Credit Card Gist

MasterCard’s profit jumped by almost a third in the second quarter, the second-biggest credit card payment network reported in a regulatory filing on Tuesday. Although it beat most analysts’ expectations, MasterCard’s profit lagged that of bigger rival Visa’s 38 percent increase, reported earlier this week.

MasterCard’s income was $458 million, or $3.49 per share, up from $349 million, or $2.67 per share, a year ago. The number of transactions processed by the company remained virtually unchanged at 5.6 billion, however cross-border transactions grew by 15.2 percent.

Internationally, the Purchase, N.Y.-based payments processor’s volume grew by 8 percent, while in the U.S. the growth was less than 1 percent. Worldwide, there were more than 1.6 billion MasterCard and Maestro credit and debit cards in use.

MasterCard’s revenue was $1.37 billion, up 7 percent from $1.28 billion a year ago. The company said the increase was due to the higher cross-border volumes, higher gross dollar volume of processed transactions and the impact of pricing changes of approximately 4 percentage points.

Operating expenses fell by 10 percent to $648 million, as a result of layoffs in 2009.

(Via MarketWatch.com)

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Visa Inc., the world’s biggest credit card network, reported on Wednesday a decline in its third-quarter net income, yet it exceeded most Wall Street estimates for a 10th straight quarter as consumer card spending continued its upward trend.

Net income for the three months ended June 30 was $716 million, or 97 cents per Class A common share, compared with $729 million, or 96 cents per share, in the same period a year earlier, the company said. Analysts expected Visa to make 93 cents a share on average.

Visa’s net operating revenue was $2 billion in the third quarter, an increase of 23 percent from the same period a year ago, according to the company.

The San Francisco-based company said it processed 11.7 billion transactions in the three months ended June 30, up 14 percent from last year.

(Via YouTube.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

American Express tripled its income in the second quarter, the biggest U.S. credit card issuer by volume reported in a regulatory filing Thursday. AmEx said its second-quarter net income was $1.02 billion, or 84 cents a share, up from $337 million, or 9 cents a share, in the same period a year ago.

Cardholders increased spending by 16 percent in the quarter, to $175.3 billion. The average spending was $3,288 per account, up 21 percent from a year ago. AmEx set aside $652 million for future loan losses, down 59 percent from the $1.6 billion loss provision a year ago.

American Express had the lowest delinquency rate among the six biggest U.S. credit card issuers in June. Payments late by 30 days or more fell to 2.7 percent of outstanding balances.

The issuer’s charge-offs – loans it does not expect to be repaid – fell to 5.7 percent in June to their lowest level since the economic crisis began. Just a year ago AmEx’s charge-off rate stood at 10 percent. Charge-offs are typically written off as a loos at 180 days after the latest payment on the account.

Unlike Visa and MasterCard issuers, American Express will not be affected from the legislation regulating interchange fees for debit card transactions, because it doesn’t issue debit cards or process debit transactions.

(Via Google.com)

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Capital One reported its net income in the second quarter was $608 million, or $1.33 per share, versus a net loss of $277 million, or $0.66 per share, a year ago. The bank’s quarterly revenue was $3.9 billion, up 25 percent from the $3.12 billion a year ago, but down 9 percent from the previous quarter.

Capital One’s net U.S. charge-offs – loans the lender does not expect to be repaid – fell to 9.28 percent on an annualized basis in June, down from 9.48 in May. Payments delinquent by 30 days or more accounted for 4.79 percent of total balances, according to the bank’s regulatory filing.

The bank’s net interest income was $3.1 billion, up from $2.95 billion in the same period a year ago. However, it was down from $3.23 billion in the first quarter of the year.

(Via YouTube.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Chase reported declines in June in the levels of both its charge-offs and late payments in its monthly filing with the U.S. Securities and Exchange Commission Thursday. Charge-offs are loans issuers do not expect to collect and write off their books as losses, typically 180 days after the latest payment on the account. The falls come despite persistently high unemployment figures and anemic economic recovery.

Chase’s charge-off rate fell to 8.32 percent of total balances in June, down more than one percent from 9.35 percent in May.

Chase’s 30-day delinquency rate, measuring the proportion of accounts with payments late by 30 days or more, dipped more modestly – to 4.3 percent in June from 4.38 percent in May, marking the sixth straight monthly drop and the lowest point of the year.

The credit card industry appears to have turned a corner, after writing off billions of dollars in the aftermath of the financial meltdown. By the first quarter of this year, the charge-off rate was just short of 10 percent, compared with 3.8 percent in the second quarter of 2007, before the recession started.

(Via Google.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).