Region round-up

Asia-Pacific

• Japan’s Mitsubishi UFJ Financial Group (MUFG)
has set the share swap ratio for its buy-out of credit card unit
Mitsubishi UFJ Nicos, valuing the credit firm at an 8 percent
discount.

Mitsubishi UFJ said in April it would acquire
half of the Japan Airlines (JAL) credit card unit, as it looks to
bolster its position against rival Sumitomo Mitsui Financial Group.
MUFG said in a statement it will offer 0.37 share for each share of
Mitsubishi UFJ Nicos.

• Global industrial giant GE
expects to choose a buyer next month for its Japanese consumer loan
business, according to GE CEO Jeff Immelt. Japanese mid-sized
lender Shinsei Bank is tipped as a favourite to buy the business,
ahead of consumer finance lender Acom.

GE has been looking to sell the business for
about a year as tighter government regulation has squeezed profits
across Japan’s consumer finance industry.

• China’s Bank of
Communications (BoComm) has launched a platinum credit
card in Shanghai, becoming the latest domestic lender to target
higher-end customers amid intensified market competition.

The card, with a maximum credit limit of
CNY50,000 ($7,200), is designed to attract business elites who
prefer to seek specially customised services, and is the first of
its kind in China, said Xu Han, deputy CEO of Pacific Credit Card
Center.

The new card is also backed by HSBC, which has
just over 19 percent of Bank of Communications as the
second-biggest shareholder.

BoComm had issued more than 6 million credit
cards by the end of first quarter this year. It entered the
business in 2005 and is now ranked fifth-largest in China. The
bank’s credit card business has increased by 150 to 200 percent
over the past few years, and is likely to rise further, said
Xu.

• Bank of East Asia has linked
with China UnionPay (CUP),
becoming the first overseas lender to issue CNY-backed debit cards
on the Chinese mainland.

The bank also plans to issue CNY credit cards
on the mainland this year after gaining regulatory approval, Bank
of East Asia chairman David Li said.

BEA’s CNY debits cards can be used on the
mainland’s 800,000 merchants with CUP point of sale machines, with
CUP’s designated merchants in 29 overseas countries and regions,
and in CUP’s ATMs in 48 overseas countries and regions. Li said he
would be “disappointed” if BEA didn’t issue more than 1 million
debit cards by the end of 2008.

• Bank of America plans to
raise its stake in China Construction Bank (CCB)
to nearly 11 percent after exercising an option to buy more common
shares in CCB. The option would be exercised under the terms of
agreement when it first invested in CCB in June 2005, when Bank of
America bought a 9 percent stake in the bank in a $3 billion
deal.

Since 2005, the two banks have launched several
partnership projects, including a leasing business in Beijing and
no-fee cash withdrawals from Bank of America’s ATM machines in
China.

• China UnionPay (CUP) has
provided point of sale machines to temporary merchants to help
smooth the use of bank cards in earthquake-hit areas in Sichuan
Province in China. Merchants have set up temporary shops in areas
in the province, which was hit by an 8.0-magnitude quake on 12
May.

The country’s sole bank card system operator
has also tied up with rural cooperatives and post offices, which
accept cash deposits, in the areas to improve bank card services
for rural workers to ensure they can withdraw cash conveniently
when they return home. CUP will also quicken the re-issuing of bank
cards for quake survivors who lost theirs or deposit receipts
during the quake.

• ICICI Bank Sri Lanka plans
to launch a card-based remittance product to provide a convenient
alternative to receive remittances. The product will be available
in the third quarter (July to September 2008) in the current
financial year.

The remittance card is a Sri Lankan
rupee-denominated card. It is reloadable for funding and can be
used to withdraw money at over 1,000 Visa affiliated ATMs in Sri
Lanka at no additional charge and merchant establishments in Sri
Lanka. Only remittance-linked credits are permissible in the
remittance card account.

• The State Bank of Vietnam
has connected two of Vietnam’s card payment systems for cashless
payment transactions.

