China’s Bank of Ningbo has partnered with online
gem trader diamondschina.com to launch China’s
first co-branded luxury credit card targeting customers with an
annual income of CNY50,000 ($6,780). Cardholders will be able to
buy products from retailers Omega, Jaeger-LeCoultre and Dunhill at
preferential prices.
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China Merchants Bank is looking to link up with
city commercial banks, rural commercial banks and rural credit
cooperatives to launch banking products such as credit cards,
credit lines and investment banking services. The bank has
established presences in the major cities but is looking to build
its network through partnerships with local regional banks by
offering product development and information technology
expertise.
HSBC will issue debit cards in China upon approval
from the China Banking Regulatory Commission. The
bank was locally incorporated in April 2007 but has yet to launch
its renminbi bank card business.
People’s Bank of China, the country’s central
bank, and Beijing’s municipal government will jointly build a
credit bureau in 2008. The information collection and construction
of the credit record system is expected to be completed in 2010 and
will include negative information such as traffic violation and
criminal record information. The database will be shared among
banks, municipal government branches, tax departments and
government employees’ housing fund administrations. The government
is considering tax discounts for those with a good credit
history.
China’s Bank of Communications has applied to set
up a credit card joint venture together with HSBC.
The latter has a 19.15 percent stake in Bank of Communications but
will not have more than a 20 percent stake in the venture. The
venture is a step-up from the credit card centre established
jointly in 2004.
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By GlobalDataIn China, Zhejiang Rural Credit Cooperatives has
launched its first credit card, Fengshou Card, which will provide
more services for farmers and small and medium enterprises in rural
areas. The credit limit will be based on credibility and demand of
the customers to establish a formal channel for bank loans.
China Construction Bank and retailer
Beijing Hualian Department Store have launched the
Hualian Dragon Credit Card – the first issued by the bank in
collaboration with a large retailer. The card is available in
single-currency and dual-currency formats.
Agricultural Bank of China has issued the Kins
International Tourism Card in partnership with Visa,
ctrip.com, China’s largest business trip ticket booking
platform, Road China Assistance and
guokang.com, a health management institution. The
card will provide cardholders with travel services for China’s
tourists across the globe.
American Express has offered a Lamborghini
Gallardo car as the top prize for its “Ultimate Platinum
Experiences” prize draw in India. Every INR10,000 ($254) spent
during the promotion period that runs from 1 December 2007 to 30
April 2008 will entitle the cardholder to one point or one chance
to enter the draw. Five cardholders will also get an opportunity to
visit Lamborghini’s test drive track in Rome.
In India, Deutsche Bank and Barclays
Bank have tied up with Jet Airways to
enable their credit card holders to redeem their reward points
towards JPMiles which may be redeemed for free flights on Jet
Airways or 12 of its airline partners. Barclays Bank customers will
need a minimum of 500 Barclaycard points for conversion while
Deutsche Bank cardholders need at least 250 points.
Aeon Credit is confident that its future growth in
Malaysia will be supported by new product launches and network
expansion while focusing on the small-value segment. It has 85,000
credit card customers and expects to register a 30 percent increase
in customers by the end of its financial year on 28 February 2008.
Its higher credit limit and low monthly repayment are attractive to
its target market. The company also plans to issue prepaid cards
next year.
HDFC Bank plans to introduce debit card and credit
card services on mobile phones for transactions soon in India. The
number of mobile banking users has reportedly doubled in less than
six months in 2007.
Citibank Indonesia is expecting to achieve up to
30 percent growth in credit cardholder numbers and value of
transactions for 2008. It is currently the market leader with 35
percent market share and 1.5 million cardholders. The bank
registered a 30 percent growth in value of transactions and 15
percent growth in cardholders in 2007.
Japanese credit card companies are reducing the redemption benefits
in their reward programmes as the lowered cap on chargeable
interest under the new money lending business law has affected
their profits. Typically, cardholders are awarded one point for
every purchase of ¥200 ($1.80), but card issuers are lowering the
point conversion rate to a third.
HSBC will launch its first credit card to premier
customers in Japan. With no annual fees, HSBC cardholders will
qualify for the MasterCard “moments service” which offers discounts
in luxury hotel results, spas and golf courses around the world.
Cardholders can enjoy discounts of up to 20 percent at selected
luxury hotels in Japan.
Korea Exchange Bank will offer the
Airplus Corporate Card to its customers. Airplus
already provides credit and settlement facilities, as well as data
management, to its Korean clients and the new credit card will
enhance the travel and entertainment package available to
cardholders.
