Credit cards direct mail stumbled 33% in the US last April, says Mintel

By Raphael Michilis
The volume of credit cards offered by post in the US has fallen 33% in April, according to data from market researcher Mintel.

American households received 260 million offers for new credit cards last April, 130 million lower the amount put forward in the same month of 2011, and the lowest estimated monthly mail volume tracked in the past 25 months.

“April marks a new low for the credit card direct mail decline that began in December 2011,” says Andrew Davidson, senior vice president at Mintel Comperemedia.

He predicted the annual volume of credit cards directly mailed in the US will also take a plunge.

“Credit card direct mail volume will be significantly lower in 2012 than 2011,” he said without risking an exact figure.

Despite the numbers, Davison has a somewhat optimistic position and said the downturn is not a sign of a long term trend, just a “temporary hiatus” in the activity, and other advertising modalities are supporting this “traditional channel”, rather than replacing it.

The fall is result of a “more cautious approach” adopted by the issuers due to an uncertain economic atmosphere, said Davison.

He explained that credit card direct mail is cyclical, and it will return to its normal volume levels along with the regain economic confidence in the US.

“For credit card issuers this is a great time to be in the mail. The mailbox is less cluttered and it is easier to get consumers to notice your message,” suggested Davison.

Reserve Bank of Australia to stop credit card surcharges

By Raphael Michilis
The era of abusive credit cards fees in Australian retailers might soon come to an end, as the Reserve Bank of Australia announced today that merchants will be forbidden to profit from credit card fees.

The new rules set by RBA’s Payment System Board determines that , from 1st January 2013, Australian retailers will be allowed to only charge customers fees enough to cover their expenses with the card transaction.

"The bank believes that there is sufficient evidence to suggest that such practices [credit card surcharges] are now relatively widespread and that the use of the freedoms provided to merchants by the (previous) surcharging reforms is (sic) no longer entirely in line with the original intent of the reforms," said RBA in an official statement.

The new regulation will also allow card providers such as Visa and MasterCard to take action against businesses who charge excessive fees.

"The Bank intends that its variation will improve price signals by enabling a card scheme to address cases where merchants are clearly surcharging at a higher level than is justified for acceptance of its card products."

The Reserve Bank of Australia has also commenced a re-evaluation of the system governing EFTPOS (electronic debit card) transactions and said a new regulation might come into force by January 2014.


Related article:


Reserve Bank of Australia to lead mobile payments

Housewives fight legislation that stops them from having a credit card

By Raphael Michilis

A group of discontent housewives started an online petition to fight the Credit CARD Act of 2009.

The group complains that the regulation prevents them from getting a credit card without her husband’s permission as they do not have proof of income.

“This is despite the fact that I make 95% of our household purchases, have an impeccable credit score and handle the majority of my family’s finances,” complains Holly McCall, author of the petition hosted at www.change.org.

“The new rules send a message that stay-at-home parents are not as credit-worthy as young adults still in school without their own income.” reads the petition about the .

The petition initiated in partnership with the online mother’s group momsrising.com appeals for the Consumer Financial Protection Bureau (CFPB) to fix the stay-at-home moms credit problem.

Meant to curb irresponsible lending and misleading credit card practices, the law denies credit to stay-at-home moms who say the Act sets women back half a century. "It is demeaning," said Holly McCall.


"This doesn't just affect stay-at-home mothers. What about the stay-at-home fathers whose wives work instead of them? And don't tell me that doesn't happen. It does. The longer this law stays unchanged the more people that are going to get hurt," protested Christian Ramage, who signed the online petition.

The Credit Union Times (CUT) newspaper reported on May 18 that Richard Cordray Director of the CFPB met McCall and received from her the petition, that - according to its profile at change.org - has reached 34,795 online signatures to date.

"As we've said previously, we are working to understand how the rule may be affecting stay-at-home spouses," said a CFPB spokesperson to the Huffington Post.

Cordray discussed the matter with Holly McCall and promised to come up with a response to her petition within 30 days from their meeting.

Americans want mobile app to redeem credit card rewards while on summer holidays

Raphael Michilis
Mobile phones and tablets will be American travellers’ best friend this summer, says the financial corporation Capital One, in the Rewards Barometer research, conducted by BIGinsight.
 
The study heard more than thousand American credit cards rewards holder, who said they will use their mobile devices to find local hot spot coupons or redeem their rewards point for last minute travel deals.
 
