Asia-pacific
Regulation
China’s central banks to
release prepaid regulations
Go deeper with GlobalData
China’s central bank, the People’s
Bank of China (PBoC), is to issue a series of supervisory
regulations this year to oversee prepaid cards.
The government is looking at ways to
protect consumer rights and develop common standards in the
burgeoning prepaid card industry.
Prepaid cards are becoming increasingly
popular in major urban centres such as Shanghai and Beijing. From
just four companies issuing prepaid cards in 2007, there are now
more than 300 registered with the PBoC.
However, prepaid’s increasing popularity is
accompanied by a rising number of complaints, many of which concern
expiry dates.
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By GlobalDataIt is estimated the total volume of money left
on prepaid cards after they expire is more than CNY100 million
($14.64 million) in Shanghai.
Product
launch
ANZ launches Visa prepaid ID
card for students
The University of Sydney, Australian
banking group ANZ and Visa have launched a student identification
(ID) card that doubles as a Visa reloadable prepaid card.
This is the first student ID card
combined with a payment facility to be used at an Australian
university, following a successful pilot with 2,000 students in
late 2009.
As well as student photo ID, personal
information and building access, key features of the card include
no issuance fee, free reloads on campus and A$0.50 ($0.40) BPAY
reloads.
It can also be used for cash withdrawals at
ATMs that accept Visa. Cards have a maximum available daily balance
of A$1,000.
ANZ managing director of retail products John
Harries said: “This kind of two-in-one card makes sense for
university students as it gives them the convenience of the Visa
network and they can stay in control of their money as the card
uses their own pre-loaded cash.”
Harries said ANZ’s partnership with the
University of Sydney followed the popular launch of the MySpace
Recharge Visa card.
Product
launch
ANZ to offer Visa debit card
for customers across Asia-Pacific
ANZ customers in 16 countries and
territories across the Asia-Pacific region will have increased
access to Visa debit cards through an expanded collaboration
between ANZ and Visa.
The ANZ Visa debit card will be introduced
progressively to ANZ customers in Singapore, Taiwan, Hong Kong,
Indonesia, Vietnam, Cambodia, Cook Island, East Timor, Fiji,
Kiribati, Laos, Papua New Guinea, Samoa, Solomon Islands, Vanuatu
and Tonga starting in early 2010.
The five-year Visa-exclusive deal continues to
build on the current collaboration between ANZ and Visa which began
in Australia and New Zealand in 2005.
There were 941 million Visa debit cards
globally as of 30 June 2009. More than $2.3 trillion in total
volume was transacted using Visa debit cards for the 12 months
ended 30 June 2009.
Technology
NETS unveils mobile payments
system
Singaporean e-payment services
provider NETS is hoping to make cashless payments more accessible
with the launch of iNets, which allows people to pay for things
through iNets kiosks at mass rapid transit (MRT) stations or their
mobile phones with a downloaded application.
The application is free, but the user will
have to pay data fees. The user sets up a password-protected
account, which can then be used to pay his or her bills.
Besides the mobile application, iNets can be
accessed at 62 iNets stations island-wide.
Some 15 service providers, including SingTel,
StarHub, United Overseas Bank, Cathay Cineplexes and Singapore
Power, will accept payments through the new application.
The service could also possibly be extended to
ATM machines and cable television set-top boxes in the near future,
NETS said.
Unlike its competitors, DBS Bank-owned AXS and
SingPost’s self-service automated machines (SAM), iNets lets users
register a personal account that can store the account numbers of
service providers, as is the case for internet banking.
Strategy and
trends
India looks to reduce number of
credit cards in circulation
According to a recent report by
Venture Infotek, an Indian payment solutions provider, around 2
million credit cards will have been removed from the Indian credit
card marketplace since March 2008, as banks look to reduce the size
of their card portfolios.
The report also explains how despite credit
card numbers dropping, overall the card industry is experiencing
healthy growth.
“The number of credit cards and debit cards
together were 162.1 million as of March 2009,” the report
added.
“This was an increase of over 32.1 million
cards in the year, registering a growth rate of 25 percent in the
financial year 2008-2009.
“But the number of credit cards in India
during the year ended March 2009 declined to 24.7 million from the
previous year card base of 27.5 million.”
The debit card base increased from 102.4
million in March 2008 to 137.4 million in March 2009.
“The card acceptance infrastructure has been
growing at positive pace, registering a merchant terminal base of
about 427,000,” the report added.
