• Deutsche Bank has launched a credit card
operation with Huaxia Bank in China, which marks the first
co-operative product release following Deutsche Bank’s acquisition
of a 9.9 percent stake in Huaxia in May 2006…
• The Finaref subsidiary of French bank
Crédit Agricole has launched the Madelios
private-label card in France…
Go deeper with GlobalData
• Jordan Kuwait Bank has become the first
Jordanian bank to issue the Visa Infinite card, aimed at
high-income affluent consumers…
Asia-Pacific
• Deutsche Bank has launched a credit card
operation with Huaxia Bank in China, which marks the first
co-operative product release following Deutsche Bank’s acquisition
of a 9.9 percent stake in Huaxia in May 2006. The Huaxia Credit
Card has been launched in Classic, Gold and Titanium versions. All
cards incorporate features such as Easy Transfer, a service whereby
the bank offers to settle outstanding payments with the customer’s
authorisation; Big Purchase, Small Repayment, which gives
cardholders the chance to pick up one major transaction within
three months after card activation and enjoy instalment payments
with zero interest and no administration charges; and 72-hour
credit card loss protection. Colin Grassie, CEO of Deutsche Bank
Asia-Pacific, said: “China is a priority market for Deutsche Bank.
Both Deutsche Bank and Huaxia Bank have brought complementary
skills and strengths to this venture.”
• Smart card technology provider Beijing Development
(Hong Kong) has announced plans to invest HK$500 million
($64 million) to build its smart card and underground railway IT
system business. The company has implemented the smart card scheme
in Beijing and aims to build transit systems in cities such as
Tianjin and Chengdu. The number of cards in use doubled after the
local government gave a 60 percent discount for smart cardholders
taking bus rides. The company is also attempting to sell its smart
card payment system to retailers.
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By GlobalData• State-owned Industrial Bank of Korea has
introduced the I am Pastor card for Protestant clergy, which gives
discounts for bible purchases and allows bonus points to be
converted into church donations. Korean pastors are usually not
issued credit cards but the bank does not expect to make much
profit out of this market. The bank plans to release similar cards
for clerics from other major religions, such as Buddhist and
Catholic leaders.
• According to a research report published by global payment
processor First Data, 152 senior bank executives
with businesses in China or with plans to enter China in the next
three years are optimistic about China’s credit card market.
Eighty-five percent of respondents were confident about China’s
credit card market, although 43 percent felt that it was difficult
to make profits from credit card within three years. Eighty percent
of the respondents felt that the highest barrier to cards adoption
is local retailers who prefer cash payments to cards.
• ValuAccess, a Hong Kong-based stored-value
gift card programme provider, has selected global payment
technology provider VeriFone’s Payware GiftCard
technology platform for its gift card system. ValuAccess enables
retailers to sell and accept gift cards either in their stores or
through other channels. ValuAccess also allows retailers to operate
a loyalty programme using the gift card infrastructure. The system
will initially be rolled out in Hong Kong before being extended to
various urban areas in China and Asia.
• Taizhou Commercial Bank, which is based in
China’s eastern Zhejiang province, claims to have made more than
CNY10 million ($1.3 million) of profits through its 30,000 banking
cards issued since 2005. The bank outsourced its card data
processing to Shanghai Union Pay Data Service.
• Financial Information Network & Operations
(FINO), a technology company that provides core banking
solutions to agencies including micro-financiers, has launched
biometric smart cards from Gemalto for micro-banking transactions.
The card can hold up to 15 different types of transactions such as
remittances, savings, loans and insurance. The card also functions
as an electronic statement, as it logs the last 150 transactions.
FINO maintains that one of the biggest challenges for micro-banking
is the large amount of paperwork required to support transactions.
The card aims to provide a secure mode for monitoring and
conducting banking transactions.
• State Bank of India (SBI) is to launch SBI
Tiny Cards for its rural banking programme. India’s banks are keen
to adopt biometric technology to minimise fraud and SBI Tiny Cards
can be used to pay government benefits such as pension payments and
wages to the cardholder. The bank is also negotiating with India
Post to use its post office network as correspondent offices.
