• Visa Europe members have started to introduce
dynamic passcode authentication technology in Switzerland to
enhance security levels of e-commerce and e-banking transactions
and to further reduce fraud…
• Latin American retailers will increasingly look to
private-label credit cards to build relationships with their
customers, says Dan Alf, Latin America and Caribbean managing
director at US processor Fiserv…
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
• Canada’s TD Bank sees opportunities to expand
its domestic credit card business, according to Tim Hockey, group
head of consumer banking, speaking at an investor conference in
March 2007…
Asia-Pacific
• The Aussie Home Loans credit cards
issued by banking and financial services group Australia
and New Zealand (ANZ) Bank have failed to attract many
takers, despite more than ten months of promotion by the highly
recognisable home loan brand. Some 120,000 credit cards have
reportedly been issued so far.
• The Indian Banks’ Association plans to launch
a domestic card processing network to rival Visa and MasterCard.
Called IndiaPay, the network plans to process all Indian card
transactions, netting $50 million a year in fees. International
transactions will still involve MasterCard or Visa.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData• ABN AMRO reported a 48 percent jump in its
first quarter India revenues, particularly from its credit card and
personal loan operations. According to the bank, consumer revenues
grew by 60 percent in the country and its credit card base
increased by 19 percent, giving it 1.5 million customers. India
will be a major focus for the bank, which is itself currently the
target of a bidding war.
• Union Bank of India is planning to launch
biometric smart cards operated by fingerprint in a pilot project
with farmers in the states of Andhra Pradesh and Uttar Pradesh. The
card will be connected to a server that links to outlets where
farmers transact, such as grocers. The bank has also opened its
first biometric ATM and plans to open more of such ATMs across the
country.
• India’s Director General of Investigation and Registration
(DGIR) has alleged that Citibank and
HSBC have violated the rules set by Reserve Bank
of India in their credit card operations. The two banks have
reportedly delayed delivery of bills and realisation of cheque
payments in order to increase interest rates, fees and fines. In
addition, the DGIR said that the two banks have operated through
third-party agents that did not declare their independent status,
thus allowing the public to think that the agents were making
promises as a bank officer. Other issues of transparency and sales
misconduct were raised by the DGIR as part of the banks’ unfair
trade practices.
• While Japanese consumers have been receptive to card
technology, the many providers of e-money have affected penetration
rates, as different providers require different terminals and
cards. The industry has thus called for standardisation to allow
any form of e-money to be used in any store.
• An Indian newspaper has reported that
Barclays has set aside $180 million to $200
million to fund initial losses in its retail operations in India.
The bank reportedly plans to make a solo foray into the country’s
credit card market in the next two months.
• e-pay Malaysia has formed a joint venture
with Malaysia’s AmBank to recruit new retailers
for the bank’s credit card customers. e-pay Malaysia plans to roll
out 3,000 new terminals over the next 20 months to support AmBank’s
prepaid and credit card transactions.
• Samsung Card has received the go-ahead to
list its shares on Korea’s main stock exchange, Korea Exchange.
Samsung Card reported $293.4 million in earnings in 2006.
• Maybank Singapore has launched a card-to-card
payment service with Visa International to enable customers to
transfer funds directly from their bank accounts to other Visa card
accounts around the world.
• Lifebrandz, an entertainment club operator,
has issued a credit card with a S$5,000 ($3,290) credit line
targeted at people who frequent its nine clubs in Singapore. The
card’s S$288 membership fee entitles cardholders to two
complimentary bottles of alcohol and a 20 percent discount on food
and drink, among other benefits. Around 800 people signed up in the
first week after its launch. Another card targeted at
undergraduates has a credit line of S$2,000. Annual interest rates
are at 21.6 percent.
• Citibank Taiwan will not rule out acquiring
credit card portfolios that will be sold by banks suffering losses
in credit card operations on the island, due to the recent credit
crunch. Citibank became the number one issuer in Taiwan in January,
with a market share of more than 10 percent toppling local market
leader, Chinatrust Commercial Bank. Citibank claims that more than
70 percent of its cards issued are in use and it expects 30 percent
to 40 percent growth in credit card issuance.
