• China Postal Savings Bank plans to start
offering credit cards in the second half of 2007…
• Qatar’s Doha Bank has launched its Dream
Programme including the revamped Dream credit card and loyalty
programme…
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• The UK’s Association for Payment Clearing Services
(APACS) has revealed that the proportion of cash demands
met by ATMs has almost doubled over the past ten years to reach 65
percent in 2006, compared to 34 percent in 1996…
Asia-Pacific
• China Postal Savings Bank plans to start
offering credit cards in the second half of 2007. It is targeting
the higher-end consumer market and has begun recruiting for the new
division. The bank has initiated market research through its local
branch network, which numbers more than 36,000. It is still unclear
if the bank will set up an independent credit card centre.
• Bank of Beijing, one of the city’s largest
commercial banks, is planning to set up an independent credit card
centre to manage its cards business. The bank has yet to set the
launch date for card issuance but its debit cards are in the
market.
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By GlobalData• Tianjin, China-based Bohai Bank will launch
banking services in Beijing and has partnered with other local
banks such as Hua Xia Bank, China Minsheng Bank and China
Everbright Bank to offer deposit and withdrawal services over a
combined network of 500 outlets. The bank is 19.99 percent owned by
Standard Chartered Bank.
• Air China and Bank of China
will offer a co-branded credit card in the run-up to the Beijing
2008 Olympic Games. The card will allow members of Air China’s
frequent flyer programmes to earn points more quickly.
• Shanghai Pudong Development Bank will launch
a co-branded Priority Club Rewards credit card which allows more
points to be earned by spending at InterContinental Hotels
Group franchises worldwide. Cardholders can collect and
redeem points at the group’s 66 hotels in China and 3,700 hotels
worldwide.
• China Bank Regulatory Commission said that
banks in Shanghai generated CNY466.26 million ($60.97 million) from
the bankcard business in the first quarter of 2007, representing a
year-on-year increase of 31.8 percent. Income from credit cards
reportedly increased 57 percent year-on-year to CNY43.29 million
over the same period.
• A recent report by CCID Consulting
highlighted that two-thirds of China’s 40 million credit cards are
inactive. The report covered 150 issuers.
• Bankcard network China UnionPay (CUP) will
accept HSBC’s ATM cards and POS terminals within
the CUP network in mainland China, Hong Kong, Macau and overseas.
The agreement follows HSBC ATM’s acceptance of CUP cards in Hong
Kong. CUP has 100,000 ATMs and 890,000 POS terminals in China.
• Australian bank ANZ will enter a joint
venture with India’s Punjab National Bank to set
up a credit card company in India. The company will focus on urban
and semi-urban areas. ANZ will be a minority investor, together
with Punjab National Bank and an unnamed local technology firm.
Punjab National Bank has over 4,000 branches and 37 million
customers.
• Technology solutions provider Financial Information
Network and Operations will partner with Indian
Bank to offer smart cards based on the bank’s zero-balance
savings accounts offering for its rural customers. There is an
estimated 500 million to 700 million customers in this underbanked
segment in India.
• The Reserve Bank of India may be empowered to
regulate payment and settlements systems such as Visa and
MasterCard in the country and enforce information sharing under the
recently drafted Payment and Settlement Systems Bill. This bill
allows the central bank to set operational and technical standards
for various payment systems and to set up audits.
• Union Bank of India has launched biometric
cards for rural banking in Uttar Pradesh. The bank has issued 1,000
cards and plans to issue 5,000 cards initially. These cards will
store transaction data for its rural banking project.
• The Reserve Bank of India’s ombudsman service
is to be expanded to address credit card complaints. The bank said
80 percent of complaints received are about credit cards.
• ICICI Bank has tied up with
telecommunications provider Airtel to allow customers to conduct
banking transactions through mobile phones in India.
• ABN AMRO has launched a credit card in India
that offers 2 percent cashback for all purchases. The cards target
people with an income of INR400,000 ($9,822) per annum – this
segment is estimated to spend INR5,000 to INR10,000 a month by
card.
