• Card spending in New Zealand has risen for the second
straight month…
• Global Payments
Asia-Pacific, a joint venture between HSBC and Global
Payments…
• Latin American ATMs are moving
from being cost-saving substitutes for branch
tellers…
• Visa Europe has launched a
‘green’ credit card…
• Three new banks in
Iraq have joined a project to provide ATM services and credit
cards…
Asia-Pacific
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• Card spending in New Zealand has risen for the
second straight month, driven by higher prices for food and
consumer goods. The value of transactions on electronic cards in
August 2008 at retailers increased 1.1 percent from the previous
month, according to state sector organisation Statistics
New Zealand. “Falling fuel prices have released extra cash
that has found its way into consumer goods spending and there are
tax cuts ahead,” said Darren Gibbs, chief New Zealand economist at
Deutsche Bank in Auckland.
• Chinese domestic card scheme China UnionPay
(CUP) has signed a deal with UK payment processor and ATM network
operator VocaLink that will allow Chinese
cardholders visiting the UK to withdraw cash at Link ATMs from
early next year. CUP has over 1 billion payment cards in China, and
these cards are already accepted in 45 other countries. This is the
first deal that the company has forged in the UK. The number of
Chinese visitors to the UK is expected to rise dramatically in the
run-up to the 2012 Olympic Games.
• China UnionPay has also signed a co-operation
memorandum with payment processor Global Payments,
extending the acceptance of CUP cards outside China. Global
Payments said it would encourage more of its merchants in the UK
and Canada to accept CUP cards.
• Global Payments Asia-Pacific, a joint venture
between HSBC and Global Payments,
has introduced a secure GPRS-powered payment service called Global
MobilePay that provides mobile card acceptance capabilities for
merchants in the Asia-Pacific region. The service is available in
Brunei, China, India, Malaysia, the Maldives, the Philippines,
Singapore, Sri Lanka and Taiwan. GPRS, which stands for General
Packet Radio Service, is a wireless communication system operating
in a similar way to GSM mobile phones.
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By GlobalData• The Reserve Bank of India (RBI), India’s central
bank, has set out strict guidelines for the regulation of mobile
banking after having requested all banks and financial institutions
put their mobile services on hold (see CI 405). Under the new
guidelines, only banks that are licensed and supervised in India
with a physical presence in the country can offer mobile services,
and only rupee-denominated domestic payments are allowed. This has
seemingly put a hold on the plans of firms such as Obopay and
Western Union to offer global remittance services via mobile
phones. RBI has stated that its long-term goal is to develop a
framework that enables fund transfers to and from accounts at any
bank in real time, irrespective of mobile network.
• ING Vysya Bank of India has opened 11 ATM
outlets in the state of Andhra Pradesh, including eight in
Hyderabad and one each in Warangal, Khammam and Guntur. It will
also open four more branches and seven additional ATMs in the next
six months. With these, the bank will have a total of 176 branches
and 66 ATMs spread across the state of Andhra Pradesh. Across the
country, the bank will be opening 56 more branches and 100 ATM
outlets this year. It has 407 branches and 203 ATMs in all.
• YES Bank of India has launched an online account
aggregation service, Money Monitor, for the first time in the
country, in partnership with US online banking solution provider
Yodlee. In India currently, only 5 million use online banking, out
of 250 million people, representing plenty of room for growth. The
number of online banking users is expected to grow to 16 million by
the end of 2008.
• American Express has announced two senior
management appointments in India. Simran Kalra has been named as
vice-president for product management and development and Shanta
Vallury Gandhi has been named as vice-president for acquisitions
and partnerships. These two new roles entail responsibility for
providing strategic direction to further enhance the American
Express consumer card business in India.
• Citi India has announced the launch of Citibank
Commercial Cards, an expense management tool for corporate clients
which is front-ended by a chip-embedded commercial card for
enhanced security and which is supported by a global expense data
management function. The service also includes automated reporting
capabilities; specialised travel management solutions; control and
visibility of expenses, and a global service network.
