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December 16, 2008updated 24 Jan 2022 8:06am

Region Round-up

Bahrains BMI Bank and Geant Hypermarket have launched their new co-branded credit card La Carte...

By Verdict Staff

• Global IT supplier IBM is providing Nationlink Network of the Philippines with technology to enhance Nationlink’s ATM network and information infrastructure…

• Bahrain’s BMI Bank and Geant Hypermarket have launched their new co-branded credit card – La Carte…

• Venezuela’s Banco Guayana has installed a secure ATM key management system from US-based Trusted Security Solutions

• Dutch bank ING and MasterCard are to pilot a near field communications (NFC)-based mobile payments system in Romania…

 

Asia-Pacific

HSBC has launched debit cards in China and has entered into a bilateral co-operation agreement with Chinese national card network China UnionPay (CUP) that will enable HSBC’s Chinese cardholders to access CUP’s domestic and overseas networks in about 50 countries and territories. The companies said the combined HSBC-CUP network offers the most extensive ATM access for a debit card issued by any foreign bank in mainland China. HSBC China’s debit cards, now launched in 17 mainland Chinese cities, are able to link with up to three HSBC China accounts, including a renminbi account and up to two foreign currency accounts.

China Postal Savings Bank has signed a multi-year credit card processing deal with China UnionPay Data Services (CUP Data). China Postal Savings Bank holds more than $200 billion in deposits and has more than 36,000 branches throughout the country. CUP Data is a joint venture between China UnionPay and US-based payment processor TSYS, which bought a 34 percent equity stake in the payments processor in 2005. TSYS has since upped its stake and now holds 44.5 percent.

• Global IT supplier IBM is providing Nationlink Network of the Philippines with technology to enhance Nationlink’s ATM network and information infrastructure. The move is in line with the electronic financial and payment network solutions provider’s strategy to bring financial services to the untapped and underserved citizens in remote areas of the country.

Zoilo Jesus M Dela Cruz III, co-founder of Nationlink Network, said: “More than 80 percent of Filipinos are under-serviced, and have to travel long distances to reach a banking facility. We need to enable the delivery of modern financial, banking, and payment services to a vast underserved market.”

Transglobal Beneficial, a US-based provider of health care solutions, has launched India Health Card (IHC), a prepaid health care card designed to provide access to health services for non-resident Indian (NRI) beneficiaries through a network of health care providers across India.

NRIs are required to load funds onto the card through the internet and then use it to receive health care services from health care providers in India. About 30 million Indians live abroad, and according to a recent World Bank report, India is the top recipient of migrant remittances in 2007, receiving $27 billion. However, only 5 percent of NRI remittances at present goes towards health care-related costs.

• A new mobile payment system has been launched in the Philippines enabling consumers to make low-value payments with their mobile phone. The system has been developed by New Zealand’s Fronde Anywhere, a subsidiary of Fronde Systems Group, and UK IT supplier Logica for i Can, a new player in the Philippines owned by the Thailand-based TAO Group. i Can’s new service allows mobile phone users to pay for purchases directly from their handset, as long as they belong to one of two participating banks, Bancnet and BPI. Other banks are set to come on board in the near future.

Citibank in Indonesia has launched a contactless payment card and associated social networking site for young professionals. The Citi Clear card supports Visa payWave contactless technology for purchases to the value of IDR200,000 ($16.86) and under. Larger value purchases are conducted via the traditional swipe and sign transaction process. The associated social networking website is billed as a lifestyle portal, offering online messaging, blogging, photo uploading and other services appealing to Indonesia’s youth market and promoting Citi Clear reward packages.

Visa has formed a payments processing joint venture with India-based Yalamanchili Software Exports in a bid to tap into developing regions like Asia-Pacific and Latin America. Visa holds a controlling interest in Visa Processing Service (VPS), which is headquartered in Singapore. Initially, the joint venture will focus on providing financial institutions, processors and other payment companies with prepaid and debit processing. However it will also offer credit, ATM, money transfer and private-label processing, as well as a range of payments services, including risk and fraud management, mobile applications, loyalty and cardholder support.

