Average U.S. Credit Card Ticket Falls Nearly 9%

The average purchase transaction on a Visa or a MasterCard-branded
credit card has declined 8.2% over the past twelve months from $90.38 to
$82.56 in the U.S. The average Visa credit card transaction declined
7.6%, from $91.10 for 2Q/08 to $84.14 for 2Q/09. (Visa released second
quarter data this week.) The average MasterCard credit card transaction
dropped 10.2% over the same period, falling from $89.31 to $80.16.
(MasterCard will release third quarter data next week.) According to
CardData, Visa posted $192 billion in purchase dollar volume with 2.28
billion transactions for 2Q/09, while MasterCard posted $120 billion in
purchase dollar volume with 1.50 billion transactions for 2Q/09. The
combination of the recessionary impact on spending and the rising shift
to debit cards has been driving the decline in credit card PDV. Gross
dollar volume for Visa credit cards declined 15% between 2Q/08 and
2Q/09. MasterCard credit card GDV declined 18.7% during the same period.
Combined, debit card GDV was up 5.4% at mid-year. For the latest Visa
and MasterCard statistics visit CardData (www.carddata.com).

Visa MasterCard
2Q/08: $91.10 $89.31
3Q/08: $89.98 $88.34
4Q/08: $85.29 $83.43
1Q/09: $84.49 $81.47
2Q/09: $84.14 $80.16
Source: CardData (www.carddata.com)


USA Technologies Wins its 71st Patent

Cashless technology provider USA Technologies has been issued its 71st patent.
The patent for invention number 7,593,897 is for a wireless system for
communicating cashless vending transaction data and vending machine
audit data to remote locations. The patent covers the technology in USAT’s ePort cashless payment system
for accepting financial card identification data as payment for items
vended, and an interactive interface, protocol, and support for
interconnecting the system to a computing platform. It further covers
the ePort technology to accept card ID data, authorizes the validity of
the card, and executes and settles the transaction payment for the goods
and services that are vended.



The Conference Board Leading Economic Index (LEI) for Mexico increased
by 1.1% while The Conference Board Coincident Economic Index (CEI)
declined 0.6% in August. With the 1.1% increase in August, the
Conference Board LEI for Mexico now stands at 111.3 (2004=100) after
having increased 1.2% in July and 2.2% in June. Meanwhile, the CEI
posting for the month was preceded by a 0.4% increase in July, a 0.1%
decrease in June and now stands at 105.6 (2004=100). LEI results for the
month were attributed to positive gains in 5 of the 6 components, which
include US refiners’ acquisition cost of domestic and imported crude
oil, the (inverted) real exchange rate, stock prices, and net
insufficient inventories while the construction component decreased in
August and the (inverted) federal funds rate
remained unchanged.


Exchange Rates Dampen Affinion Q3 Revenue Growth

Loyalty and credit card enhancement specialist Affinion reported
net revenues declined 1% for the third quarter to $361.1 million. The net loss for the quarter was $16 million, compared to $20 million for the year ago quarter. The decrease in net revenues was due to a decline in North American products net revenue, as a higher cost of insurance was only partially offset by a modest increase in International products net revenue. Excluding the negative impact of foreign-exchange in the quarter, net revenues would have grown 1.1% from 3Q/08. In North America Membership products revenue increased 0.9% to $184.8 million. Insurance and Package products revenue decreased 5.7% to $89.7 million. Loyalty products revenue decreased 6.7% to $19.6 million. International revenue increased 1.6% to $67.8 million. For more details on Affinion’s latest performance visit CardData (www.carddata.com).


Credit Card ABS Yield Continues to Remain Strong

Based on current metrics among credit card-backed securities charge-offs will likely remain elevated in the coming months based on rising delinquencies. Fitch also reports that gross yield continues to be strong relative to historical data as a result of discount options and repricing initiatives in various trusts. During October, gross yield decreased 27 bps to 19.39%. Compared to last year, gross yield is up 254 bps or 12%. During the month, Fitch’s “Credit Card Chargeoff Index” declined 77 bps to 10.75%, marking just the third month-over-month improvement. Measured by Fitch’s 60+ day delinquency index, late payments rose 16 bps to 4.22% after a 20 bp dip last month. Late stage delinquencies are running 33% higher on a year-over-year comparison. Early stage late payments increased for the month as well, with 30+ day delinquencies rising 13 bps.


