• HSBC will open new branches in the Chinese
cities…
• Australian retail giant Woolworths is making its
first foray into financial services…
• Al Salam Bank Bahrain has unveiled platinum and
gold Visa credit cards…
• Scotiabank Mexico saw a 19 percent year-on-year
increase in credit card lending…
• JPMorgan Chase has launched the Chase Workers
Compensation Visa debit card…
Asia – Pacific
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• HSBC will open new branches in
the Chinese cities of Zhengzhou and Ningbo in a move underpinning
the bank’s confidence in China’s long-term growth prospects amid
global market concerns, according to HSBC China President and CEO
Richard Yorke.
“While the remainder of 2008 will be challenging for the global
financial markets, China is one of the few markets that will
continue the growth momentum,” he said.
HSBC China, which became a locally incorporated bank in April 2007,
currently has the largest network among foreign banks in China with
73 outlets in 17 cities. Yorke said the bank expects to expand its
network to around 80 outlets this year, with new branches planned
to open in the cities of Ningbo and Zhengzhou during the fourth
quarter of this year.
• Citibank Singapore has partnered with
Card Protection Plan (CPP) and Credit
Bureau (Singapore) to launch a new service called ID
Protect Singapore, which Citi claims is Asia’s first comprehensive
identity protection service.
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• Australian retail giant Woolworths is making its
first foray into financial services with the unveiling of its
‘Everyday Money’ business. The first of a suite of personal finance
products to be launched is a general-purpose credit card offered in
conjunction with HSBC and
MasterCard. The Woolworths Everyday Money credit
card allows customers to earn gift cards which can then be used to
make purchases at the various stores within the group’s retail
outlets.
• Westpac New Zealand is joining forces with
American Express to launch a new credit card that
boosts the points earning power of Westpac’s ‘hotpoints’ rewards
programme by up to 50 percent.
The Westpac hotpoints American Express Card comes in standard, gold
and premium versions, and will offer cardholders 0.5 hotpoints more
for every dollar spent on purchases. Customers who are already
members of Westpac’s hotpoints reward programme will be offered a
new card to go alongside their existing one. Both cards are linked
to one credit card account, with one credit limit, no change to
their annual fee, one statement and one rewards points
balance.
• Malaysia’s RHB Bank has launched two new debit
cards. The RHB Cash-Connect and the Islamic My Cash-i debit cards
are also the world’s first multi-application cards that carry the
mc2 design with a rounded lower right corner edge, a patent design
issued to non-MasterCard cards on the MasterCard
brand.
The bank is expecting around half of its ATM cardholders from 1.7
million current and savings account holders to renew or switch to
debit cards in the next two to three years, and is aiming to issue
200,000 cards within the next 12 months. According to Jim Cheah,
MasterCard Asia-Pacific vice-president and senior country manager
for Malaysia and Brunei, active ATM card users comprise at least 18
percent of the more than 15 million ATM cardholders in
Malaysia.
• Citibank Korea has partnered with department
store SSG to launch the new SSG-Citicard Quattro
credit card. Customers will benefit from offerings of services and
rewards in four different categories – shopping, entertainment, gas
and internet privileges.
Sergio Zanatti, director of cards at Citibank Korea, said: “We
believe our new SSG-Citicard Quattro is an attractive card offering
that includes a wide range of universal benefits as well as reward
programmes that can be customised by the cardholder according to
his or her personal taste.”
• China Merchants Bank (CMB) has announced that it
has more than doubled its growth rate for the first half of 2008
from the same period last year. Net income rose to a record
CNY13.25 billion ($1.9 billion) from CNY6.12 billion in the first
half of 2007. Much of this growth comes from the bank improving its
loan margins and credit card fees as it withstood attempts by the
government to curb growth in lending. CMB is the largest bank in
southern China and the country’s sixth-largest bank by total
assets.