• Cambodia’s first US-owned bank, Angkor Capital Bank, has launched operations in the country, bringing the number of foreign-owned banks in Cambodia to 25. Chea Chanto, governor of the National Bank of Cambodia, the country’s central bank, said that the launch would strengthen US-Cambodian ties and that the increase in foreign-owned banks demonstrates confidence in the local banking sector. The bank will initially offer deposit accounts, commercial and individual loans, ATM services, and trade financing with innovative features. The bank also plans to launch a debit and credit card in the future, accompanied by full-service online banking.

• UK-headquartered banking group Barclays and TimesofMoney of India have partnered to launch an online remittance service that enables the bank’s UK customers to send money to India. Barclays Online Money Transfer, based on technology from payments and remittance service provider TimesofMoney, is targeted at the bank’s large non-resident Indian customer base. The service will enable customers in the UK to send payments of between £250 ($375) and £3,000 online directly to any Barclays account anywhere in India. The service will be extended in the near future to customers in other countries who wish to send money to India.

Malaysia Airlines, the national carrier of Malaysia, has opted for payment solutions from German payment solution provider Wirecard to handle its online airline ticket sales. Last year, Malaysia Airlines and its fleet of 90 aircraft carried some 14 million passengers to 100 destinations.

Malaysia Airlines senior general manager Dr Amin Khan said: “Wirecard products and services support Malaysian Airlines to significantly improve our financial operations on a global scale.”

• The State Bank of Vietnam, the country’s central bank, has turned down a proposal from the Vietnam Bank Card Association to collect fees from customers for ATM transactions. According to the central bank, the country’s current payment infrastructure and ATM services rendered the plan unsuitable. Earlier this year, the Vietnam Bank Card Association had proposed collecting ATM transaction fees starting from December 2008.

• South Korea’s Hyundai Card, a financial unit of Hyundai Motor Group, is to get unsecured loans of around $85.8 million from one of the largest Japanese banks. The loan will mature in 12 months, the company said in a statement jointly issued by its sister company Hyundai Capital. Hyundai Capital also secured a $50 million credit line extension by the same Japanese bank, the statement said, although it did not name the bank.

 

Europe, Middle East, Africa

• Banks in the United Arab Emirates (UAE) are set to introduce biometric iris scanning technology at ATMs, following a recent surge in ATM fraud across the UAE. In September banks across the UAE were forced to send customers text messages urging them to change their PIN numbers following a spate of fraudulent ATM withdrawals. The UAE’s Ministry of Interior has now reached an agreement with the UAE Central Bank and other banks in the country to roll out iris scanning technology in a bid to put an end to ATM fraud.

• Bahrain’s BMI Bank and Geant Hypermarket have launched their new co-branded credit card – La Carte – offering customers a range of benefits including a loyalty programme with rewards, a low monthly interest rate, no annual fees, and a 50-day interest-free period on all retail purchases with exclusive discounts and special offers. La Carte is the latest addition to the BMI card range, which includes classic and gold cards, as well as Sapphire and Diners Club cards for its premier and corporate clients.

• Under a co-operation agreement, Jordan’s Ministry of Planning and International Cooperation (MoPIC) and the International Finance Corporation (IFC) will work in partnership to strengthen the legal framework for credit information sharing in the country. IFC will work with the Ministry to draft and adopt new legislation to regulate the sharing of credit information, and raise awareness of stakeholders about credit reporting. IFC will share its global and regional experience in promoting credit bureaus, describe international best practice in credit information reporting systems, and discuss the benefits of credit information sharing in Jordan.

