• India’s ICICI Bank has
launched iMobile, a mobile banking platform that enables customers
to use their handsets to transfer funds and pay bills…
Lloyds TSB, the UK’s fourth-largest bank, has
unveiled the first mainstream banking facilities for Muslims in
• The general manager of Visa Europe Turkey, Berna
Ulman, said the card association is in talks with the country’s
Finance Ministry to prepare incentives to increase debit card
• Total net sales and transaction volumes at ten of the top US
e-retailers increased by 29 percent year-on-year during the 2007
year-end holiday shopping season…


• Nokia recently announced that it has launched
a near-field communication (NFC) mobile payment trial together with
China UnionPay, Industrial and Commercial Bank of China,
Bank of China, Bank of Communications, Industrial Bank and Shenzhen
Development Bank.
The trial, involving 800 consumers in
Shanghai, allows participants to use a Nokia NFC-enabled phone
embedded with payment applications to make payments at point of
sale terminals in department stores and supermarkets in the main
shopping district. Employing China UnionPay’s new mobile payment
solution, the trial enables the integration of cards issued by
different banks in one handset.
China Life Insurance has
signed an agreement with China UnionPay, which
will support the insurer’s premium collection via a co-branded bank
card and provide cash management services. The two will also
collaborate in payment through the internet, mobile phone and
telephone in the near future. Value-added services such as a bonus
point programme and discounts on payment will also be
China Minsheng Bank and
sister company Minsheng Life Insurance are to
partner to cross-sell banking and insurance services to each
other’s customer base.
• High net worth customers of China
Construction Bank
can now withdraw cash from 17,000
Bank of America ATMs outside China. Bank of
America will also expand its China card operations through future
collaboration arrangements with other partners that are yet to be
• Hong Kong’s Chong Hing Bank
recently launched its MSN@Visa platinum credit card in partnership
with MSN Hong Kong. The card targets young
customers, and issuance volume is expected to exceed 10,000 cards
in 2008. Cardholders will receive a cash rebate of 1.5
• India’s ICICI Bank has
launched iMobile, a mobile banking platform that enables customers
to use their handsets to transfer funds and pay bills. The bank
says the free tool enables customers to transfer funds from ICICI
savings, credit card and loan accounts using their mobile phones.
Money can be sent to ICICI accounts as well as those held with
other institutions. Customers can also use their handsets to pay
utility bills and insurance premiums. Last year India topped a
survey on mobile banking penetration in the Asia-Pacific region
conducted on behalf of Sybase 365. The poll found that 81 percent
of respondents were aware that they can check their bank balance on
a mobile phone and 49 percent had used the services in the previous
three months.
American Express’s sale of
its banking business to Standard Chartered is
facing regulatory roadblock in India. American Express will retain
its card business and plans to operate as a non-bank finance
company (NBFC) in India. However, the central bank does not allow
an NBFC to issue credit cards without a tie-up with a bank that
holds the credit risk. American Express is thus exploring several
options, such as selling its card business to Standard
Union Bank of India has
launched biometric smart cards targeted at small traders. About