More than 30% of respondents confirmed they use their cell phones or tablets to find restaurants, petrol stations, coupons and deals while away on holidays.
 
Before departing for their summer destination, 22% also use their mobile to program their holidays, researching for hotels and places to see, while 14% book their trip from their mobile device.
 
Some of them would also like to have a mobile application to redeem their rewards, 58% would not only to reserve, but pay for their hotels using rewards redeemed through their devices.
 
Nearly half of them (49%) would like to do the same to buy their airplane tickets.

Half of Americans plan to use rewards credit cards to pay for summer holidays

By Raphael Michilis
At least 67% of rewards credit card holders in the US plan to travel this summer, and half of them said they will use their cards to cover part of their trip expenses, according to the Rewards Barometer, a research conducted quarterly by BIGinsight for the financial corporation Capital One.
 
The 2011 edition of the research had found out 42% of respondents said they would use rewards cards to pay for their vacation expenses, 8 percentage points below this years’ result.
 
The majority of rewards card holders (54%) plan to spend between $500 and $2000 in their summer holidays this year.
 
For other 18% of respondents, the 2012 summer getaway budget will from $2,001 to U$3,000. 
 
The study also found out that almost two-thirds of the American reaward card holders do not plan to go away on popular summer holiday weekends such as Memorial Day, July 4th and Labour Day. 
 
Redemption
 
The Rewards Barometer also investigated how Americans plan to redeem their points, and found out that 58% of summer travellers will buy plane tickets with their credit card rewards. 
 
The second most popular redemption option is hotel expenses, with 42% of respondents likely to deduct it from their rewards, followed by fuel 18%. 
 
"Flexible rewards programs that allow cardholders to redeem their rewards when and how they want can make that vacation dream an affordable reality. When choosing a new rewards program, consumers should consider both the value of rewards and the ease of using them," advises Amy Lenander, Vice President of Rewards Programs at Capital One.

Sentient Group raises USD 1.3bn and a slice of the funding can go to the Amazon

Hermasa Port, Itacoatiara - Amazon Basin in Brazil

by Raphael Michilis

The Sentient Group, a venture company based in the Cayman Islands, hinted it might fortify its investments in the Amazon basin near Manaus, Brazil.

The capital would be a slice from the USD 1.3bn the company has recently raised in its fourth private equity funding.

“The Fund’s objective is to invest in mine development opportunities globally. As the Fund’s mandate is global, we will look at opportunities in Brazil alongside of any other jurisdiction,” Nicholas Mead, Sentient Partner for Investors Relations, told Money World.

Since 2009, Sentient invests in the private company Brazil Potash Corporation (PBC), who is the chief holder of mineral rights of a major potash district, 400km long.

Sentient did not confirm it already has any plans in place for the potash exploration in the Brazilian Amazon. However, “Brazil Potash Corp. expects to develop its extensive property in the State of Amazonas, Brazil, into one of the world’s largest strategic, scalable and reliable sources of potash,” says the company website.

The potash is mainly used in the production of potassium based fertilizers. The potash deposits explored by PBC are located near major markets and on established shipping routes and ports, that make the area more attractive for the Sentient investments.

In its investment portfolio, Sentient lists iron ore mining Ferrous Resources, also Brazilian, as well as companies from Australia, China, and the neighbour Argentina.

Archive - Plastiq raises USD 2.35m in angel funding

By Raphael Michilis
15 May 2012
The American card processing start-up Plastiq has raised $ 2.35m in its first angel funding all-equity round.

The investment comes from capital firms Atlas Venture and Flybridge Capital Partners, according to a notice filed at the US Securities and Exchange Commission on 11 May.

The two venture companies regularly invest in technology innovation start-ups.

Plastiq intermediates online credit card payment of “large” and “luxurious” purchases - such as cars, boats, rent, and real estate - aimed at high end credit card holders of Discover, MasterCard World Elite card, the VISA infinite, or the AMEX platinum, says the Plastiq website.

Plastiq president, Eliot Buchanan, said the company targets “transactions in the $ 5,000 to $ 10,000 range,” reports an article on Mass High Tech (MHT) website.

Buchanan said Plastic “have upped the headcount to 10 employees, and by the end of the year, they hope to be at around 25,” reads MHT article without specifying how Plastiq will apply the capital raised in the seed funding.

Besides presiding Plastiq, Eliot Buchanan is also a MasterCard employee since February 2011.