• The Reserve Bank of Australia (RBA) is
investigating whether to stop online auction site eBay from forcing
Australian sellers to offer PayPal as a payment option. Although
eBay had previously dropped plans to force Australian customers to
use PayPal exclusively to make payments (see CI 404), it continued
with its plan to make sellers offer the PayPal service as a
compulsory payment option. The RBA will be holding discussions with
PayPal with a view to seeking the removal of this rule.
“Where no-surcharge and no-steering rules have existed in other
systems, the board has encouraged their removal on the grounds that
these rules can diminish competition in the payments system,” said
the RBA in a statement.
• The Australian Law Reform Commission (ALRC) has
dealt a significant blow to the attempts of the credit industry to
obtain greater access to consumer credit history. The advisory body
rejected calls for a loosening of privacy regulations to allow more
comprehensive credit reporting that would detail a consumer’s
repayment record as opposed to the narrower negative credit
reporting model now in place (see CI 404).
The ALRC recommended that credit files be allowed to include a
customer’s repayment history data only after the introduction of an
“adequate” framework imposing responsible lending obligations.
Legislative changes would come into place after 18 months,
according to Cabinet secretary John Faulkner, although there has
been no solid commitment to implement the ALRC
recommendations.
• Payments technology provider and POS manufacturer Blue
Bamboo designed and deployed a closed-loop contactless
payment system in conjunction with Chinese partner
KuaiPay for the Holland Heineken House (HHH), the
meeting place for the Dutch community during the Beijing Olympic
Games 2008. The system mixes new technologies, such as embedded
contactless POS terminals and a new Bluetooth wireless access
server, all developed on the GlobalPlatform open standard
platform.
• Japan-based transit card issuer Surutto Kansai
has announced the launch of its PiTaPa credit card in South Korea
in October in conjunction with local credit card company
Lotte Card. The JCB-branded offering comes
equipped with a credit card function as well as a contactless
transit card application, and the company expects uptake to come
from both travelling Koreans and Japanese citizens in the country
on business. Surutto Kansai is expecting to issue 10,000 cards
within the first 12 months.
There are already 1.15 million PiTaPa cards in circulation across
Japan.
Europe, Middle East, Africa
• Alliance & Leicester Commercial Bank has
unveiled a Visa-backed prepaid card payments solution for local
authorities in the UK to distribute housing benefit payments. This
follows the recent decision by the government to transfer payment
of housing benefit to claimants instead of their landlords. The
prepaid scheme will save local authorities up to 75 percent of
processing costs, and will also help recipients save money when
converting cheques into cash.
• United Arab Emirates-based payments solution provider
Network International has announced its
half-yearly results, reporting a growth of over 45 percent over the
same period last year. Net profits also grew by 31 percent during
this period. The first half of 2008 also saw the finalisation of a
joint venture between the company and French payments technology
provider Oberthur. Network International started
the acceptance of JCB cards across its POS
machines in the second quarter of 2008.
• UK-based Barclays Bank credit card subsidiary
Goldfish has issued a statement reporting that a
printer error resulted in numerous customer statements being sent
to wrong addresses. According to the company, the customer will
have received their own front page but subsequent pages may refer
to another account.
• Bahrain Islamic Bank (BIsB) has an-nounced the
launch of its new Islamic Visa credit card, which has been approved
as a Shariah-compliant product by the bank’s Shariah supervisory
board. The BIsB Visa credit card comes in three different
categories – classic, silver and gold, with credit limits varying
from BD5000 ($13,262) to BD20,000. Customers will be entitled to
discounts on purchases at numerous merchants in Bahrain as well as
a one percent refund of purchases to the card account until the end
of the year. The card reiterates the aim of BIsB to become an
industry leader in the field of Islamic financial solutions.
• South Africa’s Absa has launched a service that
allows customers to send funds via ATMs to recipients without a
bank account or card. Customers can use the CashSend service to
electronically transfer funds using an ATM or mobile or through
internet banking services.
Recipients can withdraw the funds from an ATM using a security
password sent to their mobile phone, along with an access code
which is selected by the sender.
