• Hong Kong credit card transactions reached a
record high of HK$73.76 billion ($9.47 billion) in 2007..
• Mumbai’s railway operator Central Railways will
issue tickets on smart cards for its suburban service..
• According to a recent presentation from South Africa’s
Standard Bank, credit card fraud in the country
for 2007 reached the ZAR350 million ($45 million)..
• US banks have failed to persuade their customers to use
contactless cards and signature-based debit cards instead of PIN
debit…
Asia-Pacific
Go deeper with GlobalData
• Efforts by the Reserve Bank of
Australia to check customer spending by increasing
interest rates have paid off. Data from the Australian Bureau of
Statistics shows that the total outstanding balance on credit and
charge cards rose by 9.5 percent in the 12 months to December 2007,
compared with an average growth of 17 percent over the previous
five years. Average credit card balances were also growing at a
relatively slow rate of 4 percent in the past year. The central
bank raised interest rates twice in the space of three months in
2007.
• Woolworths, Australia’s largest supermarket
chain, will start issuing co-branded cards with
HSBC by late 2008 or early 2009. Woolworths is
reported to process 114 million credit card transactions, or 11
percent of credit card transactions in the country.
• China’s Bank of Communications is waiting for
regulatory approval to set up a credit card joint venture with
HSBC. Current regulatory policies dictate that
HSBC may not have more than a 20 percent stake in
the joint venture. Bank of Communications has issued 5 million
credit cards and launched co-branded cards with retailers Wal-Mart
and Lotus.
• Hong Kong credit card transactions reached a record high of
HK$73.76 billion ($9.47 billion) in 2007, thanks to the strong
economic growth and booming stock market. However, card issuers
have reported cautious spending in the early part of 2008 due to
uncertain market prospects, but have yet to see deterioration in
the overdue rate. A report by Merrill Lynch
highlights a 13 percent growth in retail spending in 2007 and it
believes that the growth will continue in 2008.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData• HSBC has launched its Green credit card in
Hong Kong. From 7 April 2008, customers can apply for the card
which is made of a plastic that does not contain chlorine or other
toxic chemicals. Cardholders will also receive an electronic
statement to reduce paper consumption and will support the local
environment as HSBC will donate 0.1 percent of spending to the HSBC
Green Roof for Schools programme.
• Mumbai’s railway operator Central Railways
will issue tickets on smart cards for its suburban service. It is
hoped that the Go Mumbai Card will end long queues at ticket
counters for daily train passengers on the suburban routes. A fee
will be charged for buying and recharging the card.
• Indonesia’s card issuers are reported to have suffered a loss
of $3.88 million because of fake credit cards. Some banks have
migrated to chip cards, although local issuers stress that
regulation is needed to cope with card counterfeiting.
• South Korea’s overseas credit card spending reached a new high
in 2007 as its residents travelled abroad, encouraged by the
strength of the local currency against the US dollar. The central
bank, Bank of Korea, recorded overseas credit card
spending of $6.37 billion in 2007, an increase of 32.6 percent from
the previous year.
• Korea Exchange Bank will make it easier for
foreigners living in Korea to obtain a credit card. Previously, a
foreigner applying for a credit card would need a Korean to verify
their identity even if he/she had a job and bank account. The
services will be available at Seoul Global Centre.
• Korea’s Woori Bank will release radio
frequency-enabled cash cards which will allow customers to carry
out banking transactions at the ATM without touching their card on
the ATM. According to the bank, this method is ten times faster
than inserting a physical card and prevents damage to the magnetic
strip on the card.
• American Express Bank has received a
restricted banking licence to conduct credit card and travel
business in India. This clears the way for a merger of Amex’s
banking business in India with that of Standard Chartered
Bank as part of their $860 million global deal.
• Bangkok Bank has launched Thailand’s first
contactless credit card, the Blue Wave, with Visa International and
Bangkok Mass Transit System (BTS). The card combines a credit card
and BTS travel card in one. Cardholders will be able to use their
card for contactless payments of up to THB1,500 ($50.42) per
transaction at merchants that display Visa’s payWave logo.