• AmBank has partnered with telecommunications
provider Telekom Malaysia to introduce a
co-branded prepaid card which marries the telecoms company’s
prepaid iTalk card services with the bank’s NexG prepaid
MasterCard. Telekom’s loyalty programme will also be incorporated
into the co-branded prepaid card.
• Japan Airlines is considering selling a stake
in its wholly owned credit card subsidiary,
JALcard, as part of a group restructuring. JAL
intends to keep majority control and will sell up to a 49 percent
stake. JALcard is the sixth largest credit card company by
transaction volume in Japan.
• Bank Islam Malaysia expects 60,000
cardholders for its Sharia-compliant prepaid travel card, which
targets Chinese and Middle Eastern tourists. Cardholders are
entitled to discounts of up to 70 percent at over 400 merchants
participating in the programme. Twenty million inbound visitors are
expected in 2007, which is Visit Malaysia year.
• Taiwan’s Financial Supervisory Commission has
imposed a NT$2 million ($60,468) fine on Taishin
International Bank and suspended new cards issuance by the
bank for one month as a penalty for leaking confidential customer
information. The regulator began investigations when local
newspapers reported the bank’s transactions with the island’s
president’s son-in-law when the latter was indicted on insider
trading charges. The bank has reportedly disciplined a total of 117
employees over the incident.
• Citibank Taiwan has launched a new rewards
programme that offers redemption by text messaging, non-expiring
reward points and 24-hour delivery of redemption goods, and has
launched a website with 10,000 items on offer. A bank survey found
that 53 percent of its cardholders in Taiwan favoured fast and
convenient redemption.
• Citibank Thailand has launched a Citibank
Guarantee scheme offering refunds, gift vouchers or reward points
if loan customers receive unsatisfactory service. The bank is also
guaranteeing a temporary extra credit line within seven minutes if
a customer is not able to get a loan due to technical problems.
Queries will be responded to within three business days. The
programme is a strategy to increase the bank’s focus on
service.
Europe, Middle-East, Africa
• Global payment processor First Data has
secured a five-year card processing contract with Samba
Financial Group, the largest credit card issuer in Saudi
Arabia. First Data says it has completed conversion of Samba’s card
portfolio to its issuing platform, VisionPlus. First Data will
provide the processing for Samba’s credit card portfolio and will
provide the bank with risk management, fraud and behavioural
scoring tools.
• UK card issuer Alliance & Leicester Commercial
Bank, in association with money transfer specialist
Money Card, has developed a Visa prepaid card
aimed at the insurance industry. The bank’s prepaid cards are
available in disposable or reloadable formats, in sterling, euros
or US dollar denominations. Stewart Fraser, director of prepaid
cards at Alliance & Leicester Commercial Bank, said: “Our
prepaid cards offer managers in the insurance industry some
exciting benefits. There are distinct advantages in terms of cost
savings and control throughout the claims process, the complete
removal of cash and cheques, plus the cards are well received by
customers.”
• Qatar’s Doha Bank has launched its Dream
Programme including the revamped Dream credit card and loyalty
programme. Dream cardholders will get access to instant rewards
under the programme, which Doha claims is the first credit card
programme to carry a financial application along with a loyalty
programme on one card. The points earned by cardholders, through
their daily spending around the world, can be redeemed instantly
for purchases at participating merchants including stores,
supermarkets, restaurants, fashion boutiques, jewellery, airlines
and other companies.
• ZAO Citibank, the Russian unit of global
financial services giant Citi, has expanded its presence in Russia
with the opening of seven new retail banking branches in the cities
of Yekaterinburg, Nizhniy Novgorod, Samara and Rostov-on-Don. Citi
has cited Russia as one of its major growth markets for Citi’s
Global Consumer Group. Citibank serves over 400,000 retail and
1,500 corporate clients across Russia, and has issued more than
300,000 credit cards. Is own distribution network includes over 60
retail branches and more than 300 ATMs.