• Nigeria-based United Bank for Africa (UBA) is rolling out fraud and anti-money laundering (AML) technology from payment solutions provider Actimize across 700 retail distribution centres in the country. The bank has signed for the Actimize Risk Management platform and Enterprise Risk Case Manager to help it detect and mitigate employee, electronic payment and ATM and debit fraud, as well as money laundering. The deployment will be split into two phases over several months. Nigeria has gained a reputation as a haven for fraud, but many of its banks have looked to combat the problem by installing new systems.

• UK digital money specialist Ukash is launching in South Africa as it looks to tap into the country’s large unbanked population. South Africans can now buy Ukash vouchers from terminals within the network of Blue Label Telecoms distribution channels. Explaining the decision to enter the market, Ukash cites 2007 research from Finscope suggesting 40 percent of South Africans are unbanked.

Barclaycard is preparing to boost its investment in contactless card technology after issuing 1 million contactless cards in the UK. The technology is currently available on the Barclaycard OnePulse card and the cards recently issued to Goldfish and Morgan Stanley customers. In addition, the bank says all newly issued Barclaycard Platinum cards will now include contactless technology. Barclays has also signed a deal with UK high street food chain Pret A Manger, which plans to introduce the technology across its 178-strong national store network over the next six months.

Barclays says 6,000 outlets now accept contactless payments throughout the UK, including high street retailers Coffee Republic, EAT and Yo! Sushi and thousands of local independents such as dry cleaners, shoe shops, leisure centres and bookshops.

• Online payments outfit Neovia Financial (formerly Neteller) has agreed to buy the European prepaid payment services division of IDT Corporation in a cash deal worth £10 million ($14.9 million). The deal is for the entire issued share capital of IDT Financial Services Holdings and certain other assets. Neovia will pay a total cash consideration of $15.05 million, including $10 million of banking regulatory capital. Founded in 2006, IDT provides prepaid MasterCard products across Europe, including the UK market under the IDT Prime Card brand. By combining it with the Neovia Net+ card services, Neovia said the deal would create one of Europe’s largest independent prepaid card businesses.

• Global mobile payments specialist Dialogue Communications has launched its mobile billing services in Norway and Sweden to allow consumers to buy products and services over mobile internet channels. According to Dialogue, Norway and Sweden are two of the most highly saturated mobile markets in the world and represent a significant opportunity for Dialogue and mobile internet shops. Norway and Sweden have a combined population of 14 million and mobile penetration is predicted to reach an estimated 122.5 percent by 2010.

• Dutch bank ING and MasterCard are to pilot a near field communications (NFC)-based mobile payments system in Romania, enabling customers to use their handsets to pay for low-value purchases. The bank says about 500 clients will be given Nokia 6212 handsets incorporating NFC technology for the first stage of the six-month pilot, enabling them to make payments by tapping their phones against specially equipped terminals at around 30 merchants in Bucharest.

As well as making contactless payments, participants will be able to top up their Maestro PayPass account balance over the air to their phone with a special code. The Romanian pilot is the first since ING and MasterCard outlined their plans to develop the system in February.

Visa has launched the UK’s first internet shopping prepaid gift card. The £25 ($37) 3V Visa Internet Shopping gift card can be bought over the counter at major high street retailers and comes in four different designs. It can be used to shop online, through mail order or over the telephone, wherever Visa is accepted. Cards are activated online and the recipient is issued with a unique number and three-digit security code, which are entered at the check-out. The cash value on the cards is backed by UK bank Alliance & Leicester.

• French mobile operators Orange, SFR and Bouygues Telecom have teamed with eight major retail chains in the country to form a working group dedicated to contactless m-payments systems at the point of sale. The Ergosum project will work towards a contactless payment system using international near field communication (NFC) standards and implementation specifications found in SIM cards. The group says it wants contactless payments systems that work with all handsets, operators and retail chains. They should also apply to various services such as bank and loyalty cards and discount coupons, as well as be compatible with existing electronic money systems. The technology must also be coherent with the Payez Mobile system, developed by Orange, SFR and Bouygues Telecom with seven of the country’s major banks.