Merchants include McDonald’s, Burger King, Starbucks and Siam
Cineplex. Cardholders will also receive a bonus point for every
THB25 spent on the card under Bangkok Bank’s Bualang Thank You
programme.
• In India, HDFC Bank and telecommunications
operator Reliance Communications have partnered to
provide mobile credit cards. A mobile phone with Reliance will get
credit card functionality and the mobile number will act as a
credit card number. The user will not be liable if the phone is
stolen. Transactions are conducted with a pass code.
• Bank Negara Indonesia, the country’s
third-largest lender, wants to increase its credit cardholder
numbers from 1.3 million to 1.7 million. It is targeting 40 percent
growth in the volume of credit card transactions. There were 9.2
million credit cardholders in Indonesia in 2007, an increase from
8.21 million in the previous year.
• Bank of Japan, the country’s central bank,
will start publishing data on prepaid electronic money services
such as Edy and Suica to track usage of the smart cards. It expects
the spread of electronic money to have a greater impact on the
supply and demand for coins. The bank highlighted that the
circulation of small-value coins has declined since the
introduction of electronic money. The bank will compile monthly
information on the value and number of settlements, as well as
cards issued.
• Mitsubishi UFJ Financial Group will raise its
stake in its credit card subsidiary Jaccs from 4.66 percent to 20
percent. The bank said the move is part of a planned transfer of
the consumer credit operations from another unit, Mitsubishi UFJ
Nicos, to Jaccs. The consumer credit business has undergone major
restructuring since the regulation on interest rates affected
business across the board.
• Credit cards in use in Taiwan decreased by 4.9 percent in 2007
although the average cardholder still held four credit cards each.
Citibank posted the highest growth of 7.4 percent
in the number of active credit cards, followed by ABN
AMRO with a 4.5 percent increase. Both banks offered
spending incentives to its cardholders. ABN’s platinum credit card
and its co-branded China Airlines card were major contributors to
its credit cards business.
• Krungthai Card, which is Thailand’s biggest
credit card issuer, plans to sell bonds worth up to $372.8 million
in an attempt to finance business expansions and refinance
debt.
Europe, Middle East, Africa
• American Express Middle East and Qatar-based
Doha Bank have signed off on two major agreements
that will see the acceptance of American Express cards across all
Doha Bank’s POS terminals. The agreements will also allow the bank
to sign merchants on behalf of American Express. The POS agreement
and the external sales agreement are an indication of a growing
acceptance of American Express products across a broad range of
retail outlets in Qatar.
• Ahli United Bank (AUB) and Bahrain
National Insurance (BNI) have forged a product agreement
to offer the first insurance co-branded credit card in the Kingdom
of Bahrain. The new credit card will offer consumers savings on
insurance premiums combined with the insurance benefits that an AUB
gold credit card offers. The savings on insurance include 10
percent on premiums for motor, medical and Al Dar home insurance,
as well as 5 percent on premiums for life insurance with BNI.
Cardholders have the option to have their insurance premium
payments automatically charged to their card under a direct debit
facility. Holders of the co-branded card will be eligible for other
benefits associated with AUB credit cards, including travel
insurance, medical insurance and the opportunity to earn rewards
for every dinar that they spend on the card with Pearl Rewards,
AUB’s credit card rewards programme.
• According to a recent presentation from South Africa’s
Standard Bank, credit card fraud in the country
for 2007 reached the ZAR350 million ($45 million) mark. This is an
increase of 34 percent from the previous year. The most prevalent
type of fraud was the stolen cards category, which, together with
lost cards, accounted for nearly ZAR160 million. This form of card
fraud also increased the most, followed by card counterfeiting,
which amounted to over ZAR120 million last year. Other forms of
fraud that have risen over the past 12 months include card identity
theft and card-not-present fraud. According to Standard Bank, which
commands a 36 percent market share in credit cards, all customer
groups were affected.
