While merchants promise they’ll lower prices if credit card interchange fees are reduced, consumers are not buying it. A new study has found that 56% of Americans believe merchants would do nothing and that prices would remain the same if card fees were lowered. The report by Javelin Strategy & Research found that two-thirds of consumers over 55 are skeptical about the impact on lower interchange fees. In fact, only 19% of Americans believe that merchants would actually lower prices overall. The study also concludes that large merchants looking for sympathy from consumers regarding interchange will not receive it, and efforts to make interchange a consumer issue using large merchants are fruitless. The fight for the hearts and minds of consumers rests with portraying smaller, locally owned businesses as victims. Large merchants and merchant organizations who represent them are attempting to politicize the issue by indicating that interchange is a “hidden tax” that consumers actually pay. As long as large merchants lead this fight, it is an ineffective strategy. Two-thirds of consumers state that they know that there are fees charged to merchants for each card transaction, and an overwhelming 84% believe it affects the prices that merchants charge for goods and services. But few consumers are willing to change their choice of payment method at large chain retailers because of this issue. Only 23% would use “the cheapest method for the merchant” at a large chain retailer.Details
San Diego-based debt collector Encore Capital Group reported that first quarter revenues rose 8% to $65.4 million and that net income rose 21% to $5.7 million. Revenues from the debt purchasing business were $62.2 million, also an 8% increase over the same period of the prior year. Gross collections were $90.5 million, a 3% increase over 1Q/06. During the first quarter, Encore invested $45.4 million to purchase $2.5 billion in face value of debt with a high concentration quarter in credit card portfolios. The Company also noted it generated $3.2 million in fee-based revenue during the quarter, compared with $2.9 million in the first quarter of 2006, primarily through the Ascension Capital bankruptcy services business. Last month, Encore has landed new investors including J.C. Flowers, FPK Capital and Red Mountain Capital Partners. For complete details on Encore Capital Group’s first quarter performance, visit CardData ([www.carddata.com]). (CF Library 4/23/07)
BRANDZ and the Financial Times has released the “Top 100 Most
Powerful Brands” ranking measured by their dollar value. The study has
interviewed more than 1 million consumers annually and covers 39,000 brands worldwide. The value of all brands in the ranking has increased by 10.6% since last year, from $1.44 trillion to $1.6 trillion in 2007. Google is at the top
this year with a brand value of $66,434 million, followed by
General Electric ($61,880 million), Microsoft ($54,951 million) and
Coca-Cola ($44,134 million). This ranking combine financials with measures
of consumer sentiment derived from company’s database to determine
Citi has launched “Let’s Get it Done”, a new global, corporate brand identity advertising campaign. The ads, featuring scenarios such as buying a house, merging a company and graduating from college, show that Citi is ready to help companies, organizations and individuals achieve their financial dreams and goals. An underlying theme of the campaign is that Citi’s outstanding array of financial products and services can drive its clients towards financial success. In addition to the new tag line, the campaign makes strong use of Citi’s symbolic red arc, which serves as a visual metaphor for connecting human aspirations to realities.Details
ABN AMRO Bank has introduced the country’s first transparent credit card that offers lifetime cash back on all purchases. The new “ABN AMRO One MasterCard” offers cash back of up to 2% on spends
across all categories. The card also offers discounts of up to 3% on domestic airline tickets and 2.5% on international tickets purchased through International Travel House Ltd and 15% discount on car rentals.
ABN AMRO also previously introduced India’s first chip enabled credit card, the “Smart Gold Card”; India’s first card with a flexible credit limit, the “Freedom Credit Card”; and the Barista and Adlabs co-branded cards, both firsts in their respective categories.
AirPlus International has announced its 2006 results. Total settlement volume rose by 15% to USD 18.6 billion, driven by expansion into international markets. Some highlights of 2006 include its corporate card issued jointly with China Merchants Bank; FlexEbill, a tool that enables companies to create and modify the format of their electronic billing information through the AirPlus Business Travel Portal and AirPlus once again received the prestigious Business Travel World Award for the Best Expense Management Process and two awards for innovation in its home market of Germany. AirPlus International is a provider of business travel payment solutions.Details
As part of a special offer, HSBC has launched two 0% cards. One of
the cards, available for application over the phone or at a branch, offers
0% interest for twelve months, 4.9% plus 2.5 % fee on balance
transfers, then 15.9% APR. The other card is available for application
online only and offers 0% interest plus 2.5% fee on balance transfers,
0% on purchases for first 3 months, and the 15.9% APR. The balance
transfers for both types of accounts must be made within 30 days of
account opening. These new cards coincide with research by the bank
suggesting that the offers and promotions available when opening a
credit card influence the customers’ behavior for the duration of the
Online retailer ClickBank broke the $1 million revenue mark in a single day’s business. ClickBank is one of the world’s largest online commerce systems for buying, selling and promoting digitally delivered products and/or services with more than 100,000 affiliates and 10,000 vendors. These products include ebooks, computer programs, software and games; no physical products are shipped. The company’s Internet-based business-to-consumer network handles an average of more than 20,000 transactions each day.Details
Sony will launch the Playstation Network(PSN) pre-paid card,
called the “PlayStation Ticket” in Japan for purchase at 52,000
ATMs. The “PlayStation Ticket” allows the customer access to
the PSN with a password given at time of purchase and can then
download content. With 4 pre-paid increments of 1,000 yen, 3,000 yen, 5,000 yen, and 10,000 yen, this solution brings to PSN patrons ease of payment.
According to a recent report from Auriemma Consulting Group, two-thirds of cardholders whose issuers have been a part of a merger have not changed the ways they use their credit cards after the merger. About 68% of the card holders expect little change to their opinion of their credit card company if their card issuer was bought or sold. The information in this release includes data from 401 credit card users surveyed in February 2007. The findings were originally published in the February 2007 issue of Cardbeat. ACG is a management consulting firm in the payments and lending industry.Details
AmBank and Metropolitan College have launched a college co-branded
prepaid card called “NexG-Metropolitan College Prepaid MasterCard”.
Because it is prepaid, it allows parents to manage the students finances.
Benefits include no minimum income requirement, guaranteed approval,
no application fee or bank account is needed, and is universally accepted.
Reloads of the “NexG prepaid MasterCard” can be made at AmBank
branches, e-pay terminals, at select merchants and through bank
accounts. The card is only available on Metropolitan College Campus.
Gemalto has announced that its “Pocket Reader”, for remote banking
and e-commerce verification, has received CAP certification and is
APACS compliant. For every online transaction, the device requires
the cardholder to enter a different PIN number every time, contributing
to the reduction of online fraud. The device does not require PC
configuration and is therefore portable to be used on any computer.
Gemalto offers digital security with 2006 annual revenues of 1.7 billion
euro, operations in about 100 countries and over 10,000 employees,
including 1,500 R&D engineers.