Asia-Pacific
Strategy and
trends
Go deeper with GlobalData
Discover and BC Card form
alliance
US payment network and issuer
Discover Financial Services has announced an agreement with BC
Card, the South Korean payment network, which will allow BC Card
cardholders to utilise the Discover, Diners Club International and
Pulse networks for international purchases and cash access outside
of Korea.
Korean cardholders spent $12.6 billion in 2008
on international expenditure, according to the Korea Tourism
Organisation. Founded in 1982, BC Card is the largest domestic
payments network in Korea with over 32 percent market share in one
of the world’s top credit card markets. BC Card has over 52 million
cards in Korea today, issued by 11 financial institutions.
System interoperability is expected to be
active later this year, when BC Card members will start issuing
cards under this agreement. In the past few years, Discover also
has entered into strategic alliances with China UnionPay and
JCB.
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By GlobalDataTechnology
HSBC appoints Gemalto to
facilitate EMV migration in A-P
Gemalto, the European digital
security expert, has been appointed by the HSBC Group, one of the
world’s largest banking and financial organisations, to supply a
comprehensive end-to-end EMV migration service across 19 markets in
the Asia-Pacific region.
Gemalto’s services cover three main areas:
provisioning of EMV credit cards, secure personalisation services,
and business recovery planning services. Gemalto’s presence in the
Asia-Pacific region is facilitated by its multiple sales offices,
production and personalisation sites. Fraud has been the key driver
of the ongoing migration exercise for credit cards in the
Asia-Pacific region. By replacing the traditional magnetic stripe
with an EMV version, sensitive customer data can be kept more
securely.
Product
launch
BoC launches credit card with
Taobao, Alipay
Chinese internet shopping website
Taobao.com has announced that it has co-operated with its sister
online payment company Alipay and Bank of China (BoC) in the launch
of a joint-brand credit card.
Taobao.com and Alipay, the two subsidiaries of
China’s B2B e-commerce group Alibaba, will issue the joint card so
that users can pay directly with their credit cards by providing a
password when they want to complete an internet payment via
Alipay.
Another feature of the card enables holders to
make internet payments over the current CNY500 ($73) limit. The
triple financial guarantee mechanism established by Taobao.com,
Alipay, and BoC will also ensure the smooth transaction of large
sums of money.
According to the performance report published
by Taobao.com, by the first half of 2009, the company had gained
145 million registered members, accounting for 43 percent of the
total Chinese citizens who use the internet regularly. The launch
of the BoC-Taobao credit card is expected to promote and guarantee
the development of internet payment and to stimulate the healthy
growth of the general e-commerce environment in China.
Technology
mophie announces FeliCa iPhone
card payment solution
mophie, a mobile phones accessory
provider, has announced a collaboration with Flight System
Consulting and Focal Point Computer to develop a mobile payment
solution for FeliCa technology. Available in early 2010 in Japan,
marketplace FeliCa will allow users to instantly read and write
electronic money card information using only the iPhone device and
the marketplace FeliCa application.
FeliCa is a contactless IC card technology
developed by Sony Corporation that is prevalent in Asian countries,
used in approximately 100 million mobile phones and around 120
million transportation and electronic money cards in Japan.
mophie’s marketplace FeliCa capitalises on the widespread use of
FeliCa technology and delivers solutions for consumer, general
business and retail business users who want to process any type of
electronic payment in a mobile environment.
The marketplace FeliCa, which includes
mophie’s intelligent case hardware and FeliCa transaction
processing application, will read and write FeliCa card information
to the iPhone device, allowing users to perform multiple mobile
payment transactions immediately and on-the go.
Leveraging the RFID technology of the FeliCa
cards, users can launch the marketplace app and place any FeliCa
card within one inch of the iPhone, and all information is
transmitted instantly to the device.
Technology
PayPal goes mobile
Online payment provider PayPal has
announced that its new mobile application is now available to
mobile users in the Asia-Pacific region. iPhone and Android phone
users can download the PayPal application for free via the
respective app stores while users of other mobile handsets can
access it via their WAP browser.
The PayPal mobile application allows users to
quickly and securely send money for personal payments such as
paying back money owed to a friend or splitting the cost of a
dinner bill. PayPal members can also check their account balances
and view their past transaction history while on the go. To ensure
mobile payments remain secure, each transaction is confirmed by a
password.