• Citibank Taiwan recently launched a platinum
co-brand card with EVA Air, Taiwan’s airline.
While EVA has 1.22 million members in its club, only 12,000 own
platinum cards – a situation that Citibank hopes to change. The
bank estimates the average monthly spending by these cardholders to
be $900 per person.
• The Bank of Thailand is not likely to lower
credit card rates from the current ceiling of 20 percent. The Thai
credit card business continues to be sluggish – total usage volume
was THB10 billion ($300 million) less in February than in January,
and credit outstanding stood at THB2 billion less over the same
time period.
• Visa International’s Thailand country manager
has urged Thai banks to encourage customers to spend more with
their credit cards instead of issuing more cards. This is in the
wake of the recent slowdown in consumer spending. However, debit
cards are still enjoying high growth – 13.9 million debit cards had
been issued in Thailand as of end-December 2006.
• Bangkok Bank’s credit card head, Shoke na
Ranong, has said that Thailand’s credit card market is showing
signs of an increase in non-performing loans, but the failure rate
remains acceptable. The bank has relaxed the debt repayment
schedule of some customers to reduce their financial burden. He
predicted that credit card spending growth will slow to 15 percent
this year compared to 20 percent in 2006.
• South Korea’s Kookmin Bank, the country’s
largest lender by assets, reported a record net profit in the first
quarter of 2007, largely due to the sale of its stake in LG Card.
Net profit for the first quarter was KRW1.182 trillion ($195
billion), a rise of 47 percent from KRW802.98 billion from the
year-ago period. In March, a group of LG Card creditor banks sold
off a 61 percent stake in LG Card to rival South Korean
organisation Shinhan Financial Group in a deal valued at $7.2
billion.
• Malayan Banking (Maybank) and global
electronics and entertainment giant Sony
(Malaysia) have teamed up to launch the SonyCard, Sony’s first
co-brand credit card in South East Asia. Maybank’s senior executive
vice-president and head of consumer banking, Spencer Lee Tien Chye,
said the card is expected to attract about 40,000 users from among
Sony’s 53,000 loyalty card members by the end of this year.
Europe, Middle East, Africa
• Visa Europe members have started to introduce
dynamic passcode authentication technology in Switzerland to
enhance security levels of e-commerce and e-banking transactions
and to further reduce fraud. Over 200,000 cardholders in
Switzerland have already started to use dynamic passcode
authentication. Visa Europe member banks Cornèr
Bank and PostFinance are deploying the
technology across a number of channels. A dynamic passcode
authentication pilot is also planned later this year for telephone
order transactions.
• On Track Innovations (OTI), a global provider
of contactless smart card solutions, has announced that
Smart Applications International (Smart), a Kenyan
company committed to delivering technology-driven secure health
care solutions, has placed an order for 100,000 cards, which are to
be issued by multiple medical scheme managers. Smart has
commissioned close to 200 Smart device points of service at
hospitals, pharmacies and general practitioner sites across Kenya,
enabling patient authentication, verification of benefits and
claims processing. Contactless smart cards have already been issued
by a number of medical scheme managers as part of the
programme.
• Credit Libanais, the largest merchant
acquiring bank in Lebanon, which provides financial acquiring for
more than 10,000 merchants representing the majority of the
Lebanese acquiring market, will be deploying the selektpoints
loyalty programme utilising the SCTN end-to-end loyalty solution,
via US financial technology specialist Phoenix Technology
Holdings. In addition to being an issuing bank, Credit
Libanais is an acquiring bank for Visa and MasterCard.
• UK card issuer NatWest is to raise its
charges for cardholders using its debit cards abroad by up to 66
percent. An exchange rate transaction fee is levied every time a
customer uses a debit card to withdraw cash or make a point of sale
transaction. This fee will rise from 2.65 percent to 2.75 percent
of the total transaction amount. In addition, for POS transactions,
a one-off fee of £0.75 ($1.50) will rise to £1.25. NatWest said
that it is the first rise in fees for overseas debit card
transactions since 2001. The most common overseas transaction using
a debit card is to withdraw cash, according to the bank. On 1 June
2007 this charge will drop from 2.25 percent to 2 percent, subject
to a minimum of £2 and a maximum of £5.
