• Debit cards are not popular in Thailand, according to
Kasikorn Research Centre, the research arm of
Kasikorn Bank…
• Independent Isle of Man bank Conister Trust has
signed a contract to issue credit cards marketed and serviced by
CompuCredit’s UK subsidiary…
• In November 2007, Peruvian bank brands were the target of 1
percent of global phishing attacks, US web security company
RSA says…
• Seattle-based Best Coffee is testing a number of
self-service espresso machines that contain payment-accepting
technology from Coinstar…
Asia-Pacific
Go deeper with GlobalData
• Although HSBC, Standard Chartered, Citibank, Bank of East
Asia and Hang Seng Bank have been allowed to issue
yuan-denominated bank cards in China, they are still in talks with
the central bank over its requirements for these banks to set up
data centres on the mainland. The banks cited high costs and time
commitments in setting up the new data centres and will be
prevented from issuing the local currency cards if they are unable
to reach a consensus with the central bank.
• Payment services provider TSYS recently
announced that its joint venture with bank card network
China UnionPay has completed a bank card
conversion for Shanghai Pudong Development Bank
(SPDB). The conversion allows the bank to move its card portfolio
from an overseas data centre utilised since 2004 to a domestic data
centre in Shanghai. It was the first successful conversion from an
overseas data centre and is the first Chinese conversion from a
mainframe to an open platform. TSYS owns a 44.5 percent equity
stake in CUP Data, a subsidiary of China UnionPay. SPDB issued its
first dual-currency credit card from an overseas data centre in
2004.
• Industrial and Commercial Bank of China
announced that it had issued more than 22.22 million Peony credit
cards by 11 December 2007, with an annual transaction value of
RMB160 billion ($22 billion).
• Agricultural Bank of China has set up two
pilot branches in Jilin to provide retail financial services such
as cards, deposits, insurance and investment to rural areas in
China. The bank aims to simplify evaluation, credit approval and
lending procedures to help farmers and SMEs in the rural area
borrow money.
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By GlobalData• Sumitomo Mitsui Card will issue China
UnionPay credit cards in Tokyo targeting Japanese
travelling and working in China. China UnionPay has nearly 200
overseas and domestic member banks and institutions with more than
30 overseas member banks issuing its card.
• State-owned telecoms operator China TieTong,
China Merchants Bank and communications
specialists Beijing Intac-Meidi Technology
Development have recently launched a credit card phone
service to all China Merchant Bank credit cardholders. The bank’s
cardholders can use their cards as traditional phone cards to make
low-price domestic and international phone calls with the charges
automatically deducted from their credit cards.
• Debit cards are not popular in Thailand, according to
Kasikorn Research Centre, the research arm of
Kasikorn Bank. Although Thai banks have been promoting their use,
many shops prefer cash and experience technical problems with the
card readers. A survey by the research centre found that most
prefer credit cards to debit cards and there was low awareness that
debit cards can be used for purchases as well as cash withdrawals.
Some 18.1 percent of the respondents did not know the difference
between pure ATM cards and debit cards. Of the total debit
cardholders surveyed, 61.7 percent said that they had never used
their card for purchases at stores. Some 41.1 percent of
cardholders faced problems when they used their debit card, 48.7
percent said fewer shops accept them, and 32.9 percent said most
shops suggested customers used cash instead and set a minimum
spending level for using debit cards. Some 70.1 percent of the
respondents opted to use credit cards for spending.
• American Express, Industrial and Commercial Bank of
China (ICBC) and Hainan Airlines, a
Chinese domestic carrier, have launched a credit card targeted at
local tourists and business travellers. ICBC will issue the
dual-currency card (Chinese yuan and US dollar) which utilises the
merchant network of ICBC, China UnionPay and American Express.
Cardholders will also receive global travel support and emergency
assistance from American Express’s 2,200 travel offices in over 140
countries.
