• Citibank has launched its
first renminbi debit card for retail customers in China…
• Kuwait-based Gulf Bank has launched a new mobile
banking service…
• UK banking group Lloyds TSB has reported in its
2008 interim financial results…
• Brazil’s Banco Bradesco has launched a Visa
payWave contactless card pilot …
• American Express has taken a 13 percent stake in
Concur Technologies…
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renminbi debit card for retail customers in China. Two types of
debit card will be available that cater to Citi China’s different
customer segments – a regular debit card for Citibank customers and
a gold debit card for Citigold customers. Citi is also offering
mobile banking services via its renminbi debit card, allowing
cardholders to use their mobile phones to conduct a range of
transactions in connection with their debit cards. This service is
immediately available in Shanghai, and will be rolled out in other
cities at a later stage. It is offered in co-operation with
China UnionPay and the local mobile services
providers, China Mobile and China Unicom.
• Australia’s ANZ banking group has announced the
launch of Australia’s first reloadable contactless prepaid card.
The new ANZ Stadium Visa payWave card was launched in July at ANZ
Stadium in Sydney, where it was initially offered to 2,000 ANZ
Stadium members for use during the Bledisloe Cup rugby union
tournament. The card can be reloaded with funds using BPAY via the
internet or through phone banking, and has a magnetic stripe so it
can be used as a Visa prepaid card at merchant outlets.
• Chinese mainland credit cardholders are showing the least brand
awareness among major markets in the world, according to a survey
of 4,515 cardholders in 12 major cities from market researcher CTR.
About 70 percent of mainland credit cardholders are brand-passive,
CTR said, with the average figure for major credit
card markets worldwide being 26 percent. The lack of brand
awareness in the mainland credit card market is due to the lack of
differentiation of products.
“China’s credit card market is still a fledgling one,” CTR said.
“However, in the long run, banks have to increase card loyalty to
boost profitability and competitive edge.” China had more than
104.73 million credit cards in circulation at the end of March, up
92.9 percent from a year ago, according to the People’s
Bank of China.
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By GlobalData• Standard Chartered Bank Malaysia has announced
its intention to sign up 10,000 subscribers over the next year for
its exclusive premium credit card – the Standard Chartered Visa
Infinite card. The new card rewards customers with luxury travel
and service experiences.
Members also enjoy a one-year priority banking membership with a
dedicated customer relationship manager as well as access to
preferential financial products offered by the bank. The bank
estimated that 120,000 people in Malaysia – around 2.5 percent of
the total population that are qualified for credit cards – were
eligible for the new Visa Infinite product, and the country head of
consumer banking Ho Toon Bah expects to have about 25,000
subscribers for the new card within three years.
• Singapore’s OCBC Bank has announced a
partnership with local transport card provider EZ-Link to introduce
the ‘Top & Tap’ service for EZ-Link cards, a two-step process
that involves securing funds from an OCBC Bank account either
through OCBC mobile banking or the internet. OCBC customers can top
up their own cards or that of a family member, and the beneficiary
does not have to be present with their card at the point of funds
transfer.
• Malaysia’s Maybank has reduced its net
non-performing loans (NPL) ratio by a whopping 21 percentage points
to 1.96 percent, despite a lacklustre economy and the looming
threat of inflationary pressure. The national average for NPL
ratios in Malaysia currently stands at 2.7 percent.
• The latest data released by the Reserve Bank of
India (RBI) shows that outstanding payments on credit
cards rose by 87 percent over the past 12 months. Many fear a rise
in credit card defaults due to the sharp increase in outstanding
balances on credit cards, especially when an economic slowdown is
looming on the horizon. Several banks are already noting a rising
number of defaults on unsecured advances such as credit cards and
personal loans. The central bank has recently requested that banks
not charge excessive interest rates on personal loans and small
advances, including credit cards, and asked that they prescribe a
ceiling rate on such loans.
