• HSBC, Citibank, Standard Chartered and
Bank of East Asia are expected to launch
renminbi-denominated debit cards in China in the third quarter of
2007…
• MasterCard Worldwide has announced its
second-quarter 2007 operating results for the Europe region…
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• Total Canadian debit and credit card purchases grew at a CAGR
of 15 percent between 2000 and 2006, reaching C$336 billion ($319
billion) in 2006…
• Peru’s Interbank has awarded global
technology and consulting group IBM a $4.26
million contract to install and maintain 265 new ATMs…
Asia-Pacific
• The Chinese government is encouraging the use of credit cards
to combat corruption and increase transparency in public spending.
Staff at three government institutions – CPC Central Commission for
Discipline Inspection, Chinese Academy of Sciences and China Soong
Ching Ling Foundation – will use credit cards to pay expenses of
official duties below CNY50,000 ($6,600). The Ministry of Finance
will expand credit card usage to all government departments and
institutions funded by the central budget by 2008.
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By GlobalData• HSBC, Citibank, Standard Chartered and
Bank of East Asia are expected to launch
renminbi-denominated debit cards in China in the third quarter of
2007 to tap the renminbi savings pool. Other foreign players such
as Singapore’s OCBC and DBS are
not planning to issue cards. OCBC has indicated that it will launch
mortgage and wealth management products.
• MasterCard expects card spending in Hong Kong
to rise by 10 percent to 12 percent in the second half of 2007.
Growth in number of cards issued is expected to be in the
single-digit range in that time period.
• Indian cinema multiplex operator PVR Cinemas
has partnered with Visa to provide up to 50
percent discounts on online ticket purchases through Visa’s
Platinum card. The costs of the programme will be shared by both
parties and PVR will spend INR15 million ($371,290) on marketing
and promotion efforts.
• State Bank of India has launched Cash Back
Plus to reward its debit card customers. From 1 August to 3
October, the bank’s debit cardholders will get cash back of up to 5
percent for making payments of INR501 and above. Cardholders who
make payments of INR501 more than 15 times will earn 20 percent of
the cash back as a bonus. The maximum cashback amount is INR1,000
and the first two highest spenders each day during the offer period
will win two return Air Deccan tickets each. The bank has issued 26
million debit cards.
• Bank of America’s chief executive officer,
Ken Lewis, has stated the bank’s intentions to expand its credit
card business in Asia in an interview with local media. The bank’s
first project is a credit card joint venture in Japan in 2008, with
plans to expand the business to the rest of Asia. Lewis said that
the bank does not have plans to acquire a local bank for its
international operations.
• India’s ICICI Bank is planning to expand its
credit card business to another 50 cities from the current 125
cities in its portfolio. ICICI has a 35 percent market share and
expects a 20 percent to 25 percent growth in its card business
during the year. The bank hopes to add another 60,000 acceptance
terminals this year to cement its market leadership; it currently
has a 55 percent market share of terminals across India.
• Citibank and Jet Airways of
India have launched a co-branded Jet Airways Citibank Platinum Card
and Jet Airways CitiBusiness card targeted at the airline’s
frequent flyers.
• The Personal Credit Information Centre, operated by the
Japanese Bankers Association and 1,500 member
financial institutions, has been found to contain 3.3 million
pieces of incorrect consumer credit data. The error has caused
customers to be wrongly classified as delinquent and has affected
lenders such as Bank of Tokyo-Mitsubishi UFJ, Shinsei Bank and
Sumitomo Mitsui Banking. The error was due to member institutions
modifying programmes for a computer system change in the centre in
October 2006.
• Citibank Malaysia has launched the Fly for
Sure campaign by which cardholders earn free flights when they make
a minimum of ten transactions of MYR50 ($14) each per month. The
campaign will run from 1 August to 31 October and the bank will
notify cardholders who qualify for free flights.
• Online financial services firm Tune Money of
Malaysia will be launching a mobile-enabled prepaid card service.
