• Suning Applicance, a privately-owned electrical appliances retailer, has teamed up with eight banks to boost sales in its 50 stores in Beijing…
• Global payment processor First Data has teamed up with German bank WestLB to launch a new business aimed at providing card acceptance services for retailers across Europe…
• Banco do Brasil (BB) has established what it calls a community banking operation in the Amazon region of the country…
• Bank of Canada figures have revealed that consumer credit lending in the country is increasing amid widespread calls for the provision of more credit for consumers and businesses…
• China Unicom, Chongqing Yucheng Transportation Card, mobile phone manufacturer Guohong Telecom Digital Group and SIM supplier Watchdata have collaborated to launch an NFC-based mobile payment service in China’s fourth-largest municipality, Chongqing. The Yucheng Tong Card may be used to pay for public transport, cable car rides, hotels, park entrances and restaurants in Chongqing. There are 700,000 cards in circulation and cardholders will be able to top up balances through their bank accounts in 2009.
• The Industrial and Commercial Bank of China (ICBC) issued 39.05 million Peony credit cards and 189 million Peony debit cards in 2008. ICBC is currently the largest credit card issuer in China with total spending of CNY255.1 billion ($37.29 billion) on its credit cards, an increase of 57.6 percent year-on-year, according to local reports.
• Suning Applicance, a privately-owned electrical appliances retailer, has teamed up with eight banks to boost sales in its 50 stores in Beijing. Cardholders from China Merchants Bank, ICBC, China CITIC Bank, Bank of Communications, China Minsheng Banking and China Everbright Bank will be able to purchase home appliances by making payments in instalments, while Suning absorbs the service and interest charges. The retailer expects additional sales of CNY1 billion from the arrangement and will pay CNY40 million in bank fees.
• Global payment processor TSYS’s joint venture with China UnionPay (CUP), China UnionPay Data Services (CUP Data), has signed a long-term credit card processing agreement with the Bank of East Asia (BEA). BEA was the first foreign bank to independently launch its own credit card programme in China.
• Hang Seng Bank of Hong Kong is expecting a rise in personal bankruptcies and credit card bad debts. The bank has frozen pay increases for its staff in 2009 and plans to hire fewer fresh graduates. It will review the situation again in April but does not plan to lay-off staff or lower the entry-level salary.
• ICICI, HDFC and Standard Chartered Banks in India have started imposing a fee for customers who make cash payments for their credit card bills at bank counters. ICICI charges INR100 ($2.05), while HDFC charges INR50 and Standard Chartered charges INR99.
• Given the recent accounting scandal in Satyam, one of India’s largest technology providers, banks in India have started reducing the credit limits for Satyam staff holding credit cards. Banks operating salary accounts have also instructed their staff to monitor outstanding payments before crediting the next salary payment.
• Around 15 senior executives in Visa Korea, including the country general manager and deputy manager, resigned earlier this month. There were 35 Visa staff in Korea and local reports cite contention over the audit of its Korean unit. Although the former staff have cited personal reasons, the rumour mill points to a conflict over expenses after the audit was carried out.
• Malaysia’s Maybank aims to attract two million users and MYR2 billion ($0.55 billion) in transactions for its Maybankard Visa debit offering by the end of 2009. There are currently 1 million debit cardholders generating MYR1.3 billion in transactions since the programme’s launch in March 2008, exceeding its original 12-month time frame. Since the launch of the card, Maybank’s total debit sales volume has increased by 147 percent, making up 78 percent of total debit sales in Malaysia. The bank claims its default rate is also lower than the industry average of 2 percent.
• Cambodia’s ACLEDA Bank is pressing ahead with plans to open 42 ATMs in rural areas, doubling the existing total of 60 ATMs nationwide. ACLEDA said it has around 180,000 ATM cardholders at present, and is issuing up to 500 new ATM cards a day.
• New Zealand credit card usage is in the most prolonged decline since records began in 1994, according to the country’s Reserve Bank. New Zealand’s economy is expected to come to a standstill, and 56 percent of consumers surveyed by the bank expect the economy to worsen in 2009. Credit card delinquency is expected to rise from 1.2 percent in mid-2008 to around 2 or 2.5 percent this year.
• Pakistan’s central bank, State Bank of Pakistan, has issued a code of conduct for credit card operations covering marketing, interest rates, collection and billing processes. Although there are no interest rate caps in place, card issuers will need to quote interest rates and service charges on an annual basis.
Aggressive marketing during working hours is also discouraged and cardholders need to be notified before additional charges are imposed.
