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« November 23, 2008 - November 29, 2008 | Main | December 7, 2008 - December 13, 2008 »

December 06, 2008

Addicted to Credit

Public Radio's Marketplace interviews Stuart Vyse, Professor of Psychology at Connecticut College and author of the book Going Broke: Why Americans Can't Hold On To Their Money.

He says: "It used to be the case that borrowing money was good for only certain kinds of activities -- for an asset, for a home. Now we're told that the experience of a baseball game or anything is priceless."

December 05, 2008

Jerry Grundhofer's Wish List for the US Banking Industry

Heidi Moore writes for the Wall St. Journal's Deal Journal about last night's American Banker lifetime achievement award to U.S. Bancorp chairman emeritus Jerry Grundhofer.

In his speech, Grundhofer shared a wishlist of 5 items for the banking industry. My favorite of the five is this one:

"That bankers start to understand that banking is a very difficult business. If you collect 99% of your loans, you are an average bank. If you collect 99.5% of your loans, you are a value-added bank. And if you collect 98.5% of your loans, you will find [FDIC chairman] Sheila Bair on your doorstep.”

Fed Reports October Decline in US Consumer Credit

The Federal Reserve has published its latest G.19 Consumer Credit report for October 2008 showing that overall consumer credit decreased at an annual rate of 1.6 percent in October. Revolving credit decreased at an annual rate of 0.2 percent and nonrevolving credit decreased at an annual rate of 2.5 percent.

A Look Back at Blue

In a post to the New York Times' BITS blog titled "A Credit Card Loses Its High-Tech Cred", Jennifer Kingson writes about the American Express Blue card - introduced with a lot of "sizzle" almost ten years ago in 1999. The original contact-based smart chip originally embedded in the original Blue cards is gone - now replaced with an embedded contactless chip instead.

Is There an Editorial Calendar for Payments News?

We're frequently asked - especially this time of year - whether we have an editorial calendar for Payments News. The answer: no, we don't maintain an editorial calendar. Rather, our goal with Payments News is to provide a great daily summary of the news of the day that affects payments professionals around the world.

If you're a regular reader, tell us how we're doing by clicking on Feedback in the menu bar at the top of the page.

Fed Proposes Changes to Regulation Z - Truth in Lending

The Federal Reserve has proposed changes to Regulation Z that would revise the disclosure requirements for mortgage loans. The revisions would implement the Mortgage Disclosure Improvement Act (MDIA) which was enacted in July 2008 as an amendment to the Truth in Lending Act (TILA). Under the MDIA, the proposed rules would become effective on July 30, 2009.

Investor Day Updates - NCR, Online Resources

Yesterday, NCR held an Analyst Day for investors - the presentation slides are available in an SEC filing made by the company.

Online Resources held an Investor Day yesterday - the presentation slides are available online.

December 04, 2008

Leaving Their Plastic At Home

Yian Mui reports for the Washington Post on the slump in retail sales reported by retailers in November - saying that "the recent tightening of consumer credit has shoppers leaving their plastic at home -- and sending retailers into a tailspin."

Americans Concerned About Impacts on Retirement Plans

A growing number of Americans are concerned that the current economic crisis is threatening to leave them further behind on their retirement plans, according to a new survey released today by Bank of America. The 2008 Bank of America Retirement Savings Survey, which reflects the mindset and behavior of approximately 1,000 people across the country, finds that six in ten (60%) Americans are spending less than they were three months ago as a result of the current economic climate. However, even with this decreased spending, more than half (51%) of the general public and 40 percent of affluent Americans are also saving less than they were three months ago - with approximately one in five citing that they're saving "much less." READ MORE »

EUFISERV ATM Scheme Says It's Ready for SEPA

EUFISERV Payments has announced that the EUFISERV ATM Scheme is fully separated from its former processing business, in line with the SEPA requirements of the European Central Bank and the European Commission. READ MORE »

Precious Plastic 2009 - PwC Looks at Consumer Credit in the UK

PricewaterhouseCoopers in the UK has published Precious Plastic 2009, its annual commentary on the consumer credit market in the UK. "This edition explores the impact of the 'credit crunch', the crisis in the banking sector and the downturn in the global economy on the UK consumer finance market and considers whether similar trends are being witnessed across continental Europe."

November Retail Sales Dismal - Except Wal-Mart

Stephanie Rosenbloom writes for the New York Times about November retail sales results - including some dramatic declines in same store sales from some specialty retailers. Just about the only bright spot was Wal-Mart where same store sales increased 3.4% (not including fuel purchases) including record grocery sales. The Wall St. Journal has posted a sortable chart of November 2008 sales results by retailers.