• Card processor Asia Payment Systems has
entered into a joint venture with Mongolian card issuer
Interpay Mongolia to issue a credit card branded
the Interpay Card. The card will be used in the domestic market and
will be issued with Anod Bank, a leading local bank. The launch
date is scheduled for the fourth quarter of 2007.
• India’s largest private-sector bank, ICICI
Bank, has launched a prepaid food card with a local
supermarket chain. The card is meant to be an alternative to cash
and meal vouchers and is reloadable on a monthly basis. It will be
launched in Delhi, Mumbai, Hyderabad, Bangalore and Ahmedabad.
• Singapore banks wrote off S$9.4 million ($6.1 million) in bad
credit card debts in May 2007, down from S$9.9 million a year ago,
according to the Monetary Authority of Singapore,
the country’s central bank. There were 4.17 million credit
cardholders in May compared with 3.65 million in May last year.
• Korean telecommunication company KTF said
that it will provide credit card services through its mobile phones
in collaboration with LG Card. Subscribers to its
third-generation mobile service, Show, will also be able to pay for
transport services. KTF plans to work with Visa and MasterCard to
allow the card to be used overseas.
• China UnionPay Data, a subsidiary of China’s
payment network, China UnionPay, will use anti-fraud technology
from Arcot Systems to secure online card
transactions.
• Technology company IBM is working on a
technology that will reduce the cost of transactions carried out
through biometric smart cards. The cost incurred has been a
challenge so far, as the volume is low and the value of each
transaction is small.
• The Bank of Thailand, the country’s central
bank, has rejected calls from card issuers to reduce the minimum
payment requirements. The minimum payment for outstanding monthly
balance was raised to 10 percent from 5 percent of the balance to
encourage borrowers to pay off debts.
• Vietnam’s VP Bank has officially launched its
EMV-compliant Platinum MasterCard cards. The cards are accepted by
over 24 million merchants worldwide and can be used to withdraw
cash from more than 1 million ATMs globally, including 1,000 ATMs
across Vietnam belonging to VP Bank and its affiliated networks.
Premium benefits include a 24-hour worldwide concierge service and
a loyalty rewards programme.
Europe, Middle East, Africa
• Poland’s PKO Bank Polski (PKO) has rolled out
220 ATMs from US ATM manufacturer NCR, and is also
carrying out installation, maintenance and remote monitoring
services. PKO now has more than 1,630 ATMs in place and has
installed various NCR ATM models, among which are NCR Personas M
Series 86 multifunction ATMs for cash dispensing, as well as
traditional envelope deposit.
• The Finaref subsidiary of French bank
Crédit Agricole has launched the Madelios
private-label card in France. The card is marketed under the le
privilège de l’homme brand, bearing the logo of Madelios, the Paris
department store dedicated to men’s fashion. This is the first time
Finaref has issued a card linked exclusively to a single store. The
card carries a number of benefits, such as payment facilities,
reductions, gifts and a host of services. By offering the new card
to its customers, Madelios aims to increase customer buy-in and
recognition of the Madelios concept. As well as driving sales, the
card is intended to increase the store’s footfall and average
spend.
• Jordan Kuwait Bank has become the first
Jordanian bank to issue the Visa Infinite card, aimed at
high-income affluent consumers. The card comes with an exclusive
concierge service and a global customer assistance service. Also
included is a range of loyalty programmes and award schemes linked
to elite restaurants, hotels and leisure resorts worldwide. For the
time being, Jordan Kuwait Bank is issuing the Visa Infinite card to
only a selected group of its prime clients.
• Payment processor TSYS Europe and UK
insurance company Norwich Union (NU) have launched
the Rewards prepaid card pilot programme. The new prepaid Rewards
card will be offered to NU Household customers and is now the
second programme NU has on the TSYS prepaid platform. Each Rewards
card is preloaded with a value and can be used within a network of
accepting retailers currently used for the NU insurance replacement
card. The product is Visa-supported and uses Raphaels Bank as the
bank identification number (BIN) sponsor.