Rahul Shinghal, regional mobile manager for
PayPal Asia-Pacific, said consumers want fast, secure and
convenient methods of conducting their online financial
transactions.
“It is clearly evident that the mobile phone
is becoming an essential part of daily life. Pay-Pal’s availability
on the mobile is a natural development for us as we strive to
provide our users here with the most convenient and secure online
transaction experience available,” he said.
Strategy and
trends
MoneyGram and Bank of China
announce alliance
MoneyGram International, the global
money transfer company, and Bank of China (BoC), China’s
fourth-largest bank by assets, have announced an agreement that
will bring MoneyGram money transfer services to BoC’s 10,000
domestic branches on the mainland in the coming years.
The agreement, which more than triples
MoneyGram’s presence in this growing remittance market, follows the
completion of a six-month pilot that ran in 240 BoC branch
locations in Beijing.
MoneyGram will begin rolling out its money
transfer services in BoC branches in key provinces across the
southern and eastern coast in China, beginning in January, and will
continue expanding throughout the bank’s extensive network in the
country in 2010 and 2011.
MoneyGram has been providing services in China
since 1994 through agents including Industrial & Commercial
Bank of China, Bank of Communications, CITIC Bank, China Industrial
Bank, Shengjing Bank (former Shengyang Commercial Bank); Shenzhen
Ping An Bank and Anshan Bank.
Europe, Middle East,
Africa
Technology
MasterCard inControl now
available from Barclaycard
UK card issuer Barclaycard and
global payment network MasterCard have announced that Barclaycard
is to offer the option of MasterCard inControl functionality.
The new functionality provided by MasterCard
inControl enables Barclaycard to provide a service which allows
them to give customers more control when using their
Barclaycard.
Customers can go online and set personalised
controls and spend budgets, with SMS alerts or e-mails instantly
sent to tell the customer when they have reached a budget or
control set on their credit card.
Controls can be set to trigger an alert or a
block on transactions made online or abroad.
“Personal security and the ability to keep a
tab on your spending is top of mind for our customers,” said Chris
Wood, managing director of Barclaycard UK foundation and
partnerships.
“With inControl, we are able to utilise
MasterCard’s advanced network technology and capabilities to fulfil
the demand from cardholders for ever more convenient ways to pay
and manage their spending, with added security that you expect from
Barclaycard.”
Strategy and
trends
Net1 completes enrolment of 1m
cardholders in Iraq
Alternative low-payment banking
specialist Net1 has announced that its wholly owned subsidiary,
Net1 Universal Electronic Technological Solutions (NUETS), which
focuses on Africa and the Middle East, has enrolled its one
millionth beneficiary in Iraq.
Net1’s Universal Electronic Payment System
(UEPS) was implemented in Iraq in August of 2008 and is currently
used for the distribution and payment of government grants to war
victims, government pension payments to beneficiaries, salary and
wage distribution and payments to employees of the two state
banks.
In addition, NUETS has received additional
orders for 800,000 UEPS-enabled smart cards and 1,500 POS devices
for deployment in Iraq.
Net1 expects to deliver the newly-ordered
cards over the remainder of fiscal year 2010.
Dr Serge Belamant, chairman and CEO of Net1,
said: “The growth in the number of cards issued should
proportionally increase the recurring revenues we receive from
Iraq.
“We are in the early stages of creating a
broad-based electronic transaction processing platform that would
allow the citizens of Iraq to not only receive benefits in a
secure, cost-efficient manner, but would also create broader access
to additional formal financial services.”
Technology
Major smart card market players
join forces
European smart card manufacturers
Giesecke & Devrient, Oberthur Technologies, chip suppliers
Infineon Technologies and INSIDE Contactless have announced they
have launched an industry initiative to provide a new security
solution for next-generation smart card-based public transport
applications.
The solution will build on an open standard
now being implemented by the four partner companies, which will
eventually be governed by an independent body.
Companies active in the smart card arena –
providers of chips, smart cards, application-specific operating
software, reader devices and transportation systems – are invited
to join the initiative for the advancement of more secure public
transportation applications.
The new standard promises to bring a number of
key benefits to both public transport agencies and smart card
industry players, including higher performance and advanced system
security for public transport applications, as well as the
availability of multiple sources for chip products.
Through independent testing, the open standard
will also provide optimised interoperability to enable simple and
fast integration into public transport schemes.
The first emulation chips and transportation
smart cards using this standard are scheduled to be available by
the end of 2010.
