Tuesday, December 28, 2010

Discover Small Business Watch: Small Biz Confidence Falls after 3 Month Rise


Discover® Small Business WatchSM: 
Small Business Economic Confidence Falls in December after 3-Month Rise

Survey Shows Decline in Small Business Owners Who Think the Economy is Getting Better
FINANCIAL PLANNING: Economic Downturn Affects Small Business Retirement Plans
RIVERWOODS, Ill.--(BUSINESS WIRE)--Three months of rising confidence among small business owners stalled in December, as fewer see economy getting better and more see it getting worse, according to the Discover® Small Business WatchSM. The monthly index dropped to 81.6 in December, down 5.6 points from November. The index remains 4.6 points higher than one year ago.
http://www.discoverfinancial.com
“Do you plan to retire before age 60, between ages 60 and 65, between 65 and 70 or do you plan to retire after age 70?”
Twenty-five percent of small business owners said the economy is getting better this month, down from 33 percent in November; 51 percent said it is getting worse, up from 46 percent; and 22 percent said the economy is staying the same, up from 17 percent the prior month.
“Through the four years we’ve been studying them, small business owners have remained a bit fickle when it comes to their confidence in the economy,” said Ryan Scully, director of Discover’s business card. “Like the rest of us, they’re seeing some positive signs, but they aren’t ready to declare victory, especially not with 62 percent of them still rating the economy as poor.”
Other Confidence Indicators
  • 25 percent of small business owners expect economic conditions for their businesses to improve in the first half of 2011, a drop from 28 percent a month ago; 26 percent expect conditions to remain the same, up from 24 percent; and 43 percent expect conditions to worsen, down from 44 percent in November.
  • 21 percent of small business owners will increase spending on business development in the next 6 months, down from 25 percent in November. 42 percent will decrease business development spending, up from 40 percent; and 32 percent do not plan any changes, up from 28 percent last month.
  • 62 percent rate the current economy as poor, up from 59 percent in November; 30 percent rate the economy fair; 5 percent rate it good; and 3 percent rate it excellent.
  • 45 percent have encountered temporary cash flow issues within the last 90 days that have caused them to hold off on paying some bills, up from 43 percent in November, while 49 percent have not had cash flow issues; and 6 percent were not sure.
Financial Planning Poll: Retirement Planning Slows
The number of small business owners who have a financial plan for retirement is down from a year earlier, when the Watch first surveyed small business owners on the topic. This year, 50 percent of small business owners said they have a financial plan for their retirement, down from 62 percent in 2009.
At the same time, the recession has depleted the savings of 74 percent of small business owners, the same number as last year, while 20 percent said the recession had no impact, and 5 percent saw their retirement savings increase.
When asked how much their retirement savings they had lost, fewer small business owners than last year reported that they had lost between 30 and 50 percent of their savings.
 
Asked of those small business owners who said their retirement savings had decreased:
How much did the recession decrease your retirement savings?
  2009 2010
A decrease of up to 10 percent 12% 17%
A decrease of 10 to 20 percent 24% 17%
A decrease of 20 to 30 percent 17% 24%
A decrease of 30 to 50 percent 24% 18%
A decrease of more than 50 percent 19% 20%
Not sure 5% 5%
  
When asked how likely is it that they will have enough resources to last through retirement, 56 percent indicated it was somewhat or very likely, down 63 percent from last year.
 
How likely is it that you will have enough resources to last through your retirement?
  2009 2010
Very likely 24% 24%
Somewhat likely 39% 32%
Not very likely 25% 24%
Not at all likely 7% 11%
Not sure 4% 9%
  
Fewer Planning to Retire
More small business owners are putting the brakes on retirement. When asked if they plan to retire by a certain age, 38 percent of small business owners said they do not plan to retire, up from 30 percent a year ago.
 
When asked “Do you plan to retire before age 60, between ages 60 and 65, between 65 and 70 or do you plan to retire after age 70?” US small business owners say they:
  2009 2010
Do not plan to retire 30% 38%
Plan to retire before age 60 13% 14%
Plan to retire between ages 60 and 65 28% 21%
Plan to retire between ages 65 and 70 18% 19%
Plan to retire after age 70 9% 8%
Not sure 3% 1%
  
About the Small Business Watch
The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who have less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 750 small business owners. It is commissioned by Discover Business card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of five consistent questions. The base value of the Watch was established at 100.0 based on surveys conducted in August 2006. In addition to generating the index, the Small Business Watch surveys small business owners every month on key issues, and polls 3,000 consumers four times per year to gauge purchasing behavior and attitudes towards small businesses. For past results and survey data, visit www.discovercard.com/business/watch. For information on Discover Business card, visit www.discovercard.com/business.
About Discover
Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discoverfinancial.com.
The views and opinions expressed by small business owners and consumers who participate in the Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial Services or its affiliates.

