Starbucks Card Volume Tops $1B in 2007

Starbucks reported that its customers loaded and redeemed more than $1 billion on its card products this year. The coffee giant also recently introduced a personalization option for the “Starbucks Card” program. The new “My Customized Starbucks Card” program offers a choice of three different themes: “The Original”; “My Drink As Art”; and “My Story”. A fourth theme, “All Occasions” is also planned. Starbucks is providing the ability to design the new cards directly on its Web site, or by picking up a gift box in store that lets someone else do the designing. The new “My Customized Starbucks Card” is accepted in all Company-operated stores in the USA and Canada. In addition, it is accepted at nearly all licensed store locations in the USA. Also available this year are new holiday “Starbucks Card” designs. The “Starbucks Card” was launched in November 2001. In February 2003 the Company teamed with Bank One to launch the “Starbucks VISA Card.” In October 2003 the “Starbucks Card Duetto VISA” was launched which offered cardholders the ability to earn one percent back in “Duetto Dollars” that are automatically loaded on their “Starbucks Card Account” after each billing cycle. Starbucks has more than 6,500 Company-operated stores and about 3,800 licensed stores in the USA. The Company has more than 4,000 international locations and plans to add 2,500 more locations over the coming year. (CF Library 11/28/01; 2/21/03; 10/14/03)

Details

Consumer Confidence Erosion Continues

A national consumer confidence index eroded more in November after starting to decline over the summer. The “Conference Board Consumer Confidence Index” dropped to 87.3 in November from 95.2 in October. The CB says consumers’ apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter. In fact, consumers’ inflation expectations have surpassed the spike experienced this spring. The number of consumers’ expecting business conditions to worsen rose from 13.9% last month to 16.7% in November. Meanwhile, Standard & Poor’s Equity Research Services yesterday said that it believes that holiday retail sales will be weighed down by continued housing weakness and high energy costs. However, increased online sales and gift card sales will help overall holiday spending to rise slightly. S&P says it believes that this year’s numerous high-profile product recalls will hurt companies in the toys sub-industry, and that home furnishing companies may also struggle. However, restaurants may benefit from holiday promotions, and consumers’ spending preferences may favor some luxury brands.

Details

ATM STUDY

The ATM markets in China and India are projected to maintain the
significant growth seen in the industry over the past 5 years. The current
number of units in both countries, at approximately 125,000, will reach
nearly 350,000 by the year 2010, according to the Celent research firm.
Celent credits this rapid development in the ATM industry to a correlating
developing retail banking & finance sector in conjunction with an increase
in buying power. With this increasing buying power, combined with the
cash-based societies of both China and India and a lacking presence of
customer bank outlets, comes an increase in demand for convenient
monetary access and an increasingly aggressive deployment of ATM units
to include mid-size cities, small cities and suburban regions. Celent
research
assists financial institutions in formulating strategic business and
technology
practice and publishes reports on trends in the financial services market.

Details

Pessimism Grows Among Small Biz Owners

Economic confidence among small business owners declined again in November for the fourth consecutive month, falling to its lowest point this year. The downshift was largely driven by increased pessimism over the U.S. economy as 68% of small business owners feel that economic conditions in the U.S. are getting worse, a jump from 59% in October and 20 points above November 2006. The “Discover Small Business Watch” index dipped to 93.2, down more than three points from October’s 96.8. However, Discover found that 38% of small business owners said they had experienced cash flow issues over the last 90 days, a decrease from 42% in October and 46% in September. The monthly Discover survey also gathered information about online shopping trends. Among findings: 95% of consumers who make online purchases at least once a month feel very or somewhat secure with their transactions; 75% of regular online shoppers said the cost of shipping has stopped them from making a purchase online; 50% of owners said their Web sites generate direct sales leads for their businesses; and 49% of business owners regularly communicate with customers via e-mail.

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
Source: Discover Business Card

Details

GLOBAL HOLIDAY SHOPPING

A comprehensive report on global holiday shopping has found that excluding Europe, Singaporeans will spend more online this holiday season than consumers in North America and Asia. The MasterCard survey also revealed that Australians will spend an average of US$685 overall this holiday season while Americans will shell-out an average of $610. UK-based APACS found that holiday spending among the British will top US$109 billion for an average of about US$1800. The report noted that anticipated spending is by far the lowest in Mexico at US$296. MasterCard also found that in the U.S., 26% of shoppers did not shop online last year for holiday gifts, but intend to this year. In Australia, it is 46% and New Zealand and Singapore are both at 41%. The MasterCard survey found that Singaporeans will spend US$290 online this holiday season, compared to $253 for the U.S. and US$251 in Australia. Additionally, consumers surveyed are interested in the idea of purchasing prepaid cards as gifts this holiday season. Half of the U.S. consumers surveyed and two in five in Canada, Australia, and New Zealand find the idea of purchasing gift cards “extremely” or “very appealing.”

Details

Kum & Go Now Accepting MasterCard PayPass

IA-based c-store chain Kum & Go is now accepting “MasterCard PayPass” at its more than 450 store locations. Kum & Go customers can quickly pay for their purchases by simply tapping their “PayPass”-enabled MasterCard card or device on a PayPass reader. “MasterCard PayPass” eliminates the need for customers to sign receipts for purchases under $25 further speeding up the transaction.

