View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
July 27, 2009

News Digest

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.

By Verdict Staff

ASIA-PACIFIC

Merchant Acquiring

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.

According 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

  1. Dashboards
  2. Deals
May 1, 2007updated 04 Apr 2017 4:19pm

News Digest

The release in August this year by the US Patents Office of an application filed by Google on 28 February 2006 for a patent on an invention dubbed Gpay suggests this is the case.The Patents Office describes Googles Gpay application as being for an invention that may provide users of mobile devices with a convenient method of making payments

By EPI editorial

News Digest

MOBILe PAYMENTS

Google patent application fuels speculation

Could internet search engine giant Google be planning to enter the mobile payments arena? The release in August this year by the US Patents Office of an application filed by Google on 28 February 2006 for a patent on an invention dubbed Gpay suggests this is the case.

The Patents Office describes Google’s Gpay application as being for an invention that may provide users of mobile devices “with a convenient method of making payments”. The patent application also suggests a service linking online purchases to mobile short message service payment execution. According to the Patents Office: “This invention relates to computer-enabled payment systems and methods, and more particularly to payment systems that make use of text messaging.”

SECURITY

Western Payments Alliance, Laru team up

US payments industry body the Western Payments Alliance (WPA) has formed an alliance with Laru, a vendor of automated clearing house (ACH) risk and compliance application software. The WPA represents nearly 1,000 financial institution members and more than 100 corporate members in the western US and Pacific region.

“This alliance with Laru provides exceptional value for our members in an area of growing concern,” said Peter Yeatrakas, WPA’s president and CEO. “Monitoring ACH network violations and identifying fraud are important issues for financial institutions and their customers, and Laru’s products are vital solutions to these problems.”

According to Laru, its latest product, ACH Clarity, is built on Microsoft’s Business Intelligence Platform and runs as a complementary platform to an institution’s core ACH processing system. ACH Clarity monitors ACH transactions and provides network operators with the ability to research, report and manage risk exposure from originator relationships, as well as audit the ACH pipeline. The solution generates alerts and reports that identify fraudulent ACH transactions and risk anomalies.

REAL ESTATE PAYMENTS

MoneyGram grabs a slice of $200bn market

US property rentals represent a multi-billion dollar market that payment services provider MoneyGram is eyeing following the announcement that it is to acquire PropertyBridge, a provider of electronic payment processing services for the real estate management industry. Indicative of the potential, PropertyBridge describes real estate electronic payments as an “emerging service” in a market in which more that $200 billion changes hands annually.

“PropertyBridge is a terrific strategic fit for us as we continue to build out and grow our bill payment business,” said MoneyGram’s president and CEO, Phil Milne. “PropertyBridge provides best-in-class rental payment solutions to some of the largest property management companies in the US.”

ATMs

Diebold helps to put outsourcing into perspective

Growing complexity and rising operating costs in the US’s saturated ATM market are driving ATM operators to increasingly turn to the service outsourcing route. Cost savings can be considerable – 15 percent to 25 percent, according to consultancy Celent – in a market in which ATM manufacturer and outsourcing service provider Diebold estimates total annual costs will run at $3.9 billion in 2008. Diebold estimates that the average cost of operating an individual ATM per year is about $25,000.

To assist ATM operators, Diebold has launched its Outsourcing Assessment Center, an interactive website that allows them to evaluate their current ATM channel against industry standards to learn how outsourcing can positively affect their operating costs. “Through the Diebold Out-sourcing Assessment Center, financial institutions can begin the process of understanding how they can decrease costs and maximise their time and resources at the ATM channel through outsourcing,” said Chuck Ducey, Diebold’s vice-president global product development and services.

CHEQUES

Cheque use takes a tumble in the UK

A report published by UK payments industry association APACS has revealed that the number of cheques written by individuals in the country experienced the sharpest annual decline in 2006, falling 8 percent to 1 billion. This fall resulted in the number of cheques used annually halving from 2 billion since 2006, said APACS.

Last year, said APACS, only 54 percent of adults in the UK made payments using cheques and only 47 percent received a cheque payment. On average, individuals now write 1.6 cheques a month and receive just one every two months; half of adults no longer receive any. For personal payments, cheques have fallen from one in four non-cash payments in 1996 to just one in 14 in 2006. In the retail sector the decline has been particularly rapid and cheques account for just 3 percent of all non-cash transactions.