• Visa Europe and Swiss-based Cornèr
Bank have announced the launch of the country’s first Visa
payWave card. The contactless Cornèrcard uses short-range wireless
technology to allow customers make low value payments in less than
a second. As well as being able to pay for transactions under CHF40
($36) throughout Switzerland without cash, cardholders will have
the freedom to use their payment card at checkouts across the
globe.
• Capital One has launched a new credit card
that goes against the increasing tendency towards rising fees in
the UK balance transfer market. The Capital One Bank Platinum
Balance Transfer MasterCard has no balance transfer fees on
transfers made to the card. However, the zero percent rate is
available only until August 2008. Only one other UK credit card is
free of charges on balance transfers, offered by Norwich and
Peterborough Building Society, but it is available only to its
existing customers.
• Balance transfer fees in the UK have risen recently, as
financial institutions tighten up their lending conditions.
Outstanding credit card balances have increased by £300 million
($587 million) over the past 12 months, according to figures
recently released by UK payments association
APACS.
• MasterCard has launched a new interactive
online tool that allows companies of all sizes to improve their
travel and entertainment and purchasing programmes. The MasterCard
Optimiser for Travel & Entertainment and Purchasing identifies
potential savings opportunities by benchmarking and analysing them
against best-in-class industry practices. The European launch of
this programme follows the roll-out of the MasterCard Optimiser in
both North America and the Asia-Pacific and Middle East
regions.
• For the second year in a row, Discovery and SAA Voyager credit
cards were ranked first in the South African Value in Credit Cards
survey report from Johannesburg-based business intelligence
consultants Razor’s Edge. According to the report,
the SAA Voyager Premium card is the country’s most valuable
stand-alone credit card, while the Platinum DiscoveryCard is the
most valuable card overall.
• Nearly the entire adult population of Norway – about 4 million
people – now use internet banking services, according to bank
processing company EDB Business Partners.
According to its data, there has been a 10 percent rise in the
number of web bankers in the country over the past 12 months and
the figure has grown threefold in the last four years. The total
use of internet banking services grew by around 20 percent in 2007.
Between 2003 and 2007 the number of transactions carried out online
increased by 144 percent, says EDB. The number of card payments
made in Norway also continues to rise, with the number of
transactions passing through the company’s systems up by 15 percent
on the previous year. EDB also reports a 113 percent rise in the
number of people registering for secure card payments via its
system, to 1.5 million in 2007.
• MasterCard Worldwide has been certified by
the Irish tax authorities to offer simplified value added tax (VAT)
invoice reporting through its purchasing card programme. The
agreement will enable Irish companies of all sizes to streamline
their VAT reclamation process using MasterCard Smart Data OnLine
(SDOL) or MasterCard smartdata.gen2, the latest advance in
MasterCard’s portfolio of web-based expense and information
management solutions.
• PayPal continues to be the most popular
online payment service in the UK, with over 20 million user
accounts now registered in the country, representing more than
one-third of the UK’s adult population. According to internet
market research provider Nielsen Online, eBay
subsidiary PayPal had 5.2 million unique visitors to its site in
January 2008, nearly five times as many as the next most popular
payments outfit, Royal Bank of Scotland-owned WorldPay, which had
1.07 million unique visitors.
• French smartcard vendor Oberthur Technologies
has made a SEK704 million ($113 million) cash bid for Swedish
smartcard company XPonCard. Oberthur says
XPonCard’s board of directors has “unanimously recommended the
offer to shareholders”. In addition, the French vendor has received
“irrevocable undertakings” to accept the offer from shareholders
representing about 50.7 percent of XPonCard stock. Stockholm-based
XPonCard provides smart cards for secure payments and
identification and had turnover of more than €120 million ($180
million) in 2007, according to its website. Oberthur says its
merger with XPonCard would create the world’s second-largest smart
card vendor behind Gemalto, with sales of approximately €735
million.
