• Bank of China (BoC) will maintain its strategic
partnership with the Royal Bank of
Scotland…
• The number of Vietnamese
consumers using debit and credit cards has
grown…
• Poland’s Citi
Handlowy is launching a service allowing location of
partners…
• Stanbic Bank of Uganda has extended UGX30 million ($18,292) to
2,000 credit cardholders…
• Qatar National Bank (QNB) of Doha has launched the QNB Private
Banking credit card…
Asia-Pacific
Go deeper with GlobalData
• Bank of China (BoC) will maintain
its strategic partnership with the Royal Bank of
Scotland (RBS) following RBS’s part-nationalisation by the
UK government amid the continuing global financial crisis. A BoC
spokesman said that the bank would continue strategic cooperative
relations with RBS and jointly push forward planned developments,
including debit and credit cards. RBS paid $3 billion for an 8.25
percent stake in BoC in 2005.
• Separately, Bank of China and Chinese domestic
card scheme China UnionPay (CUP) have jointly
launched the BoC Great Wall CUP platinum card in Singapore as part
of a global partnership agreement. The card is the first Singapore
dollar-denominated CUP credit card to be launched in Singapore, and
is aimed at Singaporeans who travel frequently to China. In
addition, cardholders will enjoy exclusive privileges at more than
17,000 merchants in the Chinese mainland, Hong Kong and Macau when
they dine, shop, entertain and travel.
• Citibank has launched a debit and ATM card
offering in Malaysia, offering customers global access to cash free
of charge at 13,500 Citibank ATMs in over 100 countries, and
purchases at more than 29 million Visa merchant outlets worldwide.
Citi is aiming to issue 100,000 new cards over the next 12 months.
In Malaysia, there has been significant growth experienced in debit
card usage, as debit cards registered an exponential growth of 114
percent and 81 percent in terms of volume and value respectively in
2007. Citi is also offering cardholders reward points on every
purchase they make.
• According to press reports in Japan, thousands
of Japanese police officers have been guarding ATMs around the
country in a bid to stop elderly people falling victim to
fraudsters as they withdraw cash from pension payments to their
accounts. Around 56,000 police have been deployed to guard about 80
percent of the country’s 98,000 ATMs. Police say conmen have
tricked people into transferring more than $211 million to their
accounts via ATMs so far this year and there have been 346 related
arrests.
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By GlobalData• The number of Vietnamese consumers using debit and credit cards
has grown to 900,000, or 1 percent of the country’s population,
according to Visa. Payment card usage has soared
in popularity over the past 10 years, partly due to the country’s
economic growth rate averaging 7 percent each year, with a record
8.44 percent growth in 2007. There are 22 banks participating in
the Visa network in Vietnam, with 10,000 point of sale terminals at
shops nationwide.
• Australian airline Qantas and Westpac
Bank have announced the introduction of a new Earth
Platinum credit card that offers cardholders the benefits of two
cards linked to one account. Qantas says the card is the first of
several new cards to be unveiled ahead of changes to its Frequent
Flyer programme from April 2009. Qantas cardholders can earn points
on everyday purchases and build points in their Frequent Flyer
account, whilst also having the opportunity to earn points twice
from one transaction – once on their card and once with other
programme partners. Some other credit and charge card reward
programmes will no longer offer Qantas Frequent Flyer points as a
reward option from 1 April 2009.
• According to figures from the Reserve Bank of
Australia (RBA), Australians spent A$17.8 billion ($11.8
billion) on their credit and charge cards in August, down from
$19.03 billion the previous month, a fall of 6.5 percent. Total
credit and charge card balances outstanding rose 0.33 percent to
A$44.6 billion in August, from A$44.45 billion in July, but credit
card repayments fell by 6.2 percent to A$18.16 billion in August,
from A$19.35 billion in July. The number of credit and charge
accounts increased by 0.2 percent, while the number of purchases
using credit cards fell by 8.6 percent. Credit card purchase value
decreased by 6.4 percent to A$16.78 billion in August from A$17.92
billion in July.