Contacts

Discover Financial Services
Jon Drummond
224-405-1888
jondrummond@discover.com
or
Burson-Marsteller
Jessica Douglas
312-596-3441
jessica.douglas@bm.com
Permalink: http://www.businesswire.com/news/home/20101227005079/en/Discover%C2%AE-Small-Business-WatchSM-Small-Business-Economic





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PayPal Grows in Volume and Independence, says Auriemma Consulting Group


NEW YORK--(BUSINESS WIRE)--PayPal, once seen as a niche product primarily for eBay transactions, has achieved mainstream status for American consumers. According to a new survey conducted by Cardbeat®, conducted by Auriemma Consulting Group (ACG), more than three-quarters (76%) of American consumers have an active PayPal account, up sharply from 55% in their 2008 survey.
“but it’s striking to find that 69% of respondents 45 and older said they have an active PayPal account. Many of our respondents say they feel more comfortable using PayPal rather than their credit cards for online shopping.”
“PayPal has long been popular with young consumers,” noted Patricia Sahm, Managing Director at ACG, “but it’s striking to find that 69% of respondents 45 and older said they have an active PayPal account. Many of our respondents say they feel more comfortable using PayPal rather than their credit cards for online shopping.” The Cardbeat survey also found significant gains in frequency of PayPal usage, rising from an average of 10.8 purchases a year in 2008 to 14.0 annual purchases in the most recent study.
Although PayPal still accounts for less than 10% of total online sales volume, the seemingly inexorable growth of ecommerce drives more and more dollars to the payment service. While final volume counts await the end of the holiday shopping season, PayPal reported a 27% increase over 2009 in Black Friday online payments.
And those millions of PayPal accounts are increasingly bypassing the credit card networks altogether. “We’re seeing substantial gains in consumer willingness to provide their bank account information to PayPal,” Sahm said. In 2008 45% of survey respondents said that they were “uncomfortable””with the idea of providing bank account information to an internet-based payment company like PayPal; in the most recent 2010 study that percentage had fallen to 31%. “Where Visa and MasterCard formerly had a complementary relationship with PayPal when consumers used their credit cards to fund their PayPal account, the credit card networks are cut out of the exchange when PayPal is positioned like a debit card linked directly to the checking account.”
About Auriemma Consulting Group
Auriemma Consulting Group (ACG) is a full-service management consulting firm serving the payments and lending industries since 1984. Cardbeat is ACG’s syndicated market research study of credit card holders, conducted monthly in the U.S. and quarterly in the U.K. With offices in New York and London, ACG consultants are experienced practitioners, drawn from the credit card, private label, auto finance, mortgage, and retail banking industries that we serve. For more information, contact Pat Sahm at 212-323-7000 or patricia.sahm@acg.net.

Contacts

Auriemma Consulting Group
Pat Sahm, 212-323-7000
patricia.sahm@acg.net
Permalink: http://www.businesswire.com/news/home/20101227005084/en/PayPal-Grows-Volume-Independence-Auriemma-Consulting-Group





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Monday, December 20, 2010

Frank Puts in His 2 Cents...Says 12 cents Won't Cover It...


* Says it is unlikely to help consumers 
By Dave Clarke
WASHINGTON, Dec 17 (Reuters) - The Federal Reserve's proposal to limit debit card fees would not allow card companies to cover the full cost of transactions, U.S. House Financial Services Chairman Barney Frank said in an interview on CNBC. The proposal released on Thursday would generally limit debit "interchange" fees at 12 cents per transaction. The average interchange fee for all debit transactions was 44 cents in 2009, the Fed said.
"I think the way it was written, the amount the credit card companies are allowed to charge is too low," said Frank. "It does not reflect the full cost of all that you have to do if you are running a credit card operation."