Latin America
• US payment consultancy First Annapolis is seeing
a growing interest among Latin American retailers in offering
banking services to the unbanked, Nelson Irizarry, a First
Annapolis consultant, tells CI. “Retailers have seen how successful
Mexico’s Elektra has been in expanding from retail to banking in
Latin America with its Banco Azteca operation,” he says.
Banco Azteca has operations in Mexico, Peru,
Panama, Guatemala and Honduras. “It’s far harder for a Latin
American bank to penetrate the unbanked market than for a retailer
to start offering loans and private-label credit cards to its
unbanked customers,” Irizarry says.
• US-based payments software vendor ACI
Worldwide’s Americas revenues in the fourth quarter to 31
December 2007 rose to $49.6 million from $47.2 million a year
earlier. US revenues in the fourth quarter of 2007 were $35
million, compared to $34 million a year earlier. ACI did not break
down its non-US Americas revenues.
• Banco Azteca Mexico’s revenues rose by 17
percent in its fourth quarter to 31 December 2007 to MXN4.54
billion ($421 million) from MXN3.9 billion in the fourth quarter of
2006. The increase was due to a significant rise in Tarjeta Azteca
credit card lending and in unsecured personal loans. The bank’s
gross credit portfolio including personal loans and credit card
lending rose by 9 percent to MXN21.9 billion at 31 December 2007
from MXN20.09 billion a year earlier. The average term for personal
loans and Tarjeta Azteca debt was 60 weeks at 31 December 2007, up
from 59 weeks a year earlier.
• Barbados Public Workers’ Co-operative Credit
Union (BPWCCUL) has linked its ATMs to
CarIFS (Caribbean Integrated Financial Services
Network), Barbados’s national ATM and debit switch (CI 390 p6).
UK-based Alaric provided debit card authorisation
and switching software for the project. BPWCCUL is the largest
credit union on Barbados.
• Diebold, the US-based ATM manufacturer, is
cutting 800 jobs worldwide due to weakness in the US bank ATM
market. Among the operations experiencing job losses will be
Diebold’s Brazilian subsidiary.
• Brazil’s Bradesco says its total loans to
consumers, including credit card lending, rose by 34.2 percent
year-on-year to BRL59.28 ($34.7 billion) in the year to 31 December
2007. Credit card lending to consumers rose by 47.2 percent to
BRL8.3 billion from BRL5.6 billion at 31 December 2006. At the end
of 2007, Bradesco had 29,913 ATMs in Brazil.
• Spain’s Caixa Catalunya is considering
setting up operations in Latin America, specifically in Mexico and
Brazil, according to press reports. The Barcelona-based bank
declined to comment.
• CSU CardSystem issued 446,726 credit cards in
Brazil on behalf of its clients in January 2008. The Brazilian firm
provides outsourced credit card issuing and management services to
banks, insurers, oil companies and supermarkets. Clients include
retailer Carrefour and financial services firm Omni Financeira. As
of February 2008, CSU had 17 million cards in issue.
• Chip card vendor Gemalto says its North and
South American revenues rose by 12 percent in the fourth quarter
2007 to €113.6 million ($168 million) year-on-year at constant
exchange rates. Full-year 2007 Americas revenues were up 1 percent
year-on-year to €331.5 million.
• Hypercom says its revenues for the year to 31
December 2007 included $11.9 million worth of product sales in
Brazil. It incurred $500,000 of ‘negative gross profit’ on
Brazilian countertop POS terminal revenues in full-year 2007. “This
is where we sold terminals at a slight loss to get future service
revenue,” a Hypercom spokesperson tells CI. Hypercom says it had to
make a bad debt reserve related to a single customer in Latin
America in the fourth quarter of 2007. Hypercom CEO and president
Philippe Tartavull says the company “significantly increased its
market share in Mexico, the Caribbean and Central America.”
Hypercom has also restored its profitability in Brazil, he
says.