• European smart card manufacturer Giesecke &
Devrient (G&D) has opened a new development centre in
Pune, India. The centre’s approximately 80 employees are developing
products based on smart card technology for applications in mobile
communication, electronic payment and public administration. The
Pune facility is one of three G&D development centres –
alongside those in China and at group headquarters in Munich, the
latter being responsible for controlling all research and
development activities.
• According to the Bank of Korea, the outstanding
debt owed to the non-banking sector such as credit card and leasing
companies has risen by 15 percent over the last 12 months – the
highest debt growth in six years. Analysts have argued that this
growing level of debt is primarily due to more consumers being
forced towards secondary financial institutions with higher
interest rates and stricter repayment conditions after being
rejected by the mainstream banks.
Household credit loans from the non-banking sector take up about
42.9 percent of the total outstanding debt, up 1.7 percentage
points from the same time last year. This has been the highest
increase in five years, the central bank said.
• The total number of credit cards in circulation in Macao is just
shy of 350,000, according to figures released by Monetary
Authority of Macao Special Administration Region for the
second quarter of 2008. This is a 2.6 percent rise from the
previous quarter.
• Jammu and Kashmir Bank (JK Bank) of India
recorded INR13,000,000 ($2.76 million) of withdrawals from its ATMs
in the wake of the end of the Islamic Eid period. Over 40,000
successful transactions took place at the bank’s ATMs, representing
almost one transaction per minute at each ATM. During such
festivals people prefer to withdraw cash from ATMs rather going to
branches for withdrawals. The bank has an overall network of 211
ATMs across India, which includes 92 in the Kashmir region.
• Mobiclear, a provider of personal identification
verification systems to combat payment card fraud, is to provide
security log-in protection for the Credit Card
Association of the Philippines (CCAP). Mobiclear’s service
will protect a credit card ‘negative’ list developed by CCAP for
use by its members. The Mobiclear log-in security will ensure that
only authorised users will be able to access this database.
Europe, Middle East, Africa
• Online payment solution provider Ukash has
launched a MasterCard-branded prepaid card for online gaming
customers in the UK to receive payouts more efficiently. The
UkashOut card is to be issued by gaming operators directly to
customers. Customers then select the value they want to see
withdrawn from their gaming account and this amount will be
credited to their card. Gaming site Chilipoker is the first online
operator to go live with the new offering, and is hoping to improve
its customer service and retention levels.
• Following the recent spate of fraudulent transactions in the UAE
(see CI 407), Emirates NBD, the largest bank in
the Middle East by assets, has announced that it has not changed
withdrawal limits on daily transactions conducted by its domestic
customers through ATMs. Instead, what the bank has done is
selectively reduce overseas ATM cash withdrawal limits in several
high-risk countries to protect the interests of its customers,
according to Suvo Sarkar, Emirates NBD general manager for retail
banking.
• SABB, formerly known as the Saudi British Bank,
has launched a new Visa-branded credit card as part of its
Shariah-compliant suite of products. The Amanah card comes with the
option of free shopping through the bank’s ‘ICSABB’ programme that
allows card members to earn points and get discounts and shopping
vouchers for the participating retail outlets.
• According to the UK payments association APACS,
more than a million UK-issued debit and credit cards have now been
registered with the MasterCard SecureCode and Verified by Visa
payments systems for secure online shopping. Over the last year,
cardholder registration with these two schemes has increased by 150
percent. In August 2006, only 3.6 million cards in the UK were
registered – an increase of nearly 600 percent over the last two
years. Online retailers are increasingly introducing these secure
systems, and those that have currently handle approximately
one-third of the value of all the UK’s online shopping.
• Several companies including Visa Europe,
Credit Suisse, PostFinance,
Swisscard, Swisscom and
Telekurs Multipay have joined forces in order to
launch a pilot scheme of Visa payWave contactless payments by card
and mobile phone in Switzerland. The service will be tested by
employees of the trial partners.
