REMITTANCES

Remittance Payment Card introduced In Bangladesh

The National Credit and Commerce (NCC) Bank of Bangladesh has
launched a foreign remittance payment card, known as ‘mBridge’,
which will enable beneficiaries of remittances to withdraw their
money from both the NCC Bank and 250 rural outlets of TMSS, a
non-governmental organisation, across the country. The card can
also be used to make purchases at Visa-affiliated merchants.

Remittances by Bangladeshi expatriates stood at over $886 million
in July 2009, marking an eight percent growth over the month of
July last year, central bank officials said. The growth in 2008-09
was 22.42 percent over the previous year.

 

PRODUCT LAUNCH

Air China launches business travel card suite

Chinese airline Air China has launched a suite of Air China
business travel cards, making it the first airline in China’s civil
aviation industry to introduce such a service.

There are four types of card available: the ‘Distinguished’ travel
card, the ‘Clear’ travel card, the ‘Smooth’ travel card and the
‘Easy’ travel card.

These cards can be used to store credit, book tickets, collect
frequent flyer miles and utilise complimentary services. The cards
come with a credit value of between CNY20,000 ($2,900) and
CNY300,000. The cards are also being issued with flights to a
limited number of applicants.

 

PRODUCT LAUNCH

Bank of China, China UnionPay roll out dual currency card in
HK

Bank of China (Hong Kong), Hong Kong Chinese Enterprises
Association (HKCEA) and Chinese bank card network China UnionPay
(CUP) have jointly announced the launch of the BOC HKCEA Dual
Currency credit card.

The card is the is the first dual currency co-branded credit card
to be issued in Hong Kong which displays the CUP logo and uses both
CNY and HKD as the settlement currencies. Member merchants of the
HKCEA will offer spending privileges covering the areas of
clothing, food, housing and transportation.

The card is widely accepted in China and overseas, and specially
designed for members of HKCEA in Hong Kong who are frequent
travellers to the mainland and overseas for business and
leisure.

Transactions conducted on mainland China are posted in CNY, so
cardholders can enjoy savings on the exchange rate difference,
while transactions conducted in Hong Kong and overseas are posted
in HKD. Cardholders can also receive a handling fee waiver for all
transactions and cash advances conducted in China and
overseas.

 

POS USAGE

Bank of Maldives sets limit on Visa debit card POS
transactions

The Bank of Maldives (BoM) has imposed a $300 daily limit on
transactions made with Visa-branded debit cards at foreign POS
systems.

The bank, after reducing the limit to $3,000 a day previously, has
reduced it again citing difficulties with overnight settlements in
US dollars.

BoM went on to explain that the initial reduction came as a result
of large amounts being withdrawn at POS systems in other countries
and that the bank has encountered difficulties when conducting
operations and offering services to customers.

BoM also set a daily $500 limit on the amount of cash customers
could withdraw from ATMs in other countries with their Visa debit
card. The bank said that once the difficulties in getting foreign
currency had been resolved, the bank would increase the limit
imposed on the Visa debit card.

 

PREPAID CARDS

One World Ventures to expand prepaid programme in
Vietnam

One World Ventures, a US provider of prepaid cards, has announced
that it is to launch its ‘1World’ prepaid programmes in countries
and territories throughout Asia-Pacific, starting with
Vietnam.

Vietnam had around 10 million debit and credit cards as of December
2008 among a population of over 86 million. After a decade of
reforms, Vietnam’s economy is growing more than 7 percent a year
and according to the World Bank, the country’s economic reforms
have paid off.

Vietnam’s per capita income in the past 10 years has more than
doubled to $1,024 in 2008.

 

CONSUMER INDEBTEDNESS

BDO expects slower credit card business

Banco de Oro Unibank (BDO) of the Philippines is expecting its
credit card business to register slower growth this year as
difficult economic conditions cautioned Filipinos to cut their
spending.

Ophelia Camina, senior vice-president for card issuing and
operations of BDO’s consumer lending group, said growth of the
bank’s credit card business in terms of total billings is likely to
be lower than the average of 15 to 20 percent growth that it
recorded in the past couple of years.

Growth of total billings for the first half was estimated at about
10 percent, a reflection that cardholders do not charge as much of
their expenses to their credit cards as in the past, she
said.

The bank’s credit card lending comprises about 5 to 7 percent of
the total loan portfolio of the bank. BDO is the sole issuer of
American Express credit cards in the country and also issues six
BDO MasterCard products. The bank currently has a total of 900,000
cards in circulation.