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Value of Credit and Debit Card Transactions Fall for 12th Straight Month in November


Value of credit, debit cards transactions fall again

Published 1:11 PM, 20 Dec 2010
QUICK SUMMARY | FULL STORY
By a staff reporter
The value of credit and debit card transactions dropped for the 12th straight month in November, but retail broker CommSec says there's light at the end of the tunnel for retailers.
The Commonwealth Bank Business Sales Indicator (BSI) - which tracks transaction processed through the bank's merchant facilities, including spending on airlines, automobile and personal services - was down 0.1 per cent in trend terms.
But only six of the 20 industries recorded weaker sales, CommSec said, adding that excluding utilities, the BSI lifted 0.7 per cent in trend terms, which is the best reading in 15 months.
Retail fared particularly well, up 0.9 per cent which is its strongest growth rate in 14 months, CommSec said. Clothing also recorded 0.4 per cent trend growth, their best reading in 19 months.
"While down again in November, the size of the declines has consistently narrowed over the past six months," chief economist Craig James said in a statement.



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One-Third of Small Business Owners Use Smart Phones says Discover


Discover Finds One-Third of Small Business Owners Use Smart Phones

http://www.discoverfinancial.comMany Wish for More Mobile Applications to Help Them Run Their Businesses
RIVERWOODS, Ill.--(BUSINESS WIRE)--A third of America’s small business owners are using smart phones these days, and most of them are putting the devices to work for business needs beyond e-mail and phone calls, according to a recent survey from Discover.
“Small business owners are clearly paying attention to mobile-driven consumer trends, and are looking for ways to adapt”
And while they may not be using smart phones themselves in great numbers, 19 percent of small business owners have taken or are currently taking actions to make it easier for mobile users to access their businesses.
“Small business owners are clearly paying attention to mobile-driven consumer trends, and are looking for ways to adapt,” said Ryan Scully, director of Discover’s business credit card, who has been commissioning monthly surveys of American small business owners for over four years. “Being flexible and adaptable to a changing economy has helped small business owners succeed through the years, and I wouldn’t be surprised to see new entrepreneurs push the limits when it comes to mobility.”
Thirty-four percent of small business owners indicated they use a smart phone device, compared to 26 percent of 3,000 consumers questioned in the survey. Among the business owners who use their smart phones for more than e-mail and phone calls, 33 percent of them said they use the devices “very much,” 41 percent said they use it “somewhat,” 21 percent said “not much,” and only 3 percent said “not at all.”
No Dominant Age Group Using Smart Phones
Age wasn’t a huge differentiator in smart phone usage among small business owners, with more people in their 30s using them than in other age groups. The following list shows the percentage of people in a designated age group that use smart phones:
   18-29  35 percent
30-3944 percent
40-4936 percent
50-6427 percent
65+16 percent
Forty-four percent of smart phone users said they wished there were better mobile applications available to small business owners, while 20 percent weren’t sure and 35 percent expressed no desire for more applications.
The survey indicated that younger small business owners are much more likely to use their devices for conducting business: 100 percent of small business owners ages 18 to 29 use their devices “somewhat” or “very much” for business, beyond phone calls and e-mail.
When it comes to holiday gift-giving, only 3 percent of small business owners said they planned to buy or expect to receive a smart phone this season.
The views and opinions expressed by small business owners and consumers who participate in the Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial Services or its affiliates.
About the Small Business Watch
The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who have less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 750 small business owners. It is commissioned by Discover Business card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC (www.rasmussenreports.com), an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of five consistent questions. The base value of the Watch was established at 100.0 based on surveys conducted in August 2006. In addition to generating the index, the Small Business Watch surveys small business owners every month on key issues, and polls 3,000 consumers four times per year to gauge purchasing behavior and attitudes towards small businesses. For past results and survey data, visit www.discovercard.com/business/watch. For information on Discover Business card, visit www.discovercard.com/business.
About Discover
Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discoverfinancial.com.
 
Smart Phone Usage Among Small Business Owners
Survey conducted Nov. 13-14, 2010, by Rasmussen Reports, LLC, for Discover
      
Age Group
18-29   30-39   40-49   50-64   65+
Do you use a smart phone?   Yes34%35%   44%   36%   27%   16%
No62%59%52%60%69%77%
Not sure4%5%4%4%4%7%
 
18-2930-3940-4950-6465+
If “No,” do you plan to purchase or
expect to receive one during this
holiday season?
Yes
3%0%0%10%4%2%
No92%94%94%85%93%91%
Not sure5%6%6%4%4%7%
 
18-2930-3940-4950-6465+
If “Yes,” how much do you use it
for your business BEYOND
phone calls and email?
Very much33%32%38%41%22%41%
Somewhat41%68%35%29%41%27%
Not much21%0%23%25%31%23%
Not at all3%0%4%5%4%8%
Not sure1%0%0%0%3%0%
 