Strategy and
trends
Sino Payments teams up with
Payvision
US e-commerce processor Sino
Payments which is focused on the Asia-Pacific region, has announced
it has signed an agreement with Payvision, one of the leading
international payment solutions providers for the card-not-present
marketplace, as an agent for the sale of credit and debit card
merchant accounts.
Sino Payments president and CEO Matthew Mecke
said: “Our recently concluded agreement with Payvision for services
in Europe and Asia should help us to gather steam in terms of
identifying and signing merchants.
“We look forward to building our business with
Payvision and providing related card processing services and
believe this partnership is an important step to achieve our plan
for merchant revenue growth.”
Sino Payments’ IP transaction processing
system, SinoPay GPP, is designed to convert transaction processing
systems from old type dial-up POS systems linked to sophisticated
check-out terminals to a modern seamless IP transaction process,
reducing credit and debit card transaction processing times at
check-out.
Europe, Middle East, Africa
Strategy and
trends
Gemalto and BNP Paribas
reinforce global partnership
French banking conglomerate BNP
Paribas has announced that it has selected Gemalto, the European
digital security expert, as part of its first global tender
covering 15 countries. The contract will involve the supply of EMV
banking cards and personalisation services for a two-year
period.
As part of this contract, Gemalto will become
BNP Paribas’ first supplier in France while gaining a new presence
in Belgium through BNP Paribas Fortis. In these two countries,
Gemalto will provide banking cards compliant to EMV Dynamic Data
Authentication (DDA), a standard that ensures a high level of
security by detecting counterfeit and duplicated cards.
Strategy and
trends
First Data to manage Egyptian
state benefits card programme
Global payment processor First Data
has announced a new three-year agreement with the Ministry of State
for Administrative Development of the Republic of Egypt (MSAD), for
the extension of the Egyptian government’s family card project,
which covers subsidised food and social solidarity pension services
in nine governorates/provinces.
First Data will provide a fully-managed
service for the issuing and processing of more than 4.5 million
multifunctional, reloadable smart cards. These cards are used by
eligible families to claim subsidised food at grocery stores and
social solidarity pensions at service centres throughout Egypt. The
agreement marks the expansion of First Data’s business into the
emerging Egyptian payments market.
First Data will roll out cards during the next
seven months, working with specialist local and government
institutes including Masria Card, the oldest and most advanced card
manufacturer in Egypt, for cards production and personalisation,
and the Aviation Information Technology Company (AVIT), a
subsidiary of the Egyptian Holding Company for Airports and Air
Navigation, for the provision of hardware and networking
infrastructure.
AVIT will provide operation and data hosting
services from its data centre to support the installation and
maintenance of 11,000 new POS terminals at grocery stores
throughout nine governorates in Egypt, serving 4.5 million families
each month.
Additionally, First Data will develop a
network of service centres to support cardholders and grocery
outlets.
The payment card and processing technology
used will also allow citizens to use the cards to claim a range of
other government benefits such as health, transportation, gas and
other subsidies when these are launched.
Strategy and
trends
Italian SIA-SSB opens office in
Poland
Italian payment processor SIA-SSB
has inaugurated its new representative office in Poland, located in
the Warsaw Financial Centre. The Polish office, the opening of
which is part of SIA-SSB Group’s internationalisation strategy in
Central and Eastern Europe, joins the offices already present in
Bucharest, Romania, and Budapest, Hungary, where subsidiary GBC,
operating in the sector of payment systems with credit and debit
cards, has its headquarters.
SIA-SSB currently manages over five million
payment cards on behalf of a number of the leading Polish financial
institutions, including Bank Pekao and Kredyt Bank, amounting to a
total volume of around 220 million transactions per year. The new
representative office in Warsaw will enable SIA-SSB to pursue new
business opportunities also in neighbouring markets, such as
Russia, Ukraine and the Baltic area.
Strategy and
trends
UK gift card sales on the rise
following strong Q409
A record 194 percent increase in the
sale of UK gift cards has been announced following new figures from
the last quarter of 2009, released by Newcastle Building Society
(NBS), a major issuer of prepaid cards in the UK and Europe.
NBS, through its Card Solutions division, and
veteran gift card programme manager Flex-e-Vouchers (FEV), sold
almost half a million (484,000) of its gift cards in the run-up to
Christmas (October to December 2009). These cards had a total load
value of £16.1 million ($25 million) across 76 shopping centres
where FEV giftcards are available, exceeding predicted sales of
350,000.
