Asia – Pacific
• Standard Chartered Bank India has
announced the launch of a joint credit and debit card product. The
1Money card will allow cardholders to select their preferred method
of payment on one piece of plastic, and provide more efficient
funds management. According to the bank, there has been a 28
percent yearly growth in the number of credit card applicants and a
41 percent increase in the number of those who sign up for a debit
card, while the value of both credit and debit card transactions
has grown by 20 percent and 41 percent respectively since 2007.
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• South Korean consumer spending abroad dropped by over 18
percent during the second quarter of 2008 compared to the same
period last year, according to figures recently released by
Bank of Korea. This was faster than the 12.7
percent decline in the first quarter of 2008, and the biggest
decline since a 24.6 percent annual drop in the second quarter of
2003. Meanwhile, domestic spending for the second quarter rose by 4
percent compared to the year-ago period, slightly below the 4.8
percent annual rise in the first quarter.
• China-based electronic payment network China
UnionPay (CUP) has signed a deal with DBS
Bank of Singapore that will enable CUP cardholders to use
their credit and debit cards at more retail outlets across the
island. DBS said it can now offer the full suite of CUP card
products and related services in markets it operates in, including
China and Indonesia. This covers debit and credit card issuance,
CUP card acceptance at the bank’s POS terminals and CUP card
acceptance for cash withdrawal at all DBS ATM machines across the
region. About 1.1 million Chinese tourists visited Singapore in
2007, a 29 percent increase from 2005. Their spending has increased
by 50 percent over this same period.
• United Overseas Bank (UOB), Singapore’s
largest card issuer, has teamed up with JCB
International to launch the UOB JCB platinum card. The
card is on offer to both Singaporeans and Japanese expatriates in
Singapore. Among the features and benefits on offer are dining,
shopping, beauty and travel privileges. UOB and JCB have also
partnered with Japan Airlines (JAL) and Japanese shopping mall
Liang Court to offer other travel and shopping-related perks.
According to Gan Ai Im, UOB’s regional and Singapore head, Japan is
ranked as one of the most favoured tourist destinations among a
majority of Singaporeans.
• Commercial spending in Vietnam rose by 15.4 percent in 2007
from the previous year, according to figures released by
Visa. These numbers are based on updated data on
annual commercial spending using Visa’s Commercial Consumption
Expenditure (CCE) index. The CCE index also showed annual
commercial spending in other Asia-Pacific nations grew to an
estimated $18.9 trillion in 2007, an increase of 13 percent on 2006
figures.
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By GlobalData• DBS Bank has announced plans to ramp up its
operations in India by adding eight new branches to the existing
two within the next month. The bank also suggested it may launch
credit cards within the next two to three years. The bank, which
has traditionally focused on SME and corporate banking in India,
would also focus on retail banking in coming years, said general
manager and chief executive officer Pranam Wahi. It also intends to
set up ATMs in India, subject to regulatory approval.
• Both Corporation Bank and YES
Bank in India have announced plans to offer prepaid travel
cards denominated in US dollars to their customers in conjunction
with JPMorgan Chase. Corporation Bank will offer
the card in three foreign currencies – US dollars, UK sterling and
euros, with plans to launch a Chinese yuan-denominated version in
the future. Corporation Bank aims to sell at least 25,000 cards
during the first year of its launch. YES plans to sell the travel
cards through its 101 branches in India. JPMorgan Chase provides
prepaid card services to more than 1,000 clients globally and
services more than 10 million debit cards with $1.9 billion in
financial transactions settled monthly.
• Digital security vendor Gemalto has purchased
the smart card business of Australia’s Keycorp –
which includes the Multos multi-application operating system – in a
deal worth around €15 million ($21.34 million).
“For the high-end and multi-application segments of EMV payment
cards, Multos fully complements our Java product and services range
to provide a comprehensive portfolio,” said Gemalto executive
vice-president of secure transactions Philippe Cambrie. “It extends
our base of blue chip banking customers, and also brings a highly
recognised secure post-issuance service for banking applications,
with proven efficiency, scalability and value.”