• The RBI has asked all banks and financial
institutions in India to put mobile payment services on hold until
final guidelines are drafted and issued for such transactions. The
RBI is developing a regulatory and oversight framework for mobile
banking intended to govern the mobile payment services market as
opposed to basic services such as mobile alerts and balance
enquiries.
• Japanese credit card giant Mitsubishi UFJ Nicos
has announced plans to ramp up its points programme through
relationships with the banking and brokerage units of Mitsubishi
UFJ Financial Group. The company will soon become a wholly-owned
subsidiary of MUFG, and has already started talks on card point
tie-ups with Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust
& Banking and Mitsubishi UFJ Securities.
• Chinese payment network China UnionPay has
launched a new ‘Chinese Red’ charity credit card. Chinese Red is
originally a charitable organisation founded by the Chinese Red
Cross Foundation. China UnionPay will donate to the Chinese Red
Cross Foundation’s Chinese Red Initiative with a percentage of the
funds that are spent using the card. These donations will focus on
the Red Cross Angel Programme, aimed at helping rural areas build
Red Cross clinics.
• Nam Viet Bank has launched two new card services
in Vietnam, the Navicard credit and Navicard debit offerings. The
cards can be used in a wide number of retail merchants, and also
allow customers to withdraw cash from any ATM in the smart link
system without incurring fees. An extra card can be obtained for a
family member. The Navicard-credit card allows holders to buy on
credit from VND10 million ($597) to VND100 million without interest
for 45 days.
• Chinese online travel services provider
Ctrip.com has selected the PayPal payment platform
to allow foreign customers to purchase airline tickets in the
country. In March this year, for the run-up to the 2008 Olympics,
the company launched an English language website for its domestic
travel services in March this year. The growth rate of overseas
tourism in Beijing has consistently been in the double digit range
ever since 2001, when Beijing was granted the right to host the
Olympics. The city is expected to receive 4.6 million foreign
tourists this year.
• Electronic payments processor Global Payments
has announced that it has expanded its joint venture with
HSBC to provide payment processing services to
merchants in the Philippines. The Philippine market will also be
included in the current ten-year marketing alliance agreement
between the two companies, in which HSBC refers new merchant
customers exclusively to the joint venture for payment processing
services.
Europe, Middle East, Africa
• Kuwait-based Gulf Bank has launched a new mobile
banking service for its customers that will allow them to access
their accounts to make financial transfers and payments anywhere in
the world. The Mobile Plus service is an extended version of the
existing ‘Push’ service offered by the bank, and offers mobile
banking responses allowing customers to gain instant replies upon
their request, including information about their available balance,
the last five transactions, chequebook request, fund transfers,
credit card payments and changing an individual password.
• Bahraini credit card issuer and acquirer
CrediMax has launched a campaign to update its
cardholder data, sending out a customer information update form to
its customers to be filled and returned back. The company is the
leading card issuer and acquirer in Bahrain, and is hoping to
maintain the accuracy of its data to continue effective
communication with its customers.
• A new report from market research organisation
Mintel has found that an increasing number of UK
consumers are using credit cards to meet the rising cost of living.
The research noted a 7 percent rise in gross credit card lending in
the first four months of 2008, compared to the same period last
year.
“Rising food and fuel prices combined with higher interest rates
means that people are now having to find quite a bit more money
each month to maintain their standard of living. And while some are
clearly using plastic to cover the rising living costs and mortgage
repayments, others are dipping into their savings,” said Toby
Clark, senior finance analyst at Mintel.
• UK banking group Lloyds TSB has reported in its
2008 interim financial results that it now has 1.4 million
cardholders of its AirMiles Duo credit card, and claims it is the
fastest-growing credit card in the UK. Lloyds TSB also reported
that it opened nearly half a million current accounts in the six
months to June, and increased its average additional cross-sell on
account openings to 1.12 products per customer, up from 0.91
products last year. However, unsecured consumer credit balances
were broadly flat with personal loan balances outstanding at 30
June 2008 up 6 per cent at £11.8 billion ($22 billion), while
credit card balances fell slightly to £6.5 billion.
