• A recent survey by Visa Asia highlighted the
growth potential of the cards and payments markets in
Vietnam…
• NETS, the debit card network owned by
Singapore’s three local banks, plans to increase its administrative
fee substantially from July…
Go deeper with GlobalData
• UK card issuer Royal Bank of Scotland (RBS)
is to offer a data-sharing service as part of its expanding range
of card-not-present fraud management tools…
ASIA-PACIFIC
• CITIC Bank, the seventh-largest bank in
China, plans to triple its credit card numbers to 10 million by
2010. The bank expects its card business to be profitable by 2007
after reporting losses since it started operation three years ago.
The bank sees credit cards as a platform to extend car loans,
mortgages and wealth management to its clients.
• A recent survey by Visa Asia highlighted the
growth potential of the cards and payments markets in Vietnam. The
traditionally cash-centric Vietnamese consumers are beginning to
interact with their banks for multiple and more sophisticated
services. Visa Asia says that, of the unbanked, 105 million people
are eligible to apply for bank accounts and debit cards, and in the
two largest cities, Ho Chi Minh City and Hanoi, 1.2 million people
are eligible to receive credit cards. Vietnam’s National Financial
Switching Joint Stock Company this year inaugurated the country’s
first card and ATM switching system.
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By GlobalData• Card organisation China UnionPay (CUP)
recently celebrated the formal introduction of its cards in Egypt.
This deal is significant, as it is the first time a Middle
Eastern/African country has dealt with CUP.
• MasterCard has teamed up with one of
Indonesia’s largest banks, Bank Negara Indonesia
(BNI), to launch the country’s first contactless card. BNI has 4.5
million debit cards and 1.1 million credit cards in circulation,
and a merchant network numbering 11,000 points of sale. BNI
MasterCard PayPass cards will enable transactions of up to
IDR100,000 ($11).
• In Indonesia, Bank Danamon customers can now
obtain credit card approval in under 60 minutes. This is the first
card approval service in the country and the bank hopes the reduced
application time will give it a competitive advantage.
• Japan’s JCB will increase its card processing
capacity with ACI’s Base24 software to accommodate
future growth in international transactions. JCB currently operates
its Base24 solution to process JCB transactions in the US while
retaining authorisation functions in Japan. JCB will also extend
its agreement for an additional five years.
• In Japan, Sumitomo Mitsui Financial Group is
to buy a 31 percent stake in credit card issuer OMC
Card for $619 million from retailer
Daiei. The other contender for OMC,
Shinsei Bank, apparently asked for a deadline
extension, which worked against it in the bidding war. Daiei is
selling its stake in OMC to reduce its debt levels. It will still
own 20 percent of OMC.
• Malaysia’s Maybank has tied up with
Jabatan Pengangkutan Jalan (JPJ)
Malaysia, a federal government agency, to enable credit
card payment for road tax and renewals. JPJ is reportedly the first
government body in Malaysia to accept payment via credit card. The
system will eventually be extended to car registration, ownership
transfer, licence renewal, summons payment and tenders for car
licence numbers. Maybank plans to extend this facility to include
payment by debit card in the future.
• NETS, the debit card network owned by
Singapore’s three local banks, plans to increase its administrative
fee substantially from July. Unsurprisingly, there has been much
protest from the local consumer watchdog and merchants. NETS
currently charges a fee of 0.35 to 0.55 percent of transaction
value and plans to increase the fee to 1.5 percent to 1.8 percent.
NETS has argued that the new fee scheme is in alignment with
international debit card schemes. NETS has 30,000 payment points
across the island and is used by 80 percent of local retailers.
• Samsung Card, South Korea’s second-largest
credit issuer, has announced that it raised close to $620 million
in its initial public offering. The price of KRW48,000 ($52) per
share was above the indicated range of KRW40,000 to KRW45,000 per
share. The success is likely to attract South Korean companies to
list locally, as many such companies have previously preferred a
dual listing in the belief that foreign offerings would fetch
higher valuations.
