HOLIDAY SHOPPING TRENDS

INTERAC Direct Payment was found to be the preferred payment method for
retail purchases for 50% of Canadians with 41.7 million transactions
between the
dates of December 21st, 2007 and December 23rd, 2007. Furthermore,
Canadians conducted over three billion INTERAC retail transactions for a
total of $148 billion in 2007. Of this total, 18.17% were Supermarket
transactions, 17.73% were conducted at Specialty clothing stores, 10.73%
were composed of Department Store transactions, 10.23% were for gas/auto,
12.27% were spent at restaurants and 5.76% were conducted for the purchase
of Beer, Liquor or Wine. The province of Ontario reflected the most
transactions with a total of 5,566,818, followed by Quebec with 3,179,884
and British Columbia/N.W.T./Yukon with 2,202,976. The 2 provinces with
the smallest number of transactions include Newfoundland-Labrador with only
288,559 transactions and Prince Edward Island with 75,971 retail
transactions.
The Interac Association oversees the operations of the INTERAC Canadian
POS and ATM payment network, which includes “INTERAC Online”,
“INTERAC Email Money Transfer” and “Cross Border Debit.”

Details

Dec Credit Manager’s Index Sinks

The seasonally adjusted “Credit Manager’s Index” fell for the fourth consecutive month in December. The slide is driven in part by disappointing holiday sales, a weakening employment market, accelerating declines in housing prices, downgrades of banks and insurers, plummeting consumer confidence, and a rapid increase in delinquencies and defaults on many types of credit. The National Association of Credit Management says trade credit managers are now encountering the same difficulty found in other credit markets, that is, the inability of debtors to pay bills due to insufficient cash flow. The CMI index lost 0.7% in December, dropping to a record low of 52.4. Six of the 10 components fell, including a 4% drop in dollar collections.

Credit Manager’s Index
Dec 06: 54.7
Jan 07: 56.4
Feb 07: 55.5
Mar 07: 54.5
Apr 07: 55.4
May 07: 56.1
Jun 07: 56.4
Jul 07: 55.0
Aug 07: 55.1
Sep 07: 54.8
Oct 07: 53.8
Nov 07: 53.1
Dec 07: 52.4
Source: National Association of Credit Management

Details

Arthur Blank’s TN Plant Certified by V/MC

MA-based Arthur Blank’s Tennessee card production facility, with an annual production capacity of more than 100 million cards, has received MasterCard and VISA certifications. Internationally, American Banknote is a global providers of MasterCard, VISA and other secure credit cards. This newly-certified Tennessee facility joins card production facilities worldwide including France, Brazil, Australia, New Zealand, and the Czech Republic, with an annual manufacturing capacity of more than 2 billion plastic cards for payment, pre-paid, gift, marketing and chip-based card products. Arthur Blank & Co. is a producer of private-label plastic cards.

Details

Consumers Creating Delinquency Budgets

A new survey has found that if forced to chose between which bills to pay, 98% of households would likely pay their mortgage first; while credit cards would be among the groups of bills that are least likely to be paid. The research by VA-based Online Resources also found that one out of four households report being delinquent on at least one bill, by 30 days or more. ORCC also surveyed a cross-section of clients from its 2000+ strong biller end-point network of banks, credit unions, utilities, healthcare companies, card issuers, receivables management and mortgage companies. The biller survey reveals that a majority reported feeling a negative impact from the consumer credit crunch already. Only two percent expect it to be easier to collect payments in 2008, and 84% expect to spend more on collections in 2008.

Details

Small Business Owners Stay Pessimistic

Economic confidence among small business owners slipped slightly in December for the fifth consecutive month, falling to its lowest point in 2007. Small business owners expressed less confidence that economic conditions are getting better, either in the general economy or with their own businesses. The “Discover Small Business Watch” index dipped to 92.7, down half a percentage point from November’s 93.2. The index is down a full 17 points than at the same time a year ago. Discover also found that 65% of small business owners feel that economic conditions in the U.S. are getting worse, slightly fewer than the 68% who felt that way in November. The number who believe it is getting better remained the same. About 42% said they have experienced cash flow issues over the last 90 days, an increase from 38% in November but even with 42% from December 2006.

