Australia-based prepaid card provider
OnCard has reported a 13.4 percent increase in
half-year profits…
• Network International,
a Middle East card payment solutions provider, has formed a joint
venture with Bahrain Electronic Network for Financial
Transactions…
Go deeper with GlobalData
• Mexico’s
fifth-largest bank, Banco Banorte, stated that its
fourth-quarter 2008 net profit fell to MXP1.27 billion ($0.08
billion)…
• US
Financial Services Group has officially launched
MobileProPay, an iPhone and iPod touch credit card processing
application aimed at businesses…
• Australia-based prepaid card provider
OnCard has reported a 13.4 percent increase in
half-year profits to December 2008 over the previous corresponding
period. Sales of loyalty, rewards and prepaid cards increased 120
percent, reaching 29 million in Asia and 23 million cards in China
alone.
Its China operations contributed A$3.23
million ($2.14 million) in profit, an increase of 1.9 percent from
the corresponding period last year. OnCard is expected to make
announcements regarding Asia-based acquisitions and joint ventures
in the next few months.
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By GlobalData• Industrial and Commercial Bank
of China’s cardholders will now only be charged interest
for the rollover balance on their credit cards if minimum payment
is made. Previously, cardholders were charged interest based on the
total amount borrowed if they were unable to pay off the whole sum
before the due date.
Although the move was welcomed by
cardholders, it will affect the bank’s profits. The bank claims
that credit cards account for 10 percent of the bank’s operations
and will thus not have a significant impact. The bank also recently
reported that credit card spending in January 2009 rose by 27
percent from January 2008.
• Punjab National Bank,
India’s second-largest public sector bank, has launched Global Gold
and Global Classic credit cards in collaboration with Visa. The
photo credit card offers a 50-day credit period and no annual fees.
It will be available in the bank’s 1,200 branches across India.
• The Reserve Bank of
India has proposed a maximum prepaid card limit of
INR50,000 ($1,026). Semi-closed prepaid cards may be issued with a
limit of INR1,000 without being subjected to know-your-customer
reporting requirements while prepaid payment instruments for
utilities, telephone and insurance may be issued with a limit of
INR10,000.
• GE India will exit the
consumer loans business and focus on credit cards, commercial
lending and infrastructure financing. It will miss its 2010 revenue
target of $8 billion and may take another year to reach the
targeted revenue.
The risk of fraud and defaults in the
unsecured lending segment in India is high although foreign banks
are still very keen to grow their operations in the region in the
long-term.
• India’s Supreme Court has suspended an
order by a consumer rights panel to cap credit card interest rates
at 30 percent. A joint plea by HSBC,
Citibank and Standard Chartered
cited the high business costs such as the costs of call centres,
monthly statements, fee waivers, and marketing and loyalty
programmes.
Current interest rates range from 36 to 49
percent.
• ICICI Bank, India’s
largest private sector bank, has been reviewing its growth in the
credit card business with the current economic concerns.
Indian cardholders are delaying payment on
their credit cards as total credit card outstandings registered a
sharp increase of 69.3 percent in the 12 months ending 19 December
2008. The bank has a 30 percent market share and shrunk its
portfolio by 3.7 percent from 2007 to 2008.
• Smart card manufacturer
Gemalto will partner with India-based
mChek to boost the range and choice of secured
mobile banking solutions available on Gemalto SIM cards in South
Asian countries such as India, Sri Lanka, Bangladesh and further
afield, in Indonesia and the Philippines.
• American Express has
appointed Rajesh Saxena as chief executive officer of American
Express Banking in India. Saxena, formerly with Citibank, will
manage the international consumer card and small business
services.
• Indonesia’s central bank, Bank
Indonesia, has warned card issuers to prepare for an
increase in defaults among credit cardholders. The default rate as
of the end of 2008 was at 10 percent, a decrease compared to the
default rate of 12 percent in 2007.
• South Korean credit
card firms are facing rough market conditions with the ongoing
economic slump. Delinquency rates in Samsung Card
and four other card issuers rose to 3.43 percent by the end of
2009, according to data from the Financial Supervisory
Service.
The South Korean economy shrank 5.6
percent in the final quarter of 2008 from the previous quarter, its
lowest since the 1997-1998 Asian crisis.
Credit card usage also hit a five-year low
in January 2009. Market observers are expecting it to decline
further as consumer confidence is shaken with 100,000 job cuts
expected in 2009 and no signs of an economic recovery.