• Dena Bank has joined forces with
State Bank of India (SBI) in order to launch a new
domestic credit card offering. Despite being in the Indian credit
card market for the last 10 years, Dena Bank has so far failed to
make a significant impact. SBI will handle all the back-office
functions and other processes, and the card will feature the logos
of both banks. Dena Bank has 1,165 branches and 325 ATMs, and is
planning to open 25 more this year along with 150 additional
ATMs.
• Despite healthy profits for the first half of 2008, many local
Chinese banks are seeing a spike in overdue loans which has called
their asset quality into question, according to figures released by
one of the country’s largest securities houses, Guotai
Jun’an Securities.
As of 30 June, 11 out of 14 Chinese banks reported an increase
in the outstanding value of overdue loans compared with the
beginning of the year. ICBC, the country’s largest
lender, has seen an increase in overdue loans of over 11 percent
over the last 12 months, while the overdue loans of China
Construction Bank, the country’s second-largest by assets,
rose by nearly 5 percent.
• Japan’s Mitsubishi UFJ Financial Group (MUFG)
will spend ¥152.5 billion ($1.4 billion) to increase its stake in
consumer finance lender Acom to 40.04 percent from
the 15.77 percent it currently owns. MUFG will likely merge its
consumer finance business DC Cash One with Acom in
order to bolster its position in the country’s consumer finance
market, which has suffered upheaval in recent years. With a market
capitalisation of about $4.5 billion, Acom is Japan’s largest
consumer finance company.
• HSBC has obtained approval from the
State Bank of Vietnam, the country’s central bank,
to set up a wholly foreign-owned bank in Vietnam, bringing the bank
closer to achieving its goal of incorporating locally.
HSBC Vietnam CEO Thomas Tobin said: “We aim to start operating
through our new local entity as early as possible and will actively
work with authorities to complete the necessary business
registration activities in the coming months.
“We hope to become the first foreign bank to operate a fully
owned local entity in the fast-growing Vietnamese banking sector
and look forward to opening a new chapter in HSBC’s history in
Vietnam.”
Europe, Middle East, Africa
• Alfa Bank, Russia’s fourth-largest bank, is
to launch a card personalisation product in its domestic market –
the first of its kind in the country. Alexey Marey, the bank’s head
of retail banking, told CI’s sister publication
RBI: “We have observed the trend towards personalisation,
creating an emotional link between the customer and the banking
product.” The bank had $677 million in receivables through credit
cards and instalment loans at year-end 2007, up 68 percent on 2006
from $403 million, although the proportion of cards to instalment
loans is unavailable. Provisions for loan impairments in 2007 in
the cards and instalment loans business were $36.6 million,
representing 5.4 percent of card and instalment loans outstanding,
down from 10.1 percent in 2006.
• American Express Middle East and North Africa
(AEME) has announced it has forged an agreement with Oman
Telecommunications Company (Omantel) that allows
cardmembers to pay their fixed phone and mobile bills by using
their American Express card at any of the customer services centres
of Omantel and Oman Mobile. AEME has also recently signed an
agreement with Commercial Bank of Dubai (CBD)
which will allow American Express cardmembers in the United Arab
Emirates (UAE) to settle monthly bills online. Additionally, they
can settle their bills at the 141 ENOC and EPPCO petrol station
Star Marts across the UAE.
• A six-month pilot scheme for near-field-communication (NFC)
technology on mobile phones in London has found the majority of
participants are happy using the contactless payments system. The
scheme was run by phone network O2 in partnership
with Transport for London (TfL), handset
manufacturer Nokia, Visa and
TranSys, the consortium which currently runs the
Oyster card system. Around 500 Londoners were given NFC-enabled
handsets that could be swiped across Oyster card readers in London
Underground stations and in buses. Nine out of 10 participants were
happy using NFC technology on a mobile phone, and 78 percent said
they would be interested in using contactless services if
available.
• M&S Money, the financial services arm of
UK retailer Marks & Spencer, has announced new offers on its
credit card including zero percent interest on shopping for 10
months and balance transfers made within six months of opening the
account. Barclaycard has also launched promotional
rates on its OnePulse card, including zero percent on balance
transfers for 14 months with a 2.5 percent balance transfer fee,
with a typical variable APR of 14.9 percent thereafter.
