All articles by Verdict Staff
Verdict Staff
EC’S Kroes urges banks to step up national debit scheme efforts
Kroes said such a move would undermine the fundamental aims of the Single European Payments Area, which is due to come into effect on 1 January 2008.Speaking at the European Parliament on 4 December, Kroes said: Such a SEPA for cards would mean less competition, not more with all the negative knock-on effects that can be expected from such a development And this is not something I am willing to let happen.The comments will be seen as a call to arms for banks to come up with initiatives and agreements to expand existing national debit schemes across Europe, which could rival schemes from Visa and MasterCard.The commissioner said that where banks had opted to scrap national schemes and move to the international ones run by Visa and MasterCard, as had happened in Austria and the UK, retailers had ended up paying more
Region round-up
Chinas Bank of Ningbo has partnered with online gem trader diamondschina.com to launch Chinas first co-branded luxury credit card targeting customers with an annual income of CNY50,000 ($6,780). Cardholders will be able to buy products from retailers Omega, Jaeger-LeCoultre and Dunhill at preferential prices.
CI Country Survey: Scheme debit cards encroach on credit
Government reforms have had significant effects on the profitability and product structure of the credit card industry in Australia. Following several years of rapidly mounting credit card debt, Australians are gradually making the shift to scheme debit cards. Sarah Williams reports.
Bank of Montreal partners for growth
BMO Bank of Montreal wants to grow its portfolio and the businesses served by it on a global scale, and a series of major international partnerships and alliances is in the pipeline Terry Wellsley, managing director of Bank of Montreals BMO Harris ePurchasing Solutions unit, and Mary DiRenzo, senior manager for market development for the commercial card sector, said that the bank would use technology to help it create a global network of partner banks to compete against large competitors in the commercial card market.Weve been sort of under the radar to date, Wellsley said
Are cards facing the credit crunch?
In the space of six months, global money markets have been turned upside down and profits at financial institutions worldwide have taken a severe hit following a downturn in the US housing market, which has led to rising levels of subprime mortgage defaults and the ensuing credit crunch that has fanned out into the global economy.One domino effect from the subprime fallout that markets are already witnessing is a marked rise in bad credit card debt
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EU ruling on interchange delayed
The announcement due from European Commissioner for Competition Neelie Kroes regarding the future of interchange fees charged to retailers by banks issuing MasterCard credit cards has been delayed by differences of opinion within the EC.The EC had backed down from a threat to completely abolish interchange earlier this year, but Kroes has made clear her determination to crack down on what she sees as indefensibly high fees However, European Commissioner for Internal Market and Services Charlie McCreevy fears that scrapping interchange fees in favour of an at par system would make card schemes unfeasible, and potentially hinder the launch of the Single Euro Payments Area in January 2008.Xavier Durieu, secretary general of European trading association EuroCommerce, told news service Reuters: There is going to be a decision and what we know is there are some internal diverging views within the European Commission and more specifically the resistance seems to be coming from DG Market (its internal-market division).Calls for a decisionMasterCard had warned the EC earlier this year that its opacity regarding interchange fees could deter banks investment in SEPA initiatives
Redecard’s surprise valuation
Redecard’s surprise valuationWith a recent IPO capitalisation of $13 billion, revenue of $1 billion and a 40 percent profit margin, Brazils Redecard may prove to be the most valuable acquirer youve never heard of, according to Josh Allen and Marc Abbey of First Annapolis Consulting.What acquirer generates $1 billion in revenue, has a profit margin of over 40 percent and has an enterprise valuation of over $10 billion However, Brazilian acquirer Redecard also belongs to this exclusive club.Several months ago, Redecard went public in what was at the time the largest IPO (initial public offering) in Brazil, raising over $2.5 billion and establishing a market capitalisation for all shares outstanding of over $13 billion by mid-October
Capital One remains optimistic despite credit issues
Capital One remains optimistic despite credit issuesAs the effects of the US credit crisis continue to fan outwards from the housing market, card issuer and consumer finance company Capital One recently reported that its rate of net charge-offs on a managed basis rose to 3.28 percent in October from 2.86 percent in the third quarter of 2007
Visa and Mastercard defend interchange fees in Europe
In a strongly worded letter to the European Commission, a consortium of major retailers claimed Visa and MasterCard debit card systems V PAY and Maestro, respectively were a threat to the success of the Single European Payments Area They said the schemes would replace cheaper national debit schemes and that interchange fees charged by the card associations were unjustifiable.But Visa, whose V PAY product has attracted 22 banks in eight European markets, said the systems popularity was proof of its success
Region round-up
Banks on the mainland also issued 409 different card products in 2007 to date. Sky Pearl Credit Card, issued by Guangdong Development Bank and China Southern Airlines, has become Chinas largest co-branded credit card by issuance level after it exceeded 1 million cards issued in November 2007. South Koreas Woori Bank will launch a debit card business in China in 2008 before expanding into credit cards