• South Korean card
issuers will also face a decline in fee revenue after being asked
to reduce the merchant fee to as low as 2 percent from up to 3.3
percent previously. Smaller retailers are also lobbying for a
decrease in their fees as they would be harder hit with merchant
fees.
Large retailers such as discount chains
and department stores currently pay 1.5 percent to 1.8 percent
while restaurants pay 2.6 percent to 2.7 percent and lodging houses
pay 3 percent to 3.2 percent.
• Malaysia’s MBF Cards
has launched a Lady WalletGuard programme for its MBF Lady Platinum
cardholders. Launched in collaboration with ACE Insurance
Malaysia, the scheme offers financial relief for
fraudulent transactions, stolen cash and medical expenses resulting
from thefts.
• RHB Banking Group of
Malaysia has launched a co-branded credit and debit card with
Tesco Stores and Visa.
Cardholders will enjoy a 2 percent cash rebate and earn double
Tesco Clubcard points.
On the last weekend of each month, they
will enjoy a higher cash rebate of 5 percent. Debit cardholders
will earn five times Clubcard points which can be used to offset
future purchases at Tesco.
• Bank of Ayudhya will
acquire AIG’s retail banking and cards operations
in Thailand. AIG is selling its two Thai units to concentrate on
its insurance business and repay its debt to the US government.
In a deal expected to be completed in
April 2009, Bank of Ayudhya will acquire the operations for $58.7
million or at 0.6 times book value.
This move will increase Bank of Ayudhya’s
retail loans by 14 percent, bringing its retail loan contribution
to 36 percent from 32 percent, and add 220,000 credit cards to its
portfolio.
The bank is targeting its retail loan
portfolio to make up 50 percent of its total portfolio by 2010. GE
owns 33 percent of the bank.
Europe, Middle East,
Africa
• Network International,
a Middle East card payment solutions provider, has formed a joint
venture with Bahrain Electronic Network for Financial
Transactions under which Network International will
provide third-party ATM and card processing services for banks in
the region.
This came in response to a request from
the central bank of the United Arab Emirates (UAE) for banks to
upgrade their ATM cards with EMV technology.
It is expected that more than 500,000
cards will be issued under the venture over the next five years,
with revenues projected at around AED36.7 million ($10
million).
• Kenya Commercial Bank,
the largest bank in East and Central Africa, has deployed banking
software provider Temenos’ banking system, T24, to
support its retail and corporate banking operations.
The new system has gone live in 145
branches in Kenya, supporting approximately 675,000 bank accounts,
with plans to expand to another 75 branches across East Africa.
• Global credit ratings agency
Standard & Poor’s has teamed up with the
Saudi Arabian Credit Information Bureau to develop
a commercial and corporate credit information service for banks in
Saudi Arabia.
The move will see default and recovery
data from 12 local banks collected and assessed in a bid to
strengthen the industry’s risk management standards.
Member banks will provide information on
their mid-market and large corporate defaults, both historically
and on an ongoing basis.
• UK banking group Royal Bank of
Scotland (RBS) has launched RBS WorldPay
as a new brand to consolidate its existing range of retailer
payment solutions products and services.
The new brand brings together Streamline,
Streamline International, WorldPay, Payment Trust, Bibit,
RiskGuardian and RBS Lynk.
RBS WorldPay offers payment processing
solutions across face-to-face, online, telephone and mail order
platforms servicing all sizes and sectors of business. It is one of
the largest merchant acquirers in Europe and globally, operating in
more than 40 countries.
• UK banking group
Barclays is offering its mobile banking customers
free security software from anti-virus vendor
Kaspersky to protect them against malicious
software and SMS spam which can be downloaded from its mobile
site.
Barclays claims it is the first in the UK
to offer such protection for free. The mobile site has been
revamped to make it easier to view account balances and statements
and make transfers or payments.
• German prepaid solution provider
paysafecard.com, issuer of the prepaid cards, has
changed its trade name to Prepaid Services Company
in order to reflect the growing use of prepaid solutions for
e-commerce. In 2008 there were 15 million transactions using
paysafecard.
• EntroPay, a European
prepaid solution provider, has launched the EntroPay MasterCard
which is an extension of EntroPay’s existing prepaid offering
available online.
Existing customers can now extend their
EntroPay account functionality to upgrade to a plastic
MasterCard.
