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« May 3, 2009 - May 9, 2009 | Main | May 17, 2009 - May 23, 2009 »

May 15, 2009

Suze Orman Hits the Big Time!

In an article titled "Suze Orman Is Having a Moment", Susan Dominus writes for Sunday's New York Times Magazine about the recent surge in interest in Orman's advice for consumers about credit card debt, etc. - and, in particular, consumer interest in her “Can I Afford It?” segment on CNBC.

Dominus notes: "Orman has strong opinions in general."

Suggestions for Dealing With Credit Card Debt

In an article titled "Weighing the Options with Credit Card Debt", Tara Siegel Bernard writes for Saturday's New York Times about the options available to consumers to deal with credit card debt.

The list of options she recommends isn't long:

  1. Call your card issuer - and do it yourself. Issuers have alternative repayment plans available - but they may also reduce current credit limits to the amount of debt currently outstanding.
  2. Find and work with a credit card debt counselor. A legitimate counselor should be able to negotiate a credit card debt management plan with the credit card issuer. Focus on finding a legitimate one.
  3. Work with a debt settlement company - but be very, very careful.
  4. Bankruptcy.

That's it. Have other suggestions - add your comments!

UK Card Payment Statistics from APACS for 1Q 2009

APACS has published its latest quarterly statistical release - reporting that in the first quarter were 1.9 billion plastic card purchases made in the UK totalling £94.2 billion compared to 1.8 billion purchases totalling £91.2 billion in the first quarter of 2008. The number of purchases was 4.0% higher than in 2008 Q1, and spending was 1.7% higher. Debit card usage continued to outpace credit cards - with debit cards accounting for 74.5% of all plastic card purchases in 2009 Q1 compared with 73.3% in 2008 Q1.

Quarterly US Retail eCommerce Sales for 1Q09

The Census Bureau of the Department of Commerce has announced that its estimate of U.S. retail e-commerce sales for the first quarter of 2009, adjusted for seasonal variation, but not for price changes, was $31.7 billion, an increase of 0.7 percent (±1.1%)* from the fourth quarter of 2008.

The first quarter 2009 e commerce estimate decreased 5.4 percent (±2.5%) from the first quarter of 2008 while total retail sales decreased 10.2 percent (±0.4%) in the same period. E-commerce sales in the first quarter of 2009 accounted for 3.5 percent of total sales.

Total retail sales for the first quarter of 2009 were estimated at $909.6 billion, a decrease of 1.8 percent (±0.4%) from the fourth quarter of 2008.

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First Data Corp. Reports First Quarter 2009 Financial Results

First Data Corp. has reported financial results for the first quarter 2009. Revenues were $2.1 billion, down 2% year over year. Adjusted earnings before interest, taxes, depreciation and amortization were $491 million, down 15%.

FDC's operating profit for the quarter was $30.4 million, down 85% year over year. After paying interest expense on its debt of $448 million, the company reported a net loss of $231 million for the quarter.

"Our revenue base held steady in the quarter as we added new merchant and bank customers," said Michael Capellas, chairman and CEO of First Data. "We will continue to invest in new product development to fuel long-term growth while driving cost efficiencies to sustain profitability."

A webcast and presentation are available online. In its presentation, First Data noted that the volume of merchant transactions it handled in the first quarter fell 14% compared to 1Q2008.

Sen. Chris Dodd Says Senate Will Vote Tuesday on His Credit Card Bill

Last night on Twitter, Senator Chris Dodd tweeted:

We are on the verge of a historic victory for American families that have suffered for far too long at the hands of credit card companies. The Senate will vote on my credit card bill on Tuesday, and I am committed to working to ensure that it passes with overwhelming support. It's time to put an end to the abusive credit card practices that drive millions of American families further into debt."