• Qatar Islamic Bank (QIB) has announced the
roll-out of its first EMV Visa Electron debit card with the
assistance of the PRIME suite of solutions from global payment
processor TSYS. QIB added PRIME Perso, the TSYS
personalisation system, having deployed the PRIME card management
system since 2003. This will also play a significant role in QIB’s
plans to launch Visa classic, Visa platinum and Visa gold credit
cards later this year.
• UK prepaid solution provider Altair has
unveiled a MasterCard prepaid travel card with Tesco
Personal Finance (TPF), the banking arm of the UK’s
largest retailer. It will be made available in both euros and
dollars, and has no fees associated with card application, and 0
percent commission on all card loads, as well as no fees for POS
purchases.
“Tesco’s move to enter the prepaid space will significantly
contribute to general market awareness of network branded prepaid
cards in the UK,” said Altair CEO Lee Britton. “It is unlikely
Tesco will be the last major brand to enter this area of the
market.”
• Another prepaid travel card has been launched in the UK by UK
prepaid provider Indigosolutions in conjunction
with Alliance & Leicester Commercial Bank. The
card can be ordered online from Indigo’s website and can be loaded
with dollars or euros.
• Following a recent spate of card fraud incidents across the
United Arab Emirates, many of the country’s banks
have sent alerts via SMS to their customers asking them to change
their PIN and have in some instances asked them to remain vigilant
by checking their balances regularly. Others have slashed the daily
cash withdrawal limits in an attempt to reduce potential exposure
to fraud.
While most banks maintained only a small minority of their
cardholders were hit by the sudden counterfeit usage of payment
cards abroad, they nonetheless acknowledged this was different from
previous cases of ATM card fraud and identity theft.
• Newcastle Building Society (NBS), a UK
prepaid MasterCard issuer, estimates the total number of issued
prepaid cards in the UK could reach over 10.8 million by 2009 and
the total value spent on these cards is expected to exceed £697
million ($1.3 billion). Since its launch in 2005, Newcastle
Building Society Card Solutions has increased its number of card
programmes year-on-year and in mid-September announced the launch
of its 100th scheme. NBS accounts for one million prepaid
transactions a month and has 500,000 cards in regular monthly use
in the UK. (See next issue of CI for an in-depth NBS
interview.)
• Global credit reference agency Experian is
currently in discussions to sell its France-based transaction
processing units to French post office subsidiary Doc@Post. This follows
several other cost-cutting initiatives that began earlier this year
following disappointing third quarter results.
• Petrol retailer Total is launching a Visa
payment card in France in partnership with
Sofinco, a subsidiary of Crédit Agricole Bank. The
card entitles users to rebates on fuel, and can also be used as a
deferred debit card. In addition to standard Visa insurance
coverage, cardholders will also be entitled to instant rebates of 3
percent to 9 percent on purchases at Total service stations, up to
a ceiling of €1,200 ($1,731) a year. A credit option can also be
activated. The annual fee for the card is €12.50 for the first year
(with no fee for the first six months) and €25 per annum
subsequently.
• Processing giant Global Payments has
announced it intends to purchase Russian merchant acquirer and
indirect payment processor United Card Service
(UCS) from ZAO United Investments, citing Russia as a major growth
market for electronic payments. UCS entered into a 10-year
marketing alliance with Rosbank late last year, which provides the
company with Visa and MasterCard bank sponsorship.
UCS also provides indirect payment processing services to over
70 financial institutions and for over 2,500 ATMs within the
Russian Federation.
• Turkey’s Akbank and Boyner
Holding have jointly announced the launch of the new Fish
credit card. Cardholders will be entered into daily, weekly,
monthly and annual lotteries each time they purchase goods or
services with their credit card to the value of YTL10 ($8) or more.
Prizes include televisions, motorcycles and holidays.