• International gangs operating from India, Sri Lanka and other
countries are targeting UK consumers by stealing their credit and
debit cards details at petrol stations and withdrawing money from
their accounts outside the UK. Police forces from
across the UK are investigating a spate of thefts at UK petrol
retailers, which are estimated to run into millions of pounds.
Cardholders have had their card and PIN details skimmed or cloned,
and investigations have revealed that money from UK cardholder
accounts has been withdrawn from ATMs in India, the Philippines and
Malaysia, along with other countries.
• UK banking group Barclays has reintroduced
Barclaycard-branded credit cards in South Africa, through
Absa, which Barclays acquired in 2005. The new
cards will be aimed at the affluent end of the South African
market. “The new Barclaycards will enhance Absa’s existing card
range and increase customer choice. Absa has a multi-branded
strategy, appealing to different market segments, and Barclaycard
forms part of this,” said Antony Jenkins, CEO of Barclaycard.
• The recently launched Makkah credit card from First
Gulf Bank (FGB) of the United Arab Emirates has exceeded
expectations for consumer demand, according to the bank. FGB is
promoting the card as the Middle East region’s first stand-alone
unsecured Islamic credit card. The card is compliant with Islamic
Sharia principles and also incorporates a loyalty programme that
rewards cardholders with air miles to the Islamic pilgrimage site
of Mecca.
• Italian payment processor SSB has revealed
that during 2006, payment cards under management amounted to 48
million, compared to 37 million in 2005, a rise of 32 percent. The
total number of transactions on payment systems and cards grew from
6.6 billion in 2005 to 7.3 billion in 2006, a rise of 11 percent.
The number of merchants managed increased from 960,000 in 2005 to
990,000 in 2006, and the technological management of POS service
processing reached 147,000 terminals, a rise of 11 percent.
• UK card issuer Barclaycard is developing a
green credit card that will help consumers to reduce global carbon
emissions and offers cardholder incentives to be more
environmentally friendly. The card is due to launched in mid-2007
and Barclaycard will donate 50 percent of its profits to
environmental projects dedicated to reducing carbon emissions
globally. Cardholders will also receive discounts and lower rate
borrowing on green products and services. Barclaycard said it
expects to donate a minimum of £1 million in its first year.
• Visa International has appointed Majeed
Hujair as general manager of Visa International in Bahrain, in
addition to his current responsibility as general manager for
Kuwait. In his new role, Majeed will be focusing on further
developing the company’s electronic payments business in the
Kingdom of Bahrain. Visa says that Bahrain is one of its
fastest-growing markets in the Middle East region.
• European software developer Welcome has
joined the Near Field Communication (NFC) Forum, a non-profit
industry association advancing the use of NFC technology, as an
associate member. The NFC Forum is a global standards development
and advocacy group, and is promoting the use of the technology in
the field of mobile payments. Sébastien Guillaud, Welcome’s CEO,
said: “NFC technology has the potential to cross all geographic and
physical barriers, and an open consortium is the best way to ensure
true interoperability among devices and services. Welcome wishes to
make cards more attractive and valuable to merchants and NFC
technology can help.”
• Welcome has been selected by Italian consumer
credit provider Findomestic to provide merchants
with the ability to create more added value on their co-branded
credit cards. Findomestic will utilise Welcome’s XLS technology,
which is designed to equip merchants with marketing solutions at
the point of sale. Welcome’s XLS payment software allows merchants
to differentiate and customise their credit cards.
• Turkish banking operator Turkiye Finans Katilim
Bankasi has selected US terminal manufacturer
VeriFone for the supply of 20,000 electronic funds
transfer at the point of sale terminals and PIN pads. Under the
agreement, VeriFone will supply its Nurit 8400 and Nurit 8210
counter-top models, the Nurit 8010 wireless model and the PINpad
1000SE. Turkiye Finans is the first customer in Turkey to deploy
the 8400 model.