• China’s Shenzhen Ping An Bank announced that
it has issued over 200,000 credit cards in Shanghai and Shenzhen
since the launch of its credit card business in August 2007. The
bank has sold its credit cards via the life insurance channel of
its parent Ping An Insurance Group as it does not
have a branch presence. Cardholders pay through payment terminals
in 1,600 convenience stores. The bank plans to launch payment
services through mobile phones in 2008.
• World Bank member International Finance
Corporation will support FINO, a
multibank-promoted company, to provide smart card-based solutions
for rural customers in India. The smart cards will ensure that
those in the rural areas receive social and pension payments on
time.
• State Bank of India (Canada) plans to launch
a debit card in January 2008 targeting South Asian immigrants – a
market estimated to be worth $3 billion a year. Prior to their
departure, new South Asian immigrants can set up internet banking
facilities, personal deposit accounts, bank cards and mortgages in
Canada. The bank achieved 50 percent growth in deposits and
advances in 2007.
• Barclays is targeting a double-digit market
share in India for 2008. It has aggressive plans to expand its
branch network and planned to open a new branch in the state of
Gujarat by the new year. Barclays has four branches in the country
– in Delhi, Bangalore, Mumbai and Chennai – and recently injected
$70 million into its India retail operations.
• Japan’s Mizuho Bank will increase its equity
stake in major credit card issuer Credit Saison from 2.8 percent to
6.93 percent. The bank will spend ¥23.5 billion ($214.5 million) to
complete the stake purchase.
• Korea’s largest credit card issuer, Shinhan
Card, has rolled out a universal serial bus (USB)
interface-fitted credit card that enables online and contactless
payment utilising a built-in integrated circuit chip. To pay
online, users need not key in their credit card number but instead
connect the card to a USB port on the computer. At stores with an
appropriate card reader, cardholders can make contactless
payments.
• Banknetvn and Paynet of
Vietnam have signed an agreement to connect their payment service
networks. Banknetvn members will be able to use Paynet’s point of
sale system to pay for retail purchases and services such as
utilities and internet. The portal will connect banks, service
providers and cardholders. Banknetvn is a consortium of Agribank,
BIDV, Incombank, ACB, Sacombank, DongA Bank, Sai Gon Bank and VNPT.
With 4 million cards in issuance, it accounts for 70 percent of ATM
and POS card transactions, handling 150 million transactions a
year. Paynet is the first e-payment network in Vietnam and has
2,000 POS terminals in 36 provinces processing over 200,000
transactions a day.
Europe, Middle East, Africa
• The third quarter of 2007 saw a slight improvement in the UK’s
consumer credit market performance, according to a study by
research company Datamonitor. The research said
the results were the best since the fourth quarter of 2005. High
levels of consumer debt and a lack of consumer confidence have been
restricting new business and contributed to poor performance in the
second quarter of 2007. The recent improvement has been put down to
an improved credit card market, although some products continued to
perform weakly. They included unsecured personal loans, which a
number of lenders such as Northern Rock exited, and retail
finance.
• Independent Isle of Man bank Conister Trust
has signed a contract to issue credit cards marketed and serviced
by CompuCredit’s UK subsidiary. The deal, a
MasterCard programme, marks Conister’s biggest card programme to
date, CEO Jerry Linehan said. The company expects the volume of
cards issued to be substantial. At the close of 2006, US-based
CompuCredit, a financial services provider, serviced over 4.3
million customer accounts, generating net income after tax of $107
million with assets of $2.1 billion. It bought the Monument credit
card business from Barclaycard in April 2007. Conister’s main
market is prepaid cards, but its partnership with MasterCard means
it can issue credit and debit cards too. Financial details were not
disclosed.
• UK banking group Alliance & Leicester
(A&L) is establishing a new business unit focused on developing
prepaid card products and services. The new unit will be 80 percent
owned by A&L, with the remaining 20 percent owned by
Cupera International Ltd (CIL). CIL is the parent
company of MoneyCard Group with which the bank has been working to
deliver a number of prepaid card products over the past 18 months.
These include a prepaid plastic payment card designed for use by
commercial clients that currently provide paper payments to
customers or employees, and a stored value card designed for public
sector organisations, which can be used to deliver welfare
payments.
