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Table of Contents

Lead Story

Diverse perspectives on end-to-end encryption


Industry Update

PPISC urges solidarity for security

Red Flag enforcement delayed

Minding merchants' identities

Economic indicators suggest cautious optimism

MasterCard interchange rates as of April 2009


Bob Dickerson

Small business remote deposit capture: Will ISOs claim the market as they have done with credit card

Bob Meara
Celent LLC

Selling Prepaid

Prepaid in brief

A new passport for the corporate world

Loyalty is closed-loop gift card's 'second wind'

Control your destiny, manage your program


Use checks to open new verticals

Patti Murphy
The Takoma Group


Street SmartsSM:
Developing your elevator speech

Jon Perry and Vanessa Lang

Ten ways to juice your business

Michael Dotson
Worksmart Media Group

Pitfalls to avoid in acquiring relationships

Adam Atlas
Attorney at Law

The POS trifecta

Dale S. Laszig
DSL Direct LLC

Look to the stars

Vicki M. Daughdrill
Small Business Resources LLC

Company Profile

Infinity Payment Systems

New Products

Flag and filter online payments

Advanced Fraud Detection Suite

Outsourced residual computing

EZPay ISO Portal
Company: ePayware Inc.


May the forgiving force be with you



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

May 25, 2009  •  Issue 09:05:02

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Economic indicators suggest cautious optimism

The Electronic Transactions Association's second quarter 2009 economic report tempers slight improvement in the overall U.S. economy with the strength of the payments industry to conclude the industry is holding its own amid trying economic conditions.

The ETA U.S. Economic Indicators Q2 2009 Report states that the economy has lost 5.1 million jobs since December 2007, with almost two-thirds of that loss occurring in the last five months. And with consumer confidence levels at historic lows, the report finds an economic recovery is not yet underway; however, the economy seems to have stabilized.

Citing gains in the Dow Jones Industrial Average and the Standard & Poor's 500 index, the report said, "Although the economy may not yet be in a recovery, it is no longer in the freefall it had been."

Concerning the payments industry, the report highligh-ted four main points:

  1. While U.S. consumers' general credit use - and access to credit - is down, credit and debit card transaction volumes continue to rise.

  2. Companies focused on retail segments severely affected by the economy, such as the petroleum and hospitality sectors, may need to adjust their strategies.

  3. The recession has negatively impacted publicly traded companies more than private sector businesses.

  4. Consumers' continued adoption of traditional and nontraditional electronic payment options is serving as a buffer for the payments industry overall; while the volume of total payments decreases, the percentage of payments done electronically is increasing.

A rocky year

The report, compiled by payments consultancy The Strawhecker Group, said as consumers' personal savings rates increase, consumer spending will decrease, which creates "headwinds for processors and acquirers alike."

Thus, increased savings by consumers, coupled with the subsequent decrease in the debit and credit card receivables of retailers, could cause a decrease in the profits for payment businesses, which in turn may force those businesses to find "new sources of revenue as interchange revenues slow down," the report said.

From March 2008 to March 2009, the publicly traded stock of card brands MasterCard Worldwide and Discover Financial Services took significant hits. The stock of acquirers Heartland Payment Systems Inc., TSYS Acquiring Solutions, Global Payments Inc. and Alliance Data Systems Inc. also saw double-digit declines.

(Visa Inc., First Data Corp. and Metavante Corp. were not included in the stock analysis because they were not public companies over the year-long time frame, the report said.)

Keep your heads up

The report noted that credit card charge-off rates have been steadily increasing. The rate has grown from 5.61 percent in the first quarter of 2008 to 7.11 percent as of February 2009. The report cites multiple reasons for the rise, including increased competition among card issuers resulting in more issuers taking risks, high consumer debt levels and the spike in unemployment.

Despite this negative news, the report shows growth in U.S. credit and debit card purchase dollar volume. From the third quarter of 2007 to the third quarter of 2008, the combined Visa and MasterCard debit volume grew at 15 percent. In that same period, combined credit volume growth stood at 3.5 percent.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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