Go to playlist and click the video number 2 in order to watch what Gartner Research distinguished analyst Avivah Litan has to say about the dangers of online banking..
Thursday, February 4, 2010
The Least-Trusted Banks in America
HSBC ranked dead last. The bottom seven of this year’s rankings, first to last, are Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank, and in last place, HSBC.
By JENNIFER SARANOW SCHULTZ
According to a Forrester research report, HSBC had the lowest customer advocacy score ever reported in the United States.
Customers of the biggest banks in the United States are the least likely to believe their financial institution does what’s best for them as opposed to what’s best for the bottom line, according to a new report from Forrester Research.
The report, Forrester’s annual Customer Advocacy rankings, ranks nearly 50 financial services firms in the United States by the percentage of each firm’s customers who agree with the statement: “My financial provider does what’s best for me, not just its own bottom line.” The results are based on a survey of about 4,500 consumers.
The bottom seven of this year’s rankings, first to last, are Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank, and in last place, HSBC.
Among Bank of America customers, 33 percent agreed with the statement above, while 31 percent of Chase customers agreed, 29 percent of Capital One customers agreed, 28 percent of TD/Commerce Bank customers agreed, 27 percent of Fifth Third Bank customers agreed and 26 percent of Citibank customers agreed.
Among HSBC customers, only 16 percent said they agreed with the statement, the lowest customer advocacy score ever reported in the United States, down 10 percentage points from HSBC’s score last year and in line with other recent similar poor rankings of other HSBC units.
An HSBC spokesman declined to comment on the survey, since he hadn’t seen it yet.
Continue Reading at NY Times Bucks Blog
Wells Fargo Extends Text Banking to All Customers
"Our text banking service is now available to all Wells Fargo customers via a mobile phone, not just online banking customers. Through simple and secure text queries, text banking is the fastest, easiest way for customers to see a snapshot of their accounts," said Arah Erickson, vice president and head of Wells Fargo Retail Mobile Banking. "We are proud to enable access to account information through whichever channel best suits customers' changing needs and preferences. Text banking is convenient and customers say it works well with their busy lifestyles."
Through its research, Wells Fargo learned that customers appreciate being able to check their current available account balances while they are "on the go." A text banking request to Wells Fargo can quickly provide customers with their current available account balances*, transaction history, credit card payment information, and the address of the nearest Wells Fargo ATM.
"Mobile phones are becoming an integral part of our customers' lifestyles. People want to take action immediately - whether it's ordering a pizza, getting tweets or checking their current available account balance," said Wells Fargo Senior Vice President Secil Watson, Head of Customer Experience and Money Movement for Internet and Mobile Banking. "The ability to bank via text message expands financial management options for all our customers, regardless of whether they spend a lot of time in front of a computer."
How to Enroll in & Use Text Banking
Text banking is a free service from Wells Fargo, but mobile carrier text messaging and web access charges may apply. To activate the service, customers first need to visit wf.com/text from an internet-enabled mobile phone and provide their mobile phone number. They will quickly receive a "welcome" text message from Wells Fargo with instructions on how to use the service. They can begin text banking by sending a command, such as "BAL ALL" ("get all balances"), to 93557 - the text banking short-code that spells "WELLS" on traditional numeric keypads. In moments, they will automatically receive their current available balances in a text message. Customers can also send "Command" or "COM" for a complete list of Wells Fargo's text banking commands which includes "DUE" to determine Wells Fargo credit card payment information, "ACT" to see if a check deposited, and "ATM" along with the customer's city and state or ZIP code (e.g. "ATM 94118" or "ATM San Francisco CA") for a list of nearby Wells Fargo ATM locations.
After the initial text is sent, the text number 93557 can be saved in a mobile phone address book to help make the process even faster for the customer next time. For more information about text banking, visit Wells Fargo on YouTube (youtube.com/wellsfargo).
Wells Fargo Mobile Text Banking is Safe
The Wells Fargo Mobile Text Banking service is safe. Customer accounts are referred to only by nicknames, therefore account numbers, passwords or other personal information are not needed. Mobile Banking is covered by our Online Security Guarantee. Visit Online Security Guarantee to learn more.
Access to account information while "on the go" adds protection for customers when it comes to fraud prevention and detection. Mobile text banking allows customers to review their accounts for unusual activity anytime, and take quick action if necessary.
