In the future you will pay for your McDonald’s meal - and most evrything else - using your mobile phone.  Here’s a peek into what Visa is planning on doing around mobiles (from the 2009 Paris CARTES & IDentification Congress and Exhibition). Watch the video to see what Visa had to show off, including footage of an iPhone app and a Visa app installed on a SIM card.

According to a new survey commissioned by Visa Inc. (NYSE:V), U.S. consumers cannot account for an average of $21 per week in cash spending, adding up to more than $1,000 per year. Younger adults between the ages of 18 to 24 claim to lose track of $2,500 annually, more than twice the average amount.

The international survey of more than 12,000 adults in 12 markets around the world (including 1,000 U.S. consumers) asked respondents to estimate their “mystery spending,” or the cash they spend but cannot account for every week. 

“Despite consumers’ focus on controlling spending, they are still losing track of a considerable amount of money each year  – particularly when shopping or spending leisure time with friends and family - key activities during the holiday season,” said Wayne Best, Visa’s chief economist.   

Where does the cash go?

U.S. consumers said they were most likely to mystery spend while: 

• Purchasing food and other groceries (34 percent)
• Leisure shopping for non-essentials (32 percent) 
• Enjoying a night on the town (31 percent) 
• Dining out (26 percent)

Additionally, 22 percent of U.S. consumers believe that small cash purchases make it hard to track spending.  “Even for the most organized spender, it can be tough to keep track of every cup of coffee, greeting card, teacher’s gift or stocking stuffer picked up at the mall and paid for with cash,” said Best.  “While cash purchases can be difficult to track, the survey revealed that consumers believe debit cards can help them monitor spending more closely and stay within budget.”

Debit can help solve the disappearing cash dilemma

Debit cards can provide an easy and effective way for consumers to access available funds for purchases. And, according to the Visa survey, consumers agree:

• Overall, debit cards ranked as Americans’ primary payment method for personal and household expenses (37 percent), which is considerably above cash (22 per cent).
• Over two-thirds of debit card users (68 percent) prefer to use their debit card instead of cash whenever possible.
• Three-quarters of U.S. consumers using debit cards (76 percent) agree the cards provide an easy way to track spending.
• Three in five U.S. consumers who use a debit card (61 percent) say that using their debit card helps keep their mystery spending to a minimum.
• Two-thirds of U.S. debit card users (63 percent) find that tracking their debit card spending helpful in sticking to a budget.
• U.S. consumers whose primary payment method is their debit card would rather give up coffee, their MP3 player, their mobile phone, email, visiting social network sites - and even cash - for one week than they would their debit card.

The period ending December 2008 marked the first time that spending on Visa Debit cards surpassed spending on Visa Credit cards; debit now makes up approximately 70 percent of Visa’s U.S. transactions.

“For more than a decade we’ve seen a shift in consumer behavior as debit cards have taken a greater role in everyday spending,” said Stacey Pinkerd, head of global consumer products at Visa Inc. “More places that were traditionally cash only — from taxis to charities to dry cleaners — are now accepting payment cards, so consumers can enjoy convenient access to their funds by using their debit cards with a level of control and protection not offered by cash.”

Mystery Spenders Abroad

The survey data also provides insight into international trends. Heightened spending vigilance stands out as a global phenomenon while various regions showed distinct patterns in tracking spending.

Consumers around the world report they are unable to account for 20 percent of their cash spending each week.

• Australians reported the largest cash disappearance, both in terms of actual amount lost ($59) and also percentage of total spend (34 percent). While adults in India reported only $8 missing weekly, this is actually 31% of their total weekly cash spend.
• Compared to 12 months ago, the cash-oriented countries of Russia (38 percent) and India (74 percent) believe they are losing track of more cash at a significantly higher rate than U.S. consumers do (13 percent).
• Consumers in Korea (74 percent) and South Africa (71 percent) either “strongly agree” or “agree” that use of debit cards keeps mystery spending to a minimum.
• Shopping for food or other groceries (43 percent), leisure shopping and/or shopping for nonessentials (33 percent) and out for the night or socializing (32 percent) were the top spending categories around the world where consumers feel they lose track of spending.