• European card transaction processor NETS has
announced a three-year agreement with Nordic card issuer
SEB Kort, enabling SEB Kort to route its Nordic
payment transactions through NETS.
“The agreement with SEB Kort brings us an important step closer to
becoming a leading European processor of card transactions.
Furthermore, the total number of transactions,” said Pedram
Tadayon, director of business development at NETS.
• European consumer payments and cash distribution network
Payzone has launched what it claims is Germany’s
largest electronic gift card system for cosmetics and household
retailer Schlecker. The new gift card is available
for purchase at more than 10,000 Schlecker stores across Germany,
and will replace the existing Schlecker paper vouchers, which have
an annual sales volume of three million.
• Visa Europe has launched a ‘green’ credit card
that will enable its business cardholders in Europe to offset the
carbon emissions created by the products it is used to pay for.
Visa has teamed up with RePay International, which
oversees the international ClimaCount compensation programme which
enables card issuers to make all their cardholders’ payments
carbon-neutral. Visa says companies and governments will be
supporting sustainable projects under the programme. All business
cardholders will be able to check their purchases, their carbon
emissions per transaction and the way that the emission will be
offset via a website. Visa says this latest launch follows the
earlier release of a carbon-neutral credit card – the Visa
GreenCard – in the Netherlands which was introduced into the
consumer market in 2004.
• UK card issuer Barclaycard has been fined
£50,000 ($88,000) by UK regulators for making an “extremely high
number” of silent and abandoned calls to cardholders.
Ofcom, the UK telecom regulator, says such calls
cause inconvenience and anxiety to cardholders. Silent calling
happens when call centres use automated phone systems, which dial
more numbers than staff available to take them, leaving the line
quiet when the recipient answers.
• UK banking group Lloyds TSB is adding new
functionality to its mobile banking service to enable customers to
transfer funds between accounts using their handsets. Lloyds TSB
claims to be the first bank in the UK to introduce mobile funds
transfers to customers. Users of the new service can transfer money
between Lloyds TSB current and instant-access savings accounts.
Customers can also set up SMS alerts to warn them when their
current account balances reach, exceed or fall below certain
levels. The new service also includes an overseas transaction alert
system. Subscribers will receive an alert if their debit card is
used to withdraw cash from an ATM or to make a purchase
abroad.
• Denmark’s PBS has now been licensed as a credit
institution by the Financial Supervisory Authority of Norway. PBS
said the move would increase competition in the Nordic market and
is a significant step in expanding PBS’ coverage across
Scandinavia. Through its Norwegian subsidiary PBS International,
PBS has already concluded an agreement with Norwegian Fokus Bank to
acquire Fokus Bank’s credit card acquiring services.
• Emirates NBD, the largest banking group in the
Middle East in terms of assets, has formed a strategic agreement
with the Palm Utilities group, enabling Palm residents to pay their
water, sewage and district cooling bills through the group’s broad
electronic channel network that includes ATMs, SMS and internet
banking services. The agreement, which came into effect in
September 2008, is the latest initiative by Emirates NBD to ensure
that all existing customers benefit from the group’s electronic
infrastructure.
• Three new banks in Iraq have joined a project to
provide ATM services and credit cards, raising the number of banks
participating in the project to eight.
• Ireland’s Railway Procurement Agency (RPA) has
selected global IT and software giant IBM to build
and implement the infrastructure for a smart card e-payments system
for public transport in Dublin. The integrated ticketing system
will enable commuters to use a single prepaid smart card for travel
on all buses, trains, trams and coaches in Dublin. IBM says the
technology has the capacity to process up to two million
transactions a day and can be extended to include other value added
services such as internet top-ups and small-value retail payments.
The project – part of Ireland’s ‘Transport 21’ investment programme
– is already underway, with a phased deployment of the live system
expected to begin in late 2009.