• Greek banking group Eurobank EFG is using
technology from UK-headquartered Serverside Group
to offer card customisation and online design services.
Serverside’s online card customisation technology enables customers
to design their payment card online using images selected from the
bank’s photo gallery, which includes images of Greece, sport and
nature. As of June 2007 each new customisation will cost €5
($6.73). George Kotsolakis, general manager of Eurobank EFG, said:
“Our strategy is focused on truly personalised products and
PhotoCard is in line with this strategy. Moreover, we believe that
this service will affect positively both usage and customer
retention.”
• The UK’s Association for Payment Clearing Services
(APACS) has revealed that the proportion of cash demands
met by ATMs has almost doubled over the past ten years to reach 65
percent in 2006, compared to 34 percent in 1996. The total number
of ATM withdrawals grew from 1.6 billion in 1996 to 2.8 billion
last year; the amount of cash dispensed more than doubled from £80
billion ($159 billion) to £180 billion. According to APACS, ATMs
will dispense an increasing proportion of all personal cash
acquired to reach 81 percent in 2016, when it expects £220 billion
to be paid out.
• Pan-European payments processor Equens has
secured a contract to provide outsourced payments transaction
services to Finland’s OP Bank Group. As of
mid-2007 Equens will process European Union (EU) regulation
payments on behalf of OP Bank on its ZVS processing platform.
Non-EU regulation payments will be processed by Equens at the end
of 2007. Equens said OP Bank is the first Finnish bank to outsource
payment processing to a foreign service provider.
• Jordan’s Ahli Bank is offering Visa Gold and
Classic cards for the first time to its customers, enabling them to
make POS purchases worldwide and to withdraw cash from the Visa and
Plus ATM networks. Ahli Bank claims that the cards have the lowest
interest rate of all credit card types in the Middle East region.
It is issuing the cards free of charge for the first year. The Visa
Gold card has a minimum cash limit of JOD3,500 ($4,939); the Visa
Classic card’s limit is JOD500.
• UK banking group Barclays says that profits
at card unit Barclaycard improved in the first three months of
2007, due to lower bad debt levels. In a trading statement,
Barclays said: “‘Profit before tax at Barclaycard improved on the
run rate of the second half of 2006: income and expenses were
broadly stable and the impairment charge was lower.” Barclaycard’s
2006 profits fell by 40 percent compared to 2005, due to a sharp
increase in lending arrears amid the UK’s difficult credit
environment. Barclaycard responded by imposing tighter lending
criteria and rejecting a greater number of card applicants.
• National Commercial Bank of Saudi Arabia has
launched an Islamic Titanium MasterCard credit card, aimed at the
affluent segment. The card incorporates a cashback component
rewarding the cardholder for all purchases made at domestic and
international points of sale. National Commercial Bank is the
largest bank in Saudi Arabia and specialises in Islamic banking
that conforms to Sharia principles governing interest.
• European payment processor Global Payments
has announced that its Sarajevo-based wholly owned subsidiary,
Global Payments Europe d.o.o. Sarajevo, has secured a five-year
agreement to provide payment card processing services to
Vaba Bank. Global Payments will provide the bank
with an array of services including authorisation, card management,
fraud monitoring and prevention, card personalisation and POS
terminal network management. Vaba Bank is newly established in
Bosnia and Herzegovina.
• E-payment solution provider BPC has signed an
agreement with JSC Kredobank of Ukraine to supply
the SmartVista Suite to build the bank’s in-house card processing
centre. JSC Kredobank is part of the PKO BP Group of Poland. BSC
said that the SmartVista Suite will provide Kredobank with
functionality to issue and acquire both debit and credit cards of
Visa and MasterCard. The solution will also include the SmartVista
Fraud Prevention and Monitoring module for online rule based
transaction filtering, and fully functional text message
mobile banking and EMV acquiring facilities.
• UK card start-up sQuidcard is to launch an
alternative scheme to the contactless programmes of Visa and
MasterCard which are set to roll out across the UK later this year.
sQuidcard is promising a fee of 1.5 percent for contactless
purchases, which it says would be considerably cheaper for
merchants.
