ASIA-PACIFIC

Go deeper with GlobalData

• 

  Reports

  HNW Asset Allocation Trends

  GlobalData

• 

  Reports

  Insurtech - Thematic Research

  GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

• According to People’s Bank of
China, China had issued 1.5 billion bank cards by the end
of 2007, an increase of 32.6 percent compared with 2006. The total
included 1.41 billion debit cards, up 30.4 percent, and 90.26
million credit cards, up 82 percent. Card-based transactions
accounted for 21.9 percent of total retail sales in 2007, an
increase of 4.9 percent year-on-year.

• The Shanghai branch of China Banking
Regulatory Commission (CBRC) reported that the number of
credit cards issued to applicants who already hold other credit
cards accounted for 34 percent of total cards issued over a space
of five days. Multiple credit card holders have higher overdraft
limits. CBRC has issued notices to commercial banks in Shanghai
requiring them to take into account the total credit exposure of
cardholders to avoid excessively high overdraft limits.

• China UnionPay plans to
launch the prepaid China Travel Card together with Bank of China,
Agricultural Bank of China, Industrial and Commercial Bank of
China, China Construction Bank, China CITIC Bank and China Minsheng
Bank. The stored-value card will allow visitors to make payments in
stores in China. The programme has been submitted to the China
Banking Regulatory Commission.

• China CITIC Bank has
launched the personalised CITIC Noble Platinum Credit Card in
partnership with China UnionPay and MasterCard. Cardholders can
design the card background themselves. The card targets
entrepreneurs, athletes and designers in China.

• China Minsheng Banking
Corporation is planning to sell a 30 percent to 40 percent
stake in its credit card unit. It is unclear who the potential
acquirers are at the moment, although the bank has a sizeable
credit card base through frequent product launches.

• China Everbright Bank plans
to double the number of credit cards issued by the bank in 2008. By
end of 2007, the bank had issued more than 1.9 million credit
cards. It recently launched a co-branded card combining financial
and automobile services.

• China’s central bank, the People’s
Bank of China (PBoC), has announced that it will be making
a nationwide crackdown on card fraud in order to make shopping by
plastic safer during the Olympics, which are to be held in Beijing
in the summer of 2008. Commercial lenders across the country and
China UnionPay, the national bank card network operator, will have
to perform a comprehensive internal review of their bank card
business and technologies, according to a joint circular from the
PBoC and the Ministry of Public Security. According to the
circular, the security and maintenance of their ATMs and POS
terminals must be improved. The crackdown will last from April to
July, and will focus on Olympic host cities: Beijing, Qingdao,
Tianjin, Shanghai, Qinhuangdao and Shenyang. Beijing is expected to
have 800,000 foreign and 900,000 domestic visitors in 2008. Total
overseas visitor arrivals this year are forecast at 4.6
million.

• Punjab National Bank is
planning to enter the credit card business in 2008. Housed in a
separate department, the bank also plans to introduce smart cards
in its financial inclusion project to bank the unbanked.

• ICICI Bank, India’s second
largest bank, launched the ICICI Bank Ascent American Express Card,
which offers accelerated rewards and privileges for the affluent
Indian customer. The card offers savings on business-related
expenses to attract entrepreneurs. The card comes with a
comprehensive rewards programme offering up to 6 percent of the
value of transactions.

• GE Money Indonesia has
launched a Shopping Card in partnership with MasterCard Worldwide,
with a shopping advisor feature that allows customers to find the
lowest prices for groceries from nearby retailers through
information delivered to their mobile devices.

• Maybank, Malaysia’s largest
credit card issuer, expects 50,000 new cardholders in the first
year of its American Express Platinum credit card launch. There are
around 400,000 Amex cardholders, 50 percent of whom are credit
cardholders and 50 percent chargeholders. Maybank has 1.5 million
cardholders at the moment, with a 50,000-strong merchant
network.