• UK telecommunications giant BT has launched a
credit card for its customers, representing its first move into the
credit card industry. Accounts are linked to customers’ telephone
and broadband accounts – every time the card is used for a retail
purchase, the cardholder is automatically rewarded with money off
their BT bill. Each BT credit card account holder can earn a
discount off their BT bill of up to £75 ($150) per year,
and the card comes with a 0 percent balance transfer rate for 12
months and 0 percent on card purchases for three months.
• ATMs installed at off-site locations now outnumber those
deployed in bank branches, according to an annual study of the ATM
market in Western Europe by Retail Banking
Research. The growth rate of the western European ATM
market recovered slightly from an all-time low of 4 percent in 2005
to 4.4 percent in 2006. Some 14,295 new machines were installed
during 2006, bringing the total number of ATMs in the region to
342,495. Although Turkey was found to be the fastest-growing
market, the UK remains the largest with 60,642 ATMs. Spain, which
had the leading position in 2003, is in second place with 57,989
machines, followed by Germany with 53,630 units.
• Visa International and the Fédération
Internationale de Football Association (FIFA), the world football
governing body, have confirmed that Visa has become a FIFA Partner
with global rights to a broad range of FIFA activities, including
the 2010 and 2014 FIFA World Cups, the FIFA Women’s World Cups and
exclusive marketing assets, competitions, special events and
development programmes. Based on a settlement agreement between the
parties, the US District Court for the Southern District of New
York dismissed MasterCard Worldwide’s suit against FIFA in June,
paving the way for the Visa-FIFA contract to be implemented.
• Nordic banking group Swedbank has implemented
technology from UK-based Serverside Group to
provide card customisation and online design services to its debit
cardholders. For a one-off fee of SEK100 ($14.70), Swedbank’s Visa
and MasterCard debit cardholders can add their own image or one
selected from an online gallery to their payment card.
• The total value of plastic card payments received by UK
merchants, retailers and service providers has more than trebled in
the past ten years to £321 billion, according to a report
launched by UK payment industry body Association for
Payment Clearing Services. Debit cards accounted for 61
percent of the plastic card spend (£195 billion, over five
times that spent in 1996) and credit cards 39 percent
(£126 billion, over twice that spent in 1996). In
2005, cards exceeded cash in all retail spending for the first
time, and the gap between cards and cash accelerated in 2006 when
cash spending totalled £274 billion. The figure spent on
cards equates to just under one-third of total consumer spending in
the UK; the remaining £710 billion is made up of cash,
automated payments and cheques.
• Arab African International Bank (AAIB) has
launched Egypt’s first Visa Mini card, which is half the size of a
standard card. The AAIB Visa Mini credit card can be issued as a
stand-alone or supplementary card and includes details similar to
the standard-sized card such as the card number, name and expiry
date. It is designed with a perforated hole on the bottom left
corner, allowing cardholders to attach it to such items as key
rings.
• Turkey’s Akbank and global banking giant
Citibank have signed an agreement for joint ATM
use. Akbank and Citibank customers can use the ATMs of both banks
for cash withdrawals and display transactions. Akbank has more than
1,600 ATMs across Turkey and both banks say they are aiming to
expand co-operation to other banking areas.
• Ahli United Bank (AUB) of Bahrain and
national air carrier Gulf Air have formed a
regional strategic alliance to reward AUB credit card customers
with Gulf Air frequent flyer miles through the AUB Pearl Rewards
Loyalty programme. Under the terms of the agreement, Pearl Points
earned by AUB customers can be converted into an equal number of
Gulf Air frequent flyer miles. The alliance will span the Middle
East region to include all AUB’s subsidiary and associate banks’
credit cardholders in Bahrain, Kuwait, Egypt and Qatar.
• European payment processor Atos Worldline has
been selected by GE Money Bank to process GE’s
Visa cards in Germany. Atos Worldline is handling the technical
processing of GE Money Bank’s Visa cards using its proprietary
Sempris core card management system. Atos Worldline currently
processes an aggregate 7.2 million Visa and MasterCard cards for
its customers with Sempris core.
