Recent Press Releases

Redstone Payment Solutions believes that education of our staff and our merchant customers is crucial to successful business. Here are some recent items in the news that we think may be of interest to you.
Please check back often as these stories are updated regularly.

07/25/2011 3:18 PM – Noncash payments (i.e. credit or debit cards processed) in the United States rose at a compounded annual rate of 4.6 percent since 2006, according to the Federal Reserve System.

The organization this month published its fourth report in a series of triennial examinations regarding trends in noncash payments in the United States. Here are some of the highlights of the Fed’s findings:
– The estimated number of noncash payments totaled 108.9 billion in 2009, with a value of $72.3 trillion.
– More than three-quarters of all noncash payments are now made electronically, and nearly all interbank checks are now cleared electronically.
– The transition rate from paper to electronic payment methods is rapidly rising due to the presence of debit and prepaid cards, as well as online bill payment.
– Debit card usage is maintaining double-digit growth annually. Though the study did not examine cash usage, one likely explanation for this trend is that debit cards may be replacing cash payments.
Exhibit 1: Number of Noncash Payments


2006 2009 CAGR*
Total (billions) 95.2 108.9 4.6%
Checks (paid) 30.5 24.4 -7.2%
ACH 14.6 19.1 9.3%
Credit card 21.7 21.6 -0.2%
Debit card 25.0 37.9 14.8%
Prepaid card 3.3 6.0 21.5%
Figures may not add due to rounding.
*CAGR is compound annual growth rate.

07/22/2011 12:55 PMAccording to a February 2011 Javelin Strategy & Research report on identity theft and fraud protection, more than 8.1 million identities were stolen in 2010. On average, victims of identity theft were responsible for paying $631 in out-of-pocket costs, such as those to cover fraudulent debt or legal fees, which is a significant rise from $387 in 2009. The California-based market research firm says the increased need for fraud protection may stem from thieves focusing more on new account debit card fraud.

The climbing costs may provide individuals with even more incentive to better monitor their credit reports and scores. While a credit and fraud protection program can be a great asset, consumers should also make sure to take the proper steps to lower their risk of identity theft.

Here are six tips that merchant bankers can give that may help consumers better defend against thieves.

1. Avoid throwing away any private documentation – bills, credit card offers, bank statements – that contains personal identifying details without first running it through a paper shredder.

2. Take receipts after a purchase and check their listed amounts against credit card bills. This approach may help a person identify any fraudulent charges on his or her statements.

3. Avoid carrying your Social Security card out of your home unless it’s absolutely necessary.

4. Have your mail delivery temporarily suspended when you are on vacation.

5. Use a different password for each online account and construct passwords with a combination of numbers, capital letters, and, if possible, symbols.

6. Stay abreast of the latest online fraud tactics. Knowing what scams are out there can help individuals practice safer Web browsing behavior.

07/20/2011 11:49 AM

Up, Up and Away – New Data on Increased Credit Card Spending

July 19, 2011 on

A couple of new reports released last week regarding consumer credit spending and payments seem to invoke the old “glass half full or half empty” scenario.
Increased Credit Spending and Payments Boosting Profits for Card Companies and Banks

A growing number of U.S. consumers are paying their credit card bill on time, according to the Associated Press, which reported Friday that five of the top six card issuers said the rates at which their customers defaulted on their accounts decreased in June.

“Bank of America Corp. reported the biggest drop in defaults, with JPMorgan Chase & Co. and Discover Financial Services also showing significant improvement,” reported the news outlet.
Late payments also declined for most of the top FIs, with the exception of Capital One Financial Corp., for whom payments late by 30 days or more rose slightly.
This news is particularly encouraging for the sector, considering Federal Reserve reports charge-offs grew to 10.9 percent last year.

“For the first three months of this year, that rate was down to 6.96 percent — a significant improvement, but still well below the industry average of 3.82 percent before the recession, which indicates banks will benefit further as default and delinquency rates further improve,” the AP states.

Not only have consumers’ credit payments increased but banks’ profits for Q2 as well. AP states Citigroup retrieved $757 million that was designated for dealing with unmade credit card payments. As a result, Citigroup boosted its Q2 profits to $3.3 billion. Also freeing from reserves was Capital One, releasing $579 million that contributed to the FI’s 50 percent profit growth. AP adds that the $401 million Discover Financial Services brought out from its reserves last month helped to more than triple the company’s second-quarter profits.
“JPMorgan Chase’s customers spent 10 percent more using their cards. Discover said sales volume on its namesake cards rose 9 percent,” continued the AP in its report. “What’s less clear is if the higher spending will continue… And even when the recovery gains steam, few economists say they expect consumers to pile on debt again after spending the last two years paying it down.”

Consumers’ Personal Debt Ballooning

As the government explores options for reducing the national debt, NPR reports that consumers have been piling up personal debt of their own again post-recession.

The news radio outlet cites a recent survey by consumer credit monitor FICO, which found “officials at lending institutions expect half of all credit card balances will keep rising over the next six months.”

“The FICO surveyors found that credit card debt is rising for two reasons,” continued NPR. “First, wealthier people are feeling more confident so they are spending more freely, which adds to their credit card balances. And second, poorer people are feeling more squeezed so they can’t afford to pay off their balances in full. So for a lot of households, credit card balances are rising because the families can only afford minimum payments each month, which is allowing interest costs to pile up.”

Salary raises have been scarce during 2011, and more than 14 million people are still seeking employment, according to NPR.

Before the recent economic turmoil, New York Federal Reserve Bank reports that U.S. households in 2008 had $12.5 trillion in total debt, up from $5 trillion in 2000. But with the onset of the financial crisis and rise in unemployment, many reduced credit spending, with the total number of accounts dropping by 47 million from the beginning of the year. Overall between the fall of 2008 and the end of 2010, the Federal Reserve found the number of open credit card accounts decreased by about one-fourth, and balances fell by around 16 percent.

Yet consumer debt has grown each month in 2011, according to the Fed, with total consumer debt rising by 2.5 percent in May alone.

“That’s the kind of personal debt that includes car loans and credit cards, not home mortgages,” comments NPR.

07/11/2011 1:32 PM – With the new Prepaid Card, AmEx will not charge for online purchasing, monthly maintenance, activation, balance inquiry, balance alerts, card replacement, foreign currency conversion or loading fees.  And, funds never expire.  Each withdrawal after the first will cost $2.  The fees are eliminated and AmEx retains profits because they manage all aspects of the card as the acquirer, processor, and issuer.
On the downside, there is no consumer protection (as with all prepaid cards) since it’s not linked to a bank account if the card is lost or stolen.  Plus if you recharge your card online using MoneyPak, it still costs you $4.95 each time.
Original story printed in The Green Sheet, July 11, 2011