Approximately 60 percent, or £10 million, of
the load value occurred in December alone, which according to
Kritya Patel, head of card solutions at NBS, indicates a preference
towards gift cards over the more traditional paper voucher.
Strategy and
trends
Electronic payment adoption on
the rise
The Dubai eGovernment has announced
that there has been a significant increase in adoption of
electronic services in 2009 compared to the previous year as it
continues to focus on expanding automation of government services
and sustaining the electronic transformation of the government.
Recent government statistics show that a total
of AED1.5 billion ($408 million) was collected from 1.4 million
transactions that were processed in 2009 using Dubai eGovernment’s
electronic payment gateway. This is an increase of AED500 million
from the previous year in which Dubai eGovernment collected AED1
billion from around 1 million transactions.
The payment service allows customers – whether
an individual, company or department – to process payments through
three methods: credit cards, online and direct debit from the
customer’s account.
Strategy and
trends
Middle Eastern e-commerce set
to boom in 2010
E-commerce transactions in the
Middle East are expected to grow beyond 15 percent in 2010, driven
by infrastructural development, strong government focus on online
services, and rapidly growing internet penetration, according to
Saudi-based online payments solutions provider OneCard.
The region posted the world’s highest internet
usage growth for the 2000-09 period at 1,648.2 percent and is home
to more than 60 million internet users and over 80 million mobile
phone users, making it a huge market for online and mobile
commercial transactions.
However, according to the research, several
issues have to be addressed to maximise the potential of e-commerce
and payments, such as the lack of region-wide laws covering the
sector and growing security threats as a result of the Middle
East’s expanding internet population.
“There are definitely a lot of growth
opportunities in regional e-commerce, especially in major free
market economies such as Saudi Arabia and the UAE. The region has a
young, tech-savvy middle income group who are already patronising
e-commerce as a more convenient transaction method,” said Muhannad
Ebwini, general manager of OneCard.
Latin America
Strategy and
trends
Western Union partners with
Bradesco for money transfer
Global money transfer provider
Western Union has teamed up with Brazil’s Banco Bradesco to offer
money transfer services at most of Bradesco’s locations in Brazil.
The Western Union money transfer service has been available in
Brazil since 1997 though a network of more than 5,800 agent
locations.
Customers wishing to make money transfers will
be able to do so in person at participating Bradesco branch
locations. The tie-up with Bradesco is part of Western Union’s
plans to expand its reach in emerging markets, particularly to new
consumer segments in those markets.
Product
launch
Haiti charity gift card
launched in Italy
The Italian Emergency Agency has
teamed up with gift card specialist Epipoli to launch the Haiti
Emergency CharityCard, a prepaid gift card offering. The card is
available to purchase for €5 ($7) and will be stocked in several
large supermarkets and hypermarkets in Italy.
The purchase price of €5 will be managed by
several charity organisations including Actionaid and Save the
Children, and will fund hygiene and water projects, food
distribution, shelter and reconstruction work. Besides being the
first gift card created specifically to help Haiti’s population
following the earthquake in mid-January, it is also one of the
first dedicated gift card launches in Italy, where open-loop
reloadable cards are the norm.
Strategy and
trends
Santander and Elavon form
alliance in Mexico
Global merchant acquirer Elavon has
teamed up with Spanish-headquartered banking group Santander to
establish a joint merchant services alliance in Mexico. The
alliance establishes a new foothold for Elavon in the country and
builds on its existing relationship with Santander in Spain, the UK
and Puerto Rico.
Under the terms of the marketing alliance,
acquiring services will be offered to existing and prospective
Santander merchants in Mexico. Elavon’s merchant services include
credit and debit card processing, electronic cheque services, gift
cards, and cross-border acquiring. According to the Bank of Mexico,
the number of card payment terminals rose to 441,107 in the third
quarter of 2009, from 117,787 in the first quarter of 2002.
During the same period, the number of credit
cards in circulation rose more than threefold to 22.3 million,
while debit cards nearly doubled to 62.5 million, the central bank
said.
“Expanding our global footprint into Latin
America is in line with Elavon’s global growth strategy,” said
Stuart Harvey, CEO of Elavon. “Santander is a strong, trusted bank
and this alliance will deepen our relationship while delivering
value to merchants doing business in Mexico.”