Latin America
• Ireland-based acquirer FreeStar Technology
has rolled out 1,000 Hypercom POS terminals to the Dominican
Republic’s (DR) two card schemes, VisaNet and Card Net. Paul Egan,
FreeStar’s CEO, tells CI over the next two years VisaNet
and Card Net will install a total of around 40,000 PCI- and
EMV-compliant terminals to replace older models. FreeStar has
started its first terminal deployment in Haiti, with UniBank, one
of the largest Haitian banks.
“Our DR rollout has been a big success, and we hope to expand
into other parts of the Caribbean and Latin America,” Egan said.
“We expect to see a big rise in terminal deployments due to the
prepaid calling card services we now offer telcos and card
schemes.”
• At the end of 2007, the total number of ATMs in Latin America
was 199,635, up 16 percent from 172,535 at the end of 2005,
according to UK-based Retail Banking Research
(RBR). Brazil accounted for 61 percent of Latin American ATMs, down
from 65 percent in 2005. At the end of 2007 Latin America accounted
for 11 percent of total global ATMs, compared to 26 percent for
North America, RBR said.
• In the first half of 2008, the Brazilian e-commerce market
grew by over 40 percent year-on-year to BRL3.8 billion ($2.17
billion), according to e-Bit. The Brazilian
internet research firm predicts that in 2008 as a whole, Brazilian
online shopping transactions will rise to BRL8.5 billion from
BRL6.3 billion in 2007.
• Chile’s SBIF (Superintendencia de Bancos
e Instituciones Financieras or Superintendency of Banks and
Financial Institutions) says that the total number of chequeing
accounts in Chile rose to 2.265 million in May 2008 from 2.226
million in February 2008.
The total number of internet banking users in Chile rose to
1.810 million in June 2008 from 1.617 million in December 2007,
according to SBIF. Total web banking transactions rose to 105
million in June 2008 from 93 million in December 2007. SBIF
includes account-to-account transfers, credit card and bank account
balance enquiries, and requests for product information as
transactions.
• Two mobile operators and 12 Mexican banks are developing a
service in Mexico City which will enable their customers to use
cellphones for POS purchases such as meals and taxi rides. The
banks involved in the project include Citi and
BBVA Bancomer, and the telcos are
Telefonica and Iusacell,
Reuters reports. The service, due to debut in the next few
months, will initially target younger consumers, and will link
customers’ cellphones via SMS text messaging to their bank
accounts.
• Banco do Brasil has teamed up with Brazilian
Visa acquirer VisaNet Brasil to launch a service
allowing the bank’s Ourocard Visa cardholders to make POS payments
with their cellphones. The Visa Mobile Pay service, which is
available to subscribers of all Brazil’s mobile operators, provides
cardholders with transaction confirmation via SMS text
messaging.
• Banco do Brasil has also awarded
Diebold a contract to supply and install 3,500
ATMs and 1,900 chequebook printing terminals. The new ATMs, which
will replace older units, will include encrypted PIN pads and
anti-skimming devices. Diebold will also provide Banco do Brasil,
which currently has 40,000 ATMs, with a software platform and
operating system to drive the new ATMs. Diebold won a contract in
May 2008 to supply 9,600 ATMs to Brazil’s Caixa Economica Federal.
The US-based vendor has around 60 percent of the Brazilian ATM
market
• Spain’s BBVA says it currently has a 6
percent share of the South American business credit card market in
terms of numbers of cards in issue. In terms of transaction
volumes, BBVA has over 12 percent of the South American market, it
says.
• Citi has launched Banco Citibank de Honduras
and Citibank de El Salvador, following the merger
of two Central American banks, Banco Cuscatlan and Banco Uno, which
it acquired in 2007. As part of the deal, Banco Uno’s card issuing
arm Aval Card has been renamed Cititarjetas.
Citibank El Salvador has 190 ATMs and 100 customer service
locations, including bank branches and kiosks.
• Miami, Florida-based NovoPayment has launched
the Sambil Visa general-purpose reloadable prepaid card in
Venezuela.
The firm initially issued 2,700 cards to shoppers at the Sambil
Mall in Caracas, Venezuela. It expects to issue 35,000 to 45,000
reloadable prepaid cards by the end of 2008. Cardholders choose the
load amounts, which can range from a minimum initial load of VEB100
($46) to a maximum per-transaction load of VEB4,000. NovoPayment
also offers the Sambil Visa gift card in Venezuela.