Called Tune Money-Celcom card, the service will be offered to
Celcom’s 6.4 million phone subscribers. Tune Money expects 500,000
to 1 million subscribers and will target a broad segment of
cardholders, from foreign workers making remittances to high-end
users seeking a form of credit control in their card.
• UOB Singapore has launched the contactless
One Card, based on Visa’s payWave technology, and is targeting
younger customers in their 20s and 30s. The card can be used for
items worth less than S$100 ($66) and has a daily credit limit of
S$200. The bank hopes to attract at least 100,000 customers within
the first year of the card’s launch.
• OCBC will target tertiary students with a
credit card to be launched in the third quarter of 2007. The card
is made possible due to a recent ruling by Singapore’s central bank
allowing credit cards with a monthly credit limit of S$500 to be
issued to customers with less than S$30,000 in annual income.
• South Korea’s second-largest credit card company,
Samsung Card, said that its earnings for the first
half of 2007 more than tripled that of last year’s due to cost
rationalisation efforts.
• E. Sun Bank’s credit cards imprinted with
international Taiwanese baseball star Chien-Ming Wang’s image have
proved popular on the island. Over 30,000 cards have been issued
since the card’s launch in May. The average amount per transaction
is more than NT$4,000 ($121) – higher than the market average.
• Vietnam has reportedly issued 6.2 million payment cards over
the past ten years, according to local media. Some 20 commercial
banks have issued credit and debit cards.
Vietcombank is the leader in international credit
card issuance.
• Visa has reported 100 percent annual growth
in Vietnam: 300,000 cards are in issuance so far this year. Debit
cards account for one-half the number of cards issued. Some 12,000
POS and 2,500 ATMs accept Visa cards currently.
• ABN AMRO has launched the platinum Switch
Card which offers an interest rate of 18 percent per annum,
permanent waiver of annual membership fees, free cash advance
service on ATMs and 0 percent instalment payment plan for large
ticket purchases. The average interest rate offered by card issuers
in Singapore is 24 percent, in line with the central bank ceiling
rate. This is the second platinum card launch in Singapore, the
first card being targeted at non-resident Indians.
• Deutsche Bank and Lufthansa German
Airlines have launched the Miles & More Credit Card in
India, in association with Visa International. The
card is available in two variants – Visa Platinum and Visa
Signature. Cardholders get automatic membership to Miles &
More, the frequent flyer programme of Lufthansa.
Europe, Middle East, Africa
• MasterCard Worldwide has announced its
second-quarter 2007 operating results for the Europe region. For
the quarter, the region reported double-digit increases in
MasterCard credit card gross dollar volume (14.3 percent), purchase
volume (14.7 percent), purchase transactions (12.6 percent), cash
transactions (11 percent) and cards issued (18.2 percent) compared
with the same period in 2006. As of 30 June 2007, 164 million
MasterCard cards (excluding Maestro and Cirrus) had been issued by
MasterCard customer financial institutions across Europe.
Cardholders in the region made 1,390 million purchase transactions
in the second quarter of 2007. The Maestro and Cirrus brand marks
appeared on over 292 million cards, up 4.7 percent compared with
the second quarter of 2006 in Europe.
• Tinkoff Credit Systems, a Moscow-based
consumer lending bank, has chosen European payment processor
TSYS Card Tech to supply its card management and
authorisation system. The bank plans to become the first credit
card monoliner in Russia and will focus exclusively on issuing
credit cards. Tinkoff says it is aiming to issue between 5 and 10
million new cards over the next few years.
• Payment processor TSYS Europe and UK card
issuer Lloyds TSB have launched a new prepaid
money transfer card in the UK as part of the bank’s new Silver
account, aimed at the growing number of newly arrived migrants
living and working in the UK.
• The decline of cheque use in the UK has been underlined by UK
retailer Sainsbury’s, which is no longer accepting
cheques as payment. Sainsbury’s decision follows that of other
major UK retailers such as Boots, Asda and Shell in banning cheques
as a method of payment. Recent Visa-commissioned research shows
that 86 percent of large retailers are either considering trialling
non-acceptance of cheques or have already abandoned them, as
consumers increasingly prefer payment cards to make purchases.
