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July 22, 2010

American Express Announces Second Quarter 2010 Financial Results

Amex_logo-140px.jpgAmerican Express has reported financial results for the second quarter 2010. Net income was $1 billion, up significantly from $367 million a year ago. Worldwide average spending per proprietary basic cards-in-force of $3,288 increased 21% during the quarter or 20% on a constant currency basis. "Cardmember spending rose 16% and improved credit indicators continued the year-long trend that began last spring," said Kenneth I. Chenault, chairman and chief executive officer.

Pew Report Finds Credit Cards More Transparent, Yet Problems Remain

Most of the practices deemed "unfair" or "deceptive" by the Federal Reserve have disappeared from new credit card offers since federal passage of the Credit CARD Act last year, according to a new report by the Pew Health Group's Safe Credit Cards Project. "Yet new trends have emerged that could cost cardholders significantly."
The report finds that issuers have eliminated practices such as "hair trigger" penalty rate increases (disproportionate charges for minor account violations), unfair payment allocation, and raising interest rates on existing balances. However, Pew's research also highlights a sharp rise in cash advance fees, continued widespread use of other penalty interest rates and an emerging trend of credit card companies failing to disclose penalty interest rates in their online terms and conditions.
Full details, including previous research, can be found at

Mobile Banking Steadily Gaining Acceptance Among U.S. Consumers

mobile_phone_140px.pngMobile banking and the use of mobile devices for financial transactions and payments are increasingly gaining acceptance among U.S. consumers, according to results of a survey conducted by KPMG.
The results of KPMG's fourth annual Global Consumers and Convergence survey show that 19 percent of U.S. consumers have conducted banking transactions on a mobile device, compared to only 9 percent when KPMG last completed this survey 18 months ago. More than 5,600 people in 22 countries worldwide participated in the survey.

U.S. Bank Introduces ScoreBoard, an Online Payment Management Tool for Small Business

USBank_logo-140px.pngU.S. Bank has announced a new payment management tool, called ScoreBoard, that helps small businesses make smarter decisions about the financial operations of their business.
“ScoreBoard is unique because it gives our small business customers the ability to monitor their own spending and insight into how their sales trends compare to similar merchants in their business category,” said Pam Joseph, U.S. Bancorp Payment Services vice chair. “For our customers who have a U.S. Bank credit card and merchant account, the tool provides a comprehensive view of their business trends.”

July 21, 2010

A Look at PayPal's 2Q2010 Financial Results

PayPal_logo-140px.jpgPayPal's parent eBay announced financial results for the second quarter 2010 today.

eBay's Payments segment (including PayPal and BillMeLater) revenue was $817.0 million for the quarter, an increase of 22% year over year. Net total payment volume (TPV) for the quarter was $21.3 billion, an increase of 28% year over year, but flat from the previous quarter. In term of revenue mix, Merchant Services (the off-eBay business) represented 61% of TPV, up from 59% in the prior quarter.

PayPal's revenue ("transaction revenue rate") increased slightly to 3.60%, along with a slightly higher transaction processing expense rate of 1.17% and a record-low transaction loss rate of 0.17%. Active accounts (defined as active in the last 12 months) reached 87.2 MM, up 16% year over year.

Bill Me Later's volume for the quarter was unchanged at 1% of the total Payments segment payment volume. Net chargeoffs in the BML portfolio were 8.56%, down from 9.49% in the prior quarter.

PlaySpan and VGMarket Publish Comprehensive Report on Digital Goods Spending

playspan_logo_140px.pngPlaySpan has announced their 2010 VGMarket study on virtual goods spending, which contains some new information on both first and third-party purchases. According to the company, the main takeaway from the report is that social networking games are driving digital goods growth and women 25 and older spend a disproportionate amount on digital goods than their male counterparts. READ MORE »

New Money Transfer Services

WesternUnion_logo-140px.jpgWestern Union has announced the launch of account-based money transfer (ABMT) services to two new Asia-Pacific markets, Korea and India. The new offering build on agreements with Western Union’s existing agents in the two countries: Industrial Bank of Korea (IBK) and the State Bank of India (SBI).