Latin America
• At the end of 2006, there were 379 million payment cards in
issue in Brazil, Alejandra Etcharran , an analyst with business
research and consulting company Frost &
Sullivan, tells CI. The total comprised 189 million debit
cards, 78 million Visa-, MasterCard- and Amex-branded credit cards,
and 112 million proprietary credit cards. Last year, 4.3 billion
payment card transactions took place in Brazil. The value of card
transactions rose by 20 percent in 2006 to BRL244.3 billion ($120.5
billion), following a 24 percent rise in 2005, Etcharran says.
• The Brazilian credit card industry’s total receivables rose by
18.3 percent to BRL55.6 billion ($27.43 billion) between January
and April 2007 from BRL47 billion in the same period last year,
Banco Itaú reports. The Brazilian bank estimates
that there were 597 million credit card transactions in Brazil in
that time, up from 534 million transactions in the first four
months of 2006.
• Latin American retailers will increasingly look to
private-label credit cards to build relationships with their
customers, says Dan Alf, Latin America and Caribbean managing
director at US processor Fiserv. Alf tells CI that
Mexican retailers such as Famsa are leading their counterparts in
the rest of Latin America in offering to the unbanked financial
services such as debit cards, prepaid cards and private-label
credit cards. “Eventually, retailers will offer their best
private-label card customers general-purpose credit cards that can
be used at any merchant,” Alf says. Last year, Fiserv signed a
contract to provide credit card processing services to Banco Ahorro
Famsa, Famsa’s banking arm. Two other markets where Fiserv expects
to see growth in card issuing are Colombia and Brazil, Alf
says.
• The Latin American e-commerce market, with the exception of
Brazil, is being held up by poor logistics, a lack of online
merchants and high prices, Manuel Montero, CEO of US e-commerce
company Saf-T-Pay, tells CI. Due to high prices
charged by domestic online retailers and a lack of local e-commerce
websites, consumers prefer to do their online shopping at websites
in other Latin American countries, he says. Logistics issues
include difficulties in clearing customs for cross-border
shipments, poor delivery services and high shipping costs. The
disadvantage of shopping at foreign websites is that consumers are
forced to pay in local currencies and their payment card may not be
accepted, Montero says.
• Amex Mexico has relaunched its Corporate
Gasoline card with a new design. It says the card now offers 39
interest-free days plus a low interest rate on the next 18 days for
corporate petrol purchases.
• Brazil’s Banco Itaú has obtained Uruguayan
regulatory approval to buy BankBoston Uruguay from
BankBoston’s owner, Bank of America. BankBoston owns OCA, which
with a 50 percent market share is the largest credit card issuer in
Uruguay. Itaú, which announced plans to buy BankBoston Uruguay last
year, also acquired BankBoston Chile in February 2007.
• Spain’s BBVA says it signed up 160,000
immigrants as customers in Spain in 2006. Many of the new customers
were immigrants to Spain from Latin America, where BBVA also
operates. At the end of 2006, BBVA had 552,000 immigrant customers
in Spain and says it expects this number to grow to 700,000 this
year. In Spain, BBVA offers international remittance services to
immigrants as well as bank accounts and low-cost credit cards.
• Brazilian transit payment firm Rede Ponto
Certo says it is talking to local banks including
Bradesco about using its transit smart cards for
general-purpose payments. Rede Ponto Certo has around 10 million
Bilhete Único contactless transit cards in issue, which are used on
São Paulo’s mass-transit system. “The people using our cards are
mostly unbanked,” Rede Porto Certo director Celso Campello Neto
tells CI. “Brazilian banks are interested in using our cards as
prepaid or debit cards.” Rede Ponto Certo has 3,500 merchants in
São Paulo where consumers can reload their Bilhete Único cards or
add funds to their prepaid phone accounts via the company’s
network. Last year, its revenues totalled BRL450 million and it
processed 14 million transactions over its network. The firm plans
to expand to Rio de Janeiro, Neto says.