Some Findings from the FDIC's Study of Bank Overdraft Programs

Here are some interesting findings from the Executive Summary in the FDIC's Study of Bank Overdraft Programs released on Monday:

  • A significant share of banks (24.7% of all surveyed banks and 53.7% of large banks) batched processed [sorted] overdraft transactions by size, from largest to smallest, which can increase the number of overdrafts.
  • More than half of banks with automated overdraft programs (54.2%) reported that they relied on a third-party vendor to implement or manage the program.
  • Most banks using vendors to manage their automated overdraft programs (70.6%) also reported that they paid third-party vendors a percentage of the fees generated by the program, typically 10 to 20 percent of additional fees generated.
  • Almost half (48.8%) of all reported NSF transactions took place at POS/debit (41.0%) and ATM (7.8%) terminals. Checks accounted for 30.2% of the reported NSF (nonsufficient fund) transactions.
  • Accounts held by young adults (ages 18 to 25) were the most likely among all age groups to have automated overdraft NSF activity. Among young adult accounts, 46.4% incurred NSF activity, compared with 12.2% of accounts held by seniors (over age 62) and 31.9% of accounts held by other adults.
  • Assuming a $27 overdraft fee (the survey median), a customer repaying a $20 POS/debit overdraft in two weeks would incur an APR of 3,520%; a customer repaying a $60 ATM overdraft in two weeks would incur an APR of 1,173%; and a customer repaying a $66 check overdraft in two weeks would incur an APR of 1,067%.

December 03, 2008

Schwab Launches 2% Cash Rebate Visa Signature Card

Jane J. Kim reports for the Wall St. Journal about Charles Schwab's launch of the Schwab Bank Invest First Visa Signature credit card - 2% cash rebate on all purchases, with no spending limits. Cardholders must have a Schwab brokerage account which is where the rebates will be deposited monthly. More details here.

Glenbrook Payments Boot Camp Update

Glenbrook's Denver Payments Boot Camp kicked off this morning with Carol Coye Benson and Linda Elliott teaching this session. It will wrap up tomorrow afternoon.

Our next Payments Boot Camp is scheduled for January 20-21 in Santa Clara, California. You can get more information about our Boot Camp curriculum here - or enroll here. READ MORE »

M&I Bank Renews Partnership with Visa

Visa has announced signing a seven-year agreement to renew its partnership with Wisconsin-based Marshall & Ilsley Bank (M&I Bank), an affiliate of Marshall & Ilsley Corporation. M&I Bank’s relationship with Visa began in 1977. READ MORE »

Mixed Messages about Cyber Monday

Yesterday, we highlighted Chase Paymentech's Pulse Index results for Cyber Monday - with ecommerce purchase transactions up 14.5% but actual sales volume up less than half of one percent. If you do the math on Paymentech's numbers, the average purchase amount has declined from $58.81 to $51.62 from 2007 to 2008.

This morning, Nielsen and comScore have both issued press releases talking about the growth in traffic to ecommerce sites on Cyber Monday. Nielsen is measuring web traffic, not actual purchases. comScore, however, is reporting a 15% increase in ecommerce sales - in conflict with the Pulse index results which is based upon seeing actual purchase activity from a sample of ecommerce merchants.

Amazon.com Introduces New iPhone Mobile Shopping Application

Amazon.com has announced that its Amazon application for iPhone and iPod touch is now available on the Apple App Store. Amazon says its app "offers an easy way for users to search and browse for products offered by Amazon and thousands of retailers like Target and Macy’s, access Amazon’s popular shopping features such as Customer Reviews, and purchase using 1-Click Shopping and Amazon Prime." READ MORE »

Citi's ThankYou Network Enables Amazon.com Redemption

Citi’s ThankYou Rewards Network has announced that it now allows its members to redeem ThankYou Points for products fulfilled through Amazon.com. According to Citi, "members can enjoy using their points to shop the millions of items Citi has made available to them from Amazon.com, the online retailer that features earth’s biggest selection." READ MORE »

Microsoft Online Services Utilizes MetraTech for Billing

MetraTech Corp., a charging, billing, settlement and customer care product provider, has announced that its MetraNet product has been deployed by Microsoft as the billing and partner settlement solution for Microsoft Online Services, Microsoft’s new cloud computing services. READ MORE »

December 02, 2008

How We're Using Twitter with Payments News

This particular post is mostly for the Web 2.0 payments geeks among us.