Latin America
• Due to the US economic slowdown being felt in many markets
worldwide, Latin American and Caribbean (LAC) banks are being more
cautious about whom they offer credit to, Jeff Wilson, head of
global technology and operations for MasterCard
LAC, tells CI. Wilson says the LAC region offers huge
growth potential for the card industry, as payments made with
cheques and cash represent around 70 percent of total transactions
in some LAC countries. “Also, the population in the region is
young, growing, and entering the workforce,” he says. “Despite the
US economic slowdown, emerging and developing economies in Latin
America will likely maintain robust growth rates.” Due to these
factors, Wilson is confident LAC consumers will continue to adopt
plastic as a form of payment.
• In July 2008, two-thirds of the 25 million people accessing the
internet from home and workplace PCs in Brazil visited e-commerce
websites, US web traffic measurement firm comScore
says. MercadoLivre.com.br had the greatest number of visitors in
July 2008, with 10.1 million visitors, followed by Buscape.com.br
with 4.8 million, and Submarino.com.br with 4.6 million. “Many of
the top retail sites, such as MercadoLivre, offer a comparison
shopping facility,” Alex Banks, comScore’s Latin American market
managing director, says.
• Latin American ATMs are moving from being cost-saving substitutes
for branch tellers to multi-function machines that are capable of
reloading cellular accounts, making tax payments, and displaying
advertising, Kroll-InfoAmericas analyst Jan Smith
says. Across the largest markets – Brazil, Mexico, Argentina and
Colombia – 93 percent of the banked population is familiar with ATM
use. Kroll-InfoAmericas estimates the number of ATMs in Latin
America at 250,000, of which three-fifths are in Brazil. Nearly 70
percent of the ATM networks in the region are classed as open
access. This means that customers can access their accounts from
ATMs owned by banks other than their card-issuing bank.
• Latin American business-to-consumer (B2C) e-commerce transactions
will rise by 42 percent to $16 billion in 2008 from $10.9 billion
in 2007 and may reach $30 billion in 2010, a Visa study says.
Between 2005 and 2007, B2C e-commerce volumes rose by 121 percent
in LAC. Peruvian e-commerce transactions doubled in 2007 to $218
million from 2005; Mexican online transactions rose by 143 percent
to $1.38 billion; and Chilean e-commerce transactions rose by 183
percent to $687 million. The drivers for Latin American e-commerce
are surging economic growth; a 101 percent rise in availability of
broadband internet access since 2005; wider consumer use of credit
cards; and growing bancarisation, or banking the unbanked.
• “Greater prosperity has fed into greater e-commerce spending in
LAC,” Guillermo Rospigliosi, Visa Inc.’s LAC
director of e-commerce, tells CI. “Also, there’s a direct
correlation between the growth in broadband web access seen in LAC
and higher e-commerce transactions.” People are opening bank
accounts in LAC and then getting a card, particularly a credit
card, so they can shop online, he says. This is especially the case
among younger consumers, who are very interested in the web and
want to shop online. “Credit cards are the main e-commerce payment
method in LAC, with 72 percent of all online transactions being via
credit card, and only 9 percent via debit,” Rospigliosi says. “Of
the 300 million debit cards in issue across LAC, the majority can’t
be used online. This is a big opportunity for Visa, so we’re
working with LAC banks to online-enable debit cards.”
• Banco do Brasil (BB) says it is the first
Brazilian bank to deploy the open-source Linux operating system in
its ATMs. The bank installed its first Linux-based ATM in its
technology centre in Brasilia in September 2008. By the end of
2008, a further eight ATMs running Linux will have been deployed by
BB as part of a pilot. BB says that it intends to migrate all its
39,000 ATMs in Brazil to Linux from IBM’s OS/2 operating system by
the end of 2009. Because IBM no longer supports OS/2, it has proved
difficult to add new functions to BB’s ATMs. BB says ATMs account
for over 50 percent of self-service transactions originated by its
customers. Using Linux will enable BB to offer functions such as
touchscreen access and customer personalisation across its ATM
estate, which includes ATMs from vendors such as IBM, Itautec and
Procomp.