• Taiwan’s Financial Supervisory Commission
recently announced that the 45 credit card issuers in Taiwan posted
revenues totalling $606 million in the first four months of the
year but wrote off delinquencies of $772.5 million, leading to a
loss of $166.3 million. Only 17 of the 45 companies were profitable
after writing off bad credit card loans. Citibank
Taiwan had the highest profits at $13.39 million from its
credit card business. E. Sun Bank followed with
$10.39 million profit.
• Taiwan’s recently legislated Consumer Debt Clearance
Act will allow credit card-holders with unsecured debt
lower than TWD12 million ($360,000) to negotiate with creditor
banks for lower interest rates and rescheduling of a payment period
of up to eight years. If a consensus is not reached, the borrower
can apply to the courts for individual rehabilitation or
bankruptcy. The highly controversial new law may affect bank
earnings as provisions for non-performing loans are likely to
increase sharply, and issuers have criticised the law as providing
an exit mechanism for troubled cardholders. Vulnerable banks that
have been singled out include Chinatrust Commercial Bank,
Taishin International Bank, Cathay United Bank and
Taipei Fubon Bank.
• Citibank Taiwan has selected digital security
specialists Gemalto to be its EMV migration launch
partner. Gemalto will provide more than 1 million banking cards. An
end-to-end service programme is being built for Citibank
cardholders, who will be able to choose from a variety of Citibank
services that employ a wide range of card technologies. Once the
service is selected, cardholder data is sent securely to Gemalto’s
local personalisation centre, where the corresponding card is
personalised, packaged and prepared for delivery to the
cardholder.
• Bank of Thailand governor Tarisa Watanagase
says he is not worried about the Thai credit card business because
it constitutes only 2 percent to 3 percent of total loans in
Thailand. Central bank supervision has largely been aimed at
preventing the debt crisis in Taiwan and South Korea from happening
in Thailand and has curbed credit card business growth to around 10
percent from 40 percent previously.
• The Thai police are considering legal action against local
credit card issuer Krungsriayudhya Card over its
recent credit card usage promotion programme. Cardholders who use
Krungsriayudhya Card may have from 10 percent to 100 percent of
their spend credited back to their card account if the last two or
three digits of an approval code on a sales slip match random
figures set by the company. This programme can be construed as
gambling, and the issuer may be in violation of the local gambling
law as it has not obtained a gambling licence.
EUROPE, MIDDLE EAST, AFRICA
• European payments processor Equens has signed
a reciprocal deal with Italian card processor Seceti to provide
clearing services to clients following the introduction of the
Single Euro Payments Area in 2008. Under the deal, both companies
are aiming to provide European banks with an alternative for
payment clearing via Equens and collaboration with partners to
facilitate reachability and interoperability.
• Spanish banking group Banco Sabadell is
investing €57.5 million ($76.4 million) in a joint venture with
Spanish telecoms company Telefónica that will
focus on developing instant banking services incorporating new
interactive TV and mobile telephony channels. Both organisations
have also agreed to work together on a number of initiatives,
including a service that will enable customers to use loyalty
points accrued on their banking cards to pay for air time.
• Nordic banking group Nordea is to offer the
75,000 members of the Swedish Motorcycle Club the ability to
personalise their banking cards using technology from global
digital solution provider Serverside Group. Along
with the club logo, cardholders can choose a motorcycle-related
image of their own to place on their cards. The new service will
cost members SEK295 ($41) per year, plus SEK100 every time they
wish to change the image on their card.
• UK card issuer Royal Bank of Scotland (RBS)
is to offer a data-sharing service as part of its expanding range
of card-not-present fraud management tools. The service provided by
Ethoca will be made available to customers of
RiskGuardian, RBS’s specialist risk management solution. RBS will
offer the data-sharing service to its global list of existing
e-commerce customers. Merchants already using the PaymentTrust
solution for payment or fraud management-related services will have
access to the service through their existing integration.
• Sweden’s Handelsbanken is to offer its
customers the opportunity to choose their own image on their
Allkort MasterCard and Allkort Visa cards. Cardholders can choose
one of their own digital photos or an image from Handelsbanken’s
picture gallery.