About the Survey

Ipsos MORI conducted an international study across 12 markets during September 2009. Interviews were conducted by telephone among nationally representative sample of adults aged 18+ in each market.  Data has been weighted accordingly to reflect the total adult population of each market (some markers to reflect the total urban population).  The interviews for this survey were conducted in the following markets:  USA, Canada, India, Russia, South Africa, Australia, South Korea, Mexico, Brazil, Argentina, Japan, and GCC. MARGIN OF ERROR: using a confidence interval of 95%, a difference of plus or minus four percentage points between markets is required for the finding to be significant.

http://corporate.visa.com/_images/VisaChart.jpg

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The Conference Board Consumer Confidence Index® rose to 52.9 points for December 2009 from 38.6 points one year ago. The group’s Expectations Index increased to 75.6 from 44.2 points in December 2008, but the Present Situation Index fell to 18.8 points from 30.2 points in 2008, the lowest reading recorded since February 1983.

Lynn Franco, director of The Conference Board Consumer Research Center, explained that U.S. consumers felt moderately better about the economy this month, given that the expectations for the short term increased to its highest level in two years.

“The Present Situation Index, however, continued to lose ground and remains at a 26-year low. A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the Expectations Index,” Franco said. “Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010.”

The percentage of survey respondents who claimed that business conditions were “bad” increased between to 46.6 percent in December from 44.5 percent in November, while those who claimed conditions were “good” decreased to 7 percent in December from 8.1 percent in November.

The job market outlook remained poor, with only 2.9 percent saying that jobs were plentiful. Nearly half of the respondents said that jobs were hard to find. But the percentage of consumers expecting more jobs to become available in the months ahead increased to 16.2 percent in December from 15.8 percent in November. The proportion of consumers anticipating an increase in their incomes decreased to 10.3 percent in December from 10.9 percent in November.

The monthly index is based on the reference point of the average consumer confidence level in 1985, with readings higher or lower than this base level reflecting the current level of optimism or pessimism.

According to recently published research, U.S. online retail spending hit a new high on December 15, 2009 with Americans’ one-day spending reaching $914 million.  This is the first day US online spending surpassed the $900 million mark. Cyber Monday 2009 ranks as the second highest with $887 million, and December 1 ranks third with $886 million.

During the 2009 holiday season, free shipping was an important driver of online shopping. At least 45 percent of all transactions included free shipping during every week. For the week ending November 29, the average order value for transactions including free shipping reached $124, as compared to $111 which represents the average order for those without free shipping. The average order value for transactions including free shipping for the week ending December 6 rose to $134, while the average order for those without free shipping was only $103. This indicates that online retailers can incent customers to spend more money online by making free shipping offers available.

In a year-over-year basis, US online retail spending for Black Friday and Cyber Monday combined reached USD 5.3 billion, growing 47 percent over 2008.

Holiday travel season is just around the corner. ‘Tis the season when the joy of traveling to see friends and family is all too often hampered by the challenge of trying to keep a handle on holiday season finances.

Travel can be one of the biggest-ticket items on your holiday list, so it’s worth it to plan ahead. Setting a budget - and sticking to it - can help you stay in better control of holiday spending. According to a recent Visa survey, a majority (54 percent) of this year’s summer travelers either didn’t set a budget or overspent their budget while traveling, and more than a quarter of those surveyed overspent by more than $250. To make sure this doesn’t happen to you, it’s important to create a realistic holiday travel budget and make a plan for how you will spend within your means while on the road.

To create a budget, think through your trip. First, include the basics such as transportation to and from your destination, and lodging. Next, plan for expenses that come up along the way such as meals on the road, host/hostess gifts, rental cars or public transportation. Don’t forget to include entertainment - whether sightseeing, sleigh riding or going to the movies. It’s also a good idea to build in a cushion for the unexpected.