• Commercial Bank of Dubai (CBD) has announced
the launch of a multitude of new banking services for customers on
their mobile phones via its Attijari SMS Banking System. The new
system will enable customers not only to track their bank account
details and provide a record of recent transactions, but also to
carry out all types of payment transactions instantly. The services
includes fund transfer within an account; balance enquiry and
providing information about the last three transactions on a bank
account or a credit card; and recharging the Etisalat Wasel prepaid
card.
• Net turnover from Icelandic credit cards rose by 17 percent in
the first five months of 2007 compared with the same period in
2006, according to a new report released by Statistics Iceland.
Comparatively, net turnover from debit cards rose by only 3.3
percent. According to Ingólfur Bender, head analyst of
Glitnir Bank, one of the three major commercial
banks in the country, this indicates that consumer spending is on
the increase again after a brief drop in early 2007.
• American Express Middle East has signed an
agreement with the InterContinental Hotels Group (IHG) to offer the
American Express Selects programme. As a special offer, American
Express cardmembers will receive a 25 percent discount on weekend
stays at over 400 selected IHG properties across the Middle East,
Europe and Africa. The American Express Selects programme currently
has over 300 regional merchant offers and hundreds more
internationally.
• Citibank Hungary is offering existing and
potential customers one-minute pre-screening and application
approval for Citi credit cards and loans through the bank’s
website. Should the pre-screening end with a positive result, the
customers are directed to the Citi WebShop where information about
Citi credit cards and personal loans is available, including
promotional offerings.
• In response to extreme flooding in parts of the UK,
Barclaycard has waived monthly minimum payments
for customers in affected areas. Minimum payments have been waived
for customers in all affected areas for the next 30 days. Interest
will not be payable on the minimum amount due and no late fee will
be charged. Barclaycard’s managing director for UK cards, Amer
Sajed, said: “Where customers have been hit by floods and power
cuts, I imagine making a credit card payment is the last thing on
their mind. Waiving the monthly payment means there is one less
thing for our customers to worry about.”
• First-quarter loans on credit cards rose by 68.7 percent in
Saudi Arabia compared with the year-ago period, according to
figures released by the Saudi Arabian Monetary
Agency (SAMA). Credit card loans grew to SAR7.9 billion
($2.1 billion) in the three months to 31 March from SAR4.68 billion
a year earlier. Year-on-year growth in first-quarter loans on
credit cards in Saudi Arabia stood at 40.8 percent in 2006. The
number of cards in circulation is expected to reach 20 million by
2009, representing an increase of 70 percent.
• GE Money, the global consumer lending unit of
GE, and Ryanair, the Irish budget airline, have
signed a deal under which GE Money will provide co-branded credit
cards for Ryanair across a number of European markets. The new
Ryanair credit card was launched in the UK and will be introduced
later in the year in Poland and Sweden. The agreement also allows
for the roll-out of the card across other markets where Ryanair and
GE Money operate. The card will be issued in association with
MasterCard in the UK and will be available through Ryanair.com and
at select airports.
• Austrian card company Europay Austria has
acquired a Visa licence from Visa Europe. In
addition to offering MasterCard and Maestro services, Europay
Austria will begin issuing Visa products and acquiring merchant
contracts this year. Europay will also change its name to PayLife
Bank from September to reflect its international expansion outside
Austria. Europay Austria offers services to more than 96,500
merchants and has issued more than 8 million payment cards.
• Visa Europe and Spanish card issuer
la Caixa have launched the first contactless
payment initiative in Spain with Visa payWave. la Caixa has
distributed Visa payWave cards among its clients in Madrid who live
near cinema complex Kinépolis, where Visa payWave POS terminals are
already installed.
• Mashreq Group of the United Arab Emirates has
reported a 45 percent increase in net profit for the first half of
2007: profit stood at AED956 million ($260 million) against AED660
million for the corresponding period last year. Commission and
other income increased 81 percent for the same period to reach
AED482.4 million compared with last year’s AED182.2 million, on the
back of higher income from foreign exchange and credit cards
business.
