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• Japan’s Shinsei Bank has
announced that it will be offering a new unsecured card loan
service designed to offer the bank’s account holders the
flexibility to meet temporary expenses. Shinsei PowerFlex yen
savings account holders can apply for a SmartCard loan via
Shinsei’s PowerDirect internet banking service and have the funds
deposited directly to their account. Customers will be allowed to
borrow up to an aggregate maximum of between ¥500,000 ($4,622) and
¥5,000,000, based on the results of a credit check.

Once the funds are deposited into an account,
customers can withdraw them from an ATM using their PowerFlex cash
card free of charge. They can also transfer the funds
commission-free to an account at another bank. Customers may repay
the loan by monthly direct debit and can also make top-up
repayments commission-free 24 hours a day 365 days a year using
Shinsei PowerDirect.

• Standard Chartered Bank has
joined forces with Tata AIG General Insurance to
provide risk cover for lost or stolen cards in India that will
protect consumers from fraudulent transactions. The Plus Extended
Protection Plan covers ATM assault and robbery insurance, lost
wallet protection, purchase protection and home protection, and
will be valid for any fraudulent transaction on a card up to 12
hours prior to the customer reporting the loss. In the event of
fraud, customers would receive a reimbursement up to INR50,000
($1,166) per occurrence.

“People are moving away from conventional modes
of payment and a large number are opting for cards. This product
seeks to encourage the confidence of the people who use credit
cards,” said Gaurav Garg, managing director of Tata AIG General
Insurance.

• Singapore’s United Overseas
Bank (UOB) has announced plans to double its credit card
member base in Asia to 5 million by 2013. The bank is already
targeting a 20 percent growth in card business with the unveiling
of its new UOB Preferred Platinum card for high net worth
individuals alongside other product launches this year. This
expansion is forecasted to happen in Malaysia, Thailand and
Indonesia. UOB has already rolled out a regional credit card
programme in Malaysia and Singapore and it expects to introduce the
programme to Thailand and Indonesia by 2009. Currently, there are
more than 2.5 million UOB credit cards in circulation in Asia,
primarily in Singapore, Malaysia, Indonesia and Thailand.

• Malaysia’s Hong Leong Bank
(HLB) has announced a strategic partnership with the Associated
Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM)
alongside the launch of a new card targeted at ACCCIM members who
seek business networking opportunities and value-for-money added
features in a credit card. On the back of this, the bank is
expecting to issue 20,000 Hong Leong ACCCIM credit cards under the
Visa brand within a year. Benefits of the card include an annual
fee waiver for the first three years, consolidated year-end
statement, preapproved trading lines for Hong Leong E-broking and a
free ‘Touch N Go Zing’ Visa card for principal cardholders.

• China’s Shenzhen Development
Bank (SDB) says its unaudited net profit in the first half
of 2008 may rise between 85 and 95 percent from a year earlier. Net
profit was forecast to jump to between CNY2.08 billion and CNY2.19
billion ($302 million to $318 million) in the six months ending 30
June, the bank said. The rapid growth is being driven by the
expansion of loans and intermediate services, wider interest
margin, declines in non-performing loans (NPL) and corporate income
tax rates. Bad loans dropped by CNY500 million from the previous
quarter, driving the NPL ratio down 0.5 percentage points. In the
first quarter of 2008, SDB saw net profit soar 88 percent to
CNY1.004 billion.

• Singapore-based communications provider
StarHub has signed a Memorandum of Understanding
with NTT DoCoMo, Japan’s leading mobile
communications provider, to develop a mobile wallet concept similar
to Japan’s renowned Osaifu-Keitai wallet solution for a near-future
implementation in Singapore. Singapore is the first market outside
of Japan to commence an official study and eventual pilot of this
service.

• Macau’s credit card turnover for the first
quarter of 2008 reached MOP1.5 billion ($188 million), a slight
increase of 0.6 percent over the previous quarter, according to the
figures from the Monetary Authority of Macau. Cash
advance turnover amounted to MOP100 million, 8.2 percent of the
total credit card turnover, and credit card repayments grew by 11.2
percent from the previous quarter to MOP1.6 billion.

