ASIA-PACIFIC
Merchant Acquiring
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JCB and Merchant Solutions sign
acquiring agreement
Merchant Solutions, the acquiring
joint venture between global payment processor First Data and
Standard Chartered Bank, has signed an agreement to initiate
merchant acquiring for Japanese payment card network and issuer
JCB.
The agreement covers eight markets in the
Asia-Pacific region and will enable JCB card members to use their
cards at thousands of purchase points in Hong Kong, Macau, China,
Singapore, Malaysia, Brunei, Bangladesh and Sri Lanka.
According to the Japan National Tourist
Organisation (JNTO), in 2007 overseas visitors to other parts of
Asia exceeded 13 million. More than half of that number travelled
to countries covered by the new arrangement between Merchant
Solutions and JCB International, a wholly-owned subsidiary of
JCB.
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By GlobalDataAccording to the JNTO, 1.3 million Japanese
visitors travelled to Hong Kong during 2008, spending more than
HK$3.5 billion ($450 million).
Remittances
Coinstar ties with CCB for
money transfers
US money transfer specialist
Coinstar has linked up with China Construction Bank (CCB) to enable
Coinstar’s money transfer service to be implemented at 1,500 CCB
branches across 24 Chinese provinces. The service will be expanded
later this year to an additional 1,000 CCB branches.
Coinstar offers both a cash pay-out service
through CCB branches and a direct bank deposit service to all banks
in China within the Coinstar money transfer system.
According to Coinstar, the Asia-Pacific region
is one of the fastest-growing markets for money transfers in the
world, citing figures from the World Bank which show that in 2007
China was the second-largest remittance receiving country in the
world with $25.7 billion.
“With Coinstar money transfer, CCB can now
provide a quality but affordable remittance service that enables
all the travellers, students, workers or even customers without
bank accounts to send or receive immediate cash from overseas,”
said Wang Yi, assistant general manager at CCB.
“The service will be of great help to both
Chinese and expatriates here.”
Mobile Banking
Barclays cardholders in India
can operate account via SMS
Barclays Bank in India is to provide
mobile banking facilities to its credit card customers, enabling
them to access their accounts via SMS and check credit card
outstanding balances, payment due dates and other related
transactions.
The new facility will be available to existing
and new customers of the bank free of charge.
Recently, the bank announced the launch of a
10 percent cashback promotion for its debit card customers.
Payment Processing
Sino Payments and
Wincor-Nixdorf MoU
Asia-Pacific payment processor Sino
Payments has signed a memorandum of understanding (MoU) with ATM
manufacturer Wincor-Nixdorf for the provision of Sino Payments’
internet protocol (IP) card processing system to retail clients in
the Hong Kong market.
Matthew Mecke, chairman and CEO of Sino
Payments, said: “As one of the world’s largest and most important
payment processing retail store hardware and ATM providers, Sino
Payments is extremely pleased to work with Wincor-Nixdorf in Hong
Kong to provide Sino Payments IP credit and debit card processing
to Wincor-Nixdorf’s large regional client base.
“We hope to work closely as quickly as
possible to identify potential customers in Hong Kong and Macau to
provide our card processing services.”
Prepaid Cards
Prepaid forum launches chapter
in India
Global prepaid industry trade
association, the Prepaid International Forum (PIF), is to launch a
new chapter in India in August.
According to PIF, with a population
of 1.2 billion individuals, an increasing number of young adults
and with only around 20 percent of adults having a payment card of
any kind, India represents an attractive market for providers of
prepaid solutions such as payroll, gift and travel currency
cards.
The India chapter will be launched under the
patronage of global payment processor TSYS and it is anticipated
there will be attendees from key acquirers, card issuers, banks,
other commercial associations and regulators.
Sachin Khandelwal, senior general manager of
ICICI Bank, has been appointed as chairman of PIF India.
Established in 2007 in the UK, PIF has
expanded across Europe and globally and includes developing prepaid
markets such as Australia and New Zealand and Brazil. Members
include key issuers, vendors and programme managers actively
involved in the prepaid industry.
Consumer
Indebtedness
Chinese card growth may not
lead to defaults
Credit card growth in China is
expected to continue at double-digit rates over the next decade but
this may not necessarily lead to a rise in defaults, according to
global business consultancy KPMG.
Current growth trends in China indicate that
the number of cards could surpass the number of cards in Japan in
the next 10 to 15 years, according to Egidio Zarrella, a partner at
KPMG.