 

Latin America

Banco de Mexico, the Central Bank of Mexico, says that in the quarter to 30 June 2008 there were 26.5 million credit cards in issue and 54.7 million debit cards in issue in Mexico. However, only 18.5 million credit cards and 29.1 million debit cards out of the total credit and debit cards in issue were actually used in that quarter. In the quarter to 31 March 2008, there were 26.2 million credit cards in issue and 51.8 million debit cards in issue in the country.

In the quarter to 30 June 2008, there were a total of 313.4 million ATM transactions in Mexico, up from 308.7 million in the previous quarter. Total point of sale card transactions rose to 194.8 million in the June quarter from 189.8 million in the March 2008 quarter.

• A survey by US data security firm RSA of 164 Latin American businesses in early 2008 found that only 46 percent of the respondents’ companies stored credit card data on their systems in encrypted form. A further 49 percent said they did not use any encryption for card data stored on their computers. Most (81 percent) of the survey respondents said they complied with the PCI DSS (Payment Card Industry Data Security Standard) requirement that merchants must not store full magnetic stripe data for cards on their systems. In addition, 83 percent said that they never stored CVV (Card Verification Value) codes.

• Latin Americans living in the US are keen to carry out cross-border money transfers using cell phones instead of traditional methods such as convenience stores, according to a survey by m-payments firm Upaid. The majority of survey respondents (61 percent) said they spend over $75 a month on fees and commissions associated with cross-border payments. Two-thirds of those who transfer money via a store find it expensive, particularly those sending money to Uruguay, Haiti, Belize and Aruba. Nearly three quarters of all those interviewed told Upaid that they wanted to use cell phones to make money transfers in the future.

Banco do Brasil is offering improved terms for the working capital line of credit it offers to merchants who deposit their credit card receivables from Brazilian acquirers Visanet and Redenet with the bank. Merchants can now repay their loans in 24 monthly repayments, which compares to 12 monthly repayments for those retailers who only deposit their Visanet receivables with BB. In addition, merchants who deposit both Visanet and Redenet receivables with BB have 59 days to make their first repayment to the bank. Merchants can also borrow up to eight times their monthly average Visa card transaction volume, subject to a credit check and to their Redecard transactions corresponding to at least 35 percent of their total Visanet volume. Redenet is Brazil’s MasterCard and Diners card acquirer.

• Venezuela’s Banco Guayana has installed a secure ATM key management system from US-based Trusted Security Solutions. The A98 system enables banks to remotely load ATM encryption keys on their ATMs without needing to send maintenance staff to individual ATMs. Banco Guayana has around 100 ATMs on its network.

• US Visa and MasterCard prepaid card issuer MiCash has launched a reloadable prepaid card that enables cardholders to make card-to-card or card-to-cash money transfers worldwide. For a flat fee, users can carry out transfers from their card to a recipient for pick up at any of 12,000 Bancomer Transfer Services offices in markets such as Mexico, South and Central America, India, the Philippines and China.

Banco do Brasil (BB) has launched a card for Brazilian exporters and importers that functions as a combined credit and debit card as well as a bank account-to-account funds transfer card. The Ourocard Comércio Exterior card contains a digital certificate in its chip, which enables the card to be used to digitally sign contracts over the internet, without the need for a paper signature.

• Caribbean card acquirer Rahaxi has signed an agreement to provide multi-currency cross-border payments processing services to Pure Commerce. In return, Pure Commerce, an Australian-based dynamic currency conversion (DCC) specialist, will supply a treasury facility for Rahaxi’s customers. Dublin, Ireland-based Rahaxi, which was formerly known as FreeStar Technology (see CI 411), says the deal with Pure Commerce will help it to expand in the Caribbean and Latin America by offering DCC services in the region.

Rahaxi currently provides acquiring services in the Dominican Republic, Haiti and in Europe. DCC involves allowing cross-border card transactions to be charged in the customer’s own currency, instead of the merchant’s.