Latin America
• Banamex has signed an agreement with the
Federación Mexicana de Futbol (Mexican Federation
of Football) to become the main sponsor of Mexico’s national
football team. The agreement, which lasts until the end of 2010,
also includes an option for renewal beyond 2010. As part of the
deal, Banamex will be the main sponsor of the 2007 and 2009 Copa
América Cups matches as well as all the official and friendly
matches played by the Mexican national team up to 2010. Banamex
will also issue a co-branded credit card with the official Mexican
national team.
• Banamex has teamed up with
Organización Soriana to launch a new financial
institution that offers banking services at the Mexican
self-service retail chain’s 240 stores. The as-yet unnamed
financial institution will target unbanked customers with payment
cards, mortgages, loans, remittances services and savings
accounts.
• Banco Santander Chile’s credit card fees
increased by 3.1 percent in the second quarter of 2007 compared
with the first quarter of 2007 and 13.7 percent compared with the
second quarter of 2006, as the use of credit cards continues to
expand. Its ATM fees increased by 2.2 percent between the first
quarter of 2007 and the second quarter of 2007 and by 11.2 percent
between the second quarter of 2006 and the second quarter of 2007,
in line with the growth of the bank’s ATM network.
• Banco Santander Chile’s Banco San-tander
Santiago subsidiary has ordered 320 ATMs from Wincor
Nixdorf. The order, to be filled within the next four months, will
take the total number of Wincor Nixdorf ATMs installed by the bank
to 1,100. Banco Santander Santiago will install contactless card
readers at its new Wincor Nixdorf ATMs. Users of Santiago’s public
transportation system will be able to load their Transantiago
prepaid transit cards at the new ATMs and use them to pay for
subway and bus travel.
• Citigroup has formed an alliance with Chile’s
Quiñenco that gives Citi the option to buy up to
50 percent of LQIF, the holding company through which Quiñenco
controls Banco de Chile. Citi will initially take a 32.96 percent
stake in LQIF before the end of the first quarter of 2008, and has
the option to take an additional 17.04 percent of LQIF within three
years. Once Citi has taken its initial stake in LQIF, Citi’s
operations in Chile will be combined with those of Banco de Chile
to create a bank with about 20 percent of the Chilean banking
market. Banco de Chile has over 1 million clients, including credit
cardholders, corporate clients and individual consumers. It has 293
branches and 1,456 ATMs.
• Coinstar’s subsidiary Coinstar
E-Payment Services has signed a definitive agreement to
purchase GroupEx Financial (GFC). California-based
GFC provides electronic money transfer services between the US and
Latin America, operating a network of 1,650 send agents in 23
states serving 13 countries. Last year, Washington-based Coinstar
bought European money transfer service Travelex Money Transfer. On
completion of the GFC purchase, Coinstar money transfer services
will be offered at more than 31,000 agent locations in 143
countries.
• First Data International is to buy Brazilian
processor Check Forte Processamento de Dados. The
acquisition is subject to regulatory approval and is expected to
close in the third quarter of 2007. Check Forte provides data
capture, switching and POS terminal management plus network
processing services to banks for bill payment transactions
initiated at off-premises merchant locations. It also provides
cheque verification services directly to merchants. “The
acquisition of Check Forte is a continuation of our strategy to
grow our business in Brazil,” Peter Harrington, First Data
International’s president, Latin America and Canada, said in a
statement.
• BNP Paribas’s consumer credit subsidiary,
Cetelem, has taken a 100 percent stake in Brazil’s
Banco BGN. The transaction is subject to
regulatory approval. Formerly owned by the Queiroz Galvão group,
Banco BGN specialises in consigned credit, ie, repayments debited
directly from salaries. It has a portfolio of BRL1.5 billion ($786
million) and over 600,000 active customers in Brazil. In Brazil,
Cetelem markets its co-branded credit cards with over 70 retail
partners.