Latin America
• Technology vendor AmbironTrustWave has opened
an office in Miami, Florida to act as regional headquarters for the
US e-commerce security firm’s Latin America and Caribbean (LAC)
operations. The company has already supplied technology to several
entities in Mexico, Central America and South America to help them
comply with the Payment Card Industry Data Security Standard (PCI
DSS). It has hired Jarrett Benavidez as managing director with
responsibility for LAC sales and business development.
• Banco Fácil, a new Mexican bank and credit
card issuer, is to use Fiserv CBS Worldwide’s International
Comprehensive Banking System as its core banking platform. It will
also use Fiserv’s Aperio business process management and customer
relationship management software. Banco Fácil, which will have
around 100 branches, is a joint venture between US-based Sherman
Financial Group and Mexican retailer Grupo Comercial Chedraui. It
plans to offer banking services in Chedraui’s 94 stores and
external locations.
• Brazil’s Bradesco and Banco do
Brasil have signed an ATM network-sharing agreement to let
their customers use both banks’ remote ATMs. These ATMs are located
in places such as airports, train stations and supermarkets.
Initially, the agreement covers 200 ATMs in São Paulo and Brasilia,
but eventually around 8,200 ATMs will be included across Brazil,
the banks say.
• Citigroup has completed its acquisition of
Central American bank and credit card issuer Grupo Cuscatlán. Last
December, Citi signed a deal to pay $1.51 billion in cash and
Citigroup stock for substantially all of Grupo Cuscatlán’s
subsidiaries, including its banking operations, some of its
insurance operations and other financial activities. Citi says it
has now received the necessary regulatory approval for the
transaction. Cuscatlán has 1.2 million retail customers in Costa
Rica, El Salvador, Guatemala, Honduras and Panama, as well as a
regional network of 263 ATMs.
• US-based card manufacturer CPI Card Group has
announced a contactless payment card promotion for first-time
MasterCard PayPass issuers. CPI’s Kick Start programme offers
substantial pricing discounts to issuers that place their first
orders to CPI for PayPass cards before the end of the second
quarter of 2007. “The programme applies to Latin America, the
Caribbean and Central America, as well as to North America and the
other markets in which CPI operates,” Marisha Barber, CPI’s
marketing and communications manager, tells CI.
• Euronet, the US-based ATM network operator
and money transfer services provider, has signed an agreement with
Mexican bank Banamex. The deal will enable
customers of Euronet’s Ria Envia money transfer services subsidiary
to send remittances to Mexico. Recipients will be able to pick up
their money at Banamex branches, Euronet says.
• US-based stored-value card company Global Pay
Solutions Inc (GPSI) is expanding into Latin America and
the Caribbean with the opening of a subsidiary in the Dominican
Republic. The subsidiary, GPSI-Dominicana, will be located in Santo
Domingo. GPSI manages stored-value card-based payroll programs for
federal, state and municipal governments as well as commercial
entities. Its business model is to work in areas with large
concentrations of unbanked workers.
• French contactless chip manufacturer Inside
Contactless expects to win contracts to supply chips for
several Brazilian contactless card trials, Bertrand Moussel, the
company’s executive vice-president, EMEA/Latin America Sales, tells
CI. Currently, the only Latin American contactless trial in which
Inside Contactless is participating is in Guatemala. The pilot,
which started in late 2006, also involves Visa, US
card vendor CPI and three local banks. “The cards
in the Guatemala trial are not EMV and contactless but mag-stripe
and contactless,” Moussel says. “Contactless trials in big
countries like Brazil and Mexico involve EMV cards, but in small
countries issuers are more likely to opt for mag-stripe and
contactless.”
• Around 70 percent of all Mexican credit cards and 15 percent
of debit cards have been migrated to EMV, Pedro Francisco Zago
Berra, development and innovation director at Mexico’s BBVA
Bancomer bank, told a smart card conference in Mexico City
in May. Berra said that 70 percent of POS terminals in the Unicaja
network have been migrated to EMV, while the ECR Interredes POS
network is in the process of upgrading to EMV to meet Mexico’s 2008
deadline for EMV compliance.