Zarrella stated that he expected the default
rate on credit cards to increase but remain largely in line with
the increase measured in the number of credit cards in issue.
According to Zarrella, the situation in the
Chinese market is different to that of the US due to the strong
savings culture in China and the fact that Chinese cardholders
seldom spend more than they save.
Card Spending
Trends
New Zealand card spending
falls
Consumer spending on debit, credit
and store cards in New Zealand for the month of June has fallen for
the first time in five months, according to Statistics New
Zealand.
The value of transactions on payment
cards fell 1 percent from May when it increased 0.7 percent.
Excluding spending at fuel outlets and car workshops, transactions
fell 1.2 percent.
The proportion of spending
attributed to credit cards fell for a ninth month to 45 percent of
total spending.
Despite the New Zealand government cutting
income taxes in April, the drop in spending indicates that New
Zealand’s recession, which began in the first quarter of 2008, is
likely to be prolonged until late this year.
The jobless rate, which rose to a six-year
high of 5 percent in the first quarter, may reach 7.8 percent next
year, the New Zealand Institute of Economic Research said.
EUROPE, MIDDLE EAST,
AFRICA
Prepaid Cards
O2 and NatWest launch fee-free
prepaid cards
UK mobile telecom operator O2 has
teamed up with bank and card issuer NatWest to launch two prepaid
cards under O2’s new financial services business O2 Money. The O2
Cash Manager and Load & Go cards are fee-free Visa-branded
cards being offered exclusively to O2 customers in the UK.
The Load & Go card is aimed at O2
pay-monthly and pay-as-you-go customers aged 13 and over and allows
ATM withdrawals and online purchases, except at restricted
merchants such as gambling websites. Parents can load money onto
the card over the internet and real-time text alerts will be sent
to the cardholder’s mobile phone. Funds can also be loaded onto the
card at over 20,000 locations across the UK including all O2 stores
and PayPoint and e-pay locations. The Cash Manager card is aimed at
adults and incorporates budgeting and spending monitoring
tools.
O2 says both cards are completely free of all
fees and charges when used within the UK.
Payment Processing
SIA-SSB and Volksbank sign
processing deal
Italian payment processor SIA-SSB
has signed a five-year framework agreement with Austria’s Volksbank
International (VBI) to provide issuing and acquiring services for
the complete management of credit and debit programmes in nine
Central and Eastern European countries (Slovakia, Czech Republic,
Hungary, Slovenia, Croatia, Romania, Bosnia-Herzegovina, Serbia and
Ukraine) through a single centralised platform.
The 600 outlets in the VBI network will now be
able to use SIA-SSB’s technology infrastructure to manage
operations relating to payments carried out with credit and debit
cards. SIA-SSB will be able to manage the entire authorisation
process for all types of cards issued, clearing and settlement
services, anti-fraud monitoring, ATM and POS terminals and other
value-added services for Volksbank International’s credit
institutions, subscribing merchants and national and international
networks.
Michel Ivanovsky, member of the managing board
and COO of VBI, said: “We will make a big step forward with this
new infrastructure.”
Mobile Payments
Iraqi telco and bank consortium
partner on m-banking
Iraqi telecom operator telco
Asiacell has signed a deal with AMWAL, a consortium of Iraqi
private sector banks, to foster the use of mobile phones to access
a range of financial services.
Under the deal, Asiacell subscribers
and the consortium’s customers will be able to use their handsets
to make interbank transfers, settle bills, make purchases on Visa
and MasterCard cards, check account balances and transfer funds.
Asiacell’s customers will also be able to use the service to
purchase credit for their mobile phones.
Diar Ahmed, CEO of Asiacell, said: “We
understand the significance of creating greater integration between
all economic sectors in Iraq, and look forward to seeing greater
engagement from the Iraqi people in regulated financial services
that allow them to settle all of their banking needs by utilising
this modern technology.”
Debit Cards
Doha Bank launches platinum
card in Qatar
Payment network Visa has signed a
long-term strategic partnership agreement with Qatar’s Doha Bank,
aimed at growing the bank’s debit card business in the country.
As part of the strategic alliance, Doha Bank
has launched a platinum Visa debit card, the first such card to be
issued in Qatar. The card comes with free travel insurance,
extended purchase warranties and other high-end offerings. Doha
Bank is Qatar’s largest issuer of Visa debit cards.
Tony Gougassian, Visa’s area manager for
Levant and Qatar, said: “Our signing with Doha Bank on our debit
alliance represents a milestone for Visa in growing the debit card
capabilities in Qatar.”
