• Foreign banks with locally incorporated subsidiaries in China may
not be able to issue renminbi-denominated bankcards as soon as
planned, due to new regulations from the People’s Bank of
China (PBOC), China’s central bank. The new legislation
requires foreign banks to establish bankcard data centres, which
will be used to submit data to the PBOC, before they can issue
cards independently, but most banks currently do not have a centre
on the mainland.
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• China’s Shenzhen Ping An Bank has launched its
first credit card, tapping into the sales network of its parent
company, Ping An Insurance. The latter’s 40 million life insurance
customers and 2 million corporate clients will be a key target
market. The card is bundled with family property insurance and
aviation accident insurance. In the future, other financial
services such as securities, trust and assets management will be
offered through the card. The bank has also partnered with
Lakala Billing Service, China’s largest electronic
billing services company, to give access to the Lakala’s payment
terminals in more than 5,000 convenience stores in Shanghai.
• A report by global consultancy McKinsey expects
revenues from credit cards for Chinese banks to increase to more
than $5 billion by 2010 from $500 million in 2006. The number of
credit cards issued in China has increased 13 times to 40 million
in the last two years, according to McKinsey.
• China’s Guangdong Development Bank announced
that it has issued more than 5 million credit cards, up from 4
million in February this year. The bank was the first in China to
issue credit cards.
• The Bank of East Asia has launched a prepaid
travel card together with Visa International. The
BEA Traveller’s Card is Hong Kong’s first foreign currency Visa
travel prepaid card. It can be preloaded with US dollars and a
variety of other currencies.
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By GlobalData• India’s Kingfisher Airlines has introduced a
corporate card targeted at SMEs. Launched in partnership with
American Express, the card will offer India-based
companies an 8 percent rebate on the airline’s flights. It will
also offer cardholders a membership upgrade within the Kingfisher
Airlines frequent flyer programme.
• Panin Bank, Indonesia’s fifth-largest private
bank, has launched its first credit card in collaboration with
Visa International. The Platinum Visa Card is
expected to attract at least 20,000 cardholders. The bank claims
that it signed up 2,000 cardholders within two weeks of launch and
is confident that its target will be achieved.
• Bank card network China UnionPay’s cards will be
accepted by Malaysia’s Maybank for a year. The
peninsula’s largest bank will open up its merchant network – 1,000
merchants at destinations and locations where Chinese nationals are
likely to visit will accept the card. China UnionPay cardholders
will also be able to withdraw cash from the bank’s ATMs. The bank’s
senior management expect about 600,000 Chinese tourists to visit
Malaysia this year and spend $400 million in the country.
• Visa International and software specialist
Welcome Real-Time have signed a two-year
partnership that will allow retailers to deliver targeted
promotions and rewards to holders of Visa payWave-enabled cards in
the Asia-Pacific based on amount and frequency of spend. There are
more than 3.2 million Visa contactless cards in Malaysia,
Singapore, Korea and Taiwan. Visa will have exclusive rights to use
Welcome Real-Time’s promotional marketing platform for all card- or
mobile-based Visa payWave transactions conducted in the
region.
• Maybank Singapore is offering balance transfer
rates of 0 percent per annum for up to 12 months and 12 percent per
annum thereafter to customers who transfer a minimum of S$10,000
($6,763). Customers will pay a processing fee of 3.75 percent in
order to receive the 0 percent rate for 12 months and 2.5 percent
for 12 months. Maybank aims to double the total amount of funds
transferred, to S$20 million, with the new promotion, which runs
until 28 February 2008.
• Lakala Billing Service, China’s largest
electronic billing services company, has installed China UnionPay
payment terminals in 395 chain convenience stores in Shanghai. The
terminal allows cardholders to pay their bills in the stores.
• Singaporeans with net personal assets exceeding S$2 million may
soon receive a higher spending limit on their credit cards. The
Monetary Authority of Singapore is proposing to
exempt high net worth individuals from the current credit limit of
twice monthly salary as part of its process to update credit card
rules. The central bank believes people in this category do not
require the same level of protection under the government’s social
policy rules on credit.