• Banco do Brasil’s micro- and small-business
clients can now use a working capital line of credit to finance
their business credit card purchases. BB says the new service
combines its Ourocard Empresarial business credit card with its
Giro Rápido pre-approved business line of credit offering. Since
the end of August 2008, 1,770 businesses have signed up for the
combined credit card and line of capital service, with BRL25
million ($13.51 million) worth of credit already pre-approved. BB
says that, in the first few days of offering the service, it
authorised a 429 percent increase in credit card limits for
participating clients, and that the average purchase value grew by
150 percent.
• Citi says it is the first bank to pilot Workers’
Remittances 1.0, Swift’s new messaging framework for cross-border,
person-to-person payments. In October 2008, Citi will trial the
messaging framework with Ecuador’s Banco
Bolivariano to facilitate remittances from Citi’s New York
branches to Banco Bolivariano branches in Ecuador. The pilot
follows an agreement signed between the two banks in April 2008,
under which Citi allows Ecuadorians living in the US to use its
network to send money home, with recipients picking up the funds at
Banco Bolivariano branches in Ecuador. If the remitters do not have
an existing Citi account or are unbanked, they can open a Citi
Access Account, one benefit of which is that it enables them to
build a credit history. Citi charges a $5 fee per remittance.
• Paragon Application Systems, a US vendor of EMV
simulation, configuration and testing software, has teamed up with
EMV system developer SmartSoft Information
Technologies to market end-to-end software for EMV
migration. The deal calls for Paragon to resell SmartSoft-IT’s
technology in North and South America. Istanbul-based SmartSoft-IT
develops software for EMV card issuance, card personalisation and
processing.
• Peru’s Superintendencia de Banca, Seguros y AFP
(SBS/Superintendency of Banking and Insurance) has signed an
agreement with the Inter-American Development Bank
(IDB) to co-operate on the development of mobile banking services
in Peru.
The aim of the programme is to provide financial services via
cellphone to unbanked Peruvians. Separately, the IDB, in
partnership with the GSM Association, has issued a
call for projects that will make financial services, particularly
m-banking, available to poor people in LAC. Currently only 35
percent of Latin American adults have bank accounts, the IDB says.
Financial and technical support will be provided to LAC banks and
mobile operators to help them develop m-banking services, the IDB
says.
North America
• Gift card expiry dates and inactivity or dormancy fees on gift
cards are to be banned in the Canadian province of
Alberta from 1 November 2008, Alberta Minister
Heather Klimchuk says. In 2007, Ontario was the first Canadian
province to ban expiry dates for gift cards. The new rules will
apply to gift cards bought in Alberta before, on or after 1
November. Klimchuk estimates that C$1.2 billion ($1.16 billion)
worth of gift cards are sold annually in Alberta and that each year
around C$180 million is lost through non-redemption or expiry of
the cards.
• American Express Canada says it is making an
aggressive push into the small business sector. It has launched the
Business Gold Rewards card, promoting the card to small business
owners via a multi-channel advertising and marketing campaign. The
card enables customers to earn rewards points which they can
transfer instantly to the Aeroplan Canadian mileage programme, or
use to pay for all or part of a trip booked with American Express
Travel. Points can also be redeemed for hundreds of other rewards
including electronics, dining, retail and hotel options, Amex
says.
• American Express has appointed Bill Glenn,
currently president of global merchant services, as an executive
officer of the company. Glenn, who has worldwide responsibility for
Amex’s merchant network, joins the operating committee which sets
Amex’s strategic direction.
• Century Bank is offering its merchant customers
a web-based card payment authorisation, settlement and real-time
online reporting service from Redwood City, California-based
Merchant e-Solutions. The service uses a single
online interface to process POS, e-commerce and international
payments. Century Bank is a community bank with five branches in
New Mexico.
• Chase and United Airlines say
they have renewed their United Airlines co-branded credit card
programme. “We are continuing our relationship with United
Airlines, offering consumers and small businesses travel rewards
for many years to come,” Steve Fox, general manager of Chase Card
Services, says.
