E-Commerce Spending Peaks Last Week

VISA USA reported that e-commerce spending on VISA cards reached its highest point last week since the beginning of this year. Online sales grew 44.4% to nearly $2.1 billion. Historically, the second week in December each year is the peak period for e-commerce shopping, as shoppers rush to place online orders for delivery before Christmas without incurring additional shipping costs. VISA also reported that total U.S. volume was up nearly 12% to about $23 billion. However, daily growth once again fluctuated due to the snowstorm that hit the East Coast on Sunday, December 14th. On Saturday, December 13th, total volume increased 11.1% from the same day last year, while on Sunday, December 14th, growth was a more modest 5.2%. Overall retail spending volume on VISA cards was $10.1 billion for the week, compared to $9.0 billion for the previous week. Debit card retail spending was $3.5 billion for the week, an 11% jump over the same year-ago period. Credit card retail spending was up 5% to $6.6 billion.

(Week Ending 12/14/03)

Home & Garden $1.4 billion +11%
Speciality Stores $1.8 billion +10%
Personal Entertainment $1.4 billion + 8%
Discount Stores $1.5 billion + 7%
Department Stores $4.0 billion + 4%
Source: VISA SpendTrak



The Financial Supervisory Service reported that overall credit card delinquency increased during October to 11.74%, compared to 6.6% at the end of 2002. Woori Card reported the highest delinquency, at nearly 31%, and announced it will merge its banking business with its credit card subsidiary in March. The Financial Supervisory Service says the delinquency figures may be somewhat skewed because the overall credit card loans for the country declined from US$12.0 billion to US$11.5 billion during October. The latest delinquency figures were also driven by Woori Card’s extremely high default rate, which jumped from 26.42% in September to 30.76% for October. By comparison, LG Card had a 11.40% delinquency rate, Lotte Card had a 9.75% rate, and Hyundai reported 9.19% for October. Besides merging Woori Finance Holdings with Woori Bank, the company also plans to sell US$250 million in bonds this week to help its credit card unit.


SkyMiles and AAdvantage Support the Returning Troops

Delta Air Lines announced Friday that its “SkyMiles” members have donated more than 100 million miles to support the U.S. military’s “Operation Iraqi Freedom Rest and Relaxation” program since the launch in late October. Delta, which partnered with American Express to issue the “American Express Delta SkyMiles Card,” says the miles are enough to provide transportation for 4,000 American military personnel returning home. American Airlines also announced this weekend it is inviting U.S. military men and women to spend time between flights at its “Admirals Club” facilities worldwide. American says there are many airports with no USO facilities. American, which partnered with Citibank to issue the “Citibank/American AAdvantage MasterCard,” has donated well over 10 million miles for troops to use for connecting flights to their homes.


Hellenic Bank Deploys Card Tech’s SENTRY Proxy Card

Hellenic Bank has deployed Card Tech Limited’s “SENTRY Proxy Card” product for e-commerce. The “Proxy Card” powers the bank’s new “Net Secure” product, which protects cardholder data
and secures Internet transactions by generating single use Internet cards with a user-defined line of credit. It is the first “Proxy Card” installation in the country. UK-based Card Tech Limited and Hellenic bank have worked together since 1991. The bank currently uses CTL’s “PRIME” card management system to issue and administer its VISA and MasterCard cards. CTL says “SENTRY” can easily plug in to “PRIME.”
More than 150 banks from 60 countries use CTL software.


Intelli-Check Names New Board Member

Intelli-Check named John Hatsopoulos, CEO of American Distributed Generation, to its Board of Directors. Prior to his role at American Distributed Generation, which provides a range of products and services in support of the emerging market for on-site generation of electricity, heating and cooling at commercial, institutional and light industrial facilities, Mr. Hatsopoulos held a wide variety of positions at Thermo Electron Corporation. Intelli-Check, Inc. is a developer and marketer of proprietary document verification technology, which is contained in its ID-CHECK(R) units. The multi-purpose ID-CHECK system authenticates the validity of driver licenses, state issued non-driver and military identification cards used as proof of identity.


Winners Named in Comin’ Up Roses ATM Sweepstakes

U.S. Bank last week named the winners in its “U.S. Bank’s Comin’ Up Roses ATM Sweepstakes” which awarded a $25,000 cash Grand Prize and also awarded four customers and two employees a free trip to the “Rose Bowl Game” and the opportunity to ride on the U.S. Bank float in the “Rose Parade”. The Sweepstakes took place from Sept. 22, 2003 until Nov. 7, 2003. All U.S. Bank branches in the bank’s 24-state footprint participated. The winners of a trip to the Rose Bowl Game and the Rose Parade are: U.S. Bank customers Keith Backer, New Rockford, N.D.; Bob Johnson, Aloha, Ore.; Pamela Dedrick, Bloomington, Minn.; and Jason Skinnor, Columbus, Ohio. U.S. Bancorp with assets of $189 billion, is the 8th largest financial services holding company in the United States. The company operates 2,201 banking offices and 4,506 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions.