May 14, 2009

A Look at Growth in Prepaid at Meta Payment Systems

One of the leading network-branded prepaid card issuers in the US is Meta Payment Systems, a subsidiary of Meta Financial Group. MFG reported financial results for the first quarter 2009 earlier today - and included a business segment breakout report for MPS. MPS' results included quarterly net income of $3.5 million and revenue of $36.4 million, up 139% from the same quarter last year. MPG also reported the filing of eight patents during the quarter (three provisional and five non-provisional and international) and 32 patents since the inception of MPS relating to the addition of functionality and ancillary products to prepaid cards.

Obama Holds Town Hall on Credit Card Reform Today

President Obama held a Town Hall meeting today in Rio Rancho, New Mexico on the subject of credit card reform. A full transcript of the meeting is available online.

Credit Card Companies and Transaction Data

In an article titled "What Does Your Credit-Card Company Know About You?" scheduled to be published in this Sunday's New York Times Magazine, Charles Duhigg takes a look at how credit card issuers have gotten interested in psychology - to help predict consumer behavior.

The Advisor from MasterCard Advisors

MasterCard Advisors has published a new edition of its newsletter, The Advisor. This issue is a special edition that offers strategies and tacties to US credit card issuers to "survive the current financial crisis in the short term and to retool for renewed profitability in a new era of more responsible spending."

Cards&Payments: 2008 US Bank Card Issuer Profitability

The May issue of Cards&Payments magazine has arrived with its annual survey of US bank card issuer profitability - finding that 2008 revenues grew 10% over 2007 to $129.6 billion while expenses grew 14% to $102.4 billion (primarily driven by a 52% increase in credit chargeoffs). After-tax profits declined about 3% to $17.7 billion. Purchase volume on credit cards grew less than 1% to $1.37 trillion.

TSYS to Provide Travel Bank With Japan's First Visa Prepaid Card

TSYS announced today that it would begin processing Visa-branded prepaid cards for the Japanese market in July 2009. The prepaid cards will be issued by Travel Bank Inc., a financial services company that is part of the JTB Group. Consumers can use the cards to make payments at Visa merchants when traveling overseas or to withdraw cash from Visa ATMs. READ MORE »

May 13, 2009

MoneyGram, AccountNow Launch Visa Prepaid Card

MoneyGram International and AccountNow have announced an agreement to launch a new Visa-branded prepaid card available at select MoneyGram agent locations starting in June 2009. According to the two companies, "the agreement builds on an existing relationship wherein MoneyGram is providing consumers with the convenience of adding funds to their AccountNow reloadable prepaid cards at any of its 40,000 MoneyGram ExpressPayment® locations across the United States." READ MORE »

MasterCard Mobile MoneySend Platform Set To Go Live

MasterCard has announced that its "fully-integrated, on-demand person-to-person (P2P) mobile payment platform for issuers in the United States is set to go live later this month. With this new platform, MasterCard participating bank customers will be able to offer Mobile MasterCard MoneySend(TM) P2P payments to their customers." READ MORE »

MasterCard Launches MasterCardNews on Twitter

MasterCard this morning has launched a new Twitter feed this morning.

US Retail Sales Decline in April - Down 10.1% from April 2008

The US Census Bureau has published its estimate of U.S. retail and food services sales for April - $337.7 billion - down 0.4% from March and down a whopping 10.1% from the same month a year ago.

MasterCard Holding Investment Community Meeting Today

MasterCard is holding an investment community meeting today. The meeting is being webcast beginning at 9 AM Eastern. Copies of the presentation slides are available online.

May 12, 2009

Congress Is Finally Fed Up with US Credit Card Issuers

In an article titled "With Support, Congress Seizes on Credit Cards", Carl Hulse writes for the New York Times how it seems like Congress is fed up with the actions of the credit card industry - and how "lawmakers are racing to put new restrictions on card companies, seizing on an issue with overwhelming popular and political appeal."

Hulse quotes Edward L. Yingling, president of the American Bankers Association, as saying that “the industry recognizes that the product got way too complicated, and people didn’t understand it and perceived they were being treated unfairly.” Polls indicate near universal consumer support for imposing new rules on the credit card issuers.

