ASIA-PACIFIC
Contactless payment

Commonwealth installs contactless payment readers in
Australia

Australian financial institution Commonwealth Bank has said it is
to install 5,000 contactless payment readers across the country by
Christmas.

Commonwealth Bank, Australia’s second-largest bank by assets, is to
roll the technology out after an 18-month trial involving 200
contactless readers across a range of cafes and restaurants. The
new system is set to accept both national and international cards
with a contactless chip.

Australian banks have been attempting to implement the technology
for some time; two years ago National Australia Bank announced a
pilot in Melbourne’s Docklands area, along with Visa and
telecommunications provider Telstra.

The rollout, slated to start in June, will follow the pilot in
allowing the user to purchase up to A$35 ($26) worth of goods,
although a statement from the bank said they are looking to push
that to A$100.

 

Product launch

Standard Chartered launches JustOne card in
Asia-Pacific

Financial services provider Standard Chartered Bank Malaysia has
announced the launch of the JustOne card, a product targeted at
consumers under 30 which offers users a current account to which a
combined credit, debit and ATM card is attached.

The bank has said that the card will help it expand its market
share from five to seven percent over the next 24 months, while it
expects the card alone to bring in 50,000 new cardholders within
the next 12 months, adding to the 500,000 cardholders it currently
has.

The card is available to those with an income of MYR40,000
($11,000) a year. Although Malaysia is the first market the card
will be available in, Standard Chartered will be introducing it to
other Asia-Pacific locations.

According to Standard Chartered Bank Malaysia, consumers aged 30
and under, the demographic targeted by the card, represent over 52
percent of the total Malaysian population.

 

Mobile payment

Alipay to launch mobile payment service in
China

Alipay, the internet payment subsidiary of the Chinese B2B
e-commerce group Alibaba, announced it has teamed up with China
Mobile to offer an m-payments service in the country.

The service will be initially offered to users in the Zhejiang
province, allowing them to carry out m-payments for items such as
new handsets or text message news updates. Alipay started trials of
the system in 2008 and after a one-year beta test and development
period, this service will be officially launched later in
2009.

Users of the service can perform transfers and purchases by sending
short messages to Alipay, although the upper limit of any
transaction is CNY200 ($22).

 

Contactless payment

Sony unveils contactless payments-enabled TV remote in
Japan

Japanese electronics giant Sony has launched a television with a
contactless reader on the remote control.

The new Bravia TV comes with a remote control featuring a built-in
port used for contactless payments. The remote uses FeliCa
technology, which allows viewers to pay online for video-on-demand
services by tapping their contactless cards such as Edy or eLIO
against the remote controls.

The service can also be used to check their payment records with
Edy as well as recharge e-money. The television must be connected
to the internet, and users of the Osaifu-Keitai mobile wallet
service can tap their mobile phones over the TV’s remote control to
access a TV programme information website specifically for mobile
phone users.

FeliCa technology is currently used for public transport,
specifically the Octopus card in Hong Kong, and loyalty
applications. Edy contactless cards are accepted in 40,000 retail
shops and websites in Japan including convenience stores, airports,
restaurants, supermarkets, amusement parks and game centres.

 

Contactless payment

Singaporean retailer Old Chang Kee to accept NETS’
contactless payments

NETS, the Singaporean electronic payments provider, is partnering
with retailer Old Chang Kee to roll out contactless payments
throughout its stores.

After piloting the technology at its Tiong Bahru Plaza outlet in
early 2009, Old Chang Kee now has plans to roll it out at its 70 or
so outlets dotted all over the island later in the year.

Ani Dinasan, NETS’ general manager for its merchant partner group,
said: “NETS strives to steer cashless payments in Singapore by
offering the best payment solutions to its customers and merchants.
Our vision is to constantly push technology frontiers to develop
new smart and savvy payment solutions that will make life great for
all.”

NETS currently has 4.5 million cards in circulation, and the NETS
CashCard is one of the most commonly accepted prepaid stored-value
cards in Singapore. It is accepted at more than 90 percent of car
parks in Singapore and 35,000 retail points and school canteens
around the island.

 

Contactless payment

Singapore looking to boost contactless POS terminal
presence

Singapore’s telecommunications regulator Infocomm Development
Authority (IDA) has asked companies within the country to submit
proposals for deploying contactless POS terminals.

The so-called Call for Collaboration (CFC) has been issued to
promote the use of contactless payments and to increase the number
of terminals in the country. The IDA expects the project to result
in a large increase in near-field-communication (NFC) technology
adoption within Singapore.

