Most news weeks do not have something for everyone. There will be a few highlights that will call out to some number of interested parties, but on the whole, it is hard to offer a batch of headlines that appeal to the full spectrum of news consumers in the U.S.
America is a diverse place.
But last week was the news that had something for everyone.
Love politics? The RNC took over cable news, as did the lead-up to this week’s DNC.
Love meteorology? Giant heat dome took over the nation.
Love Taylor Swift/Kimye? It’s actually too hard to explain — basically, it’s “Mean Girls” with Kanye.
And if you were a payments or commerce fan, the news banquet table ran pretty profoundly over, since it seemed hardly 24 hours passed without the next big batch of headlines. There were pair-ups: Both Visa and Mastercard made some big deals with PayPal and VocaLink, respectively. There were breakups, like Visa and Walmart in Canada. There was even continued lamentations about old breakups — heard most clearly in Amex’s Q2 earnings in reference to Costco.
And then, there were the mess-ups — best typified this week by Worldpay. Starbucks and Citigroup also managed to disappoint last week. So, how did they manage to miss, and will they be getting back on track?
Worldpay’s Three-Week Hiccup
We would say that it was not a good week to be Worldpay, but that would actually be putting too fine a point on it. If we are being accurate, it has been a pretty bad three weeks for Worldpay.
According to reports, Worldpay has been experiencing a partial outage for the last few weeks — one that is primarily hitting gamers and eCommerce sites. Etsy, for example, has been particularly hard hit. Its stock is down 3.5 percent, and the eCommerce site reports that Worldpay is still fumbling millions of their transactions.
And according to the latest, fumbling them in a myriad of ways. When complaints first started coming in, the issue seemed mostly to be that charges were not getting through. It seems now the issue has switched to charges are going through too many times, and consumers are being double — and even triple — charged on their purchases. Worldpay noted in a statement that the double charges were an attempt to fix the issue of the charges not going through.
“Ongoing technical work related to resolving this issue has resulted in a limited number of duplicate charges to Etsy customers.”
Other parties who complained include online gamblers who can no longer add or withdraw funds to accounts and some British Airways transactions.
According to Worldpay, the outage stems from a software update on one of its servers. It also notes that the outage affects only about 1 percent of its customers.
Cold comfort for the team at Etsy, who are bleeding customers, or for customers getting triple charged. But not the chilliest comfort on offer here. That goes to Worldpay’s predictions about when exactly this is going to be fixed.
“Unfortunately, I can’t quantify progress. Understandably, to do so would be take people away from the core effort of resolving the issue,” an anonymous source close to Worldpay told TechCrunch.
Even Starbucks Gets The Blues
Well, as it turns out, you can’t win ‘em all, even if you’re Starbucks.
Foot traffic was down at Starbucks, and delayed promotions and comps were all part of the total gravity that kept Starbucks earnings below what The Street had been expecting of it.
While Wall Street was looking for a 5.7 percent bounce in foot traffic, it got 4 percent. CEO Howard Schultz was also rather less effusive about the earnings picture this time around. Sales growth in the U.S. was expected at about 6 percent and at about 4.7 percent in the Asia-Pacific region; instead, sales grew at 4 percent and 3 percent, respectively.
It wasn’t all bad news, though, as mobile did remain an earnings bright spot. On-the-go ordering came in at 5 percent of all purchases, up 25 percent from the second quarter, as measured as a percentage of orders. The mobile payments platform clearly has been on the upswing after having been completed within the past several months.
Other statistics show that the membership base in the eponymous Rewards loyalty initiative, newly revised early in the quarter, showed 18 percent growth year over year. The firm said during Thursday’s (July 21) results that current enrollment in the program stood at 12.3 million members.
The mobile results, however, did not soothe The Street’s feelings over missed expectations, and Starbucks’ share price was down 4 percent after the results were announced.
Citi Still Struggling To Get The New Costco Cards Fully Operational
If American Express can have any comfort over losing out on the Costco card contract, it is probably how remarkably badly the rollout of the new Citi Costco card has gone. It’s not that consumers aren’t plenty excited about the new cards — they are. It is that they can’t seem to get the new cards into consumers’ hands.
A few weeks and millions of customer complaints later, the problem is not resolved.
Bloomberg is reporting that Citigroup CEO Mike Corbat has publicly pledged on a conference call with reporters to devote “a lot of resources” in its attempt to smooth over the apparent kinks in its underlying support to Costco’s card program. Those kinks include 40-minute wait times for customer service calls for dissatisfied Costco customers, which have apparently been cut down to 10 minutes thanks to additional staffing.
Corbat still emphasized that Citigroup is committed to doing what it takes to make things right.
“We experienced extremely high calling volumes in the early implementation of it,” Corbat said. “Questions around card activation, questions around statements, questions around where to send payments, and so, we’re working through that. We’re gaining on it. We’re very focused on it.”
Despite difficulties, it is worth noting that those who have and can use their cards are doing so — a lot.
Citigroup CFO John Gerspach explained that, in the card’s first three-and-a-half weeks of availability, consumers used it for a total of $5.7 billion in purchases. Similarly, the $10.6 billion loan portfolio acquired by Citigroup as part of the deal to replace American Express has increased to $11.3 billion at the close of the second quarter.
“It’s a much-improved value proposition for our members,” Richard Galanti, Costco’s CFO, told Bloomberg.
Or it will be anyway once all of the customer have and can use their cards.
So, what did we learn this week? “Don’t mess up” is the obvious lesson; “a mob of angry customers is always bad news” comes in a close second.
But perhaps the better lesson of the week is measure twice, cut once. Because little mistakes on little things can have some big repercussions.