The Vietnam National Financial Switching Joint
Stock (Banknetvn) and the Smartlink alliances conducted the card
system integration. The Banknetvn-Smartlink card payment system
includes the Bank for Foreign Trade of Vietnam, the Bank for
Agriculture and Rural Development of Vietnam, the Bank for
Investment and Development of Vietnam, the Industrial and
Commercial Bank of Vietnam and Techcombank.

As a result of the connection of the two ATM
card alliances, clients of one member bank are able to use their
cards at all ATMs of the four others. By March 2008, the banks had
issued 8.6 million cards, accounting for 80 percent of the
country’s payment cards market.

• ATM manufacturer NCR has
announced the renewal of its ATM managed services contract with
HDFC Bank of India. The new 42-month deal sees NCR
overseeing more than 2,000 NCR and non-NCR ATMs for the bank, and
expands on a prior three-year managed services contract.

HDFC also has signed an additional order for
300 new ATMs. This order is in line with HDFC Bank’s expansion
strategy in India.

• Australia’s ANZ banking
group has appointed heads for its Indian and Taiwan operations,
underlining its push into Asia. ANZ has appointed Andrew Leong as
its chief executive officer in Taiwan, where he will contribute to
the bank’s Greater China strategy.

Leong joins from Standard Chartered Bank, where
he was recently head of global markets and co-head of Wholesale
Bank in Shanghai. Subhas DeGamia will lead its operations in India
and will drive ANZ’s long-term strategy to become a leading foreign
bank in India. DeGamia has been with ANZ since 1999.

• Australia’s St.George Bank
and Westpac have announced that, following the
successful completion of due diligence by both organisations, they
have signed a merger implementation agreement.

Westpac chairman Ted Evans said: “The merger of
Westpac and St.George will ultimately deliver improved customer
service with strong brand support, enhanced returns for
shareholders and a strong commitment to community
initiatives.

“The combination of both organisations’
strengths and leading customer advocacy will create a compelling
proposition for all stakeholders.”

Europe, Middle East, Africa
 
UK merchant acquirer Barclaycard Business has
announced its entry into the Irish card processing market. “We are
delighted to announce our entry into the Irish market. Barclaycard
Business is offering Irish customers something more than secure
card processing – we are offering a complete service with full
commitment to the customer,” said Steve Lappin, Ireland country
manager at Barclaycard Business. According to a recent Irish
Payment Services Organisation report, the number of Irish
Laser/Maestro cards issued in 2007 climbed by 56 percent.

• Turkey’s Yapi Kredi Bank’s
first quarter 2008 results show that credit cards recorded a 16
percent increase in revenue growth from the year-ago period, with
card numbers rising from 6.4 million in the year-ago period to 6.9
million, a 9 percent increase. According to Yapi Kredi, improved
and sustained revenue growth is being driven by an improved
revolving ratio, better spread generation and repricing on fees and
commissions. The bank says it has been selling about 332,000 new
World Cards which were issued in the first quarter of 2008, and the
bank has a target of 1.3 million yearly new World cards issued by
year end.

• French consumer finance firm
Finaref, part of Cetelem, has launched a new
financing ‘click and buy’ solution for its retail partners,
allowing customers to buy a product online and pay for it later.
The first partner to try out the new ‘click’n’buy’ service is La
Redoute, France’s leading multi-product online merchant. Since the
1990s, Finaref has been pre-scoring La Redoute customers to offer
them a ‘Kangaroo’ credit card by phone when they place their online
order. Now Finaref is offering this immediate financing solution
for purchases made through an online account, enabling all the
retailer’s customers – including those who do not have a Kangaroo
card – to buy now and pay later. The customer signs the contract
that arrives with the goods. After acceptance by Finaref, he or she
will receive a Kangaroo card and gain access to all the related
services.

• Global payment processor First
Data is now directly offering a solution to address
merchant needs in Austria with the launch of its ‘FirstPOS’ card
acceptance package. “With FirstPOS we enter a new era,” said Karin
Skarek, managing director of First Data in Austria. “Because First
Data processes about 430 million card payments a year, manages
about 87,000 point of sale terminals and 7,600 ATMs in Austria, we
have decades of knowledge in this market,” said Skarek. FirstPOS
incorporates a choice of merchant terminals compliant with upcoming
EU regulations; acceptance of the full suite of current cards via
various acquirers, and a flat rate monthly fee that includes all
technical services and which is customisable to the merchant’s
individual needs.