• US computer services company EDS has launched
a card processing platform in Brazil that is designed to allow a
wider range of financial institutions and retailers to offer credit
cards. The system runs on mid-range Sun Microsystems servers,
enabling EDS to offer card issuing, authorisation, acquiring,
settlement and processing services at a lower cost than platforms
running on more powerful computers. “We plan to service the Latin
American market with this platform,” Vinnie Calo, EDS’s director of
global card services, tells CI. Calo says the platform is
being targeted both at banks issuing credit cards and at retail
chains wanting to enter the Brazilian private-label card market in
Brazil. The first bank to announce that it is using the platform is
São Paulo-based BV Financeira, which has signed a six-year contract
with EDS.
• American Express Argentina (Amex) has
launched the Business Card, a credit card aimed at owners of small
businesses and professionals such as lawyers. The card is intended
to help business owners separate their personal credit card
spending from their business spending, Amex says. It is available
in a Green and a Gold version, both of which offer cardmember
reward programmes.
• BBVA is planning to launch a trial of
wireless technology that will enable Latin American retailers to
accept card payments using a mobile phone instead of a traditional
POS card reader, a Mexico-based BBVA spokesperson tells
CI. The purpose of the technology is to make it cheaper
for merchants to accept cards.
• Central American card issuer and acquirer
Credomatic has teamed up with warehouse club
operator PriceSmart to offer a co-branded credit
card to the 100,000 PriceSmart members in Honduras, El Salvador,
Nicaragua, Costa Rica and Panama. The card acts as both a
PriceSmart membership card and a credit card. Credomatic says it
also plans to offer a range of financial services to PriceSmart
customers in Central America. It says the PriceSmart co-branded
credit card is available in Classic, Gold, Platinum and Business
versions. Cards issued in Honduras, El Salvador, Nicaragua and
Costa Rica carry an Amex logo, while cards issued in Panama carry a
Visa logo.
• Credomatic had a total of 1.82 million credit
and debit cards in issue at the end of May 2007, Juan Carlos Paez,
the company’s regional credit card director, tells CI. The
total transaction volume of card payments processed by Credomatic
last year was $6.02 billion, including transactions in Central
America, Panama and Mexico.
• US e-commerce processor CyberSource has expanded its
international operations to include Brazil and Mexico. Vic
Dolcourt, CyberSource’s product manager, international payments,
tells CI that the firm is offering e-commerce payment
authorisation and settlement services in Mexico and Brazil. “Fairly
soon, we plan to enter the Argentinian and Chilean e-commerce
markets,” he says. “We are also talking to Visa about offering
e-payments services in the northern part of Latin America.”
According to a CyberSource study, 90 percent of bank cards issued
in Brazil, and 60 percent of Mexican bankcards, cannot be used for
cross-border transactions due to strict currency controls.
• Experian has agreed to buy an initial 65
percent stake in Brazilian credit bureau Serasa from a consortium
of Brazilian banks. The stake will increase to 70 percent over the
next six months. Experian says it is paying BRL2.3 billion ($1.2
billion) for the initial 65 percent stake. The transaction is
expected to close by the end of June.
• First Atlantic Commerce, a Bermuda-based
e-payments processor, has joined Dublin, Ireland-based
Ethoca’s data-sharing partnership programme.
Ethoca supplies shared data for businesses involved in e-commerce
and other card-not-present environments to help prevent fraud.
First Atlantic Commerce provides processing for e-merchants in
Latin America, the Caribbean and other markets. “One of the key
reasons for our partnering with First Atlantic Commerce is to be
able to identify Latin American merchants who may be interested in
pooling their experiences to fight fraud,” Ethoca spokesperson
Barry Neary tells CI. First Atlantic Commerce will offer
Ethoca’s shared data to its customers as part of the security
services it provides.