• In Taiwan, Chinatrust Commercial Bank has
announced that it will roll out credit chips in mobile phones in
collaboration with telecoms operator Chunghwa
Telecom. There will be a credit ceiling limit of NT$3,000
($92) for each transaction. Stores offering credit phone shopping
in Taiwan include convenience store chains such as 7-Eleven and
Watsons and hypermarkets such as Carrefour. Other banks in Taiwan
such as Taishin, Union and Fubon are also in the midst of running
pilot programmes of this payment method.
• Taiwan’s Chinatrust Financial Holding, the
parent company of Chinatrust Commercial Bank, will jointly
establish a credit card company in Thailand with Government
Savings Bank. The company, possibly to be named Sawasdy
Card Company, will be operational by next year. There are
reportedly 11 million credit cards in Thailand, one-third of the
total 33 million credit cards in Taiwan. Through its newly
established card company, Chinatrust aims to have a market share of
6 percent in five years and foresees that card numbers in Thailand
will triple to 30 million within ten years.
• Mitsubishi UFJ Financial Group (MUFG) will be
strengthening the group’s credit card business through an alliance
involving credit card company Mitsubishi UFJ Nicos, consumer credit
company Jaccs and the Bank of Tokyo-Mitsubishi UFJ. Mitsubishi UFJ
Nicos will transfer its car loan, shopping credit and other
instalment sales businesses to Jaccs and retain its credit card
business. Mitsubishi UFJ Nicos will eventually be wholly owned by
MUFG in an attempt to tap into economies of scale in restructuring
efforts of the cards business.
• European smart card and solution provider Innova
Card has opened an office in Hong Kong in order to
increase its presence in the rapidly growing security markets
across Asia.
Europe, Middle East, Africa
• French telecom operator Orange and BNP
Paribas subsidiary Cetelem have joined forces to launch a
range of co-branded credit cards. Both companies will market the
first product of their agreement, a co-branded Visa card designed
for teenagers, in early 2008. The agreement will also lead to the
first multi-service card for daily use in telecommunications. Card
issuing and customer contract management will be handled by a joint
company, Orange – BNP Paribas Services, which is currently being
created, subject to approval from authorities. This venture may
also potentially spill over into other areas of development, as BNP
Paribas and Orange are both participants in the working groups on
mobile contactless payment.
• Kazakhstan’s Kazkommertsbank has launched the
American Express Gold Card and Platinum Card in
Kazakhstan. The new cards are available in Kazakh tenge or US
dollar denominations. Kazkommertsbank is the exclusive issuer of
American Express cards in the country and is responsible for
signing new merchants in Kazakhstan to accept American Express
cards. Established in 1990, Kazkommertsbank is the largest private,
full-service bank in Kazakhstan, measured by total assets, lending
portfolio, net profit and total deposits. As at 31 December 2005,
the bank had 615,000 cards in issue.
• Saudi Hollandi Bank (SHB) has launched a new
smart card billed as the first lifelong credit card for its
customers. The card’s package includes a free MP3 player for the
cardholder, who automatically enters a draw for a round-trip
two-night stay in Dubai with flights aboard Emirates Airlines.
Statistics released by the Saudi Arabian Monetary Agency show that
credit card debt rose to $2.1 billion in the first quarter of 2007
from $1.25 billion during the same period last year, while credit
card lending surged by around 160 percent from 2003 to September
2006.
• Global payment processor First Data has signed a
contract to provide card processing services to Russia’s
Moskommertsbank in support of its MasterCard card portfolio.
Moskommertsbank is a subsidiary of
Kazkommertsbank, the largest bank by capital in Kazakhstan.