For more information on how customers can protect themselves, visit Wells Fargo's Fraud Information Center (https://www.wellsfargo.com/privacy_security/fraud). It reminds customers to never disclose personal information, such as account numbers, passwords, or any combination of sensitive information via text message. Customers should use legitimate sources to verify contact information including:
About Wells Fargo Online & Mobile Banking
Wells Fargo is a leading provider of online and mobile financial services for individual consumers, small and middle market businesses, and large corporations with a full range of banking, money movement, investing, asset management, and other financial and risk management products. Wells Fargo launched its personal computer banking service in 1989 and was the first bank to offer Internet banking through wellsfargo.com in May 1995. Wells Fargo has been named the No. 1 Consumer Internet Bank in North America by Global Finance magazine (November 2009), earned an "A" grade from ABI Research for Wells Fargo Mobile (September 2009); ranked the No. 1 website out of 68 leading U.S. corporations' websites for technology innovation by the Brookings Institution (July 2009) and was awarded two Monarch Innovation Awards by Barlow Research for online services for small business, including Foreign Exchange Online and My Spending Report with Budget Watch (February 2009).
About Wells Fargo
Wells Fargo & Company is a diversified financial services company with $1.2 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,000 stores and 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally.
Secure POS Vendor Alliance Launches Lab Network to Improve Security within the Payment Industry
ATLANTA--(BUSINESS WIRE)--The Secure POS Vendor Alliance (SPVA), a non-profit business organization founded by Hypercom (NYSE: HYC), Ingenico S.A. (EURONEXT: ING) and VeriFone (NYSE: PAY) announces the formation of its new Lab Network, a group of labs that will participate with SPVA members, prospective members and the SPVA's Technical Working Groups on security evaluations of the SPVA implementation guidelines. Members of the Lab Network will work together to share best practices and raise the security level within the point of sale industry.
“This network is an unprecedented milestone in the payments industry as it will connect us directly with the technicians, academics and researchers who are often behind product innovations and future developments and breakthroughs,” said Steven Hughes, SPVA president. “By tapping into this network, the SPVA can draw from a diverse pool of talent to further its mission, extending best practices and guidelines to a comprehensive compliance verification of the whole payment process.”
Establishment of the SPVA Lab Network facilitates the closing of gaps in security payment process compliance by ensuring certain aspects of technology and applied processes will be subject to independent verification and standard guidelines. This will give end-users and customers a method for establishing an independent and credible review of an implementation of forthcoming SPVA best practices and provide them with options to ensure their compliance is verified.
The following are requirements for eligibility: Provide information security evaluations in the POS industry; Authorized Qualified Security Assessor (QSA); Provide evaluations in the PIN entry and device security; Approved by the Payment Card Industry to evaluate compliance with the PCI Data Security Standard (PCI DSS), the Payment Application Data Security Standard (PA DSS) and accredited to test PIN Entry Devices for compliance with the compulsory PCI standards (PCI PED). To learn more about the SPVA and how to participate in and benefit from the Lab Network, visit www.spva.org.
About Secure POS Vendor Alliance (www.spva.org) The Secure POS Vendor Alliance (SPVA) is a non-profit organization, founded by Hypercom (NYSE: HYC), Ingenico S.A. (EURONEXT: ING) and VeriFone (NYSE: PAY), that works with the multiple stakeholders of the payment value chain. Its aim is to develop an end-to-end security framework and to enhance security elements of payment solutions which protect cardholder information and defend merchants and acquirers against security breaches, to help reduce fraud and lower risk for all electronic payment stakeholders.
MoneyGram International Announces Agreement to Expand PropertyBridge’s Payment Services to Bank of America Merrill Lynch Account Holders
MINNEAPOLIS--(BUSINESS WIRE)--PropertyBridge, Inc., a MoneyGram International (NYSE:MGI) subsidiary and leading provider of electronic payment services to the multi-family housing industry, today announced an agreement that will bring PropertyBridge’s state-of-the-art payments platform to the property management clients of Bank of America Merrill Lynch, one of the world’s largest financial institutions. Bank of America Merrill Lynch is one of the nation’s largest lenders to the multi-family housing industry and currently provides banking, lending and payment processing services to more than 40 of the top 50 property management companies in the U.S.
