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• Citibank India and the
Delhi Metro Rail Corporation (DMRC) have announced
the launch of the Delhi Metro Citibank Credit Card, India’s first
co-branded transit credit card. Aside from acting as a contactless
access card for the Delhi Metro system, the reward points – which
are doubled for all Metro spending – can be redeemed for free Metro
rides at the Citibank POS terminals. There is also a ten percent
discount for all travel fares paid for with the card. This new
offering also brings consumers exclusive shopping discounts in
Delhi and the surrounding national capital region as well as fuel
surcharge waivers and other benefits associated with a Citibank
credit card.

• India’s ICICI Bank has
launched a new card aimed at the growing affluent sector of the
Indian consumer market, the Platinum Identity card. The new
offering comes with extensive privileges such as an accelerated
rewards programme for international purchases, and is an upgrade
from the bank’s previous travel and lifestyle product, the ICICI
Bank Platinum credit card. India is the second fastest growing
cards market in the Asia-Pacific region, with an annual growth rate
of more than 30 percent. It is predicted by the Indian Banks’
Association that the financial cards market will increase threefold
within the next five years

• Standard Chartered, India’s
largest international bank, has selected Arcot
Systems to provide a higher level of security for its 2.1
million customers when paying online with credit and debit cards.
Arcot, a provider of secure e-payment and authentication solutions,
will deliver a hosted solution called TransFort to support the
bank’s implementation of Verified By Visa and MasterCard SecureCode
for online transaction security.

• Global payment processor First
Data has signed a card processing agreement with
Kotak Mahindra, one of India’s leading financial
conglomerates. This agreement strengthens First Data’s presence in
India and further supports the company’s expansion into the
Asia-Pacific market. Under the five-year agreement, First Data will
provide processing services for Kotak’s unsecured lending
portfolio, supporting the launch of a new credit card and loan
portfolio. Client services support will be provided locally from
First Data’s offices in Mumbai.

• MasterCard Worldwide and
Japanese electronics giant Toshiba have announced
the launch of a MasterCard PayPass-enabled chip module. MasterCard
and Toshiba plan to introduce the chip module into the Japanese
market by the end of 2008. As of the first quarter of 2008, there
are over 28 million PayPass cards and devices and 109,000
MasterCard PayPass-enabled merchant locations worldwide. Toshiba
will undertake production, while MasterCard will expand the chip
module-equipped cards in the market.

• Japan’s Mitsubishi UFJ Financial
Group (MUFG) announced on 20 May that said its net profit
for the fiscal year ended March 2008 fell 28 percent, pushed down
by higher credit costs and US subprime mortgage-related losses.
Fiscal year net profit came in at ¥636.6 billion ($6.16 billion)
for the 12 months ended 31 March, down from 2006’s ¥881 billion.
MUFG said it expects net profit in the 12 months through March 2009
to be more or less flat at ¥640 billion as sluggish trading
continues amid lacklustre economic growth in Japan.

• Industrial Bank of China
plans to issue 2.5 million new credit cards this year to boost its
retail banking operations. The bank prefers to seek a healthy
growth in the number of cards rather than a too rapid jump, said
Yan Xuewang, the bank’s vice-president of retail banking. The bank
will also try and ensure that its clients hold on average 1.1 of
its credit cards per capita to maximise the effectiveness of the
product so that its cards are frequently used, rather than one
client holding several cards which are hardly used. Transactions
involving credit cards have totaled CNY12 billion ($1.71 billion)
so far this year, Yan said. The figure last year was CNY19.2
billion. Shanghai-listed Industrial Bank had issued 3.5 million
credit cards at the end of the first quarter of 2008 and has a bad
loan ratio of 1.08 percent. China had more than 71.62 million
credit cards in circulation at the end of 2007, up 144 percent from
a year ago, according to the People’s Bank of China.