2,500 roadside traders and small shop owners received a card.
Korea.net, the official
South Korean government website, reports that credit card spending
in 2007 grew 15 percent between 2006 and 2007. Amounting to $272.1
billion, card spend for 2007 was the highest since 2003, when the
data was first collated.
• Card issuers in South Korea will be required
to set aside more provisions against bad loans next month with the
adoption of stricter standards in line with the introduction of
Basel II. The minimum provisioning ratio for loans classified as
normal will rise to 1.5 percent while those classified as
precautionary will increase to 15 percent. Under the new
regulations, card issuers will also be required to accumulate
provisions against cardholders’ entire credit limits as opposed to
currently provisioning against unspent amounts in cash of cash
advances. Industry observers expect card issuers to reduce credit
limits and cancel inactive credit cards.
BC Card has reported that
Koreans are shifting their overseas spending from North America and
Europe to Asia. The top five countries capturing overseas spending
by BC cardholders were in Asia. According to the local credit card
issuer, its cardholders charged the most in the Philippines and
chartered a nearly 100 percent increase from last year’s spending
levels in the country. Spending went up 45 percent in Singapore and
Standard Chartered Bank has
launched its MoneyHome card programme, targeting remittance flows
as low as MYR100 ($30) per transaction from Malaysia to Indonesia
through a retailer network. Twenty Giant hypermarkets in major
Malaysian cities will pilot the programme, which will be expanded
to other retailers if necessary. Customers can go to a Giant
outlet, present a passport or identity card and receive a MoneyHome
card. The money is wired within 24 hours to
PermataBank, Standard Chartered’s sister company
in Indonesia, where the beneficiary can open an account and receive
a debit card that offers cash withdrawal at PermataBank ATMs and
retail partners.
GP Bank and
Commonwealth Bank of Australia have joined the
Vietnam Bank Card network, which allows the banks’
customers to access 900 ATMs and 1,500 POS terminals.
• Vietnam’s central bank reported that
commercial banks had issued around 8.28 million debit and credit
cards by late 2007, up from 3.5 million in 2006. Card transactions
now account for 6 percent of non-cash payments in the country, with
debit cards holding the biggest market share. Local debit cards
make up nearly 94 percent of cards issued by banks, international
debit cards make up 3.65 percent, international credit cards 2.22
percent and domestic credit cards 0.31 percent. As of 31 December
2007, 32 institutions issued 130 brands of cards with more than
half of them domestic brands.
• Japan’s Shinsei Bank and
Seven Bank are considering working together to
raise customer service levels and operational efficiency by sharing
sales channels and jointly developing new products and services.
The first step would be the installation of Seven Bank ATMs at
Shinsei Bank’s unmanned sub-branches in Tokyo, streamlining and
enhancing the efficiency of both banks’ ATM networks. Shinsei Bank
views Seven Bank’s ATM network, with more than 12,000 units
nationwide, as an important sales channel in its retail strategy
(currently, Shinsei customers can withdraw money only from Seven
Bank ATMs). Seven Bank aims to explore means of providing service
through its ATM network with Shinsei Bank and expanding its
business by utilising the bank’s products.