• Dollar Express (DolEx) is to offer its
customers the option of paying their cellphone, landline and
utility bills using TIO Networks’ bill payments processing platform
at DolEx money transfer offices. Owned by processor Global
Payments, DolEx provides Latin American remittance services to
Hispanic consumers in the US. Canada-based TIO provides bill
payment services for North American unbanked consumers.
• Scotiabank says that in its third quarter
ending 31 July 2008, its international banking unit, which mainly
comprises operations in Latin America and the Caribbean, saw a 35
percent year-on-year growth in credit card lending.
“Results in international banking benefited from continued
robust organic loan growth in the third quarter of 2008,
particularly in mortgages and credit cards,” the Canadian bank
said.
• Until 17 October 2008, US third-party transaction processor
TransferOrbit is providing money transfer booths
at 16 Mexican dances and concerts in the US. The events are
promoted by Tu-Dnro (pronounced Tu-Dinero, ‘your
money’), which provides prepaid products to Hispanic consumers in
the US. TransferOrbit’s system, which was developed by US-based
FonWallet, allows consumers to pay cash for a money transfer, and
then use their cellphone to transfer the funds to a third party.
Tu-Dnro has given TransferOrbit an exclusive contract to process
money transfers at its events. Mexican nationals in the US send
home around $22 billion a year.
• VeriFone has launched an ‘Integrated Systems
Group’ for Latin America to market integrated payment systems and
services throughout the region. Gustavo Jimenez has been named
vice-president and general manager of the group, reporting to
Fernando Lopez, vice-president and general manager of VeriFone
Latin America and the Caribbean.
• VeriFone’s restated quarterly earnings
figures reveal that the POS system vendor’s Latin American revenues
fell 2 percent year-on-year to $40.65 million in its second quarter
to 30 April 2008.
North America
• The Federal Deposit Insurance Corporation
(FDIC) says a pilot project to find ways for banks to offer
small-dollar loans profitably has revealed significant
cross-selling opportunities such as lines of credit. FDIC spokesman
Andrew Stirling tells CI that 31 banks have been offering
sub-$1,000 loans in a two-year pilot that began February 2008.
The loans are an alternative to pay-day loans from firms that
charge up to 361 percent in interest. Participating banks must
offer an APR of under 36 percent, repayment periods extending
beyond a single pay-cheque cycle, and no late payment penalties.
Summit Bank, a pilot participant, says 18 out of its 19
small-dollar loan customers have expanded their relationship with
the bank by migrating to other products. Most have added chequeing
accounts; 14 have taken debit cards; and five have savings
accounts.
• Sridhar Chityala has been named head of
Wachovia’s e-commerce division, reporting to
Ranjana Clark, head of marketing. He will be responsible for the
bank’s internet, intranet and mobile channels, and will help
Wachovia business units to develop e-commerce strategies. Chityala
joins from Citi Cards, where he was involved in contactless card
issuing.
“I want to expand Wachovia cardholders’ transactions online, and
also align the bank’s e-commerce activities in the cards field with
the Wachovia cards operation,” he told CI.
• Revolving US consumer credit, which includes
credit card loans, rose by a seasonally adjusted annual rate of 4.8
percent in July 2008 to $969.9 billion, the Federal Reserve’s
monthly G.19 report says. In June 2008, revolving credit rose by
3.5 percent to $966 billion.
• Nearly one in five people who share credit card accounts say
use of the accounts has sparked arguments with the other
cardholder, a CreditCards.com poll reveals. The
survey found 51 percent of US cardholders have shared a credit card
account, mostly with a spouse or partner (91 percent) and some with
a child or adult child (21 percent). The nationwide poll of 1,000
adults was carried out in June 2008 for the online credit card
information provider.
• Barney Briggs has been named chief financial officer at
Barclaycard US, Barclays’ US credit card arm.