• Chilean retailer Distribución y Servicio
(D&S) has denied a report in the Diario Financiero newspaper
that BBVA Chile has signed a preliminary agreement
to take a 50 percent stake in Presto, D&S’s credit card
subsidiary. The Chilean newspaper says Presto has around 1.5
million cardholders. A spokesperson for BBVA Chile, part of Spain’s
BBVA, would not comment on the report, which also named Banco Itaú
and HSBC as being interested in Presto. “We have been talking to
different banks as part of a process to make a decision on the
future financing of our credit card business,” a D&S
spokesperson tells CI. “This is an ongoing process, no preliminary
agreement has been signed with any bank, and looking for a
partnership with a bank is one of several possibilities for
financing. Another option could be the issuance of bonds.” In 2006,
Presto’s outstanding receivables grew by 37 percent, with the
average card balance rising by 30 percent during the year.
• Euronet Worldwide, a US-based payments
processor, has completed its acquisition of money transfer services
company Ria Envia. The purchase was originally
announced in November 2006. Los Angeles-based Ria operates in North
America, Europe, Puerto Rico, the Dominican Republic and Australia.
Euronet acquired Ria for $380 million in cash and $110 million in
Euronet stock.
• Banco Itaú, which has over 13 million credit
cards in circulation, is to issue American
Express-branded credit cards in Brazil. The agreement
calls for Itaú to market the co-branded cards through its
distribution network, which includes over 3,000 branches. It will
also be responsible for billing, customer service and charge
authorisations, and will own the cardmember loans and
receivables.
• Banco Itaú has launched a TV advertising
campaign for its credit cards, under the tag line ‘Much more for
your life’. The campaign stresses the aspirational benefits of the
bank’s cards, showing how cardholders can use their cards to
realise their personal dreams.
• Visa International Latin American and
Caribbean (LAC) says its total POS purchase volume rose by
33 percent year-on-year to $110 billion in 2006. The figure covers
all Visa-branded products in LAC. POS purchases with Visa debit and
prepaid cards rose by 34 percent compared to 2005 to $37 billion,
while purchases made with Visa credit cards grew 32 percent to $73
billion. The number of Visa debit and prepaid card POS transactions
rose by 25 percent to 1.4 billion in 2006. Visa has 2.4 million
card acceptance points in the region.
North America
• Bankruptcy filings in US federal courts dropped 70 percent in
calendar year 2006, according to data from the
Administrative Office of the US Courts.
Bankruptcies filed in the 12 months to 31 December 2006 totalled
617,660, the lowest figure since 1988, when 613,465 bankruptcies
were filed. By comparison, in the 12 months to 31 December 2005,
2,078,415 bankruptcies were filed, the largest number of bankruptcy
petitions ever filed in any 12-month period in the history of the
federal courts. The 2006 statistics cover the first full 12-month
period in which the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 has been in effect.
• Nine US states have introduced a total of 15 bills concerning
credit card interchange fees, the Merchants Payments
Coalition (MPC) says. Pending state legislation ranges
from proposals to ban the charging of interchange fees on the sales
tax portion of a retail transaction to requirements that credit
card companies fully disclose their rules and policies to merchants
and consumers, the trade association says. An MPC survey in
February 2007 found that 90 percent of US adults believe credit
card companies should disclose how much they charge in interchange
fees and how these fees are set.
• The Federal Trade Commission (FTC) is to hold
a workshop in Washington, DC in October 2007 to discuss changes in
the debt collection industry and their impact on consumers and
businesses. The public event is open to consumer advocates,
industry representatives, and state and federal regulators. The FTC
says the workshop will examine whether the Fair Debt Collection
Practices Act and other laws have kept pace with technological and
economic developments in the debt collection industry (see CI 378,
page 7).
• Twelve men and one woman involved in a large-scale identity
fraud ring have been indicted by Manhattan District Attorney Robert
Morgenthau on conspiracy charges. The 13 have been charged with
over $3 million in fraudulent credit card transactions across the
US. The gang allegedly acquired card information from individuals
who worked as card skimmers in Asian restaurants. The information
was used to create counterfeit cards, with which the gang bought
expensive items. Morgenthau alleges that these items were sold on
to electronics and computer stores.