• Innovative Card Technologies (ICT), a
US-based payment security company, has formed a partnership with
Brazil’s InfoServer to market the ICT DisplayCard
to Brazilian banks. The debit card-sized DisplayCard contains a
chip that calculates one-time pass codes for authenticating web
banking or e-commerce transactions. “InfoServer provides back-end
authentication services to Brazilian banks such as Banco Bradesco
and Banco Itaú,” Alan Finkelstein, ICT’s president, tells
CI. “There is a significant amount of online fraud in the
country, so Brazil is an important market for ICT.” Finkelstein
says ICT is involved in several trials of its technology in Brazil.
Last month, ICT signed an agreement with Grupo Inteligensa, under
which the EMV card manufacturer will become a reseller of the
DisplayCard to its 200 Latin American financial institution
clients. Inteligensa manufactures around 35 percent of all
bankcards issued in Latin America.
• JPMorgan Chase has expanded the availability
of Rapid Cash, a service that enables Chase US checking account
customers to send money to Mexico for free. Rapid Cash is now
available in the states of New York, New Jersey and Connecticut,
having initially been launched in Texas. The service allows Chase
checking account customers to make three free transfers per monthly
statement cycle. The money is transferred to
Banorte, which has 1,000 branches and 2,800 ATMs
in Mexico, and deposited into a Banorte account. The funds can also
be picked up at any Banorte branch in cash for no fee.
• Online purchases of consumer goods such as books, CDs, DVDs
and electrical items by Brazilian consumers rose by 90.5 percent to
BRL1.65 billion in the first quarter of 2007 compared with the
first quarter of 2006, according to Brazilian online business
consultancy E-Consulting and the Brazilian
Chamber of e-Commerce. Online tourism spending by
Brazilian consumers rose by 12 percent to BRL800 million during the
same period. The number of online shoppers in Brazil is expected to
rise from 5.7 million in December 2006 to 10 million in December
2007, the Chamber of e-Commerce says.
• Indian consultancy RNCOS says in a report
that microcredit will emerge as a huge opportunity for Brazilian
banks over the next four years. It also says that between 2007 and
2011, bank credit to both Brazilian businesses and consumers will
continue its current growth trend. Total Brazilian bank loans are
forecast to grow at a compound annual growth rate of 12.23 percent
between 2007 and 2011. Increasing lending to small- and
medium-sized businesses will be an important driver of this growth,
says RNCOS.
North America
• Credit reporting agencies would be required to report cases of
identity theft to the US Secret Service under the Credit Agencies
Identity Theft Responsibilities Act, which has been introduced by
Congressman Elton Gallegly (Republican-Ventura and Santa Barbara
Counties). Currently, the agencies report irregularities only to
the individual concerned.
• US state governments are accepting electronic payments for an
increasing number of state taxes and fees, according to a study by
the Council of State Governments’ Financial Services
Working Group. However, cards account for a negligible
amount of tax and fee payments to state governments, while
automated clearing house (ACH) transfers account for nearly 51
percent; cheques are used for the remainder. The study found that
86 percent of the responding states accept ACH payments for
business and corporate taxes, and 92 percent accept ACH transfers
for excise, sales or usage taxes. Some 95 percent of the responding
states offer residents the option of using credit cards and 54
percent accept debit cards. Credit and debit cards are used for
less than 1 percent of the total dollar volume of payments for the
main tax categories – corporate, income tax withholding transfers,
sales and individual income.
• American Express Canada (Amex) has renewed
its 11-year contract with concert promoter House of Blues Canada.
The new five-year contract will enable Amex to offer its Front Of
The Line Club cardmembers access to premium concert seats and entry
to show parties. The programme gives cardmembers preferential
access to top-quality seats for artistic, cultural, theatrical and
sporting events.
• JPMorgan Chase has appointed Gordon Smith to
head its Chase Card Services group, replacing Richard Srednicki,
who is retiring. Smith, who was previously president of Amex’s
Global Commercial Card group, will also join JPMorgan Chase’s
operating
committee.
• Chase Card Services is offering an incentive
to encourage its credit cardholders to manage their credit card
accounts more effectively and pay their bills on time. Its Clear
& Simple plan will offer a $10 credit when cardholders sign up
for free alerts, automated bill payments and online statements.