• The largest financial services provider in Germany, DZ
Bank, and Visa Europe have introduced the
first German V PAY debit card in Europe’s largest market. Following
the agreement of DZ Bank, WGZ Bank, Bundesverband der Deutschen
Volksbanken und Raiffeisenbanken and Visa Europe last year, V PAY
has now become a reality in Germany. Some 22 banks in eight
European countries have already committed to the introduction of V
PAY, which will equate to 20 million V PAY cards.
• Russian card manufacturer Rozan will look to
gain permission from MasterCard and
Visa to make credit cards out of gold and
platinum. The cards will reportedly be hand-made from precious
metals and decorated with semi-precious stones, enamel, mother of
pearl and fine wood, and would function as normal cards. This
latest announcement comes after a South Korean company designed a
diamond-encrusted credit card in November and the launch of the
Dubai First Royale diamond-encrusted MasterCard-branded card.
• Germany’s Commerzbank is the exclusive
partner of the online marketplace eBay in Germany
with the launch of a new credit card, the eBay MasterCard.
Cardholders are offered an exclusive bonus programme for purchases
made on eBay. “The eBay MasterCard with the new bonus programme is
an attractive offer for our customers. It connects the development
of our customer connection activities with the extension of our
strategic partnership with Commerzbank,” said Harald Eisenaecher,
managing director of marketing and sales at eBay in Germany.
• Austria’s Erste Bank has introduced the
Sparefroh Junior ProfitCard for children as a modern alternative to
the savings book, with a child-friendly layout and benefits. Legal
representatives or grandparents can use the savings card to provide
for the future or to help save up for a particular wish. Gifts of
money can also be paid in directly to the savings account by
standing order. The savings deposits can be accessed from all
self-service terminals of Erste Bank and the Sparkassen, while the
e-banking service gives 24-hour access to the account.
• Barclaycard boss Anthony Jenkins said he is
happy with the company’s position – despite problems caused by the
credit crunch. In an interview with UK newspaper the Daily
Telegraph, he emphasised the strengths of the company’s risk
management systems, which he said accept only around 50 percent of
applicants. Jenkins said the company has been cutting back on its
lending. He also admitted that it was hard to tell what the outlook
was in the increasingly uncertain credit market environment.
Barclaycard would have to cut back on credit lines and increase
collections intensity if there was further deterioration in the UK
economy, he added. Barclaycard issues one in five UK credit cards,
and operates overseas in around 60 countries. It is currently
working on expanding its business in the US, where it became the
fastest-growing major credit card issuer in August 2007 (see CI
386).
• Ireland’s Minister of Finance, Brian Cowen, gave the credit
card industry a boost when he delivered the national budget in
December. He announced that with immediate effect, stamp duty
payable on all payment cards would be reduced significantly – a
move which has been applauded by Irish banking and commerce bodies.
On credit cards, the annual duty payable was cut by 25 percent,
from €40 ($57) to €30. Duty on Laser cards, the
main debit system in Ireland, was reduced 50 percent from €20 to
€10. The duty on ATM cards fell by 50 percent from €10 to €5. Cowen
revealed that in the past tax year, a total of €121 in stamp duty
was collected on bankcards, up from €118 million in 2005.
• US-based financial services company FundsTech
has announced it has installed its prepaid processing platform in
Johannesburg, South Africa. It is awaiting certification for the
secure facility. FundsTech executive vice-president Victoria
Vaksman said it will use the platform to issue prepaid cards in
South Africa, Kenya, Tanzania, Mozambique and Morocco. The company
said it would deliver around 1.5 million cards through its
strategic partners in the region. FundsTech provides prepaid debit
cards to people who do not have a bank account. The potential
global market is believed to 1 billion people and could be worth as
much as $200 billion annually, according to FundsTech.