• In the current weak economic conditions, Singaporeans are turning to credit cards that offer cash rebates in the hope of stretching their money further. United Overseas Bank (UOB) saw a 35 percent year-on-year increase in billings on its cash rebate credit card, with billings doubling in December 2008 alone. Citibank also saw billings for its cash rebate credit card grow by 30 percent year-on-year. Such cards make up four out of 10 new applications in these two banks and the number is expected to grow. Citibank hands out a 5 percent cash rebate for everyday purchases made by its Dividend card while UOB’s One card gives up to S$80 ($50) in rebates every quarter, or up to S$320 a year.
• Taiwan’s Financial Supervisory Commission has asked banks to lower their revolving rates on credit card loans following interest rate cuts by the central banks. Current rates range between 14 and 20 percent annually, while the benchmark discount rate is now 1.5 percent – the lowest since September 2004.
• Non-banks with over NT$300 million ($8.88 million) in capital may now issue stored value cards in Taiwan. Taipei City’s transport card issuer, EASYCARD Corporation, will benefit with its 15 million EASYCARDs in the market. The company plans to extend the transport card application to convenience stores, coffee chains, petrol stations and theatres. The company targets transactions of less than NT$500.
• Vietcombank and Bank for Investment and Development of Vietnam (BIDV) have started charging fees for ATM withdrawals made through rival banks. Customers will now have to pay VND3,300 ($0.18) per withdrawal, while account information and a receipt will cost an extra VND1,650, raising public protest as salaries are often credited through a bank account.
Vietnam’s central bank governor has since declared that banks must notify the public of any charges imposed before doing so. The two banks have only done so through their websites. Most domestic banks are members of the Smartlink Joint Stock Company or Vietnam National Financial Switching Joint Stock Company.
Europe, Middle East, Africa
• Global payment processor First Data has teamed up with German bank WestLB to launch a new business aimed at providing card acceptance services for retailers across Europe. The business, First Merchant Solutions, has been set up to capitalise on the launch of the Single Euro Payments Area (SEPA). First Data says that the SEPA launch requires retailers to have cross-border card acceptance agreements. The venture will see WestLB provide the licences and payment services infrastructure, with First Data offering a range of merchant acquiring services. The services will be offered in 38 countries and territories across Europe.
• MasterCard Europe has announced the appointment of Hany Fam to the position of group general manager of UK and Ireland markets and global accounts, reporting to Javier Perez, president of MasterCard Europe. Leigh Clapham, who previously held the role, will move to a newly created position as customer delivery leader, Europe. Fam will be responsible for overall management and strategic direction for the UK and Ireland as well as driving business globally for MasterCard’s UK-based global accounts.
• MasterCard and global retailer Carrefour have announced the launch of the PASS MasterCard card, a contactless-enabled multifunction offering which will be rolled out in France from 11 February by Carrefour’s financial services subsidiary Société des Paiements PASS. The card incorporates debit and credit payment functionalities and a loyalty programme. It is one of the first cards in France to include MasterCard’s PayPass contactless functionality. Contactless transactions can be made for purchases up to €25 ($32).
• European smart card solution supplier NXP has announced that its secure contactless microcontroller chip, SmartMX, has been selected by the VDV-Kernapplikations, a German transport industry body, to power future electronic transport ticketing schemes in Germany. Alongside card and inlay-manufacturer Cardag, NXP will provide SmartMX chips for around 8 million contactless cards to be issued throughout Germany by 2012, as part of an initiative to provide a single ticketing solution that will be used across all nationwide transport networks.
• American Express and Post Bank of Bulgaria have launched a website for American Express cardholders in the country. Post Bank is the exclusive issuer of American Express cards in Bulgaria. Since the beginning of the partnership, the bank has issued over 190,000 American Express credit cards to Bulgarian customers.
• Global payment processor First Data has appointed Vincent Roland as regional head of Europe, Middle East and Africa. Roland will assume responsibility for service delivery to First Data customers and for operations and personnel across the region. He joins First Data from Atos Worldline where he was CEO of the company’s operations in Northern Europe.
Roland replaces Nadeem Shaikh who has assumed responsibility for a new international business line that will co-ordinate and drive sales and delivery to First Data’s banking customers and other financial institutions across Europe, Middle East, Africa, Asia-Pacific, Latin America and Canada.
• Dubai Islamic Bank (DIB) has launched a loyalty programme for its Al Islami credit cardholders, which will allow them to earn unlimited loyalty points, Wala’a AED, on their card transactions. Each Wala’a AED is equal to AED1 ($0.27) and cardholders can redeem them against utility payments for things such as mobile phone and cable TV bills. Cardholders can also redeem points against gift vouchers at retailers including Carrefour along with travel vouchers.
