Tuesday, December 30, 2008

Worst Holiday Since 1970...maybe 1929?

Worst holiday shopping season since "at least 1970"  
CNN Money reports that the recession, discounts and bad weather are to blame.
NEW YORK (Reuters) -- The U.S. holiday shopping season is the worst since at least 1970 due to the recession, heavy discounting and harsh winter weather just before Christmas, the International Council of Shopping Centers said Tuesday.
Sales at U.S. chain stores fell 1.8% in the week ending Dec. 27 compared with the previous year, while sales fell 1.5% compared with the prior week, according to the ICSC-Goldman Sachs Weekly Chain Store Sales index.

The ICSC expects holiday sales in November and December to fall 1.5% to 2%.

That would represent the first decline since the ICSC began tracking holiday sales in 1969...(so it could be the worst since '29?)

Related Stories at CNN Money

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Holiday Top 40 - Satisfied?

ForeSee Results - Holiday 2008 Top 40 Online Retail Satisfaction Index
Holiday 2008 Top 40
Online Retail Satisfaction Index

The Top 40 Online Retail Satisfaction Index assessed customer satisfaction with leading online retailers during the holiday shopping season, the most critical time of the year. 2008 was the fourth year in a row that ForeSee Results conducted this research, allowing for valuable insights on year-over-year performance by individual retailers.

Overview Commentary: This report ranks the Top 40 retailers in terms of how well they satisfy customers online and contains high-level insights into drivers of customer satisfaction during the critical holiday shopping season. Highlights include:

  • Amazon and Netflix top the list and are the only two online retailers to score above 70.
  • Only 10 websites improved satisfaction year-over-year, while more than 40% saw satisfaction decline.
  • More than a quarter of all websites scored 70 or lower, well below industry standards

To download the free report you'll need to fill out a form on ForeSee's website.  They also have a free report on the Top 30 online retailers in the UK available for download.  

To read more, the NY Times Blog has a story on it in today's publication. Click here to read "How E-Commerce Sites Stack Up" there.

Here's a snippet: 

Those that score 80 or greater are classified as excellent. Only Netflix and Amazon.com, which tied at 84, made the cut, which might help explain why Amazon.com recently reported its best holiday season ever during the worst holiday season for e-commerce as a whole. Close behind were QVC, the Apple Store, Barnes & Noble, L.L.Bean, Walmart.com and Newegg.com (which sells computer parts.)
Tying at 69, the lowest score in the group, were Circuit City, HSN, Overstock.com, (that's what happened) HomeDepot.com, Neiman Marcus and Gap...

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Consumers Don't Trust Mobile Security - Javelin Research

Javelin Strategy and Research » Consumers fear mobile banking security threats – study
Consumers fear mobile banking security threats – study

The Paypers- Another widespread opinion among consumers who chose not to sign up for mobile banking is the fact that since mobile transactions are not yet mainstream, mobile banking services providers cannot anticipate the type of attacks fraudsters could launch against users once mobile banking adoption rates climb. Despite inherent safety features such as real-time transaction alerts and transaction level validation, the research indicates that consumers overlook advantages and mainly fear security threats such as malware, which are not widespread or can be easily blocked in mobile devices.

Thus, 73 percent of consumers fear hackers can remotely access their phones, 68 percent of interviewees are concerned sensitive mobile banking data can be stolen using a wireless signal despite encryption, and 54 percent of consumers worry that their mobile phones can be stolen.

The same study points out that all the major US mobile banking platform vendors offer authentication tools which comply with the standards set out by the Federal Financial Institutions Examination Council (FFIEC), however 56 percent of them have not implemented strong authentication systems for their mobile banking platforms.

The study was conducted by financial services market research company Javelin Strategy & Research. Read Full Article

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E-payment Fraud up 11% Over 2007

E-payment fraud projected to hit $4 billion in 2008, up 11% over 2007

E-commerce fraud losses in the U.S. and Canada are expected to reach $4 billion in 2008, an 11% increase from $3.6 billion in 2007, according to CyberSource Corp's 10th annual survey of e-commerce fraud.

Chargebacks accounted for almost half of 2008 online payment fraud losses. The percentage of online revenue lost to fraud held steady from 2007 at 1.4% of online sales, the report says.

Merchants fight only about 50% of the fraud chargebacks they receive, with a third of merchants challenging less than 10%. Merchants that do challenge chargebacks recover, on average, 28% of that revenue, CyberSource says.

The consumer electronics category showed the highest 2008 fraud rate at 2%, nearly double the average among the eight industry segments measured. Merchants with online revenue of $5 million to $25 million faced the most fraud.

The annual survey also found that order-rejection rates tied to suspicion of fraud showed a significant drop to 2.9% of incoming orders, down from 4.2% in 2007. On average, 1.1% of accepted orders were fraudulent, CyberSource says. Merchants have made little progress in minimizing the time spent manually examining good orders, CyberSource says.