• Commonwealth Bank of Australia (CBA) says
BankWest, which it is acquiring from HBOS of the
UK, will be included in its overhaul of core banking operations.
CBA agreed to acquire the BankWest unit from HBOS for A$2.1
billion. The acquisition will add 366 ATMs to CBA’s network of 275
in Western Australia, as well as 100 branches and 28 business
banking centres.
• The results of the Reserve Bank of Australia’s
review of payment systems have concluded that regulations according
to which merchants have the right to surcharges for credit card
transactions have encouraged competition in the payments system. As
a result, the Reserve Bank has announced that such reforms
concerning the credit card service fees paid by merchants could be
removed within a year with one condition: if card companies take
into account the Reserve Bank recommendations and if industry
participants take the necessary measures to prevent the possibility
for interchange fees in the credit card system to grow in the
absence of regulation.
• Australian consumer advocacy groups say the country’s banks are
ripping off their customers by not passing on recent interest rate
cuts. There are 14 million credit cards in circulation in
Australia, with almost every Australian adult owning at least one.
But there has been little sign that any of the major banks or other
credit institutions will pass on the latest Reserve Bank rate cut
of 1 percent point to credit card consumers. Federal Finance
Minister Lindsay Tanner has urged consumers to put pressure on
their banks to cut interest rates on credit cards.
• Global electronic payment and risk management services provider
Apax Global Payment and Technologies has launched
its business operations in the Asia-Pacific market, with a special
focus on Vietnam and China. Apax has opened an office in Hanoi,
Vietnam to deal with the demand for credit card and electronic
payment products across the region. Apax Global Payment and
Technologies supports processing for over 100,000 cardholders and
their merchants from worldwide industries.
• South Korea’s Ministry of Strategy and Finance
has launched a new tax payment programme which allows citizens to
pay a number of taxes using credit cards. The programme, effective
from 1 October, aims to expand the range of tax payments available
to credit cardholders in a bid to cut administration costs and
prevent tax evasion. Credit card-based tax payments have been
available to citizens since 1997, but restrictions were in place
which only allowed local taxes to be paid via such transactions.
The new programme enables citizens to pay income taxes, value-added
taxes, property taxes as well as education taxes and tariffs via
credit cards.
Europe, Middle East, Africa
• A contactless version of the Lufthansa Miles
& More credit card has been launched in Germany, incorporating
MasterCard’s contactless PayPass technology. The
new card, which is the first credit card in the country to
incorporate contactless payment technology, features a SmartMX
security EMV chip from NXP Semiconductors, and is
issued by Deutsche Kreditbank in conjunction with
Lufthansa. PayPass terminals have been installed in Frankfurt and
Munich airports, with plans to install more in participating
retailers in Germany. The Lufthansa Miles & More card is
already accepted at more than 27 million locations globally.
• Smart card solution provider On Track
Innovations (OTI) has secured a contract from Kenyan
health care technology solution provider Smart Applications
International for an additional 100,000 MediSmart cards,
which will be issued by medical scheme managers in Kenya. Smart has
already issued approximately 100,000 cards and deployed 340
contactless smart card readers and other device points of service
at hospitals, pharmacies and general practitioner sites across
Kenya, enabling patient authentication, verification of benefits
and claims processing electronically.
• Poland’s Citi Handlowy is launching a service
allowing location of partners of the ‘Discount’ loyalty programme
for Citibank credit cardholders via SMS messaging. Customers of
Citi Handlowy can check the addresses of the nearest points of sale
offering discounts on purchases made with the Citibank credit card
by sending a SMS text message. The Citibank Discount programme
offers customers rebates of up to 50 percent on purchases in more
than 3,100 points of sale across Poland.
• Online payment provider PayPal and BNP
Paribas Personal Finance have entered into a strategic
European partnership for financing online purchases. PayPal has
incorporated the Aurore Cetelem card into its range of payment
methods in France, Spain and Italy. Furthermore, the two main
players have initiated negotiations that may lead, at some point in
2009, to the launch of an online financing offer under the PayPal
brand name, enabling PayPal users to pay in several instalments and
to benefit from a cash reserve for making purchases over the
internet and at points of sale.