• Australian credit card spending grew at its
slowest pace in more than a decade in April, according to the
latest statistics from the Reserve Bank of
Australia. Australian consumers are increasingly
struggling with high interest rates and the rising cost of fuel and
food.

Australians spent A$17.66 billion ($16.77
billion) on their credit and charge cards in April, up 3 percent
from A$17.14 billion in March, figures from the Reserve Bank of
Australia show. Total credit and charge card balances outstanding
increased by 1.4 percent in April to A$43.64 billion, from A$43.04
billion. The average credit card balance was $3,085 in April, up
from $3,056 the previous month.

• Standard Chartered Bank of
Brunei has announced its partnership with Royal
Brunei Airlines to introduce the Royal Skies Loyalty
programme to its credit card rewards programme. From now until 31
August 2008, Standard Chartered Bank credit card members can enjoy
free holidays by converting every reward point into air miles under
the Royal Skies programme.

Special bonus miles are available for Platinum
card members, Gold card members and Classic card members. All card
members who convert their points to Royal Skies air miles from now
until August will be entitled to fly for free with Royal Brunei
Airlines prize draws to destinations including London, Dubai,
Australia, New Zealand, Hong Kong Singapore and Bangkok. In
conjunction with the launch, all purchases made overseas using
Standard Chartered Bank credit cards will enable card members to
earn twice the reward points.

• State-owned Punjab National
Bank (PNB) is likely to launch its credit card business in
the second half of this fiscal year, and would enter into an
agreement with Visa or MasterCard for the venture, according to a
senior level spokesperson for the bank. PNB is also intending to
set up a subsidiary in Canada as well as a representative office in
Singapore besides upgrading its existing representative office in
Dubai.

“We expect the credit card business to get
operational in a period of six months and would tie up with Visa or
MasterCard for the business. We have finalised the business
strategy for the proposed card business,” said PNB executive
director JM Garg.

Europe, Middle East, Africa

• Gulf Bank, Kuwait’s second largest commercial
bank, has announced that its cardholders can now get complimentary
unlimited access to business lounges across the globe. The Airport
Lounge Access scheme is available on all Gulf Bank MasterCard and
Visa credit cards, and allows every cardholder entry for up to two
people, the cardholder and a guest, by presenting the card at the
entrance of the lounge. Some of the lounges accessible to Gulf
Bank’s credit card customers include Beirut, Cairo, London, Paris,
Amsterdam, Milan, Geneva, Frankfurt, Kuala Lumpur, Bangkok, Mumbai,
Maldives and New York.

• Israeli credit card company
ICC-CAL and German airline
Lufthansa have joined forces to launch a credit
card for Israeli customers that will award them airline miles from
Miles & More, Lufthansa’s frequent flyer programme. Customers
who purchase the MasterCard branded Miles & More credit card
from ICC-CAL will earn miles from Lufthansa with each purchase, in
addition to a 3,000 mile bonus with the purchase of the card.
Customers will also earn more miles when buying from CAL-partner
businesses. The Miles & More programme has 165,000 customers at
present. The card will be available with both Gold and Platinum
options.

• The latest MasterCard
Worldwide Index of Consumer Confidence findings for the
second half of 2008 for key markets across South Asia, Middle East
and Africa (SAMEA) has found that credit cards are gradually
becoming more popular in Saudi Arabia. Banks in the Kingdom are now
better informed about credit cards, and are trying to enter
different segments of the market including women, affluent
customers and extremely high net worth individuals, according to
Shaun Rashid, senior business leader at MasterCard Worldwide. “It
is most likely that during the next two to three years around 50
percent of the Saudi bankable consumers will be issued with one or
the other brands of credit cards,” said Rashid, adding that the
country has yet to attain a credit card culture while banks are
jockeying to get their share of the market.