• Poland’s Citibank Handlowy
says that the number of Citibank-BP Credit Cards issued now exceeds
200,000. In the first quarter of 2008 Citi Handlowy acquired almost
68,000 new Citibank credit cards. As a result, the number of
Citibank credit cards issued by the bank exceeds 866,000.
Co-branded credit cards play a key role in customer acquisition –
83 percent of the new cardholders chose one of the Bank’s
co-branded credit cards: Citibank-Plus, Citibank-BP, Citibank-Elle
or Citibank-LOT.

• Tanzania’s CRDB Bank has
sealed a deal with the Tanzania Electricity Supply
Company (Tanesco) which will enable customers of the power
utility company pay their bills through the bank. Tanesco customers
in Tanzania can now pay their electricity bills with CRDB bank
cards following the launching of the service in Dar es Salaam.
Tanesco customers will be able to pay electricity bills through
‘Tembo’ cards regularly used by the bank’s customers, while
non-CRDB bank Tanesco clients will pay their bills to bank
cashiers. Tanesco is also working to facilitate online bill
payments through the internet, while preparing a customer service
charter that will enable customers to make claims on damage or
undelivered services, on the basis of the charter.

• United Bank for Africa, West
Africa’s largest banking group, has linked up with English Premier
League soccer outfit Arsenal to issue co-branded
credit and debit cards. The strategic partnership deal, Arsenal’s
first in Africa, supports United Bank’s attempts to increase the
use of electronic banking products in its core African markets of
Nigeria, Ghana, Uganda, Cameroon and the Cayman Islands.

• Israel’s Ariav committee is considering a
differential separation of credit cards from the country’s main
banks and giving affirmative action to mid-sized banks. If the
committee decides on the divestment, Bank Leumi
will have to sell its controlling interest in Leumi Card and
Bank Hapoalim will have to do the same for
Isracard. However, Israel Discount Bank and First International
Bank of Israel will be allowed to continue controlling Israel
Credit Cards-Cal (ICC-Cal). Israel’s Ministry of Finance believes
that removing the banks’ control from the credit card companies
will enable the companies’ buyers, such as insurance companies, to
create competition against the banks in the consumer credit market,
and make more credit available. Currently, credit card companies
provide 2.3 percent of consumer credit in Israel.

• Dubai First, the consumer
finance company from Dubai Group, a member of Dubai Holding, has
launched a business credit card for the region’s burgeoning small
and medium enterprises (SME). Launched in association with Visa,
the card’s purpose is in line with the stated aims of the
government of Dubai which has repeatedly highlighted the role of
the SME sector as an engine for the growth of the economy.

• Barclays Bank has announced
a Barclaycard anniversary promotion to mark its first successful
year in the United Arab Emirates (UAE). Under the anniversary
offering, customers applying for a Barclaycard will be given a
complimentary du Monthly Plan SIM card with free talk time worth
AED280 ($76) and up to 3 months waiver of monthly fee on the du SIM
card, taking the value of the anniversary offer to AED495. The
offer is valid on approved applications for Priority and Prestige
Barclaycards as well as the newly released Barclays Premier
League-branded MasterCard.

• Global industrial giant GE
says that its GE Money and Commercial
Finance units will sell some of its European operations
and its card and auto businesses in the UK for about €1 billion
($1.55 billion) to Spain’s Banco Santander.

As part of the agreement, GE Commercial Finance
will acquire Banco Santander’s Interbanca for about €1 billion. GE
and Banco Santander expect the deal to close early in the fourth
quarter of 2008. Confirmation of the deal comes after the two
companies reached a preliminary, non-binding agreement at the end
of March in which Santander agreed to acquire GE Money’s businesses
in Germany, Finland and Austria and the card and auto operations in
the UK. GE said the final agreement also includes the sale of GE
Money’s card business in Ireland.