“PropertyBridge’s singular focus on the multi-family housing industry has allowed it to build the industry’s leading payments platform”
“PropertyBridge’s singular focus on the multi-family housing industry has allowed it to build the industry’s leading payments platform,” said Greg Waltz, vice president and general manager of Payment Products at MoneyGram International. “Our agreement with Bank of America Merrill Lynch will help accelerate our growth by combining our rent and lease payments platform with Bank of America Merrill Lynch’s banking services to create the industry’s premier financial services offering to the highly fragmented multi-family housing sector,” added Waltz.
According to the National Multi-Housing Council, nearly one-third of Americans rent their housing, representing 18 million apartments with approximately $146 billion spent annually on residential rent- and lease-related payments in the U.S. As the volume of rent checks increases, today’s property managers are challenged with how to centralize and streamline payments, reduce fraud and improve collections while also providing residents with multiple payment options.
The agreement enables Bank of America Merrill Lynch to leverage PropertyBridge’s expertise and long-standing relationships in the multi-family housing industry to offer a vertical payment solution uniquely designed to serve the needs of property managers—needs that are evolving due to the growing movement to automate rent payments in an industry still heavily reliant on paper checks. As part of this agreement, credit card processing will be performed by Bank of America Merchant Services in connection with PropertyBridge’s custom technology.
The PropertyBridge platform provides a suite of payment options including credit cards, check scanning, ACH, and electronic check acceptance. Renters can use the PropertyBridge solution to make payments through multiple payment channels—online, by phone, or in the rental office. In addition to providing renters with more options for making a payment, PropertyBridge’s solution serves the needs of property managers with a number of key features, such as:
a single web-based interface to access comprehensive payment options
integration of payment data with back-end accounting systems
compliance with industry-specific rules and regulations
marketing and adoption programs to boost resident payment adoption
“Our relationship with Bank of America Merrill Lynch demonstrates our ability to provide financial institutions with a unique opportunity to increase deposit income and extend long-term relationships in the lucrative property management vertical. We look forward to a successful relationship with Bank of America Merrill Lynch and are excited about the potential to expand our presence throughout the financial institution channel,” said Vicki Keller, vice president of PropertyBridge.
About Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company's corporate and investment banking, and sales and trading businesses operate under the Bank of America Merrill Lynch brand. Bank of America Merrill Lynch focuses on middle-market and large corporations, institutional investors, financial institutions and government entities. It provides innovative services in M&A, equity and debt capital raising, lending, trading, risk management, research, and liquidity and payments management. Bank of America Merrill Lynch serves clients in more than 150 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and nearly 96 percent of the Fortune Global 500.
Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are both registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed
About PropertyBridge, Inc.
PropertyBridge, a MoneyGram Company, is a leading electronic payments processor for property managers and real estate owners in the multi-family housing industry. The PropertyBridge Payments Platform enables residents to pay rent and other lease-related transactions using multiple payment types, including credit and debit cards, Automated Clearing House (ACH), check scanning (Remote Check Capture) and cash payments at 40,000 MoneyGram agent locations. PropertyBridge’s rent payment solutions are designed to be fully integrated with the accounting systems and business processes of most property management firms. Residents can pay rent online, by phone or in person and set up recurring payments. The company collaborates extensively with financial services leaders including Visa USA, MasterCard, Discover Financial Services, American Express, Wells Fargo Bank and First National Bank of Omaha. MoneyGram International acquired PropertyBridge in October 2007. For more information visit www.propertybridge.com.
About MoneyGram International
MoneyGram International offers more choices and more control for people separated from friends and family by distance or those with limited bank relationships to meet their financial needs. A leading global payment services company, MoneyGram International helps consumers to pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 190,000 agent locations in 190 countries and territories. To learn more about money transfer or bill payment at an agent location or online, visit www.moneygram.com.
UK Web Merchants Are Optimistic
Karin von Abrams, eMarketer Senior Analyst is reporting that almost 70% of online merchants in the UK anticipate online revenue to grow this year...
"Despite the economic downturn, 69% of online merchants in the UK said they anticipated that their revenues from Internet sales would grow in 2010, while 11% foresaw a decrease, according to e-commerce payment firm CyberSource. The annual “UK Online Fraud Report,” which charts the experiences and expectations of over 200 UK e-tailers and the views of more than 1,000 UK consumers, found that four in 10 online businesses expected growth of 20% or less. But 6% said they hoped to more than double their revenues in the current year. Smaller retailers were generally more optimistic than larger ones.