• Stanbic Bank of Uganda has extended UGX30
million ($18,292) to 2,000 credit cardholders since it launched its
first credit card product six months ago. Currently, 40,000
customers qualify for the facility. The bank is aiming to extend
credit to qualifying customers in phases within a timeline of six
months. According to the bank, holders of a silver card can
withdraw up to UGX50,000 per month, while gold cardholders can
withdraw between UGX2 million and UGX8 million.
• Payment processor TSYS has signed a multi-year
agreement to service the closed-loop, private-label store cards of
UK retailers Argos and Homebase; brands that are part of Home
Retail Group. Argos and Homebase have offered their customers the
ability to apply for store credit through in-store, phone and
internet options since 2001, and currently have an active
cardholder base of over 1 million accounts. Terms of the agreement
have not been disclosed but include customer account management,
payment processing and customer care, with the conversion of
existing accounts scheduled for 2009.
• Software solution provider Postilion, a division
of S1 Corporation, has announced that Mashreq, the
largest privately held bank in the United Arab Emirates (UAE), has
replaced its existing payment switch infrastructure with Postilion
solutions. The new solutions from Postilion are being used to drive
the bank’s ATM network, point of sale terminals and to introduce
new integrated POS services for retail merchants.
Mashreq will use Postilion to support its operations across the
Middle East region, including the UAE, Bahrain, Qatar, and Egypt.
The bank currently has over 200 ATMs and 12,000 POS terminals
installed, and the majority of these devices have already been
successfully migrated to the Postilion platform.
• UK peer-to-peer loan lender Zopa is reporting
increasing interest from both borrowers and lenders due to the
credit crunch forcing banks to tighten their lending criteria. Zopa
says that between July and September 2008, an average of 3,700
borrowers joined per month, compared to 2,500 a month in the
previous quarter.
The number of lenders joining during the quarter also rose, up from
300 a month between April and June, to 500 a month. Zopa says these
lenders have also been getting average returns in excess of 10
percent over the last couple of months, compared to 8.9 percent
between April and June. Zopa passed the 200,000 member milestone in
July, with lending topping the £23 million ($40 million) mark
during the month.
• ZAO Citibank of Russia, ZAO Express
Card and MasterCard have announced the
launch of a joint credit card, incorporating contactless payment
technology for travel in Moscow’s underground rail system. The
partner companies releasing the card now plan to add the function
of paying for travel on all forms of public transportation in
Moscow. The potential market for the new credit card is estimated
to be more than one million customers.
• JCB and JCB International,
ORIX Corporation and
Majid Al Futtaim Group have established a joint
venture credit card company, Majid Al Futtaim JCB Finance, in Dubai
in the United Arab Emirates (UAE). MAF JCB will issue JCB credit
cards and promote license partners throughout the Middle East and
North Africa. MAF JCB is accepting applications for the first JCB
international brand card in the UAE, the Najm JCB credit card at
Carrefour and other MAF Group-operated retail facilities.
• Qatar National Bank (QNB) of Doha has launched
the QNB Private Banking credit card for high-end customers. The
card features a black design fringed with a metallic gold border
and encrusted with a real diamond, and comes pre-approved with no
pre-set spending limit. The card offers exclusive premium services,
including global concierge services and travel assistance.
• Stamp duty for combined ATM/debit cards in Ireland is set to be
cut in order to encourage more electronic payments amid estimates
the continued use of cheques and cash costs the Irish economy as
much as €1.4 billion ($1.9 billion) a year. Finance Minister Brian
Lenihan said that duty on such cards will fall from €10 a year to
€5, with the measure funded by an increase in duty on cheques from
€0.30 to €0.50 each. The Irish Payment Services
Organisation (IPSO) welcomed the latest measure, saying
Ireland is one of the last few significant users of cheques.
Ireland’s cheque usage per capita is double the European Union
average, IPSO said.
