Mobile payments
NAB to explore m-payments after successful trial
Go deeper with GlobalData
National Australia Bank (NAB) is considering a commercial launch
of contactless mobile payments after a three-month trial at
Melbourne’s docklands “exceeded expectations” and indicated strong
consumer support for the technology.
During the trial, consumers downloaded the NAB Visa credit card
software application to their Telstra SIM card remotely, and used
their mobile phone to purchase goods and services by waving the
handset over a participating merchant’s Visa payWave-enabled
reader.
According to user feedback, 90 percent of trial participants
were very or extremely satisfied with the contactless payment
system, while 95 percent said they were likely or extremely likely
to use the technology in the future. More than three-quarters (78
percent) of participants said paying using a mobile phone was
better than cash.
NAB said that feedback from participating merchants was also
positive, with participants reporting contactless mobile phone
payments as a quicker, more efficient and convenient way to serve
customers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataNAB regional general manager for consumer product solutions John
Salamito said: “Now we know that mobile payments can work
successfully in a real environment, we are looking at ways to
launch this into the Australian market.”
Product launch
HSBC launches Visa debit cards in Sri Lanka
HSBC, in collaboration with Visa, has launched the first HSBC
Visa debit card in Sri Lanka, following an agreement signed by both
parties in late 2008 to offer HSBC Visa debit cards in several
markets across the Asia-Pacific region. Sri Lanka is the first
among 12 countries and territories to launch a new HSBC Visa debit
card.
Three new HSBC Visa debit cards have been introduced: the HSBC
Visa classic debit card and Visa platinum debit cards for HSBC
Premier and HSBC PowerVantage accountholders.
Consumer indebtedness
Hong Kong card delinquency ratio rises
The credit card delinquency ratio in Hong Kong rose slightly to
0.34 percent in the fourth quarter of 2008 from the previous
quarter’s record low of 0.31 percent, according to the Hong Kong
Monetary Authority (HKMA). The delinquent amount rose to HK$263
million ($33.9 million), compared with HK$227 million in the
previous quarter.
Total card receivables grew 4.3 percent in the fourth quarter
after rising 0.8 percent in the previous quarter, driven mainly by
festive spending near the end of the year as well as the payment of
salaries tax via credit cards, the HKMA said. The total number of
credit card accounts fell by 1 percent.
The roll-over amount, an indicator of borrowing by customers
using their credit cards, declined to HK$23.8 billion at the end of
December from HK$23.9 billion three months earlier. The charge-off
amount rose to HK$584 million, or 0.77 percent of average
receivables, from HK$505 million in the previous quarter.
Commercial cards
Visa unveils programme for Asia-Pacific
Visa has launched its 2009 Visa Commercial Offers programme
designed to help Asia-Pacific businesses drive down costs for a
range of essential business expenses.
The Visa Commercial Offers programme features savings on a wide
range of business products and services from more than 120
established merchants in Australia, China, Hong Kong, India,
Malaysia, New Zealand, Singapore, Taiwan and Thailand.
The Commercial Offers programme includes discounts for business
travel and accommodation, business support services, office
supplies, IT and telecom services among other professional products
and services. There are also special concessions on essential
business support services such as web hosting, printing and courier
services.
The programme is open to all cardholders of Visa commercial
solutions which includes Visa business cards, Visa corporate cards
and Visa purchasing cards.
Credit losses
Indian issuers expect more losses in 2009
SBI Cards, India’s second-largest credit card issuer is likely
to report a loss for the second consecutive year as defaults
mount.
CRISIL, the Indian arm of global ratings agency Standard &
Poor’s, said in a recent report that SBI Cards was expected to
report more losses in 2008-2009 on high credit costs and lower fee
income. Another major Indian issuer, ICICI Bank, is also expecting
higher losses in the coming months.
Sachin Khandelwal, head of credit cards at ICICI Bank, said: “In
2007-2008 the credit cards business grew by 20 to 25 percent. We
had issued 1.5 million cards in 2007-2008 which has been reduced by
60 per cent in the first 10 months of 2008-2009. The credit losses
have increased by more than 1 percentage point [of the spread
between lending rates and cost].”
Product launch
Citi launches platinum card in India
Citibank India has announced the launch of the Citibank
‘Platinum Select’ credit card, which offers customers a combination
of preferential privileges, priority service and protection. The
card incorporates a rewards programme offering five times the
points on ordinary cards for lifestyle spending, with an exclusive
service platform for members.
The product is aimed at giving customers lifestyle benefits for
dining, shopping and leisure activities.