• According to UK comparison website
Fairinvestment.co.uk, there are around 2.3 million
prepaid cardholders in the UK, and by 2010 this figure will rise to
more than 7 million, representing a market worth £4 billion ($8
billion). The website says prepaid cards are no longer seen as just
for people with bad credit histories, and are becoming attractive
to those who want the functionality of a credit card but without
the debt risk.
• In an attempt to reach out to the youth segment, Jordan
Kuwait Bank (JKB) has launched its anticipated VIP-JKB
credit and prepaid cards range. This follows the strategic
partnership between JKB and Virgin Megastore
announced in July this year. All cardholders will receive an
instant 10 percent discount in Virgin Megastore on all purchases of
books, CDs, DVDs and boutique items.
• The UK’s Conservative Party has unveiled its
plans for a Post Office-run card scheme aimed at allowing people
who do not have bank accounts to reduce energy bills. The plan
would help low-income earners receive the same discounts as those
who pay their bills by direct debit. According to Shadow Chancellor
George Osborne, this could help as many as four million people save
up to £100 ($184.4) a year. Around eight million people in the UK
do not have a bank account, or withdraw all their cash weekly, say
the Conservatives.
• Al Salam Bank Bahrain has unveiled platinum and
gold Visa credit cards for both individual and corporate clients.
The cards are fully EMV-compliant, and their introduction follows
the successful launch of internet banking services earlier this
year.
• Consumer finance company Dubai First has
launched the Dubai First MasterCard corporate card to address the
financial needs of medium to large-sized companies in the United
Arab Emirates. The card comes equipped with several key features
including a dedicated account manager, insurance benefits and
offers with key business-to-business vendors.
• UK prepaid solution provider M-Cube has
announced it will waive all purchase and delivery fees for UK
customers choosing its Aspinall Foundation Maestro prepaid card.
Additionally, all profits from transactions made by cardholders
using the card will also be donated by M-Cube directly to the
Aspinall Foundation to support its efforts in protecting the
western lowland gorilla.
• SEB Kort and EDB subsidiary
CEKAB have entered into an agreement for the
supply of card services for SEB Kort’s activities in Sweden. The
agreement means CEKAB will continue to be responsible for
processing all card transactions carried out through payment
terminals used by SEB customers in Sweden. The agreement is an
extension of an existing contract and runs for two years, with a
total value of SEK20 million ($3.14 million).
• Global payment processor First Data has
announced an agreement with new Polish bank Alior.
Under the terms of the agreement, First Data will provide Alior
Bank with services in card issuing and personalisation to support
the bank’s expansion into Poland later this month. First Data will
also provide card database management, authorisation, and ongoing
transaction monitoring.
• BPC, a provider of e-payment solutions for the
global financial industry, is to implement its SmartVista solution
for Armenian processor Armenian Card. The deployed
solution will provide monitoring and management of the nationwide
self-service network of the processor including ATMs and currency
exchange terminals.
Armenian Card was established in 2000 by the Central Bank of
Armenia to issue and acquire cards of the national payment scheme;
to provide third-party processing services for the MasterCard
Worldwide and Visa payment cards; and support e-commerce
operations. At present the company serves 20 commercial banks in
Armenia, managing almost all of the country’s card
infrastructure.
• Global online payment solution provider NETeller
has signed a contract with UK prepaid solution provider
TransSend to provide Net+TM MasterCard prepaid
cards to its e-wallet customers.
NETeller will shortly begin providing its e-wallet users with the
opportunity to add Net+TM cards to their account. The Net+TM
prepaid cards will be available by early October when NETeller
e-wallet consumers can sign up for two new products – a virtual
MasterCard prepaid card for use online, and a physical MasterCard
prepaid card for use at the POS or ATM.
Latin America
• Total annual global commercial spending rose by 12.2 percent
year-on-year to an estimated $77.3 trillion in 2007, according to
Visa’s Commercial Consumption Expenditure (CCE)
index. Spending in Latin America and the Caribbean (LAC) rose from
$3.7 trillion in 2006 to an estimated $4.5 trillion in 2007. Brazil
led the LAC region with a 20.4 percent year-on-year increase in
spending to $1.8 trillion in 2007. The CCE index provides
standardised tracking of business and government spending globally
each year.