• Mexican retail and financial services company Grupo
Elektra has received a banking licence to offer consumer
credit services in Brazil. The group already operates banks in
Mexico, Panama, Guatemala, Honduras and El Salvador. At the end of
the second quarter of 2007, its Banco Azteca Mexico unit reported
that the average term of the credit portfolio for its main credit
lines, including personal loans and credit cards, was 60 weeks, up
from 57 weeks in the second quarter of 2006. In the second quarter
of 2007, solid growth in credit cards and personal loans helped to
grow the Mexican bank’s revenues by 14 percent to MXN3.9 billion
($350 million) from MXN3.4 billion in the second quarter of
2006.
• Smart card vendor Gemalto has appointed Luis
Cohen as commercial director for the southern region of Latin
America, encompassing Brazil, Peru, Bolivia, Chile, Argentina,
Paraguay and Uruguay. Cohen will be responsible for helping local
banks to migrate to smart card technology, as well as for Gemalto
sales in the transport and digital security sectors.
• Peru’s Interbank has awarded global
technology and consulting group IBM a $4.26
million contract to install and maintain 265 new ATMs. As a result,
Interbank’s ATM network will increase by 38 percent from its
current installed base of 701 ATMs. The new ATMs, which will accept
both the Peruvian nuevo sol currency and the US dollar, will allow
customers to withdraw cash, make deposits and pay bills. Interbank
expects that following installation of the new ATMs, 70 percent of
its customer transactions will be done over the web, by phone or at
ATMs.
• Visa International Latin America and Caribbean
Region (Visa LAC) has launched a website (www.visa.com/empresarial) for
SMEs. It is intended to encourage use by Mexican and Latin American
SMEs of Visa Commercial cards by explaining how electronic payments
can help their businesses to expand. In May 2007, Visa LAC launched
a multimedia marketing campaign to promote Visa Commercial cards in
Latin America. The website, which is part of this campaign, will
offer incentives and discounts to Visa Commercial cardholders.
• Visa LAC says its POS volume increased by 26
percent year-on-year to $116.3 billion in the 12 months to 31 March
2007. POS purchases made with Visa credit cards grew by 26 percent
year-on-year to $77.8 billion and POS volume for Visa debit and
prepaid card rose by 25 percent to $38.5 billion. The number of
Visa LAC credit cards in issue rose by 37 percent year-on-year, and
now stands at 91.3 million cards.
North America
• Total Canadian debit and credit card purchases grew at a CAGR
of 15 percent between 2000 and 2006, reaching C$336 billion ($319
billion) in 2006, Mercator Advisory Group says.
Because Canadian consumers are very comfortable using payment
cards, this growth trend is set to continue, Mercator says in a
report. Between 2005 and 2006, credit card purchases grew by 12.6
percent to C$215 billion and debit card purchases grew by 8.2
percent to C$121 billion.
• A global survey by digital security company
RSA of phishing attacks in June 2007 found US
banks accounted for 70 percent of banks targeted by phishing
e-mails in that month. Only 2 percent of banks attacked by phishing
e-mails in June 2007 were located in Mexico; Peru accounted for 1
percent, and Canada 6 percent, RSA said. The US also came top of
the list of countries hosting computers that were used to launch
phishing attacks, according to RSA.
• A bill to improve credit card interest rate disclosure is to
be introduced by Carolyn Maloney, Democratic Representative for New
York. Maloney, chair of the House of Representatives Subcommittee
on Financial Institutions and Consumer Credit, has issued a set of
best practices for credit card issuers. She says she wants issuers
to provide customers with clear notification of late fees and
penalty rate changes applied to their credit card accounts. Maloney
also wants issuers to ban universal default, in which missing one
loan repayment leads to higher interest rates on all a consumer’s
loans.
• American Express is reporting success for its
six-week Keep It Local campaign which ran in Brooklyn, New York
during June and July 2007. Amex encouraged purchases at local
retailers by making a donation of $1 to the Heart of Brooklyn Fund
for every transaction made with an Amex card at participating
merchants. “This was the second year of the promotion and the
number of our participating merchants doubled in that time,” an
Amex spokesperson told CI.