• Financial criminals are exploiting a loophole
in a payment verification system used by e-retailers in order to
steal goods, according to UK fraud protection specialists
The 3rd Man. The company says it has spotted a
flaw with the address verification system (AVS), which is used by
credit card companies and banks to verify the identity of
cardholders, when monitoring transactions for a retailer. AVS
checks the billing address of the credit card with the one on file,
matching the house number and postcode for each card issued, and is
therefore popular with e-commerce outfits. However, fraudsters are
now finding alternative addresses that have the same house number
and digits in a different post code, tricking AVS into thinking it
is the same place.

• Network International, the
largest payment service provider of credit and debit cards in the
United Arab Emirates (UAE), has announced that it will be handling
the majority of the payment processing for Al Hilal
Bank, including debit card management, ATM switching and
an integrated credit card management system, as well as offering a
transaction switching and clearing service for the bank.

• Figures from UK payments association
APACS show that card-not-present fraud (CNP) rose
by 37 percent to £290.5 million ($569.2 million) during 2007 and
now accounts for more than half of all industry losses from card
fraud. Overall CNP fraud losses rose by 122 percent between 2001
and 2006, but over the same period the total value of online
shopping transactions increased by 358 percent.

• Dubai-based Emirates NBD has
announced a joint initiative with UAE telecoms provider
Etisalat to pilot a revolutionary contactless
technology using mobile near field communication (NFC), enabling
Emirates Bank and National Bank of
Dubai customers to make low value payments using their
mobile phones – the first pilot of its kind in the region. “Our
partnership with Etisalat is the perfect union to test this
contactless technology and will inevitably transform banking as we
know it today, as both organisations are leaders in their game and
hence, are fully equipped for such a bold innovation,” said Jamal
Bin Ghalaita, Emirates NBD general manager of consumer banking and
wealth management.

• American Express has
recently launched its new Corporate Travel Account (CTA) service
across the Middle East region on a staggered schedule. The CTA will
be a cardless solution that will aid companies in streamlining
their spending by providing greater transparency on their travel
expenses, helping them to identify important opportunities for
savings. “As a virtual solution, CTA enables the billing of air
travel expenses through a centralised account lodged with travel
agencies,” said Amex consultant Mark Turner, adding that the
descriptive billing statements provided by Amex to companies would
provide enhanced data to assist them in monitoring and analysing
expenditure.

• UK-based Nationwide Building
Society has announced details of a change to its credit
card range – it will no longer be offering a Comic Relief credit
card to new customers. However, Nationwide will remain a supporter
of the Comic Relief charity and will continue to fundraise for its
events. The Society donated £3.8 million to a wide range of
charitable and community initiatives in the last financial year,
and is planning to donate a further £7.8 million this financial
year.

• The European Union (EU) is
set to introduce new rules that will crack down on e-commerce
companies that conduct business across member states but force
customers to make purchases on country-specific websites. EU
consumer chief Meglena Kuneva is planning to clamp down on
companies that impose geographical restrictions on shoppers. In a
speech given in London, Kuneva said she will propose new
legislation later in 2008 for creating an EU-wide set of rules
governing online and in-store transactions. The “single, simple set
of core rights and obligations” will make it easier to buy and sell
across borders and bring down costs for shoppers.

• Dutch supermarket chain Albert
Heijn is teaming with European payments processor
Equens to test fingerprint scanning technology as
an alternative to card and cash payments at the POS. Shoppers
participating in the new service, called Tip2Pay, will be able pay
for purchases by placing their fingertips on a reader at the POS.
The payments will then be processed by Equens. Customers who want
to use the technology will need to provide proof of identification
and a debit card before having their fingerprints scanned, says
Equens. Customers’ names, addresses, bank account numbers and
loyalty card details will then be registered in accordance with
Netherlands privacy laws. Albert Heijn and Equens are conducting
the six month biometric payments pilot in consultation with
biometric specialists IT-Werke, which has implemented the
technology at German supermarket chain Edeka

Latin America

• An Economist Intelligence Unit (EIU) survey of
global bank executives has found that, despite recent financial
turmoil, Latin America’s banking industry is set to attract
increased levels of investment. The EIU study was sponsored by
MasterCard. It says a large majority of respondents expect a
greater share of their bank’s revenue to come from Latin America in
the next five years. A third of respondents said they expect their
investment in their Latin American payment cards operation to rise
by 5 percent in the next five years, while 17 percent said it will
rise by 1 percent to 5 percent. The EIU says 12 percent of all
respondents expect the greatest increase in competition in Latin
American banking to come in consumer finance and cards, while 27
percent expect the greatest increase to come in retail
banking.