• According to the latest GPC Visa Annual Report,
all aspects of the UK Government Procurement Card (GPC) Visa
programme, now in its tenth year, have continued to grow in 2006.
GPC Visa generated monetary savings of more than £108 million ($213
million) through more than 3 million transactions. More than 1
million more transactions occurred in 2006 than in 2005, and there
are now more than 850 schemes initiated into GPC Visa schemes. Some
93,867 GPC Visa cards are in use in the UK.
• The management team of Welcome Real-time, the
French payment card technology provider, has completed a buy-out of
the company with the support of Axa Private
Equity. Welcome provides smart card loyalty systems to
banks in 21 countries around the world. The vendor’s technology is
designed to boost revenue by enabling banks to add new applications
– such as loyalty points, coupons and cashback features – to
payment cards.
• European payment processor Global Payments
has reached a multi-year agreement to provide a complete
outsourcing solution for payment card processing services to
Russia’s Starbank. The scope of the agreement
encompasses authorisation services, card management services,
bankcard personalisation data preparation, fraud monitoring, ATM
and POS management, e-commerce and mobile phone text message
account alerting services. Starbank plans to begin issuing credit
cards in the summer of 2007.
• Lloyds TSB and MasterCard
Worldwide have reached an agreement under which the bank
will issue the majority of its credit card products through the
MasterCard scheme. This will result in a doubling of the number of
MasterCard-branded Lloyds TSB credit cards in issue over the coming
year. Lloyds TSB, which serves about 15 million retail customers
through 2,100 branches in the UK, will continue to offer American
Express-branded credit cards.
• One month after the merger between Italian payment technology
clearing specialist SIA and processor
SSB, the group has announced the acquisition of
GBC (Giro Bankkàrtya), the Hungarian company
providing financial institutions, payment cards issuers and
acquirers with management services for ATM and POS terminals,
transaction switching, fraud control and other services for payment
systems. GBC has recorded growth of 63 percent on turnover over the
past three years.
• Barclays Bank has launched its retail banking
services in the United Arab Emirates (UAE). Customers in the UAE
are being offered products such as Barclaycard, current and savings
accounts, non-resident Indian banking and personal loans.
Barclaycard will launch a range of credit cards
that allow customers to choose the level of repayments and rewards
they can earn.
• According to figures from the Bank of
England, UK consumer credit lending is slowing down: the
rise in net credit card lending of £100 million for April was lower
than March. The annual growth rate of consumer credit continued to
fall, by 0.3 percentage points to 5.4 percent, and the three-month
annualised growth rate also fell by 0.3 percentage points to 4.1
percent.
• Garanti Bank of Turkey has signed an
agreement with Chinese bankcard organisation China
UnionPay (CUP) to issue credit cards in China, becoming
the first European bank to do so. Tourists and business executives
visiting China will be able to use their Bonus Business, Bonus
Personal and Garanti Paracard credit cards under the new agreement
between Garanti and CUP, while Chinese tourists and business
executives visiting Turkey will be able to use their credit cards
at all Garanti ATMs.
• Qatar National Bank (QNB) has launched the
QNB MasterCard unembossed chip debit card. Ali Shareef Al Emadi,
acting chief executive of QNB, said: “The MasterCard unembossed
chip debit card has been launched to offer cardholders a payment
card with enhanced chip features, combining the convenience of a
chip-enabled card with a greater level of security, thus falling in
line with our strategy to combat credit and debit card fraud.”
• The National Bank of Kuwait (NBK) and Mobile
Telecommunication Company (MTC), a Middle East telecom service
provider, have teamed up with Visa to launch the new NBK-MTC
co-branded credit card. MTC and NBK clients will be able to send
free text messages through their mobile phone. The card is being
aimed at postpaid mobile line customers to encourage them to use
credit cards instead of paying cash. Cardholders will also be able
to pay their MTC bills through the card.