Inter-bank network service operator Malaysian Electronic
Payment System (MEPS) celebrated the opening of ATM
services to China UnionPay cards in November.
Three member banks of MEPS, Hong Leong Bank,
Maybank and Public Bank opened
their ATMs to China UnionPay cards, allowing cardholders to access
more than 50 percent of ATMs across Malaysia.
Habib Bank of Pakistan has launched the HBL credit
card in green and gold versions. Cardholders will be rewarded with
a reduction in rates of service charges at the end of each year
with timely bill repayments. Other features include mobile phone
text alerts, fax statements, e-statements and revolving credit
facilities.
The Industrial and Commercial Bank of Vietnam will
now offer JCB card payment services. JCB
cardholders can withdraw cash from 750 ATMs and pay bills at 1,600
point of sale terminals run by the bank. It is the second bank to
do so after the Bank for Foreign Trade of
Vietnam.
Europe, Middle East, Africa
Beleaguered UK mortgage lender Northern Rock has
withdrawn its sole credit card offering as it continues to struggle
in the credit crunch. The bank, which also announced increased
interest rates for its Eskimo loans brand, will no longer offer
customers its Visa credit card, which was funded by the
Co-operative Bank. The card, The Northern Rock
Base Rate Tracker card, offered the Bank of England base rate for
the first six months with a rate guarantee after that.
Telecom operator 02, card network Visa and handset maker
Nokia have launched the UK’s first large-scale
pilot of contactless mobile payment technology, allowing customers
to make purchases with their mobile phones. The trial will issue
over 500 02 customers with £200 ($405) of credit and will run until
May 2008. Participants have been issued with Nokia 6131 handsets
installed with the 02 wallet, which uses near field communication
software. It allows customers to make payments totalling less than
£10 by tapping their mobile phones on a ‘smart poster’. Purchases
can be made at participating retail outlets as well as on London’s
public transport system.
UK prepaid card service provider and transaction processing company
Altair Financial Services International has teamed
up with MasterCard to create a limited edition
Swarovski Fashion Rocks prepaid Tap & Go card, which makes use
of MasterCard PayPass contactless payments technology. Altair also
worked with MasterCard to launch the UK’s first MasterCard PayPass
contactless payments programme in September this year.
Card security outfit MobiClear has signed business
travel account company TheCard Scandinavia to
technology that enables customers to use mobile handsets to
authorise transactions. The MobiClear card security system requires
customers to enter a four-digit code on their mobile phone to
authorise transactions on the internet, in stores and at ATMs. The
system also features an on/off card security tool which enables
customers to use their mobile phones to ‘switch off’ credit and
debit cards. MobiClear says that by turning off their cards when
not in use, customers reduce the risk of fraud.
Aeroplan Income Fund, a Canadian loyalty marketing
company, has entered into a definitive agreement to acquire
privately-held LMG for a purchase price of £350 million ($715.6
million) plus working capital adjustments of £18 million (for total
consideration of £368 million. LMG is the loyalty marketing and
customer-driven insight and analysis company that owns and operates
the Nectar loyalty programme in the UK, the largest customer
rewards programme with 50 percent of UK households participating at
15 leading national retail brands.
UK bank Lloyds TSB said its underlying profits are
on track to grow 11 percent this year but has warned it will take a
£200 million ($405 million) hit from exposure to credit market
problems. Lloyds said its UK retail banking and insurance and
investments units had continued the positive trends seen in the
first half of 2007, but wholesale banking had been affected by a
credit market crunch in recent months.
Bank of Beirut has unveiled its ProfilO credit
card series. The ProfilO series is a lifetime-free-of-charge
product range targeted at professionals, and incorporates an array
of features including the lowest interest rate in the market and
loyalty points redeemable into cash.
Citibank Russia has analysed the consumer
behaviour of over 100,000 Russian customers who actively used their
credit cards throughout 2006, finding that one of the most popular
shopping categories is jewellery, watches and luxury items. Another
growth leader is toiletries and cosmetics, followed by electronics,
and purchases at petrol stations. Citibank began to issue credit
cards in Russia in 2003 and has already issued over 350,000
cards.
Japanese card consortium JCB and its JCB
international subsidiary have announced that Card Complete
Service Bank AG, a payment service
provider in Austria, has signed an agreement to enhance JCB card
acceptance in Austria. Card Complete will start opening selected
merchants in Austria to JCB cardmembers by mid-2008, especially
merchants in the travel and entertainment business across the
country.
