
(credit card loans)
2000: C$500.3 million
2001: C$487.3 million
2002: C$559.2 million
2003: C$538.7 million
2004: C$427.4 million
Source: CardData (www.carddata.com)
Banque Saudi Fransi, SAMBA, Arab National Bank, National Commercial Bank, and National Bank of Dubai have deployed Level Four software for ATM testing and development. Countries across the Middle East are in the process of upgrading their banking and POS infrastructures to meet the EMV mandate for smart chip cards by January 2006. As part of this move, Saudi Arabia is also undertaking an industry-wide migration to SPAN 2, the second generation of the Saudi Payments Network, which will create a secure infrastructure
for electronic fund transfers, supporting the implementation of
electronic banking services across the country.
Cash Systems announced a new contract to provide check cashing, ATM and credit and debit card cash advance services to the Chickasaw Nation’s 14 casinos in Oklahoma. Cash Systems, Inc.,is a provider of cash access and related services to the retail and gaming industries.Details
Posera Software and Chockstone have partnered to offer fully integrated gift, loyalty, and promotion card programs through the “Maitre’D POS” platform. The joint solution gives
restaurateurs the ability to offer gift cards with real-time promotions
based on customer behavior and history, as well as real-time loyalty;
all seamlessly integrated with debit and credit card processing. By enhancing the Maitre’D POS platform, restaurant marketing,
operations, and financial personnel will be able to finally identify
their best customers and reward their loyalty. Moreover, the new
technology will transform the traditional gift card into a gift, loyalty
and promotions card. Chockstone processes and analyzes all transaction
data in real-time to generate instant and customized rewards.
Chockstone’s clients have consistently posted bounce-back results
ranging from 23-38%. Restaurant decision makers track these results in
real-time via Chockstone’s Web-based reporting interface.
Ernex has entered into partnership with Florida-based SIVA Corporation to integrate loyalty and gift card functionality and card interface into SIVA’s point-of-sale application. Ernex, a division of Moneris Solutions Corporation, is a provider of marketing solutions. SIVA Corporation distributes point-of-sale, inventory, labor and operations intelligence products. A joint investment of the Royal Bank of Canada and the Bank of Montreal, with assets of $700 billion, Moneris Solutions serves more than 350,000 North American merchant locations.Details
HMV, the largest retailer of music, DVD and games in the UK has launched a gift card via TSYS and the Royal Bank of Scotland. Launched in October, the card has passed the one million gift card milestone. The
non-denominated, re-loadable cards are now available in HMV’s 200 stores
throughout the UK, and can be activated in amounts ranging from GBP1 to GBP500. The parent company, HMV Group plc, also owns 189 Waterstone’s specialist book stores in the UK and Ireland, and plans to offer a Waterstone’s gift card in 2005.