• Bank of America has appointed a new boss at its
European credit card headquarters in Chester, UK. Ian O’Doherty has
been named as Europe card services executive, and will be
responsible for the bank’s card services businesses in the UK,
Ireland and Spain. He will also oversee expansion efforts into
other European markets. Bank of America’s credit card business
operates in Europe under the MBNA brand, and the bank also provides
affinity credit cards for over 900 organisations.
• PayPal has launched a reloadable prepaid card
for the UK market that can be used for purchases in traditional
retail stores as well as online. The Visa-branded card will have an
initial fee of £4.95, and will be issued by the Royal Bank of
Scotland. The card will be available to buy on the PayPal website,
where it can also be reloaded.
• Coffee chain Coffee Republic has announced that
it will be rolling out the contactless OneTouch technology from
Barclaycard throughout its 16 company-owned stores
throughout the UK, following a successful four-month trial period.
The company is also in talks with franchise owners in approximately
40 outlets about installing the technology. The London-based trial
in five outlets saw a 50 percent rise in contactless
payments.
• American Express Middle East announced that it
has signed an agreement with Bank of Kuwait and Middle
East that will allow Kuwait-based American Express
customers to settle monthly bills via the Shared Electronic Banking
Services Company’s (Knet) secure Payment Gateway System.
Cardholders will be able to transfer amounts from accounts held in
any Kuwaiti bank towards the payment of their American Express card
bill. The company has also signed an agreement with
Emirates NBD that will allow American Express
cardholders in the United Arab Emirates holding bank accounts with
Emirates Bank to settle monthly bills online and at cash deposit
machines.
• Despite the tighter credit conditions of recent times, a report
from price comparison website uswitch.com has
found that many credit cards are still being handed out to UK
consumers without the proper checks being carried out by credit
card companies. The study found that 84 percent of consumers that
managed to get hold of a credit card in 2007 did so without having
to provide any proof of income and other documentation. According
to an official from the company, these checks were becoming more
important as the worsening credit conditions have led to more
people lying about their income in order to get hold of a credit
card.
• Newcastle Building Society of the UK has
launched the Money Express prepaid card, a joint payroll payment
card and international money share product. Cardholders will have
the ability to get their wages or salary paid directly onto the
card, and a ‘Money in Minutes’ facility that will allow them to
transfer cash from a primary card to a secondary card, offering a
simple way for secondary customers to spend funds earned by the
primary cardholder earning money in the UK. The card is a
MasterCard-branded product that can be used across the globe.
• Recent figures released by the British Bankers’
Association have shown that credit card borrowing
meanwhile fell by £100 million in July, while borrowing on personal
loans and overdrafts rose by £200 million. Overall spending on
credit cards totalled £7.67 billion in July, an 8 percent rise from
July 2006. After allowing for repayments and seasonal adjustment,
underlying net lending decreased by £82 million.
• The Prepaid International Forum (PIF) has
announced the launch of an accreditation scheme designed to ensure
best practice across the industry. The trade association explained
that this scheme came about through the growing demand of its
members, who are eager to establish best practice standards in
light of negative media coverage surrounding prepaid such as
aggressive marketing, alleged money laundering and poor customer
service.
• South-Africa-based Absa Bank has joined forces
with Visa to launch the country’s first reloadable prepaid card.
The product is aimed at the unbanked and consumers seeking an
alternative to other payment forms such as cheques. The card is
available for an initial fee of ZAR30 ($4.50). The card will remain
valid for three years, and will have no management or
administrative fees. Additionally, the card has no minimum balance
requirements and can be topped up by transferring funds via mobile
or online banking, or at any ATM.
Latin America
• US payment research firm Mercator Advisory Group
says that since 2001 Brazil has seen a 224 percent growth in the
number of payment cards (of all types) in circulation, a 230
percent rise in the number of card transactions, and a 270 percent
increase in total card transaction value. If current trends
continue, by 2013 Brazil will become the third-largest card market
in the world in terms of the number of transactions, behind only
the US and China.