• The House Committee on Banks and
Finance Intermediaries in the Philippines will fast-track
the approval of a legislative measure that prohibits hidden
penalties or costs from being slapped on customers by card issuers.
The legislation also proposes to limit surcharges or penalties to a
maximum of 1 percent a month.

• In Australia, retailer
Woolworths and global banking giant
HSBC have signed a deal to issue the Woolworths
credit card, which is set to be launched later this year.
Woolworths selected HSBC on the basis of the bank’s existing
retailer partnerships overseas, such as Marks & Spencer in the
UK and Saks in the US. Woolworths stores process 114 million
transactions or 11 percent of all credit card transactions in
Australia each year. The companies are expected to sign a formal
agreement by the end of first quarter 2008.

• Korea’s Hana Bank is
considering selling off its credit card unit if the number of valid
cardholders surpasses 4 million, said its chairman, Kim Seung-yu.
Hana’s credit cardholders currently total 4.71 million customers,
and valid cardholders tally 4 million after inactive users are
discounted. The bank is also reshuffling its business structure to
be constructed on four business units – retail finance, corporate
finance, asset management and corporate sector.

• HSBC has announced that it
is planning to launch its new ‘green’ credit card in early April
2008 in the Hong Kong market. HSBC’s green credit card will enable
customers to contribute to environmental protection as they spend.
In addition, cardholders will be contributing to the setting up of
green roofs at a number of schools in Hong Kong, as HSBC will
donate an equivalent sum of 0.1 percent of cardholder spending to
the HSBC Green Roof for Schools programme.

• The South Korean government
has unveiled plans for a mass debt bailout for indebted individuals
and struggling small businessmen in an effort to stimulate economic
growth. The presidential office said the government would help
about 290,000 credit delinquents pay back their debts by allowing
them to retrieve their deposits in the national pension fund. It
will also help other credit delinquents through consultations among
state agencies, the office said. The total number of such
delinquents stood at 1.42 million at the end of last year. In 2004,
some one million credit delinquents were bailed out following a
year-long credit card crisis that prompted banks to clamp down on
overdue card bills. But credit problems have grown again, mainly
due to a sharp increase in the size of mortgage loans as property
prices soared.

EUROPE, MIDDLE EAST, AFRICA

• The latest figures from the Bank of England show
that the increase in net consumer credit in February of £2.4
billion ($4.75 billion) was above that in January and above the
previous six-month average. Net credit card lending rose by £400
million, above the increase in January, indicating that financially
stretched UK consumers are turning to their credit cards in greater
numbers. Conversely, the numbers of loans approved for house
purchase (73,000) and remortgaging (111,000) were lower than in
January. The annual growth rate of consumer credit rose to 6.6
percent in February, and the three-month annualised growth rate
rose to 7.3 percent.

• The Central Bank of Kuwait
has announced new regulations for consumer loans, setting the
maximum percentage of total monthly instalments at 40 percent of a
cardholder’s salary, or 30 percent of a retiree. Although banks in
the country have been anticipating such a move for some time, and
have been lowering credit card limits for many of their clients,
the new rules draw a number of questions regarding the future of
credit cards in the Islamic constitutional monarchy. The issuance
of credit cards grew by 10 percent in 2006 and 2007, and banks have
tried to cut down on cash withdrawals by placing 4 percent interest
on amounts withdrawn.

• The number of credit cards issued in Lebanon
has risen significantly over the last 12 months, according to
figures published by Byblos Bank Group in its
economic research document Lebanon This Week. There were 1,386,468
credit and debit cards issued in Lebanon at the end of September
2007, a 0.5 percent increase from the previous quarter and a 10.6
percent rise on a yearly basis. During this period, the number of
ATM branches in Lebanon also rose by 6 percent to number just over
1,000 ATMs in 2007. Additionally, the number of enterprises
accepting cards for payment reached 46,506 by the end of September
2007, an increase of 1.8 percent on a quarterly basis and a 6.7
percent rise annually. Debit cards for residents accounted for 63.6
percent of the total number of cards, followed by credit cards for
residents comprising 19.9 percent of the market. Each month,
residents spent an average of about $60.7 million in Lebanon with
their cards, up 12 percent from the previous quarter.