The first ever debit card dedicated to women in France has been
launched by BRED Banque Populaire and
MasterCard. The BRED Affinity card, which comes in
both classic and gold formats, combines the features of an
international payment card with exclusive services and discounts
targeted at women. The card includes options to pay for purchases
in instalments through an SMS-based credit request, emergency calls
for home repair services or domestic accidents, guarantees for
purchases and home shopping, and one or two year-extension of
guarantees granted by manufacturers. BRED Banque Populaire aims to
issue more than 20,000 classic cards and 5,000 gold cards in 2008,
tapping into the sizeable target market of 16 million females aged
between 20 and 40 years-old in France.
Royal Bank of Scotland, the UK’s second-largest
banking group, is conducting trials of mobile contactless debit
technology at its Edinburgh headquarters. The bank plans to start
public trials next year. Participants will be able to make
purchases up to the value of £10 by placing their mobile near a
contactless payment terminal.
Visa Europe has announced that 22 banks across
Europe have committed to issue 20 million V PAY cards, Visa
Europe’s SEPA-compliant debit product. The 20 million card
commitment is equivalent to a 12 percent market share of debit
cards in the targeted markets for V PAY.
Slovakian bank Slovenská sporitel’ňa is the latest
card issuer to enable cardholders to design their own cards using
Serverside Group customisation technology. The new
service, which went live on 1 December, is being marketed as My Own
Card. Cardholders can either customise their cards with a personal
image or photo, or choose one from a range of galleries. My Own
Card will initially be available across Slovenská sporitel’ňa’s
debit card range. Starting in the second quarter of 2008, the bank
intends to roll the service out across its credit card
portfolio.
The Irish Banking Federation (IBF) has welcomed
the announcement by Ireland’s Minister for Finance in the 2008
national budget to reduce the level of stamp duty payable on bank
cards. The changes in stamp duties payable by cardholders on ATM,
debit and credit cards represent a welcome reduction in the cost
born by bank customers and a clear signal by government of the
importance of accelerating the development of Ireland’s national
payments infrastructure.
Latin America
An Economist Intelligence Unit study of government
e-payments adoption in 43 countries says Canada is the world’s
leading nation for government e-payments. Brazil came 22nd in the
Government e-Payments Adoption Ranking (GEAR) study, which was
commissioned by Visa, with the US and Germany in joint second
place. Mexico came 25th, Argentina 28th, Colombia 24th, Costa Rica
36th, and Venezuela 40th in the ranking. The study covered all
e-payment methods, including cards and internet transfers.
According to Mexican banking association Asociación de
Bancos de México (ABM), there were 27,775 ATMs in Mexico
as of 30 September 2007. In September 2006, there were 25,665 ATMs
in Mexico. The number of POS terminals in Mexico rose to 367,852
units in September 2007, ABM says, from 286,691 a year
earlier.
Latinia, a Spanish wireless messaging software
vendor, says that 38 of Latin America’s top 100 banks now offer
mobile banking services. Of the 38 banks offering m-banking, eight
are from Brazil, six from Argentina, six from Chile, five from
Mexico and four from Venezuela, it says.
Quova, a US vendor of IP (internet protocol)
geolocation card fraud prevention software, has signed a deal with
Brazilian card-not-present transaction risk management company
ClearSale. From January 2008, ClearSale will be
using Quova’s software, which verifies the physical location of
internet users, to help its Brazilian e-commerce merchants prevent
fraudulent card transactions. Two companies that will be using the
Quova system are Brazilian mobile operator Vivo
and e-retailer Americanas.
Panama’s Banco General has launched the Visa
Estrellas (stars) credit card, which offers one Estrellas rewards
point for every US dollar of spending. The points can be redeemed
for gift vouchers or for air travel without any restrictions on
when flights can be booked.
Brazilian credit bureau Associação Comercial de São
Paulo (ACSP) has launched Brazil’s first Global FICO Score
service. Developed by global credit scoring solution provider
Fair Isaac, Global FICO Score is a consumer credit
risk-scoring system which combines negative credit data supplied by
the credit bureau as well as positive data supplied by the credit
bureau client which requested the score.
Prepaid debit card issuer Coinstar E-Payment
Services has launched two mobile phone pay-as-you-go
products aimed at Mexicans living in the US – Azteca Mobile and
Ilimitado (Unlimited) Mexico. Azteca Mobile is a prepaid wireless
voice and internet account offering mobile phone numbers for both
the US and Mexico. Unlimited Mexico is a prepaid calling card that
can be used with a toll-free number from any phone.