• The Hong Kong Monetary
Authority (HKMA) has recently released its credit card
lending figures for the first quarter of 2008. Total card
receivables decreased by 6 percent in the first quarter after
rising by 8.8 percent in the fourth quarter of 2007, reflecting the
diminishing effect of the payment of salaries tax by credit cards
and the transfer of HK$155 million ($19.9 million) of rescheduled
receivables outside the surveyed institutions’ credit card
portfolio. The overall number of credit card accounts also
decreased slightly by 0.1 percent. According to the HKMA, there was
a HK$35 million drop in the delinquent amount from the previous
quarter – as such, the delinquency ratio plummeted to a new record
low of 0.32 percent. The charge-off amount decreased further in the
first quarter to HK$499 million – 0.67 percent – of average
receivables from HK$504 million at the end of 2007.

• Chip and PIN technology will be available for
Australian credit card consumers from 4 June. Intended to speed up
queues and bolster security, Visa, MasterCard, American Express and
Diners Club credit card users will be able to verify their
purchases with a PIN number, affecting 20 million cards and 600,000
POS terminals across the country.

• Figures released by the Reserve Bank
of Australia (RBA) show that credit card balances in the
country fell by 0.5 percent in March 2008 from the previous month,
as rising interest rates put pressure on consumers. Total
repayments rose by 5.4 percent during this period, while the number
of credit and charge accounts increased by 65,000 from February to
almost 14.1 million. However, the number of purchases made with
credit cards also rose by 3.2 percent from the previous
month.

• The memorandum of understanding (MoU) between
Life Insurance Corporation (LIC) of India and
GE Money for a credit cards venture has expired,
but both the companies said the deal is on course. In September
2007, LIC announced an MoU with GE Money India, Corporation Bank,
LIC Housing Finance and LIC Mutual Fund to create a new credit card
company that was to leverage the strengths of each company. The
remaining 14 percent stake is to be offered to financial investors.
The parties had aimed to finalise definitive agreements by the end
of October 2007. The MoU was valid for 90 days. “The initial period
is over, but the project is on. In one or two weeks we may announce
the launch of some aspects related to the credit card company,”
said Hemant Bhargava, CEO of LIC Credit Cards Company.

Europe, Middle East, Africa

• UK smart card specialist Aconite has announced that it will be
providing the technology for the new Visa Europe
payWave contactless prepaid card. The company says it will be
adapting its Smart PrePaid (SPP) software to support Visa Europe’s
new prepaid chip specification. There will be an initial pilot
scheme in order to minimise the integration requirements with
existing systems that will be followed by a more expansive
roll-out. The SPP software allows for transactions to be made
securely offline without the need for online authorisation. The
available balance is stored on the card and tracked in a shadow
account, reducing each time a purchase is made and making sure that
no purchases can be made once the funds have been exhausted.

• Abu Dhabi Commercial Bank
(ADCB) has announced that it has forged a Memorandum of
Understanding with Emirates Identity Authority
(EIDA) to explore the business opportunities provided by the
chip-based National ID card for introducing new financial services
on credit and debit cards. By working with EIA, the bank is hoping
to make use of a chip-based ID card in order to develop numerous
financial applications and services bringing increased
functionality and convenience to their customers.

• Recent figures released by the
Central Bank of Kuwait (CBK) showed a noticeable
drop in operational credit cards in the first quarter of 2008 to
reach 522,500, compared to 549,600 in 2007. This indicates that
some 27,100 cards, around 5 percent of the total amount in Kuwait,
have been suspended or cancelled in reaction to the new CBK
directives to limit loans and credit facilities. However, the
number also accounted for cards that have expired and not been
subsequently renewed during this time. During the first quarter of
2008, domestic credit card expenditure also decreased noticeably at
a level of around 7.4 percent to KWD144.7 million ($550 million).
Local credit card spending accounts for nearly 64 percent of the
overall spend total – the remainder comes from abroad.

