Barclays U.S. IT Consulting & Computer Services: Mid-Holiday Update: Spend Data Continues to Bode Well for Card Networks/Acquirers

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Barclays U.S. IT Consulting & Computer Services: Mid-Holiday Update: Spend Data Continues to Bode Well for Card Networks/Acquirers

Barclays analyst, Darrin D. Peller, said, "With Black Friday and Cyber Monday now in the rearview mirror, we have seen several data points (including this morning's Cyber Holiday Pulse Index from Chase Paymentech) that suggest overall holiday spending metrics remain generally positive. In our view, this serves as an incremental positive for both the card networks and acquirers into year-end, as it further illustrates resilient spending by consumers in what remains an uncertain macroeconomic environment. In particular, the data showed strong growth in e-Commerce channels (both online and mobile), which we note is important given that the overwhelmingly majority of online transactions are conducted through either Visa (NYSE: V) or MasterCard (NYSE: MA) cards (with V stating on its F4Q11 earnings call that 46% of all e-commerce transactions are conducted with a V product)."

"First Data (NYSE: FDC) - Solid Y/Y Growth on Tough Comparisons: First Data, the largest merchant acquirer in the U.S. (based on 2010 V and MA purchase volume) released its SpendTrend analysis for Black Friday 2011 earlier this week. The data track same-store consumer spending at U.S. merchant locations through credit, debit (both signature and PIN) and EBT cards. Dollar volume growth was up 6.3% Y/Y, with transactions up 7.3% Y/Y, even with tough Y/Y comparisons (Black Friday 2010 volume and transaction growth was 12.3% Y/Y and 10.1% Y/Y, respectively). While dollar volume growth slowed sequentially from ~9% Y/Y growth in October and September, transaction growth remained flat (7.5% and 7.1% in October and September, respectively). Additionally, Cyber Monday saw dollar volume growth up approximately 20% Y/Y."

Chase Paymentech (NYSE: JPM) - Up-to-date e-Commerce Spend Trends: Chase Paymentech, the third largest merchant acquirer in the U.S. (based on 2010 V and MA purchase volume) announced up-to-date holiday season e-commerce spend trends. The company's Cyber Holiday Pulse Index (which tracks sales and transactions for the top 50 e-retailers) indicated that dollar volumes were up 26% Y/Y, with transactions up 40% Y/Y. Specifically for the holiday weekend including Black Friday, dollar volume increased 24% Y/Y and transactions increased 36% Y/Y."

"PayPal (Nasdaq: EBAY) - More Consumers Turning to Mobile Shopping: With increased penetration of smartphones amongst consumers, recent data released by PayPal indicated a 516% (six-fold) and 552% (six-fold) increase in mobile payment volume on Black Friday and Cyber Monday, respectively, as compared to the same periods a year ago."

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