• eBay says that from October 2008, it will no
longer allow cheques and money orders to be used as payment methods
on its US auction website. Customers will have to pay via
PayPal; credit or debit card; the ProPay online
payment service; or payment at pick-up.
• Equifax Canada has launched a premium credit and
identity theft monitoring service called Equifax Credit Watch. The
service, which costs C$11.95 ($11.57) plus taxes a month, includes
C$2,500 worth of ID theft insurance. Subscribers receive e-mail
alerts telling them about key changes to their Equifax credit
file.
• The new MoneyExchange RevolutionCard offers online card-based
person-to-person payments as well as ATM withdrawals and the
standard web and POS payment options offered by reloadable prepaid
cards. It is marketed by St Petersburg, Florida-based
Revolution Money and issued by Brookings, South
Dakota-based First Bank & Trust. The PIN-based
card can be used at the 300,000 locations that are part of the
RevolutionCard network. Merchants pay a 0.5 percent fee to accept
the card.
• Canadian supermarket chain Sobeys is using its
Club Sobeys reward programme to promote its new Citibank-issued
Club Sobeys MasterCard credit card. Customers receive twice as many
Club Sobeys reward points when they use the card at its
supermarkets than they would receive if they paid for their
purchases by any other method. The card will be equipped with
MasterCard’s PayPass contactless technology and an EMV chip.
• US Financial Services Group (USFSG) has expanded
its multi-currency credit card processing services to 16 additional
countries. The Cardholder Preferred Currency (CPC) service enables
retail POS and e-commerce merchants to price goods and services in
a variety of foreign currencies, but receive payment in US dollars.
The foreign currency price can be fixed or dynamically linked to
exchange rate movements.
• VeriFone says it has successfully carried out
consumer field trials for its Secure PumpPay payment system. The
module can be retro-fitted to existing gas station fuel dispensers
in order to make them PCI-compliant and to prevent card skimming.
Secure PumpPay cryptographically masks all customer account
information at the card reader. A screen is included which enables
retailers to display promotions while the customer is buying gas.
VeriFone says the product has been used for 1 million consumer
transactions in the US.
• Chris Hogg, president and CEO of Mint
Technology, says the Canadian prepaid card firm is
exploring opportunities for payroll remittance cards in Dubai and
the Middle East.
“In the United Arab Emirates (UAE), we have a contract to issue
30,000 payroll cards for the Emirates Group, the 2nd largest
employer of foreign labour in the UAE,” he says.
The UAE Ministry of Labour said in 2007 that all foreign workers in
the UAE must no longer be paid in cash, but by a transfer to an
account. This provides an opportunity for payroll card issuers in
the UAE, Hogg says. He adds that Mint is working with several large
credit card issuers in Canada, the US and the UK.
“We are developing a prepaid card for people who are declined a
credit card when they apply for a Visa or MasterCard,” he says.
“They will be offered a prepaid card with the credit card issuer’s
logo, and will also be given a tool to help them rebuild their
credit record.”
• VeriFone says that its On The Spot
pay-at-the-table managed services system has been certified by
Heartland Payment Systems. The US processor will
market On The Spot to restaurants nationwide under the Heartland
Tableside brand. On The Spot uses the VeriFone Vx 670 handheld card
reader in combination with wireless internet, and stores payment
card and transaction data on an internet transaction gateway
operated by the processor.
• Visa says it will begin supporting the issuance
of unembossed cards in the US for Visa consumer debit, business
debit and consumer credit cards. Unembossed cards feature printed
personalised information, such as the account number and cardholder
name, instead of the raised lettering found on embossed
cards.
By changing the Visa USA Inc. operating regulations to allow the
issuance of unembossed cards, Visa says it is providing more
choice, flexibility and value for issuers and their cardholders.
The move follows a series of pilots with US financial institutions
such as Commerce Bancshares, TD Banknorth and United Heritage
Credit Union. Visa has permitted unembossed prepaid cards in the US
since 2005.