Fraud and
security
Gemalto provides secure
corrective procedure in Germany
Following its statement of 6 January
2010 related to a Y2K coding error on German payment cards that
rendered millions of German payment cards unable to process the
2010 date-change, smart card manufacturer Gemalto has provided a
secure procedure to its customers in Germany to address the
situation.
Olivier Piou, Gemalto CEO, said: “This is a
regrettable incident, and we are doing everything in our power to
support our banking customers in resuming full normal
operations.
“We worked with them hand-in-hand to create a
strong secure software solution that enables our customers to
resolve the problem of the concerned cards without reissuing these
cards.
“All along we kept at heart to consistently
maintain a high level of security for our customers and the German
cardholders.”
Gemalto will book a special provision to cover
the potential consequences related to this event.
This exceptional charge, of an amount
estimated in the range of €6 million ($8 million) to €10 million,
will be booked as part of 2009 results, modifying accordingly
Gemalto’s expectation of around €180 million.
Strategy and
trends
National Bank of Kuwait extends
agreement with First Data
First Data, the global technology
and payments processor, has announced the conversion of National
Bank of Kuwait’s credit card portfolio to First Data’s global
issuing and consumer finance processing solution FirstVision.
The conversion follows the renewal of First
Data’s processing contract with the bank for an additional five
years.
Under the new agreement, First Data will
continue to provide a range of processing solutions and fraud
management services to the bank for its credit card portfolios.
National Bank of Kuwait has been a First Data
client since 2001 and conversion to FirstVision has enabled the
bank to expand further beyond its domestic market and offer credit
cards in other Gulf Cooperation Council (GCC) countries.
National Bank of Kuwait is one of the largest
banks in Kuwait and the Middle East and is the highest-rated
regional bank in the Middle East. It has banking operations in
almost all GCC countries in addition to major international
cities.
First Data has also signed a four-year
processing agreement with International Bank of Qatar (IBQ). Under
the terms of the agreement, First Data will host IBQ’s entire
credit card portfolio on its FirstVision processing solution. The
agreement extends First Data’s market reach into Qatar and its
support of the electronic payments landscape in the Middle East
region.
Latin America
Technology
RegaloCard expands m-payments
service in El Salvador, Guatemala
Mobile payment company RegaloCard
has announced that its services are now available in Guatemala and
El Salvador.
Guatemala’s $4 billion in annual
money transfers represents 12 percent of the country’s GDP, and in
the coming weeks RegaloCard will announce the retailers in
Guatemala who have joined its mobile payments platform.
Meanwhile, in El Salvador, franchise
restaurant chain Chili’s has also joined the RegaloCard mobile
payments platform. El Salvador’s money transfer market is worth
$3.8 billion annually.
RegaloCard is a prepaid gift card that
immigrants can buy in the US. The RegaloCard redemption PIN is then
delivered instantly via mobile payment technology to selected
recipients in Latin America, who can then make purchases at
participating retailers.
RegaloCard chairman and CEO Gregory Keough
said: “With RegaloCard’s entrance into Guatemala and our current
operations in El Salvador, in these markets alone consumers are
sending $8 billion per year in money transfers and paying hundreds
of millions of dollars in costly money transfer fees which can now
be totally avoided.
“While the RegaloCard service is free, it is
also available instantly, and for the first time the sender can
send as little as $10 and control how that money is spent.”
Technology
Oberthur moves into Colombia
for EMV migration
European smart card solution
provider Oberthur has acquired a service centre in Bogota,
Colombia, in order to position itself as a provider for Colombia’s
EMV migration programme.
Oberthur formed a partnership with local
technology vendor Dyetron in June 2009 to establish a service
centre that could assist with Colombia’s migration to EMV, which
was scheduled to start during early 2010.
Colombia’s financial supervisory body
Superintendencia Financiera had imposed a 1 January 2010 deadline
for issuers and merchants to migrate to EMV payment.
After this deadline, the liability over
fraudulent transaction rests solely on the party that hasn’t
upgraded to EMV, whether it be the issuer or the merchant.
Strategy and
trends
Wells Fargo expands remittance
service in Latin America
US banking giant Wells Fargo has
expanded its ExpressSend remittance services to Honduras,
Nicaragua, the Dominican Republic, Colombia, Ecuador, Peru,
Bolivia, and Argentina.