• Fitch Ratings has assigned long-term local
currency issuer default ratings of ‘B’ to Tarjetas
Cuyanas (TC), the Argentinian credit card issuer which is
60 percent owned by Argentina’s Banco de Galicia y Buenos Aires.
TC’s rating outlook is stable, Fitch says. The ratings agency say
it expects TC’s “profitability to remain sound based on its good
revenue generation and growth, despite higher administrative
expenses due to the company’s expansion and a legal limit on fees
and interest rates imposed on [Argentinian] credit card issuers in
2005”.
• Visa LAC (Latin America and the Caribbean)
reported $291 billion in total consumer Visa-branded debit and
prepaid card volume in 2006, up 17 percent on 2005. The figure
includes POS transactions and cash withdrawals. Visa says it is
working with its members in several countries to develop prepaid
debit services to help government agencies move away from
paper-based payments. It says the Dominican Republic government
disbursed nearly $46 million in benefits on 216,000 Visa Electron
prepaid cards in 2006.
• A survey by technology research company Aberdeen Group for
Visa and the Association of Corporate
Travel Executives reveals that average yearly purchasing
card spending per company rose by 28.3 percent from $618,000 in the
12 months to March 2006 to $793,200 in the year to March 2007 in
Latin America. Average annual travel and entertainment spending on
corporate cards per Latin American company rose by 17.5 percent to
$8.9 million in 2006 from $7.6 million in 2005, the survey
shows.
• Volkswagen Financial Services says it has
applied for a banking licence in Mexico. The bank, which is owned
by auto maker Volkswagen, offers credit cards in Germany and
several other European markets, a spokesperson tells CI. He
declined to disclose additional details of the Mexican banking
operation.
• Western Union says that 215 Soriana and
Mercado Soriana stores in Mexico are now offering money transfer
services. Consumers can send funds from Western Union’s Vigo and
Orlandi Valuta agent locations in the US to the Soriana and Mercado
Soriana stores. Recipients in Mexico pick up their money transfers
on loyalty cards issued by Soriana. The cards can be used at all
Soriana outlets for purchases or can be exchanged for cash at the
POS.
North America
• One in ten financial institutions eased their lending
standards for credit card applications in the three months to 31
March 2007, the US Federal Reserve Board’s April
2007 Senior Loan Officer Opinion Survey on Bank Lending Practices
reveals. For its quarterly survey, the Federal Reserve interviewed
around 60 large US domestic banks and 24 US branches and agencies
of foreign banks.
• The US Federal Reserve Board is asking for
public comment on proposed amendments to its Truth in Lending
regulations regarding credit card accounts and other
non-home-secured revolving credit plans. The regulations are
intended to ensure that information on consumer credit products is
provided in a timely manner and in a form that is readily
understandable. The board says its proposed revisions are based on
extensive testing of consumer understanding of credit card
terms.
• A group of telemarketers has agreed to settle US
Federal Trade Commission charges that their credit
card “debt elimination programme” violated federal telemarketing
sales rules and Washington state laws. The defendants, which
operated Debt Solutions, DSI Financial, DSI Direct and Pacific
Consolidation Services, allegedly misrepresented the projected
savings that credit cardholders using their programme could obtain.
Under the proposed settlement, the two owners of the four companies
are permanently barred from engaging in any debt negotiation or
debt elimination business.
• The US House of Representatives has passed a
bill intended to stop retailers and other non-financial services
companies from establishing or buying industrial loan companies
(ILCs). Under licences issued by the Federal Deposit Insurance
Corporation, ILCs are eligible to make loans, take deposits and
issue credit cards. The bill, which passed by 371 votes to 16,
would require a company to obtain at least 85 percent of its
revenues from financial services in order to own and operate an
ILC.
