Sunday, December 14, 2008

Brave New World Order:

The Recent Mega-Mergers, the Economy, and Their Impact on the Payments Industry



Several of the largest commercial banks in the United States are currently involved in mergers that stand to have a significant impact on the payments industry. The recent merger activity and consumer payment trends are driven by an economy in recession. All of the major key indicators are pointing to a steep recession just in its beginning stages, providing a dramatic backdrop for the mergers. NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP

Boston, MA (PRWEB) December 14, 2008 -- Several of the largest commercial banks in the United States are currently involved in mergers that stand to have a significant impact on the payments industry. The recent merger activity and consumer payment trends are driven by an economy in recession. All of the major key indicators are pointing to a steep recession just in its beginning stages, providing a dramatic backdrop for the mergers.


Within the payments space, observers and operatives have noticed a movement toward debit payments and away from credit. This shift coupled with the tightening credit environment will accelerate consumers' already increasing adoption of prepaid and debit payment instruments, including cards and checks, and cash payments will likely also see a resurgence. Financially stressed consumers are trying to gain greater control over their budgets and increasingly protect themselves from overdraft and other retail banking fees. Households are focusing on aggressive spend management and account balance monitoring. The movement back to cash-based payments could also create more transaction volume for EFT networks. The flight to the relative safety of debit and prepaid will include even larger ticket items that would previously have been charged to credit cards.

Tightening credit coupled with rising unemployment, however, may not bode so well for overall consumer spending. As consumers' finances are further squeezed, personal consumption may fall to the point where all payment categories feel the sting of a recessionary economy, even debit. Though the secular trend in the payments space has been toward a general electronification of both consumer and business payments of all kinds (credit, debit, and prepaid), decreased spending could impact overall electronic payments growth, not just the trend line for credit cards.

Regardless of the danger of declining volume growth or even shrinking volume, it is Mercator's firm belief that payments will continue to provide no small measure of insulation against market and economic volatility, both for the new mega-banks as well as the smaller financial institutions deeply involved in the payments industry.

WHAT IS 'TARP' ?

A Kommie New World Order Golden Parachute?

video

Who Got Bailout Money So Far?





USA Today
Blank Check for Banks, Pink Slips for Detroit
New York Times, United States - 21 hours ago
“I don’t have a sense of transparency, that there are visible accountability criteria being applied to TARP. If banks want to tidy up their balance sheets, ...
When does Main Street get help from Treasury? Kansas City Star
Treasury sees TARP funds for financial sector Reuters
Wagoner Said to Confer With Paulson, Bolten on Rescue Bloomberg
MSNBC - Washington Post
all 362 news articles » GM

Washington Post
UAW: TARP is 'only resolution'
CNNMoney.com - Dec 12, 2008
"Now, the only resolution is for Treasury to use TARP funds," Gettelfinger said. "UAW calls on Secretary of the Treasury Paulson or the Federal Reserve to ...
Video: UAW Pres Hopes Washington Will Help Industry AssociatedPressWhite House says mulling TARP funds for automakers Reuters
White House and TARP to the Rescue -- of Automakers, but not of ... RGE Monitor
all 16,389 news articles »

ABC News
GM, Chrysler May Win Reprieve With Access to TARP Aid
Bloomberg - Dec 12, 2008
3 Chrysler welcomed the prospect of TARP funds, the details of which weren’t spelled out. GM said it would trim first-quarter output by about 30 percent, ...
The Good, the Bad and the Ugly: Auto Bailout Alternatives ABC News
GM and Chrysler turn to Bush for clemency guardian.co.uk
With Auto Bailout Failed, Another Hit for Markets Wall Street Journal Blogs
The Money Times - Zacks.com
all 1,041 news articles » GM

Business Wire (press release)
PROMERICA BANK Announces Decision to Not Participate in TARP
MarketWatch - Dec 12, 2008
Scott Montgomery, Interim CEO, stated, "After a careful examination of TARP's Capital Purchase Program by our Board of Directors and Executive Management, ...
More Banks to Get TARP Funds Los Angeles Business Journal
Columbia Bank parent Fulton Financial Corp. to get $375M TARP ... Bizjournals.com
PROMÉRICA BANK Announces Decision to Not Participate in TARP International Business Times
Motley Fool - MarketWatch
all 480 news articles » FULT - NWSB - KIDS

ArabianBusiness.com
Oil pares losses after Bush says TARP may fund auto rescue
Tehran Times, Iran - 22 hours ago
NEW YORK (Bloomberg) -- Crude oil pared losses after the Bush administration said it may tap the $700 billion bank-rescue fund to prevent an auto-industry ...
Oil Pares Some Loses, But Closes Lower RTT News
Oil off lows: TARP cash may go to Detroit CNNMoney.com
Crude falls 7% on concerns over auto industry rescue MarketWatch
BloggingStocks
all 732 news articles »
BlackRock’s Fink Says Paulson Erred With TARP Switch (Update1)
Bloomberg - Dec 11, 2008
“It is our opinion that the major mistake in TARP was not to put money in assets,” Fink said at a conference in New York today, referring to the Troubled ...
BlackRock’s Fink Proposes Mortgage Purchases to Obama Bloomberg
all 4 news articles » BLK

Canada Free Press
TARP To Be Tapped For Detroit
U.S. News & World Report, DC - Dec 12, 2008
It was impossible to predict the efficacy of TARP because in passing it, Congress gave so much deference to Bush and Paulson that it is now impossible to ...
Forget Red Carpet: Bush to Roll Out TARP for Liberals, UAW NewsBlaze
Auto bailout wrong for many reasons Las Vegas Sun
Ensign says Bush should 'show some courage,' reject bailout loans Las Vegas Review - Journal
ShareCast - London Stock Exchange
all 15 news articles »

ABC News
Oversight Panel to Criticize TARP
Wall Street Journal - Dec 9, 2008
By DAMIAN PALETTA and DEBORAH SOLOMON WASHINGTON -- The panel set up to oversee the Treasury Department $700 billion financial-rescue fund is expected to ...
Oversight Panel’s 10 Questions on TARP Wall Street Journal Blogs
Treasury Warned: Modify Loans or No More Tarp Funds BankInvestmentConsultant.com
US Rep Frank: Treasury to ultimately get TARP cash guardian.co.uk
Talk Radio News Service - Conde Nast Portfolio
all 727 news articles »

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