It is being launched initially only in New Delhi and Mumbai and
will carry an annual fee of INR4,000 ($79.45). India is one of only
two countries in Asia-Pacific – the other being Thailand – to offer
the Citibank Platinum Select card.
N Rajashekaran, country business manager of the global consumer
group at Citi India, said: “The Citibank Platinum Select is a
demonstration of our strategy to offer the right product
propositions for maximum customer engagement and activity on our
products.”
Lending growth
Bank loans on the rise in Cambodia
The Cambodian banking sector has experienced loan growth rising
from $500 million in 2004 to around $2.4 billion by the end of
2008, according to the National Bank of Cambodia, the country’s
central bank.
There are now 24 commercial and six specialised banks, and 338
ATMs in place in the country, along with 60 non-governmental
financial institutions and 3,937 money exchange locations.
Hang Chuon Naron, secretary general at the Cambodian Ministry of
Economy and Finance, told a trade and investment seminar that the
government believes that the banking sector of Cambodia is on a
solid footing, despite the economic crisis and reports of high
risk.
Limited exposure to real estate, low non-performing loans and
rising deposits show that the sector is in good shape, he said.
EUROPE, MIDDLE EAST, AFRICA
Security and fraud
Africa’s first EMV cards ready to be rolled out
Nigerian banks are set to start rolling out EMV cards to replace
the existing magnetic stripe ATM cards. Full implementation of the
programme must be completed before deadline set at the end of the
second quarter of 2009 by the Central Bank of Nigeria. The mandate
was formulated in response to a rise in fraudulent transactions
being made at the country’s ATM machines with the older magnetic
stripe cards.
Intercontinental Bank, in conjunction with national transaction
switching company Interswitch, has rolled out the first ‘Verve’
chip and PIN card incorporating a loyalty application created in
Nigeria. Cardholders can carry out payment transactions on over
11,000 point of sale terminals, 7,300 ATMs, 200 websites and via
50,000 mobile phones.
Interswitch also plans to launch an awareness programme that
will introduce cardholders to safeguarding their PINs, awareness of
card fraud, card insurance and other new services.
Card usage trends
UK online retail spending drops
UK payment industry body APACS has revealed its December 2008
figures for UK debit and credit card usage, with total spending on
payment cards over the Christmas period rising by just 0.3 percent
to reach £32.3 billion ($47 billion), of which £4.7 billion was
spent online. December saw UK consumers spend a total of £21.6
billion using debit cards – a rise of 3.1 percent over 2007, and
credit card spending amounting to £10.8 billion – a fall of 4.8
percent compared to 2007.
Sandra Quinn, director of communications at APACS, said: “While
the number of transactions was higher than in December 2007,
average transaction values fell, no doubt influenced by price
discounting by retailers and the VAT cut. Also, this fits in with
what supermarkets were reporting – in that people were buying the
same number of items but opting for cheaper budget alternatives.
The fall in credit card spending follows the trend we’ve seen over
the last four years with customers continually preferring to put
most of their card spending on debit cards.”
Product launch
Women’s credit card launched in Morocco
BMCI, a Moroccan subsidiary of French banking group BNP Paribas,
has launched a new EMV-enabled credit card aimed at women in
Morocco. The MasterCard-branded ‘Ladies First’ card has been
launched in conjunction with Morocco First, a retail group. The
card also incorporates a loyalty programme, called Morocco Premium
Ladies First Privileges, which entitles cardholders to discounts
and special benefits in conjunction with women-orientated retailers
and leisure facilities.
Mobile payments
Monitise partners to develop East African m-banking
service
UK-based mobile payment solution provider Monitise has formed a
partnership with E-Fulusi Africa, the Tanzanian mobile wallet
provider, to develop mobile banking services for the millions of
people across East Africa that are currently unbanked.
Monitise was recently awarded $1.5 million of funding by the
Africa Enterprise Challenge Fund (AECF) to deliver its service in
East Africa. The UK-based company says it will integrate its mobile
money manager platform with E-Fusili’s mobile wallet technology to
create financial accounts that can be operated from consumer
handsets.
The E-Fulusi mobile wallet technology currently powers the
Mobipawa and ZPESA services, the first two mobile banking services
in Tanzania. The firm says it has worked closely with the national
central bank to establish a regulatory framework for mobile banking
in the country.
Monitise East Africa will initially offer services in Uganda,
where it will have its headquarters in Kampala. In due course the
service will expand into neighbouring countries, including Burundi,
Democratic Republic of Congo, Ethiopia, Kenya, Rwanda, Tanzania and
Zambia.
