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.
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.
In 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.
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.
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.