EntroPay plans to develop a bespoke
business service in 2009, where companies will be able to co-brand
their EntroPay plastic MasterCard cards with their logo for
employees.
• European IT service company
Tieto has partnered with global payment processor
First Data for a new payment card solution for state institutions
in Latvia. The solution is based on the Tieto Card Suite Acquiring
module and is aimed at speeding up payment processes.
Instead of multiple bank transfers, end
users will now be able to pay for the services of Latvian state
institutions with a payment card.
• Citi Handlowy of Poland
has announced that the number of Citi credit cards issued in the
country has exceeded one million. Citi also claims to be the market
leader in terms of the number and value of credit card
transactions.
More than 3,200 points of sale in Poland
now offer discounts to Citi credit cardholders, and Citi has also
launched an SMS messaging service for cardholders.
• Global payment processor
TSYS is to provide end-to-end payment services to
Benelux card acquirer and processor PaySquare.
PaySquare began outsourcing payment
processing operations to TSYS in October 2008, supporting
MasterCard, Visa and Maestro card transactions through its Prime
processing platform. It manages more than 55,000 merchants.
• First Data has also
started processing payment and loyalty cards for
Mercator, a retail chain in South-east Europe.
The launch of the services, which are now
live in Slovenia, Croatia, Serbia, Bosnia and Herzegovina and
Montenegro, comes 10 months after First Data signed a processing
agreement with Mercator.
Mercator operates more than 1,500
hypermarkets, supermarkets and grocery stores in the region.
First Data is providing issuing processing
services for Mercator’s loyalty programme ‘Mercator Pika’, which
has around one million members.
• Separately, TSYS has
been selected by Germany’s Deutsche Bank for
credit card processing.
TSYS will manage around 1.5 million card
accounts for Deutsche Bank from the second quarter of 2009.
• Valitor, a card
acquirer in Iceland, has entered the UK through a strategic
partnership with global payment services provider
YESpay.
It has selected YESpay to act as its sales
agent and payment processor in the UK to provide managed card
payment services to multi-chain retail businesses in a range of
sectors.
YESpay will perform various services,
including merchant recruitment, risk assessment as well as payment
processing services.
• Swedish bank,
Handelsbanken has introduced a new fraud
protection facility on its credit cards which will enable customers
to temporarily disable them when they are not in use and also
disable the overseas transaction facility.
Card fraud in Sweden has almost been
eliminated with the introduction of PINs, but criminals are able to
use cards abroad where the system has not been introduced.
Latin America
• Smart card
manufacturer Gemalto has teamed up with
Corporación Cardtech, Venezuela’s largest supplier
of magnetic stripe bank cards, and EMV specialist Newtech
Solutions to help the country migrate to EMV-enabled
credit cards in an effort to fight fraud. The firms predict that
eight million cards may be in issue by the end of 2009. The country
currently has 16 million debit and credit cards in circulation,
which will all be replaced by July 2009.
• Brazil-based Global M-Payment
Consortium has launched an off-the shelf and ready to use
hardware component CodeOne, which could work at 3.8 billion points
of sale from world-capable GSM handsets. The product, which the
consortium claims meets international industry standards, can be
deployed by banks to process all credit card-like transactions.
• Global payment
processor TSYS has signed a payment processing
agreement with Tarjetas Unisoluciones, a
wholly-owned subsidiary of Unibanco Brasil, for
the launch of its Unicard México consumer card portfolio. The bank
will be the first in Mexico to utilise TSYS’ platform.
• Banco
Bradesco’s 2008 results showed that the bank’s BRL65.4
billion ($28.8 billion) of card sales comprised BRL39.7 billion of
credit card sales, BRL21.1 billion for Bradesco Visa Electron debit
cards, and BRL4.5 billion of private-label card sales. Bradesco’s
market share of the overall card market in Brazil stood at 18.2
percent at the end of 2008 as it had issued 33.7 million credit
cards and 47.9 million debit cards.
• According to
press reports, the Brazilian consumer finance unit of
Citi may be integrated into the bank’s credit card
business. Citi has denied market speculation that it would seek to
sell off any of its Brazilian operations.
• Growth in
Mexican bank lending to individuals and companies
fell in December 2008, with consumer credit falling sharply amid
increased fears of defaults due to global economic turbulence. In
recent months banks in the country have reined back the number of
new credit cards issued.