• By 2015, there could be 324 million
general-purpose prepaid cards in issue among unbanked Latin
American consumers, a study by NovoPayment
predicts. The Miami, Florida and Caracas, Venezuela-based firm
issues prepaid cards for unbanked Latin Americans. By 2015, annual
general-purpose prepaid card spending by unbanked Latin American
consumers could reach $214 billion a year, NovoPayment says. The
study covers 15 Latin American countries including Argentina,
Chile, Colombia and Venezuela. It says Brazil, followed by Mexico,
will be the biggest general-purpose prepaid card market in the
region by 2015. There will be 109.9 million general-purpose prepaid
cards in Brazil by 2015, compared to 64 million in Mexico.

• Total Brazilian credit card billings for the
first six months of 2008 will amount to BRL101.6 billion ($63.14
billion), Banco Itaú predicts. This figure is more
than the total BRL46.7 billion worth of Brazilian credit card
billings in 2004, it says. In June 2008 alone, total credit card
billings are expected to be BRL17.6 billion, down from BRL18.4
billion in May 2008. A key factor in the expansion of the Brazilian
credit card market is the growing use of cards by people on
low-incomes, which Itaú defines as being under BRL1,499 a month.
Between 2003 and 2008, the amount of low-income credit card
billings rose by 142 percent, Itaú estimates.

• UK-based EMV software firm
Aconite has opened a Latin American regional sales
office in São Paulo, Brazil. The office will be managed by Rafael
Marinho, formerly commercial director of Brazilian cards
consultancy Omnia Consultoria e Servicos. Aconite recently signed
partnership deals with several Latin American smart card companies,
including Genia Tecnologia in Brazil, ipsgroup in Argentina and
Vilsa in Mexico (see CI 397, CI 399).

• Colombia’s Banco de Bogota
has expanded the number of ATMs connected to the country’s RED
ATH(A Toda Hora) ATM network to 2,008 ATMs. The bank has also
launched an m-banking service enabling its customers to transfer
funds, pay bills and check balances via cellphone. Its branch
network has now been expanded to 688 branches across
Colombia.

• Brazil’s Banco Itaú has
launched a new logo for its Argentine operation along with a
publicity campaign with the slogan ‘Proud To Be Your Bank’. Itaú
has spent US$10 million on the new logo and the ad campaign. It has
launched a website (http://www.orgullosos.com.ar/)
as part of the campaign. Itaú plans to expand its branch network in
Argentina over the next three years. It currently has 26 branches
and 200 ATMs in the country.

• Brazil’s Bradesco says its
consumer credit card loan portfolio fell to BRL8.19 billion ($5.10
billion) in the first quarter of 2008 from BRL8.28 billion in the
fourth quarter of 2007. In the first quarter of 2007, the portfolio
stood at BRL6.11 billion. Bradesco’s corporate credit card loan
portfolio rose to BRL4.51 billion in the first quarter of 2008 from
BRL4.26 billion in the fourth quarter of 2007 and BRL3.01 billion
in the first quarter of 2007. Its total cards fee income fell to
BRL677 million in the first quarter of 2008 from BRL688 million in
the fourth quarter of 2007. Total card fee income was BRL557
million in the first quarter of 2007.

• US prepaid card processor
InComm is distributing across North America the
Poni card, a remittance card that allows funds to be sent instantly
to Mexico. The card, which is denominated in Mexican pesos, was
created by American Cash Exchange. InComm was bought by First Data
in April 2008. US residents wanting to send money to Mexico can buy
a Poni card and place a maximum of MXN2,000 ($193) on it. They then
phone the recipient to give them the PIN printed on the front of
the card. The recipient picks up a Poni cash card at a convenience
store and activates it by entering the PIN at a POS terminal. They
can then use the card, which can be reloaded by the remittance
sender, to withdraw cash at a Mexican ATM.

