• 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…
Go deeper with GlobalData
• 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…
Asia-Pacific
• 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.
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By GlobalData• 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.
Latin America
• 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.
North America
• 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.