7-Eleven Takes Vcom to a New Level

Nearly 1,000 of 7-Eleven’s “Vcom” financial kiosks now offer 24×7 online shopping. The expanded service is the result of its partnership with MA-based Cyphermint which recruits the online merchants. Cyphermint also uses its “Pay Cash” system to enable “Vcom” users to pay for their purchases with cash. There is a $1 service fee for each transaction. The kiosk’s bunch-note acceptor can handle up to 30 bills inserted at one time and dispense exact change. 7-Eleven’s “Vcom” financial kiosks also offer ATM transactions via American Express and check cashing through Certegy Check Services. Users can also purchase Western Union money orders and conduct money transfers. Bill payment services are also provided by e-Money Systems. 7-Eleven says it also plans to offer auto insurance services through the kiosks through Public Access Insurance.


Moneris’ SmartSELECT Terminals Empower RadioShack POWER Card

RadioShack Canada’s new “POWER Card” program has selected Moneris’ “SmartSELECT” terminals. RadioShack and Household Finance launched the new card in September which offers five per cent off most purchases. Moneris currently processes all MasterCard, VISA and Interac Direct Payment transactions for RadioShack Canada. Offering full credit and debit payment options, Moneris’ “SmartSELECT” terminals
also have the capability for private label, loyalty and gift card transactions. RadioShack Canada has more than $600 million in annual retail sales. Moneris processes for more than 350,000 merchant locations.


Payment Rates and Yields Invert for the First Time

For the first time, monthly payment rates have exceeded the monthly portfolio yield rate. The news comes at a time when consumer debt has resumed at a brisk pace, and indicates that both revolvers and convenience users are in a very healthy situation for the first time since the start of the recession in 2001. For the month of October, the monthly payment rate hit 18.01% of outstanding balances while the monthly yield rate settled in at 16.77%. Payment rate is one of the most important performance variables for credit card-backed securities. Yield levels are affected by cardholder agreement terms and the annual percentage rate charged by the issuer, the percentage of convenience users in the portfolio, and the level of charge-offs and delinquencies in the portfolio. The yield has declined due to the low interest rate environment coupled with fairly high levels of charge-offs and delinquencies. However, charge-offs and delinquencies have shown recent signs of declining. Last week, the Federal Reserve reported that during October, Americans added $2.2 billion to revolving credit at an annual growth rate of 3.6%, more than twice the rate of growth one-year ago. For complete details on October’s portfolio performance statistics visit CardData ([www.carddata.com][1]).

(as of the month of October each year)
Year Payment Rate Yield
2000 14.80% 18.20%
2001 14.89% 18.30%
2002 16.19% 17.60%
2003 18.01% 16.77%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com


ACG ATM-Remarketers Mourns Loss of Top Sales Guy

Atlanta-based ACG ATM-Remarketers sadly reported last week the death of Michael Owen Ham, its 15-year VP/Sales. During his more than 15 years with ACG, he was instrumental in the company’s success, including the expansion of the employee base by 500 percent. Ham is survived by William and Patricia Ham of Columbus, Ga., Ida and Henry Becker of Bradenton, Fla., and Mark and Pat Becker of Palmetto, Fla. ACG ATM-Remarketers is a provider of custom refurbished ATMs and kiosks at a cost 30 to 60 percent lower than that of comparable new equipment, as well as parts, maintenance and training for community financial institutions and independent store operators.


MasterCard Incents American Airlines AAdvantage Members

American Airlines and MasterCard have launched a December promotion that awards “AAdvantage” members 2,500 bonus miles for using a MasterCard, plus 1,500 bonus miles for using a “Citi/AAdvantage MasterCard”, and another 1,000 bonus miles if a round-trip ticket is purchased online at AA.com using a MasterCard. Now through Dec. 31, 2003, American Airlines is offering AAdvantage members a holiday gift of up to 5,000 bonus AAdvantage miles when they purchase round-trip tickets at AA.com using a valid MasterCard card. MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs. American Airlines is the world’s largest carrier. American, American Eagle and the AmericanConnection regional carriers serve more than 250 cities in over 40 countries with more than 3,900 daily flights.