 

PRODUCT LAUNCH

Chinatrust Commercial Bank to issue CUP cards

Taiwan’s Chinatrust Commercial Bank is to issue China UnionPay
(CUP) cards in both China and Taiwan. Merchants in Taiwan started
accepting payments made to them using CUP cards from 7 August 2009.
The cards will be launched in collaboration with Taiwan’s Joint
Credit Information Centre.

The Joint Credit Information Centre, Taiwan’s largest acquiring
service provider with 40 percent of the market, collects credit
data on individuals and companies for its member banks.

The JCIC is the first Taiwan institution approved by the island’s
regulator to be an acquiring institution for CUP cards.

Overall, Chinese visitors are expected to spend around $600 million
(TWD20 billion) every year in Taiwan via CUP cards.

 

MOBILE PAYMENTS

Lakshmi Vilas Bank teams with PayMate for mobile
payments

Lakshmi Vilas Bank, an Indian private sector bank, has teamed up
with mobile payment solutions company PayMate to provide mobile
payment solutions to the bank’s customers across 250 branches in
India.

Lakshmi Vilas Bank customers will be able to use their mobile
phones to pay for mobile recharge, utility bills, movie and flight
tickets, online purchases and retail shopping at over 15,000
merchants in India registered with PayMate.

 

EUROPE, MIDDLE EAST, AFRICA

MERCHANT ACQUIRING

RBS WorldPay sells German POS portfolio to easycash

European payment service provider easycash has bought the German
merchant POS portfolio of the German domestic acquiring arm of RBS
WorldPay, a subsidiary of UK bank Royal Bank of Scotland.

The portfolio consists of several thousand merchant relationships
and the purchase of RBS WorldPay’s German POS acquiring business
will enable easycash to offer merchants credit card acceptance for
MasterCard and Visa. The purchase price was not disclosed.

“The takeover of the German merchant POS portfolio of RBS WorldPay
is a further important milestone in the business development of
easycash,” states Siegfried Heimgärtner, CEO of easycash. “By way
of this, we are able to instantly enter the acquiring market for
credit card acquiring as well. It enables us to offer the full
range of all card-based payment forms with a one-stop
offering.”

 

CARD PERSONALISATION

ING pilots mobile phone app for card personalisation

Serverside Group, the UK card customisation specialist, has
launched a financial card designer application for mobile phones
with Dutch bank ING. ING used the mobile designer to support a
financial card design competition where people were encouraged to
put their holiday snaps onto debit cards and have the chance to win
a traveller’s cheque to the value of €1,000 ($1,417). The mobile
phone application enabled prospective cardholders to immediately
visualise how a personally-designed card could look.

The new mobile card design interface has multiple potential
applications, from generating ID cards in-branch and enhancing
outdoor marketing events through to assisting new account
generation in countries without broadband infrastructure but good
mobile coverage.

Adam Elgar, president of Serverside Group, commented: “Adding a
mobile application to our card design and marketing platform
extends the ways issuers can use our technology enormously.

“The mobile marketing space is a massive growth sector and one that
Serverside simply had to move into. Now, with a card designer that
fits into your back pocket, issuers can market card customisation
anytime and anywhere.”

 

MOBILE PAYMENTS

BT and paysafecard unveil e-commerce m-payments
system

UK telecom company BT has collaborated with European prepaid
specialist paysafecard to give its mobile customers the opportunity
to buy goods online and charge them to their mobile phone.

The scheme, which taps into the industry-developed PayForIt system,
will be available on all of the five mainstream UK operators –
Orange, Vodafone, T-Mobile, 3 and O2. The programme includes 2,700
integrated websites where purchases can be made and charged to a
consumer’s mobile phone.

PayForIt launched in 2007, allowing subscribers to use their
handsets to pay for low value purchases. The scheme was set up by
the telcos to provide a standardised payment system to
customers.

 

PAYMENT NETWORKS

Visa extends global payment services in Iraq

Visa has announced that Bank of Baghdad and Iraqi bank consortium
Al Amwal have joined the Visa payment network in Iraq. Bank of
Baghdad and Al Amwal will help expand the acceptance network for
Visa cards at ATM and POS locations within Iraq, and help issue
additional Visa payment cards to local customers, allowing Iraqis
and individuals visiting Iraq to use their Visa cards to pay for
goods and services at merchant locations throughout the country,
including airport duty-free shops, select hotels, travel agencies
and a number of restaurants and other stores.