Briggs joins from Citi, where he was most recently senior
vice-president and senior director of the American Airlines
AAdvantage business. Michelle Bottomley has been named chief
marketing officer at
Barclaycard US. She was previously chief operating officer at
Ogilvy & Mather New York. Both Briggs and Bottomley will report
to Lloyd Wirshba, chief executive officer, and will join the
Barclaycard US executive leadership team.
• Bank of America (BofA) has launched the
‘Student Package’, a suite of banking products for students, which
includes CampusEdge chequeing and savings accounts with a BofA
photo security debit card. There are no monthly chequeing account
maintenance fees for five years and no monthly maintenance fees on
savings accounts after the first debit card purchase. CampusEdge
customers are enrolled into BofA’s ‘Keep the Change’ programme,
which rounds up debit card purchases to the nearest dollar amount
and transfers the difference from their chequeing to their savings
account.
• Citi has teamed up with US prepaid card firm
Green Dot to market Citi-issued general-purpose
gift cards and reloadable prepaid MasterCard and Visa debit cards
to US consumers. As part of the pact between the two firms, Citi
Cards’ retail business partners will offer co-branded versions of
Citi-issued prepaid cards to their customers. The prepaid debit
cards can be reloaded at stores that offer the Green Dot MoneyPak
service for loading cash onto prepaid cards.
• According to a new survey from global industry body
Smart Card Alliance, three-quarters of the US
population are not even aware of the existence of contactless
technology. However, those that do own contactless cards rate them
highly, with over 90 percent of those surveyed stating that they
like using them. Javelin Strategy and Research surveyed 500
contactless card users, finding that 92 percent think the
technology is fast and easy to use. Respondents also use their
cards regularly, with over 22 percent making payments with their
contactless cards more than six times per month. The research also
found 43 percent are likely to use a mobile phone handset as a
mobile wallet, compared to just 19 percent who don’t use
contactless cards.
• Brooklyn and Chicago have
used JPMorgan prepaid debit cards in campaigns to
take firearms off the streets. The gun buy-back programmes were
sponsored by local law enforcement officials who offered citizens
prepaid debit cards for working guns, no questions asked. More than
7,500 firearms were collected at community churches and other
turn-in sites in the two cities.
• JPMorgan has renewed its contract with the
State of Arizona for the distribution of benefit
payments to the 250,000 households participating in programmes such
as food stamps and cash assistance. Using JPMorgan’s electronic
banking transfer services, programme participants are able to
access their benefits through Arizona Quest debit cards.
• US drugstore chain Rite Aid now accepts
MasterCard PayPass contactless payments at its
check-out counters as well as magnetic stripe payment cards.
PayPass can be used at 3,800 of Rite’s 5,000 stores across the
US.
• US prepaid card firm NetSpend has teamed up
with Axcess Financial to launch the NetSpend
Axcess prepaid MasterCard, a general-purpose reloadable prepaid
debit card issued by Inter National Bank. The deal enables the
NetSpend Axcess card and NetSpend’s National Savings Program, an
online-only savings account linked to NetSpend prepaid cards, to be
distributed through Axcess Financial’s marketing channels. Axcess
Financial sells its products online and through 1,300 Check ‘n Go
retail locations in 30 US states.
On 25 August 2008, the NetSpend Axcess card and the NetSpend
National Savings Program were made available on a pilot basis to
customers at 200 Check ’n Go locations in Ohio, Tennessee, Michigan
and Kentucky. The cards will be rolled out to the remaining Check
‘n Go outlets later this year.
• All Southwest Airlines aircraft are to be
equipped with handheld card readers from
GuestLogix that will enable flight attendants to
accept credit and debit cards for payment of alcohol and soft drink
purchases. Once the rollout, which started on 9 September 2008, is
complete, the Dallas, Texas-based airline will no longer accept
cash onboard.
• Visa and Chase have launched
a pilot project in Phoenix, Arizona that delivers merchant offers
via SMS text message to Chase credit and debit cardholders’ mobile
devices. The offers are tailored to match the personal interests
selected by Chase cardholders and can be redeemed at the 50
participating merchants’ stores or e-commerce websites. The pilot
has the potential for 5,000 participants, Visa says.