“Although many US firms recognise the future potential of the
Brazilian payment card market, relatively few have appreciated the
opportunities that exist there today, or that will emerge in the
next five years,” Mercator analyst Terry Xie says.
Debit cards have seen the fastest growth so far, Xie says. However,
credit cards will really take off in the next five years, due to
innovative product and service launches and infrastructure
improvements, such as the expected introduction of a comprehensive
credit bureau.
• Brazil’s Banco Bradesco has launched a Visa
payWave contactless card pilot in association with domestic Visa
acquirer Visanet. Starbucks’ Brazilian coffee house chain is the
first Brazilian retailer to accept the contactless cards. Visa says
the cards can be used without a PIN or signature for all purchases
below BRL100 ($63.57) at any Starbucks location in Brazil.
Separately, in May 2008, Bradesco launched a credit card made from
recycled plastic (see CI 400).
• In March 2008, Bradesco had an 18.2 percent
share of Brazilian total credit card billings and 18.8 percent of
total debit card billings, according to ABECS, the
Brazilian Association of Credit Card and Service Companies. In
December 2007, Bradesco had an 18.1 percent share of total credit
card billings and 19.8 percent of total debit card billings.
• In the first quarter of 2008, Bradesco’s payment
card fee and commission income rose by BRL120 million to BRL677
million from BRL557 million compared to the same period in
2007.
However, due to the greater volume of card transactions in the
fourth quarter of 2007, card income in the first quarter of 2008
fell by BRL11 million from BRL688 million in the fourth quarter of
2007. Bradesco’s total number of cards in issue, comprising credit,
debit and private-label cards, rose by 21.1 percent to 73 million
in the first quarter of 2008 from 60 million compared to the same
period in 2007.
• Chile’s Banco Santander says that in the second
quarter of 2008 its fees from credit, debit and ATM cards rose by
29.1 percent year-on-year to CLP10.52 billion ($20.82 million).
However, the fees were down by 6.4 percent compared to the first
quarter of 2008’s CLP11.24 billion. According to Chilean credit
card processor Transbank, as of June 2008 Santander Chile’s share
of the Chilean bank-issued credit card market was 36 percent,
reflecting a 10.7 percent year-on-year rise in Santander’s total
number of credit card accounts.
Purchases with Santander credit cards in monetary terms grew by 20
percent year-on-year as of June 2008. The bank’s market share in
terms of purchases rose to 35.9 percent as of June 2008 compared to
35.4 percent as of June 2007. Santander estimates that its share of
the total Chilean credit card market, including credit cards issued
by department stores, is 14.6 percent of total purchases.
• Citi’s Latin American cards revenues rose by 24
percent year-on-year in the second quarter of 2008, primarily
driven by higher purchase sales and average loans, which were up 29
percent and 26 percent, respectively. The second quarter 2008
results included the impact of Citi’s acquisition of Grupo
Cuscatlan, the Central American bank it bought in May
2007. In Latin America, Citi’s cards division’s credit costs rose
by 60 percent in the second quarter of 2008, as net credit losses
more than doubled. Higher net credit losses were driven by higher
business volumes and an increase in losses and past due accounts in
Mexico and Brazil. The net credit loss ratio increased 457 basis
points to 11.41 percent.
• Financial software firm Fiserv is providing
Banco do Brasil with a core banking system for its
new bank, Federal Savings Bank, which targets
Brazilian migrants in the US. Federal Savings Bank will also use
Fiserv EFT for its ATM and debit cards as well as the Fiserv Credit
Processing and Fiserv Lending Solutions platforms. The bank is to
open five branches in the US this year.
“We found large pockets of Brazilian immigrants across the US who
are not adequately served by existing banking institutions, as they
are primarily Portuguese-speaking,” Leonard Whyte, Banco do
Brasil’s deputy general manager, says. “This market is an obvious
niche for the bank.”