• MasterCard is teaming up
with Irish e-payments specialist Payzone to
develop a pan-European POS reload service for its prepaid
offerings. The rePower service will be rolled out in the UK
initially in early 2009 by Newcastle Building Society in
association with prepaid solution provider Altair Financial. The
new system will allow customers to top up MasterCard and Maestro
prepaid cards using both chip and PIN-based technology and
conventional ‘swipe’ technology, in order to meet Europe’s
migration to EMV.

• The UK Payments Council, an
independent body established in March 2007 to replace the Office of
Fair Trading’s Payments Systems Task Force, has unveiled its first
national payments plan which includes proposals for the “managed
decline” of paper-based cheques and the development of a
collaborative “bank account to bank account mobile payment
service.” However, there were concerns about the setting of an “end
date” for cheque clearing, according to Brian Pomeroy, chairman of
the Payments Council board. During the public consultation the
Council had suggested that cheques be phased out by 2018, but this
was scrapped in the final plan.

• Uganda’s Stanbic Bank has
recently issued 1,600 credit cards to its high net worth customers.
“We embarked on issuance of credit cards at the beginning of May
and have so far approved 1,600 customers as eligible to hold these
cards,” said Sydney Mpipi, the chief operations officer, adding
that the move was necessary to retain a customer base that was
becoming increasingly knowledgeable and sophisticated regarding
financial products.

• HSBC Middle East has
launched its enhanced Visa Platinum credit card, which will offer
benefits to cardholders such as access to premium tickets for
worldwide sporting, concert and theatrical events. The card also
provides for free valet parking at selected locations such as malls
and airports, and customers will benefit from an association with
the Air Miles Rewards Programme. According to HSBC, the premium
cardholder contributes to more than 45 percent of the total card
spend in the market, constituting a significant share of its
customer base.

• UK high street bank Abbey
has announced the launch of its new Zero card, which the bank
claims is the first ever card to offer no balance transfer fee, no
foreign exchange fee and no cash advance fee on the same card. The
card also offers customers an introductory six-month interest free
period on balance transfers and purchases, after which an 18.9 per
cent APR on all purchases will apply. Abbey’s foreign exchange fee
is normally 2.75 percent and its balance transfer and cash advance
fees are 2.5 percent or a minimum of £3 ($5.87).

• UK-based holiday specialist
Saga has unveiled the Saga Platinum Visa credit
card, which comes with a 15.9 percent APR and no foreign currency
charges for transactions within the Visa Europe region. This
includes all EU countries as well as some non-members such as
Norway and Turkey. Payment on the card is arranged in such a way
that after interest and fees, the most expensive debt is cleared
first, and there is a 55-day interest free period for cash
withdrawals.

• Barclaycard and
InterContinental Hotels Group (IHG) have launched
the Priority Club Rewards Visa credit card, which offers customers
a way to earn rewards that can be redeemed at IHG hotels.
Cardholders will be able to redeem their points against a wide
range of rewards including hotel stays, airline miles, experience
days out, exclusive wines and more. There is no annual fee for the
card, and a six month interest free option on all balance
transfers.

• The UK-based payment industry body
Association for Payment Clearing Services (APACS)
has published its latest quarterly statistical release covering the
first quarter of 2008. According to the release, there were 1.8
billion plastic card purchases made in the UK totalling £91.1
billion during the first quarter of 2008. The number of purchases
grew by 8.9 percent, while spending also increased by the same
amount. During this period, the volume of CHAPS payments increased
by 1.9 percent with a 9.8 percent rise in overall values. According
to Bank of England figures, gross credit card
lending to individuals in the first quarter of 2008 totalled £32.1
billion, while outstanding credit card balances increased by £1
billion.

• Student travel specialist STA
Travel has launched a branded prepaid MasterCard in
conjunction with prepaid provider Tuxedo Money
Solutions. Up to £5,000 can be stored in a secure online
‘eccount’ with the STA Travel Cashcard, which is designed for easy
and safe card management through the cardholder’s mobile phone. The
card is chip and PIN-enabled, and comes with access to 1.3 million
ATMs and 25 million merchants. Up to five cards can be placed under
one eccount, meaning money can be transferred from card to card via
text, making it ideal for parents with children travelling
abroad.

