The oldest credit card in the U.S. reached its 68th birthday this year. When the Diners Club card was started by Frank McNamara in 1950, it only had around 200 members and 27 restaurants. After a group of investors put up $1.5 million, the cardboard credit card exploded, signing up more than 20,000 members in its first year, and growing to 42,000 by 1952.
In 1952, McNamara sold his interest in Diners Club to his partners for $200,000. The first plastic Diners Club card was introduced in 1961 and by the mid-1960s, Diners Club had 1.3 million cardholders. Diners Club International was acquired by Citigroup in 1981 and by Discover Financial Services in April 2008 for $165 million.
My Fav Card
Robert McKinley, the author and retired founder of RAM Research, CardTrak, CardFlash and CardData, recalls loving his Diners Club International Carte Blanche card from Citibank for three reasons 1) 60-day interest-free grace period, 2) generous rewards and perks and 3) an unlimited (Carte Blanche) credit line. McKinley says what was really cool is the card did not display any payment network logo and merchants would often say they were not sure they could accept it, some even thought Carte Blanche was an old European card. For others it did present some “snob” appeal, like the American Express Centurion card, both requiring mid-six figure income, he notes.
Diners Club Today
Today, the Discover Global Network includes Discover Network, Diners Club International, PULSE and affiliate networks. The Diners Club card runs on the Mastercard network as well. Therefore it has more than 44 million merchant acceptance locations and 2 million ATM cash access locations across 190 countries and territories. Discover has established network to network alliances across the globe, including relationships in China, Japan, Korea, India, Brazil, Turkey, Nigeria and throughout Europe.
Currently Discover offers two personal Diners Club cards: Diners Club Card Premier and Diners Club Card Elite. There are also two professional Diners Club Cards: Diners Club Card and Carte Blanche Card. Diners also six corporate Diners Club cards: Diners Club One Card; Diners Club Corporate Travel & Entertainment Card; Diners Club Corporate Travel Account; Diners Club Corporate Event Card; Diners Club Multinational Corporate Card Program; Diners Club Corporate Carte Blanche card.
Last Year Elo, the 100% Brazilian payment brand, and Diners Club International, extended their partnership with the launch of Elo Diners Club International Cards in Brazil. Elo, whose shareholders are Banco do Brasil, Bradesco and Caixa Econômica Federal, were parties to the deal.
Diners Club Card Performance
Gross dollar volume (GDV) for licensees of Discover-owned Diners Club International declined 1.3% year-on-year (YOY), on a nominal basis or not currency adjusted basis (NFX), in the first-quarter (1Q/19). The sharp decline is the steepest in more than five years.
For 1Q/19, Diners Club International posted $8278 million in GDV, compared to $8700 million for the fourth-quarter, and $8390 million for 1Q/18. In the first-quarter of 2015, Diners Club International reported $6474 million in GDV, according to CardData.
The negative YOY NFX GDV change of 1.3% for Diners Club International , compares to 13.7% YOY NFX for 1Q/18; 9.6% YOY NFX for 1Q/17; and 4.1% YOY NFX for 1Q/16.
Diners Club International so currently growing at a four-year NFX CAGR (compound annual growth rate) of 6.34%, based on analysis by RAM Research.
Visa Mastercard International Performance
International card GDV (gross dollar volume) for Visa [V] and Mastercard [MA] payment cards (credit+debit+charge+prepaid) rose 8.7% YOY on a currency adjusted basis (FX) for the first-quarter (1Q/19). On a nominal basis (not currency adjusted) international payment cards GDV decreased 0.4% YOY.
Visa and Mastercard reported US$2732 billion in international payment card GDV for the first-quarter, compared to US$2889 billion in the prior quarter, and US$2742 billion for 1Q/18.
American Express International Performance
American Express international cards (credit and charge) gross dollar volume (GDV) on a currency adjusted basis (FX) has slipped for six consecutive quarters. The decline is most pronounced in the JAPA (Japan, Asia-Pacific & Australia) region as GDV is running about half the growth rate of one-year ago, and a third of the rate five-years ago. However, gains in proprietary international consumer and commercial cards has remained solidly in double-digits FX year-on-year (YOY).
For the first-quarter American Express posted US$100.2 billion in international credit and charge card GDV, compared to US$103.9 billion for the prior quarter and US$101.3 billion for 1Q/18. American Express international credit card delinquency is up 10 basis points (bps) sequentially and YOY. Gross charge-offs increased 30 bps from the prior quarter, and up 20 bps from the year ago quarter.
Capital One International Performance
Capital One international card gross revenue was flat in the first-quarter (1Q/19) while after-tax net income sunk 44% YOY. International credit card purchase dollar volume (PDV) was up nearly 3% as of 1Q/19 and end-of-period (EOP) outstandings slipped by 3% YOY.
Capital One [COF] issues credit cards in Canada and the U.K. internationally. COF international credit card portfolio metrics were moderate as charge-offs declined sharply from the prior quarter, due to seasonality, and net revenue margin remained solidly above 16%.
PDV, excluding cash advances and balance transfers, for COF’s international card business, not currency adjusted (NFX) for the first-quarter rose 2.7% YOY to $7.5 billion, compared to $8.9 billion in the prior quarter, and $9.0 billion for the year ago quarter. In 1Q/18 COF international PDV rise 17.7% YOY.
Citibank International Performance
Citibank international card profits soared for the Latin America Caribbean (LAC) region in the first-quarter while credit card profits for Asia increased moderately. However, late-stage delinquency and charge-offs metrics in the LAC for the first-quarter (1Q/19) are rising to 2015 levels. Average yield in Asia is also slipping back to 2015 levels.
In Citi’s Asia region, which also includes some European Middle East Africa (EMEA) countries, gross revenues rose 1% YOY for the first-quarter on a currency adjusted (FX) basis, compared to an 8% FX YOY gain in 2018 and 4% FX YOY gain in 2017. In Citi’s LAC region, gross revenues rose 6% YOY for the first-quarter on an FX basis, compared to a 6% FX YOY gain in 2018 and an 8% FX YOY gain in 2017.
Purchase dollar volume (PDV) for Citi’s LAC credit cards increased 4.8% YOY NFX, for the first-quarter to $4.4 billion, compared to $4.8 billion for 4Q/18 and $4.2 billion for 1Q/18.
Purchase dollar volume for Citi’s Asia credit cards was flat YOY NFX, for the first-quarter to $21.4 billion, compared to $22.2 billion for 4Q/18 and $21.5 billion for 1Q/18.
Other Related Reports [2015-2019]