• A Visa-branded prepaid card offered by
Alliance & Leicester Commercial Bank will be
made available to staff at Manchester’s Trafford Housing
Trust, which manages 9,500 properties in the city, to
allow them to make purchases. The cards are aimed at lowering costs
by improving the payment process and reducing time and paperwork
utilised by employees.

• Malta-based financial consultancy firm
Kyte is the country’s first company to be
validated as a Qualified Security Assessor Company by the Payment
Card Industry Security Standards Council in the US. This now means
that payment gateways, processors and merchants no longer need to
acquire the services of an overseas firm to be certified as being
Payment Card Industry Data Security Standard compliant, resulting
in considerable savings on fees and expenses.

• Out of the total 31 commercial banks that
operated in Bosnia and Herzegovina (B&H) at the end of 2007, 24
banks provided card operations services and 18 of them had some
international payment cards. According to the data of the
Central Bank of Bosnia and Herzegovina, the total
number of issued cards as of 31 December 2007 was 1,528,498. In
2007, more than 24 million transactions were performed in card
operations, of which more than 13.8 million transactions were
performed through ATM machines, while 10.3 million transactions
were performed through point of sale (POS) terminals. Total value
of stated transactions was BAM3.5 billion ($2.79 billion); however,
only 20 percent of this figure was used for the payment of goods,
while 80 percent was related to cash withdrawals through ATM
machines and POS terminals. The average value of one transaction
was BAM145. A total of 655 ATM machines and 14,076 POS terminals
are installed in B&H.

• A new ‘creditbuilder’ function developed by
UK prepaid provider Advanced Payment Solutions
(APS) is aiming to offer financial redemption for the more than
eight million UK consumers suffering from a bad or no credit
rating. The creditbuilder is a new feature of APS’s cashplus
prepaid gold MasterCard – the first of its kind of Europe – and
comes endorsed by the Consumer Credit Association. The standard
monthly fee is advanced upfront for the year and then each month
the loan is ‘repaid’ by the cardholder with a monthly instalment of
£4.95 ($9.80), and reported to the leading credit rating agency. At
the end of 12 months the loan with APS will be cleared and would
count towards building or improving the customer’s credit rating as
a satisfied loan.

• Ugandan micro-finance specialist
Capital Finance Corporation has announced that it
will be issuing new account identification cards that will also
serve as ATM cards in future. This news follows the announcement by
Uganda’s central bank that the country’s first Credit Reference
Bureau will soon be launched. Juma Walusimbi, director of public
relations at the central bank, said that South African company
Compuscan Information Technologies had been selected for the
service. Due to the lack of a national identification scheme, an
identity system would be set up alongside the introduction of new
financial cards.

• Following the intervention of the Office of
Fair Trading (OFT), Barclays Bank subsidiary Clydesdale
Financial Services has decided to reduce its store card
default charges from £22.50 to £12 with immediate effect. The move
follows the OFT’s decision in April 2006 to set the threshold for
credit card and store card default charges – imposed for late
payments – at £12. The OFT stated that credit card default charges
had been generally set at a significantly higher level than was
considered fair. However, Barclays Partner Finance, which provides
the credit for a range of retailer store cards, said it did not
believe the guidelines issued in 2006 applied to store cards and
claimed references to store cards were unclear in the original
document.

• UK-based high street giant Marks
& Spencer (M&S) has confirmed that it will be
offering 0 percent interest for six months on the M&S Credit
Card for purchases and balance transfers. This will apply on all
shopping for six months from account opening and on balance
transfers made within six months of account opening. The card
charges a typical rate of 18.9 percent APR variable. Cardholders
earn M&S rewards points every time they use their card, and can
also collect extra points with regular bonus point offers. Four
times a year, these points are converted into M&S Reward
Vouchers to spend in M&S stores.