About one-third of the businesses polled said the proportion of their income lost to online fraud went up each year, and 57% said that fraud was the biggest threat to their online operations. Almost as many said they feared customer data being stolen.
Continue Reading at eMarketer
MoneyGram International Reports Fourth Quarter, Full-Year 2009 Financial Results
“During the quarter, we increased our money transfer revenue, grew our global agent network and launched new products and services to bring more value to more customers all over the world”
- Money transfer transaction volume increased 7 percent, and money transfer fee and other revenue increased 6 percent in the fourth quarter of 2009 versus prior year. On a constant currency basis, money transfer fee and other revenue increased 3 percent versus prior year.
- Global agent locations reached 190,000, an 8 percent increase over prior year.
- Total revenue in the fourth quarter was $296.4 million compared with $319.0 million in the same period last year. Fourth quarter 2008 total revenue included net securities gains of $10.2 million and investment revenue that was $27.6 million more favorable compared with 2009.
- Full-year total revenue in 2009 was $1,171.9 million, up from $927.1 million in 2008. Total revenue in 2008 included net securities losses of $340.7 million and investment revenue that was $128.9 million more favorable compared with 2009.
- Net income for the quarter was $28.1 million and EBITDA was $60.0 million. Both net income and EBITDA benefited from $2.6 million (pre-tax) of significant items in the quarter. These items include a $15.5 million curtailment gain on the Company’s benefit plans, partially offset by $7.1 million of stock-based compensation and $6.1 million in asset impairment charges. Net income included a $20.3 million tax benefit related to net securities losses in 2007 and 2008.
- Adjusted EBITDA in the quarter was $57.4 million versus $62.4 million in the prior year. Fourth-quarter 2009 Adjusted EBITDA includes $6.0 million of net investment revenue compared with $33.0 million in the comparable period last year.
Balance Sheet Items
In the fourth quarter of 2009, MoneyGram paid the remaining $45.0 million outstanding on its revolving credit facility and made a $40.0 million prepayment on its Senior Tranche B Loan under its Senior Facility. In 2009, the Company paid down $186.9 million, or 19 percent, of its total outstanding debt. The Company ended the year with assets in excess of payment service obligations of $313.3 million.
Market Development
The Company continues its focus on enhancing its product offerings and expanding its agent network. MoneyGram recently:Announced an agreement with SMART Communications, Inc. that will make it easier and more convenient for consumers in the Philippines to receive money transfers to their SMART Money account on their mobile phones. This relationship connects money transfer services to SMART's network of over 39 million mobile phone users in the Philippines.
- Launched the Poste Mobile service in Italy, enabling customers of the Italian Post Office to send a money transfer from a mobile phone.
- Announced an expansion of its agreement with the Bank of China to bring money transfer services to the bank’s 10,000 locations across China.
- Expanded its network in India through an agreement with two urban co-operative banks, Abhyudaya Co-op Bank and Thane Janata Sahakari Bank.
- Added Hungary to its global money transfer network with the signing of new super agent Corner Cash Keszpenz Zrt.
- Renewed its agreement with Duane Reade, the New York City-based drugstore chain, and added Utility Bill Payment services as part of the multi-year agreement.
- Announced an alliance with Alpha Bank Srbija A.D. to add MoneyGram money transfer services to more than 165 locations in Serbia.
- Expanded its presence in Romania through an agreement with Intesa Sanpaolo Bank to offer money transfer services at nearly 100 locations in the country.
- Introduced MoneyGram Rewards in Canada, expanding the Company’s loyalty program that offers members fee discounts, receive notices, and fast and convenient money transfers.
- Announced an agreement between MoneyGram’s wholly owned subsidiary PropertyBridge and Bank of America Merrill Lynch that will bring PropertyBridge’s state-of-the-art rent and lease payments platform to the bank’s property management clients, which include 40 of the top 50 property management companies in the U.S.
Segment Reporting Changes
MoneyGram revised its segment reporting in the fourth quarter of 2009 to reflect changes in how it reviews operating performance and allocates resources. The Company now manages its business primarily through two reporting segments: Global Funds Transfer, which is composed of the money transfer and bill payment products; and Financial Paper Products, which is composed of the official check and money order products.