Bank extension of consumer credit, including
credit cards, fell 33.5 percent in December 2008, compared to the
year-ago period, according to data from Mexico’s central bank. Most
of that drop was attributed to Spain’s Santander
and Banamex, the Mexican unit of Citi, which
recently moved credit card debt off their books and into
specialised lending companies.
• Mexico’s
fifth-largest bank, Banco Banorte, stated that its
fourth-quarter 2008 net profit fell to MXP1.27 billion ($0.08
billion), a drop of 24 percent compared to a year ago, due to
rising loan loss provisions. The bank had set aside MXP827 million
in provisions for credit to retailer Comercial
Mexicana, which defaulted on its debt in October 2008.
Banorte also said it had increased reserves on its credit card
lending amid the rise in defaults. Its non-performing loans
represented 2 percent of its total at the end of December, up from
1.7 percent in September. Banorte’s credit card portfolio fell 8
percent in the fourth quarter from the third.
• Venezuela’s
Commission for Currency Administration (CADIVI)
has slashed the amount of US dollars that Venezuelans may purchase
each year to travel abroad from $5,000 to $2,500. The full dollar
allowance will only be available to high-income consumers who
qualify for gold credit cards. This is likely to restrict the
ability of low- and middle-income Venezuelans to travel abroad.
There are only around 2 million credit cards in issue in Venezuela,
which has a population of 24 million.
• Visa
Latin America has deployed a new system which can detect
potential fraud in real time across the Latin America and Caribbean
regions. Advance Authorisation, says Visa, is the first service of
its kind to be launched in the area. The system detects unusual
spending patterns and monitors individual accounts for fraud.
• Brazilian mobile
financial services provider, Samba38, has launched
a service which will allow consumers to top up prepaid mobile phone
accounts as well as make mobile phone payments instead of using a
credit or debit card. The company predicts that the Brazilian
market for mobile payments will reach $164 billion by 2011. There
are over 121 million mobile phones in the country already.
• The
Argentinean government has announced a new
electronic ticketing system for Buenos Aires’ public transport
system, which will cost the government $57 million. The decision
came because of a dire shortage of coins in the economy, which led
to their hoarding.
Commuters may only pay with change on Buenos
Aires’ public transport system and as a result a black market had
sprung up with street vendors selling coins at a profit – a
practise which has now been made illegal.
•
Citi reported a plunge of 41 percent in its Latin
America earnings, where 2008 saw net profits of $2.14 billion
compared to $3.6 billion the previous year. Its global cards
business in Latin America reported a net profit in 2008 of $491
million, down 60 percent from $1.23 billion the previous year.
Credit costs increased 89 percent, reflecting higher net credit
losses, up 37 percent, and a $231 million incremental net loan loss
reserve build.
• Bankcard
Empire (BCE), a provider of merchant services processing
which has operations in the US and the rest of the world, has added
the Dominican Republic to its list of represented
territories. They will begin the first quarter of 2009 by targeting
Latino and Hispanic business operations as part of their
diversification plans.
• The US payments
network provider Bling Nation and engineering firm
Micrologica are teaming up to develop hardware and
software technology which will support smartphones, wireless point
of sale machines and contactless payment tags in Chile. They have
received a $500,000 grant from CORFO, the Chilean
economic development agency which will subsidise their business in
the country. The grants are given to encourage US technology
companies to invest in Chile, basing their research and development
efforts there.
• Banco de
Chile has reported its fourth-quarter 2008 results, with
total fees and commissions rising by 15 percent on the back of
increased credit card usage boosted by marketing campaigns, new
co-branding alliances and the incorporation of the Diner’s Club
credit card aimed at high income individuals, previously
administered by Citibank Chile.
• Nexxo
Financial, a self-serve remittance services provider to
the US Hispanic and Latin American market, announced that its
consumers had deposited more than $200 million in the company’s
patent-pending money transfer ATM-like machines, called Cajeros,
which allow the sender to use a touch-screen to conduct money
transfers.
North America
• The National Payment Card
Association (NPCA) of the US has raised $2 million from
San Francisco-based KPG Ventures for the purpose
of expanding beyond petrol stations and convenience stores to
supermarket and pharmacy chains.
NPCA enables merchants to
pay lower transaction fees on debit card payments by processing
them through the Federal Reserve Automated Clearing
House, an alternate payment solution it has offered since
June 2006.