• UK card issuer Halifax has announced the launch
of the Purchase Card, featuring a 0 percent introductory offer on
purchases for 15 months. The card will be available in all Halifax
and Bank of Scotland branches from October 2007. It features a 0
percent deal on balance transfers for six months, although a 3
percent transfer fee applies, as well as a typical APR of 14.9
percent. It has 59 days interest-free credit, but this does not
apply to cash advances or cheques.
• Electronic Document Centre (EDC), a subsidiary
of Emirates Post, has been certified to produce new smart cards
that will soon replace magnetic stripe cards for major bank credit
cards, meeting the deadline set by Visa and MasterCard for phasing
out old technology. The EDC launched its card centre in 2005, which
has been hailed as one of the biggest and most technologically
advanced in the Middle East region. Located in Dubai, the company
already produces health, insurance, identity and loyalty
cards.
• Standard Chartered Bank has launched a new smart
credit card in Botswana, complete with additional features and
benefits such as a travel privileges programme, free funeral cover
and lost card replacement cover. Privileges include dining and
shopping discounts, as well as cash and mobile phone vouchers. Up
to three free supplementary credit cards are available for the
cardholder’s immediate family, with no extra joining fee.
• Swift Global, a Kenyan internet service
provider, has teamed up with global technology company
Business Phone to launch a mobile phone that
enables debit and credit cardholders to transfer money. As well as
providing regular mobile phone functions, the Biashara phone offers
users the security and functionality of a POS terminal. The phone
will be targeted at both corporate businesses and small or
independent traders who need to conduct financial transactions
quickly and securely. “Although traditionally Kenya has a cash
culture, we are now following the global trend of moving from cash
towards a card-based society. After South Africa, Kenya is the
fastest-growing credit card market in Africa,” said Mohamed Jeneby,
the managing director of Swift Global.
• Following the resolution of the Visa International Central
Europe, Middle East and Africa (CEMEA) board of directors,
Azerbaijan’s Unibank has been licensed as a Visa
International acquirer, the first private bank and only the third
bank in Azerbaijan to achieve this status. Following completion of
the certification, Unibank can enter into POS terminal location
agreements independently with mercantile businesses. Unibank
started co-operation with Visa International and became an
associate member in 2003 and a principal member in 2006. The bank
issued 23,355 Visa International and MasterCard cards in the first
half of 2007.
• London newspaper The Evening Standard has
unveiled a prepaid contactless card that can be topped up on the
internet. The Eros Card can be used as a substitute for cash when
purchasing the paper by tapping the card on electronic pads at
newsstands. The new system, which requires readers to register on
the paper’s website, will also be used for advertising and
marketing information, providing in-depth knowledge of how many
people are buying the paper and when, as well as customer rewards,
according to Andrew Mullins, managing director of the
newspaper.
• Capital One is offering its customers a new
rewards package in the UK through its Cashback with World
MasterCard credit card. The card offers 4 percent cashback on all
purchases for the first three months and 1 percent cashback on all
purchases thereafter. It has a 15.9 percent typical APR variable.
In addition to the cashback rate, customers can take advantage of a
variety of World MasterCard travel benefits including free travel
insurance and travel assistance.
• Oesterreichische Nationalbank (OeNB), the
central bank of Austria, and Inform Lykos have
signed an agreement for the sale to Inform Lykos of a majority
shareholding in Austria Card, which is a wholly owned subsidiary of
OeNB. Inform Lykos will acquire 85 percent of the share capital of
Austria Card, while OeNB will retain a 15 percent ownership.
Oesterreichische Nationalbank is aiming to become the largest
payment card service provider for the emerging Central and Eastern
Europe region. The company produces more than 75 million cards per
year.
• UK payments association APACS has announced that
American Express and European merchant acquirer
Elavon Merchant Services are to become members of
its Card Payments Group. Membership of the group now consists of
the 17 largest card issuers and acquirers in the UK, alongside a
representative of the community of smaller banks and building
societies that issue cards.