Debit Cards
Alinma Bank launches
invitation-only Visa debit card in Saudi Arabia
Saudi Arabia’s Alinma Bank has also
launched a Visa debit card product, the ‘Alinma Infinite’ card
which is being offered to customers of the bank by invitation only.
Alinma Infinite comes with multilingual 24/7 support in nine
languages, concierge service, multi-trip travel coverage, emergency
cash advances, and a range of other services tailored to high-end
and VIP customers.
The bank is also planning to launch a Visa
Infinite credit card in Saudi Arabia, also available by invitation
only.
Fraud and Security
French payment card fraud rose
in 2008
Payment card fraud in France
increased slightly in 2008, according to the Bank of France, with
the fraud rate standing at 0.069 percent, up from 0.062 percent in
2007. Although frauds on domestic transactions remained stable last
year, fraud on international transactions climbed to 0.427 percent
from 0.368 percent.
Card Acceptance
South Africa expands credit
card acceptance
Motorists in South Africa will now
be able pay for fuel with their credit cards, following changes to
rules made by the country’s Department of Energy, which is aiming
to promote payment cards as a safer alternative to cash, and to
make life more convenient for tourists in the country. According to
the Department of Energy, all credit, debit, cheque, garage, fleet
and petrol cards can now be used to pay for fuel.
The Payment Association of South Africa (PASA)
has welcomed the new rules as providing greater choice for
consumers, and as being especially beneficial given that South
Africa will see an influx of tourists in 2010 as the host country
of the World Cup football tournament.
“The change in regulations will help ensure
that South African payment choices at fuel forecourts are
normalised, and that some of the benefits of greater efficiency,
security, convenience and choice to consumers and retailers are
unlocked as the usage of electronic and card payments is
broadened,” the PASA said in a statement.
Mobile Payments
Mi-Pay expands services in
Africa
Mobile money service company Mi-Pay
has secured three new contracts which will see it expand its
presence in North, East and West Africa. Mi-Pay offers
international and domestic remittance services using agents,
person-to-person transfers and mobile phone-based transfers.
Norman Frankel, CEO of Mi-Pay, said: “With
mobile penetration at over 270 million, there is now a viable
springboard to service Africa’s unbanked, which currently stands at
around 75 percent of the population. The demand and infrastructure
is here and, with the growing presence of companies like Mi-Pay,
the expertise to implement change is now here too.”
LATIN AMERICA
Mobile Payments
Bank of Mexico issues mobile
payment rules
The Bank of Mexico has issued rules
governing mobile payment services in an effort to make financial
services accessible to more of the population. The Bank of Mexico
said banks can use third parties, including mobile phone companies
and telecom operators, to open mobile banking accounts for their
clients.
Consumers can deposit the equivalent of up to
2,000 inflation-indexed UDIs (an investment unit), or about
MXP8,500 ($617) a month in their mobile accounts, and use a mobile
phone to make financial transactions, the central bank said.
Other such banking agents include retailers
contracted by a bank to conduct transactions on behalf of their
clients. Mexican authorities have attempted to increase financial
services and product availability by encouraging banks to offer
low-cost current accounts and promoting the use of banking agents
as alternative distribution channels to those provided by
traditional banks.
Consumer
Indebtedness
HSBC Mexico says credit card
defaults under control
Despite its credit ratings being
placed under review by Moody’s Investor Service, HSBC Mexico says
that defaults in credit card lending are under control and that the
bank is taking steps to help customers by restructuring their
monthly repayments. HSBC Mexico also has loan loss reserves that
exceed the requirements of the country’s regulators, the bank
stated.
In early July, Moody’s Investor Service placed
the ratings of HSBC’s Mexican unit under review, warning that its
credit card portfolio could lead to higher-than-expected losses.
Around half a million Mexicans have lost their jobs this year,
leading to a rise in consumer delinquencies. Non-performing loans
(NPLs) accounted for almost 17 percent of HSBC Mexico’s total
credit card debt as of May 2009.
Prepaid Cards
Latin America prepaid market to
soar
According to Latin American prepaid
solution provider NovoPayment, the region’s general-purpose
reloadable, mobile and utilities prepaid market could be worth
around $160 billion a year by 2015.
Latin America’s huge unbanked population can
benefit from linking prepaid reloadable cards to mobile and utility
services, offering low- and middle-income consumers the ability to
buy airtime and pay bills via text messaging, internet, phone or
scheduled debit without an underlying bank account, says
NovoPayment.