Despite the declining trend, APACS is not predicting the death of the cheque, said Sandra Quinn, the organisation’s director of communications. “Although volumes will continue to fall, we forecast that there will still be around 840 million cheques used in the UK in 2016,” said Quinn.

DATA SECURITY

Lost data equals lost customers

Data breaches can have a serious impact on customer loyalty, a survey conducted by US content security service provider Tablus has revealed. According to Tablus, the overriding theme of the survey respondents’ comments was ‘lose my information and you’ve lost my business’.

Specifically, Tablus highlighted a number of key findings from the survey:

• 96 percent of respondents stated that companies’ highest priority should be protecting customers from a data breach;

• 85 percent of respondents would prefer to do business with a company that has never experienced a data breach; and

• 82 percent of respondents felt that companies that had never experienced data loss were more trustworthy than those that had.

“This survey shows how essential content protection is to an organisation, not just from an IT perspective, but from the value a brand has in the public eye,” observed David Puglia, Tablus’s vice-president of marketing.

PREPAID CARDS

PayPoint enters UK gift card market

PayPoint, the UK’s largest over-the-counter bill payment service provider, is to make its debut in the country’s prepaid gift card market in partnership with US electronic payments and cash processor CoinStar.

PayPoint joins a growing number of retailers that have adopted CoinStar’s gift card mall programme, which was introduced in the UK in 2006.

The CoinStar programme consists of a display rack carrying gift cards of a wide range of retailers and was first adopted by UK retailer WHSmith in November 2006. PayPoint will add 17,000 locations at supermarkets, convenience stores and petrol filling stations. In 2006 PayPoint reported processing more than 400 million transactions worth a total of £5 billion ($10 billion).

“This marks a huge step for CoinStar,” said Mohit Davar, MD of CoinStar E-Payments Services (UK). “By partnering with PayPoint we build on our initial success in the UK, and broaden the reach of our innovative gift card mall programme to retailers across the country.”

MOBILE BANKING

Royal Bank of Scotland joins mobile brigade

Royal Bank of Scotland (RBS) has made a mobile banking service available to its 13 million debit card customers in the UK. Running on the MoniLink platform – a joint venture between mobile technology vendor Monitise and payments processor VocaLink – the service is initially limited to buying mobile phone airtime and accessing account information. The bank plans to extend the service at a later stage to include fund transfers and payments.

RBS joins three other UK banks already running mobile banking services on the MoniLink platform: HSBC, first direct and Alliance & Leicester. According to MoniLink, Ulster Bank in the Irish Republic and another UK bank, NatWest, are soon to follow suit.

In mid-August 2007 MoniLink reported that it had attracted a total of 25,000 users to its service, which is free until the end of 2007. HSBC, the first bank to join the MoniLink platform, launched the service in October 2006.

DEBIT CARDS

UK retailers breathe sigh of relief

In what UK retail industry body the British Retail Consortium (BRC) described as a “victory for retailers and customers”, MasterCard has scrapped a plan under which it would levied a fixed fee of £0.035 ($0.07) plus 0.15 percent of the purchase price on transactions using a debit card. MasterCard’s proposed new fee structure would have meant higher card charges on any item priced above about £20.

MasterCard has announced that it will retain the existing fee structure, under which UK retailers pay a fixed fee on debit card transactions regardless of the value of the transaction. Fees range from £0.06 to £0.18 depending on which card is used and where.

Fees charged by MasterCard and Visa in the UK are the subject of an Office of Fair Trading investigation. Fees they charge on cross-border transactions are being investigated at European Union level by the Competition Directorate General.

CONTACTLESS PAYMENTS

JCB goes contactless in Taiwan

Japanese payment card issuer and acquirer JCB International and the Union Bank of Taiwan have joined forces to launch the Breeze Center JCB Card, the first card to utilise JCB’s J/Speedy contactless payment system which shares Visa Asia-Pacific’s contactless specification for common merchant acceptance. The card will initially be limited to use at merchants located in the Breeze Center, a shopping mall located in Taipei City, Taiwan.

JCB launched its first contactless card product, QuicPay, in Japan in April 2005. QuicPay is, however, based on Japanese technology company Sony’s FeliCa chip specification.

According to JCB, it has 55.75 million card members in the 19 countries and territories in which its cards are issued and its network now spans 13.5 million merchants in 190 countries.

