Technology

Sanjay Sakhrani, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., trimmed his profit estimates for MasterCard Inc. after it reported second-quarter results that he said showed "some slowing in the U.S."

Heartland Payment Systems Inc. says that a marketing agreement with a group of school identification-card providers will help it boost sales of its campus payment card systems to small and midsize schools.

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Visa Inc. and MasterCard Inc., thriving despite challenging economic conditions, are looking at money transfers as one way to stay that way in a fast-changing payment industry.

Visa Inc. and MasterCard Inc. posted double-digit revenue increases last quarter as nondiscretionary spending on cards cushioned the effects of the U.S. consumer slowdown and international and cross-border volumes continued to exhibit healthy growth.

The 15 largest debt buyers last year purchased a combined face value estimated between $25.1 billion and $37.7 billion in delinquent credit card accounts, or 60% to 90% of total debt purchases of $41.9 billion, according to a survey by CardLine sister publication Collections & Credit Risk. The survey revealed the total face value of all types of accounts purchased by the top-ranked buyers–including such noncard accounts as utility debt, auto deficiencies, home equity lines of credit and more exotic assets such as health club membership dues–increased 32.2% from nearly $31.7 billion in purchases made during 2006. The credit card debt purchased included Visa, MasterCard, Discover and private-label credit cards. The debt purchasers did not estimate the total spent to purchase the accounts. Credit card charge-offs not yet placed with a collection agency are being sold for approximately 7 cents to 9 cents on the dollar. The amount can fall to as low as fractions of a cent on the dollar for delinquent accounts previously worked by several collection agencies. The top five U.S. debt purchasers by face value, as ranked by Collections & Credit Risk, are Sherman Financial Group, New York; Unifund, Cincinnati; Asset Acceptance Capital Corp., Warren, Mich.; Encore Capital Group, San Diego; and Portfolio Recovery Associates, Norfolk, Va.

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German consumers buying goods and services online will pay with something other than a credit card for about 66% of such purchases, according to a report released Wednesday by Germany-based acquirer and payment-services firm Pago eTransaction Services GmbH. By contrast, consumers from other regions around the world use credit cards for 90% of online purchases. Pago based the report on analyses of some 30 million purchases the company processed between October 2006 and September 2007. The report also shows how much better British online merchants are than their counterparts in other countries in attracting international customers. British online merchants attract about 55% of their customers from outside the United Kingdom. One-third of those non-British consumers come from outside Europe, Pago says. By contrast, German online merchants see fewer than 5% of online purchases from customers outside Germany. Of those international customers, 0.8% come from outside Europe. "This could be a result of the language barrier," Pago says in a news release, noting that English is "understood by a majority of e-commerce consumers." Consumers in Germany and the UK show the most enthusiasm for online shopping, followed by those in France and Ireland, the report says.

Metavante Technologies Inc. announced yesterday it has created CustomPay for National Payment Network Inc., an El Segundo, Calif.-based company that creates loan acceleration products for auto companies. The product enables consumers to reschedule car-loan payments and can help those who have fallen behind on loans repay their debts more quickly than the terms of the original loan, Jeff Lewis, president of Metavante's ePayment Solutions division, tells CardLine. "It brings in the discipline that the consumer normally wouldn't apply to help them pay off the loan faster," Lewis says. While Metavante created the program at National Payment Network's request, it has considered offering a similar product to other companies, Lewis says. CustomPay works by combining Metavante's prepaid-processing, online bill-payment and automated clearing house systems, Lewis says. CustomPay customers sign up to have part of their payroll automatically deducted and set aside to pay their car loan, Lewis says. Milwaukee-based Metavante's ACH system moves the funds, which are held in a prepaid account, and the lender is paid through Metavante's bill-payment system, Lewis says. Companies also can use the product for mortgages and other types of long-term loans, Lewis says. CustomPay benefits lenders because borrowers are more likely to pay off their loans using the product. It benefits consumers because they pay the principal on the loan down more quickly because they make payments from every paycheck, so they pay less interest, Lewis says.