Mobile payments
Zain launches mobile banking service
Middle East and African mobile telecom provider Zain is set to
launch mobile banking in the region of East Africa, starting with
Kenya and Uganda, followed by Tanzania.
The service, called ‘Zap’, will be launched in co-operation with
Citigroup and Standard Chartered, allowing millions of people
access to banking for the first time. Users will be able to pay
bills, make payment for goods, receive and send money, withdraw
cash and manage their own bank accounts. The service will also
allow users to send airtime to other Zain customers across Kenya,
Tanzania and Uganda.
Zain customers can sign-up for free for the new Zap banking and
payment services by completing an application form and handing it
over to registered Zain agents in tens of thousands of villages,
towns and cities across East Africa. Zain will then provide the
customer with a mobile wallet, which will allow them to use their
mobile phone in much the same way as a bank account debit card and
manage their money through their handset.
Mobile payments
Viva launches mobile payments with Macalla
Viva, a Kuwaiti mobile service provider, has awarded a contract
to Irish mobile payment software Macalla. Macalla plans to partner
with partner Turnkey Systems in delivering the project. It will
also provide Viva with software services and expertise.
The mobile payment service will be available in Arabic and
English directly to subscribers and via a Viva dealer network.
Macalla’s platform allows operators to offer their subscribers
services including direct top-up, bill payments, money transfers,
mobile banking and international remittances.
E-commerce
OneCard promotes online payment services
OneCard, the Saudi Arabian smartcard solution provider, is
planning to take advantage of the rapid growth in internet use
throughout the Middle East to further promote its online payment
and e-commerce services in the region.
The Middle East region registered an internet usage growth rate
of 1,176.8 percent between 2000 and 2008, which is expected to
further hike the number of Arab internet users to 25 million in
2009.
OneCard expects that solid public spending in 2009 will
influence retailers to launch more e-commerce initiatives in the
region.
“The Gulf is expected to increase its average GDP by a solid 2.4
percent in 2009. One of the key factors for this growth is strong
public spending, which will definitely influence retailers to
launch their own e-commerce initiatives,” said Muhannad Ebwini,
general manager of OneCard.
“Given that a majority of Arab internet users are youth who are
active consumers, e-commerce has the potential to expand
exponentially this year.”
LATIN AMERICA
Mergers and acquisitions
Itaú Unibanco merger approved in Brazil
The Brazilian Central Bank has inked the merger of the Itaú and
Unibanco groups which will now do business as Itaú Unibanco
starting 31 March 2009.
Itaú, one of the country’s largest private banks, announced it
would merge with its smaller rival in November last year, creating
the country’s largest bank, with assets of around BRL575.1 billion
($245 billion).
The deal awaits a green light from the country’s anti-trust
agency Cade.
Mobile payments
Telcel and Banamex launch SMS banking
Mexican financial institution Banamex and mobile phone service
provider Telcel have teamed up to launch an SMS-based mobile
banking service, Banca Móvil.
Users who want to use the service will need to swap their SIM
for a card with upgraded security settings available at Banamex
branches.
The phone number and credit card accounts are linked up which
will enable Telcel subscribers to request account information, make
payments or pay utility bills. The limit for transactions has been
capped at MXN6 million ($410).
Banamex has 12 million customers while the Telcel subscriber
base exceeds 56 million. Telcel’s parent company America Móvil
predicts that nearly 2.9 percent of its overall customer base in
Latin America will use mobile banking services by 2010, a figure
expected to increase to 9 percent by 2012.
Financial results
Banco do Brasil doubles profits, lending down
Brazil’s largest government-owned bank, Banco do Brasil (BB),
more than doubled its loan portfolio in the fourth quarter of 2008
on expansion of credit portfolios and a non-recurring gain
generated by a revision in the calculation of pension plan assets.
This amounted to BRL224 billion, up 40 percent from a year
earlier.
The bank’s consumer credit portfolio rose 52.5 percent in the
fourth quarter from a year earlier. With this increase, BB raised
its bad loan liabilities in the fourth quarter to BRL3.89 billion
from BRL1.5 billion a year earlier.
The bank’s net income went up to BRL2.94 billion ($1.23
billion), a jump of 142 percent compared to BRL1.2 billion in the
year-ago period. Excluding non-recurring gains in the period, the
bank posted a net profit of BRL1.6 billion.
Its default rate fell to 2.4 percent in the quarter from 2.7
percent last year, but the default rate in Brazil surged in
December to its highest since September 2002 because the country’s
economy slowed down and the cost of lending went up.