Global Funds Transfer Segment Results
Total revenue for the Global Funds Transfer segment rose to $263.8 million in the fourth quarter of 2009 from $252.2 million in the same period last year. The segment reported operating income of $29.0 million, and an operating margin of 11.0 percent in the fourth quarter.
Money transfer transaction volume increased 7 percent and fee and other revenue increased 6 percent to $230.6 million in the fourth quarter of 2009 from $217.0 million in the fourth quarter of 2008. On a constant currency basis, money transfer fee and other revenue improved 3 percent. The difference between transaction growth and constant currency revenue growth is primarily related to lower average principal and lower average fee per transaction.
In the fourth quarter, money transfer transactions originating in the United States, which excludes transactions sent to Mexico, increased 7 percent. Transactions originating outside of the United States increased 13 percent from the prior year. The economic downturn in Spain continues to impact the Company’s non-U.S. transaction growth. Excluding Spain, transactions originating outside of the United States increased a healthy 20 percent from the prior year. MoneyGram’s fourth quarter transaction volume to Mexico decreased 13 percent.
Bill payment transaction volume declined 3 percent and fee and other revenue decreased 5 percent to $33.1 million in the fourth quarter of 2009 from $34.7 million in the fourth quarter of 2008. MoneyGram’s bill payment products continued to be impacted by the economic slow-down in the U.S., particularly in the auto and credit card sectors.
Financial Paper Products Segment Results
Financial Paper Products total revenue declined to $30.1 million in the fourth quarter of 2009 from $52.9 million in the fourth quarter of 2008. Total revenue in 2009 and 2008 reflect investment revenue of $5.7 million and $33.4 million, respectively. The segment reported operating income of $1.4 million in the fourth quarter of 2009, compared with $24.1 million in the fourth quarter of 2008.
Non-GAAP Measures
In addition to results presented in accordance with GAAP, this press release and related tables include certain non-GAAP financial measures, including a presentation of EBITDA (earnings before interest, taxes, depreciation and amortization, including agent signing bonus amortization) and Adjusted EBITDA (EBITDA adjusted for significant items). The following tables include a full reconciliation of these non-GAAP financial measures to the related GAAP financial measures.
We believe that EBITDA and Adjusted EBITDA provide useful information to investors because they are an indicator of the strength and performance of ongoing business operations, including our ability to service debt and fund capital expenditures, acquisitions and operations. These calculations are commonly used as a basis for investors, analysts and credit rating agencies to evaluate and compare the operating performance and value of companies within our industry. In addition, the Company’s debt agreements require compliance with financial measures based on EBITDA and Adjusted EBITDA. Finally, EBITDA and Adjusted EBITDA are financial measures used by management in reviewing results of operations, forecasting, assessing cash flow and capital, allocating resources and establishing employee incentive programs.
Although MoneyGram believes the above non-GAAP financial measures enhance investors’ understanding of its business and performance, these non-GAAP financial measures should not be considered an exclusive alternative to accompanying GAAP financial measures.
Conference Call
MoneyGram International will host a conference call today at 9:00 a.m. ET, 8:00 a.m. CT to discuss its fourth quarter and full-year 2009 results. Pamela H. Patsley, chairman and chief executive officer, will host the call. The conference call can be accessed by calling 1-877-548-7911 in the U.S. The participant confirmation number is 9618545. Slides are available on MoneyGram’s website at www.moneygram.com. A replay of the conference call will be available one hour after the call concludes through 5:00 p.m. ET on Feb. 11, 2010. The replay of the call is available at 1-888-203-1112 for U.S. callers or 1-719-457-0820 for international callers. The confirmation code is 9618545.
About MoneyGram International, Inc.
MoneyGram International, Inc. is a leading global payment services company. The Company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company with 190,000 global money transfer agent locations in 190 countries and territories. For more information, visit the Company's website at www.moneygram.com.
TSYS to Provide Payment Services to B+S Card Service and Its Merchant Clients
B+S Card Service is one of Europe’s leading acquirers and providers of card payment solutions having developed a presence in 12 European countries, and has been helping its merchant clients transact payments for more than 20 years. TSYS’ TS PrimeSM platform will be utilised, offering B+S Card Service a fully flexible, scaleable and enhanced cross-border merchant acquiring capability.
