IMGCAP(1)]
First Data Corp. experienced a decline in general retailer transactions processed on its network in October versus September, Michael D. Capellas, First Data CEO, told analysts today during a conference call this morning. Same-store transactions decreased by 2% in October compared with a flat growth rate in September from August, he says. Third-quarter 2008 domestic merchant transaction count increased 9% to 7.1 billion to 6.5 billion a year ago. Domestic debit issuer transactions grew 3% in the third quarter of 2008 to 3.1 billion from 3 billion in the 2007 third quarter. International transactions saw the largest growth, hitting 1.6 billion transactions, up 21% from the 1.3 billion in the 2007 third quarter. Capellas said he expects global transaction growth to be more modest during the fourth quarter than in previous quarters, and transaction volumes to continue to shift to large discounters. International markets will begin to show "the same signs of weakness that we have seen in the United States," he added. First Data expects U.S. retail sales to remain flat or decrease in the fourth quarter versus the same period last year. "The company's revenues could decrease as sales may continue to shift to large discount merchants from which the company earns less per transaction," First Data states in a U.S. Securities and Exchange Commission 10-Q report. Capellas told analysts First Data has a good business model for current economic conditions but shied away from forecasting how long the downturn could last. "I don't think anybody who is in the business community is ready to stand up and say, 'I predict the recession will be X and we'll recover in Y,'" he said.