• Argentine banking automation equipment vendor
Mediterránea has launched the MED-360e terminal,
which enables bank customers to pay bills with either cash or
cards. Mediterránea says the touchscreen self-service terminal is
designed to automate the payment of tax and utility bills.
• Cross-border remittance company MoneyGram has
secured an agreement for equity and debt investment from a
consortium led by Thomas H Lee Partners and Goldman Sachs. The
stock to be issued will give the investors an initial equity stake
of around 63 percent in MoneyGram, which specialises in remittances
from the US to Mexico. MoneyGram has until 7 March 2008 to consider
rival investment proposals. Separately, US-based remittance
provider and ATM network operator Euronet says it is withdrawing
its takeover bid for Moneygram. Euronet launched the unsolicited
bid in December 2007 (see CI 393 p7).
• Moody’s Investors Services is entering the
Colombian credit rating market via an affiliation agreement with
BRC Investor Services. Bogota-based BRC provides
local market credit ratings. After receiving training from Moody’s,
BRC is to provide credit ratings on Colombian companies based on
the US company’s methodology.
• Smart card vendor Oberthur Technologies’
Americas revenues rose to €56 million ($83 million) in the fourth
quarter of 2007 from €48.9 million a year earlier. Its Americas
region encompasses the US, Canada and Latin America, and includes
bank card as well as SIM card sales. Oberthur saw an 80 percent
increase in SIM card sales volumes in Latin America in the fourth
quarter of 2007. For full-year 2007, Oberthur’s Americas revenues
rose to €181.2 million from €169 million in 2006.
• Peruvian banking regulator SBS
(Superintendencia de Banca Seguros) has introduced a law forcing
banks to justify unsolicited increases in their customers’ lines of
credit. The law, which came into effect 1 February 2008, applies to
credit cards as well as to lines of credit linked to bank accounts.
The SBS says banks must inform customers if they increase their
customers’ credit facilities without being requested to do so, and
explain any new terms and conditions.
• Visa Inc. says in a US Securities and
Exchange Commission filing that its Latin American and Caribbean
region accounted for 30 percent of the increase in non-US operating
revenues seen in the quarter to 31 December 2007. Total global
operating revenues rose by $315 million year-on-year to $1.488
billion in the quarter. Visa did not break its operating revenues
into US and non-US segments.
North America
• A MasterCard Advisors study on the US small
business credit card market says that many issuers still rely on
direct mail to target small business owners. But direct mail may
not be the best way to reach this relatively untapped market, it
says. Banks need to make more use of branches to sell small
business cards. The study is based on a survey of 5,000 US small
business owners. It reveals that 64 percent of small business
owners use a consumer credit card for their business spending.
• Instead of looking for new customers, US credit card issuers
are doing more to encourage existing customers to use their cards,
says market research company Mintel Comperemedia.
The number of credit card direct mailings sent to non-customers
dropped by 11 percent from 2006 to 2007, says Mintel. However,
loyalty credit card offers, sent only to current customers,
increased by 16 percent during that period. Loyalty credit card
offers encourage cardholders to use their cards by advertising
benefits such as balance transfers, convenience cheques and bonus
rewards.
• Revolving US consumer credit, which includes credit card
borrowing, rose by a seasonally adjusted annual rate of 2.7 percent
in December 2007 to $943.5 billion, according to the
Federal Reserve’s monthly G.19 report. In November
2007, revolving credit rose by 13.7 percent to $941.4 billion. For
the fourth quarter of 2007, revolving consumer credit was up by a
seasonally adjusted annual rate of 9.3 percent. For 2007 as a
whole, it was up by 7.8 percent.
• US credit card charge-offs and delinquency rates are on the
rise and not just for subprime debt. The charge-off rate for prime
card balances was 5.4 percent in January 2008, up from 4.3 percent
in January 2007, according to debt rating company Fitch
Ratings. Moody’s Investors Services
expects US credit card charge-off rates to rise still further this
year and for at least part of 2009.