"As we continue to expand our presence across Europe, TSYS was selected as the right partner to assist us with further developing our innovative merchant acquiring capabilities,” said Michael Pip, Managing Director of B+S Card Service. “Through TSYS, we will be able to develop our existing business, expand into new markets and deliver the high-quality service that our customers expect.”
"By working with B+S Card Service, TSYS intends to be a leader in the European acquiring market,” said Bob Evans, group executive of TSYS International. “TSYS has a strong presence in the issuing market across Europe, and this further enhances our offering and expands our presence at a time when the European payments market is seeing great changes.”
The conversion is planned for Q1 2011 and will be supported from TSYS’ state-of-the-art European datacenter, based in the UK. TSYS will also support B+S Card Service with Risk and Fraud Detection and Information Management Solutions.
About TSYS
TSYS (NYSE: TSS) is one of the world’s largest companies for payment services, offering a broad range of issuer- and acquirer-processing technologies that support consumer-finance, credit, debit, debt management, healthcare, loyalty and prepaid services for financial institutions and retail companies in the Americas, EMEA and Asia-Pacific regions. For more information contact news@tsys.com or log on to www.tsys.com. TSYS routinely posts all important information on its website.
B+S Card Service
B+S Card Service is one of the leading providers of card payment solutions in Germany and has a strong presence across Europe. Its range of services includes acceptance agreements for the MasterCard, Visa, JCB and CUP credit card organisations as well as all debit cards such as ec cards, Maestro and V PAY. B+S is a one-stop shop for retailers and any companies and organisations that want to offer their customers the option of cashless payments, as it can provide access to network operation as well as the necessary terminals. B+S is an associated company of the Deutscher Sparkassenverlag in Stuttgart and is a member of the Sparkassen-Finanzgruppe. The company provides a wide range of services to facilitate card payments. B+S also offers a particularly innovative and advanced range of products in the field of e-commerce. B+S payment solutions are in use within Austria, Belgium, Italy, Luxembourg, Hungary and Slovenia as well as Switzerland, the Netherlands, Slovakia and the Czech Republic.
Over 97 Percent HPY with Visa Data Security Breach Settlement
PRINCETON, N.J. & SAN FRANCISCO--(BUSINESS WIRE)--Financial institutions representing more than 97 percent of eligible Visa-branded credit and debit cards have accepted the Alternative Recovery Offers they received pursuant to the settlement entered into by Visa Inc. (NYSE:V), Heartland Payment Systems® (NYSE: HPY) and Heartland’s sponsoring acquirers last month. This level of acceptance fulfills the 80 percent opt-in condition that was one of the requirements of the $60 million settlement. The settlement provides these issuers with a recovery from Heartland with respect to losses they may have incurred from the 2008 criminal breach of the payment processor’s payment system network.
To provide additional issuers an opportunity to work through the mechanics of the opt-in process and not be excluded from the benefits of the settlement, Visa, Heartland and Heartland’s sponsoring acquirers have agreed to renew the Alternative Recovery Offer to the non-accepting issuers. The renewed offers will remain open until 5:00 p.m. PST on Monday, February 8, 2010.
“Visa is pleased to bring this issue to a close for so many financial institutions,” said Ellen Richey, chief enterprise risk officer, Visa Inc. “Working with Heartland on this settlement to provide a certain recovery, prompt payment and a streamlined process resulted in an equitable and expedient resolution for all parties.”
Bob Carr, Heartland’s chairman and chief executive officer, concurred: “Reaching a fair settlement agreement that helps issuers of Visa-branded cards was a key priority for Heartland. Now, these issuers will be able to immediately obtain a recovery for their Visa-related claims.”
The settlement provides recovery for U.S. card issuers who chose to participate in the program and international issuers of accounts Visa considered to have been placed at risk of compromise. Once all remaining conditions of the settlement have been satisfied, Visa will be notifying participating U.S. issuers and international issuers with details about the payment process. For additional questions, issuers can contact their Visa account executive or Visa’s E-Support Team at eSupport@visa.com or 888.847.2488.
About Visa Inc.: Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks – VisaNet – that is capable of handling more than 10,000 transactions a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com.