MoneyGram_logo-140px.pngIn related news, MoneyGram announced it has signed two national post offices to its growing international agent network -- the Kazakhstan Post and the Moldova Post

And in even more related news, Standard Chartered Bank, India's largest international bank, has announced the launch of its online remittance service, Transfer2Home, that enable customers to transfer money to India from USA, UK, UAE, Singapore, Hong Kong and Bahrain.

eBillme Online Spending Index Shows Signs of eCommerce Sales Growth

eBillme_logo-140px.jpgeBillme has announced its latest quarterly eBillme Online Spending Index finding that 17% of consumers plan to do their back to school shopping online this year, a five percent increase over last year.
According to the Q3 Index, consumers are planning to spend an average of $271.77 online, an 8% increase over Q2 and 20% over Q3 2009.
In addition, this quarter, consumers were surveyed about back-to-school spending. Shoppers plan to spend an average of $516.96 on back-to-school, both online and offline. 18-24 year-olds plan to do the most back-to-school shopping online this year with 30% expecting to buy from eCommerce sites, 13% above the overall average. READ MORE »

July 20, 2010

Financial Habits of Low-Income Families in Greater Los Angeles

According to a recent report by the Pew Health Group, "Half of low-income families in Greater Los Angeles turn to costly and unregulated alternative financial services (AFS) rather than banks to meet their monetary needs."
Roughly one-third (29%) of the unbanked conduct all financial transactions in cash. The project estimates that there are 300,000 people operating in the cash-economy in Los Angeles alone.
The report, Unbanked by Choice: A Look at How Low-Income Los Angeles Households Manage the Money They Earn, provides a comprehensive look at the financial behaviors and attitudes of 1,000 unbanked and 1,000 banked families residing in Greater Los Angeles. It reveals that both are loyal to their financial service provider and utilize a variety of services on a regular basis. READ MORE »

July 19, 2010

Your Views on Contactless POS Deployments in the USA?

Over on our sister blog, Glenbrook's Carol Coye Benson is asking for community input regarding the perception of deployment of contactless POS readers at merchants in the US market. If you can spare a minute, please take Carol's quick survey - and optionally sign up to receive a copy of the results!

Citi Reports 2Q2010 Financial Results

Citi_logo-140px.jpgCitigroup has reported financial results for the second quarter 2010. In its North American Consumer Banking sector, Citi reported a 6% increase in Citi-branded card revenues. Average card loans decreased 5% to $79.2 billion, reflecting lower accounts and a decline in purchase sales.

Customer Profitability Still Down at Big Retail Banks

accenture_logo_140px.pngAccording to a recent Accenture survey, "A majority of executives at leading retail banks globally say average customer profitability has remained below pre-crisis levels, while their customers' price-sensitivity and inclination to "shop around" have increased."
Interviews with 46 senior banking executives in 14 countries -- including many of the world's largest institutions -- suggest that nearly half of the top retail banks globally (46 percent) have seen their average customer profitability decline by 5 percent to 15 percent since the financial crisis, while an additional 11 percent have seen even greater customer profitability declines.

150 Credit Unions Choose Mobile Money From Fiserv

fiserv_logo.gifFiserv recently announced that 150 credit unions have chosen to implement Mobile Money, including "84 that are already live."
Mobile Money gives credit union members the flexibility to use any mobile device to check account balances and history, transfer funds, pay bills, and track account activity. Mobile Money is the industry’s most complete mobile banking and payments offering, supporting all three mobile access modes: SMS (text messaging), mobile browser, and downloadable applications.

Bank of America Reports 2Q2010 Financial Results

BankofAmerica_logo-140px.jpgBank of America has reported financial results for the second quarter 2010.

In its Global Card Services unit, the bank reported "net income increased $2.4 billion compared to a year ago due to declining credit costs reflecting continued improvement in the U.S. economy. Revenue decreased $401 million from a year ago, driven by lower average loans and reduced interest and fee income primarily resulting from the implementation of the CARD Act, partially offset by the $440 million pretax gain on the sale of the MasterCard position. Provision for credit losses decreased $3.9 billion from a year ago as lower delinquencies, decreasing bankruptcies and lower expected losses from the improving economic outlook drove lower charge-offs and reserve reductions during the quarter."

Headline News - July 19, 2010

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