• Canada’s Finance Minister Jim Flaherty says he opposes a bill
introduced by the federal opposition party that seeks to ban
Canadian bank ATM fees (see CI 375, page 7).
• American Express’s (Amex) net income for its
first quarter to 31 March 2007 rose by 21 percent to $1.1 billion,
from $873 million a year earlier. Revenues net of interest expenses
were up 10 percent year-on-year to $6.7 billion for the first
quarter of 2007. Revenue growth was driven by an increase in
cardmember spending, a 29 percent rise in worldwide loan balances
and a 10 percent rise in cards in force worldwide, Amex said. US
consumer Amex card spending was up 12 percent in the first quarter
of 2007, while US small business card spending was up 15 percent,
it said.
• Denise Pickett has been appointed president and CEO of
Amex Bank of Canada and of Amex
Canada. She will manage the company’s Canadian Consumer
Card and Small Business Services and will also chair the board of
directors of Amex Bank of Canada.
• Bank of America (BofA) is promoting its MLB
Extra Bases credit card, which allows cardholders to redeem rewards
points for tickets to regular season Major League Baseball games.
The points can also be redeemed for tickets to special events such
as the 2007 All-Star Game and tours of selected ballparks. Fans can
apply for the credit card, which pays one point for every dollar
spent, at MLB ballparks or at BofA branches.
• Capital One has signed a multi-year agreement
making it the official retail bank of the New Orleans Hornets
basketball team. The credit card issuer joins Cadbury Schweppes
Americas Beverages which is already a team sponsor. Under the
category-exclusive partnership agreement, Capital One ATMs will be
placed throughout the New Orleans Hornets’ arena. The deal also
includes advertising and branding opportunities for Capital One at
the arena.
• CIBC has completed a C$90 million ($80
million) technology upgrade of its 3,800 ATMs across Canada. The
Canadian bank says its ATMs now offer improved security to prevent
card skimming, as well as faster cash withdrawals and better access
for customers with disabilities.
• First Data has signed a merchant acquiring
agreement with WestJet, Canada’s second-largest
airline. The deal calls for First Data to provide WestJet with
merchant acquiring services including Visa and MasterCard
processing. Peter Harrington, president, Latin America and Canada,
First Data International, said: “This is a significant and
strategic win for First Data in Canada, and it demonstrates the
trust our clients place on us to deliver value.”
• HSBC has launched OptiPay, a combined
private-label debit and retail reward card, in the US. OptiPay
transactions will be processed over Tempo
Payment’s low-cost PIN-debit card acquiring network. HSBC
expects to start marketing OptiPay cards to retailers within the
next six months.
• Metavante and Postilion have
formed an alliance to offer electronic bill presentment and payment
services to banks in Latin America, North America and the
Caribbean. The two payment software companies say their platform
will enable bank customers to pay bills online using credit or
debit cards as well as via web banking services.
• Pennsylvania State University has extended
its agreement with PNC Bank for a combined ID card
and bank card programme. The agreement, initially set up in 2002,
will now run until 2013. The id+ card is issued to all of the
university’s 70,000 students and 16,000 staff and faculty members.
The cards can be linked to PNC bank accounts and used as debit or
ATM cards.
• RBS Lynk, Royal Bank of Scotland’s US
processing arm, has appointed John Grendi as senior vice-president
of business development. Grendi’s responsibilities will include
developing strategic relationships with third-party industry
partners.
• Canada’s TD Bank sees opportunities to expand
its domestic credit card business, according to Tim Hockey, group
head of consumer banking, speaking at an investor conference in
March 2007. Currently, 40 percent of TD’s Canadian customers hold a
TD-branded credit card. Hockey said he expects the bank will expand
that percentage to 50 or 60 over the next few years by
cross-selling credit cards to existing customers. TD has 7.5
percent of the Canadian credit card market, Hockey said.