About Heartland Payment Systems: Heartland Payment Systems, Inc. (NYSE: HPY), the 5th largest payments processor in the United States, delivers credit/debit/prepaid card processing, payroll, check management and payments solutions to more than 250,000 business locations nationwide. Heartland is the founding supporter of The Merchant Bill of Rights, a public advocacy initiative that educates merchants about fair credit and debit card processing practices. For more information, please visit HeartlandPaymentSystems.com, MerchantBillOfRights.com, CostOfABurger.com and E3secure.com.
MasterCard Reports Fourth-Quarter and Full-Year 2009 Financial Results
- Fourth-quarter net income of $294 million, or $2.24 per diluted share
- Includes after-tax severance charge of $0.19 per diluted share - Fourth-quarter net revenue growth of 6.0%, to $1.3 billion
- Fourth-quarter gross dollar volume up 5.3% and purchase volume up 5.7%
Net revenue for the fourth quarter of 2009 was $1.3 billion, a 6.0% increase versus the same period in 2008. Currency fluctuations (driven by the movement of the euro and the Brazilian real relative to the U.S. dollar) contributed 3.8 percentage points of the increase in net revenue for the quarter. The higher net revenue in the fourth quarter this year benefited from:
- Pricing changes of approximately 5 percentage points;
- An increase in cross-border volumes of 3.9%;
- A 6.7% increase in the number of transactions processed, to 5.9 billion; and
- Growth of 5.3% in MasterCard’s gross dollar volume, on a local currency basis, to $674 billion.
The net revenue growth was somewhat tempered by an increase in rebates and incentives primarily due to new and renewed customer agreements.
Worldwide purchase volume during the quarter rose 5.7% on a local currency basis, versus the fourth quarter of 2008, to $510 billion. As of December 31, 2009, the company’s customers had issued 966 million MasterCard cards, a decline of 1.3% over the cards issued at December 31, 2008.
“In 2009 we took important steps to maintain MasterCard's bottom-line growth, and as a result delivered another quarter and year of solid financial results,” said Robert W. Selander, MasterCard chief executive officer. “We remained focused on the needs of our customers, and continued to add value amid a challenging economic environment. For example, we recently announced a significant debit win in the U.S. with SunTrust and the first consumer inControl implementation with Barclaycard in the UK.”
Selander commented, “Throughout the year, we greatly improved our expense management and realigned our organization to capitalize on the most promising growth opportunities, from both a geographic and product development standpoint.
“In the fourth quarter, we saw encouraging signs with regard to key aspects of our business as cross-border volumes increased and processed transactions continued to grow. Overall, we are very pleased with our performance, and we look forward to building on that momentum as the global economic climate continues to improve,” concluded Selander.
There were no special items for the fourth quarter of 2009. The special item for the fourth quarter of 2008 represented a $6 million charge related to a litigation settlement.
Total operating expenses increased 9.8%, to $830 million, during the fourth quarter of 2009 compared to the same period in 2008, excluding special items. Currency fluctuations contributed 3.2 percentage points of the increase in expenses. The increase in total operating expenses was driven by:
- A 1.6% increase in general and administrative expenses versus the year-ago period, primarily resulting from increased personnel costs due to severance-related charges of $38 million in the fourth quarter of 2009, offset by a benefit from foreign exchange remeasurement. Currency fluctuations represented 2.3 percentage points of the increase. Excluding the impact of severance costs in both periods, general and administrative expenses declined 2.3% for the fourth quarter of 2009; and
- A 25.1% increase in advertising and marketing expenses versus the year-ago period, primarily related to incremental investments to support activities in priority countries. Currency fluctuations represented 5.4 percentage points of the increase.
Total other expense was $10 million in the fourth quarter of 2009 versus total other expense of $17 million in the fourth quarter of 2008. The decrease was primarily due to lower interest expense of $13 million related to litigation settlements versus the comparable period in 2008.
MasterCard's effective tax rate was 35.8% in the fourth quarter of 2009 versus 46.1% in the comparable period in 2008, excluding special items. The decrease was primarily due to a more favorable mix of earnings, a lower state tax rate and a lower provision for tax reserves in the fourth quarter of 2009.
Full-Year 2009 Results
For the year-ended December 31, 2009, MasterCard reported net income of $1.5 billion, or $11.19 per diluted share, excluding the impact of special items, and net income of $1.5 billion, or $11.16 per diluted share, including special items. The 2009 earnings per share figure includes an after-tax severance charge of $0.69 per diluted share, compared with $0.16 in 2008. The 2008 earnings per share figure includes after-tax gains from the sale of a portion of the company’s investment in Redecard S.A. of $0.43 per diluted share.
