Charge-offs for credit card-backed bonds in the U.K. improved slightly during the third quarter to 7.03%, compared to 5.40% one-year ago and 7.07% for the prior quarter. Delinquencies were fairly stable and even fell slightly from 3.78% at the end of June over the third quarter. According to FitchRatings, in July the index fell to 3.74%, slipping further to 3.72% and 3.69% in August and September, respectively. Although this remains high compared with historical values, there had been a general leveling-off of the index over the preceding five months since a peak of 3.93% in March 2006, which may herald a slowdown in the growth of charge-offs. FitchRatings reported that charge-offs improved to 6.86% in July and, despite an increase to 7.14% in August, finished the quarter at 7.03%, a sequential improvement of 4 basis points. The monthly payment rate fell from 17.26% at the end of 2Q/06, to 16.50% by end-September, but, climbed to 17.75% in August. The yield was fairly stable in comparison with recent quarters, and slightly below levels seen earlier in the year. From 19.72% at the end of June, the index fell to 19.13% in July and, although an increase in August took it back up to 19.41%, it closed the the third quarter at 19.05%.Details
Dallas-based Chase Paymentech has created a “pulse” index to measure online commerce at the top merchants this holiday season. This week shows that online sales for the first Monday in December rose 49% from one-year ago. Overall sales for 10 of the largest Internet retailers during the period Nov. 20th thru Dec. 6th increased 17% over 2005. Early weekdays continue to emerge as favored online shopping days. In addition to Monday’s strong sales, Tuesday December 5th and Wednesday, December 6th outperformed 2005 by 20% and 28%, respectively. Overall sales growth is counter-balanced by an equally significant dip in weekend online shopping activity, in some cases dipping below 2005 sales performance. The Chase index is based on actual transactions going through the system rather than samples.Details
Loyalty Access Solutions will be deploying the Smart Chip Technologies’ “Loyalty System” to several of its clients early next year. Smart Chip Technologies’ turnkey customer retention solutions,
including loyalty, pre-paid stored value, punch cards, and gift cards, enable issuers, acquirers, and merchants to take advantage of real-time programs using their cardholder’s existing cards using bar codes, magnetic stripes, smart chips, RFID, Internet accounts, and other consumer electronic devices.
VISA International announced this week a new set of test requirements to help card manufacturers ensure that emerging card technologies, such as battery powered cards and display cards, meet VISA standards. VISA has developed a set of test requirements including testing protocols, best practices for addressing local and global regulations, and a selection of qualified test laboratories ready to evaluate powered cards. Tools and information will be available to VISA member financial institutions and qualified card manufacturers. VISA says its expects to pilot a number of powered card capabilities next year. Powered cards can incorporate value-added capabilities such as displays, dynamic account information, authentication services, light and sound. They work by embedding a tiny battery into the plastic card.Details
The average merchant service fee charged by Bankcard, MasterCard, VISA and Diners Club in the third quarter edged down by one basis point from the prior quarter and dipped three basis points from one-year ago. However, fees charged by American Express dropped six basis points sequentially and sunk 15 basis points from 3Q/05. The Reserve Bank of Australia also reports that since it forced pricing reforms on VISA and MasterCard in 2003, the market share of American Express and Diners Club has climbed from 14.5% to 16.9% for the third quarter of 2006. The pricing advantage has enabled American Express and Diners Club to offer more generous rewards program. The average merchant service fee charged by Bankcard, MasterCard and VISA in the third quarter was 0.93%, compared to 0.94% in the prior quarter and 0.96% for 3Q/05. The average merchant service fee charged by American Express in the third quarter was 2.22%, compared to 2.28% in the prior quarter and 2.37% for 3Q/05. The average merchant service fee charged by Diners Club in the third quarter was 2.26%, compared to 2.27% in the prior quarter and 2.29% for 3Q/05.Details
MasterCard Worldwide has won the rights to continue sponsorship of the “World Cup” soccer tournament for at least the next two “World Cups” despite a deal VISA signed with FIFA calling for it to receive the rights on Jan. 1st. About six months ago VISA was awarded the sponsorship by the Federation Internationale de Football Association for the next eight years. MasterCard, a long-time FIFA sponsor quickly filed a lawsuit claiming FIFA broke its contract giving MasterCard the right of first refusal on an extension of its 16-year sponsorship of the “World Cup.” The ruling was handed down this morning by U.S. District Judge Loretta Preska in New York City. Preska ordered that FIFA proceed with the “2007-2014 MasterCard Agreement” that the parties agreed to. She also noted that FIFA’s negotiating team misled MasterCard about an extension period while FIFA was simultaneously and aggressively negotiating with VISA.Details
More than one-quarter of Canadians say they or someone they know has been a victim of identity theft. Nearly three in ten Canadians say that while they hear a lot about identity theft they are not sure what it means. The findings come from Capital One Canada’s second annual identity theft survey which also found that 36% of Canadians say they would not know who to call or what steps to take to restore their name and credit if they were a victim of identity theft. Concern over identity theft has led Canadians to be more guarded about their personal information. Over half say concern has led to the use or purchase of a shredder, while 92% of concerned Canadians say they now review, rather than toss away, their monthly financial statements and pay closer attention to the way merchants handle their credit and/or debit
card when shopping. In spite of increased vigilance, over half of
Canadians do not review their credit report at least once per year to check for errors or unfamiliar activity.
Bankruptcy filings rose for the fifth consecutive month in October, now averaging about 14,000 per week compared to approximately 8,000 filings per week in the fourth quarter of last year. One-year ago filings averaged 35,000 per week, prior to the full implementation of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” During October filings topped to 57,000, the highest level since October 2005 when the reforms went into effect. The number of filings in the first and second quarter of 2006 is the lowest number of quarterly filings in the last 20 years. Through the first nine months of 2006 bankruptcy filings have exceeded 400,000 and will likely hit 600,000 by year’s end.
Jan 06: 34,411
Feb 06: 39,636
Mar 06: 42,724
Apr 06: 44,989
May 06: 43,780
Jun 06: 46,620
Jul 06: 48,849
Aug 06: 54,937
Sep 06: 56,412
Oct 06: 57,566
Source: CardData (www.carddata.com)
Puerto Rico-based EVERTEC, the ATH Network’s processing firm for Latin America and the Caribbean, has signed an agreement with NYCE Payments Network to enable purchases throughout the U.S. for holders of ATH debit cards issued by ATH Network-affiliated banks and cooperatives in Puerto Rico and the U.S. Virgin Islands.Details