Latin America 

• Brazilian banks are in the middle of mass EMV card roll-out,
motivated by a desire to cut fraud, according to Kim Hangoc, Latin
America vice-president of product management at
MasterCard’s chip centre of excellence. Hangoc
told the Smart Card Alliance and CTST conference in Orlando,
Florida in May that in Mexico, the main motivation for EMV roll-out
is not fraud but differentiation from non-EMV compliant issuers.
Brazilian EMV card issuers require a PIN for both debit and credit
card purchases, but in Mexico PIN entry is not required.

• A study by Brazilian banking association
Febraban says the number of ‘simplified’ bank
accounts (contas simplificadas), designed for people on low
incomes, rose by 12.2 percent year-on-year in 2007 to 7.6 million.
The total number of current accounts in Brazil rose by 9.3 percent
in 2007 to 112 million. Febraban says that there were 93 million
credit cards in Brazil at the end of 2007. Credit card transaction
volumes rose to 2.4 billion in 2007 from 2 billion in 2006.

• Skimming and cloned card fraud grew at a 43.5
percent compound annual growth rate in Brazil between 2004 and
2006, according to Mario Mello, executive superintendent of cards
at Brazil’s Banco Real ABN Amro. Speaking at the
Smart Card Alliance and CTST conference, he said Banco Real has
issued 2 million EMV-based bankcards and plans to double that
number in 2008.

• Bolivia’s Banco Bisa has
launched the Bisa Movil cellphone banking service. Bisa Movil uses
SMS text messaging to transmit customer transactions to the bank
for authorisation. The service is compatible with all the cellphone
networks in operation in Bolivia. It offers transfers between the
customer’s accounts, transfers to third-parties, and reloading of
cellphone prepaid airtime accounts. To register, Banco Bisa
customers need to enter their debit card number on the Bisa Movil
Website.

• Mexico’s Banorte has issued
700,000 EMV credit cards out of a total of 1.3 million cards, and
has equipped 30,400 of its 33,700 merchant POS terminals with chip
card readers, according to Carlos Avila, the bank’s Operations
Executive Director. The rest of the merchant terminals will be
upgraded by the end of 2008.

• Citi has donated $11.2
million through its Citi Foundation to microfinance programmes in
developing countries, including programmes designed to help the
unbanked in Central America.

• Gemalto has won a contract
to supply electronic driver’s licence cards to three additional
Mexican states, in cooperation with local systems integrator
Cosmocolor. The two companies worked together to implement the
first Mexican electronic driving license card in Nuevo León State
in January 2007. They are now collaborating to roll out cards to
drivers in the States of Mexico, Veracruz and Sonora. Mexico’s
e-driver’s licence is recognised as proof of identity for services
such as cashing a cheque, opening a bank account or getting credit,
Gemalto says. The driver’s identification data is read from the
smart card directly on to a PC, using a chip card reader.

• Mexican retailer Grupo
Elektra says its Banco Azteca Mexico subsidiary’s gross
credit portfolio rose by 4 percent to MXN22.6 billion ($2.2
billion) in the first quarter of 2008 ending 31 March from MXN21.69
billion a year earlier. At the end of the first quarter of 2008,
the bank had 8.3 million active accounts, up 19 percent
year-on-year. Its credit portfolio includes consumer loans,
personal loans and Tarjeta Azteca credit card lending.

• HSBC Bank Brazil has used
file transfer software from US-based Sterling Commerce to cut the
time taken for its business electronic banking customers to receive
payment for receivables submitted to the bank. Sterling Commerce
says the average time taken has fallen from 7 hours 40 seconds to
3.1 minutes, enabling customers to receive payments in real-time.
In Brazil, it is common for merchants to be paid with pre-dated
cheques or through credit card installment payments. A merchant can
exchange these receivables with their bank for immediate payment,
minus a fee.

• MasterCard has launched its
‘Global Premium Collection 2008’ initiative in Mexico, offering
rewards and “special experiences” to Mexican cardholders who use
their Platinum MasterCards. Mexican hotels taking part in the
rewards programme include Hoteles Boutique de México, Hotel Playa
del Carmen Acanto and Marquis los Cabos.