Latin America
• US consultancy First Annapolis says that
Brazil’s VisaNet and Redecard
came respectively 8th and 11th in its global ranking of the world’s
largest bankcard acquirers. First Data came top, followed by Bank
of America. The ranking, published in the September 2008 edition of
the First Annapolis Navigator bulletin, is based on credit and
debit card purchase transactions in 2007. In Latin America, First
Data provides acquiring services in Mexico and Argentina.
• Brazil’s central bank Banco Central do Brasil
says internet and PC banking transactions rose by 21 percent
year-on-year in 2007. These transactions included bill payments,
balance enquiries and fund transfers between accounts. Between 2006
and 2007, the volume of non-cash withdrawal transactions such as
account transfers and balance enquiries at Brazilian ATMs fell by 3
percent.
• French contactless microprocessor vendor Inside
Contactless has entered the Brazilian market through an
alliance with American Banknote Brazil (ABnote).
The two firms are developing a MasterCard type-approved contactless
payment card which uses Inside’s MicroPass 4003 contactless chip.
MicroPass 4003 is designed for MasterCard PayPass applications.
ABnote Brazil and Inside worked together to obtain type approval
for the new card and to install in-house pre-personalisation
capabilities. ABnote Brazil produces hundreds of millions of
bankcards a year for Brazilian banks such as Banco Bradesco, Banco
Itaú, Unibanco and Banco do Brasil.
• In its second quarter to 30 June, 2008, smart cards accounted for
18 percent of American Banknote Brazil’s BRL61.4
million ($32.4 million) in net revenues from its cards
manufacturing division. In volume terms, smart cards only accounted
for 2 percent of total card output in the second quarter of 2008.
ABnote Brazil makes three types of smart card: chip-based
bankcards; GSM cellphone SIM (subscriber identity module) cards;
and contactless cards with built-in chips and antenna for
applications such as transit and access control. In the second
quarter, ABnote Brazil doubled its smart card production volume
from the first quarter, mainly because it started to supply smart
cards to Banco Itaú and Banco do Brasil.
• In the first half of 2008, the turnover of Banco do
Brasil’s (BB) debit and credit cards business rose by 28.3
percent to BRL28.9 billion ($13.68 billion) from the first half of
2007. The revenues included BRL1 billion from the 1.6 million
co-branded cards issued with 24 firms. BB’s total credit card
receivables rose to BRL4.95 billion in the first half of 2008 from
BRL1.88 billion in the first half of 2007. At 30 June 2008 BB had
23.7 million credit cards in issue and 51.2 million debit
cards.
• Puerto Rico-based Banco Popular has launched an
online card design service, U-Design, for holders of its Visa and
MasterCard credit cards. The service, which is available at
www.popular.com/udesign, uses
card customisation software from UK-based Serverside
Group. Cardholders are able to add their own image, or
select an image from an online gallery of pre-set images, paying
$4.99 per customised card.
• Gemalto says its advanced card personalisation
centre in Barueri, São Paulo, Brazil has been awarded the ISO
(International Standards Organisation) 9001 quality management
certification. The centre, which opened in August 2007, already has
certifications from Visa and MasterCard.
• US-based POS terminal vendor Hypercom has named
Samia Christine Bounaira as managing director, Mexico. She replaces
Jaime Arroyo who is now responsible for Hypercom’s Caribbean,
Central America and Andean region. Bounaira was previously Oberthur
Technologies’ sales director, Mexico and Central America. Hypercom
has also named Lloyd Baylard as vice-president/general manager,
multilane products, responsible for multilane sales in the
Americas. Rod Hometh is now senior vice-president and general
manager of the modular payments business unit, responsible for
sales to the unattended payments market in the Americas.
• HSBC Argentina is using US-based Vasco Data
Security International’s Digipass online authentication system to
protect its retail and corporate web banking customers. So far,
HSBC Argentina has distributed 200,000 Digipass Go 3 two-factor
authentication devices to its clients. Go 3 calculates a one-time
passcode which is used to authenticate online transactions. In
Chile, Banco de Chile uses Vasco’s Digipass technology to protect
its web banking customers.