LATIN AMERICA
• The number of payment cards in issue in Central America rose
to over 18 million in 2006, with debit cards overtaking credit
cards by three to two, Hypercom says. The POS
terminal vendor says its figures are based on data from other
industry sources. Nearly 30 percent of retail purchases in Central
America are now made with cards as opposed to cash, Hypercom says.
The region’s installed base of POS terminals now exceeds 115,000,
and that figure is expected to double within the next five to ten
years.
• Brazilian banks are expected to increase their outsourcing of
their credit card and ATM operations this year in an effort to cut
costs, according to a survey from IDC Brazil, a
market research and analysis company. “Banks are definitely
considering outsourcing their credit card processing and ATM
operations,” Mauro Peres, director of IT and telecom research at
IDC Brazil, tells CI. “Originally, Brazilian banks only got outside
firms to solve ATM breakdowns.” However, Brazilian bank Bradesco is
bucking the outsourcing trend by taking back in-house the American
Express (Amex) credit card processing operation which its Amex
Brazil unit had outsourced to global technology and consulting
corporation IBM, Peres says.
• BBVA has outlined plans for a significant
expansion of its presence in Latin America. Speaking to investors,
senior executives of the Spanish bank said they want to achieve a
20 percent expansion in BBVA’s customer base in Spain, Portugal,
Mexico and South America. It expects to double its consumer credit
portfolio in South America and Mexico over the next three years. In
Mexico, BBVA wants to add 45 new branches by 2010, and increase the
number of ATMs it operates in the country from 4,876 to 7,500. In
South America, BBVA plans to treble its investment in credit cards
and to increase the number of ATMs in the region from 3,600 to
5,600. It also wants to expand its regional network from 1,360 to
1,600 branches.
• Around 200,000 consumers currently use ICP-Brazil digital
certificates for internet banking, Maurício Coelho, director of
public key infrastructure (PKI) at Brazil’s Instituto
Nacional de Tecnologia da Informação, tells CI. “By the
end of 2007, the number will have increased to 400,000,” he says.
“The first digital certificates were issued for online banking in
2006.” ICP-Brazil is a PKI scheme that provides digital
certificates for applications such as electronic payments and
access to government websites.
• Cardtronics says it added 190 new ATMs to its
Mexican surcharging ATM network in the first quarter of 2007. The
US-based independent ATM operator now has around 500 ATMs in
Mexico, a Cardtronics spokesperson tells CI. Its Mexican revenues
rose to $603,000 in the first quarter of 2007 from $52,000 in the
first quarter of 2006. The company says it intends to roll out
additional ATMs in Mexican retail outlets as opportunities
arise.
• Banamex, Citigroup’s Mexican subsidiary, has
launched a co-branded credit card in Mexico with Spanish football
club FC Barcelona. Cardholders
earn loyalty points that can be used to pay for trips to watch FC
Barcelona matches. The card has an introductory 24.9 percent
interest rate for the first six months. Banamex offers ten other
football-related credit cards, but its FC Barcelona card is the
first to be co-branded with a non-Mexican football club.
• Experian, the UK-based credit reference
agency, has acquired Informarketing, a Brazilian
direct marketing services provider for the financial sector. An
Experian Brazil spokesperson tells CI that Informarketing
provides marketing data, services and analytical tools to clients
including HSBC and Banco Safra. In April, Experian said it was in
talks about acquiring Brazilian credit bureau Serasa.
• Bermuda-based e-commerce payments processor First
Atlantic Commerce has launched an internet protocol (IP)
geolocation system which enables online merchants to view their
customers’ physical location, including the country, state, city
and zip code. The service can be used not just to prevent
e-commerce fraud but also to offer targeted marketing and
advertising that is relevant to a customer’s location. “If an
online merchant wants to target a new market such as South America
with distinct promotional information, our IP geolocation service
will enable them to track their campaign and consumer behaviour for
that market,” according to Andrea Wilson, First Atlantic Commerce’s
CEO.
• Inside Contactless, the French contactless
chip vendor, shipped 650,000 Micropass chips in Latin America in
the first six months of 2007, Bertrand Moussel, the firm’s
executive vice-president, EMEA/Latin America sales, tells CI.