Europe, Middle East, Africa

• Payments processor First Data has
signed a contract with Germany’s cadooz AG, a
provider of corporate gift and incentive vouchers, to deliver
prepaid card-based incentive and reward solutions. cadooz can now
offer prepaid card products, and benefit from recent innovations in
controlled-loop prepaid card technology, where use of prepaid cards
is restricted to specific merchants. First Data will provide
processing, card procurement, personalisation and customer service.
The German company was established in 2000 and delivers a range of
incentive programmes and solutions, including paper-based and
online certificates and individually tailored reward

First Data has also
announced the launch of AIB Merchant Services, a
joint venture with Allied Irish Banks, after
receiving approval from the EU. It will provide card acquiring
services in Ireland, the UK and elsewhere in Europe.
Lloyds TSB, the UK’s
fourth-largest bank, has unveiled the first mainstream banking
facilities for Muslims in Scotland. The products, which are already
at 30 branches in England, do not allow customers to pay or receive
interest, which is forbidden by Islamic Sharia law. The bank
consulted a panel of specialist scholars before launching the
products south of the border last year. The Islamic current account
offers no credit interest and has no overdraft facility, but it
does provide a debit card. Funds held on behalf of customers are
invested solely in ethical companies, a further condition of Sharia
law. The bank also announced a Sharia-compliant money transfer
• The consumer finance unit of Spanish bank
BBVA has launched a free credit card that offers 0
percent interest and deferred payments for cash withdrawals for the
first three months. The bank claims the product, the Gold 3 card,
is the first premium MasterCard in Europe to enable customers to
defer payments for that length of time. The card is being launched
in conjunction with BBVA consumer finance’s Prática credit
offering, with which it shares its credit limit. It also features
travel insurance of up to €310,000 ($462,000).
Citi Cards has teamed up
with UK airline easyJet to launch a credit card
that offers a free flight, as well as discounts on extra flights
and related purchases. In the first 90 days, customers can claim a
free flight worth up to £40 ($78) if they spend £250 on the card.
They also receive a 10 percent discount on all flights they book
during the period. The easyJet MasterCard also offers 0 percent
interest for the first nine months on all transfers, although they
will be subject to a 3 percent fee or minimum of £5. Card companies
are increasingly using non-price competition methods to distinguish
themselves from competitors as revenues and margins become squeezed
by declining interest rates.
• France’s state postal service, La
Banque Postale
, and French bank Société
(SocGen) have agreed on a joint venture to bring
together their electronic payment systems. The joint company, which
will be headquartered in Paris, with separate teams in Strasbourg
and Paris, will aim to reduce costs by mutualising investments,
maintenance and operations. It will also centralise current and
future IT processing. La Banque Postale and SocGen are big players
in electronic payment systems in France with a combined volume of
10 million cards in use, more than 100,000 retailer contracts and
10,000 ATMs.
• The general manager of Visa Europe
, Berna Ulman, said the card association is in talks