• PayPal is being adopted by merchants in Latin
America and other regions such as Asia where its parent eBay does
not have a strong presence, eBay president and CEO John Donahoe
told investors in a conference call. He said offering PayPal helps
to open up a global market for these merchants and also increases
their sales.
• Banco Deuno, a new bank targeting Mexican
middle-income consumers, plans to offer credit cards with fixed
interest rates. The bank was launched with 12 initial branches on 1
October by its parent, Ixe Grupo Financiero.
• US-based processor TSYS says in the third
quarter to 30 September, 2008, it signed a multi-year deal with
Banco Wal-Mart de México Adelante to launch a
consumer credit card for the bank. The deal includes fraud
detection and analytic services. In the same quarter, TSYS also
signed a deal with Mexico’s Metrofinanciera for
the launch of a new credit card programme in Mexico.
In June 2008, TSYS signed a payments processing agreement for
Mexican credit card issuer Globalcard’s consumer card portfolio
(see CI 403).
• Visa has launched a near-field communications
(NFC) cellphone payment trial in the Guatemalan capital Guatemala
City. Visa cardholders can use their NFC phones to pay for meals in
four Guatemala City malls at selected fast food restaurants and
movie theatres that accept Visa payWave contactless cards. Visa
says the six-month trial, which involves Compañía de Procesamiento
de Medios de Pago de Guatemala (Visanet Guatemala), Banco
Industrial, and Banco Uno, is the first NFC payWave pilot in Latin
American and the Caribbean. Over 200 Visa cardholders have migrated
their credit card data onto their NFC phone for the trial, which is
expected to pave the way for future pilots offering applications
such as account management, alerts, and mobile couponing.
• Visa has launched a series of free online
seminars for Latin American small and mid-sized firms, which are
intended to help them manage their business more effectively. The
seminars, which are available at the visa.com/seminariosempresarial
website, include information on how to start a business, create a
sales/marketing strategy, and manage company finances.
North America
• The August 2008 US credit card charge-off rate rose to 6.82
percent from 6.36 percent in July 2008 and 4.61 percent in August
2007, says Moody’s Investor Services. The
delinquency rate rose to 4.6 percent in August from 3.83 percent a
year ago. In August 2008, cardholders paid back, on average, 17.4
percent of their credit card debts, down from the August 2007 rate
of 20.07 percent. Income yield fell to 17.63 percent from 19.81
percent in August 2007.
The one-month excess spread, which is the yield less the expenses
of the related credit card asset-backed transactions such as
coupon, servicing fee and charge-offs, dropped to 6.12 percent in
August from its year-prior level of 8.17 percent. Revolving US
consumer credit, which includes credit card loans, fell by a
seasonally adjusted annual rate of 0.8 percent in August 2008 to
$969 billion, the Federal Reserve’s monthly G.19 report says. In
July 2008, revolving credit rose by 5 percent to $969.6
billion.
• Hitachi Consulting/BAI’s 2008 Study of Consumer
Payment Preferences says that 63 percent of all US consumer
payments are now electronic, and that electronic payments account
for the majority of transactions across all three major venues:
bill payments, in-store purchases, and web shopping.
“This year, for the first time, the balance in bill payments tipped
from cheques to electronic payments,” Hitachi Consulting analyst
Melissa Fox says. “Only 38 percent of US bills are paid by cheque
now, down from 55 percent in 2005.”
Fox says many US biller-owned websites do not offer an online card
payment option due to reluctance to pay merchant fees, but the
number of biller sites offering card payments is growing. Cash
accounts for 29 percent of US in-store purchases, cheques 8
percent, and debit cards 37 percent. Some 98 percent of US web
shopping payments are electronic, with credit and debit cards
jointly accounting for 74 percent of transactions.
“E-payment services like PayPal and Amazon Payments are often
card-based at the back-end,” Fox says. “We found a low consumer
enrolment in online security schemes Verified by Visa and
MasterCard SecureCode.”