Inside Contactless is involved in a Visa contactless card trial in
Guatemala, and also expects to participate in several forthcoming
Brazilian contactless payment card pilots. Globally, Inside
Contactless has shipped 20 million Micropass units since the chip
was launched in November 2005, the majority being supplied to the
US market.
• Grupo Inteligensa, a Latin American bankcard
manufacturer, has become a gold level reseller of Innovative Card
Technologies’ ICT DisplayCard, a debit card-sized payment card that
includes built-in authentication technology. US-based ICT says that
cardholders can use passcodes generated by the ICT DisplayCard for
authenticating internet banking or e-commerce transactions.
Inteligensa, which has offices in Brazil, Mexico, Colombia and
Venezuela, will offer the ICT DisplayCard to its 200 client
financial institutions.
• MarkMonitor, a US internet security company,
says there was a substantial increase in the number of phishing
websites (false websites set up to steal a consumer’s banking or
credit card details) targeting Latin American financial
institutions in the first quarter of 2007 as compared to the whole
of 2006. “For all of 2006, MarkMonitor saw an average of 4.66
phishing incidents per month targeting Latin American financial
institutions, and in the fourth quarter of 2006 there was an
average of 6.66 incidents per month,” Laura Mather, a senior
MarkMonitor researcher, tells CI. “In the first quarter of
2007, there was an average of almost 40 incidents per month.
Initially, it was people who had US accounts but who lived in Latin
America who received phishing e-mails. We’re now seeing specific
targeting of Latin American financial institutions.”
• VeriFone says it has completed a pilot with
Amex in Mexico for the VeriFone Vx 670 Pay at the Table wireless
handless payment device. The POS terminal vendor says it expects to
win Vx 670 orders in Mexico as a result of Amex Mexico’s ad
campaign about wireless Pay at the Table services. VeriFone also
says its Latin American revenues rose by 56 percent to $41.5
million in the first quarter of 2007 from $26.5 million in the
first quarter of 2006.
NORTH AMERICA
• Bank of Montreal (BMO) is offering its
Canadian debit cardholders an Air Miles reward programme in a bid
to capture the personal banking business of Canada’s 9 million
active Air Miles collectors. The bank says it is the only major
Canadian financial institution to offer rewards for debit card
purchases. To encourage customers to use more of its products, such
as its Mosaik MasterCard Air Miles credit card, BMO is linking the
value of the Air Miles earned to the number of products a customer
holds with the bank.
• Canadians are not interested in prizes, giveaway or offers
with a time-limited low introductory rate when it comes to choosing
credit cards, according to research by Capital One
Canada. In an online survey of 1,317 Canadian adults, 82
percent of respondents said they preferred cards that offered one
low rate and had no giveaways or time-limited offers on interest
rates. Capital One Canada is offering a Platinum MasterCard that
charges an interest rate of prime plus 1 percent, totalling 7
percent as of 8 June 2007, and has no annual fee or balance
transfer fee.
• Capital One says its chief information
officer, Gregor Bailar, will be leaving to pursue various
philanthropic pursuits. The US issuer also says Robert M Alexander,
who is currently executive vice-president for internet and
enterprise customer management (ECM), will assume the role of CIO
and head of ECM.
• Cardtronics has signed a definitive agreement
to buy 7-Eleven’s US ATM network. The US-based independent ATM
deployer says it will pay around $135 million in cash for
7-Eleven’s 5,500 ATMs, which include 2,000 financial self-service
kiosks offering bill payment and money transfers. The deal, which
is subject to regulatory approval, is expected to be concluded by
the end of June 2007.
• Cryptomathic, a Cambridge, UK-based payments
software company, has won a contract to supply its EMV data
preparation system to one of Canada’s largest financial
institutions. The unnamed card issuer will use Cryptomathic’s
software to help it roll out Visa-branded EMV credit cards and
Interac-branded EMV debit cards in Canada next year. Interac is
Canada’s national debit card scheme. “The issuer will use our
CardInk EMV data preparation system to generate the personalisation
data for its EMV cards,” Morten Landrock, Cryptomathic’s managing
director, tells CI. “The data for each card will
then be run through the issuer’s card personalisation system,
following which the card will be issued to the customer.”