LATIN AMERICA

• Latin American governments are increasingly using prepaid cards
to pay social security benefits to their citizens, says a report by
US-based Mercator Advisory Group. This trend
includes governments in countries with highly developed payment
card markets, as well as those in countries with emerging markets.
Other growing segments for Latin American prepaid cards include
gifting, transit ticketing, remittance and money transfers, and
general prepaid cards. “Growth in Latin American prepaid markets
can be attributed to increased consumer awareness of the benefits
of this form of payment, in both the public and private sectors,”
says Mercator analyst Elisa Athonvarangkul.

• Over half the Brazilian population either has
a credit card or is eligible to have a credit card, says Brazil’s
Banco Itaú. Of Brazil’s 187.2 million total
inhabitants, 102.1 million people, or 54.5 percent, are marketing
targets for the credit card industry. Separately, Itaú says that
total Brazilian credit card billings by all issuers are expected to
have risen by 18.3 percent year-on-year to BRL16.8 billion in March
2008. In February 2008, total billings amounted to BRL15.1
billion.

• Continental Airlines has
rolled out NCR self-service check-in kiosks for
its customers at 13 airports throughout Latin America, including
Acapulco, Mexico; Bogota, Colombia; and Mexico City. Separately,
AeroMexico has installed 32 NCR self-service check-in kiosks at
Benito Juárez International Airport in Mexico City. AeroMexico also
offers NCR self-check-in kiosks at seven additional airports across
Mexico. The NCR kiosks contain software enabling different airline
applications to run concurrently on the same unit. They also accept
credit cards, an NCR spokesperson tells CI.

• Banco Banif has launched a
Visa-branded credit card that can be used outside Brazil. It is
using Orbitall as transaction processor for the card.
Orbitall, a subsidiary of Banco Itaú, processed a
total of two billion card transactions on behalf of its clients in
2007.

• AIG Consumer Finance Group,
a subsidiary of insurer American International Group, has agreed to
buy Inversora Pichincha, the third-largest consumer finance company
in Colombia, from Ecuador-based Banco Pichincha. The purchase is
subject to regulatory approval in Colombia. Inversora Pichincha
provides consumer auto loans and unsecured consumer credit through
direct and indirect distribution channels. AIG Consumer Finance
provides products and services including credit cards, auto loans
and consumer loans in Argentina, Brazil and Mexico.

• Banco do Brasil says it
plans to launch a retail bank in the US during the second half of
2008, once it has gained US regulatory approval. The new
Banco do Brasil Federal Saving Bank will compete
in the cross-border remittance market with domestic US banks that
target Latin American immigrants to the US. It will also target
unbanked or underbanked Brazilian migrants in the US with banking
services.

• American Express Mexico has
launched a promotion offering its cardmembers, who use their Amex
card to buy a British Airways ticket, a free ticket for a
companion. They also get six months free of interest to pay off
their ticket purchase. However, the cardmember has to pay the taxes
on their companion’s ticket.

• US-based ATM operator
Cardtronics says it expanded its Mexican ATM
network by 315 new machines in its fourth quarter to 31 December
2007. As of 28 February 2008, it had 1,300 ATMs in Mexico.

• Mexican retailer and financial services firm
Grupo Elektra has launched a banking and retail
operation in Brazil. Grupo Elektra has opened Banco Azteca and
Elektra stores in the State of Pernambuco, in northeastern Brazil.
Banco Azteca do Brasil will offer savings products
and consumer loans. Grupo Elektra launched a banking operation in
Peru in February 2008 (CI 395, Region round-up). Across Mexico,
Guatemala, Peru, Honduras, El Salvador, Panama and Argentina, Grupo
Elektra and Banco Azteca have 1,900 points of sale and eight
million active credit accounts.

• Portuguese bank Banif Financial
Group is to expand its branch network in Brazil, with 18
new branches being opened in 2008. It will also relaunch its
LusoCred consumer credit operation, offering Brazilians car and
domestic appliance finance, housing loans and other types of
consumer credit. Banco Banif currently has 12 branches in
Brazil.