Discover Small Business Watch
Nov 06: 114.6
Dec 06: 109.7
Jan 07: 114.3
Feb 07: 113.4
Mar 07: 117.7
Apr 07: 110.3
May 07: 110.0
Jun 07: 102.5
Jul 07: 107.3
Aug 07: 102.4
Sep 07: 99.2
Oct 07: 96.8
Nov 07: 93.2
Dec 07: 92.7
Source: Discover Business Card

Details

AmEx Launches a Gift Card Awareness Campaign

American Express has launched a consumer gift card awareness campaign in select markets. Print advertisements with usage tips will run in the New York and Washington, DC metro areas. Tips include reminders to pay attention to the balance and to use the gift card as soon as possible. Recipients of the American Express Gift Cards can also take advantage of special offers when redeeming the Gift Card at retailers, restaurants and merchants.

Details

Credit Card Deals Declined Sharply

The number of “Prime Performing” credit card portfolio acquisitions tumbled last year to $9.4 billion versus more than $90 billion in 2006. According to card industry broker expert R.K. Hammer, the number of deals, excluding small credit union portfolio sales, declined from 83 in 2006 to 51 for 2007. (There were about 80 credit union card portfolio sales in 2007.) However, there are still approximately $48.4 billion in the possible deal pipeline, which would shrink the reported deal trend deficit considerably. Hammer says the range of sale premium prices for prime performing card deals varied widely last year, from 8.5% to over 35% over face value. The 2007 range was up 3% from the prior year.

Card Deals Historical
2003: $40.5 billion
2004: $30.6 billion
2005: $44.3 billion
2006: $90.3 billion
2007: $ 9.4 billion
Source: R.K. Hammer

Details

GPN 4Q/07

Atlanta-based Global Payments reported that revenues for the quarter ended November 30th increased 18% to $308.8 million, compared to one-year ago. Net income for the quarter rose 13% year-on-year to $38.3 million. GPN says the revenue gain was driven by growth in its merchant services segment, a strong Canadian currency exchange rate and its Asia-Pacific JV with HSBC. Sequentially, revenues declined $2.2 million and net income slipped $5.3 million. During the quarter, GPN completed the integration of Discover Network card transaction processing and support services for the majority of its merchants; activated the first of its ISOs relationships to acquire Discover Network merchants; announced an agreement to provide its “VIP LightSpeed” suite of cash access products and services to the Mount Airy Casino Resort in Paradise Township, Pennsylvania as well the Mystic Lake Casino Hotel and Little Six Casino in Minneapolis/St. Paul, Minnesota; and licensed Hypercom’s “SmartPayments Server and Client” software products as key technology components of its host electronic transaction processing platform. GPN updated its annual fiscal 2008 revenue guidance to range between $1,231 million and $1,257 million, reflecting a 16% to 18% growth versus fiscal 2007. For complete details on Global Payments latest results, visit CardData (www.carddata.com).

Details

December 18th Produces Green Tuesday

Holiday online sales data from Chase Paymentech show that Tuesday, December 18th was a record setting day. The “Chase Paymentech Pulse Index” posted a high of $169 million in sales and more than 3 million orders. The spike was more than 42% higher than Friday, December 15th, the peak “Pulse” shopping day in 2006. The index tracks online holiday spending at 10 of the top 30 online retailers as ranked by Internet Retailer magazine. To date, more than $4.7 billion has been spent online with these merchants, totaling 91 million orders. The index for 2007 found that online retailers consistently see higher sales volumes on Tuesdays and Wednesdays compared to previous years.

Details

Cigarette Gift Cards Banned in California

A California bill barring the use of gift cards to encourage cigarette use has gone into effect January 1. AB 1585 prohibits the use of coupons, gift certificates, gift-cards and similar offers, credits, and proofs-of-purchase in California by including these forms of advertising in the definition of ‘non-sale distribution’ of tobacco products. In addition, the bill clarifies that tobacco companies that engage in non-sale distribution by mail must verify that the recipient of the product is 18 years of age or older. California joins Massachusetts as the only other state to outlaw these sample offers.

Details