• Consumer finance company Dubai First has
teamed with MasterCard Worldwide to introduce the
Dubai First MasterCard credit card, which includes the highest
cashback offer in the Middle East. The cards also have the
MasterCard PayPass contactless payment feature. Cardholders can
earn up to 4 percent cashback for every purchase at all merchant
locations in the United Arab Emirates and abroad.
Latin America
• In November 2007, Peruvian bank brands were the target of 1
percent of global phishing attacks, US web security company
RSA says. Mexican bank brands also were the target
of 1 percent of global phishing attacks in November, and Colombian
banks of 3 percent. US banks were the target of 62 percent and
Canadian banks 4 percent. RSA says the fact that Colombia, Mexico
and Peru are among the top ten targeted countries for phishing
attacks is “an indication that Latin American banks have been
subjected to increasing attacks since April 2007”.
• According to Chile’s Asociación de Bancos e Instituciones
Financieras (ABIF), there were 6.62 million credit
cards in issue in Chile in June 2007. This figure included
domestic-only and international-branded credit cards as well as
additional cards on a cardholder’s account. In 2006, there were
6.36 million credit cards in Chile, ABIF says.
• To encourage increased card spending, American
Express has launched the Amex Deferred Payments Plan in
Mexico. The plan allows Mexican cardholders to pay off their
balances in three to 24 months at a fixed interest rate.
Cardholders can apply for the plan at any time, Amex says.
• A report from Mexican bank Banamex says that
as of November 2007, there were no signs of deterioration in
Mexico’s credit card market as a result of the subprime credit
crisis in the US. In August 2007, total Mexican credit card lending
was MXN258.7 billion ($23.7 billion), according to Banco de México,
the central bank.
• BBVA Chile is to double its ATM network to
400 units over the next few months, following an agreement with
Farmacias Ahumada. The Chilean pharmacy group
intends to install 200 BBVA-owned ATMs at its stores across Chile.
BBVA says the deal means its ATMs will be placed in retail outlets
with a high turnover of shoppers.
• The Wall Street Journal says Citigroup may
sell its 24 percent holding in Brazilian MasterCard acquirer
Redecard in 2008, as Citi prepares for difficult
conditions ahead. Redecard held an initial public offering on
Brazil’s Bovespa stock exchange in July 2007.
• As of 30 September 2007, Chile’s Corpbanca
had 216,000 credit cards in issue, up 39.8 percent year-on-year.
Better fee collection processes for its credit cards and checking
accounts helped Corpbanca increase its fees and income from
services to CLP25.7 billion ($52 million) in the nine months to 30
September 2007. This represented a 21.2 percent year-on-year
increase. In the third quarter of 2007, Corpbanca signed up 28,000
new credit card accounts.
• Mexico’s Grupo Financiero Banorte is using US
software company Actimize’s Enterprise Risk Case
Manager for anti-money laundering and fraud prevention. The
programme monitors banking transactions for suspicious activities
and generates alerts. “Actimize is getting a lot of interest in
fraud detection solutions right now from the Latin American
market,” Amir Orad, Actimize’s executive vice-president, tells
CI.
• Chile’s Banco BCI says that in the third
quarter of 2007 ending 30 September 2007, it had 1.44 million debit
cards and 228,886 credit cards in issue. In the second quarter of
2007, it had 1.38 million debit cards and 219,818 credit cards in
issue.
• Brazil’s Unibanco (Uniao de Bancos
Brasileiros) has signed a new, five-year agreement to use Fair
Isaac’s Falcon Fraud Manager as its fraud detection system.
Unibanco will use the neural network-based software to protect its
retail credit, debit and private-label card portfolios.
• Canada’s Scotiabank says its international
banking operations, which include banks in Latin America and the
Caribbean, experienced “very strong organic growth in the year to
31 October 2007, particularly in credit cards and mortgages in
Mexico and the Caribbean”. In Central America and the Caribbean,
Scotiabank’s credit card lending rose by 26 percent in 2007, while
credit card fees were up by 30 percent year-on-year. In Mexico,
Scotiabank’s credit card balances were up by 43 percent in 2007,
while credit card fees rose by 19 percent.