Mergers and acquisitions
Citi sells Argentine consumer finance unit
Citi has sold its Argentine consumer finance unit Provencred to
local bank Comafi for an undisclosed sum. Provencred was acquired
by Citi in 1999 and specialised in consumer loans and credit cards.
Its business portfolio amounts to around $50 million.
“With the sale of Provencred, Citi leaves a non-strategic
business to refocus on increasing its resources to continue
expanding its traditional consumer and corporate banking business,”
Citibank Argentina chairman Juan Bruchou said in a press
release.
Comafi had ARS3.04 billion ($856 million) in assets as of
September 2008, and operated through 55 branches across
Argentina.
Acquiring Provencred represents an important opportunity for
Comafi to expand into the country’s provinces, according to the
bank.
Financial results
Banco Macro profit jumps in Q408
Argentina’s Banco Macro has reported its fourth-quarter 2008
results, with net profit rising to ARS184.1 million ($52.2
million), a 9 percent rise compared with ARS168.7 million in the
year-ago period. Net operating income rose 25 percent to ARS253
million in the same period, and its financing to the private sector
grew by 15 percent, driven by personal loans.
Interest income, which represents 58 percent of the bank’s
income, grew by 66 percent year-on-year, with interest income from
credit cards in particular jumping by 134 percent year-on-year.
Banco Macro provides banking products and services to
individuals, businesses and corporates across Argentina.
Financial results
Banco Patagonia net income jumps in Q408
Argentina’s Banco Patagonia has reported its fourth-quarter 2008
results, with net income rising by 43.3 percent to reach ARS107.6
million ($30.3 million), driven by rises in interest rates and
fluctuations in the exchange rate between the ARS and the US
dollar.
Lending to the private sector rose by 16 percent over the year
to reach ARS3.51 billion, compared to ARS3.02 billion in the fourth
quarter of 2007, driven by credit cards and personal loans.
Net service revenues from credit cards reached ARS36.4 million
in the fourth quarter, compared to ARS31.5 million in the preceding
quarter. Credit card loan portfolio growth was 30.7 percent over
the year, amounting to ARS101 million.
Income from services increased by 9.7 percent compared to the
third quarter of 2008, driven by commissions on deposit accounts,
granting of safety boxes, revenues due to the use of credit cards,
and commissions related to the granting of loans. As of December
2008, Banco Patagonia had a network of 153 permanent customer
desks, 2 tourist service centres, and 259 ATMs nationwide.
Mobile payments
EFICI launches collaborative mobile payments platform
EFICI, a US-based technology and outsourcing company, has
launched EFICASH, a mobile payments platform for banks and mobile
phone companies that the company claims addresses one of the main
obstacles of using mobile phones as a means of payment at the point
of sale.
The application is based on a prepaid model that securely allows
consumers to make and receive payments by linking their debit and
credit cards and bank accounts. EFICASH can support multiple
languages, currencies, and different types of accounts, among other
customisations.
Andres Gonzalez, CEO of EFICI, says that the platform enables
users to use phones with integrated cameras to interpret 2D codes,
rather than waiting for near-field-communication (NFC) technology
to be rolled out on a widespread basis.
“In the US and Latin America, the adoption of mobile payments is
progressing slowly as compared to other regions such as Europe,
Asia and Africa. Success requires the introduction of a lower cost
model for financial institutions, mobile network operators (MNOs),
merchants and users, with a disruptive technology to break the
barriers of adoption,” said Gonzalez.
NORTH AMERICA
Consumer debt
Helpline planned
Bank of America, Capital One, Citigroup and the payment
networks, MasterCard, Visa and Discover, are teaming up to launch a
telephone helpline and website to help consumers deal with personal
finance issues. The initiative, ‘Help With My Credit’, will provide
advice on how to manage credit cards and guidance on how to
approach card issuers and accredited credit counselling
agencies.
The announcement comes at a time when issuers are suffering
record-high charge-offs, with credit rating agency Fitch’s credit
card index reporting a 40 percent increase this January compared to
the same time last year.
Three national, non-profit credit counselling agencies – Take
Charge America, Money Management International, and Novadebt – have
agreed to participate in the initiative.
Prepaid cards
Discover launches prepaid card for teens
US payment network and card issuer Discover has launched
‘Current’, a new debit card for teens that helps them track and
manage their spending.
Discover said the card has been launched to help parents foster
financial responsibility in teens, which is especially critical in
the current economy.
Teens can choose from seven unique designs and receive
members-only in-store coupons and online discounts at hundreds of
merchants. Current’s $0 fraud liability means money is protected
from unauthorised transactions if the card is ever lost or
stolen.