According to the CFC, POS terminals have to be compliant with a
Singapore e-payments standard called Cepas (contactless e-purse
application). The terminals must also accept at least one type of
Cepas-compliant multi-purpose stored-value card which can be used
for transit payments.

The IDA has said it will provide funding for any proposals that
could increase the number of contactless POS terminals across
Singapore, although each deployment has to include over 100
terminals. It has said that it is looking for adoption of the
technology in food courts, coffee shops, fast food outlets,
convenience stores and vending machines. The grants will be awarded
by IDA in late July 2009 and participants have to complete their
contactless POS terminal deployment within 18 months from accepting
their grants.

 

EUROPE, MIDDLE EAST, AFRICA

Prepaid cards

MasterCard pairs up with Travelex

UK foreign currency prepaid card distributor Travelex has announced
a partnership with MasterCard Worldwide to deploy the prepaid
transaction processing capabilities of MasterCard’s Integrated
Processing Solutions (IPS).

As part of the new global agreement, Travelex, which already issues
and distributes MasterCard Cash Passport cards, will launch new
MasterCard-branded consumer and corporate Cash Passport programmes
around the world utilising IPS. Travelex will also convert existing
programmes to MasterCard.

Travelex’s Cash Passport cards are available in 10 currencies,
offering consumers and corporates the ability to lock in foreign
exchange rates on a reloadable card. The Cash Passport has multiple
applications and is currently being used for leisure travel,
business expenses, airline compensation, payroll and per diem
expenses.

 

Corporate cards

BNP Paribas and Visa launch card in Egypt

French-headquartered card issuer and consumer finance provider BNP
Paribas (BNPP) and Visa have launched the first Visa corporate
credit card in Egypt. The BNPP Visa corporate credit card is a
globally accepted currency that can be used for purchases and cash
withdrawals locally and internationally. Visa’s network ensures
acceptance at 30 million merchant outlets and 1.4 million ATMs
worldwide.

Maha El Sayed, head of retail at BNPP, said: “This reinforces
BNPP’s lead of corporate banking in Egypt. We are better able to
understand and support their evolving needs.

“This is increasingly important during current economic conditions
when more emphasis is directed towards cost efficiencies.
Transferring corporate spending to a card-based solution may
substantially reduce costs and ultimately contribute to improving
companies’ financials.”

 

Fraud and security

Infotechnology and Clickatell provide safety

Nigerian IT services provider Infotechnology Solutions has paired
with communications provider Clickatell to launch its interactive
SMS service MoneyGuard.

The service enables banks to offer customers real-time SMS alerts
with every transaction, giving them immediate knowledge of any
movement in their account. Using MoneyGuard, customers have the
ability to rapidly respond to alerts on transactions considered
fraudulent.

It takes an average of two weeks after a ‘stop’ request is made in
Nigeria before a card is blocked. Both companies claim with the new
service it only takes minutes.

 

Payment methods

APACS finds cheques becoming extinct

UK payments association APACS has released figures highlighting the
move away from cheques towards plastic debit cards for making
payments in 2008.

Retail spending statistics – which cover all online and offline
retail transactions – show £269.9 billion ($411.2 billion) was
spent by consumers last year, of which £116.1 billion (43 percent)
was by debit card, up 6.8 percent on 2007, while only £7.1 billion
(three percent) was by cheque, a 4.1 percent decline on 2007.

Debit card spending was up 9.5 percent on the previous year to
£245.4 billion, while cheques saw a decline of 6.9 percent, to
£180.6 billion. Automated payments continued to account for the
biggest chunk of spending, £333.1 billion, up 6.9 percent on
2007.

APACS director of communications Sandra Quinn said: “These latest
figures don’t reveal any marked changes from the annual trends we
have seen over the past few years. Most notably consumers are
increasingly choosing to use debit cards in preference to cash or
cheques and also, it seems, credit cards.”

 

Contactless payment

Oberthur issues contactless stickers

European card manufacturer Oberthur Technologies is to deploy its
FlyBuy contactless stickers to three banks internationally,
including one of the largest card issuers in the US.

Developed in cooperation with MasterCard, the FlyBuy Sticker is a
contactless payment sticker that can be attached to any surface,
including a mobile phone, PDA, MP3 player or key ring. To pay, the
user places the device with the sticker attached in front of the
contactless reader.

 

Contactless payment

MasterCard, RBS WorldPay link with Boots

MasterCard has announced a new partnership with merchant acquirer
and processor RBS WorldPay and UK health and beauty retailer Boots
to introduce the contactless MasterCard PayPass scheme in selected
Boots stores in London and Liverpool. As acquirers, RBS WorldPay
will work with Boots and its technology partners to enable
contactless transactions.