• NovoPayment will shortly
launch a prepaid card operation in Peru, CEO Anabel Perez tells CI.
Currently, it only provides prepaid cards in Venezuela (see CI
399). It will also launch an operation in a third Latin American
country in the fourth quarter of 2008 or the first quarter of 2009.
Although the firm does all its processing at its Miami office, it
doesn’t offer prepaid cards in the US.

“Our US office gives us access to all the
telcos in the Latin American region,” Perez says. “We partner with
telcos to offer their subscribers branded prepaid cards carrying a
Visa or MasterCard logo that can be used to top up their prepaid
phone accounts, for shopping, or paying utility bills.”

Most Latin Americans use disposable prepaid
cards for calls, Perez says. In February 2008, NovoPayment launched
a Visa-branded shopping mall gift card in Venezuela.

“The mall card was so popular we have
relaunched it as a reloadable prepaid card,” Perez says.

A big market for NovoPayment is providing
companies with payroll, travel and incentive cards.

“Some 5,000 Venezuelan companies use our
corporate and cash management cards, many of them multinationals,”
Perez says.

• Puerto Rico-based Popular, the holding
company for Banco Popular de Puerto Rico, says
that increases in debit and credit card fees helped boost revenues
in its ‘other service fees’ category by $17.6 million year-on-year
in the first quarter of 2008. The ‘other service fees’ category
also includes investment banking fees, insurance premiums and
mortgage fees. Popular’s credit card fees and merchant charge
income rose to $27.2 million in the first quarter of 2008 from
$23.5 million in the first quarter of 2007, while debit card fees
rose to $25.4 million from $16.1 million. Processing fees, which
covers all types of transactions, rose to $12.4 million from $12.1
million. Popular also has operations in the US and the Virgin
Islands.

• Royal Bank of Canada has
completed its purchase of RBTT Financial Group, paying TTD13.7
billion ($2.2 billion) for the Caribbean bank. In October 2007, RBC
signed an agreement to buy RBTT. Once it has merged RBTT’s
operations with its own Caribbean units, RBC will have 130 branches
across 18 countries and territories in the Caribbean.

North America

• Revolving US consumer credit, which includes credit card
borrowing, rose by a seasonally adjusted annual rate of 0.4 percent
in April 2008 to $956.9 billion, according to the Federal
Reserve’s monthly G.19 report. In March 2008, revolving
credit rose by 7.4 percent to $956.6 billion.

• A bill has been introduced to the US
Senate which would allow small and large merchants to
collectively negotiate interchange fees and terms. ‘The Credit Card
Fair Fee Act of 2008’, introduced by Dick Durbin, Democratic
senator for Illinois, has a companion bill by the same name, which
is currently before the House of Representatives. According to the
Senate bill, interchange disputes would be settled by a panel of
three judges appointed by the Department of Justice’s Antitrust
Division and the Federal Trade Commission.

• Phoenix, Arizona-based Debt
Settlement USA has published The Consumer Debt Index, a
quarterly statistical report that measures the amount of credit
card, car repayment, mortgage, and other debt carried by US
consumers. In the first quarter of 2008, the index stood at 11.76,
up 22 percent from 9.60 in the second quarter of 2007. The index is
based on a combination of the US Consumer Price Index, consumer
credit outstandings, the mortgage delinquency rate, and the
unsecured consumer loan delinquency rate. As a result of its
analysis, Debt Settlement USA predicts a 40 percent rise in the
number of US consumers who use debt settlement services in
2008.

• Discover Financial Services’
monthly US Spending Monitor rose 1.4 points in May 2008 to 86.8 as
consumers braced for higher spending in the wake of record petrol
and food prices. Over half (56 percent) of the consumers
interviewed by Discover said they spent more in May than in April
and 46 percent said they expected to spend more in June.