Latin America

• Fewer Latin Americans are sending money home regularly from the
US, a survey by the Inter-American Development
Bank reveals. The February 2008 poll of 5,000 Latin
Americans living in the US found that only 50 percent of
respondents were still sending funds on a regular basis to their
families. This was down from 73 percent of respondents remitting
funds in the IADB’s 2006 survey.

• Fitch Ratings says Brazil’s
banking system is adequately positioned to absorb the potential
pressure from a downturn. Its fundamentals and leading players have
remained strong and are well-positioned to absorb potential
pressure on its growing loan portfolio, according to Peter Shaw,
managing director of Fitch’s Latin American Financial Institutions
Group. But, while the development of the banking system seems
robust, some risks remain. “There is the lack of a well-proven
credit culture in Brazil, as reflected in historically low levels
of bank credit to gross domestic product, and no reliable way to
measure the overall indebtedness of individuals,” Fitch says.
“Therefore, a sharp economic downturn represents the largest risk
faced by Brazilian banks.”

• American Express Mexico has
launched the Platinum Skyplus credit card which enables its
cardholders to accumulate points towards free air tickets. Amex
says there are no restrictions on when these tickets can be used.
Cardholders have free access to Amex’s travel agency to reserve
their flights. Purchases amounting to the Mexican peso equivalent
of $15,000 generate a free domestic round-ticket. These tickets can
be exchanged for tickets to Canada, the US or other foreign
destinations.

• Chile’s Banco de Crédito e
Inversiones (BCI) is to spend $100 million in 2008 on
opening 55 new branches and installing 200 new ATMs, reports
Business News Americas.

• Brazil’s Banco Itaú is to
issue hardware authentication devices to its retail web and phone
banking customers. US-based Vasco Data Security
International is supplying its Digipass GO3 tokens along
with back-end authentication software to Itaú.

• Brazil’s Bradesco has
launched a Visa-branded credit card made from recycled plastic. The
bank says it will use some of its revenues from the card to help
protect the Amazon rainforest.

• US independent ATM network operator
Cardtronics says it had 1,422 ATMs in Mexico as at
31 March 2008. The year-earlier figure was 424 ATMs (CI 398, Region
round-up: Latin America).

Diebold has won an order for
9,600 full-function ATMs from Brazil’s Caixa Economica
Federal. The government-owned bank currently has 19,000
ATMs.

• Equifax has taken majority
control of Credit Report Buro de Informacion
Crediticia, an Ecuadorian credit bureau. The US firm
bought 70 percent of the total shares outstanding from Credit
Report’s management and other individuals, bringing Equifax’s total
ownership to 95 percent. Quito-based Credit Report provides credit
providers with credit reports and credit scores. Consumer lending
in Ecuador grew about 15 percent in 2007, Equifax says.

• Ficen, a Mexican company
which provides financing for SMEs (small and medium-sized
companies), has launched a MasterCard-branded business credit card.
The card, which was introduced in April 2008, is targeted at SMEs
as well as self-employed sole traders. A Ficen spokesperson tells
CI that this segment is not well-served by Mexican credit card
issuers. Ficen aims to have 15,000 plastics in issue in the next
three years. Processing for the card is carried out by the joint
venture between Mexico’s Prosa and
TSYS.

• First Atlantic Commerce, a
Bermuda-based multi-currency payment services firm, has won the
Bermuda Ministry of Telecommunications & E-Commerce’s
‘Innovation of the Year’ award for its online consumer
authentication technology. FAC’s innovation involved implementing
the Verified by Visa and MasterCard SecureCode cardholder
authentication systems for the Mexican e-commerce market including
airlines, hotels and large retailers. As a result of the system,
Mexican acquirers and merchants have seen an immediate 85 percent
reduction in online Visa and MasterCard credit card fraud, FAC
says.