with the country’s Finance Ministry to prepare incentives to
increase debit card use. Ulman, whose comments were reported in
Turkey’s English language daily newspaper Zaman, added only 2
percent of consumers were using debit cards as a payment
instrument. The country’s government stated it wanted debit card
usage to increase as part of a 15-point plan to clamp down on the
unregistered economy. Although there are 55 million debit cards in
the country as of the end of 2007, most Turks prefer to withdraw
cash at ATMs. There are 36 million credit cards in circulation, on
which customers spent a total of YTL1.4 billion ($1.17 billion) in
• UK internet sales jumped 54 percent from 2006
to hit a record high of £46.6 billion in 2007, marking the
continuing shift of consumer spending habits. According to figures
released by management consultants Capgemini and
retail forum Interactive Media in Retail Group
(IMRG), internet sales improved £16.4 billion from £30.2 billion in
2006. The statistics showed that online spending continues to
increase at the high street’s expense. For every £1 spent on retail
goods in 2007, £0.15 was spent online, up from £0.10 in 2006.
However, the figures showed consumer demand tailed off towards the
end of the year, which was attributed to the impact of the global
credit crunch.
MasterCard’s debit scheme,
Maestro, has lost its legal battle to claim the
maestro.co.uk internet domain name from a UK web developer.
Maestro’s appeal, after an initial complaint was turned down in
September, was rejected by a dispute resolution service provided by
Nominet, a company that registers UK domain names. The appeal was
based on MasterCard’s trademark rights to the word Maestro for
goods and services in the financial services industry. However, the
appeal panel ruled in favour of the current domain name holder
because the domain name in question was a generic term.
Commercial Bank of Dubai
(CBD) has chosen PIC Solutions to develop
application scorecards for their credit card and loan portfolios.
CBD, which offers retail and commercial banking services to its
clients in Dubai, said the deal will help it improve risk
management. During the project, PIC Solutions’ predictive modelling
team will provide consulting services to implement the new
scorecards. PIC, which is based in South Africa, provides consumer
credit solutions, consulting and other related services.
• UK-based mobile banking and payments provider
Monitise has launched a platform for near-field
communication payments and ticketing. The MoniTrust service allows
banks, mobile operators, card schemes and merchants to collaborate
within a single environment, potentially bringing mobile
contactless payments a step closer. Through a single connection to
the MoniTrust platform, participants can enable consumers to manage
their bank accounts, card accounts, mobile wallets, transport and
ticketing applications. Monitise, which also operates in the US, is
working with a range of partners in the financial services and
telecommunications sectors to develop the embryonic but potentially
huge mobile banking and payments market (see pages 14 and

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Latin America

• According to Latin American banking federation
Felaban, there are only 8.45 bank branches per
100,000 inhabitants in Latin America, compared with 30.6 in
developed countries, reports the news service Business News
Americas. Felaban also says overall ATM penetration in Latin
America is one-third of that in developed nations.