• The total number of chequeing accounts in Chile rose from 1.67
million in 2004 and 1.80 million in 2005 to 2.03 million in 2006
and 2.2 million in 2007, says Banco Santander
Chile. The total number of credit cards in issue rose from
2.56 million in 2004 and 3.23 million in 2005 to 3.94 million in
2006 and 4.23 million in 2007. Total debit cards in issue rose from
4.65 million in 2004 and 5.63 million in 2005 to 7.42 million in
2006 and 7.7 million in 2007. The total value of credit card
transactions rose from $4.35 billion in 2006 to $4.9 billion in
2007, while debit card transactions rose from $2.52 billion in 2006
to $2.94 billion in 2007. ATM transactions rose from $17.68 billion
in 2006 to $19.86 billion in 2007. The figures are based on data
from Chile’s SBIF (Superintendencia de Bancos e
Instituciones Financieras/Superintendency of Banks and Financial
Institutions).
• Banco do Brasil (BB) has launched a co-branded
credit card with the Ordem dos Advogados
(OAB/Order of Advocates). The OAB Platinum Visa card will only be
available to the OAB’s 670,000 members. BB says that 226,000 OAB
members already have current accounts with BB. There is no fee for
holding an OAB credit card for the first year, BB says.
• Banco do Brasil’s share of the total Brazilian
payment card market rose to 16.5 percent in the first half of 2008
from 15.9 percent a year earlier. Total transactions made with BB
cards rose by 28.3 percent in the first half of 2008. BB says its
growth in market share is due to its strategy of launching cards
for new market segments, such as the agricultural sector.
ABECS (Associação Brasileira das Empresas de
Cartões de Crédito/the Brazilian Association of Credit Card and
Service Companies) says that in the first half of 2008 total
Brazilian credit, debit, and private-label card transaction volumes
rose by 24 percent year-on-year to BRL176 billion ($109.91
billion).
• BBVA Chile says it continued to
restructure its loan book in the second quarter of 2008, focusing
on offering more loans to individuals, particularly through credit
cards and unsecured consumer credit. The bank’s consumer lending
business, which is run jointly by BBVA Chile and the Forum finance
company, grew by 20.4 percent year-on-year in the second quarter of
2008.
• CitiFinancial North America, Citi’s consumer
lending subsidiary, has launched a Spanish and English-language
website in Puerto Rico. The citifinancial.pr site allows customers
to compare different CitiFinancial loans, and provides financial
education tools such as a credit card balance calculator. It also
offers advice about how to reduce credit card debt.
• Diebold says it saw particularly strong growth
in orders for ATMs in its Americas region in the second quarter of
2008, as the US-based company received a large number of ATM orders
in Brazil. It did not release any specific data on its Americas ATM
business.
• US processor and money transfer services firm
Euronet saw a 7 percent year-on-year fall in
remittances to Mexico in the second quarter of 2008. While
transfers to Mexico declined, gross profit on transfers to Mexico
was the same as in the second quarter of 2007 due to Euronet’s
focus on higher-margin transfers.
• Gemalto’s secure transactions business, which
includes EMV cards and contactless cards, saw a 10.2 percent
year-on-year growth in revenues in the first half of 2008 to €214.9
million ($318.88 million) at constant exchange rates. The revenue
growth was driven by continuing rollout of EMV and contactless
payment systems in Latin America, Europe and Asia, the chip card
vendor says.
HSBC Brazil says that its customers’ average
credit card balances rose by 25 percent in the first half of 2008
compared to the same period in 2007. The rise in balances resulted
from overall market growth as well as new deals by HSBC Brazil on
co-branded cards combined with marketing promotions to improve card
usage.
• In the second quarter of 2008, MasterCard
cardholders in Latin American countries (LAC) carried out 576
million cash withdrawals and point of sale purchase transactions.