• There is a strong likelihood that the US Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005 (BAPCPA) will
undergo revision by Congress in the coming year, a report from
industry analysts TowerGroup predicts. With
consumers rushing to file for bankruptcy before BAPCPA came into
effect in 2005, bankruptcy filings fell initially as a result of
the act. However, recent bankruptcy volumes are back on the rise.
“The cost of bankruptcy to consumers has gone up considerably
because BAPCPA shifted the costs to the bankruptcy attorneys who
passed the extra charges on to consumers,” TowerGroup analyst
Dennis Moroney tells CI.
• Barclaycard US is on track to be profitable
in 2007, Barclays Group chief executive John Varley reported in a
trading update. Barclays entered the US credit card market in 2004
when it bought Juniper Financial Corp from Canadian bank
CIBC. Barclaycard US made pre-tax losses of £56
million ($111 million) in 2006 and pre-tax losses of £59 million in
2005. Barclays said Barclaycard US’s losses were due to investments
it had made in the business.
• Canadian retailer and credit card issuer Canadian
Tire says total credit card receivables rose by 8.7
percent to C$3.3 billion ($3.05 billion) at the end of the first
quarter of 2007 from C$3 billion in the first quarter of 2006. The
growth was due to a continued increase in the number of card
accounts with a balance. Canadian Tire says its Gas Advantage
MasterCard, a credit card rewarding cardholders for purchases at
its petrol stations, was a major contributor to the growth in
balance-carrying accounts.
• Chase Card Services is offering its US
cardholders an online shopping portal in conjunction with
Mall Networks. The Chase Rewards Plus portal has
links to 400 merchants such as Apple.com, Lands’ End and
Travelocity. Customers shopping at Chase Rewards Plus receive
rewards and offers from both Chase and participating merchants.
Chase Card Services is the credit card arm of JPMorgan Chase, while
Mall Networks operates online shopping portals for credit card
issuers and professional sports teams.
• Financial services kiosk operator Coinstar is
to offer First Data’s Money Network Pay Cards in a pilot. The
kiosks will issue single-load Money Network cards that can be used
at ATMs and PIN debit card-accepting POS terminals connected to
First Data’s Star Network. The personalised Money Network cards
also offer payroll direct deposit and money transfers from the US
to Latin America.
• Major US credit card issuers are falling behind companies in
other industries in terms of the customer service experience they
deliver, in particular the customer service provided by their
websites and interactive voice response systems, Forrester
Research says. The consultancy evaluated the customer
service experience delivered by four large credit card issuers:
American Express, Bank of America, Citibank and JPMorgan Chase. The
credit card companies scored lower than PC manufacturers and
consumer electronics retailers and marginally outperformed mobile
phone operators.
• Bank of America (BofA) is expanding its
affinity programme with the launch of a set of banking products for
National Association for Stock Car Auto Racing
(NASCAR) fans. The products include NASCAR-branded
Visa credit cards, check cards, and a rewards programme.
• Canadians are largely ignorant of flexible bank accounts that
consolidate a consumer’s debts and savings into one account,
according to a survey by Canada’s Manulife Bank.
Manulife reports that almost two-thirds of respondents said they
had not heard of the all-in-one-accounts which are popular in the
UK and Australia. Manulife has launched the Manulife One account
which offers interest savings to consumers who consolidate their
mortgages, credit card debt, lines of credit and personal
loans.
• US financial services technology and software provider
Metavante says financial institutions that use its
Points2U outsourced rewards programme can now give their customers
reward points for paying their bills online (see CI 279 p7). The
payments software firm has expanded Points2U, which previously only
covered credit and debit cards, to include online bill payment
services.
• The PCI Security Standards Council, which
oversees the Payment Card Industry Data Security Standard, has
elected a board of 14 advisors who will represent its 200 member
organisations (see CI 380 p7). The elected seats are distributed
among members from industry associations, financial institutions,
merchants, processors and POS technology vendors. The elected
organisations include APACS, Chase Paymentech, First Data, JPMorgan
Chase, Microsoft, PayPal, Tesco, VeriFone and Wal-Mart.