Coinstar E-Payment Services’ parent, US
self-service kiosk network operator Coinstar, has
set up a five-year $400 million senior credit facility syndicated
by Bank of America. The facility will be used to
help finance Coinstar E-Payment Services’ acquisition of GroupEx
Financial Corp (GFC). In July 2007, the company signed an agreement
to buy GFC, a provider of money transfer services from the US to 13
countries in Latin America.
Canadian software developer CPNI has formed an
alliance with Mexican payments network operator
PROSA (Promoción y Operación SA) to roll out its
m-payments technology in Mexico. PROSA will provide Mexican banks
with the centralised payments processing backbone network for
CPNI’s Phone Authorized Transfer (PAT) system. PAT enables banks to
use their existing infrastructure to offer m-banking and m-payments
services to their clients, CPNI says.
Diebold, a US-based ATM vendor, is setting up a
direct sales operation in Central America and the Caribbean. Based
in Costa Rica, the new unit will be operated through a joint
venture with General Business Machines (GBM),
Diebold’s Central American and Caribbean ATM distributor. The deal
involves Diebold buying a controlling share in GBM’s ATM
distribution business. GBM also sells IBM systems to Central
American companies.
Indian mobile payment company PayMate is entering
the North American market, offering mobile phone-based cross-border
remittances from the US to countries such as Mexico and
India.
French SIM card supplier Gemalto has launched a
mobile phone banking service in Colombia in partnership with local
banks and all the country’s mobile operators. The banks
participating in the service are Bancolombia and
Banco AVVillas, as well as Colombia’s
Redeban Multicolor inter-bank network. The service
enables mobile phone subscribers to transfer funds, check their
bank balances, recharge mobile prepaid accounts, and pay bills
using software stored on their handsets’ SIM cards.
French chip card vendor Oberthur says its Americas
sales in the third quarter of 2007 rose by 20.2 percent to €43.3
million ($63.5 million), an increase from €36 million one year
earlier. Oberthur’s Americas region encompasses the US, Canada and
Latin America, and includes bank card as well as SIM card
sales.
Canada’s Scotiabank has closed a $1.02 billion
transaction to acquire Banco del Desarrollo,
Chile’s seventh-largest bank (CI 387 p6). Scotiabank acquired 99.5
percent of the shares in Banco del Desarrollo, valued at $51.79 per
share. The transaction, which was completed on 26 November, was
announced in September 2007. The combined operations of Banco de
Dessarollo and Scotiabank’s Chilean subsidiary, Scotiabank Sud
Americano, will create Chile’s sixth largest bank, Scotiabank
says.
US POS systems vendor VeriFone has launched
VeriFone Access, which will provide hosted merchant payment
services in Mexico and other Latin American countries. VeriFone
says the new company will host software for small and medium-sized
merchants enabling them to offer services such as selling mobile
airtime.The platform will also enable merchants to create loyalty
programmes and accept credit and debit card purchases, including
monthly card-based instalment payments.
Western Union has launched the Quick Cash service
which allows Google AdSense website publishers to receive payment
in cash in nine countries including Argentina, Chile, Colombia and
Peru. AdSense enables website publishers to display ads targeted to
their website’s content. Before the launch of Quick Cash,
publishers using AdSense received payment via cheque or electronic
funds transfer into a bank account. Now, AdSense subscribers in the
nine countries can receive payment in cash at a participating
Western Union agent location.
North America
According to a Federal Trade Commission (FTC)
study, 3.2 million US adults suffered fraud related to their
existing credit cards in 2005. A further 1.8 million were victims
of fraud related to stolen IDs and new accounts, including credit
cards and bank accounts that were opened in their name, the FTC
estimates. Victims did not suffer major out-of-pocket expenses as a
result of fraud due to ID theft, it says. However, the time victims
spent resolving problems was considerable.
A survey from global payments processor First Data
says that 77 percent of US adults are “extremely, very likely or
somewhat likely” to buy gift cards for family and friends as
Christmas presents. Two-thirds of survey participants intend to buy
the same number of gift cards again this year, with 19 percent
planning to purchase more, First Data says.
Revolving US consumer credit, which includes credit card borrowing,
rose by an annual rate of 8.3 percent in October 2007 to $928.5
billion, according to the Federal Reserve’s
monthly report. In September 2007, revolving credit rose by 6
percent to $922.1 billion.