• The Identity Theft Resource
Center’s 2007 US identity theft victimisation survey has
found respondents spent an average of $550 in out-of-pocket
expenses for damage done to existing accounts in 2007. As regards
new accounts opened fraudulently in their name, respondents spent
an average of $1,865 in 2007, up from $1,342 in 2006. More than
half (57 percent) of respondents said their personal data had been
used to open a new line of credit in their name.

• Accertify, a US-based
e-commerce fraud prevention technology firm, has received funding
from Intel Capital, the investment arm of chip
maker Intel. No financial terms were disclosed.

• American Express Canada has
launched a marketing campaign in partnership with Canadian media
firm Canwest. The ‘More Access to Entertainment’ advertising
campaign makes use of various media channels owned by Canwest,
including websites, TV stations and newspapers. Through these
channels, Amex card members are offered special access to
entertainment and dining events.

• Bank of America (BofA) has
received approval from the Federal Reserve to buy
Countrywide Financial. It announced plans to buy
the mortgage lender in January 2008. The transaction, which needs
to be approved by Countrywide’s shareholders, is expected to close
in the third quarter of 2008. BofA says the acquisition will make
it the largest US mortgage lender and also enable it to offer
products such as credit cards and deposit accounts to Countrywide
customers.

• Capital One says in a SEC
filing that its principal US credit card charge-off rate in May
2008 was 6.28 percent, up from 6.08 percent in April 2008. Its US
30-days-plus delinquency rate in May 2008 was 3.81 percent, down
from 3.90 percent in April 2008. Capital One’s international card
charge-off rate in May 2008 was 6.50 percent, and its international
30-days-plus delinquency rate was 5.21 percent. In April 2008, the
comparable international rates were 6.34 percent and 5.20
percent.

• Chase has created a rewards
programme to encourage its checking account customers to sign up
for more products from the bank such as mortgages, home equity
lines, and certificates of deposit. The Chase Exclusive programme
includes free rewards points for Chase debit cardholders and triple
points for Chase Freedom credit card transactions.

• Chase and
Continental Airlines have renewed an agreement to
offer a co-branded credit card programme. Cards offered under the
programme include the Presidential Plus and TravelBank cards.

• JPMorgan Chase has renewed
its contract with the US Environmental Protection Agency (EPA) for
purchase, travel and fleet charge card services. The annual
transaction volume of the 20,000 cards included in the programme is
expected to be over $80 million. The four-year contract, which
includes two three-year renewable options, is part of the US
General Services Administration’s (GSA) SmartPay 2 government
charge card programme (CI 400) JPMorgan has provided charge cards
to the EPA since 2004 under the current GSA SmartPay scheme.

• Citi and
AT&T have launched the AT&T Universal
Business Rewards credit card which offers small business owners
rewards for their purchases. The card also provides cardholders
with a prescription drug benefits programme and an around-the-clock
personal business assistant.

• Equifax has appointed Carol
Gray as president of its Canadian operation. She was previously
executive vice-president of small business banking at CIBC.

• The Federal Deposit Insurance
Corporation (FDIC) has issued enforcement actions against
Atlanta, Georgia-based CompuCredit and Wilmington,
Delaware-based First Bank of Delaware and
Brookings, South Dakota-based First Bank &
Trust for allegedly marketing subprime credit cards in
violation of the Federal Trade Commission Act (FTC Act).

The FDIC alleges that the solicitations failed
to adequately disclose significant upfront fees and misrepresented
the consumer’s initial available credit. The enforcement actions
aim to provide over $200 million in restitution to consumers in the
form of credits for fees arising from the deceptive marketing
practices. The FDIC is also seeking civil money penalties of $6.2
million against CompuCredit, and a total of $431,000 against First
Bank of Delaware and First Bank & Trust. A third bank linked to
CompuCredit, Columbus, Georgia-based Columbus Bank and Trust,
settled the FDIC’s allegations by agreeing to a cease and desist
order and a $2.4 million penalty.

• US prepaid card processor I2c has appointed
Blake Crisp as director of account management and Eric Thacker as
director of marketing.

• US card payments gateway provider
Merchant Link has appointed Daniel Lane as chief
technology officer. Merchant Link, which is owned by Chase
Paymentech Solutions, links merchants to US transaction
processors.