Latin America
• Wireless POS terminals are a big driver of payment solutions
provider VeriFone’s sales in Latin America,
Fernando Lopez, VeriFone’s vice-president/general manager, Latin
America and Caribbean (LAC), tells CI. In its third quarter to 31
July 2007, VeriFone’s Latin American revenues rose 78 percent
year-on-year to $42.7 million. “There’s a demand for portable
pay-at-table units in [LAC] restaurants, due to fears about
card-skimming,” Lopez says. VeriFone has 20,000 portable
pay-at-table terminals deployed in Mexico alone.
• The popularity of payroll cards has forced Latin American banks
to roll out POS terminals to small merchants in suburban areas,
Fernando Lopez, VeriFone’s vice-president/general
manager, Latin America and Caribbean, tells CI. “Increasingly,
employers are issuing prepaid payroll cards instead of paying staff
with cash,” he says. “Some Latin American governments insist that
employers pay via payroll cards.” Banks have realised that payroll
cardholders are typically unbanked people who are not used to
making card payments, Lopez says. To encourage them to use payroll
cards at the POS, rather than just get cash from ATMs, banks have
been putting terminals in convenience stores. In Mexico, the number
of POS terminals has doubled from 350,000 two years ago, due to a
government programme to encourage firms to issue payroll
cards.
• Payments software vendor ACI Worldwide says its
revenues in the Americas, excluding the US, in its third quarter to
30 June 2007 rose to $19.6 million from $17.7 million in the third
quarter of 2006. US revenues rose to $33 million from $29.3 million
in that quarter. During the third quarter of 2007, ACI signed a
contract with an unnamed Brazilian bank for its ACI Proactive Risk
Manager and ACI Automated Case Management risk and payment
management software.
• Argentina’s Banco Galicia has spent ARS18
million ($5.7 million) on 380 new ATMs from US vendor NCR. The bank
is also deploying NCR’s ATM incident detection and prevention
technology. Banco Galicia currently has 600 ATMs and 549
self-service deposit terminals.
• CSF International (CSFi), a Florida-based
payments software vendor, is to supply a debit and ATM card
management system to RBTT Financial Group. The
Antigua-based bank will install the CSFi system at its operations
centre in Trinidad and Tobago. The system will enable 11 RBTT-owned
banks across the southern Caribbean to maintain their debit and ATM
cardholder files. CSFi says it expects RBTT will also install the
CSFi card management system at its RBTT Bank Jamaica subsidiary to
support several other RBTT-owned banks in the northern
Caribbean.
• Banco Galicia says its net income from services
in the second quarter to 30 June 2007 was boosted by credit and
debit card fees, due to a significant rise in card transactions.
Total net income from services rose by 41.9 percent to ARS223.1
million, including ARS157.4 million in card-related fees, from
ARS157.2 million in the second quarter of 2006. Card-related fees
in that quarter totalled ARS110.6 million.
• Banamex, Citigroup’s Mexican subsidiary, is to
install US-based Transoft International’s OptiCash
ATM and branch cash management software. Transoft says Banamex will
also use OptiCash to support other Citigroup-owned Latin American
banks’ ATM and branch cash requirements. OptiCash enables banks to
automate their cash ordering, monitoring and forecasting.
• Banco de Mexico, the country’s central bank,
estimates that electronic transfers accounted for 93 percent of
total money remittances from the US to Mexico in 2006, up from 53
percent in 1996 and 85.8 percent in 2003. Mexicans living in the US
sent $23.1 billion back home in 2006.
• A Banco Itaú study says overall Brazilian credit
card transactions totalled BRL15 billion ($8.18 billion) in
September 2007, down from BRL15.4 billion in August 2007 but up
19.8 percent from BRL12.5 billion a year earlier. Total Brazilian
credit card transactions in the first nine months of 2007 were
BRL128.5 billion. In September 2007, there were 199 million credit
card transactions, with an average value of BRL76, Itaú says.
• Banco Itaú says that in 2007, instalment plan
purchases by credit card in Brazil will overtake one-off credit
card purchases for the first time. Instalment plan purchases by
credit card will account for 51.9 percent of all credit card
purchases in Brazil this year, Itaú credit card marketing director
Fernando Chacon said.