• The Venezuelan banking regulator, Sudeban
(Superintendencia de Bancos y Otras Instituciones Financieras), has
told the country’s banks that prepaid cards issued for use outside
Venezuela are no longer valid. The new law came into effect 1
January 2008. Sudeban says banks must replace customers’ prepaid
cards that were issued for use outside Venezuela, with credit
cards. But, according to local press reports, the banks do not
think it is feasible to replace existing prepaid cards with credit
cards. The banks say most clients holding prepaid cards do not meet
the requirements to be credit cardholders. Also, banks claim they
would need to assess applicants’ credit profiles in a very short
space of time.
• Corporación BI Capital, owner of
Banco Industrial, the largest bank in Guatemala,
has paid $90 million for a 90 percent stake in Banco del
País (Banpaís). Honduras-based Banpaís will retain the
Banpaís brand name.
• US wireless telcommunications provider Trumpet
Mobile has launched a prepaid debit card that Hispanic
consumers can use in conjunction with their Trumpet mobile phone to
send money to relatives in Latin America. The card can also be used
at ATMs and in stores. For wireless money transfers, it uses
US-based Affinity Mobile’s MADE m-payments system and Western
Union’s remittance network. A Trumpet spokesperson tells CI that
nearly 50 percent of new Trumpet subscribers sign up for the
prepaid debit card.
• German ATM and POS equipment vendor Wincor
Nixdorf says that, in the year to 30 September 2007, its
Americas operations posted a 17 percent year-on-year gain in net
sales, calculated in US dollars. In euros, this represents an 8
percent year-on-year rise to €167 million ($246 million). The
Americas accounted for 8 percent of Wincor Nixdorf’s total net
sales in fiscal 2007. “We improved our market position in Latin
America in fiscal 2007 and received a number of orders from major
[Latin American] banks,” it says. Wincor’s plan is to achieve
double-digit growth in the Americas, particularly in Latin America.
It has operations in the US, Mexico, Venezuela and Brazil.
• French smart card company Xiring is to supply
15,000 smart card readers to the Brazilian Finance Ministry. The
smart card readers, which will be used by employees at the
Department of Internal Revenue, are being deployed to ensure the
security of online tax return submissions and tax payments. The
contract is part of the Brazilian government’s programme to roll
out 8 million smart card-based digital certificates across the
country over the next two years, which can be used to authenticate
internet transactions.
North America
• Canadians spent C$860 million ($861 million) using payments
network Interac debit cards on 21 December,
Canada’s busiest shopping day of 2007. The most popular locations
for Interac usage were supermarkets and speciality clothing stores,
each of which accounted for around 18 percent of the day’s total of
15.6 million Interac transactions. “We saw about 5 percent
year-on-year growth in the number of Interac transactions in
December 2007,” an Interac spokesperson tells CI.
• US internet shopping during the Christmas period, running from
1 November to 27 December 2007, rose by 19 percent year-on-year to
$27.96 billion, says digital measurement company
ComScore. The figure excludes online auctions and
large corporate spending.
• Phishing attacks cost US consumers $3.2 billion in 2007, says
research company Gartner analyst Avivah Litan. The
number of online US adults who received a phishing e-mail rose by
118 percent from 57 million in 2004 to 124 million in 2007, she
estimates. Thieves are increasingly stealing debit card numbers and
bank account credentials, as fraud detection systems for debit
cards and bank accounts are weaker than for credit cards, Litan
says.
• Seattle-based Best Coffee is testing a number
of self-service espresso machines that contain payment-accepting
technology from Coinstar. The Best Coffee Express
Espresso Bars accept cash as well as debit and credit cards and
dispense beverages such as lattes, mochas and chai tea. They are
being installed at locations that have high traffic but limited
space, for example supermarkets. Best Coffee is an independently
operated brand within the Starbucks portfolio.
• Cardtronics held its initial public offering
on the NASDAQ stock market on 11 December 2007. The US-based
independent ATM operator sold 12 million shares at $10 each,
raising $110 million net of expenses.