Small Businesses Want to Ensure Coverage Under Credit Card Bill

In a press release, the National Small Business Association has urged that "the Senate to approve the Landrieu-Snowe Amendment to the Credit CARD Act of 2009 (H.R. 627/S. 414) in order to guarantee that small-business owners are fully protected by the critical safeguards included in the bill. Small business reliance on credit cards is at an all-time high with 59 percent of respondents to the recent NSBA Small Business Credit Card Survey (NSBA Survey) using credit cards to finance their business--up from 49 percent just four months ago." READ MORE »

A Look at Fees for Overseas Credit Card Purchases

In an article titled "New Fees for Card Usage Abroad", Jane Kim writes for the Wall St. Journal about fee increases that credit card issuers are imposing on purchase transactions made while traveling abroad. She notes that American Express recently increased its fee from 2% to 2.7% and that Discover has just begun charging a 2% fee. Some issuers have also begun charging fees on purchases even when made in US dollars at overseas merchants. Kim notes that Capital One and Charles Schwab are two issuers that are not currently charging any fees on overseas purchases.

Maloney: Credit Card Holders Have Rights, Too

In an article titled "Credit Card Holders Have Rights, Too", Rep. Carolyn B. Maloney writes for The Nation about the legislation she introduced, the Credit Cardholders' Bill of Rights, which passed the House a few weeks ago.

She writes that "The Credit Cardholders' Bill of Rights would also be better than the regulators' rules [referring to Federal Reserve rules due to take effect in July 2010] simply by virtue of being in statute--with the full force of law--changeable only by the courts or future legislation, and immune to the pressures of any future administration which might prefer more lax enforcement and oversight of the credit card industry."

A Look at Recent US Credit Card Issuer Behavior

The Center for Responsible Lending has announced recent findings from a Research Brief by Joshua M. Frank, senior researcher, regarding US credit card issuer behavior.

According to the report, "We took a quick sampling of credit card issuers' recent activities to see how they have responded to the Federal Reserve rule changes that were announced in December 2008 but won't take effect until July 2010. We found the top eight issuers, who account for 80 percent of credit card balances, are raising interest rates on a larger portion of customers than usual and increasing the number of fees they impose. The new Fed rule will ban some but not all of these activities."(i) READ MORE »

ICICI Bank to Issue Visa Debit Cards in the U.S.

India's ICICI Bank and Visa have announced a strategic relationship that will enable ICICI’s New York Branch to issue Visa Debit cards in the U.S. The bank will offer Visa Debit cards to its Global Indian Account and other checking account customers at its New York branch. The Global Indian Account service addresses the banking needs of Indians moving overseas who require access to local banking facilities in the United States. READ MORE »

Advanta Plans to Shut Down Future Use of Small Business Credit Cards

Late yesterday, Advanta announced that, due to the negative performance of its securitized credit card portfolio, it was taking steps to "designed to dramatically limit the Company’s credit loss exposure and maximize its capital and its liquidity measures." One of those steps involves shutting down all of its small business credit cards to future use as of June 10. Beginning on that date, Advanta's credit card customers would not be able to make new purchases using their Advanta-issued credit cards.

See also this front page article in today's Philadelphia Inquirer by Harold Brubaker.

Headline News - May 12, 2009

Note: Throughout the day, as Payments News happens, this post is updated. For job opportunities available for payments professionals, visit PaymentsJobs.com. Employers looking to hire payments professionals can post their job openings there as well.

May 11, 2009

New Opportunities in Business-to-Business Payments

Looking for new areas for product development or investment in business to business payments? At Glenbrook, we're spending a lot of time looking at the move towards electronics for B2B payments. Join us at our upcoming New York City workshop, "New Opportunities in B2B Payments", on May 27th & 28th. If you have any questions about this workshop, please contact Glenbrook's Carol Coye Benson."

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