• Gulf Oil has launched the Gulf MasterCard,
which is issued by Barclays-owned Jupiter Bank.
The card offers a 10 percent discount on petrol purchases at Gulf’s
US petrol stations and 2 percent on all other purchases for the
first two months after the account is opened. Thereafter, the
discount falls to 3 percent on petrol purchases at Gulf stations
and 1 percent for all other purchases. No discount is offered for
purchases from other oil companies’ petrol stations.
• HSBC USA and US retail chain CVS/Pharmacy are
to pilot a new CVS-branded PIN debit card that offers OptiPay
loyalty rewards. The card is the first to be issued since HSBC
signed an agreement last year with Tempo Payment Network to issue
retailer-branded Tempo payment cards that draw their funds from
customers’ existing bank accounts. Payments cleared over Tempo’s
non-bank PIN-debit acquiring network incur lower interchange fees
than card payments cleared over other networks. CVS customers will
be able to swipe their cards once to both pay for merchandise and
collect rewards.
• RBS Lynk, Royal Bank of Scotland Group’s US
payments processing arm, is to start processing card payments for
Alon, a Dallas, Texas-based oil company. Alon
refines and markets petroleum products under the Fina brand, and
operates 200 convenience stores in Texas and New Mexico under the
7-Eleven and Fina brands. RBS Lynk will process credit, debit and
gift card transactions for Alon’s convenience stores and also
handle card transactions for in-store and pay-at-the-pump sales of
petrol.
• US bank Wachovia says it has issued 1 million
credit cards since it re-entered the US credit card market in its
own right in July 2006. Wachovia terminated its joint marketing
agreement with MBNA in November 2005. In the past year, Wachovia
has launched consumer cards, commercial cards, and a business
credit card targeted at companies with annual revenues of up to $15
million.
• State Bank of India’s US subsidiary, State Bank of
India (California), has signed a three-year agreement to
refer its commercial customers to payment processor Moneris
Solutions. “We provide commercial services for the 70 percent of
mid-range and lower- range US hotels and motels that are owned by
Asians,” Damodaran Pillai, the bank’s chief credit officer, tells
CI. Holly Senykoff, Moneris’ Marketing Communications
Manager, says: “Moneris will be the acquirer, working through an
affiliate, for the State Bank of India merchants.” A joint venture
between Royal Bank of Canada and Bank of Montreal, Moneris has its
US headquarters in Chicago.
• Visa’s settlement service fee is unlawful, a
US federal judge has ruled. Visa introduced the fee in 2003 to help
pay for the $2 billion damages awarded against it in the Wal-Mart
merchant class action settlement. The fee was designed to prevent
Visa’s top 100 US debit card issuers from shifting their debit
issuance from Visa to avoid paying their share of the damages. The
judge also said Visa must allow the issuers to terminate their
debit issuing agreements with Visa if they so wish. “This is a
significant win for MasterCard and its customers,” Noah Hanft,
MasterCard’s general counsel, says in a statement. Rosetta Jones,
Visa USA’s vice-president, says Visa does not rule out appealing
the decision.
• Credit cards issued by credit unions are gaining strength in
the US market, according to credit card brokerage firm
Asset-Exchange. In the 12 months to 31 March 2007, the average
balance per credit union credit card account grew 10 percent to
nearly $2,200, says AssetExchange. The percentage
of credit union credit card portfolios that grew by more than the
rate of inflation during the previous 12 months increased from 51
percent in March 2006 to 70 percent in March 2007.
• Revolving consumer credit decreased by 0.5 percent in April at
an annual rate, compared to a 9.1 percent increase in March at an
annual rate, the Federal Reserve says. Revolving
credit comprises short- and intermediate-term credit extended to
individuals, including credit cards, but excludes loans secured by
real estate. Total revolving consumer credit outstanding was $887.2
billion at the end of April 2007, down from $887.6 billion in March
2007.