• A survey of 3,400 people in Guatemala,
Honduras, El Salvador, Nicaragua, Costa Rica and Panama by the
Inter-American Development Bank (IDB) found that
56 percent of remittance recipients receive their cash via a bank.
However, these recipients are rarely offered an account at the bank
where they go to pick up their funds, the IDB says. Over half (53
percent) of recipients are “very interested” in opening bank
accounts, it says. Latin American banks need to make more efforts
to offer accounts and credit facilities to remittance recipients,
the IDB urges.
Asociación de Bancos e Instituciones
Financieras de Chile
(Association of Chilean banks and
financial institutions) says that between November 2006 and August
2007, 3,435 Chilean merchants started accepting credit and debit
cards. In October 2006, the association launched a campaign to
increase the number of merchants accepting cards in Chile, with the
goal of signing up 14,500 new merchants over five years. As part of
the campaign, it managed to reduce the number of Chilean towns
without ATMs to 86 by August 2007, from 108 before the programme
• Foreign remittances to Guatemala totalled
$4.13 billion in 1007, Banco de Guatemala says.
The central bank says this represents a $518.6 million increase on
remittances in 2006.
Appleseed, a US and Mexican
civil rights network, has published a guide to help banks and
credit unions better serve the remittance market. It says that
among Latin American immigrants in the US, 70 percent of remittance
senders use cash-to-cash transfer services via money transfer firms
such as Western Union. Estimates of remittances sent through banks
range from 5 percent to 19 percent, Appleseed says. Around 100 US
banks and credit unions currently offer consumer remittance
services. Appleseed says this is a fraction of the number that
could be providing remittance services to immigrants.
• Brazil’s Banco Itaú has
launched an advertising campaign to promote its banking channels.
The ads draw consumers’ attention to the bank’s 2,500 branches,
25,000 ATMs, the 24-hour-a-day Bankfone telephone service, the
Bankline.com web banking service, and several wireless services
including mobile phone top-up and m-banking. The multimedia
campaign lasts until 29 February 2008.
• Spain’s Banco Sabadell has
signed an agreement to buy rival Spanish bank
BBVA’s private banking business in Miami, Florida.
Sabadell already operates a branch in Miami providing private and
corporate banking services to individuals and companies in the US
and Latin America. The acquisition will increase the business
volume of Sabadell’s Miami branch to over $3 billion, of which
about $2.6 billion are customer funds and $400 million are
• Credit reference company
Experian has appointed Francisco Valim, formerly
president of Latin American cable TV company Net Serviços de
Comunicação, as chief operating officer for Latin America. Valim
will have responsibility for Experian’s businesses throughout Latin
America. Elcio Anibal de Lucca, previously president of Experian’s
Serasa credit bureau subsidiary, has been appointed as president of
corporate affairs for Experian Latin America. He has also been
elected as vice-chairman of Serasa’s board of directors.
FSV Payment Systems is
offering FSV prepaid payroll debit cardholders a card-to-cash
international money transfer service provided by
MiCash. US-based FSV provides stored-value
processing services and prepaid card programmes. MiCash, a US money
transfer company, also offers card-to-cash remittances for
MiCash-branded prepaid debit cards. The recipient can collect funds
in cash at one of Bancomer Transfer Services’ 12,000 locations in
Mexico, Latin America and Asia, and can have the money deposited
into a bank account in certain destination countries. Bancomer
Transfer Services is a US-based subsidiary of Mexico’s BBVA
• Mexico’s IXE Banco plans to
launch a bank to target the underbanked mid-to-low retail markets
in Mexico. IXE will use customer relationship management, loan
origination and core banking transaction software from US-based
Open Solutions for the new bank, which will have
its own brand name. It will also use the same software for IXE
Banco, its existing bank brand. An Open Solutions spokesperson
tells CI that the firm’s software will be integrated with IXE
Banco’s credit and debit card management systems.
MasterCard has announced the
election of José Octavio Reyes Lagunes to its board of directors.
Reyes Lagunes, who joins the board as a Class A director, is
president of the Latin America Group at Coca-Cola.
• Brazilian MasterCard and Maestro acquirer
Redecard processed BRL102.3 billion ($58 billion)
in credit and debit card transactions last year. This was up 23.2
percent on 2006, it says. Redecard’s recurring net profits rose by
38.9 percent in 2007 to BRL769.4 million. At the end of 2007,
Redecard had 782,000 POS terminals connected to its network, and a
total of 1.14 million merchant clients. The number of POS terminals
rose by 21.2 percent last year, while total active merchant clients
rose by 16.1 percent. The total number of wireless terminals on
Redecard’s network rose by 54.2 percent in 2007 to 51,600. In the
fourth quarter of 2007, 99.6 percent of Redecard’s POS terminals
were EMV-compliant.
Citigroup hopes to raise
BRL1.08 billion from the sale of 41.13 million shares in
Redecard. According to a prospectus, Citi,
Itaú and Unibanco will sell their
Redecard shares in a secondary offering on the Brazilian stock
exchange Bovespa. The two Brazilian banks did not divulge the
number of shares they plan to sell. Citi holds a 24 percent stake
in Redecard with 161.2 million shares, while Itaú and Unibanco each
have 23.2 percent holdings. Redecard held an initial public
offering in July 2007. The secondary offering is still awaiting
approval from Brazil’s financial regulators. (See CI 384 p6.)
Western Union has signed a
new ten-year partnership agreement with Grupo
, a Dominican Republic-based financial services
group. The deal means that consumers on the Caribbean island will
continue to be able to send and receive global money transfers via
the Western Union network. Western Union has been present in the
Dominican Republic since 1989, when it first signed an agreement
with Vimenca.