• Mexico’s Grupo Elektra, a retailer and financial
services company, says its Banco Azteca Mexico
subsidiary had 9 million active credit accounts at 30th June 2008.
This was up 23 percent from 7.3 million at 30th June 2007. The
average term of the credit portfolio on the main credit lines –
consumer credit for goods, personal loans and Tarjeta Azteca credit
card — was 60 weeks at the end of the second quarter of 2008, the
same number of weeks as in the same period of 2007. The gross
credit portfolio was MXN22.5 billion ($2.23 billion), compared with
MXN21.36 billion at 30 June 2007.
• POS terminal vendor Ingenico Group’s Latin
American revenues rose to €31.5 million ($49.42 million) in the
second quarter of 2008 from €25.4 million in the year-ago period.
In March 2008, Ingenico merged with Sagem Monitel, whose POS
terminals are also sold in Latin America. North American revenues
rose to €24.0 million in the second quarter from €21.7 million in
the year-ago period. In the first half of 2008, North American
revenues rose to €48.6 million from €45.4 million a year earlier,
while Latin American revenues fell to €50.8 million from €52.3
million.
• Processa, a Latin American system integrator and
electronic funds transfer (EFT) service provider, is using
Inetco’s Insight software to perform real-time
monitoring and analysis of payment card transactions. Inetco is
based in Vancouver, Canada, while Colombia-based Processa provides
transaction processing for 10,000 POS terminals. It is using
Insight to carry out audits of the quality of service provided by
its POS network and application software systems.
• Brazilian MasterCard, Maestro and Diners Card acquirer
Redecard processed BRL28.5 billion ($18.75
billion) credit and debit card transactions in the second quarter
of 2008, up 23.4 percent on the year-ago period. At 30 June 2008,
Redecard had 1.22 million retailers on its network, up 15.3 percent
year-on-year. Redecard’s total installed base of POS terminals rose
by 24.1 percent year-on-year to 858,600 in June 2008. Recurring net
profits rose by 43.7 percent year-on-year to BRL256 million in the
second quarter, while net operational revenues rose by 23.4 percent
to BRL601.1 million.
North America
• Americans travelling abroad are choosing foreign travel
destinations close to home. In a survey of US cardholders by Visa,
46 percent of American travellers listed Canada as their top
destination for travel in 2008; 45 percent picked Mexico; and 28
percent chose the UK. In 2007, US Visa cardholders spent $2.9
billion in Canada; $1.7 billion in Mexico; $1.3 billion in the UK;
$741 million in Puerto Rico; and $334 million in Costa Rica. In the
first quarter of 2008, US Visa cardholders spent $558 million in
Mexico; $531 million in Canada; $244 million in the UK; and $215
million in Puerto Rico.
• The ACCEL/Exchange Network has named Michael
Kelly as general manager. Owned by banking IT firm Fiserv,
ACCEL/Exchange is a nationwide US ATM and point of sale terminal
network. Kelly was previously president and CEO at ePayments
Consulting Group. Earlier, he worked for Fiserv EFT as director of
business development for ACCEL/Exchange.
• American Express Business Travel and the
National Business Travel Association have launched
a global B2B online networking community for the corporate travel
industry. BusinessTravelConnexion.com brings together a consortium
of industry decision-makers, suppliers, and experts, Amex
says.
• American Express has taken a 13 percent stake in
Concur Technologies, a provider of on-demand
travel and entertainment expense management services. The two firms
have also agreed to form a marketing alliance, under which Concur
will exclusively promote Amex’s corporate cards to its clients, and
Amex’s Global Commercial Card business will exclusively promote
Concur’s system to its corporate clients.
• American Express Canada is adding two new
features, Pearson Priority Lane and Partner Ticket, to its Canadian
rewards programmes. Platinum cardholders can show their card in
order to gain expedited access to the security screening point at
Toronto’s Pearson International Airport. Also, AeroplanPlus
Platinum cardholders receive a free partner ticket once a year,
when they redeem Aeroplan miles for a short-haul economy ticket for
themselves.