Special items for the full-year 2009 included charges of $7 million related to litigation settlements.
Special items for the full-year 2008 included:
- Charges of $2.5 billion related to several litigation settlements; and
- A $75 million gain in other income from the termination of a customer business agreement.
Excluding special items for both periods, total operating expenses decreased 6.9%, to $2.8 billion, for full-year 2009 compared to 2008, primarily due to reduced advertising and marketing expenses versus the year-ago period. Excluding the impact of severance costs in both periods, total operating expenses decreased 10.5%. Currency fluctuations of 1.4 percentage points also contributed to the decline. The decrease in total operating expenses was driven by:
- A 3.1% decrease in general and administrative expenses, primarily resulting from lower professional fees and travel and entertainment expenses; as well as a benefit from foreign exchange remeasurement, versus the comparable period in 2008. The decrease was partially offset by an increase in personnel costs, driven by severance charges. Excluding the impact of severance costs in both periods, general and administrative expenses declined 8.5 % for 2009. Currency fluctuations of 1.2 percentage points also contributed to the decline; and
- A 19.2% decline in advertising and marketing expenses versus full-year 2008 due to cost-containment activities in response to market realities. The impact of foreign currency fluctuations contributed approximately 1.6 percentage points to the decline.
Including special items, total operating expenses in 2009 decreased 48.6%, to $2.8 billion, versus 2008.
Excluding special items, the operating margin was 44.5% for full-year 2009, up 5.5 percentage points over the year-ago period. Including special items, the operating margin was 44.3% for the full-year 2009.
Total other expense was $42 million for full-year 2009 versus total other income of $76 million for the same period in 2008, excluding special items. Investment income decreased due to gains recorded in 2008 from the sale of the remaining Redecard securities. Interest expense increased $12 million versus the year-ago period, primarily due to interest accretion associated with a 2008 litigation settlement. Including special items, total other income was $151 million for full-year 2008.
MasterCard’s effective tax rate, excluding special items, was 34.1% for the full-year 2009, versus a rate of 38.8% for the full-year 2008. The decrease was primarily due to a lower deferred tax remeasurement and a decrease in tax reserves in 2009. Including the special items, the effective tax rate was 34.1% for 2009 and 33.7% for 2008.
Fourth-Quarter and Full-Year 2009 Financial Results Conference Call Details
At 9:00 a.m. ET today, the company will host a conference call to discuss its fourth-quarter and full-year 2009 financial results.
The dial-in information for this call is 888-396-2386 (within the U.S.) and 617-847-8712 (outside the U.S.) and the passcode is 89358445. A replay of the call will be available for one week thereafter. The replay can be accessed by dialing 888-286-8010 (within the U.S.) and 617-801-6888 (outside the U.S.) and using passcode 28360818.
The live call and the replay, along with supporting materials, can also be accessed through the Investor Relations section of the company’s website at www.mastercard.com.
About MasterCard Incorporated
MasterCard Incorporated advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 22 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.
Visa Posts Solid Fiscal First Quarter 2010 Earnings Results
San Francisco: Visa Inc. (NYSE: V) today announced financial results for the Company's fiscal first quarter 2010 ended December 31, 2009. GAAP net income for the quarter was $763 million, or $1.02 per diluted class A common share. The weighted average number of diluted class A common shares outstanding was 745 million.
GAAP net operating revenue in the fiscal first quarter of 2010 was $2.0 billion, an increase of 13% over the prior year and driven by strong contributions across all revenue categories, in particular data processing revenues and international transaction revenues.
"By all measures, Visa's fiscal first quarter was a strong start to the new year, as we continued to execute well against our business plan," said Joseph Saunders, Chairman and Chief Executive Officer, Visa Inc. "We were able to capitalize on the secular trend to digital currency and grow revenues, as we expanded our payments network and processing capabilities to drive transaction growth through effective marketing programs. Even in the midst of the current economic environment, we remain fully committed to assisting our clients through these challenging times and returning excess cash to our shareholders.
Read more on Visa Inc. Investor Web site.
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Media Contacts:Jack Carsky or Victoria Hyde-DunnInvestor Relations
+1 415 932 2213
ir@visa.com
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