Chase is also launching an online site with tools and information
to help customers avoid late credit card fees and obtain the best
available credit card interest rates.
• Global payments processor First Data is to
close a call centre in Daytona Beach, Florida by spring 2008,
resulting in the loss of 400 jobs. The processor will transfer the
work handled by the Daytona Beach unit to other call centres in the
US and the Dominican Republic. The Daytona Beach call centre
provides customer services relating to credit cards, money orders
and cheque processing for merchants and consumers.
• MasterCard is launching a new service called
MasterCard Product Graduation which enables cardholders to retain
their card numbers when they switch to new cards with the same
issuer. Because card numbers remain unchanged, recurring bill
payments and other automatic payment relationships are not
interrupted when customers change cards. MasterCard says the
service, which is currently available only in the US, will help
issuers to migrate customers to new card products.
• US card processor Merchant Lynx Services is
using US software vendor Amcat’s Contact Centre
Suite software at its customer contact centre. The customer
interaction software combines a central database with a web-based
automated outbound contact system, and an appointment and sales
travel scheduler. The software is being used for customer
acquisition and sales processing, says Amcat.
• Morgan Stanley’s recently spun-off
Discover Financial Services unit (see
Discover debuts on US stock market) is teaming up with First
Data’s Money Network Financial unit to issue payroll cards. Money
Network will issue the Discover-branded cards and handle card
administration. As well as ATM access and prepaid debit card
payments, the cards offer money transfers from the US to Mexico and
Latin America, online bill payments and the ability to write Money
Network cheques. First Data already offers Discover card acceptance
for small- and medium-sized merchants.
• US consumer advocacy group Privacy Rights
Clearinghouse (PRC) has issued a guide advising consumers
not to use or carry debit cards. The guide examines the potential
risks arising from the use of debit, credit and gift cards, as well
as the consumer protection available for each card type. Credit
cards offer the best legal protection against fraud, it says. While
banks do offer their debit cardholders protection against fraud,
they are not obliged to make refunds until at least two weeks after
a disputed transaction takes place, PRC says. Also, if cardholders
delay reporting debit card fraud to their banks, they may not be
covered, it says. For withdrawing cash, consumers should obtain an
ATM-only card from their banks, PRC says. Unlike debit cards, ATM
cards can be operated only with a PIN and cannot be used for POS
transactions.
• Royal Bank of Scotland Group (RBS) is
launching a multi-currency e-payment service in the US. The
service, supported by RBS acquiring businesses around the world,
will allow merchants operating in the US to accept online payments
in local currencies from customers in 143 countries. Via a single
e-commerce gateway, RBS’s e-merchant customers will be able to
accept card payments from US and international cardholders. Josh
Groves, previously CEO of RBS’s person-to-person payments business,
Magex, has been appointed president of the new e-payments unit,
which is part of RBS Lynk, RBS’s US acquiring arm.
• Customers of the Tim Hortons Canadian coffee
shop chain will soon be able to pay for purchases with MasterCard
credit cards. Previously, Tim Hortons only accepted cash payments.
Under the agreement between the two organisations, Tim Hortons will
accept MasterCard cards at participating counter and drive-through
locations across Canada, and, for a limited period, MasterCard will
be the exclusive credit card accepted at Tim Hortons. The deal also
includes acceptance of MasterCard PayPass contactless cards.
• Canadian restaurant operator Cara is to
install processing software provider VeriFone’s On
The Spot wireless pay-at-the-table system in its 800 restaurants
across Canada. VeriFone says the multi-million dollar order is the
largest order it has received since launching On The Spot in May
2006.
• Wells Fargo is offering a low-cost package
for small businesses such as dry cleaners and doctors’ offices that
want to accept in-person card payments. The Wells Fargo Merchant
Checking account combines a business checking account with credit
and debit card processing at a flat fate of 1.99 percent plus $0.30
for all signature-based Visa and MasterCard transactions.
