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« April 24, 2005 - April 30, 2005 | Main | May 8, 2005 - May 14, 2005 »

May 07, 2005

Consumer Revolving Credit Growth Slows

The Federal Reserve yesterday released its monthly statistics for March reporting that revolving consumer debt barely grew in March - from $800.1 billion to $800.5 billion. A low growth rate in consumer revolving loans is generally bad news for credit card issuers.

May 06, 2005

Fair Isaac Introduces Falcon One System to Combat Fraud at Every Customer Interaction

Fair Isaac has introduced Falcon One, a new enterprise software solution for effectively combating both existing and emerging types of fraud at every customer touchpoint. READ MORE »

May 05, 2005

PayPal vs. iPayment

With the release of iPayment's first quarter results this morning, it's interesting to do a comparison of it with PayPal's first quarter results.

Coincidentally, they both reported essentially the same payment volume for the quarter: $6.2 billion. PayPal's payment volume growth in the first quarter was 44 percent while iPayment's grew 118 percent including recent acquisitions.

But the revenue yield from that quarterly payment volume was quite a bit different between the two. On the top line, PayPal's net revenues for the quarter were $233 million; iPayment's revenues were $163 million.

Note that both companies include the cost of interchange in their revenues (unlike most of the other publicly traded merchant acquirers) -- so any comparison to other companies has to net out interchange expense up front. On a percentage basis, PayPal's interchange expense is lower per dollar of payment volume because of its hybrid funding model -- where slightly more than half of its funding activity is sourced from credit card accounts.

While they're really different businesses (one operating exclusively in the ecommerce space, the other in the small merchant physical point of sale space), it's interesting to also look at valuations. iPayment currently has a market cap of about $650 million; PayPal was acquired by eBay in 2002 for about $1.5 billion (in eBay stock) and recently an analyst commented that PayPal was probably worth $6-7 billion.

Do you have any more insights to offer re: comparing these two companies? Comments are open for this posting.

[Update: iPayment stock got hammered following the earnings announcement and conference call this morning - closing down over 10 percent and reducing its market cap to $580 million.]

May 04, 2005

New Merchant Group Forms to Win Regulatory Relief on Interchange

Digital Transactions reports on the recently formed Merchant Payments Coalition.

After years of friction between banks and merchants over the subject, this appears to be the first organized effort by retailers to gain regulatory relief on interchange costs.

Retail Shuffle Affects Private-Label Cards

Robin Sidel reports for the Wall St. Journal on the deal making in the retail industry that's affecting private label card portfolios.

Although the private-label business can be quite profitable, retailers have been shedding the operations to focus on their core businesses. And that is having a big impact on third-party private-label companies, which include Citigroup and GE.

May 03, 2005

First Face-to-Face BayPay Meeting: Tuesday, May 10

A couple of months ago we (along with some friends) announced BayPay -- a brand new professional networking group for payments professionals in the San Francisco Bay Area.

We'll be holding the first face-to-face meeting of BayPay next Tuesday, May 10th, at 6 PM.

If you're interested in attending this first meeting and haven't already joined BayPay, please let us know via our feedback form and we'll tell you how you can participate. Last call!

Amex Launches Premium Cash Rebate Card for Small Business

American Express has announced a new Platinum Business Premium Cash Rebate Card designed for high-spending small business owners.

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MasterCard Reports First Quarter Volumes

MasterCard this morning announced first quarter 2005 volumes of $379.6 billion, a 10.9 percent increase over the same period in 2004 for gross dollar volume on MasterCard-branded cards. Purchase volume increased 11.4 percent to $277.2 billion while the number of MasterCards issued worldwide rose 11.2 percent to a total of 697.9 million cards.

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The Interra Concept

Red Herring profiles the Interra Project created by former Visa International CEO Dee Hock and Greg Steltenpohl, founder of Odwalla.

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Today's Other News - Tuesday, May 3, 2005

Note: This posting is updated regularly throughout the day.

May 02, 2005

Globe Telecom's G-Cash P2P Mobile Payments

We're asked regularly by our clients for our opinions about the state of mobile commerce. I recently spent a bit of time looking at Globe Telecom's G-Cash money transmission service -- now available in the Philippines.

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Merchants Welcome Fed Conference on Credit Card Fees

The Merchants Payments Coalition today issued a press release applauding the Federal Reserve Bank of Kansas City for holding a conference on credit and debit card interchange fees later this week. The conference on interchange rates is scheduled for May 4-6 in Santa Fe, New Mexico.

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Visa to End Sponsorship of Triple Crown

The AP reports that Visa USA will end its sponsorship of the Triple Crown after this year but will enter a new five-year sponsorship of the Kentucky Derby.

Today's Other News - Monday, May 2, 2005

Note: This posting is updated regularly throughout the day.

May 01, 2005

Future Debt In The Cards For Teens

Al Lewis writes for the Denver Post about plastic cards and teens.

Today, 11 percent of teenagers have credit cards in their names, according to a recent nationwide survey by Junior Achievement, a Colorado Springs-based group bringing financial literacy to kids. The group found that 6.2 percent of all 13- and 14-year-olds have plastic in their pockets, too.

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