Choice Hotels Names AmEx Card Exec to its Board

Choice Hotels International has named Gordon Smith, President of the U.S. Consumer Card Services Group of American Express TRS, to its Board of Directors. He holds overall responsibility for the company’s consumer card businesses in the United States, including charge, credit and co-brand cards, as well as strategic relationship services. His other previous positions include serving as Senior Vice President in charge of the American Express Service Center in Phoenix, Senior Vice President of Operations and Reengineering for the Latin America and Caribbean region, as well as senior positions in the U. S. Credit and Fraud operations, at Amex Life Insurance Company and in the international card and Travelers Cheque businesses.

Details

Online Shopping to Peak Tomorrow

Tomorrow, December 14th, is projected to be the biggest online shopping day of 2004. CyberSource Corporation says the estimate is based on analysis of CyberSource transaction volume, shipping days remaining before December 25th, and merchant incentives to encourage earlier ordering. Furthermore, Mondays and Tuesdays are typically the biggest online shopping days throughout the year. The peak shopping day has occurred earlier during each of the past two years: in 2002 it was December 17th, in 2003 it was December 15th. CyberSource believes that is mostly due to store incentives to order earlier — online merchants have learned their lesson in prior years about unmanageable shipping volume the last few days before Christmas.

Details

Charge-Offs and Delinquency Slip Up-Stay Low

Charge-offs and delinquency, among credit card-backed securities, edged upward in October, compared to September but remain comfortably lower than one-year ago. Meanwhile, monthly payment rates tapered off a bit as the yield jumped 100 basis points to 18.00%, compared to the previous month. According to Standard & Poor’s “Credit Card Quality Index,” charge-offs rose to 6.4% in October, compared to 5.9% in September, and 6.9% on October 2003. Delinquency increased to 4.5% during October, compared to 4.4% in September, and 5.2% one-year ago. The monthly payment rate slipped to 17.1% in October, compared to 17.3% in September, and 16.9% for October 2003. Yield rose to 18.0% in October, compared to 17.0% in September, and 17.6% one-year ago.

CARD ABS PERFORMANCE
Oct 01 Oct 02 Oct 03 Oct 04
Delinquency 5.2% 5.5% 5.2% 4.5%
Charge-Offs 6.8% 6.9% 6.9% 6.4%
Payment Rate 16.2% 16.3% 16.9% 17.1%
Yield 19.9% 18.7% 17.6% 18.0%
Source: Standard & Poor’s Credit Card Quality Index

Details

Rising Debt May Create Long-Term Problems

Total borrowing by British households continues to grow at
annual rate of 15%, raising household debt to 140% of aggregate income. The Bank of England says this is above the levels in the United States and most large European countries. According to the latest “Financial Stability Report,” unsecured borrowing by individuals, especially credit cards, may create “heightened long-term vulnerabilities.” The report found that 40% of mortgage holders agreed with the statement, “My house value has risen so much that I do not worry about other debts I may have.” The BOE cautioned that financing difficulties would be exacerbated if any fall in house prices were accompanied by a wider economic slowdown. Looking forward, the BOE says banks face a number of risk management challenges. One is managing the transition to the new personal insolvency law regime, which could have a long-lasting effect if it changes debtor behavior and thus the sensitivity of write-offs to adverse macroeconomic shocks. Another is managing the implications of the strong growth in unsecured lending over the past five years, especially where this has occurred through lending to new customers for whom the bank has no past current account information with which to supplement a credit assessment. Lending to customers with multiple borrowing relationships may also pose a challenge when the bank does not have complete information about the evolution of a customer ‘s total indebtedness over time.

Details

Cash Systems Signs a New Torguson Contract

MN-based Cash Systems announced a new, corporate contract with Torguson Gaming Group to provide check cashing, ATM and credit and debit card cash advance services at the Bacaran Bay Casino Resort located in Biloxi, Mississippi. The casino and resort is expected to have 1800 slot machines and 75,000 square feet of convention space. Cash Systems, Inc., located in Minneapolis and Las Vegas, is a provider of cash access and related services to the retail and gaming industries. Cash Systems’ products include its proprietary cash advance systems, ATMs and check cashing solutions.