It claims that the overwhelming majority of
mobile customers in Latin America – between 80 percent and 90
percent – are already on prepaid plans, representing a huge
business opportunity for service providers.
Credit Cards
US Bank partners with TACA
Airlines for credit card roll-out
US Bank has entered an alliance with
TACA (Transportes Aéreos del Continente Americano or Air Transports
of the American Continent) Airlines, an international airline
headquartered in El Salvador, to provide Distancia Visa and
Distancia Visa Signature credit cards.
Distancia is the frequent flyer loyalty
programme of TACA Airlines. Distancia Visa Signature cardholders
have access to the Visa Signature concierge services, travel and
emergency assistance services, as well as offers from hotels,
resorts, retail and travel providers. TACA flies to 40 destinations
in 23 countries in North, Central, and South America and the
Caribbean.
Regulation
Brazilian politicians to
propose increased credit card regulation
Brazilian politicians are presenting
proposals for credit card regulation in order to increase
competition in the marketplace. In early July the country’s Senate
approved a bill aimed at reducing interchange fees.
According to Senator Adelmir Santa,
such fees are around 70 percent higher than what is charged in
Europe and the US. The approved bill would enable merchants to
offer discounts for cash payments which would put pressure on
payment networks to lower fees.
Another proposal is aimed at ending the market
dominance of payment networks Redecard and VisaNet, which have a
combined market share of more than 90 percent. Some politicians are
suggesting that existing payment networks be forced to share their
networks with new competitors, and are also working on a regulatory
framework to attract new players to the marketplace.
Contactless
Payment
ACS to provide contactless
ticketing system in Peru
US IT services company Affiliated
Computer Services (ACS) has been contracted by the transportation
authority of Lima, Peru, to provide a contactless ticketing system
for the city’s Bus Rapid Transit (BRT).
ACS will be in charge of operating the system
for a 14-year period, and the contract is worth an estimated $200
million. ACS is to supply and operate an integrated fleet
management and ticketing scheme for the BRT system in Lima, which
is expected to carry over 700,000 passengers every day.
The City of Lima has announced plans to build
ten other ticketing solutions on other lines over the coming
years.
The ticketing solution will be based on smart
contactless cards designed to be controlled at each station by
gates. The cards will be sold via automatic ticket vending machines
and manned POS terminals. The 220 buses will be monitored and
regulated via a fleet management system designed to minimise
waiting time at each station.
Fraud and Security
CardSwitch partners with
OpenCard on fraud
CardSwitch Technology and OpenCard
have signed a partnership agreement which will allow OpenCard to
market CardSwitch payment security solutions. CardSwitch’s
technology enables cardholders to put an electronic lock and key on
their card accounts, making it difficult for hackers and fraudsters
to skim cards.
Parameters can be set by sending an
SMS command with a mobile phone, calling an automated voice
response system, or via the internet. Cardholders can lock or
unlock their card accounts 24 hours a day, seven days a week.
OpenCard currently has customers in Colombia,
Costa Rica, Puerto Rico, Venezuela, Panama and the US. OpenCard
claims its solutions are the dominant solutions in the financial
industry in Colombia, encompassing 58 percent of the total active
cards in this market.
“We are excited to bring CardSwitch Technology
solutions to our customers in the Latin American market to enhance
the security of their card offering,” stated Alvaro Ortega Mejia,
sales and marketing manager for OpenCard.
NORTH AMERICA
Credit Cards
BMO scraps annual fee for new credit
card
Canada’s Bank of Montreal (BMO) is
launching the BMO Air Miles MasterCard credit card, which will not
charge an annual fee. The card incorporates double reward air miles
and is being positioned as a way for BMO to take a greater market
share of the air miles loyalty market in Canada.
The bank also announced that it will simplify
and enhance its entire suite of credit cards, aimed at lowering
costs and providing more consumer-friendly products.
On 3 August, BMO is eliminating its bronze and
silver Air Miles categories, blending them into the no-fee BMO Air
Miles MasterCard that awards 1 Air Miles reward mile for every C$20
($18) spent on the card.
This will effectively double the reward miles
for more than 1.2 million existing customers and remove the $35
annual fee for another 400,000 customers. The bank will also
enhance its BMO Gold Air Miles MasterCard by boosting the exclusive
discount on the number of reward miles required to redeem for any
Air Miles flight from 20 percent to 25 percent. Additionally,
highly valued travel protection benefits have been added to the
card including car rental collision damage coverage.