Financial
results
Cielo posts sharp rise in Q4
earnings
Brazilian payment card processor
Cielo (formerly VisaNet) has reported that net profit in the fourth
quarter of 2009 rose by 77.5 percent to BRL442 million ($240
million) from BRL249 million in the year-ago period. Cielo
attributed the growth to higher credit and debit card transaction
volume and higher revenue from POS equipment, along with the
Brazilian economy recovering from recession.
Net revenue rose to BRL1.03 billion, from
BRL838 million in the year-ago period.
For the full year of 2009, Cielo’s net profit
rose to BRL1.5 billion from BRL1.1 billion. Net revenue totalled
BRL3.6 billion, up from BRL2.89 billion in the year-ago period.
Financial
results
Banco Bradesco reports healthy
Q4 profit
Banco Bradesco, Brazil’s
second-largest bank, has reported that its fourth quarter profit
rose on the back of the bank expanding its consumer credit loan
portfolio. Net profit rose to BRL2.18 billion ($1.7 billion) from
BRL1.61 billion in the year-ago period.
Bradesco’s credit portfolio rose 6.8 percent
from the year-ago period to BRL228 billion. Consumer loans rose
11.5 percent to BRL82.1 billion, driven by a 53.8 percent rise in
credit card transactions. Default rates for loans unpaid past 90
days rose to 4.9 percent from 3.4 percent in the year-ago
period.
The bank is forecasting loan growth in the
range of 25 percent in 2010 and is investing BRL4.2 billion this
year in technology infrastructure and the opening of 250 new
branches.
Strategy and
trends
Mexico bank loans on the
rise – CNBV
Mexico’s bank loans rose 5.2 percent
in 2009 to MXP1.96 trillion ($152 billion) from the year-ago
period, according to banking and securities regulator CNBV, which
attributed the rise to a surge in lending in December.
Loan balances in December rose 2.3 percent
from November, led by commercial, government and home loans,
according to the regulator. However, consumer lending continued to
show weakness, with loan balances falling 17.4 percent to MXP388.6
billion, and credit card loans down 23.6 percent to MXP227.6
billion.
Compared with November, consumer loan balances
were down 2.1 percent. In credit card portfolios, where banks have
suffered the highest levels of defaults, non-performing loans
declined to 8.8 percent in December from 9.3 percent in
November.
Banks responded to a surge in bad credit card
loans by restricting consumer credit, while high unemployment also
made consumers more reluctant to take on debt. Bank lending is
expected to recover with the economy in 2010. The Bank of Mexico
expects GDP to grow between 3.2 percent and 4.2 percent this year
as Mexico benefits from an economic recovery in the US, its largest
trading partner.
Strategy and
trends
Jamaican debit card spending on
the decline
Data from Jamaica’s multilink
banking system shows that debit card spending during the December
shopping season dipped slightly. The peak withdrawal day was 24
December when J$530.5 million ($5.9 million) was withdrawn in
99,483 transactions. For December, ATM transactions totalled J$10.3
million, a fall of 2.2 percent from 2008, and POS spending of J$7.1
million, a rise of 5.6 percent from 2008. Total debit card
transactions came in at J$17.4 million. Withdrawals at ATMs account
for about 60 percent of debit card use.
Multilink, which accounts for 25 percent of
all debit card activity, processes card transactions on behalf of
Jamaica’s top banks, building societies and credit unions. However,
the data does not include all transactions, only those between
institutions in the multilink network.
ATM withdrawals and POS spending in December
bucked the trend of the first 10 months of 2009, with up to 7
percent less spent against trends for the total in December, and 5
percent less than expected on peak days. Before December, the
highest level of withdrawals was J$488 million on 25 September.
North America
Product
launch
Blackhawk and Microsoft launch
Xbox prepaid cards
Blackhawk Network, the largest
provider of third-party gift cards in the US and Canada, has
announced a partnership with global software giant Microsoft for
its Xbox Live service on the Xbox 360 video game console. Customers
can now purchase Xbox Live gold subscription and Microsoft points
cards from Blackhawk Network’s gift card mall.
In addition to accessing online multiplayer
gaming, consumers will also have the ability to download gaming and
entertainment content using these cards. Created and operated by
Microsoft, Xbox Live is one of the largest online multiplayer
gaming and digital media delivery services with over 20 million
members worldwide.
Xbox Live cards are available in denominations
of $19.99 for 1,600 Microsoft Points or a three-month gold
subscription; and $49.99 for 4,000 Microsoft Point or a 12-month
gold subscription.
An Xbox Live gold subscription also gives
members access to multiplayer games, and social networking and
entertainment sites including Facebook, Last.fm, Netflix and
Twitter.