• BMO Spend & Payment Solutions, Bank of
Montreal’s North American commercial card issuing arm, has signed a
deal with expenditure management software vendor
Ariba. The deal calls for BMO to combine Ariba’s
software with BMO’s Spend Solutions system to create a single bank
interface for its clients. The interface will enable firms to
automate their purchase order, and invoice receipt, reconciliation
and settlement processes; make payments via purchasing cards and
bank-to-bank electronic funds transfers; access the 160,000
suppliers in Ariba’s global supplier network; and get third-party
financing and early payment discounts.
• A group of payment services firms has set up the Canadian
Acquirers Association (www.acquirers.ca/index.html).
A spokesperson tells CI that, with bank-owned acquirers dominating
the Canadian acquiring industry, it is important for non-bank
players to have an independent trade association. Board members
include Anil Bissa of CardSolve International; Michael Gokturk of
VersaPay; and Michael Jaffe of NXGEN Payment Systems.
• Coinstar E-Payment Services carried out a
MasterCard gift card promotion at 650 US convenience stores in
spring 2008. The convenience store gift card issuer says the
promotion resulted in a 30 percent rise in MasterCard gift card
sales compared to pre-promotion periods. The promotion also led to
higher sales across Coinstar’s entire gift card portfolio.
• Diebold is providing ATM outsourcing services to
Oregon-based OnPoint Community Credit Union, which
has 45 ATMs and plans to install an extra 30 by 2011. The deal
calls for Diebold to provide new Opteva ATMs, maintenance, network
monitoring, ATM and debit card processing, currency management, and
help desk support.
• Merchant acquirer Elavon has renewed a
three-year contract to provide card acquiring services and payment
systems to Regency Hotel Management and Affiliates
across Regency’s 50 North American properties. Formerly called Nova
Information Systems, Elavon is owned by US Bancorp.
• Denver, Colorado-based processor ePayments has
acquired Hastings, Minnesota-based ACH
Technologies. ACH provides electronic cheque
re-presentment (RCK, or re-presented cheque) services for
convenience stores and filling stations. ePayments will combine
ACH’s network with its own cheque processing software and customer
service centre in order to provide third-party RCK processing. It
will also offer additional services such as credit card processing
and electronic cheque conversion to the customer accounts acquired
with ACH.
• Heartland Payment Systems has become the
exclusive referral partner for the Arkansas Community
Bankers Association (ACB). Princeton, New Jersey-based
Heartland will offer the association’s 148 member banks services
such as credit, debit and prepaid card processing; gift cards;
payroll; and cheque management and processing.
• Hypercom has received certification from
Canada’s Interac for its Artema Modular unattended payment
terminal. The certification means Artema can be installed in kiosks
or vending machines, and connected to Interac’s debit card POS
network. Artema has a PINPad applications programming interface
(API) supplied by MSC, a subsidiary of North American processor
Moneris Solutions. MSC sells the Artema Modular in Canada as the
K800.
• Moneris Solutions has bought the merchant
payments business of Alabama National
BanCorporation (ANB). The acquisition includes the
servicing of 103 bank branches in the South East US and ANB’s
existing merchant processing portfolio. ANB, a bank holding company
operating through 11 subsidiaries in Alabama, Florida and Georgia,
was bought by Royal Bank of Canada earlier this year. Moneris is
owned by RBC and Bank of Montreal.
• Online Resources (ORCC), a web-based financial
services provider, says three of the top 10 US credit card issuers
have signed multi-year contracts for its Virtual Collection Agent
(VCA) online collections service. The three issuers have either
signed an agreement for VCA or already implemented the service for
their domestic credit card portfolios since April 2008, ORCC says.
VCA is an online customer service and payment processing system
which helps issuers to recover outstanding debt. By providing
account-holders with a private way to resolve their delinquency,
ORCC clients have reduced their credit card charge-offs by 10
percent or more, the firm says. ORCC currently has 11 out of the
top 20 US card issuers using its technology.