NPCA has also launched a ‘Gas Cap’ rewards
programme which enables US customers to make savings on their
utility bills. The rewards system, tied in with their existing
loyalty programme, is funded by passing a portion of the
transaction savings back to consumers. It is available through
VeriFone, Gilbarco, Radiant and Wayne point of sale
distributors.
• Shell
Canada Products has agreed to carry on as a sponsor of the
loyalty and marketing solutions provider Alliance
Data’s Canadian Air Miles reward programme. Shell Canada
Products operates more than 1,500 retail service stations under the
brands Shell, Turbo, Payless and Beaver and is one of the top five
sponsors and suppliers of Air Miles rewards since 1993.
• Payment services
software developer Fidelity National Information
Services and Cuna Mutual, a
financial services provider, have teamed up to roll out plastic card
fraud data sharing services for credit unions, which will
transfer information from Fidelity’s systems to Cuna’s claims
processing software. The companies say nearly 2,300 credit unions
will be implementing such systems.
• Optimal
Group is planning to sell its wholly-owned subsidiary,
Optimal Payments, to United Bank
Card for $11 million.
The portfolio represents more than 5,000
merchant locations in the US. Before the deal is completed, Optimal
will continue processing any residual transactions while paying a
fee to United, but this will be adjusted against the final
price.
•
Citigroup plans to lend a total of $36.5 billion
to consumers, of which $5.8 billion will be as credit card loans.
The decision comes after it received a $45 billion government
bailout. US banks have been under increasing pressure to restart
lending after receiving the rescue packages.
• Nearly 6,300
students said they felt forced to sign up to a prepaid debit card
provided by Chase Card Services in order to
receive their student loans. The students must pay $2 each time
they withdraw money using the cards, $10 for talking to a bank
teller, or $1.25 for current account balances – services which are
usually free for other Chase customers.
• A new credit card has
been launched by the US Azeris Network (USAN) which will be
issued online by Kansas City-based UMB, a
multi-bank holding company. A spokesman for USAN said the network
will receive a donation of $50 the first time a cardholder makes a
purchase and a percentage on all purchases thereafter. The funds
will be used by the Azerbaijani diaspora group for grassroots
advocacy projects in the US.
• Prepaid debit
card solutions provider TransCard has launched a
service which will allow consumers with MasterCard, Discover and
STAR-branded cards to pay bills online or even make paper cheques
for smaller utility companies who may not have the technology to
process electronic payments.
• Canadian coffee
shop chain Second Cup has joined Visa’s roster of
contactless-enabled payment merchants. Nearly 360 outlets will have
implemented Visa’s payWave technology by 31 March. The deployment
comes at a time when Visa is migrating to chip technology in
Canada.
• US
Financial Services Group has officially launched
MobileProPay, an iPhone and iPod touch credit card processing
application aimed at businesses. The features on the application
will be able to accommodate an unlimited number of users, order
descriptions, tax/exemption, shipping cost and the ability to email
customers. The new application could be used by merchants at places
such as conventions or fairs as long as there was a wireless
internet connection available to them. Users could set up an
account with Authorize.net for $27.50 per month
which charges them a $0.35 flat fee for each transaction, which
will include a percentage cut for the card issuer. A similar
application already retails at Apple stores across
Australia as iCharge.
• Old
National Bank (ONB), the largest financial services
holding company in Indiana, has teamed up with Southern
Illinois University to offer a co-branded cheque card,
designed in maroon which is the local sports teams’ jersey colour.
Existing customers will be able to switch the to the new-look card
which is acceptable at all Visa merchants across the US. The bank
had formed a similar partnership with Indiana University in August
2008.
• Banks in the US
are seeing dwindling returns in non-interest earnings like ATM and
overdraft charges – as customers are making fewer withdrawals and
purchases. At TCF Financial, earnings from fees
and other charges was $474.1 million for 2008, down 3 percent from
2007. TCF’s CEO doubts this trend points to prudence, but was more
likely a result of curtailed spending symptomatic of the world
economic downturn. He said the current sliding trend started
six-to-nine months ago – but the falling rate had worsened by the
quarter.
• Of the 4,000
merchants in metropolitan cities like Chicago, New York and Paris
surveyed recently by Motorola, 44 percent could be
easily infiltrated by hackers. This figure has improved since 2007
when it stood at 85 percent. The mobile phone manufacturer has
warned retailers not to use outdated encryption technology. It has
refused to reveal the name