PAYMENTS PROCESSING

First Data scores a key first in Germany

In a significant development, First Data has become the first independent payments processor approved to act as a kopfstelle (central gateway) for debit card processing services for cross-border and domestic payments in Germany by the owner of the national electronic cash system, the Central Credit Committee. Prior to the US payments processor’s appointment, banks in Germany were obliged to use one of four collectively owned kopfstellen as the default gateway.

“Having more choices will be a real benefit to German retail and savings banks,” said Ernst Verbeek, vice-president with responsibility for First Data’s operations in Germany.

First Data said it is now permitted to offer routing and switching services for German banks on both the issuing and acquiring sides of the business. Card issuers can now also use authorisation services from First Data in support of their national debit card business, thus consolidating service provision for the processing of all their debit card transactions, added First Data.

STRAIGHT-THROUGH PROCESSING

Bank of Taiwan streamlines foreign operations

Bank of Taiwan, Taiwan’s largest bank, has selected US payments software vendor SunGuard’s System Access Symbols product to provide straight-through transaction processing for its offshore branches. Accessed via the internet, the SunGuard system will link Bank of Taiwan’s offshore branches located in Tokyo, Hong Kong, Singapore, London, New York, Los Angeles and Johannesburg.

“System Access Symbols will help us see a complete picture of the profitability of our offshore banking businesses,” said Edwin Song, general manager of Bank of Taiwan’s IT department. “Its centralised data and straight-through processing capability will improve the efficiency of our operations as multi-site transactions are processed real-time across geographies.”

According to Bank of Taiwan, it has total assets of approximately $80 billion.

MOBILE BANKING

Etisalat launches mobile banking service

Etisalat, the United Arab Emirates’ (UAE) telecommunications service provider, and UAE-based Abu Dhabi Islamic Bank have joined forces to launch a new mobile banking service in the UAE branded 123 Mobile Banking. The service, which will be available to Etisalat’s 6 million mobile subscribers in the UAE, allows customers to perform banking transactions and services for free via a menu-driven user interface. There is no need to install or download any application to their mobile device.

Of note, the 123 Mobile Banking service has adopted unstructured supplementary services data (USSD) technology as the transaction method and not short message service (SMS), the more commonly used method in mobile banking. USSD-based services are generally quicker than those that use SMS and are also cheaper than SMS.

NATIONAL PAYMENTS SYSTEMS

Bahrain’s payment system off to good start

Launched in June this year and fully commissioned on 9 August, Bahrain’s national real-time gross settlement payment system is proving highly effective, according to a report released by the Central Bank of Bahrain (CBB). In the first month of full operation, the new payments system handled total transactions of BHD4.6 billion ($12.2 billion) and “dramatically speeded up the flow of money in Bahrain’s economy”, said the CBB’s director, banking services, Ahmed Buhijji.

The CBB said Bahrain’s retail banks are using the system for two types of payments: customer fund transfers and interbank fund transfers. The processing and settlement of transactions takes place in real time with final and irrevocable intra-day settlement, explained Buhijji. Prior to the system’s deployment, settlement times were two to four days.

DEBIT CARDS

Pulse expands PIN-less debit offerings

US electronic funds transfer network Pulse EFT Association has introduced a service for utilities, government agencies, insurance companies, educational institutions and secured loan providers that enables their consumers to pay recurring bills using a debit card without entering their PIN. The service is also offered on a pilot basis to property lessors and credit card companies. Pulse defines recurring payments as those that cardholders have authorised a biller to charge to their debit card automatically each payment period.

Introduction of the service was in response to what Pulse’s vice-president of retail services, Judith McGuire, termed “tremendous room for growth” in debit-based bill payments. “Although consumers are increasingly using electronic methods to pay their bills, until now debit cards have accounted for only a small fraction of those payments,“ said McGuire.

According to consultancy TowerGroup, PIN-less debit bill payment volume in 2007 will be at least 40 percent higher than in 2006 but will still represent only about 0.45 percent of overall bill payments.

ELECTRONIC INVOICING

EU moves towards e-invoicing framework

The EC has backed a report compiled by a special task force that calls for the creation of a common electronic invoicing framework for the EU. The EC acknowledged that while creating an electronic invoicing framework presented significant challenges, it would represent a logical move towards extracting the full benefits of the Single Euro Payments Area due to be phased in between 2008 and 2011.