In the second half of 2009, 15 stores in London and six in
Liverpool will allow customers to pay for everyday purchases under
£10 ($15) with MasterCard PayPass cards and other contactless
payment cards.

Hany Fam, general manager of the UK and Ireland markets at
MasterCard, said: “We are proud to be the first payments company to
introduce contactless to a major high street retailer in the UK.
Boots UK is an ideal environment in which to showcase the speed,
convenience and security of PayPass. Over a million people in the
UK already know carrying a PayPass card means always having the
exact change without being weighed down by it.”

 

Prepaid cards

Union Bank, Travelex issue prepaid Visa card

Union Bank of Nigeria (UBN) has joined with Travelex Global
Financial Services to issue the Travelex Cash Passport prepaid Visa
currency card in Nigeria, which is designed so international
travellers can take money abroad in card form.

Dr Kenneth Adeyemi, executive director of commercial banking at
UBN, said the bank would work with other partner banks to improve
the quality and utility of the card to enhance the experience of
their customers and non-customers.

 

Contactless payment

DnB Nor and Telenor set for m-payments trial

Nordic banking group DnB Nor and telecom company Telenor are to
test contactless mobile payment technology in the autumn of 2009 in
the Norwegian capital Oslo, marking the first trial of its kind in
the Nordic region.

The trial is being run in conjunction with MasterCard, card
manufacturer Giesecke & Devrient and others and involves a near
field communication-enabled mobile phone being used with a new type
of SIM card for secure storage of the payment application. Since
September 2007, DnB Nor and Telenor have cooperated with MasterCard
Worldwide to facilitate contactless payments with mobile phones
using MasterCard PayPass technology.

 

LATIN AMERICA

Financial results

Banco Santander Chile profit up 19 percent

Banco Santander Chile, Chile’s largest bank by deposits, has
reported an 18.6 percent rise in operating income for the first
quarter of 2009 compared to the same period last year.

The bank also revealed fees from credit, debit and ATM cards
increased 6.8 percent year-on-year. Its credit card business, with
33.5 percent of the credit card accounts in Chile, generated 36.3
percent of all purchases in the first quarter of 2009 compared to
35.3 percent in the year-ago period. In the ATM market the bank,
with approximately 30 percent of the ATMs installed in the country,
generated 41 percent of total transactions in 2008.

In Latin America, Santander manages over $200 billion in business
volumes (loans, deposits, mutual funds, pension funds and managed
funds) through 6,089 branches. In 2008, Santander reported €2,945
million ($4,018 million) in net attributable income in Latin
America, up 10 percent from the previous year.

 

Payment processors

TSYS signs with Carrefour in Brazil

Global payment processor TSYS has signed a multi-year contract with
Banco Carrefour to process their hybrid and private-label card
business in Brazil. The first phase of the agreement is the launch
of a new MasterCard hybrid card in June 2009. The hybrid card will
act as a private-label card when used within the Carrefour store
environment, but will act as a general-purpose credit card when
used outside of Carrefour stores.

Carrefour chose TS Prime(SM), TSYS’ outsourced servicing model, on
its multi-client payments processing platform. TSYS will establish
a local client support infrastructure and is working with IBM to
create a data centre facility in Brazil.

Carrefour has been in Brazil for more than 30 years and is the
country’s largest food retailer.

“This is a true milestone for TSYS,” said Gaylon Jowers, president
of TSYS International. “We are committed to the Brazilian market as
it is forecast to grow and become the fourth-largest by cards
issued and the second-largest by card transactions by 2011.”

 

Financial results

Rising Redecard profits

Brazilian acquirer and processor Redecard, which is the exclusive
acquirer of MasterCard transactions in Brazil, has reported first
quarter net profit of BRL317.2 million ($144.7 million), up from
BRL222.5 million in the first quarter of 2008. Net revenue rose
from BRL440.3 million in the year-ago period to BRL558.8
million.

The figures exclude the one-time gains Redecard made in the first
quarter of 2008 from the sale of all its shares in MasterCard.
Including the effects of the sale, net income was only 13.8 percent
higher year-on-year. Redecard captured, processed and settled
BRL32.3 billion in credit and debit card transactions during the
quarter, up 16.6 percent.

In a separate securities filing, Redecard announced a one-year
share buyback programme for up to 5.5 million common shares or 1.63
percent of its current free float level. The company plans to use
the shares for a management stock option programme. Redecard also
stated that it had bought no shares under a May 2008 repurchase
programme.