• Smart card vendor Sagem
Orga’s Brazilian unit has appointed Carlos Henrique Airam
as its operations manager. Fernando Ulbrich has been hired to
coordinate the firm’s technical support for the telecoms, banking,
healthcare, and ID card sectors.

• Scotiabank says it plans to
expand its Latin American and Caribbean banking division’s credit
card offering to provide better value to customers. It will launch
an Aero Platinum Visa card with a proprietary travel rewards
programme in Trinidad, and a MasterCard Black card for its
private-client customers in the Bahamas and Cayman Islands. Also,
Scotiabank’s joint venture in Mexico aimed at the consumer finance
segment will launch a Global card.

• Scotiabank Mexico says in
the first quarter of 2008 to 31 March its credit lending and other
unsecured personal loans rose by 14 percent year-on-year to MXN19.9
billion ($1.92 billion).

• Scotiabank Peru has taken a
100 percent stake in Banco del Trabajo, a Peruvian
bank owned by Chile’s Grupo Altas Cumbres. No financial terms were
disclosed for the purchase, which requires regulatory approval.
Banco del Trabajo is the ninth largest commercial bank in Peru,
with 132 points of sale and assets of $430 million at 31 December
2007.

The merger of Scotiabank Peru’s consumer
finance operations with Banco del Trabajo will make Scotiabank Peru
the number one bank in the Peruvian consumer finance segment and
number two in micro-lending, Scotiabank says. The deal also
includes an exclusive co-branding arrangement with upscale Peruvian
mall Jockey Plaza.

• Florida-based remittance services
TransferOrbit has launched ‘alBanco’ (‘to the
bank’), a technology platform that enables US banks to offer money
transfer services to Hispanic customers. alBanco allows consumers
to make money transfers to Latin America and to pay bills via their
cell phones, bank tellers, ATMs or merchants affiliated with a
bank. TransferOrbit has 17,000 money transfer agents across Latin
America.

• Guilherme Blumenthal has been named COO and
chief payments risk officer at Visanet Brasil, the
Visa acquirer in Brazil. He was previously executive vice-president
of global sales and operations at Hypercom.

North America

• Nine out of 10 US adults who responded to a First
Data survey said they gave or received gift cards in the
previous 12 months, while 60 percent said they did both. The poll
of 2,182 adults was carried out in September 2007 for First Data’s
2007 US Gift Card Consumer Insights Survey. Some 68 percent of gift
card purchasers bought a gift card as a birthday present, and 61
percent bought a gift card as a Christmas present. First Data says
88 percent of gift card purchasers bought more than one gift
card.

• Mintel Comperemedia says the
estimated number of direct mailings sent from US credit card
issuers fell 14 percent between the fourth quarter of 2007 and the
first quarter of 2008 from 3 billion offers to 2.6 billion. Three
of 2007’s top five US credit card mailers, Chase, Bank of America
and HSBC, reduced their direct mail by over 15 percent during the
first quarter of 2008.

• Canadian consumers are unprepared for either
an economic downturn or an adverse change in their circumstances, a
poll by RBC Royal Bank of Canada reveals. Only 22
percent of Canadians are increasing their savings and only 49
percent have emergency funds available. Instead, 65 percent of
respondents consider their line of credit and credit cards to be
their back-up in case of an emergency. Some 34 percent of Canadians
spend all of their monthly pay cheque on living expenses.

• Taxpayers in Pennsylvania set a record this
year for filing their 2007 state tax returns electronically, says
the Pennsylvania Department of Revenue. The 3.2
million people (55 percent of all individual taxpayers) who filed
their taxes electronically were also able to receive refunds into
their accounts. In the first five months of 2008, 619,500 taxpayers
chose to deposit refunds directly into their accounts; 235,300 paid
taxes via the automated clearing house system; and 24,300 paid
taxes by credit card.