• Caribbean financial services group Republic Bank is rolling out Fortent’s anti-money-laundering and financial crime prevention software. The Port of Spain, Trinidad and Tobago-based bank is using the software, which includes transaction management and know-your-customer verification, across all of its major lines of business including retail banking, credit card services, electronic banking, and wire transfers.

• Canada’s Scotiabank says that its international card revenues rose by 11 percent year-on-year in the year to 31 October 2008 due to strong growth in Peru, the Caribbean and Mexico. Its Canadian card revenues were up 6 percent year-on-year, due mainly to higher transaction volumes. Scotiabank says its Mexican subsidiary had strong retail loan growth in fiscal 2008, but was hit by increased loan losses, particularly in credit cards.

PayPal has launched a localised website in Mexico that enables its Mexican customers to buy and sell online using Mexican pesos. Mexican consumers can use the site to make purchases online using their credit cards or bank accounts.

In addition, PayPal has introduced new PayPal domains for 18 countries, including Argentina, Chile, Hungary, India, the Philippines, Portugal, Saudi Arabia, Turkey and Venezuela. Customers in these countries can access PayPal via a dedicated country domain that displays relevant PayPal information and products available in that country.

• US card payments and ATM software vendor Postilion has won four new contracts in Venezuela and Bolivia. The new clients are Venezuelan financial institutions Micasa, Banco Corp Banca, and BancoBanorte, as well as Bolivia’s Banco Mercantil Santa Cruz. Postilion now has 32 clients across 11 Latin American countries.

Micasa, a credit union in the process of converting to a bank, will use Postilion’s ATM software to drive 150 ATMs. Banco Corp Banca, which was recently acquired by Banco Occidental de Descuento Venezuela, is using Postilion to replace its legacy payments platform and to interface with American Express and Consorcio Credicard, a Venezuelan card network. Banco Banorte is deploying Postilion’s software to drive 10,000 POS terminals across Venezuela. Banco Mercantil Santa Cruz is using Postilion to drive 150 ATMs.

 

North America

• The US credit card market will follow the mortgage market into decline, Oppenheimer & Co. analyst Meredith Whitney says. Led by Bank of America, Citi and JPMorgan Chase, credit card issuers will withdraw $2 trillion in consumer lines of credit over the next 18 months. Consumer liquidity, already hit by job losses, will be further eroded by this 45 percent drop in credit card lines of credit, Whitney says.

She also believes the $110 billion worth of funds made available to US banks under the Troubled Asset Relief Program (TARP) will be used to plug holes in banks’ balance sheets. This is because new accounting rules will require credit card and other risky debt to be moved back onto bank balance sheets. Consequently, banks will need more capital to cover potential loan losses and to protect customer deposits. If they are to expand their card lending, banks will need to raise yet more capital, Whitney says.

• Internet PIN debit payments firm Acculynk (formerly called ATM Direct) expects to publicly announce partnership deals with two US EFT (electronic funds transfer) networks in January 2009. Acculynk has signed partnership deals with four EFT networks in total for its PaySecure service, but so far has only been able to name one of the networks, US processor Fiserv’s ACCEL/Exchange. Trials of PaySecure will start in January 2009 involving Acculynk’s EFT partners and four US online merchants with sales ranging from $15 million to $250 million.

Danielle Duclos, Acculynk’s director of marketing, tells CI: “We’ve partnered with three acquirers, Elavon, Merchant e-Solutions and UATP,” she says. “Also, we’ve started discussing strategic partnerships with non-card-based online payment firms such as Moneta.”

Debit cardholders shopping at a PaySecure-accepting website enter their PIN on Acculynk’s software-only graphical, scrambling PIN-pad, which appears on their PC screen at check-out. The PIN is then encrypted and, along with the customer’s card information, is processed through a participating EFT network.