• Bermuda-based e-commerce processor First Atlantic
Commerce has been certified for Puerto Rico-based
Evertec’s internet payment processing platform.
First Atlantic says the certification means that it can settle
transactions to all merchant-acquiring banks that use Evertec’s
platform. The deal is expected to help First Atlantic to win new
contacts from Latin American and Caribbean acquirers. Evertec is
the transaction processing subsidiary of Popular, the parent
company of Puerto Rico’s Banco Popular.
• Banco do Brasil says its credit card
outstandings rose by 26.3 percent year-on-year to BRL22.4 billion
($12.2 billion) in the first half of 2007. The bank currently has
15.7 million credit cards in issue.
• US-based processor Global Payments says its US
money transfer business, which solely handles remittances to Latin
America, had revenues of $29.6 million in its first quarter to 31
August 2007. In the year-ago quarter, revenues were $29.3
million.
• Global Technologies Investment, a US-based
m-payments software developer, has set up a new company, Payment By
Cell. It will market Global Technologies’ mobile banking and mobile
POS technology primarily in Latin America. Payment By Cell is
looking for partnerships with Latin American banks, credit card
companies and mobile operators. Global Technologies’ software
enables merchants whose business is too small to justify installing
a POS system to receive card payments via mobile phones.
• Visa held a seminar in Mexico City on 20
September on how prepaid cards can help public sector bodies save
costs. According to a Visa survey of Mexican government
departments, there is a high level of ignorance in the public
sector about how government-issued prepaid cards can be used to
replace cheque payments. Speaking at the seminar, Van Elder Espinal
Martínez, director general of the Dominican Republic’s Social
Subsidies Administration, said his organisation issued 216,000 Visa
Solidaridad prepaid cards in 2004. The success of the programme has
prompted the government to start issuing Solidaridad cards to
people on other welfare programmes, Martínez said. By the end of
2007, 300,000 Solidaridad cards will be in issue.
North America
• The US Justice Department is investigating interchange fees that
MasterCard, Visa and their member
banks charge retailers for processing transactions, news service
Bloomberg quotes Thomas Barnett, head of the department’s antitrust
division, as telling Congress on 25 September. Barnett revealed the
enquiry when asked at a Congressional hearing if the department is
investigating merchants’ complaints that alleged collusion by
MasterCard and Visa and their member banks forces retailers to pay
higher prices for transactions.
• US credit card loan delinquencies fell slightly in the second
quarter of 2007, the American Bankers Association
(ABA) says. Late payments on credit cards affected 4.39 percent of
all accounts in the second quarter of 2007, compared to 4.41
percent in the first quarter of 2007, on a seasonally adjusted
basis. The ABA report defines late payments as 30 days or more
overdue.
• US revolving consumer credit rose by an annual rate of 6.6
percent in July 2007, following a 6.4 percent rise in June 2007,
the Federal Reserve’s monthly consumer credit
survey says. Revolving credit including credit card debt totalled
$907.4 billion in July 2007, compared to $902.4 billion in June
2007.
• The average US ATM surcharge has risen to $1.78 from $1.64 a year
ago, Bankrate.com says. The financial services comparison company
estimates that Americans will pay $4.4 billion in ATM fees in 2007.
In September 2007, Bank of America said it had
increased surcharges at most of its ATMs to $3 from $2. Surcharges
are fees charged by an ATM owner to customers of other banks.
• North Carolina-based CommunityOne Bank has sold
its credit card portfolio to Elan Financial Services, a division of
US Bancorp. Elan provides outsourced services to other financial
institutions.
• Barclays’ US subsidiary has teamed up with
satellite TV broadcaster DirecTV to launch the
DirecTV Rewards Visa credit card. The card offers so-called
‘once-in-a-lifetime experience’ rewards such as all-inclusive trip
for two to the Sundance Film Festival. Cardholders can also redeem
points in exchange for DirecTV programming content.