18-2930-3940-4950-6465+
If “Yes,” do you wish there were
better mobile apps available to
small business owners?
Yes44%25%52%49%44%45%
No35%59%27%27%34%46%
Not sure20%16%21%23%22%9%
 
18-2930-3940-4950-6465+
Have you taken, or are you currently
taking, actions to make it easier for mobile
users to access your business?
Yes19%27%21%19%15%8%
No73%59%76%72%76%80%
Not sure8%14%3%10%9%12%

Contacts

Discover Financial Services
Jon Drummond, 224-405-1888
jondrummond@discover.com
or
Burson-Marsteller
Jessica Douglas, 312-596-3441
jessica.douglas@bm.com
Permalink: http://www.businesswire.com/news/home/20101220005239/en/Discover-Finds-One-Third-Small-Business-Owners-Smart



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MasterCard Worldwide and PerkStreet Financial Partner to Offer Innovative Financial Solutions to MasterCard Cardholders

MasterCardImage via Wikipedia

PerkStreet to convert debit card program to MasterCard early next year

WILMINGTON, Del. & PURCHASE, N.Y.--(BUSINESS WIRE)--PerkStreet Financial, the progressive online financial services company, and MasterCard Worldwide, today announced an exclusive partnership to offer innovative financial products to MasterCard cardholders as part of PerkStreet’s checking account rewards program. As part of the agreement, PerkStreet will convert its debit card program to MasterCard early next year.
“PerkStreet’s rapid growth is proof that now, more than ever, consumers are looking for cutting edge payments products that make their lives easier and reward them for their loyalty,” said John Ainsworth, Group Head, U.S. Markets, MasterCard Worldwide. “Our partnership with PerkStreet provides MasterCard cardholders with both, while encouraging a responsible approach to spending.”“We chose MasterCard as our exclusive card partner because of our companies’ shared commitment to innovation and helping consumers get more from their financial relationships,” said Dan O’Malley, Chief Executive Officer of PerkStreet Financial. “With MasterCard, we’re excited to be able to provide even more value to our account holders through enhanced debit rewards, security and worldwide card acceptance.”
In addition to benefiting from PerkStreet’s unique cash rewards program, PerkStreet debit account holders will now also have access to thousands of merchant offers and exclusive discounts through MasterCard Marketplace simply by having a MasterCard. The MasterCard debit product platform also includes enhanced benefits such as Purchase Protection, Extended Warranty and Satisfaction Guaranty to give PerkStreet customers greater peace of mind when using their debit card.
About PerkStreet Financial
PerkStreet Financial is the progressive online financial services company that offers the most valuable online rewards checking account in the U.S. PerkStreet sets itself apart from other online bank accounts by taking the $80 billion that the big branch banks spend on building and maintaining branches every year and passing that savings on to its customers in the form of better rewards. PerkStreet offers the most fully featured checking account in the U.S., a checking account with the most rewards and access to the largest network of FREE ATMs in the country. For more information about PerkStreet Financial, visit http://www.perkstreet.com/. Banking services are provided by The Bancorp Bank. Member FDIC.
About MasterCard Worldwide
As a leading global payments company, MasterCard Worldwide prides itself on being at the heart of commerce, helping to make life easier and more efficient for everyone, everywhere. MasterCard serves as a franchisor, processor and advisor to the payments industry, and makes commerce happen by providing a critical economic link among financial institutions, governments, businesses, merchants, and cardholders worldwide. In 2009, $2.5 trillion in gross dollar volume was generated on its products by consumers around the world. Powered by the MasterCard Worldwide Network – the fastest payment processing network in the world – MasterCard processes over 22 billion transactions each year, has the capacity to handle 140 million transactions per hour, with an average network response time of 140 milliseconds and with 99.99 percent reliability. MasterCard advances global commerce through its family of brands, including MasterCard®, Maestro®, and Cirrus®; its suite of core products such as credit, debit, and prepaid; and its innovative platforms and functionalities, such as MasterCard PayPass™ and MasterCard inControl™. MasterCard serves consumers, governments, and businesses in more than 210 countries and territories. For more information, please visit us at www.mastercard.com. Follow us on Twitter: @mastercardnews.

Contacts

PerkStreet Financial
Kyle Psaty, 646-326-1144
kyle.psaty@perkstreet.com
or
MasterCard Worldwide
Dwain Schenck, 914-249-4199
dwain_schenck@mastercard.com
Permalink: http://www.businesswire.com/news/home/20101220005256/en/MasterCard-Worldwide-PerkStreet-Financial-Partner-Offer-Innovative



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