• While some US households are experiencing vanishing credit lines, others still have access to high amounts of credit, Synovate Mail Monitor says. For the first three quarters of 2008, credit lines across all credit cards rose to an average of $27,626 per household from $26,902 in 2007.

In 2008, US households received 4.2 billion credit card offers, down 20 percent from 5.2 billion offers in 2007. Most of the 1 billion drop in offers – 722.6 million – affected households with annual income of less than $50,000. The card issuers that cut back solicitations most in the third quarter of 2008 versus a year ago were HSBC (-70 percent), Bank of America (-44 percent) and Citibank (-40 percent).

• US gift card sales will drop 9 percent from $70 billion in 2007 to $59.9 billion in 2008, TowerGroup says. Merchant-sponsored closed-loop, or private-label gift cards will see a 14 percent fall in sales, while bank-sponsored, network-branded gift cards will see a 5.6 percent rise. The decline in the merchant-sponsored gift card sector will be driven by a decrease in retail sales and consumers’ fears that private-label gift card issuers will go bankrupt. There will also be a shift to branded products from banks which can be used for necessities such as groceries and petrol.

• Canada’s 2008 Christmas spending season may be the softest since the early 1990s, a Bank of Montreal and Air Miles survey reveals. Many Canadians will use accumulated loyalty points to save on the cost of gift giving, the survey says. While 60 percent of Canadians plan to pay off credit card balances for holiday shopping immediately, the rest expect to carry that balance for six months or more.

Retail Decisions (ReD) says there was a 40 percent year-on-year rise in attempted US online fraud on the day after the Thanksgiving holiday known as Black Friday, 28 November 2008. ReD says fraudsters attempted to buy goods online costing an average of $248 per item, up 25 percent year-on-year on a like-for-like basis. The most fraud-prone US shipping and billing states on 28 November 2008 were Florida and New York, the fraud prevention firm says.

• The potential funds available from stolen credit cards offered online by cyber-criminals totalled $5.3 billion worldwide between 1 July 2007 and 30 June 2008, web security firm Symantec says. Credit card information is the most advertised category of goods and services offered on underground economy servers, accounting for 31 percent of the total in the reporting period, 1 July 2007 to 30 June 2008.

The second most common category of goods and services advertised is bank accounts, accounting for 20 percent of the total. The potential worth of these bank accounts was $1.7 billion for the reporting period. The total asking price for the stolen information was $276 million during the period, Symantec says.

Chase Card Services has added gift cards to the range of rewards on offer to its Chase Freedom credit cardholders. They can now opt to receive their cashback points in the form of gift cards from US restaurants and department stores.

• US processor Heartland Payment Systems has bought Chockstone, a gift card and loyalty programme provider. Portland, Oregon-based Chockstone offers technology which analyses customer behaviour in real time in order to create targeted point of sale promotions.

HSBC Canada’s MasterCard unit is offering a way for homeowners to cut their mortgage balances by redeeming their credit card reward points for additional mortgage repayments. Until 31 December 2009, the HSBC MasterCard rewards programme allows cardholders to apply a cashback equivalent to 2 percent of their total card spending towards their HSBC mortgage. From 1 January 2010, cardholders can apply their credit card cashback to their Mortgage Account at a rate of 1 percent of total card spending.

JPMorgan Chase is to take Washington Mutual’s (WaMu) consumer card business in-house, following its September 2008 purchase of the Seattle-based financial institution. WaMu’s consumer card portfolio was previously administered by payment processor TSYS under a contract which has now been discontinued. Chase is to pay TSYS an undisclosed fee for ending the contract and deconverting WaMu’s portfolio. The deconversion is due to take place in March 2009, after which Chase will process the WaMu cards in-house using technology licensed from TSYS.

WaMu accounted for less than 4 percent of TSYS’ revenues in the first nine months of 2008. Separately, the Toronto branch of JPMorgan Chase Bank has extended TSYS’s contract to process its Canadian card portfolio through 30 April 2012.

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