• American Express in Saudi Arabia has signed an agreement with Etihad Airways of the United Arab Emirates to issue co-branded credit cards to customers across the kingdom of Saudi Arabia. It will mark the first airline co-brand for American Express in the Middle East region. The card will include the Etihad Guest loyalty programme, which allows cardmembers to earn loyalty miles at over 40 international partners. The programme has more than 350,000 cardmembers worldwide, and was on track to reach over 500,000 cardmembers by 2008, according to Etihad.
• Barclays Bank in Egypt has teamed up with American Life Insurance Company (Alico) to launch the ‘Sehaty’ card, which incorporates a package of health care and medical services benefits. Sehaty cardholders will be entitled to discounts on medical fees, plus access to medical advice and insurance.
Bassel Kelada, consumer banking director for Barclays Bank Egypt, said: “The bank is working on offering a variety of banking services and products that provide more facilities and safety to its clients, whether they are insurance programmes, payment cards, or loans.”
• Al Rajhi Bank of the UAE has formed a partnership with Visa to provide selected employees with Visa corporate cards by March 2009. The cards will replace petty cash and help companies in managing, monitoring and analysing the business or entertainment travel expenses of cardholders. The new service is the latest in a series of product agreements that Al Rajhi, one of the largest Islamic banks in the region, has signed with Visa.
• Gulf Bank in Kuwait has started to issue MasterCard debit cards featuring EMV chip technology to Gulf Bank customers, in an effort to accelerate the migration away from cash and paper payments to payment cards. Gulf Bank has informed customers that the cards are already available for customers to collect at their branches.
• Global loyalty programme Air Miles has signed up with the hospitality division of Saleh Bin Lahej Group, a leading chain of restaurants, to further increase its partner portfolio in the UAE. By showing their Air Miles card, members earn Air Miles at a variety of retailers and service providers throughout the UAE. Miles can then be redeemed for shopping rewards including electronics, jewellery, travel and leisure expenses. Throughout 2008, Air Miles signed up with 37 high-profile retail brands and expects to increase its partner base further during this year. Air Miles now has more than 1.5 million members across the UAE, Bahrain and Qatar.
• Rwandan telecom company Rwandatel is set to launch a mobile banking and money transfer service later this year, becoming the latest African telco to target Africa’s huge unbanked market. In an interview with Reuters, the Libyan-owned firm’s CEO Patrick Kariningufu said that from October users will be able to send and receive money internationally via text message. Subscribers will be able to make deposits and withdraw funds from shops and kiosks around the country. Customers who run out of credit can also apply for a loan. Kariningufu added that Rwandatel had already signed up 140,000 subscribers – 15 percent of the market – since launching in December 2008 and taking on South Africa’s MTN.
• Global banking giant Citi saw 2008 net profits in its Latin American operations fall by 40 percent to $2.14 billion, compared to $3.6 billion in 2007, according to its latest earnings release. But its fourth-quarter 2008 net earnings fell a staggering 99 percent to $6 million from $939 million in the fourth quarter of 2007. Citi’s global cards business in Latin America reported a net profit in 2008 of $491 million, down 60 percent from $1.23 billion from a year ago.
Credit costs increased 89 percent, reflecting higher net credit losses, up 37 percent, and a $231 million incremental net loan loss reserve build. Citi said higher credit costs were driven by continued deterioration in the credit environment in Mexico and Brazil. The net credit loss ratio increased 517 basis points to 14.2 percent at the end of 2008 compared to the previous year. Citi has a presence in 24 countries and territories in Latin America. Its largest Latin American operation is Banamex, Mexico’s second-largest financial group, with banking, insurance and pension interests.
• In light of Citi’s results, speculation has mounted that it may sell its Brazilian banking operations – a claim that its Brazilian office has denied. The country is considered strategic for the company’s future and the company’s reorganisation phase, according to a statement released by Citi.
Citigroup has retail, private and investment banking interests along with a sizable credit card presence in Brazil. Citi’s Mexican business Banamex has also been the subject of speculation, with RBS Greenwich Capital Markets saying in a note to clients that Citi may opt to sell Banamex to a group of local investors. However, Banamex has denied that a sale will take place.
• Citi’s Mexican unit Banamex says that the volume of remittances to Mexico may drop in 2009. It estimates that remittances from the US alone are likely to drop by around 2.5 percent this year. Remittances in 2008 dropped by 2 percent to $23.5 billion, the first annual decline since the bank began tracking the relevant data 13 years ago.