Atheer Al Qadhi, executive director of Amwal, said: “This
transformation of the Iraqi payments marketplace from cash to
electronic payments is our main goal.”

 

MOBILE PAYMENTS

Masabi and Mi-Pay target developing world with m-payments
system

UK mobile application developer Masabi has entered an agreement
with UK mobile payments provider Mi-Pay to develop a mobile
transaction system, Street Vendor, that enables mobile operators,
banks and other retailers to offer their services in remote regions
by allowing vendors to use their mobile phones.

The Street Vendor application enables vendors to take cash in
return for mobile top-ups or money transfer services using standard
mobile handsets. The handset acts as a POS terminal and
communicates with a central server to authenticate and approve the
transaction over encrypted SMS in areas where other data
connections are unavailable.

The technology works in any part of the world that has SMS
reception. In addition, the application is compatible with many
standard handsets, up to seven years old, and does not rely on
smartphones or 3G and GPRS connectivity which are not always
available in rural areas.

 

RISK MANAGEMENT

Isbank selects Experian decisioning solution

Turkey’s Isbank is to implement an automated decisioning tool from
global information services company Experian to assess the
financial risk of consumers applying for Isbank’s credit cards and
retail loans.

Experian’s New Business SM system is a fully automated decisioning
tool that takes the information from the application form and
accesses multiple internal and external credit bureau data sources,
including existing customer data. Using this information, Isbank
will be able to identify optimal customers and then offer them a
tailored package to suit their needs, based on an accurate risk
profile.

 

CONSUMER INDEBTEDNESS

Barclaycard extends help to financially distressed
customers

UK card issuer Barclaycard has announced that its early assistance
scheme, which was launched earlier this year to help customers in
financial distress, has so far helped 11,500 Barclaycard
customers.

The scheme is designed to spot customers who may be about to
experience problems with their credit before these problems become
an issue.

Barclaycard is identifying customers whose account behaviour has
recently changed or where they appear to be struggling with their
debts, including those who are persistently close to their credit
limit or those who have markedly changed their repayment
behaviour.

Customers will be contacted, either by telephone or text message,
and invited to discuss their situation with one of Barclaycard’s
debt advisers.

The scheme has been launched by Barclaycard in response to an
increased demand from customers for an extra level of assistance
during the current economic climate and follows on from the
establishment of Barclaycard’s customer helpline in February this
year.

 

LATIN AMERICA

MOBILE PAYMENTS

Mobile banking launched in the Caribbean

LIME, the Caribbean telecoms provider, has been selected as the
first carrier in the region to partner with a number of indigenous
banks to provide mobile banking and payments services.

The service, initiated by ECIC Holdings, will allow LIME’s
customers with accounts at any of the member banks to access their
bank information, pay bills and conduct other banking transactions
from their mobile phones.

Mobile banking will be run on LIME’s messaging platform in the five
islands where the service has been launched in Phase I, namely
Antigua and Barbuda, Dominica, St Kitts and Nevis, St Lucia and
Turks and Caicos.

The participating banks in these islands are: St
Kitts-Nevis-Anguilla National Bank; First National Bank St Lucia;
TCI Bank of the Turks and Caicos; ABI Bank of Antigua; and National
Bank of Dominica.

LIME will use its messaging platform to bring awareness to
customers of the availability of the service as it is launched in
the respective islands.

 

FINANCIAL RESULTS

Citi Latin America profits down

Citi reported second quarter net income from its Latin American
consumer banking operations of $70 million, down 79 percent from
$334 million in the same quarter last year, due to lower card
revenues and increasing credit costs. These figures include Citi’s
Mexican banking group Banamex.

The bank reported consumer banking revenues in the region of $1.82
billion, down 23 percent from the year-ago period, impacted by
foreign exchange and lower credit card receivables, although this
was partially offset by higher volumes in retail banking.

Credit costs were $766 million, up 8 percent from the year-ago
period, as deteriorating credit conditions were partially offset by
the impact of foreign exchange. Card net credit loss rates
increased to 16.2 percent in the second quarter from 11.4 percent
for the same period last year.

Mexico’s largely foreign-owned commercial banks have been stung by
a sharp increase in non-performing loans as a consumer lending
spree earlier in the decade and the current recession spur rising
defaults across all loan categories.

 

MERGERS AND ACQUISITION

Prosa looks to expand in Latin America

Mexican electronic payments processing firm Controladora Prosa has
said it sees good chances for expansion in the card-based payment
market. Prosa, which runs the general-purpose card brand Carnet,
operates one of the largest payment networks in Latin America and
is hoping to increase its market share in credit, debit and prepaid
cards.