• In the first quarter of 2008,
MasterCard cardholders in the Latin America and
Caribbean (LAC) region used their MasterCard-branded cards
(excluding Cirrus and Maestro) for 415 million purchase
transactions. MasterCard gross dollar volume (GDV) totaled $44
billion in the first quarter, up 20.7 percent in local currency
compared to the first quarter of 2007.  Purchase volume
reached $22 billion in the first quarter of 2008, up 22.7 percent,
on a local currency basis, from the year-ago period. The number of
MasterCard-branded cards issued at 31 March 2008 rose by 15.5
percent to 102 million. MasterCard cardholders could use their
cards at 2.7 million acceptance locations throughout LAC. The
Maestro brand mark appeared on over 117 million cards in LAC, up
10.7 percent on the first quarter of 2007.

• US point-of-sale terminal vendor
Hypercom says its service revenue grew by $4
million year-on-year in South America in its first quarter to 31
March 2008, primarily due to an increase in service volume.

• In 2007, Banco Itaú’s retail
and corporate customers carried out a total of 3 billion
transactions using its self-service channels, of which 40 percent
took place at its ATMs. Customers carried out 867 million
transactions on Itaú’s web banking site.

• A survey of Mexican
MasterCard debit cardholders by MasterCard has
found that 56 percent of respondents would make more use of their
card, if it offered more benefits. The respondents said they were
looking for benefits such as improved cardholder services,
insurance protection, and retail promotions and discounts.
MasterCard says it is now offering accidental death and injury
insurance to Mexican MasterCard debit cardholders. To qualify for
coverage, they have to have made two debit transactions in the 30
days before the accident.

• Scotiabank has signed an
agreement with Intesa Sanpaolo to buy the Italian
bank’s stake in Scotiabank Peru – another Peruvian acquisition for
the bank. Through this acquisition, Scotiabank will be increasing
its current 78 percent stake in Scotiabank Peru to 98 percent.
Scotiabank says it currently has 2,265 ATMs and banking kiosks
across Latin America.

• US-based processor TSYS says
its Mexican revenues rose to $3.7 million in its first quarter to
31 March 2008 from $3.3 million a year earlier.

 
North America

• Revolving US consumer credit, which includes credit card
borrowing, rose by a seasonally adjusted annual rate of 7.9 percent
in March 2008 to $957.2 billion, according to the Federal
Reserve’s monthly G.19 report. In February 2008, revolving
credit rose by 5 percent to $950.9 billion.

• The economic enthusiasm of Americans rallied
slightly in May 2008, according to Royal Bank
of Canada’s RBC CASH (Consumer Attitudes and
Spending by Household) Index. The index rose nearly 10 points in
May, reversing six straight months of declining confidence. The May
RBC CASH survey of 1,000 consumers found that respondents were more
positive about their future economic prospects, but still worried
about job security. The index hit an all-time low in April
2008.

• The US Government Accountability
Office (GAO) says in a report that federal entities
accepted cards for $27 billion worth of transactions in fiscal
2007. This figure included $433 million in “merchant discount
fees,” it says. “By accepting cards, federal entities realise
benefits, including more satisfied customers, fewer bad cheques and
cash thefts, and improved operational efficiency,” the report says.
(see Report reignites US interchange issue)

• A TowerGroup report says
that the combination of higher credit card losses and lower
consumer spending will cause US credit card return on asset (ROA)
performance levels for 2008 to drop at least 15 percent below 2007
levels. In 2007, ROAs were already lower than 2006 ROA levels.
However, the report says that by focusing their business strategies
on customer retention and expansion rather than acquisition credit
card issuers can still tap profit opportunities in 2008. The report
is titled “Credit Crisis: What Card Issuers Can Learn from Previous
Economic Downturns.” (see Learning from the past)

• According to Mintel
Comperemedia, US credit card mailers increased their
current customer mailings by 18 percent in 2007 compared to 2006
(CI 399, Region round-up: North America).

• AirPlus International, a
provider of business travel payment services, has launched a
corporate MasterCard in the US with its partner Wright
Express Financial Services Corp.