• An international gang has been charged in Los
Angeles, California and New Haven, Connecticut with using phishing
emails to commit computer fraud and card fraud on the web. The
gang, which was masterminded from Romania, had members in Canada,
Pakistan and Portugal. Members face sentences of up to 30 years for
defrauding individuals and financial institutions, which included
Citibank, Capital One, JPMorgan Chase, Comerica, Wells Fargo, eBay
and PayPal.

• AirTran Airways is promoting
Bill Me Later payments on its website. Customers who use the
facility to pay for their tickets receive a $10 discount and do not
have to pay for 90 days. By selecting the Bill Me Later option,
consumers can pay online without providing credit card
information.

• Bank of America has named
Bruce Hammonds as president of the bank’s Credit Card and Unsecured
Lending unit, which includes US and European consumer and business
credit cards and unsecured lending. Hammonds is based in
Wilmington, Delaware.

• Kevin Sullivan has been named managing
director of communications at Barclaycard US. He
previously worked as senior director of strategic alliances at
Barclaycard US and at JPMorgan Chase’s Card Services unit.

• US retailer LL Bean has
decided to discontinue its relationship with Bank of America, the
issuer of the LL Bean Visa credit card, with effect from 30 June
2008. The US retailer did not disclose the name of the issuer which
will provide the new LL Bean Visa card. It says existing
cardholders will be invited to apply for the new card.

• Capital One is going
contactless in Canada. The issuer is adding PayPass technology to
all its Canadian magnetic-stripe MasterCard credit cards.

• Chase Card Services has
launched a Spanish-language website in the US. The Claro y Simple
site (http://www.chaseclaroysimple.com/)
includes tools and resources to help Hispanics manage their credit
card accounts. Customers can select their own payment due dates,
commission cheques, and caps on credit lines. They can also protect
themselves against over-limit fees by choosing to have transactions
declined that would cause their account to exceed its limit.

• An employee of Coinstar is
alleged to have stolen $450,000 from the firm’s grocery store
coin-counting kiosks in three US states, court documents reveal.
Coinstar operates a network of kiosks that convert coins into
prepaid debit, gift and phone cards as well as shopping
vouchers.

The documents allege that Michael Burns wore a
Coinstar uniform when he entered grocery stores and used his
knowledge of Coinstar security codes to break into the kiosks. He
has been charged with first-degree theft in Everett District Court
in Everett, Washington. A Coinstar spokesperson says in May 2008
“law enforcement authorities arrested several individuals for theft
involving paper currency from Coinstar kiosks”.

• French contactless chip vendor Inside
Contactless has joined the Canadian smart card industry
association Advanced Card Technologies (ACT)
Canada. In the last six months, Inside Contactless has supplied 5
million MicroPass contactless payment chips for MasterCard PayPass
deployments worldwide. The firm plans to play a major role in the
Canadian contactless chip market.

“Canada is in the middle of a major EMV
migration, creating what we think will be a substantial market
opportunity for dual-interface cards later this year, and we are
preparing to support the Canadian market,” Inside Contactless
executive vice-president of payments Charles Walton said.

• JPMorgan has published a
report to help companies manage their procurement card spending.
The report, Auditing and Compliance Strategies for a Solid
Purchasing Card Program, includes tips from top US companies such
as Starbucks, Chevron and Monsanto. Regular monitoring of spending,
peer reviews and training as well as external and internal audits
are some of the strategies used by these firms to avoid card misuse
and out-of-policy spending.

• MasterCard is testing near
field communication-enabled cellphones with PayPass capability on
Canadian telco Bell Mobility’s wireless network. During the
four-month trial, participants will be able to use PayPass-enabled
cellphones to make purchases at any Canadian merchant which accepts
PayPass.

• Money Movers of America
(MMOA), an independent services organisation partner of Chase
Paymentech Solutions, has launched a charitable giving arm called
Process Pink to raise funds for the National Breast Cancer
Foundation (NBCF).

With help from Chase Paymentech, each time
consumers make a credit card purchase at a participating merchant,
a portion of MMOA’s processing fee is donated to the NBCF. The
arrangement allows for MMOA and its merchant clients to advertise
their support for the NBCF.