Banamex attributed the drop to the US recession in which thousands of Mexican construction workers have lost their jobs, and a drop in the number of Mexicans attempting to illegally cross the heavily patrolled US border.
• Banco do Brasil (BB) has established what it calls a community banking operation in the Amazon region of the country in order to provide banking convenience, microfinance and credit products. BB has teamed up with a range of public sector organisations, including the Foundation Bank of Brazil and the Ministry of Work, in order to expand financial inclusion efforts to rural communities in the region.
• Brazil’s Banco Bradesco has announced a change in leadership, with Luiz Carlos Trabuco Cappi being appointed chairman of its board of executive officers. Cappi’s previous roles include stints at various banking sector organisations, including the Brazilian banking association Febreban.
• Redecard, the Brazilian processor of MasterCard card transactions in the country, saw its share price rise on speculation that deeper cuts in interest rates in Brazil will boost the economy and increase card usage. According to industry analysts, Redecard is likely to benefit from the continued migration from cash and cheques to payment cards.
• Banco Bradesco is reported to be in negotiations for a possible purchase of mid-size Brazilian bank BicBanco. According to press reports, Bradesco regards BicBanco as having a good credit portfolio and origination capacity. BicBanco’s profits for the first three quarters of 2008 amount to BRL300 million ($129.5 million), a rise of 128 percent compared to the same period in 2007.
• Venezuelan banks, whose loan delinquency ratios worsened in 2008, are expected to face more deterioration in loan quality this year as the economy slows further, according to industry analysts. After five years of expansion, Venezuela’s economy will face tougher times in 2009, with some economists predicting GDP growth of around 1 percent and others a contraction of 1 percent. Declining oil prices late last year impacted Venezuela’s economy in 2008, when it grew 4.9 percent, the slowest pace in five years.
According to ratings agency Fitch, the slowdown in the economy will hurt bank loan growth and push up the volume of past-due loans. Banks saw their past-due ratio worsen to 1.97 percent at the end of November 2008 from 1.19 percent at the end of 2007 and 0.89 percent at the end of 2006, banking regulator Sudeban statistics show.
• Banco do Brasil (BB) is to pay BRL4.2 billion ($1.81 billion) for a stake in the banking unit of Banco Votorantim (BV) in an effort to ease credit lending in the country. BB will buy a 50 percent share in BV, owned by family-controlled Grupo Votorantim. Votorantim is a major provider of car loans and credit to corporations and large businesses that have found it difficult to find financing amid the global economic crisis.
• Chilean BancoEstado has lowered interest rates on consumer loans and mortgages by 10 and 100 basis points respectively in response to interest rate cuts by the country’s central bank. BancoEstado is Chile’s third-largest lender, operating through 342 branches countrywide.
• The ID division of French secure technologies provider Oberthur Technologies plans to target South America this year through Chile. Oberthur’s ID Business commenced operations in 2008 after the acquisition of Swedish firm Xponcard, which specialises in products and services related to the administration of smart cards –- including credit and identification cards.
The unit will start in Latin America through a partnership with Chilean IT services provider Grupo Disc.
• US payment security solution provider Trustwave has opened an office in São Paulo, Brazil, to serve as the regional headquarters for the company’s Latin American operations, encompassing South America, Central America and the Caribbean.
Trustwave will provide its full suite of security and compliance solutions, including validation services for the payment card industry data security standard, required for storing, processing or transmitting cardholder data.
• Tight credit conditions and a bigger global economic slowdown than originally anticipated, as a result of the international financial crisis, are the biggest threats to Chilean financial stability, the country’s central bank said in its half-year financial stability report released in mid-January.
In its report, the monetary authority said that amid a less-favourable macroeconomic scenario and reduced appetite for debt, household debt rates have continued to rise. Household debt in Chile rose 9.8 percent in the third quarter of 2008 to CLP33.9 trillion ($55.2 billion) compared to the same period in 2007.
• The fourth-largest credit card network in the US, Discover, has received a preliminary approval for $1.2 billion in funds under the government’s bail-out package, it said in a regulatory filing with the federal body, the Securities and Exchange Commission (SEC). It plans to become a bank holding and a financial holding company, and claims that its existing capital levels satisfied the definition of a ‘well-capitalised’ bank holding company under SEC’s regulatory guidelines.
• Executives of the Electronic Funds Transfer Association and the Electronic Payments Association have created a new council, the eGovernment Payments Council, to represent organisations involved in the development and operation of electronic benefits transfer systems, which are intended to replace government-issued cheques and vouchers with prepaid or debit cards. Its members include financial institutions, state payment and social services agencies, transaction processors, technology companies and manufacturers.