The combined gross dollar value (GDV) of the cash withdrawals and
purchases rose by 26.5 percent, or 17.4 percent in local currency
terms, to $47 billion compared to the second quarter of 2007. The
GDV and transaction figures do not include Cirrus and Maestro
cards. As of 30 June 2008, there were 106 million
MasterCard-branded cards in issue in LAC, up 15.8 percent
year-on-year.
• HSBC Mexico says that the quality of its credit
card and revolving credit portfolios deteriorated in the first half
of 2008. As a result, its income was affected by a “significant”
increase in loan impairment charges, with the bank posting a 42
percent drop in pre-tax profits year-on-year. HSBC increased its
share of the Mexican credit card market to 10.8 percent in May 2008
from 9 percent a year earlier.
• Scotiabank Mexico saw a 19 percent year-on-year
increase in credit card lending in the second quarter of 2008.
Credit card fee income rose to MXN211 million ($20.77 million) in
the second quarter from MXN187 million a year earlier. In the first
half of 2008, credit card fee income rose to MXN390 million from
MXN353 million a year earlier.
• Visa’s total credit and debit card volumes in
Latin American countries for the three months to 31 March 2008 rose
by 21.8 percent year-on-year in constant US dollars to $143
billion. This figure includes purchase transactions as well as cash
withdrawals, and comprises Visa, Visa Electron, and Interlink
cards. As of March 2008, there were a total of 312 million Visa,
Visa Electron, Interlink and Plus cards in LAC.
• Brazilian Visa acquirer VisaNet Brasiland
confectionary manufacturer Nestlé have teamed up
to enable street ice-cream vendors in Rio de Janeiro to accept Visa
and Visa Electron cards. As of mid-July 2008, 60 vendors had been
signed up to accept Visa cards.
• Western Union has completed the acquisition of
its Panama-based agent, Transfer Express de
Panama, a money transfer and bill payments firm. Following
the acquisition, Transfer Express will directly operate its own 15
branches and manage relationships with sub-agents who represent 100
sites throughout Panama. Western Union says the acquisition will
help the US-based firm expand its bill payment services in
Panama.
North America
• Citi, American Express,
Chase, and Discover are using a
new payment platform called TrialPay to attract new US customers.
The issuers are placing their advertisements on e-commerce websites
operated by firms such as Lavasoft,
McAfee, and Skype. Customers who
apply for a new card via the online ads get a product from the
merchant for free. The merchant then receives a fee from the card
issuer for each new customer.
“TrialPay works with Citi Platinum Select, Discover Open Road Card,
Discover More Card, Amex Blue Cash, and Chase Flexible Rewards,”
Lisa Contoyannis, director of marketing and PR, at Mountain View,
California-based TrialPay, tells CI. “Through their partnership
with TrialPay, these issuers get free exposure to millions of
high-quality customers each month and only pay when they acquire
new customers. TrialPay’s cost per acquisition advertising model is
no risk and all reward.”
• US loyalty systems vendor Alliance Data Systems
is to provide private-label credit card services to Bradenton,
Florida-based Beall’s Department Stores. The deal
covers 85 department stores in Florida as well as the http://www.beallsflorida.com/
website. Services provided by Alliance Data will include account
acquisition; card authorisation; private-label credit card issuing;
remittance processing; and customer service functions. Alliance
Data also provides private-label credit card services for two
Beall’s subsidiaries, Beall’s Outlet Stores and Burke’s Outlet
Stores.
• Amazon.com has launched an e-commerce check-out
system that third-party retailers can use on their websites. The
‘Checkout by Amazon’ system uses the same payments technology as
Amazon uses on its own e-commerce sites.
• Canada Post is to install 7,000
VeriFone MX870 point of sale systems at Canadian
post offices. The MX870 includes a touchscreen display, which
allows customers to enter their signatures with a stylus, a card
reader, and a receipt printer. Around 2,200 MX870 units will be
installed in 2008, with the rest to be rolled out in 2009. All the
systems will be equipped to accept EMV-based Visa and MasterCard
credit cards and Interac EMV debit cards, VeriFone says. Interac is
Canada’s proprietary debit card scheme.
