Mobile payments NAB to explore m-payments after successful trial
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.
NAB 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.”
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.
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.