Credit card loans held by US government body Federal
Deposit Insurance Corp (FDIC) insured banks rose by 0.4
percent to $384.5 billion in the third quarter of 2007 from $383.1
billion in the year-earlier quarter. In the second quarter of 2007,
credit card loans totalled $373.9 billion. Loan loss provision by
FDIC-insured banks across all assets including credit cards was
$16.6 billion in the third quarter of 2007 compared to $7.5 billion
a year earlier.
Bank of America has launched the Brighter Planet
Visa credit card, which allows consumers to use their points for
reducing climate change. Cardholders contribute the EarthSmart
points awarded by the card towards building community-based
renewable energy projects across the US.
Bank of America says it now has 500,000 active
mobile banking customers across the US, nine months after it first
introduced its m-banking service in March. The service enables Bank
of America customers to use internet-connected mobile phones to
check balances on their checking, savings and credit card accounts.
They can also pay their bills; transfer money between their
accounts and to other bank customers; and view their
transactions.
BMO Bank of Montreal took a C$185 million ($183.7
million) pre-tax charge in its fourth quarter ending 31 October
2007 for future customer redemptions from the Air Miles loyalty
rewards programme offered by its Mosaik MasterCard
business. The charge was offset by a C$110 million gain from the
sale of BMO’s MasterCard International shares.
BMO Bank of Montreal is offering Air Miles reward
points to its customers who use the Interac Online
service with a bank account linked to their BMO debit card. The
rewards are available from participating online merchants.
Transactions are debited via a direct internet transfer from the
customer’s bank account, without a debit card number being entered
on the merchant’s site. Interac Online is currently available from
BMO, Royal Bank of Canada, Scotiabank and TD Canada Trust.
Discover Financial Services is extending the reach
of its Discover card network via an agreement with
Metavante. The Milwaukee-based processor will
provide its merchant clients with an integrated processing service
that includes Discover card transactions as well as transactions
for other card schemes. The service enables merchants to receive a
single bank deposit and statement for all the different types of
card they accept, Metavante says.
US bank Chase is to deploy 900 no-envelope
cheque-accepting ATMs in the first half of 2008. Customers can
insert a stack of up to 30 cheques or 50 US currency-denominated
bills in the new ATMs without an envelope or deposit slip. The ATMs
calculate the deposit and display images of the cheques on both the
screen and printed receipt in under 60 seconds. The rollout is part
of Chase’s plans to upgrade or replace 5,000 deposit-taking ATMs by
2010.
Continental Airlines and Chase Card
Services have introduced the Continental Airline
TravelBank World MasterCard which offers cardholders a
no-restriction air travel reward programme. Cardholders earn travel
credits, which can be used for all or part of any flight purchased
on www.continental.com. They earn rewards equivalent to 1 percent
of spending for all card purchases, and 3 percent for the purchase
of eligible cable TV, telecoms and wireless services.
Payments processor Heartland Payment Systems has
filed a Federal anti-trust lawsuit against rival US processor
Chase Paymentech, its Merchant Link subsidiary and
their technology partner, US point of sale software vendor
Micros Systems. The suit alleges that Chase
Paymentech and Micros have been using unlawful tying agreements to
prevent Heartland from offering restaurants competitive transaction
processing fees.
Capital One has launched the Capital One Card Lab,
an online tool designed to help US consumers “build” their own
credit card. The tool lets cardholders choose the interest rate,
annual fee, introductory offers, rewards and the design on the
front of their card.
ePayments, a Denver, Colorado-based processor and
electronic cheque conversion company, is expanding its geographic
reach with the acquisition of St. Simons Island, Georgia-based
Check Collection and Recovery (CCR). ePayments
says CCR brings a regional focus and client base in the retail,
government and utility collections sectors.
Rob Tourt, vice-president of network services at Discover
Financial Services, is to take over as chairperson of the
PCI Security Standards Council with effect from 1
January 2008. Tourt succeeds the current chairperson, Seana Pitt,
who is vice-president of global merchant policy and data quality at
American Express’s Global Network Operations. The
council is the body responsible for the Payment Card Industry Data
Security Standard.
Retailer TJX has agreed a settlement with
Visa USA relating to losses suffered by US Visa
card issuers following the retailer’s data breach. It has agreed to
make a $40.9 million settlement, conditional on acceptance by 80
percent of US Visa card issuers affected by the breach.
Visa USA is asking merchants to improve
surveillance of point of sale PIN-entry devices installed in
isolated parts of their stores. Thieves are taking under a minute
to swap these devices for skimmers that capture customers’ PINs and
card details, Visa warns in a security alert. The problem affects
older terminals that are not tamper-resistant and tamper-evident,
it says.