The move is an attempt to tap into
the large Hispanic consumer segment in the US who regularly remit
funds to their home countries.
Additionally, Wells Fargo has added
Telecomunicaciones de Mexico (Telecomm Telegrafos) – one of the
largest telecommunications companies in Mexico – as a new paying
agent.
Customers can now remit to an additional 1,560
new payout locations in Mexico, bringing the total payout locations
in Mexico to more than 5,500 locations.
Mergers and
acquisitions
Bradesco enters Mexico with Ibi
acquisition
Banco Bradesco, Brazil’s
second-largest private-sector bank, is to buy Mexican bank Ibi
Mexico for an undisclosed sum, marking its first international
foray in retail banking as it seeks to take advantage of rising
credit demand in the country.
Bradesco has signed a memorandum of
understanding with Cofra Holding, Ibi’s parent company, and the
transaction is expected to be completed by the end of March.
The acquisition of Ibi Mexico is an extension
of an agreement between Bradesco and Cofra signed in 2009, under
which Bradesco bought Ibi’s operations in Brazil for BRL1.4 billion
($766.7 million).
Ibi operates mainly inside retail chain
C&A’s stores, offering consumers credit card and consumer
finance services. Ibi Mexico has a loan book totalling MXP1.3
billion ($100 million) and more than one million credit card
customers.
Strategy and
trends
Banco Galicia to invest in IT
and branch networks
Argentina’s Banco Galicia is to
invest AXP200 million ($53 million) in its IT systems and upgrading
its existing branch and ATM networks. Banco Galicia operates 327
branches and 670 ATMs. The move is part of the bank’s plan to grow
both private sector lending and deposits between 20 and 25 percent
during 2010.
Banco Galicia also wants to create further
synergies with consumer finance company Compañía Financiera
Argentina, which it acquired in June 2009 in order to complement
its existing credit card business, Tarjetas Regionales.
Strategy and
trends
Santander to launch Brazilian
card venture
Banco Santander’s Brazilian unit is
to launch a venture to process credit card transactions, in a bid
to take on the duopoly of VisaNet (now known as Cielo) and
MasterCard-affiliated Redecard, which have a combined market share
of 90 percent.
Along with Brazilian technology vendor GetNet,
Santander plans to offer clearing and processing of debit and
credit card transactions, Santander Brasil said in a regulatory
filing. Details of the venture as well as a business plan will be
unveiled during the first quarter, the filing said.
The move comes as regulators and government
agencies in Brazil move to increase competition in the $190 billion
credit card industry. Brazilian antitrust authorities and the
central bank are recommending a series of measures aimed at
increasing competition and transparency in the country’s credit
card industry.
Strategy and
trends
HSBC Mexico unit predicts
lending growth
HSBC’s Mexican unit intends to grow
its loan portfolio over the next three years as the country’s
economy comes out of recession, although the bank’s small business
and commercial loan portfolios show the most promise currently.
Mexico’s GDP is expected to grow by
3.5 percent in 2010 after contracting an estimated 7 percent in
2009.
Parent company HSBC injected around $700
million of capital into its Mexican subsidiary in December 2009 to
fund its growth, including investments in its branch and ATM
networks.
The bank has remodelled or relocated about 345
of its 1,200 branches and plans to do the same with the remaining
855 branches by the end of 2012, investing about $220 million.
It also plans additional investments to
replace older machines in its network of 6,300 ATMs.
North America
Product
launch
Visa Canada launches
Olympic-themed cards
Visa Canada has launched Olympic
Games-themed Visa prepaid cards, to be issued by Canadian prepaid
card specialists Peoples Trust and subsidiary InComm.
Available in two denominations, C$50 ($47) and
C$100, the cards can be used worldwide at any merchant that accepts
Visa.
Visa prepaid cards issued by Peoples Trust and
InComm are currently available at around 3,500 retail locations
across Canada, including Shoppers Drug Mart and Money Mart.
A worldwide sponsor of the Games, Visa is the
only card accepted at official Olympic and Paralympic venues.
“Visa is continuously looking for new
opportunities to provide our customers with innovative payment
solutions,” said Brian Triplett, head of global prepaid products at
Visa Inc.
“Canadians can shop securely and conveniently
using Peoples Trust and InComm Visa prepaid cards at retailers – in
person, online or travelling outside of Canada.”