 

Financial results

Mexico’s Banorte net profit falls 17 percent

Grupo Financiero Banorte, Mexico’s fifth-largest banking group, has
reported a first quarter net profit fall of 17 percent due to
rising loan loss provisions and a one-off gain made a year earlier.
Net profit was MXN1.61 billion ($117.6 million), down from MXN1.93
billion in the first quarter of 2008. Banorte booked an
extraordinary gain of MXN237 million in the first quarter of 2008
from the sale of part of its stake in payment network Visa
following Visa’s IPO.

Banorte’s performing loan book grew 18 percent on the year to
MXN235.42 billion at the end of March, led by commercial and
mortgage lending, while retail deposits increased 29 percent to
MXN255.29 billion. Credit card loan balances fell 9 percent to
MXN13.84 billion. Banorte is in the process of restructuring its
credit card portfolio, which has experienced a sharp rise in bad
loans, and the bank says it will soon be able to start lending
again in that segment.

 

Financial results

Itaú-Unibanco reports first quarter profit
fall

Itaú-Unibanco, Brazil’s largest bank, has reported first quarter
net profit of BRL2.02 billion ($947 million), down from BRL2.78
billion in the year-ago period, due to an increase in loan loss
provisions, which went up 56 percent to BRL3.83 billion.

Itaú-Unibanco also attributed the reduction of its net profit to a
one-time amortisation worth BRL491 million related to a portion of
shares that the bank bought in Redecard, the Brazilian acquirer and
card processor.

The bank attributed the deterioration of risk in its credit
portfolio down to the deceleration of economic activity in the
fourth quarter of 2008. The bank’s non-performing loan rate was 5.6
percent in the first quarter of 2009, compared with 4.8 percent in
the year-ago period. The bank stated that the non-performing loan
rate could go as high as 6.8 percent in September before
stabilising.

The bank’s total credit portfolio was BRL272.7 billion at the end
of the first quarter, up from BRL218 billion in the year-ago
quarter, with the bank maintaining its guidance for an expansion in
its credit portfolio of between 10 percent and 15 percent this
year.

Itaú-Unibanco’s consumer credit portfolio rose 18.6 percent in the
first quarter to BRL94.47 billion, while its corporate credit
portfolio increased 31.1 percent to BRL152.8 billion.

 

Economy

Mexican banking assets stabilising

Asset quality in Mexico’s banking industry showed signs of
stabilising in March, according to the country’s National Banking
and Securities Commission. Non-performing loans as a percentage of
total loans stood at 3.4 percent at the end of March, similar to
the previous month, but worse than the 3.2 percent posted in
December, the regulator said in a report published in early
May.

Total loans held on the balance sheets of banks and their non-bank
subsidiaries stood at about MXN1.9 trillion ($142.3 billion) as of
March, including MXN893.7 billion in commercial loans, MXN295
billion in mortgages and MXN270.8 billion in credit card loans.
Non-performing mortgage loans rose to 3.8 percent in March from 3.6
percent in February, while in credit card loans, the non-performing
portion rose to 10.3 percent from 10.2 percent.

Mexico’s five leading banks – BBVA Bancomer, Banamex, Grupo
Financiero Santander Mexicano, HSBC Mexico and Banorte – control
about three-quarters of loans and deposits. The Central Bank of
Mexico is predicting a contraction in GDP of between 3.8 percent
and 4.8 percent due to the global economic slowdown and a
subsequent drop in trade.

Global credit ratings agency Standard & Poor’s revised its
outlook on Mexico’s credit ratings from stable to negative on 11
May, saying it may downgrade them if the Mexican government fails
to address fiscal issues this year.

 

NORTH AMERICA

Contactless payment

Giesecke and NXP launch contactless chip

European communications hardware manufacturer NXP has teamed up
with payment card supplier Giesecke & Devrient to release a new
contactless payment chip in North America.

The Fast Pay chip will support the latest MasterCard and Visa
contactless payment specifications, offering a higher level of
security than software solutions alone. The chip has also been
produced to support very thin card designs. At the end of 2008,
over 70 million contactless smart cards were issued in the US and
this annual number is expected to rise to 100 million over the next
three years.

Steve Owen, vice-president of sales and marketing at NXP
Semiconductors, said: “The new Fast Pay chip has been designed in
close alignment with our customers and is tailored to provide
consumers in the US and Canada with a secure, fast and comfortable
payment experience.”

 

Prepaid cards

FSV Payment Systems, Western Union link up

Houston-based prepaid card provider FSV Payment Systems has added
reloading capabilities to its PayChekPLUS! Prepaid payroll card at
Western Union agents.