Details

VERIFONE ACCESS

Verifone Holdings has partnered with Tienda-kit for the introduction of
the “Verifone Access” solution in Mexico. This solution has been launched
to provide merchant hosting services for electronic payments to businesses
and customers with various payment options, including monthly installment
payments, utilities payments and loyalty programs, over Tienda-kit’s
electronic card processing network. Moreover, the “VeriFone Access”
managed service platform has been designed to incorporate payment
authorization, estate management, front- and back-end services, value-
added payment card management, digital product distribution services and
management products for its merchant customers. VeriFone Holdings
provide electronic payment solutions for merchants, processors and
acquirers around the world while Tienda-kit, now operating as VeriFone
Access, is a third party processor providing payment solutions for over
9,000 organizations throughout Mexico.

Details

GPN Extends Discover Acquiring to its ISOs

Global Payments has activated the first of its ISOs relationships to acquire Discover Network merchants in a manner consistent with VISA and MasterCard acquiring programs. The first GPN ISOs to activate include EVO, Mercury Payments, North American Bankcard and Total Merchant Services. GPN anticipates finalization of its entire merchant portfolio including its ISO channel by the third quarter of next year. Last month GPN completed the integration of Discover Network card transaction processing and support services for the majority of its merchants. In October TSYS inked an issuer processor agreement with Discover to begin processing prepaid and credit card transactions on the Discover Network. In September, Chase Paymentech began integrating the Discover Network into the merchant boarding process as the first step towards full integration, and expects to rollout the full processing package to its existing merchant customers starting early next year. In December, RBS Lynk completed integration and roll-out of direct Discover Network card processing. Also last year, First National Merchant Solutions agreed to offer its customers Discover card acquiring services. U.S. Bancorp’s NOVA Information Systems signed a merchant acquiring agreement to add Discover Network card acceptance. (CF Library 10/10/06; 12/5/06; 12/18/06; 9/20/07; 10/9/07; 10/18/07)

Details

LEVEL 4 & XFS

Level 4 ATM software has joined the Technical Committee for the
eXtensions for Financial Services (XFS). The XFS Committee develops
ATM hardware and software from different providers and allows industry-
wide communication. Additionally, the committee provides ATM deployers
a wider range of hardware and software than they would otherwise be
afforded and abstracts ATM hardware from ATM application software.
Level Four’s contribution to XFS allows for increased interaction of ATM
deployers, bank systems, third parties and improves the overall cost to
service-quality ratio.

Details

Yahoo! Merchants Solutions Melts Down

Heavy holiday traffic on “Cyber Monday” resulted in outages for merchants using Yahoo!’s payment system. The Company says it was aware of the issue and is currently investigating the matter. The outages started around 5:30 a.m. EST yesterday. Some Yahoo! merchants reported that shoppers were receiving an error message indicating ‘system unavailable’ during the checkout process. Reportedly, merchants found that Yahoo! was not forthcoming about the matter and some have indicated they will find a more reliable provider after the holidays. Yahoo’s Merchant Solutions powers more than 40,000 small Web businesses. The Company’s shares tumbled 3.5% in Nasdaq trading yesterday. Online spending for “Cyber Monday” is projected to top $700 million with 72 million consumers shopping online.

Details

Alliant CU Joins Credit Union 24 EFT Net

Chicago-based Alliant Credit Union is the newest member-owner of the Credit Union 24 EFT network. Alliant CU’s more than 200,000 members will now have surcharge-free access at more than 12,000 Credit Union 24 CU HERE ATMs across the country. Alliant Credit Union is a not-for-profit financial cooperative headquartered in Chicago, Ill. Organized in 1935, Alliant ranks as the eighth largest credit union in the nation and serves more than 207,000 members worldwide with approximately $4.5 billion in assets. Credit Union 24 is a flexible, member-owned, full-service, deposit-taking ATM and POS network with multiple processor links, hundreds of thousands of POS locations and more than 100,000 ATM terminals across the country.

Details

Credit Card Charge-Offs Ramp Up in Oct

Charge-offs headed north again, hitting 4.89% in October, setting a new record for this year. This is the fifth consecutive month that credit card charge-offs have increased. There have been growing concerns that the mortgage meltdown is spilling over into the general consumer finance market. As a result, most major issuers have beefed-up loss reserves in anticipation of higher future defaults. During the third quarter Chase reported a managed net charge-off rate for credit cards of 3.64%, up from 3.58% in the prior year and 3.62% in the prior quarter. Capital One reported that the net charge-off rate for U.S. credit cards was 4.13% for the third quarter, compared to 3.73% for the second quarter and 3.39% one-year ago. However, Citi reported that charge-offs for bankcard and private label cards declined to 4.41%, compared to 4.55% in the prior quarter and 4.26% one-year ago. BofA also posted a decline in the third quarter charge-off rate of 4.86%, compared to 5.20% in the prior quarter and 4.18% one-year ago. According to the American Bankers Association, credit card delinquency, based on total dollars past-due, rose in the second quarter to its highest level for a second quarter since 2004. The ABA says consumers’ priorities can shift, especially for borrowers who face a one-two punch: higher interest payments on their adjustable rate mortgages and declining equity as their home prices fall. According to CardData, charge-offs have increased 56 basis points since January. (CF Library 9/26/07; 10/15/07; 10/17/07; 10/18/07; 10/19/07)

CHARGE-OFFS
Jan 07: 4.33%
Feb 07: 4.39%
Mar 07: 4.44%
Apr 07: 4.60%
May 07: 4.65%
Jun 07: 4.60%
Jul 07: 4.62%
Aug 07: 4.77%
Sep 07: 4.81%
Oct 07: 4.89%
Source: CardData (www.carddata.com)

Details