Merchants in 2008 accepted an average of 73% of orders they manually reviewed, roughly the same percentage as in 2007. About half of merchants accepted 90% or more of the orders they reviewed.

CyberSource surveyed 400 online merchants in the U.S. and Canada between Oct. 21 and Nov. 11.

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Only 1% of US Consumers Will Charge More

It looks like 2009 is going to be the "Year of the Debit Card."  According to a US Banker poll, only 1%  of U.S. Consumers are going to use their credit cards more this year.  In the wake of 3% growth in 2008, look for a decline in 2009.  Meanwhile, according to The Nilson Report, debit card usage grew at 13% in 2008.  Look for growth in prepaid and debit cards to surge in 2009...

New Poll Finds Only One Percent of U.S. Consumers Plan to Charge More - 01..2009 - U.S. Banker Article

U.S. credit cardholders are not in the mood to charge, according to national poll results recently released by Bankrate, Inc. The phone study was conducted from December 5 through December 7.

Just one percent of those surveyed plan to charge more in 2009, while 32 percent are likely to use their cards less frequently and 15 percent won’t be taking out the plastic at all. Forty percent of these consumers wouldn’t care if their credit lines were cancelled.

As far as credit availability goes, 41 percent of those polled reported that their credit lines were increased, while 44 percent said their lines were unchanged; only six percent experienced a decrease.

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Credit Line Cuts Could Backfire

Credit Line Cuts Could Boomerang - 12.29.2008 - American Banker Article

Credit line reductions, account repricing, and other steps that card issuers are taking to control risk could soon start causing their customers to do something many homeowners did this year: walk away from their obligations.

In the past month current and former industry executives and observers have raised concerns that prevalent risk management tactics may spur such behavior — even among customers who still have the capacity to pay.

For example, some observers said aggressive repricing could lead to a spike in "bust-outs" — when cardholders decide to run up as large a balance as possible before abandoning the account. In the past, bust-outs have typically been perpetrated by fraudsters who always planned to default, but they may soon become more common among regular consumers who obtained their cards in earnest, these observers said...

continue reading at American Banker
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Facebook Scraps Payments Initiative

According to "Inside Facebook"  the company has temporarily abandoned its initiative to launch a platform payment system which would enable retailers to conduct e-commerce transactions and accept payments directly inside their Facebook applications." 

Facebook announced the beta test version of a payments platform initiative in December 2007. It was originally billed as a means to allow Facebook users to carry out transactions and purchase virtual and physical goods and services without resorting to third party payment platforms such as Paypal.

Facebook Payments was also initially designed to act as a revenue generator for Facbook via payment processing commissions, and a means for the social networking website to gather consumer data to facilitate future direct transactions such as the purchase of Facebook’s virtual gift offerings.

However, one year after the initiative was made public, the payment system has not yet been developed and Facebook representatives have confirmed that no further developments are currently conducted regarding the project.

China Online Growth Continues

The Paypers. Insights in payments.

China's online transaction volume to reach EUR 9.4-9.9 billion in Q4 2008

In Q4 2008, the online transaction volume is expected to reach between EUR 9.4 and 9.9 billion in China.

In spite of the financial crisis, the online transaction volume is on an upward curve as a result of the expansion of payment channels and application fields and boosted by the launch of new online payment services. Alibaba's online payment services provider Alipay has made an online payment system available for utility payment, allowing Chinese internet users to pay online for water, electricity, town gas, and mobile phones. Tenpay and PayEase have had similar initiatives, the first teaming up with ten partners for the delivery of online payment services for air tickets. The total transaction volume of online shopping in China reached EUR 7.51 billion in Q3 2008. Data has been released by market research firm iResearch Consulting Group.

According to estimates for the full year of 2008, the volume of e-commerce transactions is to jump to EUR 27.2-28.3 billion.

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RBI to Allow Outward Remittances?

Sending money overseas instantly could soon become a reality with the Reserve Bank of India (RBI) considering proposals to allow non-banking
entities like online money transfer portals to undertake wire transfers for outward remittances from India. At the moment the facility is limited to inward remittances, while only banks are permitted to carry out outward remittance orders.

According to sources close to the development, the central bank has been approached by a number of players to enable outward remittance facilities on their money transfer channels. The banking regulator is in the process of working out the know-your-customer (KYC) norms that are to be followed while sending cash abroad via online payment web-portals.

The first half of the ongoing financial year has witnessed outward remittances to the tune of $ 431 million, marking a sharp rise compared to $440.5 million during the full financial year of 2007-08, according RBI data...

continue reading

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Debit Growth for 2008

Americans switch purchasing options

Americans are turning away from credit cards and "shifting" to debit card usage.

Debit card purchases...at the end of 2008...are forecast to climb by 13% for the year, according to an industry newsletter by The Nilson Report.

Credit card purchases are predicted to be up a mere 3%.

The numbers seem to indicate a strong "shift" away from credit as the economy tries to find its way out of recession.   Look for more disparity in 2009...

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