Carnet, which is only useable in Mexico, is offered free to card
issuers in the country as a low cost alternative to much larger
brands such as Visa.

Participating lenders in the Carnet scheme have said they will
attempt to issue around 4 million Carnet cards by the end of
2010.

Prosa’s shareholders include some of the country’s largest banks.
HSBC Mexico, Grupo Financiero Banorte, Banco Invex, Grupo
Financiero Santander and Grupo Scotiabank each own 19.7 percent of
the firm, with state-run bank Banjercito holding the rest.

According to the Bank of Mexico, there were 24.6 million credit
cards and 58.4 million debit cards in circulation at the end of
March this year. There were 31,966 ATMs, up from 17,011 at the
close of 2003, while terminals rose to 454,620 from 129,971 during
the same period.

 

ECONOMY

Securitised loans to increase in Argentina

According to US ratings service Moody’s, Argentine securitisation
deals should pick up in the second half of 2009 as banks and
investors adjust to some recent regulatory and market
changes.

Moody’s stated in a recently issued report that structured finance
deals totalled $1.5 billion in the first six months of the year, up
2.4 percent from the same period a year ago.

The report also stated that while business would increase in the
second half of the year, overall results should be in line with
2008’s performance.

Securitisations of personal loans and consumer loans dropped to
17.4 percent of total issuance in the first half, from 38.2 percent
in the same period of 2008.

Moody’s also stated that consumer loans, including credit card
receivables, as well as infrastructure deals, will continue to make
up the bulk of issuance. Moody’s states that the introduction of
additional mezzanine bonds, which lessen the impact of the new
income tax on residual bonds, were a new addition to the
market.

 

REGULATION

Brazil’s VisaNet faces antitrust probe

VisaNet, the Brazilian card processor, is being investigated for
antitrust violations by the Brazilian Justice Ministry. The probe
also involves Visa do Brasil Empreendimentos and Visa International
Service Association, according to a statement by the
ministry.

The ministry, through its economic law department, is attempting to
establish whether it is the exclusive right of Visa-Net to allow
businesses to accept cards carrying the Visa logo. A statement from
the ministry went on to say the practice substantially reduces
competition in the industry.

The ministry has subsequently decided to suspend VisaNet’s
exclusivity, allowing other companies to hand out Visa
accreditations. A central bank study in March recommended changes
to Brazil’s credit card market to make it more efficient.

The recommendations for payment processors included the spin-off of
certain businesses, the requirement that card networks accept all
brands, and the end of all exclusivity agreements between retailers
and brands.

 

FINANCIAL RESULTS

Bank of Nova Scotia profits halve in Mexico

Canada’s Bank of Nova Scotia (BNS) has revealed that second quarter
profits from its Mexican division fell 53 percent. The loss was
attributed by the bank to higher loan loss provisions and the sale
of a portion of its credit card portfolio, with net profit coming
in at MXN372 million ($310 million), down from MXN798 million for
the same period last year.

A 38 percent increase in loan loss provision, which rose to MXN687
million, as well as the sale of MXN806 million in credit card
loans, resulted in a net loss on the portfolio sale of MXN371
million.

Despite the damage done by the increased loan loss figures, net
interest income on deposits and lending rose 16 percent to MXN2.26
billion, while the bank’s performing loan portfolio rose 1.7
percent to MXN93.22 billion at the end of June, although this was
slightly offset as past due loans surged 56 percent to MXN4.18
billion. Deposits were virtually unchanged at MXN105.17
billion.

 

NORTH AMERICA

REMITTANCES

Fifth Third joins Western Union money transfer
network

Global money transfer specialist Western Union and US-based Fifth
Third Bank have announced an agreement to offer Western Union
global money transfer services at Fifth Third’s banking centre
locations in the US.

The signing of Fifth Third Bank is part of Western Union’s North
America “go-to-market” strategy to enter new delivery channels such
as cash-to-cash, account-to-cash and account-to-account.

 

CORPORATE PAYMENTS

Bank of America sells B2B business to Bottomline

US financial process automation specialist Bottomline Technologies
has announced it is to acquire Bank of America’s PayMode product,
operations and vendor network. PayMode facilitates the electronic
exchange of payments and invoices between organisations and
suppliers. The two companies are entering into a multi-year
agreement to operate the Software as a Service (SaaS)
offering.

