Google is testing a new feature Purchase on Google – in essence a ‘Buy’ button that will allow consumers to buy a product directly from a search ad displayed on a mobile device. According to Google the new service is being tested with about a dozen merchants and will be expanded more broadly based on test results. Google’s latest move pushes it deeper into mobile and online commerce – not surprising given its expansive relationships with businesses, the re-positioning of its mobile payment service and market trends towards “frictionless” payments. Note recent announcements by Amex, Pintrest and Instagram related to their Checkout, Buy and Shop Now buttons.
Apple has launched Apple Pay in the U.K., the first location outside the U.S. The service is being supported by seven banks (with the notable exception of Barclays, Lloyds and HSBC) and 250,000 merchant locations as well as Braintree merchants for in app purchases. While the U.K. is well terminalized for NFC purchases and contactless cards are common, there is a purchase limit for GBP 20 which applies to Apple Pay as well. This transaction limit is due to be addressed with a terminal software update following which Apple Pay will have an advantage over contactless cards. Despite this benefit, there are mixed views on consumer adoption but bankers and payments industry professionals are optimistic on new incremental card volume. Compared to the U.S., Apple Pay is priced lower in the U.K. partly due to lower interchange in Europe but also because of market and competitive factors. Additionally, transactional data will only be available to consumers and merchants.
Apriva announced an agreement with Globalcom to bring EMV acceptance solutions to unattended terminals. This includes parking, kiosk, car wash, banking, gaming, airline kiosk, vending, and retail. Given the fast approaching EMV liability shift deadline of October 1, this should help in expanding the chip card acceptance infrastructure.
Synchrony Financial reported strong Q2 financial results. Retail Card purchase volume was $23.5B up from $18.1B in Q1 while outstandings grew to $42.3B from $39.7B (including the BP portfolio acquisition) and platform revenue increased to $1.8B from $1.7B. Payment Solutions platform revenue increased 7%, with growth across industry segments led by home furnishing, automotive products, and power equipment. During the quarter Synchrony added several new programs: Mattress Firm, Newegg and Stash Hotel Rewards and extended Chevron. The private label and specialty consumer finance business is proving to be strong with good growth prospects.
SNL Financial reports that credit card yields waned modestly in June while delinquencies were flat or trended down and loss rates declined. According to master trust data, the net yield for major issuers was 16.89% (down from 16.95% in May), 30+ day delinquency was sub 2% (Capital One stayed flat at 2.05%) and loss rates trended below 3% (Amex ticked up to 1.21% from 1.15%). Given the stable and low chargeoff experience there is room to tradeoff some losses for asset growth. Opportune time for regional and community banks to re-examine their credit card business strategy.