• Washington Mutual, the largest US savings and
loan institution, opened a record 928,000 new credit card accounts
in the second quarter to 30 June 2007. Net credit losses for the
managed portfolio (including securitised and sold credit card
receivables) accounted for 6.49 percent of total receivables, up
from 6.31 percent in the first quarter of 2007. Provision for
credit card loan losses was increased to $229 million from $106
million in the first quarter of 2007. Net card income was down to
$141 million from $256 million in the first quarter of 2007.
• Amex reported US consumer card spending up 12
percent for the second quarter of 2007 and small business card
spending up 15 percent compared to a year ago. Its US Card Services
unit’s revenue for the second quarter of 2007, net of interest
expense, was $3.6 billion, up 12 percent compared to a year ago.
However, second-quarter 2007 US net income of $580 million was down
2 percent from $594 million a year ago. US provisions for losses
increased 85 percent.
• Bank of America (BofA) has installed over
2,500 ATMs in the US that allow customers to make cheque and cash
deposits without an envelope or deposit slip. Consumers get
immediate credit for cash deposits and same-day credit for deposits
until 8pm local time. The ATMs scan the cheques, count the cash and
produce a receipt that includes an image of each cheque deposited
and a verification of the amount of cash.
• BofA reported strong growth in credit card
activations for its second quarter to 30 June 2007. Its Card
Services unit’s managed net revenue rose 2 percent to $6.43
billion. However, increased credit costs led to a 44 percent
decrease in net income for Card Services from $1.7 billion in the
second quarter of 2006 to $961 million in the second quarter of
2007. Managed credit card net losses were $2.1 billion in the
second quarter of 2007 compared with $1.5 billion in the second
quarter of 2006. Managed credit card net losses as a percentage of
average managed credit card receivables were 5.02 percent for the
second quarter of 2007 compared with 3.67 percent a year ago.
• Ezcorp, an Austin, Texas-based provider of
short-term loans, is giving its customers the option of receiving
funds in the form of prepaid MasterCard debit cards. The cards are
provided by prepaid card company NetSpend. New and
existing holders of NetSpend cards will be able to reload their
cards at 390 Ezcorp-owned Ezmoney loan service stores across ten
states. NetSpend MasterCard prepaid cards are issued by
MetaBank.
• GE Money has launched the GE Money Earth
Rewards Platinum MasterCard card, which it says is the first US
credit card to reduce cardholders’ carbon emissions through
greenhouse gas emission offsets. The card, which is part of GE’s
ecomagination portfolio, allows users to reduce their carbon
footprint by automatically contributing up to 1 percent of their
card purchases to buy greenhouse gas emissions offsets.
• Charlotte, North Carolina-based ATM software vendor
Level Four Americas has named Steven Lund as
president. The company sells ATM software in North America, Latin
America and the Caribbean.
• RBS Lynk, Royal Bank of Scotland’s US payment
processing arm, has appointed Larry Mandras as chief technology
officer. Mandras joined RBS Lynk earlier this year as senior
vice-president of product management. He now adds IT functions,
transaction processing and application development to his areas of
responsibility. Before joining RBS Lynk, Mandras worked for US
processor Global Payments.
• US alternative payments network Tempo
Payments is to launch a decoupled debit card called Tempo
Debit. Decoupled debit cards can be issued by financial
institutions, such as credit card issuers, even if they do not
offer current accounts. In such cases, cards are linked
electronically to current accounts held at other banks.
Transactions for Tempo’s decoupled cards can be cleared either via
card associations such as Visa and MasterCard, or over the Tempo
network, which uses the automated clearing house system.
• Wells Fargo’s debit and credit card fees were
up 24 percent in the second quarter of 2007 compared with the
second quarter of 2006. Credit card loans 90 days or more past due
date were up from 181 days at the end of June 2006 to 253 at the
end of June 2007, but down from 272 at the end of March 2007.
• US online book and entertainment retailer
Amazon is to follow the lead of search engine
Google and micropayment service PayPal in launching its own online
flexible payments system. The system will allow users to accumulate
several micropayments and bundle them into one transaction, then
process it through an existing payment mechanism, such as a card
account.