North America

• Canada’s New Democratic Party (NDP) is calling
for the Canadian government to regulate and reduce credit card
charges. The left-wing opposition party wants credit card interest
to be charged only on the amount owing and to start only on the due
date of the bill. It also wants interest rates to be capped at 5
percent above prime, which, at current rates, would bring maximum
rates down to 10 percent.

• ‘Vishing’ attacks against US financial
institutions and consumers are rising at an alarming rate,
according to the Federal Bureau of Investigation.
Criminals use cheap voice-over-internet protocol technology to make
scam calls to customers and to set up fake call centres that
purport to belong to banks. These calls are intended to lure
customers into divulging their personal identifiable
• Thirty percent of the 100 top US online
retailers now offer some form of alternative payment method on
their website, according to a study by interactive marketing
company Brulant. The number of such e-retailers
offering alternative payments grew by 25 percent between February
2007 and November 2007. Bill Me Later was offered by 21 percent of
top e-retailers in November, PayPal by 19 percent and Google
Checkout by 10 percent, while all three payment options were
offered by 5 percent of top e-retailers.
• Total net sales and transaction volumes at
ten of the top US e-retailers increased by 29 percent year-on-year
during the 2007 year-end holiday shopping season, the Chase
Paymentech Pulse Index
reveals. Chase Paymentech processes
payments for these ten e-merchants. The US processor says its index
tracked holiday online shopping transactions from 5 November 2007
to 7 January 2008. The index showed a total of $5.48 billion in net
sales on 108.4 million transactions. In the 2006 year-end holiday
online shopping season, the index showed $4.24 billion sales on
83.9 million transactions.
• Revolving US consumer credit, which includes
credit card borrowing, rose by an annual rate of 11.3 percent in
November 2007 to $937.5 billion, according to the Federal
’s monthly G.19 report. In October 2007, revolving
credit rose by 8.5 percent to $928.7 billion.
Capital One is allowing all
its US cardholders to customise their credit cards with their own
photos. Cardholders can visit the issuer’s website and upload the
photo of their choice, which is then printed onto their cards.
Capital One also offers an interactive website, known as the Credit
Card Lab, where customers can configure their card features such as
annual fees, interest rates and reward options.
• A US company that stores data tapes for
GE Money has mislaid a tape containing credit card
details and other sensitive data for 650,000 customers of JC Penney
and up to 100 other US retailers. The customers hold credit cards
that are processed by GE Money. “There’s no evidence to indicate
the tape has been stolen, or that information on this tape has been
either accessed or misused,” a GE Money spokesperson tells CI. “As
a precaution, we’ve offered some individuals whose information is
included on the tape a year of free credit monitoring.”
• Germany’s Giesecke &
(G&D) is supplying 100,000 contactless cards
to First Hawaiian Bank, the first bank in Hawaii
to issue MasterCard PayPass debit cards. G&D says the
contactless cards are to be used as Priority Rewards MasterCard
PayPass debit cards. First Hawaii, owned ultimately by BNP Paribas,
is using MicroPass, a payments platform supplied by France’s Inside
Contactless, for its contactless roll-out.
• US debit processor NYCE Payments
has signed agreements with ten financial
institutions to provide mobile financial services to their
customers. The services are supplied by m-banking company
Monitise Americas over the NYCE debit network.
NYCE is owned by Metavante, which is co-owner of Monitise Americas
along with the UK’s Monitise. The latest banks and credit unions to
sign up for Monitise Americas include California Business Bank,
Michigan Schools and Government Credit Union, and Summit Bank.
Monitise Americas, which launched in the US in November 2007, now
has a total of 14 financial institutions using its system via the
NYCE network.

• Airport concessionaire Paradies Shops is to
install VivoTech contactless payment terminals at
all its 500 US and Canadian locations. The terminals accept
magnetic-stripe cards as well as contactless cards and near field
communications mobile phone payments.

• Credit union organisation PSCU Financial
has appointed Tom Gandre to the newly created
role of chief debit officer. Gandre, who was previously with First
Data, oversees the co-operative body’s debit services unit which
serves 200 credit unions and 700 ATMs. St Petersburg, Florida-based
PSCU says the unit is seeing strong year-on-year growth in
transactions, ATM placements, and participation by new credit

• Payment systems vendor Ingenico North America
has appointed Lisa Shipley as senior vice-president of sales and
marketing. Shipley is to focus on banking and multi-lane retail
opportunities in the US and Canada. She was previously senior
vice-president of national sales at rival vendor Hypercom North

• In a bow to the rise in popularity of debit cards in the US,
MasterCard is featuring both credit and debit
payment options in its Priceless advertising campaign. In the
latest ads, the MasterCard logo flips to showcase the two payment
methods. This marks the first time that debit and credit payment
options have appeared together in the decade-long history of the
Priceless campaign, MasterCard says.

• Atlanta, Georgia-based payment processor Nova Information
and American Express have reached
an agreement under which Nova will sign up and service American
Express merchants on behalf of Amex. Nova, a wholly owned
subsidiary of US Bancorp, will add Amex card acceptance to its card
payment processing services.

• US Visa and MasterCard debit
and credit cardholders and Diners Card members who
paid foreign currency fees between 1 February 1996 and 8 November
2006 are being urged to put in refund claims by 31 May 2008. The
refunds are being offered as settlement for a class action lawsuit
(http://www.ccfsettlement.com/) called Re Currency Conversion Fee
Antitrust Litigation. Berger & Montague and Coughlin Stoia
Geller Rudman & Robbins, the law firms that have obtained
preliminary approval for a $336 million settlement, are hoping to
get final approval from a New York court on 31 March 2008. Most
class action members have opted for the fixed $25 refund, rather
than try to recover their full foreign currency fees.