• Bank of America has launched
an American Express card in the US with South Korea’s
Asiana Airlines. The card provides two miles per
US dollar of card spending on everyday purchases and three miles
for every dollar spent at select grocery stores. The one additional
grocery store mile is provided through a joint programme between
Asiana Airlines and US grocery chains such as H Mart, Galleria and
Paldo Market. The card also offers access to member-only golf
courses in Korea and the Asia-Pacific region.

• Citi has added a range of
rewards and services to its Citi Diamond Preferred no-annual fee
credit cards that it says are typically provided on fee-based
rewards cards. It is offering Diamond cardholders concierge
services, access to unique experiences and special events,
money-saving discounts, and a complimentary annual account summary.
There is still no fee for the Diamond cards, it says.

• The Community Bankers Association of
Kansas has teamed up with US payment processor
Merchant e-Solutions (MeS) to make advanced
merchant services available to its 125 member banks. Based in
Redwood City, California, MeS provides web-based merchant sign-up,
transaction reporting and analysis tools for small merchants and
regional banks. Its technology will enable smaller banks to compete
with national banks in servicing merchants, the Association
says.

• First Data has signed an agreement to buy
InComm, a US-based marketer, distributor and
technology developer for stored-value gift and prepaid products.
The payment processor will pay $980 million, plus “contingent
future payments of up to $250 million over a three-year performance
period,” for InComm. The purchase is expected to close in the
second half of 2008.

• MasterCard is offering savings on fuel and
maintenance to small US businesses that use its credit and debit
business cards. The savings are available at participating
Fuelman Network locations in the US to cardholders
who sign up to MasterCard’s Easy Savings programme. Customers
receive a 1 percent rebate on fuel at 15,000 gas stations and a 5
percent rebate on all maintenance purchases made at 1,800
locations. Fuelman is a nationwide network of fleet fuel and
maintenance providers, which is operated by FleetCor.

• JPMorgan Chase is to provide charge card
services for the US Department of Commerce (DOC)
over a four-year period. Six other Federal bodies are included in
the contract: the US Office of Personnel Management; the
Smithsonian Institution; the Appalachian Regional Commission; the
Library of Congress; the Holocaust Memorial Museum; and the US
Social Security Administration. The DOC card programme is expected
to generate 23,000 MasterCard-branded cards and an annual
transaction volume of $220 million, a JPMorgan spokesperson tells
CI. The contract is part of the US General Services
Administration’s (GSA) SmartPay 2 government charge card programme.
“We have now been selected by more than a dozen agencies as part of
GSA SmartPay 2,” the JPMorgan spokesperson says.

• Card processor Moneris Solutions is to start
offering Discover Network card acceptance
services. Moneris says Discover acceptance will be offered as part
of the Moneris integrated service to small- and mid-sized US
merchants.

• Global Payments has extended its marketing
alliance agreement with National Bank of Canada
through 2017. As a result of the deal, National Bank, one of
Canada’s top five banks, will continue to refer merchants
exclusively to Global Payments, and its customers will continue to
be offered Global Payments’ range of card acceptance services,
including point of sale (POS) products, credit card processing and
account settlement. National Bank will also continue to provide
MasterCard Canada processing sponsorship to Global Payments.

• Canadian independent gas station chain Pioneer
Petroleums is accepting MasterCard PayPass contactless
cards. Customers can pay for purchases under C$50 ($49.83) either
at the pump or in-store without swiping their cards or entering
their PIN. Atlanta, Georgia-based Global Payments
is providing transaction processing for Pioneer Petroleums, which
has 140 locations across Ontario.

• Scotiabank has launched StartRight, a programme
designed to meet the financial needs of the 200,000 new immigrants
who arrive in Canada each year. The suite of financial services
includes a simplified process for opening a bank account, obtaining
a credit card, building a credit history, gaining access to foreign
exchange services and transferring money between Canada and the
immigrant’s home country.