In addition to continuing to market PayMode to new clients, Bank of
America will retain existing PayMode client relationships and join
Bottomline’s strategic advisory council. The bank will also have an
equity interest in the company via warrants for one million
Bottomline shares. With 80,000 vendors, PayMode is one of the
largest and fastest-growing business-to-business payments networks
in the US.

 

CO-BRANDED CARDS

RBC and WestJet Airlines enter alliance to launch travel rewards
card

Canadian airline WestJet is to team up with RBC Royal Bank and
MasterCard to launch a co-branded travel rewards credit card
allowing customers to earn WestJet rewards.

The new rewards card will be the first MasterCard product offered
by RBC in Canada. This is also expected to make RBC the first
Canadian bank to offer both MasterCard and other credit card
brands, as up until November 2008 financial institutions in Canada
were not allowed to offer cards by both Visa and MasterCard.

 

CO-BRANDED CARDS

United Airlines and JPMorgan Chase release travel reward
cards

US-based United Airlines and JPMorgan Chase have announced they are
now offering travel credit cards. The three new premium cards have
annual fees ranging from $130 to $375. Cardholders will be entitled
to benefits such as accelerated bonus air miles and economy-plus
seating, along with Red Carpet Club membership.

Robert Sahadevan, vice-president of Mileage Plus at United
Airlines, said: “Our new cards go beyond the conventional
spend-a-dollar, earn-a-mile structure by offering cardholders
features that provide travel comforts and accelerate their path to
achieving coveted elite status or reaching their next award
destination.”

 

CONTACTLESS PAYMENT

Home Depot goes contactless

US home improvement retailer Home Depot is the latest retailer to
begin accepting contactless payments, announcing that MasterCard’s
PayPass will be implemented at Home Depot’s 1,974 locations across
the US, along with Discover’s contactless proposition Zip.

According to research from MasterCard, consumer preference for
contactless forms of payment is on the rise. As of the first
quarter of 2009, over 55 million PayPass-enabled cards or devices
had been issued, more than doubling the number of cards and devices
in circulation around the world in one year. In addition, 41
percent of consumers say they use cash less often today than they
did two years ago. Of the consumers who have a PayPass-enabled card
or device, 77 percent say they use it as their primary form of
payment.

Discover’s contactless Zip proposition, aside from being available
in traditional bank cards and key fobs, also comes as a mini
adhesive card which can be attached to personal items such as a
mobile phone or MP3 player.

 

ATM NETWORKS

Washington Trust Bank taps NYCE for ATM and POS
access

US ATM network NYCE Payments Network, part of processing giant
Metavante, has announced that Washington Trust Bank has renewed its
NYCE network participation and converted to NYCE as its exclusive
provider of ATM and POS access.

Washington Trust is the largest privately-owned bank in the Pacific
Northwest, with more than $4 billion in assets and more than 40
financial services centres in Washington, Oregon, Idaho, and
Utah.

 

SECURITY AND FRAUD

Network Solutions hack exposes 500,000 card accounts

Network Solutions, a US host for e-commerce merchant websites, has
revealed 573,928 credit and debit cards may have been compromised
by criminals who planted malicious software (malware) on its
servers.

The company says the unauthorised code may have been used to
transfer data on transactions Network Solutions processed for about
4,343 merchant websites. Exposure varied by merchant, but in all
cases took place sometime between 12 March 2009 and 8 June 2009.
Transactions after 8 June were not exposed to the unauthorised
code.

The company has arranged for a credit reporting agency to work with
them to contact merchants’ customers whose data may have been
affected and provide services that will help potentially affected
US-based customers protect their information. Network Solutions
says the code has been removed and it has no reason to believe card
account information has been misused. The firm is now working with
law enforcement officials.

 

CORPORATE PAYMENTS

Visa and US Bank form financial supply chain network

Visa and US Bank have announced the creation of Syncada, a joint
venture that provides a business-to-business (B2B) network for
corporations and governments to process and track invoices, make
and receive payments around the world, and have payables or
receivables financed through local and global financial
institutions.

Syncada combines Visa’s experience in delivering commercial payment
services to financial institutions and managing a multi-bank
network with US Bank’s PowerTrack, an automated B2B e-invoicing,
payment processing and trade finance network.

The venture allows financial institutions of all sizes to offer
their commercial clients standardised B2B invoice processing,
financing and payment services across a variety of payment types
and local currencies.

Financial institutions can also build transaction and credit-based
treasury management business by offering the network’s services to
buyer and supplier clients.