• Affluent Americans represent a growth opportunity for debit card
usage, a MasterCard Advisors study says. The
study, which examined four US income segments (sub-$25,000;
$25,000-$50,000; $50,000-$75,000; plus-$75,000), found debit card
usage is highest in households with annual incomes of
$50,000-$75,000. However, 31 percent of affluent debit cardholders
with household incomes above $75,000 do not regularly use their
debit cards for purchases, while 19 percent in the $50,000-$75,000
segment do not regularly use debit for purchases. Total debit spend
by value among people in the plus-$75,000 segment is 87 percent of
total debit spend by people in the $50,000-$75,000 segment.
“Younger consumers tend to use debit more, as they have less access
to credit cards than more affluent consumers, who often have
rewards-based credit cards,” MasterCard Advisors’ Greg Howes said.
“Younger consumers will more likely be in the lower-income
segments.”
The study also found rewards programmes have a positive influence
on debit card usage.
• American Express Canada’s point of sale network
will be ready for EMV contactless cards in the first quarter of
2009.
“We already have the capability to accept contactless mag-stripe
cards, but have not been advertising this fact,” Amex Canada
spokeswoman Jolene Price said. “If Amex US card members want to use
Amex contactless mag-stripe cards in Canada, they can do so.”
Price says Amex Canada will be issuing EMV contactless cards by the
end of 2009.
• Consumer electronics retailer Best Buy Canada
and Chase Card Services Canada have launched the
Best Buy Reward Zone Visa card. Customers receive one reward point
for every C$1 ($0.77) spent on their card and two points for every
C$1 spent on purchases at Best Buy stores in Canada or at http://www.bestbuy.ca/. Points are
redeemable for reward certificates that can be spent in-store. The
card has no annual fee.
• Coca-Cola Bottling Company is to add
MasterCard PayPass contactless readers to 5,000
vending machines across Canada by 2010. So far, 400 units located
in major Canadian cities have been equipped with PayPass
readers.
“This deal is important as it expands card acceptance to locations
that traditionally only took cash,” Will Giles, MasterCard Canada
vice-president, acceptance, said. “Vending machines with
contactless readers will not lose the sales of people without coins
wanting to make purchases.”
• US electronics group United Technologies has
withdrawn an unsolicited takeover offer for ATM vendor
Diebold. The $2.64 billion offer, rejected by
Diebold management, was originally made in February 2008.
• First Data is expanding the range of payment
options it can process for e-merchants via a deal with
CardinalCommerce, a US alternative payments provider.
CardinalCommerce’s Centinel system processes a range of alternative
payments including PayPal, eBillme, Bill Me Later, Google Checkout,
MyECheck, NACHA Secure Vault Payments, Amazon Payments, and
RevolutionCard. In October 2008, PayPal’s owner eBay announced a
deal to buy Bill Me Later, which offers consumers a deferred
payment alternative to using credit cards online.
• MasterCard has launched a merchant-funded
discount programme for debit and prepaid cards. The MasterCard
Savings platform will be available to all US issuers of MasterCard
debit and prepaid cards. Cardholders enrol for the programme online
and elect which merchants they wish to receive promotional offers
from. MasterCard is offering the programme in partnership with
rewards and loyalty provider Next Jump. Thousands of merchants are
already participating in the scheme, MasterCard says.
• US payments technology firm Metavante is to
provide the processing platform for Community Bank
Products (CBP), a supplier of network-branded prepaid card
products to 1,000 US reseller community banks. Metavante will
provide CBP with prepaid card processing, as well as card
production, delivery and account management. It will also supply
CBP with fraud prevention, a call centre and automated voice
response services.
• Montreal-based Optimal Group has sold its
Optimal Payments card-not-present (CNP) processing business to
Toronto-based Card One Plus for $7 million plus
the assumption of liabilities. Optimal Payments has CNP operations
in Canada, Ireland, the UK and US. According to an August 2008 SEC
filing, Optimal Group expects to divest its Optimal Payments US
card-present processing business within the next year.
The August filing said Sterling Payment Solutions had agreed to pay
$2 million plus the assumption of liabilities for the Optimal
Payments Canada card-present processing business.