Details

Washington Post Uses Paymetric Card Solution

Houston-based Paymetric is providing its SAP-integrated payment card solution to The Washington Post, its 100th client. The XiPay solution from Paymetric integrates credit card acceptance with native SAP workflows and infrastructure, streamlining sales and customer service. Businesses prefer to buy from firms that help them conduct business efficiently and accurately. Paymetric is the market leader in Enterprise Payment solutions with specific focus on SAP payment processing.

Details

MasterCard Holiday Transactions Up Nearly 10%

Card activity for the third holiday shopping weekend rose nearly 8% compared to one-year ago, however the growth rate was about half the pace of the previous weekend. On average, the number of payment card transactions over the first three shopping weekends of this year is up 10.8%, compared to last year. MasterCard says its cumulative growth in global transactions for the season, to-date, is 9.8%. For the weekend of December 10-11, MasterCard processed 67.7 million authorizations over its “Banknet” network, as compared to 62.8 million for the same period in 2003. Through December 11, MasterCard processed 483.1 million transactions, as compared to 439.9 million at this same time in 2003. On “Black Friday” MasterCard processed over 35.1 million transactions, a 10.1% growth over the 31.8 million authorization transactions it handled on the same day in 2003.

MASTERCARD TRANSACTIONS
Holiday Weekend Transactions Growth
Nov 26-27 64.2 million +9.3%
Dec 3-4 64.6 million +15.8%
Dec 10-11 67.7 million +7.8%
TOTAL 196.5 million +10.8%
Source: MasterCard International

Details

Personal Debt Growth May Undermine UK Lenders

The Bank of England released its semi-annual “Financial Stability Report which says unsecured borrowing by individuals, especially credit cards, may create “heightened long-term vulnerabilities.” The BOE noted that total borrowing by British households continues to grow at annual rate of 15%, raising household debt to 140% of aggregate income. The BOE says this is above the levels in the USA and most large European countries. The report also found that 40% of mortgage holders agreed with the statement, “My house value has risen so much that I do not worry about other debts I may have.” The BOE cautioned that financing difficulties would be exacerbated if any fall in house prices were accompanied by a wider economic slowdown. Looking forward, the BOE says banks face a number of risk management challenges, especially those related to new bankruptcy laws.

Details

Sterling Jewelers Installs RealPOS Terminals

Sterling Jewelers, the world’s largest specialty retail jeweler, has installed NCR “RealPOS” POS terminals in all of its 1,141 U.S. locations. Sterling Jewelers Inc., which operates Kay Jewelers, Jared The Galleria Of Jewelry and a number of well-established regional names, recently completed installation of the new terminals that began in July 2004. NCR Corporation is a leading global technology company helping businesses build stronger relationships with their customers.

Details

Metavante Processes the Clout Mini VISA Card

Clout Financial Services is piloting VISA mini cards with Metavante providing account processing, card personalization and fulfillment services, as well as underwriting, compliance, customer service, collections, handling of disputes, chargebacks and fraud monitoring services. The Clout Visa mini card is an innovative payment tool, about half the size (1.5″ X 2.5″) of a regular credit card, and is being offered as a companion to full-sized credit cards. Clout is a financial services company dedicated to providing access to a wide array of financial products to career minded students and young professionals. Metavante Corporation delivers banking and payment technologies to financial services firms and businesses worldwide.

Details

Rewards Network Launches an Online Marketplace

Chicago-based Rewards Network has teamed with Allegiance Marketing Resources to launch a new “Shopping and Services Program.” Rewards Network members can now earn extra rewards when purchasing merchandise at retailers like Target, Brookstone, Dell and Best Buy. Members must use their registered credit card to earn “Cashback Rewards” while shopping. Rewards Network has 3.7 million active members, over 10,600 restaurants and more than 11,100 hotels participating in its rewards programs.

Details