Retailers Report Dismal Sales in December

While Wal-Mart posted a 5.6% gain in retail sales for December and Macy’s was up 1.1% and Saks 0.8%, other retailers posted dismal results. Nordstrom reported a 3.8% decline and Limited Brands was down 8.0% in December sales, compared to one-year ago. Chico’s was off 13.7% while Ann Taylor declined 13.1% and Gottschalks dropped 13.8% in December. The National Retail Federation projected $474.5 billion in holiday retail sales, a 4% increase over 2006. Holiday sales in 2006 rose 5%. Over the last ten years, the average percentage increase in sales for the holiday season is 4.8%. Most of the retailers reporting today expect to post lower fourth quarter earnings than expected. Yesterday, the British Retail Consortium reported that retail sales rose 30 basis points in December compared with a year ago. According to the International Council of Shopping Centers same-store sales for December are expected to be up about 1%, indicating total sales for the holiday season rose only 2.25% in the U.S. (CF Library 9/21/07)

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Gift Cards Projected to Top $52B by 2012

A new report suggests that gift card sales will rise nearly $14 billion over the next five years. MD-based Packaged Facts predicts the gift card market will grow 5%, topping $52 billion by 2012. The research firm notes that gift cards, which lead the closed-loop segment of the $81 billion prepaid card market, have been gaining credit since 2002, accounting for more than 4% of the market since 2005. Nearly 35% of consumers who purchased gift cards in the last 12 months anticipate spending more on gift cards during the next 12 months, with 9.1% expecting to spend “significantly more.” Fifty-three percent of gift card redeemers often or always spend more than the card value, and most likely over two store visits rather than one.

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Chockstone Gift Card 07 Volume Up 169%

OR-based Chockstone reported that it processed $1.1 billion of volume across its gift card programs, its integrated gift and loyalty programs, and its credit card gateway services, which represents a growth rate of 169% over 2006. The Company also released figures for the number of loyalty and reward points that consumers earned and redeemed at its clients’ locations in 2007. The 680 million points processed on behalf of nearly 20 million consumer accounts in 2007 represents a 221% increase over 2006’s tally of 212 million points. Additionally, Chockstone more than doubled the number of merchant locations for which it processes transactions, increasing its footprint from 22,000 locations in 2006 to more than 46,000 locations in 2007.

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FIRST HAWAIIAN PAYPASS

First Hawaiian bank is issuing its “Priority Rewards MasterCard PayPass”
debit cards provided by Giesecke & Devrient (G&D). Furthermore, these
new cards are powered by INSIDE Contactless’ MicroPass hardware,
which allows users to conduct transactions by tapping the card against the
terminal, providing speed and convenience. The German-based G&D has
supplied over 10 million contactless payment cards to U.S. banks and
employs nearly 8,300 with an annual revenue of EUR1.3 billion while
INSIDE Contactless provides NFC, contactless payments, and access
control services around the world with its 55 granted patents and 35
million
MicroPass payment platforms delivered between 2005-2007. Hawaiian
Bank has $12.5 billion in assets, 58 branches in Hawaii, three on Guam and
two on Saipan while the MasterCard PayPass is accepted by more than
73,000 merchants around the world.

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SPARTANICS 580

Spartanics has introduced its “580 ID Card Punching System”, providing
sensor controls to decrease material waste costs. Furthermore, the new
punching system minimizes overlaminate, provides automatic database
correlation controls by detecting tracking numbers in real time and
minimizes downtime with laminator fault conditions. Spartanics is
headquartered in Chicago and provides screen printing, card punching,
plastic card inspection and automated counting technology.

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WESTERN UNION AGENTS

Western Union has opened its 50,000th agent location in Gurgaon, Haryana
India. The new branch is operating at a local State Bank of India branch to
provide consumers with money transfer services. These services are in high
demand throughout India, given that 26.9 USD billion in remittance were
sent to India during the 2006-2007 fiscal years. Western Union Indian
branches are located in 5,000 cities, towns and villages, in over 8,500
post
offices and 14,000 banks. Furthermore, the company provides money-transfer
services around the world through nearly 320,000 Agent locations in over
200 countries.

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Personix Offers Edge-to-Edge Card Printing

Fiserv’s Personix has installed the “Datacard Artista VHD” retransfer color printing module with the “Datacard MX 6000” card issuance system to print edge-to edge debit, credit and prepaid cards. This capability helps financial institutions offer advanced customization for the user to have a one-of-a-kind card by allowing a personal digital photo to be uploaded and printed on the card. Datacard Group provides secure ID and card personalization solutions. Personix is a provider of high-volume laser printing, mailing, electronic document delivery solutions and plastic card manufacturing, personalization and mailing services.

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Sig and PIN Debit Growth to Downshift Thru 2010

A new analysis predicts that the number of signature debit card transactions in the U.S. will grow at a compound annual growth rate of 10% over the next four years, compared to 17% in the 2002-2007 period. Meanwhile, PIN debit card transactions are expected to produce a 13% CAGR through 2010, compared to a 22% CAGR over the past five years. MD-based First Annapolis says issuers have traditionally relied on increased penetration as the primary growth vehicle for their debit portfolios, however issuers will need to increase focus on card activation and usage for future growth. The research firm suggests that branches represent the first touch point and perhaps the best opportunity to influence customers to become active debit users. Many issuers offer branch employees incentives for simply selling debit cards, but this overlooks the importance of card activation and the branch’s ability to influence cardholder behavior. Eighteen of the top 20 debit issuers currently offer rewards programs. Many of these issuers have found that the reward-earning segment of their portfolios noticeably outperforms the segment that does not earn rewards. Also, segmentation analysis allows debit issuers to identify these under performing cardholders and target them with focused marketing messages. Debit portfolio segmentation can be conducted along several different dimensions including debit purchase volume, number of banking products utilized, and length of banking relationships.

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Affinity Mobile Lands a New CEO

Dallas-based Affinity Mobile has landed John Carney, former SVP/Sales and Operations for T- Mobile USA, as its new CEO .He will lead strategic efforts to drive rapid adoption of their Mobile Application Delivery Enablement (MADE) platform that enables true “mWallet,” “mTransfer” and “mPayments” capabilities. During his ten years with T-Mobile, Carney launched prepaid phone service and drove their highly successful retail and dealer distribution strategy that ultimately led to a distribution organization that supported 25,000 retail outlets and over $14 billion in annual revenue. Before T-Mobile, Carney spent 10 years with telecommunications companies MCI and Mid-com Communications. Affinity Mobile enables financial mobility in everyday applications through the MADE platform.

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Holiday Budget Hangover to Impact Jan Spending

A monthly barometer has found that 24% of consumers are expecting to scale back their spending in January, compared to 11% in December. Also, for the first time since June, only 49% expect to have money left over after paying their monthly bills. According to the Discover “U.S. Spending Monitor” the budget hangover from the holidays will likely be the driver of the January decline. The “Monitor” showed a reading of 90.5 for December, compared to 93.1 for the prior month. Discover also found that only 27% of consumers rate current economic conditions as good or excellent, a new low. At the same time, consumers rating the economy as poor rose to 36%, a new high. The survey reflects responses from 12,500 randomly sampled consumers contacted during December.

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