Digital Transactions Authoritative, insightful and timely information for payments professionals
Some of the biggest payments companies and debit card issuers this week reported their latest volumes and related data along with their fourth-quarter financials.
• American Express Co. late Thursday reported that U.S. card-billed business grew 7% to $155.5 billion from $145.5 billion in 2011’s last quarter. International volume increased 9% to $80 billion, bringing the total to $235.5 billion, up 8% from $219 billion at the end of 2011. Discount revenue increased 6% to $648 million from $612 million a year earlier. AmEx said its average worldwide discount rate was 2.49%, down 2 basis points from 2.51% in the year-earlier quarter.
Despite the strong charge volume and a 5% increase in net revenues to $8.14 billion, AmEx’s fourth-quarter profit plunged 47% to $637 million from $1.19 billion a year earlier. AmEx set aside more reserves to cover credit card loan losses. On Jan. 10, the company said it would lay off 5,400 employees, some 8.5% of its work force, and take a $400 million pre-tax restructuring charge mainly due to pressures on its travel business caused by more travelers using the Internet. The company also reported $495 million in expenses related to changes in its Membership Rewards program and for reimbursing cardholders on transactions challenged by regulators.
• JPMorgan Chase & Co.’s Chase Paymentech merchant-acquiring subsidiary processed $178.6 billion in charge volume in the fourth quarter, up 17% from $152.6 billion the prior year. The transaction count jumped 21% to 8.2 billion versus 6.8 billion a year earlier. Chase Paymentech processes the volume generated by Square Inc., the fast-growing mobile-payments company, and it is now the acquirer, through Square, for Starbucks Corp. A Chase spokesperson declined to discuss how Square influenced Chase Paymentech’s results.
For all of 2012, Chase Paymentech processed $655.2 billion in charge volume, up 18% from $553.7 billion in 2011. Transactions increased 21% to 29.5 billion from 2011’s 24.4 billion.
• Bank of America Corp., the nation’s leading debit card issuer, reported $66.2 billion in fourth-quarter debit card volume, up 3.9% from $63.7 billion in 2011’s last quarter. For the full year, BofA debit customers charged $258.4 billion, an increase of 3.1% from 2011’s $250.5 billion.
Chase and BofA are running nearly neck-and-neck in mobile banking. Chase, which has heavily promoted its mobile remote deposit capture service, reported 12.4 billion active mobile-banking customers, up 51% from the end of 2011. BofA said it had 12 million mobile-banking customers as of Dec. 31, an increase of 31% from a year earlier.
• U.S. Bancorp, whose Elavon subsidiary is one of the nation’s top acquirers, reported $354 million in merchant-processing revenues for the fourth quarter, down 6.3% from $378 million a year earlier because of lower rates despite higher volumes, and the reversal in 2011’s fourth quarter of an accrual for a terminated revenue-sharing agreement.