Expanding on the importance of a common electronic invoicing framework, the EC noted that it could reduce annual supply chain costs by an estimated €243 billion ($338 billion), as well as helping to streamline business processes and to drive innovation. Denmark has demonstrated that introduction of electronic invoicing in the public sector alone has saved an estimated €100 million to €134 million annually, said the EC.

The EC recommended the establishment of a steering committee tasked with strategic policy development, initially focused on managing the method by which the barriers to electronic invoicing are addressed. The EC would later develop appropriate policy recommendations to support the European electronic invoicing framework, in particular.

REMITTANCES

Number of US-Mexico remitters falls

The percentage of Mexicans residing in the US who regularly make remittances to Mexico fell to 64 percent in the first half of 2007, down from 71 percent in 2006, according to Inter-American Development Bank (IADB), a Latin American development agency. This meant that about half a million migrants stopped sending money home, said the IADB. In monetary terms, $11.5 billion was remitted in the first half of 2007 compared with $11.4 billion in the first half of 2006.

The decline in migrants remitting money was steepest in states such as Georgia, North Carolina or Pennsylvania, where Mexican immigration is most recent. In new destination states, 56 percent of Mexicans remitted money home in the first half of 2007, down from 80 percent in 2006.

According to the Federal Reserve Bank of Dallas (FRBD), Mexicans who reside in the US remitted $23.1 billion to Mexico in 2006, a 15 percent increase compared with 2005 and about three times the amount remitted in 2000.

Since 2000, the Mexican-born population of the US has risen by about 20 percent, said the FRBD.

MOBILE BANKING

UK-US venture tackles US mobile banking

UK mobile banking and payments service provider Monitise and US banking and payments technology vendor Metavante have formally launched Monitise Americas, a joint venture they are promoting a “the mobile banking and payments ecosystem for the United States”. The launch follows the signing a memorandum of understanding by the two companies in March this year.

The partners explained that Monitise Americas is designed to meet the needs of the mass market and that the ecosystem model means that participants – financial institutions, mobile carriers, payments brands and processors, merchants and consumers – “will share in the benefits generated through the platform”.

Monitise Americas is expected to launch consumer services that would include balance inquiries, mini-statements, funds transfers, mobile phone top-ups and payments later this year.

PAYMENT PLATFORMS

NEC and Valista seek opportunities in Japan

Irish multi-channel payment processing service provider Valista and Japanese technology hardware and software vendor NEC have partnered to target what they term “payments solutions business opportunities in Japan”. Central to this goal will be the development of the Value Chain payments platform that will integrate Valista’s payment processing products and NEC’s next generation network (NGN) service application platform.

United Nations agency the International Telecommunications Union defines NGN as “enabling unfettered access for users to networks [fixed, mobile and internet] and to competing service providers and services of their choice”.

“The arrival of the era of the NGN will have a considerable impact on the lifestyle of individuals and enterprise business models,” said Shigeru Okuya, assistant general manager of NEC’s Second Network Software Division.

CONTACTLESS PAYMENTS

Visa payWave gains ground in US

First Citizens Bank (FCB) has become the latest and 12th US card issuer to adopt Visa’s contactless payment system, payWave. FCB, which has customers in South Carolina and eastern Georgia, operates 340 branches and has total assets of $16 billion.

FCB’s move followed closely on the heels of the announcement that UK bank Barclays’ US unit was in conjunction with discount retailer BJ’s Wholesale Club to issue a co-branded payWave-enabled credit card. BJ’s Wholesale Club operates 175 stores and 99 petrol filling stations in 16 eastern US states including New York, New Jersey, Georgia and Florida.

According to Visa, there are now 9 million payWave-enabled credit cards in circulation in the US and 37,000 US merchant locations that accept Visa payWave for payments under $25.

PREPAID CARDS

More competition in UK prepaid call market

Mobile carrier Vodafone has launched a prepaid card that slashes the cost of making phone calls from the UK to landlines in China, Thailand, Pakistan, Nigeria, Hong Kong, India and ten Central and Eastern European countries. Prepay customers can make calls at £0.05 ($0.10) per minute, as much as 96 percent less than they were previously paying, said Vodafone.

Vodafone’s move coincided with the launch of a prepaid phone card service in the UK by Bermuda-based Nobel. Nobel, which utilises voice over internet protocol technology, offers, for example, calls to India at a cost as low as £0.029 per minute.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Electronic Payments International