• Mexican retailer Comercial
Mexicana has signed an agreement with Grupo
Financiero Banorte to launch a joint venture offering
credit cards and banking services in supermarkets. Banorte will
hold a 49 percent stake in the new unit, with Comercial Mexicana
holding the remaining equity. Before the company can start
operations, it needs to be authorised by Mexican banking
regulators, and Comercial Mexicana has to be freed from its
existing partnership with consumer lender Cetelem.
The as-yet-unnamed company’s market will be unbanked and
underbanked Mexican consumers.

• Banco de Costa Rica (BCR)
says its total credit card lending rose to CRC25.6 billion ($50
million) at 31 December 2007 from CRC21.7 billion a year earlier.
Total revenues from BCR’s credit card business rose to CRC4.4
billion from CRC4.2 billion at 31 December 2006.

• In the fourth quarter of 2007 to 31 December
2007, Chile’s CorpBanca sold 5,000 new retail
checking accounts and 33,000 new credit card accounts. At the end
of 2007, CorpBanca had 59,000 retail checking accounts and 233,000
credit cards, up 23.1 percent and 35.4 percent respectively on
2006.

• Paragon Application Systems,
a US vendor of payment simulation, configuration and testing
software, has licensed its FASTest and ATMulator software to Banco
de Costa Rica (BCR). BCR is using FASTest and ATMulator to improve
its ATM quality assurance testing and to reduce the time to market
for new ATM features. The bank has 400 ATMs in Costa Rica.

• German m-payments firm
Paybox has launched a prepaid mobile phone airtime
top-up service for Chile’s RedFácil. As a result,
the Chilean mobile prepaid airtime distributor has been able to
replace its physical scratchcards with an electronic top-up
service. RedFácil is currently processing several thousand
electronic top-up transactions a day, Paybox says. Using Paybox’s
TopUp Mobiliser software, RedFácil’s merchants and distribution
partners are able to recharge a customer’s airtime via POS
terminals, web-connected computers or street-sellers’ mobile
phones. The service has been certified by Chilean telcos Entel PCS
and Telefonica Movistar, with a third telco, Claro, expected to
follow shortly.

NORTH AMERICA

• US bank Washington Mutual (WaMu) is to issue up
to 15 million debit cards featuring MasterCard’s PayPass
contactless technology to customers in 2008. The bank began testing
contactless payments across both credit and debit card platforms in
partnership with both Visa payWave and MasterCard PayPass in April
last year. It will now roll out between 12 and 15 million
MasterCard debit PayPass cards in 2008, making it the largest
issuer of the contactless card in the US. The bank launched its
debit PayPass MasterCard nationwide in January, offering it to new
customers opening a current account and small business customers.
Since March the bank has begun offering PayPass to customers
renewing their cards.

• Nearly two-thirds of young Americans in their
twenties and thirties say they have credit card debt. They also
believe they are not saving as much as they should and not making a
good job of investing the money that they do save. The findings
come from The Financial State of Gen X and Gen Y, a study
commissioned by the American Savings and Education
Council and the AARP, a consumer advocacy
group that serves people aged 50-plus.

• Shipments of PC-based POS terminals in the US
and Canada grew by 5 percent in 2007, says IHL
Group. The overall market for POS terminal software,
hardware and maintenance was worth $5.56 billion in 2007. Terminals
running Microsoft Windows contributed $3.8 billion to the overall
market, IBM 4690-based terminals $1.02 billion and Linux operating
system-based machines $475 million, with DOS and other operating
systems making up the remainder. PCI DSS (Payment Card Industry
Data Security Standard) compliance is a major consideration for
retailers making new POS terminal purchases, says IHL.

• Canadian bank losses due to
Interac debit card fraud rose to C$106.8 million
($105.3 million) in 2007 from C$94.6 million in 2006 and C$70.4
million in 2005. The number of Canadians compensated for debit card
fraud rose from 72,000 in 2005 to 119,000 in 2006 and 159,300 in
2007. Despite the increase in fraud, the total number of Interac
debit card transactions rose from 3.07 billion in 2005 to 3.29
billion in 2006 and 3.45 billion in 2007.