• Citi Cards and oil company
ExxonMobil have launched a new US rewards
programme for the ExxonMobil MasterCard consumer co-branded credit
card. Cardholders will receive a 15-cent-per-gallon rebate on
gasoline purchased at Exxon and Mobil gas stations. Consumers
opening a new ExxonMobil MasterCard account by 31 December 2008
will get a 30-cent-per-gallon rebate on Exxon and Mobil gas
purchases for the first 60 days, with no limit on the amount of gas
rebates earned.
• Compliance Coach, a US vendor of automated
regulatory compliance systems for banks, and the San Diego,
California-based Identity Theft Resource Center
are to jointly promote each other’s ID theft prevention services.
They will also work together to raise awareness among businesses
about the need to comply with the Fair and Accurate Credit
Transactions (FACT) Act Identity Theft Red Flags Rule. This Federal
regulation will come into force on 1 November 2008 and will affect
all types of consumer or small business lenders including credit
card issuers. Lenders must identify any ID theft “red flags” for
their customers, and put in place written ID theft prevention
programmes by 1 November.
• Elavon, formerly Nova Information Systems, US
Bancorp’s processing arm, has acquired substantially all of
Capital City Bank’s merchant processing portfolio.
Capital City Bank has 70 branches in Florida, Georgia and Alabama.
Elavon will supply processing services to Capital City Bank’s
existing base of 2,200 merchants and will also service new
merchants.
• Brentwood, Tennessee-based farm retail chain Tractor
Supply Company has renewed an existing contract to use
Fifth Third Processing Solutions as its credit
card processor. Also, US farm food retailer and restaurant chain
Bob Evans Farms has renewed its contract with
Fifth Third for credit and gift card processing.
• First Data has signed a new seven-year contract
to provide processing services to Nordstrom fsb, a
federally chartered thrift savings bank which is owned by US
retailer Nordstrom. The deal calls for First Data to provide card
processing; call centre and back-office automation tools; fraud and
risk management; and customer analytics. First Data will also
supply e-statements and e-mail alerts for Nordstrom’s entire
portfolio of 4.5 million cards, which includes Nordstrom Visa
cards, private-label cards, and commercial cards for Nordstrom
employees.
• Greeneville, Tennessee-based GreenBank USA is to
use a merchant payment gateway, processing platform and
internet-based reporting system from US processor Merchant
e-Solutions (MeS). Bill Adams, GreenBank’s chief
information officer, says MeS’s technology will enable the bank’s
merchant clients to use the internet to process e-commerce and
traditional payment transactions, without incurring IT and systems
integration costs.
• Global Payments has renewed a multi-year
contract to act as a processor for CashLINQ, a US
merchant services provider and independent sales organisation
(ISO).
• French contactless smart card technology firm Inside
Contactless has named Kim Madore as vice-president of
sales and business development in Canada. She was previously
Toronto-based vice-president of emerging technologies for German
card vendor Giesecke & Devrient.
• Members of the Independent Community Bankers of
America (ICBA) are to sell prepaid foreign currency
products from UK foreign exchange firm Travelex.
The products offered by ICBA include Travelex’s MasterCard Cash
Passport prepaid card, which is available in euros and UK
pounds.
• JPMorgan Chase has launched the Chase Workers
Compensation Visa debit card, which can be used by US insurance
companies to pay injured workers. The prepaid cards carry the logo
of the issuing insurer and are intended to replace cheque-based
payments. Insurers use an online managing and reporting system to
administer and top up their cards.
• MasterCard says US-based Mexican quick-service
restaurant chain Taco Bueno now accepts MasterCard
PayPass contactless payments at all of its 161 corporately-owned
store locations. Customers can use their PayPass card or device to
pay for purchases at the counter or the drive-through. Taco Bueno’s
corporate stores also accept magnetic-stripe cards.
• The US-based Electronic Funds Transfer
Association’s board of directors has elected
Online Resources’ president and chief operating
officer Raymond Crosier as its chairman for a two-year term.