Product
launch
JitterBook selects Parago to
provide Visa prepaid cards to students
US online retailer JitterBook has
announced a deal with reward programme specialist Parago in which
students can now trade in books and get paid on Parago’s Visa
prepaid cards.
Parago supports a range of sales, channel,
employee and consumer incentives for companies such as Staples, Ace
Hardware, General Electric, McAfee and Hitachi.
“JitterBook is based on the foundation of
simplifying the way students buy and sell textbooks,” stated Eric
Henze, CEO of JitterBook.
“Every point of interaction is designed around
the students: easy online, year-round trade-ins, free shipping –
and now students can receive their funds directly onto a Visa
prepaid card.
“This is a tremendous convenience for
students, enabling them to immediately access funds, as many of
them do not have easy access to banking facilities on campus.”
Strategy and
trends
TSYS and US Bank expand
relationship
Outsourced payment service provider
TSYS has signed a new long-term agreement with US Bank.
As part of the agreement, TSYS will continue
to support the bank’s commercial card payment services, as well as
becoming its exclusive partner in providing card processing
services for the bank’s consumer-directed health care (CDH) benefit
cards, issued by its Healthcare Payment Solutions business
line.
The CDH agreement will allow US Bank
cardholders to eventually access multiple spending accounts, cash
and lines of credit from a single card. Terms of the multi-year
agreement were not released.
“Now, more than ever, consumers need to
control and manage how their health care dollars are spent. We are
confident that TSYS is the right choice for our business, as we
continue to expand our suite of innovative, card-based healthcare
payment options to those consumers,” said Ralph Bernstein, senior
vice-president of US Bank Healthcare Payment Solutions.
Technology
Dynamic Card Solutions’ instant
issue technology selected by Glacier
Dynamic Card Solutions (DCS), a US
provider of instant issuance and PIN selection solutions for banks,
credit unions and retailers, has announced it is to work with US
bank Glacier Bancorp.
DCS is working with Glacier Bancorp, a holding
company of 11 banks and 94 branches in Montana, Idaho, Wyoming,
Colorado, Utah and Washington states, to implement a card programme
that instantly issues unembossed Visa debit cards at the branch
level.
Glacier Bancorp plans to begin rolling out
DCS’ CardWizard software and FCP 20/20 unembossed card printers to
two of its banks, Mountain West Bank, which has 24 branches, and
Glacier Bank, with 15 branches.
Mountain West Bank and Glacier Bank will now
be able to offer customers an instantly-issued unembossed debit
card in their branches which can then be used immediately.
Strategy and
trends
SunTrust selects MasterCard for
debit card programmes
US banking group SunTrust Banks and
global payment network MasterCard have announced that SunTrust will
convert the company’s debit card programmes to MasterCard.
After the conversion to MasterCard-branded
debit cards, which is expected to begin late this year, SunTrust
will issue approximately five million MasterCard debit cards that
can be used everywhere MasterCard debit cards are accepted,
including ATMs.
In addition to MasterCard debit cards,
SunTrust will expand its current commercial card offering in the
future to include MasterCard-branded commercial credit cards.
SunTrust will continue to offer Visa branded
cards as an option for various consumer and commercial credit
products.
SunTrust Banks, headquar-tered in Atlanta, is
one of the largest banking organisations in the US, serving
consumer, commercial, corporate and institutional clients.
As of 30 September 2009, SunTrust had total
assets of $172.7 billion and total deposits of $119.3 billion.
Its primary businesses include deposit,
credit, trust and investment services.
Product
launch
American Express and Lowe’s
launch small business credit card
American Express Open (Amex), the US
issuer of payment card products for small business owners, and
Lowe’s Companies, the world’s second-largest home improvement
retailer, have announced the launch of a new credit card for
business owners.
The Lowe’s Business Rewards card from Amex is
a business credit card that enables business owners to earn points
on virtually all card purchases.
This is the first rewards programme offered to
Lowe’s small business credit customers.
The new card provides a tiered structure for
earning rewards points.
Cardmembers earn one reward point for every
eligible dollar spent on the card, double rewards points on every
eligible dollar spent at Lowe’s, and triple rewards points on every
eligible dollar spent on restaurant purchases, office supplies and
wireless bills.
Cardmembers can redeem points for a variety of
valuable business credit card rewards, including Lowe’s or Amex
gift cards.
There is no cap on the amount of business
rewards a cardmember can earn, and there is no expiration date to
redeem the points.