• Capital One Canada has launched a No Hassles
MasterCard Rewards credit card. The no-annual-fee card offers
either cashback or rewards points that never expire. To use points
for travel, customers book their tickets via the sales channel of
their choice using their Capital One card. They then tell Capital
One they wish to use points to pay for their travel and get the
cost of their ticket refunded to their card account on their next
statement.
• Citigroup and travel website
Expedia.com have launched the co-branded Citi
PremierPass/Expedia.com credit card. Cardholders earn points for
everyday purchases made with the card, additional points for
eligible travel booked on Expedia.com, and points for the miles
they fly on any airline.
• Discover Financial Services posted a pre-tax
income of $387 million in the US for the third quarter to 31 August
2007, unchanged from the 2006 period. Its US credit card
delinquency rate of 3.16 percent was 15 basis points lower than
last year and 19 basis points higher than in the second quarter of
2007. Discover’s managed US credit card net charge-off rate of 3.70
percent was up 15 basis points from the third quarter of 2006, but
down 30 basis points from the second quarter of 2007.
• Brokerage firm Fidelity Investments has launched
its first checking account in the US. MySmartCash comes with a
debit card that offers free ATM withdrawals and a credit card that
has no annual fee.
• GoUrban, an e-commerce website for
African-Americans, has launched a prepaid MasterCard card. The
reloadable card is issued by US-based MetaBank and
payment technology is provided by ESafe Cards. The
GoUrban.net cards can be loaded with up to $2,500 and accept
payroll direct deposit. Details of each transaction are sent to the
cardholder’s mobile phone.
• The Office of Thrift Supervision has closed Alpharetta,
Georgia-based NetBank as a result of
mortgage-related losses the online bank sustained in 2006 and 2007.
NetBank was taken into receivership on 28 September by the Federal
Deposit Insurance Corp. ING has agreed to acquire
$1.5 billion of NetBank’s $2.3 billion deposits as well as $724
million of NetBank’s assets.
• RBC Royal Bank is to deploy Visa payWave
contactless technology on its chip and PIN credit cards. The bank’s
customers will begin receiving chip and PIN credit cards with the
Visa payWave feature in October. Cardholders will be able to use
the cards in the six-month chip and PIN market trial, which will
start in Kitchener-Waterloo, Ontario this autumn.
• GE Money is to issue a private-label credit card
for upscale north-eastern US department store chain Lord &
Taylor. The card will be issued to the retailer’s existing 1.5
million store cardholders and will also be marketed to new
customers.
• US retailer Target says it is considering
selling its $7 billion credit card portfolio, which includes a Visa
card and a private-label card. It has hired Goldman Sachs to help
it evaluate options for its credit card business. (See ”Eyes on
the prize”)
• Canadian federal and Albertan provincial privacy commissioners
say US-based retailer TJX’s data security breach
was foreseeable and preventable. Their investigation found TJX
broke federal and Albertan privacy laws designed to regulate how
businesses store consumer information. “TJX collected too much
personal information, kept it too long and relied on weak
encryption technology to protect it,” Federal Privacy Commissioner
Jennifer Stoddart says.
• TJX and merchant acquirer Fifth Third
Bancorp have agreed to settle class action lawsuits
brought on behalf of US, Puerto Rican and Canadian customers who
were victims of the TJX data breach. The retailer did not disclose
the cost of the proposed settlement.
• Visa USA has launched Visa Micro Tag, a
contactless payment device for use at Visa payWave-enabled POS
terminals. The key fob contains an embedded contactless chip, and
can be offered to Visa cardholders as a companion device to an
existing credit, debit or prepaid card.
• Canadian debit card scheme Interac reports the
processing of the country’s first chip and PIN debit card
transaction at POS. In the transaction, which was processed by TD
Merchant Services, a Bank of Montreal-issued chip and PIN debit
card was used at a Toronto store on 12 September.