Without V/MC AmEx and Discover Have 2009 Losses

While American Express and Discover posted credit card profits for the third quarter, they were propped up by Visa and MasterCard. Discounting the antitrust litigation settlement payments, AmEx had an $81 million pre-tax loss and Discover’s pre-tax profits were $441 million for 3Q/09 in their U.S. Card segments. According to CardData, since the third quarter of last year Discover received $2.28 billion and American Express received $1.1 billion from Visa and MasterCard. Over this five quarter period Discover’s pre-tax profits were actually $75 million. Even with the V/MC payments, American Express lost $1.03 billion pre-tax for its U.S. Card business. For 2009, AmEx has lost $1.17 billion and Discover has lost $170 million. Discover’s third quarter profits were driven by lower interest expense and lower provision for loan loss. For complete details on American Express and Discover third quarter performance visit CardData (www.carddata.com).

($ millions)
3Q/08: $245 0
4Q/08: $646 $846
1Q/09: $167 $475
2Q/09: $388 $473
3Q/09: $913 $472

($ millions)
3Q/08: $364 $220
4Q/08: -$48 $220
1Q/09: -$50 $220
2Q/09: -$332 $220
3Q/09: $139 $220

Source: CardData (www.carddata.com)


PayPal to Offer Up to 20% for Holidays

PayPal has announced that starting November 3, it will offer its 2009
holiday promotions that includes savings up to 20% off, cash-back or free shipping from online
retailers. PayPal is also working with MicroPlace to provide holiday shoppers with
a unique gift that helps the world’s working poor. Shoppers who purchase
a gift certificate on MicroPlace.com will get a free $20 gift
certificate to give to someone else on their list. These gift
certificates will provide much needed capital to organizations that
provide financial services to poor people around the world. This gift
could help someone get access to a loan to start a business, generate
income and work their way out of poverty.


Sears Platinum MasterCard is Unveiled

Retailer Sears has introduced the “Sears Platinum MasterCard” and is offering customers free credit score access.
“Sears Platinum MasterCard” cardholders can enroll in the complimentary
Sears Choice Rewards program, which rewards customers with merchandise, travel,
dining and more. Members earn one point for every $1 spent on all purchases and have the
opportunity to enjoy exclusive bonus point events. And, all current Sears Gold
MasterCard customers will have full access to platinum card benefits. Sears
cardholderscan review their credit score at any time, understand the factors that
affect their credit score and learn how to improve their score using the innovative
“credit score simulator” tool. – Sears cardholders can take
advantage of “Monthly Cardholder-only Sales” offering special deals, including extra discounts, deferred interest financing
offers and valuable coupons in their billing statements.


Discover Financial to Deploy Carolina

Discover Financial Services has licensed VA-based Dulles Research’s SAS-to-Java conversion solution “Carolina” for production implementation.
Carolina converts Base SAS programs to Java which can be deployed in any Java Runtime Environment Version 5.0 or higher. Business applications include
analytics, modeling, scoring, and data manipulation. The product also provides integration with web services, Business Rule Management
Systems, and other enterprise decision management tools.



INSIDE Contactless advanced open-standard contactless chip technologies
and Discover Financial Services have inked collaborative agreements to
develop “Discover Zip” contactless payment devices. The agreements
stipulate INSIDE will support “Discover Zip” in upcoming versions of its
award-winning MicroPass contactless payment platform and is designated a
preferred vendor for card-based Zip implementations with its “MicroPass
4002” contactless payment processor. “MicroPass 4002” is the first
Discover-certified implementation on the market and is designed for
Discover Zip contactless payment applications with fast transaction
speed for an enhanced cardholder experience to enable contactless
transactions reliably complete.