Once you’ve set your holiday travel budget, you need to stick to it. One tool that can help is a prepaid travel card. A prepaid card draws from funds that are set aside in advance for purchases. Here are a few ways prepaid travel cards can come in handy:

• Keep travel funds separate. An easy way to make sure you don’t go over budget is to set your travel budget aside on a prepaid travel card. Simply load the card with your travel budget, and use it for everything from online booking to grabbing lunch during an (unexpectedly extended) layover without worrying about spending more than you planned or dipping into gift-buying funds.

• Access cash. Whether you need a few dollars or several yen, choose a prepaid card that will allow you to withdraw cash from ATMs around the world. If you’re travelling internationally, it’ll also save you the hassle of tracking down and waiting in line for local currency.

• Browse and buy. Look for a prepaid card that you can use online. Travel sites offer a wealth of information and detailed listings of competing offers from airlines and hotels as well as reviews from fellow travelers. For flights, you can typically compare possible savings by traveling on alternate days or from nearby airports. Once you spot the deal that works for your budget, use your prepaid travel card to snap it up.

• Enjoy peace of mind when traveling. Prepaid cards may come with travel-related services. For example, the Visa Reloadable Prepaid card offers Zero Liability for lost or stolen cards as well as lost luggage reimbursement and purchase security. Make sure you know which benefits your card offers and how they work so you can tap into them should the need arise.

With some advance preparation and the right tools in place, you don’t have to overspend on travel this holiday season. In fact, with some careful planning, you could end up with enough left to buy yourself a little something during the post-holiday sales. For more information about starting the Visa Reloadable Prepaid card at your financial institution, contact Blake Colbo at blake.colbo@mapacific.com.

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• Issue 16 - November 2009
• Issue 15 - July 2009 (INSERT - Credit Card ACT 2009 Compliance Alert)
  
• Issue 14 - March 2009
• Issue 13 - September 2008
• Issue 12 - March 2008
• Issue 11 - October 2007
• Issue 10 - February 2007
• Issue 9 - October 2006
• Issue 8 - May 2006

As Visa members and business partners introduce new prepaid programs, the use of Visa Prepaid cards by corporations and government agencies to disburse tax refunds, wages, benefits, and corporate incentives is expanding. Visa Prepaid cards provide significant benefits to Visa member financial institutions and their corporate and government clients, including revenue and chargeback protection, as well as ease-of-use and convenience for consumers.

An important feature of the Visa Prepaid card, as well as all Visa-branded card products, is the manual cash disbursement service or “over-the-counter” (OTC) cash, which allows cardholders to obtain cash at a Visa member financial institution teller without a transaction fee, even if the cardholder does not have an existing relationship with that member institution.

Visa members and business partners are reminded to ensure compliance with the proper processing procedures for manual cash disbursements originating from any valid Visa card, including prepaid products, as published in the Visa U.S.A. Inc. Operating Regulations.

• Cards May be Embossed or Unembossed—Visa Prepaid cards may be personalized or embossed with a cardholder’s name or may be issued with a generic identifier. Visa Operating Regulations require that Visa members authorized to make manual cash disbursements honor both embossed cards and those Visa cards that do not bear an embossed name.
   
• No Fee May Be Charged for Cash Disbursements—Visa Operating Regulations require that Visa members authorized to make manual cash disbursements honor Visa Prepaid cards, as well as all Visa-branded card products, without charging a surcharge or other fee to the transaction amount, except for taxes or other charges imposed by local law.

  This is critical for the 2009 tax season because many tax preparers will distribute Visa Prepaid cards (such as the Jackson Hewitt ipower® card or the Liberty Tax All-Access Liberty Visa Prepaid Debit card) to their clients as part of tax refund or loan services. Holders of these cards must be able to convert these payments to cash without a fee.