The PayChekPLUS! card enables employers to pay their employees
through direct deposit instead of receiving paper cheques. Any user
who wants to add funds to their card can now visit any Western
Union agent location, complete some basic information and present
their card to the agent with their cash, plus a $3.95 service
fee.

“Western Union’s massive footprint of more than 54,000 agent
locations throughout the US will give our cardholders more
opportunity than ever to add cash to their cards quickly and
conveniently,” said Jon Palmer, FSV president and CEO.

 

Card issuance

Fifth Third extends MasterCard agreement

MasterCard Worldwide has announced a multi-year contract extension
with US bank Fifth Third Bank. Under the agreement, Fifth Third
Bank will continue its partnership with MasterCard, issuing credit
and debit MasterCard cards for both consumers and
corporations.

“By extending the MasterCard relationship, Fifth Third Bank
cardholders will continue to have access to reliable payment card
products that are accepted all over the world,” said Fifth Third
Processing Solutions president Charles Drucker.

Fifth Third, holding $119 billion in assets, and operating 16
affiliates with 1,311 branches in the US, has been issuing
MasterCard products since 1980.

 

Prepaid cards

US bank issues 30 millionth Visa gift card

North America’s sixth-largest commercial bank, US Bank, recently
issued its 30 millionth Visa-branded gift card. The bank is
currently the top Visa prepaid card issuer in the country.

Customers can purchase US Bank Visa gift cards at any branch
location in the region, at shopping malls or on the bank’s website.
The cards can be used anywhere Visa debit is accepted.

“As a national leader and innovator in prepaid cards, this is an
exciting milestone for US Bank,” said Ralph Bianco, senior
vice-president and head of US Bank’s prepaid cards programme.

 

Financial results

TSYS offers up debt management arm

US payments processor TSYS has reported a fall in first quarter net
profits of around 18 percent compared to the same period last year.
Profits for the company fell 17.8 percent from $56.6 million in the
first quarter last year, to $46.5 million this year.

TSYS said TSYS Debt Management (TDM), a wholly-owned subsidiary
involved in the legal collections management and bankruptcy
processing, is no longer core to its business. TSYS has signed a
letter of intent with a potential buyer, and expects the sale to
close in the second quarter.

“This economic-driven slowdown in the market, combined with
discontinued operations, has led us to adjust our guidance for
2009,” said Philip Tomlinson, chairman of the board and CEO of
TSYS.

“We are now expecting declines in revenues of 5 percent to 3
percent, and net income of 13 percent to 11 percent, as compared to
our previous guidance of increases in revenues of zero to 2
percent, and declines in net income of 3 percent to zero. We are
committed to continuing to reduce our costs and improve our
operating margin.”

TSYS has blamed the drop on several factors, including exchange
rate variables masking international profits, and distressed US
bank Washington Mutual moving its processing in-house when it was
purchased by JPMorgan Chase late last year.

 

Debit cards

ICICI issues Visa debit

ICICI Bank, India’s second-largest Bank and India’s largest credit
card issuer, has teamed up with Visa to announce a strategic
relationship that will enable ICICI’s New York Branch to issue Visa
debit cards in the US.

The bank will offer Visa debit cards to its Global Indian Account
and other checking account customers at its New York branch. The
Global Indian Account service is aimed at Indians moving overseas
who require access to local banking facilities in the US.

GVS Ramesh, head of ICICI Bank’s US Branch, said: “We chose Visa as
our partner in the US for exactly the same reason we work closely
with Visa in India – they have an unmatched suite of payment
products that allows our customers to pay securely and conveniently
for every type of purchase.

“Visa debit makes an important contribution to enhancing our
relationship with our most valued customers.”

 

ATMs

PULSE launches surcharge-free ATMs

US ATM and debit network PULSE has launched PULSE Select, a
surcharge-free ATM network alliance with the MoneyPass network,
which will provide financial institution participants with access
to more than 16,000 surcharge-free ATMs across the country.

The PULSE Select/MoneyPass network enables PULSE participants to
provide cardholders with increased access to surcharge-free ATMs at
banks, credit unions, grocery stores, convenience stores,
restaurants and other locations throughout the country. Debit
cardholders who use an ATM not owned or operated by their financial
institution typically are charged a surcharge fee ranging from
$1.50 to $3 per transaction.

“This is an excellent opportunity for MoneyPass to come together
with one of the country’s leading ATM/debit networks,” said Douglas
Miraglia, president of MoneyPass, which serves more than 1,000
financial institutions and 30 million cardholders.

“This strategic alliance enables MoneyPass to continue to expand
our network, providing convenient ATM access to cardholders
everywhere.”