• MasterCard Worldwide has published a report aimed at dispelling misperceptions about payment systems and explaining the advantages of electronic payments bring to the economy as a whole. The paper, Benefits of Open Payment Systems and the Role of Interchange, explains that interchange is a critical element to payment systems and provides maximum benefits to all participants in the payments chain. The paper is available on MasterCard’s website.
• JPMorgan Chase has announced that approximately 21,000 parents in the state of Idaho have received a new debit card under the Idaho Child Support Program. The card is a Chase Visa-branded debit card which is replacing the Idaho Quest card for child support payments. JPMorgan Chase said that the migration to the new card will save the state of Idaho an estimated $250,000 a year.
• US prepaid solution provider NetSpend has teamed up with Liberty Tax Service, enabling customers to have the option of loading their tax refunds onto a NetSpend All-Access Liberty prepaid card that can be used for financial transactions at establishments where Visa cards are accepted. The card is a Liberty-branded general-purpose reloadable debit card issued by Inter National Bank and marketed by NetSpend.
• Fuel company Shell Oil has launched a payment card in the US which offers promotional discounts of $0.05 per gallon of fuel until 1 June and of $0.02 per gallon thereafter. The Shell Saver card, a non-credit payment product, which will be linked to checking accounts and has no impact on users’ credit scores.
• California-based Obopay, a person-to-person mobile payment outfit, is now extending three widgets or small applications that can be embedded on web pages to social networking websites like Facebook and MySpace. The new widgets are for sending three kinds of payments – gifts, donations and payments – through a web browser in a mobile handset, like an iPhone.
• MoneyGram, the global payment services firm, has named company insider Anthony Ryan president and CEO of the company, and Pamela Patsley, formerly president of First Data International, executive chair of its board. Ryan was overseeing the business after the company’s chief operations officer Philip Milne stepped down in June 2008.
• Integrated electronic payments solutions provider Payment Data Systems subsidiary Zbill has reached an agreement with a company to add a bill payment service to its payroll card programmes. The company, which has not been named, is a provider of stored value cards and transaction processing services. This solution will allow the more than 250,000 users to use their stored value payroll cards to pay their bills online.
• Bank of Canada figures have revealed that consumer credit lending in the country is increasing amid widespread calls for the provision of more credit for consumers and businesses. The central bank’s numbers showed that credit card lending was up by 5 percent during December 2008 to C$53.4 billion ($43.6 billion), a 10 percent increase on the year before. There were 68.2 million Visa and MasterCard cards in circulation in Canada last year, up from 64.1 million in 2007. Economists said the country’s banks had bucked the global trend of the credit squeeze and continued lending, but with stiffer interest rates. Meanwhile, there were calls for the Canadian government to regulate and possibly cap consumer rates – with some attention being paid to the behind-the-scenes charges like interchange and merchant rates – in the next annual budget.
• TD Retail Card Services has acquired the private-label credit card programme of the Canadian operations of Montreal-based Birks & Mayors, a luxury jewellery retailer with stores in Canada and the US. Following the move, Birks cardholders will continue to have access to a number of financing options, including interest-free and low-interest offerings, as well as a customer loyalty rewards programme and a variety of special incentives and services.
• Visa Inc has expanded its zero liability programme to include Visa business cards issued by Canadian financial institutions. Zero liability means business cardholders who have been victims of credit card fraud, including unauthorised transactions made via telephone or on the internet, do not pay for fraudulent transactions. Zero liability does not apply to transactions with Visa corporate or Visa purchasing cards.
• Colin Temple has been appointed vice-president and general manager of merchant services at Amex Bank of Canada. Temple will develop the business, with a focus on strategy, client relations and day-today management. He will also be a member of the Canadian executive team to align merchant services with other Amex businesses.
• Nevada-based card technology solutions and data provider Selling Source is set to diversify its services portfolio with the acquisition of the marketing unit of Atlanta-based CompuCredit, a company that markets and provides financial services for branded credit cards.
The group is looking forward to improving its marketing strategy on the internet, building on its online account origination strategies and its e-service capabilities.
• US bank Wells Fargo is launching a card personalisation tool for its customers, allowing them to customise the design of their debit or credit cards. Customers can add a photo to their card of themselves, a snapshot of their family or friends, a picture of a pet, or an image of a special hobby. Customers can also customise the card background with an image of their choice or one from Wells Fargo’s image library. The card design studio service is available to customers enrolled in Wells Fargo’s online or business online banking facilities.