Parents can deposit funds directly onto their teen’s Current
card for free, using their credit card, bank account or through
recurring deposits. Parents can also set daily, weekly or monthly
spending limits and block certain merchant categories that may be
inappropriate for teens. Parents can also earn Discover Cashback
Bonus or AirMiles when they load their teen’s Current card using
their Discover card.
Cardmembers pay a $5 monthly charge for each card, or save $10
by paying an annual fee of $50. Fees include four free ATM
withdrawals per card per month.
Prepaid cards
Wal-Mart cuts prices on MoneyCard
Wal-Mart, the US budget shopping supermarket chain, has sold 2
million MoneyCard cards, its prepaid reloadable Visa debit
offering, within 18 months of launch. Wal-Mart is marketing the
product to low income, budget-conscious consumers in a weak
economy. It has plans to develop a consumer finance portfolio by
leveraging its vast customer base.
It is looking to market MoneyCard to the 35 million US families
underserved by traditional financial institutions by offering many
current account facilities, like depositing pay cheques, checking
balances, paying bills and shopping anywhere that Visa debit is
accepted. The MoneyCard retails at $9 but will now be sold for $3,
its monthly fee cut to $3 from $5, and its topping-up fees cut to
$3 from $4.64. Wal-Mart also hopes to launch a community programme
to teach basic money management skills.
Payment networks
Amex pays customers to leave
US payment network and card issuer American Express (Amex) is
encouraging selected customers to pay off their balances and close
their accounts by offering them a $300 Amex prepaid gift card. Amex
is thought to be the first of the major US issuers to have made
such an offer to its customers to go elsewhere, and it may spur
other issuers into offering similar deals.
The offer is only being made to consumers and not corporate
cardmembers. Customers who have received the offer have until 28
February to respond.
Cardmembers have from 1 March to 30 April to pay off their
balances and receive the prepaid card. During that time, the
balance is subject to the same interest rates and fees that it
would be if they chose to keep their card. If customers don’t pay
off their balance by 30 April, they will not get the gift card and
their accounts will still be closed.
Prepaid cards
Discount stores to start accepting prepaid cards
US budget retail stores like Sam’s Club and So Low will start
accepting electronic benefit transfer (EBT) prepaid cards which
were issued as part of the 2004 federal supplemental nutrition
assistance programme.
The cards replaced paper food stamp coupons and can be used in
all 50 states and the District of Columbia, Puerto Rico, the Virgin
Islands, and Guam.
Areas like Minnesota, where poverty rates are the second highest
in the US, have seen a sharp rise in usage of the card. There are
more than 150,000 families in Minnesota – the second-poorest state
in the country – that currently use the cards, an increase of
20,000 on last year.
Stores like Sam’s Club and So Low – both with a low-income
clientele – are cashing in.
“Usage is up on EBT – in the last two years, probably about 10
to 15 percent,” said Scott Godes, the owner of So Low groceries.
However, items like paper products, cosmetics, pet food, eat-in
items, vitamins and medicines cannot be bought using the cards in
these stores.
Credit lending
Lending by bail-out recipients down
Bank of America and Citigroup – the recipients of the largest
rescue packages in the US – have reduced their overall consumer
lending volumes and started to offer lower credit limits on new
credit card issued. Their lending was cut by $45 billion or about 2
percent, according to recently published US Treasury figures.
The bigger picture is complicated as outstanding debt in the US
increased because cash-strapped customers took advantage of their
credit cards. This indicates a short-term increase in lending but a
long-term decrease in the availability of loans.
Citigroup, for example, reported that outstanding credit card
balances grew by nearly $800 million, but it reduced total
available credit by almost $37 billion. But the total decline was
modest and some large banks even posted small increases. Treasury
officials insist the fall was due to a recessionary decrease in
consumer demand and the diminished credit-worthiness of
borrowers.
Mobile payments
ViVotech snaps up US patent for NFC phones
ViVotech, a California-based solutions provider of contactless
and near field communication (NFC) technology, has won an
NFC-related technology software patent that covers a range of
payment methods systems for credit provisioning, debit, prepaid,
loyalty and other payment and non-payment cards. The patented
technology will be available for use via wireless networks, in
mobile phones or on the internet.
ViVotech’s over-the-air infrastructure will allow consumers
self-authentication to activate single or multiple payment and
loyalty cards downloaded onto NFC mobiles via service providers’
networks. It accommodates a two-server architecture which allows
the issuer to use its own or a third party’s network, allow
branding exercises, and provides customer support information among
other features.