• Canada’s Bank of Montreal
has launched the Shell Mosaik MasterCard credit card. For the first
three months, the card pays 5 percent cashback on all purchases at
Shell’s gas stations across Canada. The rate falls to 3 percent
after three months on purchases at Shell gas stations. Cardholders
receive 1 percent cashback on purchases at other Canadian
retailers. All purchases attract Air Miles rewards points.

• CIBC has started issuing
chip-enabled Visa credit cards as part of the EMV chip and PIN
market trial currently underway in Kitchener-Waterloo, Ontario (CI
395, Region round-up). The Canadian bank says that all its ATMs
across Canada are now chip-enabled and that it will be issuing EMV
debit cards in the trial area this spring. CIBC expects to issue a
total of 40,000 chip-enabled cards for the trial. It also plans to
start rolling out chip-based credit and debit cards to all its
Canadian customers during 2008.

• The Hannaford Brothers
grocery chain is facing a class action lawsuit for exposing 4.2
million credit and debit card numbers to potential fraud. The US
chain, which is owned by Belgium’s Delhaize Group, says the stolen
data was accessed from its computer system during transmission of
card authorisation. The breach also affected customers who had used
their cards at Sweetbay, another US retailer owned by Delhaize. Law
firm Berger & Montague, which has filed the suit on behalf of
consumers, says there have been around 1,800 cases of reported
credit and debit card fraud stemming from the breach.

• Meta Payment Systems has
launched iAdvance Line of Credit, which enables consumers to obtain
small loans and have the money transferred to a prepaid card. The
US prepaid card company is a division of MetaBank. It issues
prepaid cards in collaboration with other companies.

• Louisville, Kentucky-based processor
Payment Alliance International (PAI) has acquired
ATM Express, a Montana-based ATM management
company. ATM Express provides ATM network and sales support
services to third parties. The 500 ATM resellers who are affiliated
with ATM Express are the largest network of ATM resellers in the
US, says PAI. The acquisition increases PAI’s customer base to
26,000 ATM locations and 35,000 credit and debit card-accepting
merchants and enables it to increase the range of services it
offers customers, says PAI.

• US biometrics payment firm Pay By
Touch has stopped processing biometric transactions on
behalf of its merchant customers and consumer subscribers.
Customers included Shell gas stations in Chicago and several US
supermarket chains. Consumers signing up for the Pay By Touch
system had to pre-register a fingerprint against one of their
payment accounts, enabling them to make card-less purchases at the
point of sale. Pay By Touch’s parent Solidus Networks filed for
Chapter 11 US bankruptcy protection in December 2007. Abandoning
biometric authentication is part of Solidus Networks’ restructuring
programme.

• Royal Bank of Canada is to
use Canadian processor Pay Linx for its RBC
QuickLinx Prepaid Benefit debit cards. The RBC QuickLinx card is
designed for government agencies as an alternative to paper
cheques. Pay Linx, which is 25 percent owned by RBC, will provide
back-end services, processing and customer support for QuickLinx.
The agreement with RBC follows a Pay Linx pilot with the provincial
government of Alberta which has been operational since March
2006.

• Starbucks has announced new
rewards for its prepaid cards, which are used by one in seven of
its customers. The cards come as stand-alone prepaid cards, or as
combination prepaid and Visa credit cards, and can be customised
and reloaded online. The rewards, available to registered
cardholders at participating stores in the US and Canada, include
two hours’ daily use of free wireless internet, free refills, and
complimentary tall beverages with a purchase of coffee.

• US retail chain TJX has
reached a settlement with the Federal Trade Commission (FTC) over
complaints that it did not provide adequate security for its
customers’ data. TJX admitted in January 2007 that fraudsters had
stolen 45.7 million card numbers from its computer systems. It was
later claimed in court filings that the real figure was closer to
94 million cards. The deal with the FTC requires TJX to implement
comprehensive IT security programmes and to obtain audits by
independent third-party security professionals every other year for
20 years.