BMO will also introduce a lower interest rate
credit card for those who don’t have an interest in reward
programmes. The BMO Preferred Rate MasterCard will offer a 17.5
percent annual interest rate and comes with no annual fee.
Prepaid Cards
Urban Trust Bank and Visa sign
prepaid card agreement in US
Urban Trust Bank, a
minority-controlled federally-chartered US thrift, and Visa have
signed a multi-year agreement to offer the Urban Trust Success
prepaid debit card.
Under the terms of the agreement,
Urban Trust Bank will offer Visa-branded prepaid products to its
existing customer base in 24 branches throughout central Florida
and Maryland, as well as online and through other channels with the
expectation of becoming a nationally recognised leader in the
prepaid market.
Urban Trust Bank will offer an
optional ‘Elastic’ line of credit to this product offering. Elastic
allows customers to use small lines of credit for emergency cash or
to increase their buying power.
Additionally, cardholders will be able to add
funds to their Urban Trust Success cards through Visa ReadyLink,
Visa’s prepaid load network, at nearly 50,000 participating
merchant locations nationwide.
Robert Johnson, chairman of Urban Trust
Holdings, said: “Our offering of an optional Elastic line of credit
will enable consumers with a regular source of income – banked or
unbanked – to have responsible access to a line of credit, help
build their credit histories, and to participate in the financial
mainstream.”
ATM and Debit
Networks
US Bank and PULSE extend debit
network agreement
PULSE, the US ATM and debit network,
has extended its relationship with US Bank in a long-term agreement
that provides US Bank customers with PIN debit POS and ATM
services. PULSE, owned by Discover Financial Services, currently
serves more than 4,500 banks, credit unions and savings
institutions across the US, linking more than 289,000 ATMs.
“PULSE has a proven record of providing
reliable and high-quality PIN POS and ATM services, which was vital
in renewing our long-standing relationship,” said Lynn Heitman,
senior vice-president in US Bank’s retail payment solutions
division. “PULSE has been a strong partner for many years, and we
look forward to continuing to provide our cardholders with
convenient and accessible debit and ATM services through an
industry leader like PULSE.”
Contactless Payment
Interac and Inside Contactless
join forces
Canadian debit and ATM network
Interac has teamed up with European contactless chip technology
company Inside Contactless to develop chips containing the
specifications for Interac’s contactless payment service.
Under the partnership, Interac and
its members will gain the ability to provide a contactless retail
payments service to their debit card users.
“The small-ticket purchase segment in Canada,
which is still dominated by cash and coin, represents green field
territory for card payments, and although this market has been
targeted time and again, it has been difficult to penetrate due to
the lack of the right technology solution delivered at the right
cost” said Shyam Krishnan, industry analyst at technology research
specialist Frost & Sullivan.
“The partnership between Interac and Inside
Contactless goes a long way towards creating a viable solution,
providing the technology and value proposition necessary to break
the barriers to this market.”
Payment Processing
Citi outsources US lockbox
services to processor First Data
Citi has agreed an outsourcing
agreement with global payment processor First Data which will see
Citi handing over the core processing elements of its US lockbox
operations.
Under the deal, First Data will provide
lockbox, image capture, posting and reporting of receivables for
corporate billers. The firm says it will offer jobs to the 500-odd
existing Citi staff in the unit and sub-lease the bank’s lockbox
processing facilities. Citi says it remains committed to clients
and will continue to be their direct point of contact for sales and
service.
Amol Gupte, head of treasury and trade
solutions for North America at Citi, said: “For Citi, this will
result in a more competitive position in the market while providing
a scalable platform and the long-term infrastructure to enable us
to meet the growing geographic scope and sophistication of our
clients’ needs.”
Payment Processing
Five US credit unions sign
platform agreements with Fiserv
US-based financial services
technology services provider Fiserv has signed five credit unions
to new account processing contracts for its Portico, CubicsPlus and
Galaxy credit union platforms.
Under the terms of the agreements,
the credit unions have also selected a series of value-added Fiserv
solutions, such as card services, virtual branch internet banking,
accounting tools, and interactive voice response to enhance
efficiencies across the enterprise.
Fiserv’s new credit union clients include
Seasons Federal Credit Union, United Police Federal Credit Union
and Ashtabula County School Employees Credit Union, which are set
to implement the Portico credit union pla