In addition to being an important service that is provided to Visa cardholders, when financial institutions provide manual cash disbursements, they receive interchange fee revenue on each OTC cash transaction. Visa members can also protect themselves from fraud and remove much of the risk associated with this type of transaction by training all branch personnel on recommended chargeback protection procedures and ensuring that these procedures are followed.

Inform Your Branches to Ensure Compliance

Visa asks all members and business partners to share this information with their branches. Branch managers are encouraged to circulate this article regularly, perhaps on a monthly basis, to remind personnel of this important policy.

Complaints received by Visa regarding financial institutions that have declined service or charged fees for manual cash disbursements will be referred to the Visa Compliance Department. The Visa Compliance Department will contact the institution in question to request a remedy.

The winter holidays are upon us and with them the added stress of tight financial times. This year, enjoy the season without letting holiday spending get the better of you. We’ve put together expert advice and practical tools to help you minimize spending concerns and make this holiday season a joyous time.

Make a Budget and Stick to It
Start your holiday budgeting by looking at what you spent last year. Were you on target, or did last year’s spending land you in debt? Make a list of what you plan to spend money on this year. Knowing your spending goals beforehand will keep you on track. Some financial planners recommend spending no more than 1.5% of your annual income ($750 per $50,000 of annual income). Look at your major spending categories - gifts, entertaining, meals, and travel- and estimate how much you can afford in each category.

Use this easy Holiday Budget Calculator to help determine your holiday budget.

Get Creative
Save money this year by getting creative. Store-bought gifts are great, but when you make a gift for someone they truly appreciate your time and effort. Ideas for creative gift projects are plentiful online. A fun place to start is Instructables.com, a do-it-yourself web site full of step-by-step tutorials for everyone.

Perhaps you don’t have time to make something yourself but still like the affordability and personal touch of giving homemade gifts. At Craftzine.com you’ll not only find ideas that you can make yourself, but budget gifts available from other crafters. The ultimate marketplace for homemade gifts however is Etsy, where you can find crafty items from over 200,000 sellers.

Join Together
Instead of excessively spending on each other this year, join together with family members to help those who may be less fortunate. Online opportunities are easy to find, and there are several in this article, “Helping others when money is tight.” Other opportunities for online giving can be found at the websites for Oxfam International and ACCION.

Travel Wisely
If you plan on traveling, take some time to determine how much it will cost you with our Holiday Travel Planner and don’t forget these holiday travel planning tips.

Avoid the Holiday Hangover
Holidays are a wonderful time to entertain. And a little planning and budgeting will help you avoid financial headaches. Give our Holiday Entertainment Planner a try and let it help you plan your entertainment so that you don’t have to pay for it the rest of the year. And Check out these holiday entertainment tips to help you keep your holiday budget in shape

Visa Inc. a Worldwide Olympic Games Sponsor for more than two decades, today announced the global launch of its Olympic-themed marketing campaign for the Vancouver 2010 Olympic Winter Games, Go World. This global campaign, which features television,digital and out-of-home advertising, host market merchant activation programs and usage promotions, enables Visa to connect with cardholders and Olympic and Paralympic Games fans to drive preference for and usage of Visa products worldwide.

This launch follows the recent extension of Visa’s Olympic Games sponsorship for another eight years - through 2020 - enabling Visa’s financial institution clients and merchant partners to continue to build strong relationships with their customers through unique Visa marketing programs.

“Go World builds on the concept that ran so successfully in the United States during the Beijing 2008 Olympic Games,” said Antonio Lucio, Chief Marketing Officer of Visa Inc. “To connect with Olympic fans globally, we’ve taken this platform and created a campaign that transcends borders, resonates with fans’ sense of national pride, builds our own business and that of our clients, and advances the spirit of the Olympic Movement.”

The Go World campaign celebrates athleticism and human triumph through unique athlete stories. It features a wintry blue tone throughout all creative executions and will be customized to maximize local relevance in key markets. The campaign also includes merchant offers, enhanced social media applications and a deeper focus on Visa-sponsored athletes (Team Visa - Vancouver).