Some of you have noticed that a couple of months ago we started posting our updates to Payments News not just to this site - but also as brief snippet updates send out via Twitter. Twitter became a new way you could follow the news here - we think that, if you're an active Twitter user, you'll naturally want to sign up to follow PN there. A couple of hundred folks have already done so.

Up until we added our Twitter feed, you could tune into Payments News by just periodically checking the web site, by subscribing to our daily email distribution (if you only want a dose of PN once a day every morning - but then you're also always going to be at least a day behind!) or by monitoring the PN RSS feed in semi-real time using an RSS reader (by the way, we LOVE and highly recommend Google Reader for reading RSS feeds!).

Now, if you choose to follow PaymentsNews on Twitter, you'll see our posts almost as soon as they're published - as we're using Twitterfeed to pull our RSS feed into Twitter automatically - and push them out to your Twitter account. So, if you're already on Twitter, be sure to follow PaymentsNews. If you're new to Twitter and want to try it, you can sign up here.

If you're looking for some advice as to how all this works, take a look at Wednesday's Wall St. Journal Mossberg Solutions column titled "Birds of a Feather Twitter Together" by Katherine Boehret. Or, read Tim O'Reilly's post "Why I Love Twitter". For more tips on using Twitter, see Darren Rowse's new TwiTip blog. Or, read Guy Kawasaki's "How I Use Twitter as a Twool". Twitter is going mainstream - fast.

And, if you want to follow your Payments News editor's personal Twitter feed, you can do so by following SJL My personal tweets are much more about what I'm working on, exploring, learning, questioning, etc. and definitely not about news of the day!

Questions/comments? Click on the Feedback tab in the title bar up top on this page and send us an email! If you're active on Twitter and want us to share your feed with others here on PN (like the other payments and banking blogs we share), send us your Twitter ID and we'll add you to a new page we'll be building soon of like-minded, Twitter-oriented payments professionals!

And, if you're looking for help thinking through the implications of all this Twitter stuff for your business, we can help you with that as well. READ MORE »

Chase to Take Washington Mutual's Card Business In House

TSYS has announced that an agreement with JPMorgan Chase with respect to the discontinuation of the servicing of Washington Mutual Bank's (WaMu's) consumer card portfolio by TSYS. Chase will pay TSYS fees for deconversion and termination which both parties have agreed not to disclose. The deconversion is expected to take place in March 2009 after which Chase will process the WaMu portfolio in house on the technology platform it licenses from TSYS. READ MORE »

Cyber Monday 2008 Sees Very Small Sales Gain from Last Year

Chase Paymentech's Pulse Index reports that yesterday's Cyber Monday 2008 sales volume increased less than half a percent from last year, but transaction count was ahead of 2007 by 14.5 percent. This resulted in the average ticket size, or average dollar spent per transaction, decreasing 12 percent below last year.

"Cyber Monday was very interesting," said Aaron Press, Director of Market Analysis for Chase Paymentech. "Transaction volume was well ahead of last year for that day, but sales growth was meager. For the entire holiday season, the slower rise in sales volume compared to the steeper increase in transactions has resulted in the average ticket being lower on most days."

FDIC Releases New Study of Bank Overdraft Programs

The FDIC has released "FDIC Study of Bank Overdraft Programs" icon_PDF_small.gif containing results from a two-part study "to gather empirical data on the types, characteristics, and use of overdraft programs operated by FDIC-supervised banks. The study was undertaken in response to the recent rapid growth in the use of automated overdraft programs, defined as programs in which the bank honors a customer's overdraft obligations using standardized procedures to determine whether the nonsufficient fund (NSF) transaction qualifies for overdraft coverage. Little empirical data have been available on these programs, their features, their managing practices, the fees imposed, and consumer usage patterns." READ MORE »

Visa Forms New JV for Payments Processing Outside US

Visa Inc. and Yalamanchili Software Exports (P) Limited have announced that they have formed a joint venture that they say "will allow Visa to extend its industry-leading processing capabilities in some of the fastest-growing payments regions in the world. Visa will have a controlling interest in the joint venture, named Visa Processing Service Pte. Ltd. (VPS). It begins operations this week and will serve existing processing clients." A new website at www.visaprocessingservice.com provides more information. READ MORE »

December 01, 2008

Retailers Form New Retail Gift Card Association

Several major US retailers led by founding members Applebee's, Best Buy, Home Depot, Marriott International and Subway have announced they are joining together "to create an industry group whose goal is to ensure shoppers have only positive experiences with the gift cards they buy and use. The Retail Gift Card Association (RGCA) formed in October with a mission to create consumer-centered policies and procedures for members that will let consumers continue to confidently buy and use the cards that have become the #1 gift choice over last several years." READ MORE »

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