• Cardtronics has signed an agreement with
Webster Bank to place the bank’s brand on 158
Cardtronics-owned and -operated ATMs located in Walgreens
drugstores in Massachusetts, Rhode Island and Connecticut. The ATMs
will be rebranded with the Webster logo during the first quarter of
2008.
• Chicago-based Northern Trust has joined
Allpoint, a surcharge-free ATM network with 32,000 ATMs across the
US. Allpoint is owned by Cardtronics, while Northern Trust provides
banking services for the affluent.
• Discover Card has redesigned its website in
order to make it easier for customers to choose from the various
cards and services on offer. The issuer says it will introduce
additional interactive content and tools throughout 2008. The site
will also offer simplified disclosures, easy-to-understand rate
information and improved clarity and transparency, it says.
• US-based ATM operator and remittance transfer company
Euronet Worldwide has launched an unsolicited
takeover bid for its larger competitor, MoneyGram.
The bid values MoneyGram, which specialises in money transfers from
the US to Mexico, at $1.65 billion.
• Global payment processor First Data is to
provide small- and medium-sized merchants with card acceptance
services for American Express cards. Under the
agreement, First Data will provide payment processing services on
behalf of Amex, while Amex will retain acceptance contracts with
merchants, establish merchant pricing and receive the same
transactional information it does today.
• Fifth Third Processing Solutions has acquired
four restaurant chains as new clients. The four chains together
operate nearly 1,000 sites across the US. Fifth Third Processing
Solutions, a unit of Cincinnati, Ohio-based Fifth Third Bancorp,
will provide the restaurants with gift card and credit card
processing.
• IBM has acquired a 7.41 percent stake in
US-based payments software vendor and processor ACI
Worldwide. The two companies plan to provide integrated
electronic payment services to the financial services industry. ACI
is to develop payments technology based on the IBM System z
software platform. The vendors say the new technology will support
the convergence of retail and wholesale payments.
• ACI Worldwide said on 21 December that it had
received a written notice from NASDAQ that it could be delisted
from the stock market due to a failure to file its annual report
for the year to 30 September 2007. It plans to file its Form 10-K
annual report, which should have been submitted to the US
Securities and Exchange Commission by 29 November, “as promptly as
possible”. It will also seek a hearing with NASDAQ to review the
delisting warning, but warns there is no guarantee NASDAQ will
grant its request for continued listing. ACI stock continues to
trade on NASDAQ meanwhile.
• Boston, Massachusetts-based merger and acquisitions company
MerchantPortfolios.com has launched an online
marketplace for buyers and sellers of merchant processing
portfolios, ATM portfolios, residuals and independent sales
organisations. “Sellers of merchant portfolios and ATM portfolios
now have the ability to maximise the selling price of their assets
by getting as many buyers as possible to compete for them,” Adam
Hark, a partner at MerchantPortfolios.com, says.
• Scotiabank is offering money transfer
services to its customers in Canada under a pilot project with
Western Union. Initially, customers will be able
to use their Scotiabank debit card to send money transfers to 200
countries from 42 bank branches. A roll-out across the bank’s
national branch network and via its online banking service is
planned for late January 2008.
• Retailer TJX said on 20 December that 95
percent of US-based Visa issuers affected by the retailer’s data
security breach had accepted its $40.9 million compensation offer.
The deal had been conditional on its being accepted by 80 percent
of Visa issuers affected by the breach. Also, on 18 December, TJX
said it had agreed a settlement with all except one of the four US
banks and three bankers associations that were suing it.
• Wireless transaction specialist USA
Technologies (USAT) is buying contactless card readers
from Santa Clara, California-based VivoTech for
use in vending machines. The near field communication (NFC) based
readers accept payments from contactless credit, debit or prepaid
cards and fobs as well as from traditional magnetic stripe cards
and from NFC-powered mobile phones. USAT has purchased 2,000
contactless payment readers from VivoTech and is ordering another
8,000 units to be delivered in 2008. The readers will be integrated
with USAT’s e-Port contactless payments technology.