Fraud and
security
Verifone releases PAYware
mobile security app for iPhone
Verifone, the US-based secure
electronic payment expert, has announced it is shipping its PAYware
Mobile secure credit card encryption sleeve for iPhone and that the
complementary PAYware mobile app is now available on the Apple app
store.
PAYware Mobile provides small businesses with
secure card processing capabilities using the iPhone. The app and
card encryption technology are provided free in conjunction with a
PAYware gateway services agreement.
Verifone’s card encryption sleeve slips over
an iPhone to accommodate card swipes and allow merchants to avoid
high-cost card-not-present fees. It incorporates a stylus for
signature capture and a mini-USB port for charging the iPhone while
the encryption sleeve is attached.
“Pre-order response to PAYware Mobile for
iPhone has been phenomenal,” said Verifone CEO Douglas Bergeron.
“Clearly, we have tapped into the vast wellspring of small business
owners who want the benefits of secure card acceptance but have
been deterred by the cost of entry in the past.”
Product
launch
Online payment provider Kwedit
announces new payment systems
Kwedit, a US provider of alternative
payment systems, has announced the launch of Kwedit Direct and
Kwedit Promise. Kwedit Promise enables consumers to receive goods
immediately, and Kwedit Promises can be paid off using any of the
mechanisms provided by Kwedit Direct.
Kwedit Direct allows consumers to
make payments at participating retail stores, starting with 5,800
7-Eleven stores in the US, or by mailing cash or asking a friend or
family member to pay on their behalf through a unique social
payment network, ‘Pass the Duck’.
“Most teenagers and the 25 percent of American
households that do not have a credit or debit cards – or who would
prefer not to use them online because of concerns over privacy,
security, or financial responsibility – have been locked out of the
exploding virtual goods markets,” says Danny Shader, CEO of Kwedit.
“With Kwedit, those consumers can safely participate in the digital
content revolution, growing the market for publishers and retailers
such as 7-Eleven.”
Product
launch
Discover introduces new online
card customisation tool
US card issuer and payment network
Discover has announced the launch of CardBuilder, an online tool
that gives applicants the ability to select certain terms, rewards
preference and card design. CardBuilder provides prospective
cardmembers with the ability to design a card based on how they
want to use their Discover card.
Prospective Discover.com cardmembers can get
started by selecting which option best describes their credit
standing, as well as how they plan to manage their balance.
This information helps identify the best offer
available for the particular applicant. Users may select an option
from each of the three CardBuilder customisation offerings.
CardBuilder also enables users to choose which
type of rewards programme they prefer, whether it’s cash rewards
(cashback bonus), airline miles or getting interest back for paying
on time (pay-on-time bonus).
Product
launch
Wells Fargo extends text
banking service
US bank Wells Fargo has said that
its text banking service is now accessible to all customers,
including those who have yet to enrol in Wells Fargo online
banking. Wells Fargo is the first major financial services company
in the US to offer text banking to all its customers.
“Our text banking service is now available to
all Wells Fargo customers via a mobile phone, not just online
banking customers. Through simple and secure text queries, text
banking is the fastest, easiest way for customers to see a snapshot
of their accounts,” said Arah Erickson, vice-president and head of
Wells Fargo retail mobile banking.
“We are proud to enable access to account
information through whichever channel best suits customers’
changing needs and preferences. Text banking is convenient and
customers say it works well with their busy lifestyles.”
“Mobile phones are becoming an integral part
of our customers’ lifestyles. People want to take action
immediately – whether it’s ordering a pizza, getting tweets or
checking their current available account balance,” said Wells Fargo
senior vice-president Secil Watson, head of customer experience and
money movement for internet and mobile banking.
Financial
results
Diebold cuts jobs after
disappointing US results
US ATM maker Diebold has reported
fourth-quarter 2009 income from continuing operations of $7.9
million, down 55 percent from the year-earlier period.
Fourth-quarter 2009 revenue was $724.9 million, down 8 percent from
the same period in 2008.
The company also said its business related to
bank branch construction in North America remains challenging and
will likely not return to historical norms in the near future. The
job cuts are coming from its North America operations and corporate
functions, the company said. The company employs about 16,000
people overall.
Thomas Swidarski, Diebold president and CEO,
said: “To improve our ability to invest in key growth initiatives,
we are realigning our organisation and resources to better support
our opportunities in the emerging growth markets. Unfortunately,
these changes will result in the elimination of approximately 350
full-t