• US banks have failed to persuade their customers to use
contactless cards and signature-based debit cards instead of PIN
debit, despite major marketing efforts last year,
Gartner says. The US consultancy surveyed 4,500
online American adults in August 2007 and found that cardholders
prefer PIN-based debit cards over other payment methods such as
credit cards, contactless cards and signature-based debit. Gartner
says PIN debit is popular with consumers, as they feel it is more
secure than signature-based card transactions. Banks like
signature-based transactions as they earn higher interchange fees
from them than from PIN debit.
• The Network Branded Prepaid Card Association
(http://www.nbpca.com/), a US
organisation promoting network-branded prepaid cards, has published
a document called “Recommended Practices for Anti-Money Laundering
Compliance for US-based Prepaid Card Programs”. The document
provides advice for network-branded prepaid card issuers to help
them comply with the US Bank Secrecy Act’s anti-money laundering
requirements.
• CIBC has introduced the Chinese language to
all of its 3,800 ATMs across Canada. The Toronto-based bank says it
also offers Chinese language services over the phone and internet
and in many of its branches across Canada.
• Citi has entered a marketing alliance with
Los Angeles-based concert operator Live Nation. As the Live Nation
official sponsor in the US credit card category, Citi will receive
benefits such as access to pre-sale and preferred tickets. Citi
will offer the benefits to its cardholders through its Private Pass
programme. The deal is expected to drive ticket sales for Live
Nation and provide Citi with advertising and marketing
opportunities.
• Citi has won a ten-year contract to
administer the US Department of Defense’s (DoD) Travel Card
programme. The contract covers the US Army, Navy, Marine Corps and
Air Force as well as 20 other agencies. In 2007, the DoD Travel
Card programme had 1.2 million cardholders and a spend level of
$4.9 billion, or 61.2 percent of US government-wide travel
spending. The new official travel cards will be activated on 30
November 2008, replacing the current cards which are administered
by Bank of America.
• Citi has made an undisclosed equity
investment in US near field communications payments technology
company VivoTech. In 2007, VivoTech received
equity investments from NCR, First Data and Motorola.
• US payment processor Moneris has launched a
PC- and internet-based application for processing card payments.
The eSelectplus application resides on a Moneris server and allows
merchants to process card payments without using traditional card
terminals. Merchants access eSelectplus on the web by using a
password and do not need to purchase additional equipment or
software. They can then process payments involving credit cards,
signature- and PIN-based debit cards, and automated clearing house
e-cheques. eSelectplus can be used in either a point-of-sale or
card-not-present environment.
• The Port Authority of New York and New Jersey Transit are to
jointly test MasterCard PayPass contactless
payments in an eight-month trial starting in early 2009. The pilot
will involve PayPass contactless cards as well as other
PayPass-enabled devices such as fobs and mobile phones. Contactless
payments will be available solely to PayPass users during the first
two months of the pilot and to other bank-issued contactless
cardholders for the remaining six months.
• MasterCard says 17,500 US vending machines
are now equipped with ePort cashless payment terminals that enable
them to accept PayPass. The number has been boosted by the recent
installation of 4,000 additional ePort terminals by USA
Technologies, ePort’s manufacturer. The move to expand cashless
sales at vending machines was driven by positive feedback from
consumers, vending operators and soft drink bottlers, as well as
increased sales at machines that accept contactless payments,
MasterCard says.
• US credit reference agency TransUnion and
payments consultancy Edgar, Dunn & Company
(EDC) have developed a scoring model to help issuers understand how
customers prefer to manage their credit card balances. The Revolver
Model aims to help credit card portfolio managers to cross-sell
products and services to their customers, EDC says. For example,
high revolvers might be interested in services such as balance
transfers, or low APR offers, while non-revolvers are more likely
to be interested in special rewards or features, it says.
• Canadian processor VersaPay has acquired
wireless POS terminal reseller Positive. VersaPay says it made the
acquisition in order to expand its service offering. Positive has
established relationships with multiple vendors and is able to
enhance their products by tying in value-added programmes and
services, VersaPay says.
