Asia-Pacific
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• The use of credit cards in China has spread quickly and reshaped
shopping habits in the last few years, especially in cities,
according to business information provider
Nielsen’s most recent China Personal Finance
Monitor (PFM). While cash is still the main form of payment, most
credit cardholders prefer to use their credit cards for payment as
a convenient substitute to carrying piles of banknotes, according
to the report. According to the PFM report, based on a survey of
11,500 Chinese consumers in 18 cities, people in their 20s are
comfortable with spending tomorrow’s cash for today’s needs – a
change in attitude towards credit from a generation ago.
• China UnionPay will complete the linking of its
national electronic payment market when it sets up branches in
China’s Xinjiang Uygur and Ningxia Hui autonomous regions as well
as in Gansu and Qinghai by next year. The network operator claims
to have issued 10.21 million credit cards through 189 domestic bank
card issuers in the first half of 2007, an increase of 200 percent
compared to the same period last year.
• GE Money will not be taking an equity stake in
Shenzhen Development Bank because of the rising
price of the bank’s stock from RMB5.25 ($0.70) at the time of
purchase in 2005 to RMB40 currently. As the share structure of the
bank was unclear until May 2007, the price for GE’s agreed 7
percent equity has become a point of contention. Although both
parties have yet to deliver a unanimous announcement on the status
of its credit card joint products, GE is reportedly “looking for
better opportunities in co-operating with other banks”.
• In Hong Kong, Standard Chartered Bank has rolled
out a joint credit card with integrated information technology
solutions and services providers Jardine OneSolution (JOS),
targeting SMEs. The Standard Chartered JOS Visa Platinum Business
card will provide services such as business overdraft and cash
management. The bank is targeting 5,000 cards to be issued in the
first year with the number doubling in the second year.
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By GlobalData• Singapore banks wrote off SGD9.1 million ($6.3 million) of bad
credit card debt in September, lower than the SGD10.2 million
written off in the same period last year. However, the number of
cardholders and amount of card billings have increased over the
same time period. There are now 4.3 million credit cardholders in
Singapore compared to 3.8 million a year ago, and card billings
have increased from SGD1.6 billion to SGD1.9 billion. The increase
is likely to continue as positive consumer sentiment rides on
strong economic growth.
• In India, American Express and
Kingfisher Airlines have launched a co-branded
card in association with telecommunications giant Airtel that links
calls, flights and card rewards. The issuers are targeting India’s
affluent customers and will offer giveaways valued at more than
INR50,000 ($1,272).
• SBI Card, the second-largest credit card issuer
in India, has announced a new Paycash payment option for its
customers through Easy Bill payment outlets. Easy Bill is a chain
of 3,500 one-stop financial transaction centres operated in
conjunction with retailer partners. This is the first time that a
cash payment option has been offered by a credit card issuer in
India.
• In India, Deutsche Bank is launching a debit
card called imagine, which customers can personalise using three
types of logo – Zodiac signs, a travelling logo and images from the
Incredible India advertising campaign initiated by the local
tourism ministry. The card will offer flexible limits for ATM and
POS transactions in addition to rewards programmes for gold debit
cards.
• Twenty commercial banks in Vietnam have set up the
Smartlink Card Service Joint Stock Company to
facilitate inter-bank electronic payments and to operate a card
payment network. Smartlink will allow cardholders to carry out
transactions, bill payments and mobile card deposits at all
Smartlink members’ ATM and POS terminals. Seventeen out of 25 banks
have been successfully linked to the network and operate 3 million
cards at more than 2,000 ATMs and 6,000 POS terminals.
• In Indonesia, 60,000 UOB Buana Bank Platinum
cardholders receive air fare discounts with Merpati Nusantara
Airline. Platinum cardholders are eligible for three-for-one
rewards on transactions made between 10 October and 10 December
2007 for flights between 10 January and 30 April 2008. Gold or
Classic cardholders get two Merpati tickets while paying for only
one.
• South Korea’s life insurers are considering withdrawing from the
credit card network in opposition to government policy that
encourages them to accept credit card payments for insurance
premiums. The insurers see the 3 percent credit card commissions as
a burden. This is higher than the 1.5 percent that insurers charge
as an expense for collecting premiums.
• Bank Kerjasama Rakyat of Malaysia is confident
of achieving MYR1 billion ($300 million) in pre-tax profit in two
years’ time. Its third-quarter 2007 profit before tax and other
charges increased by MYR104.5 million to MYR552.8 million compared
with the previous quarter. Its launch of credit cards has been
postponed to April 2008.
• Direct Access, a division of
CIMB, Malaysia’s second-largest bank, aims to
issue its new Affinity Card to 16,500 members of the Institute of
Engineers Malaysia. The bank has over 8,000 existing cardholders
who receive free-for-life credit cards with no joining or annual
fees.
• Bank of the Philippine Islands (BPI) is reducing
its classic card interest rate to 2.75 percent from 2.99 percent.
Other issuers are charging between 3.25 and 3.5 percent. BPI is
confident that it will be able to maintain profitability, as the
average interest rate across BPI’s credit card billings is 3.4
percent. The bank is targeting growth of 15 percent in cards
issuance and currently has 800,000 cardholders.
• The number of credit cards issued in Taiwan in September declined
to 36.5 million, a decrease of 2.97 million over the previous year.
Outstanding revolving credit also declined by $2.55 million to
$8.94 billion over the past 12 months. In light of this,
Chinatrust Financial Holding has announced that it
will not offer cash cards again until the market conditions are
right.
• In Thailand, a report from market researchers Kasikorn
Research Centre highlighted that inflation has caused
Bangkok residents to become heavily in debt to credit card issuers.
The survey found that Bangkok residents faced the highest compound
interest rates from card issuers, followed by the interest rates
for mortgages and hire purchase financing.
Europe, Middle East, Africa
• UK banking giant HSBC has sold its Marbles and
Beneficial UK credit card portfolios to SAV Credit for around £385
million ($790 million), saying they were no longer an important
part of its cards strategy. HSBC said it would concentrate on its
HSBC and first direct brands to grow its cards business in the UK.
SAV Credit offers credit cards and other financial products to
near-prime and subprime borrowers – a market it says represents
nearly 20 percent of the UK population. It launched its Aqua card
product in 2002, issued by the Bank of Scotland, and has 150,000
credit card accounts.
• Visa Europe has announced that the first
transaction using the Visa payWave contactless card has taken place
in Switzerland. The cards can hold a maximum of CHF40 ($34) and are
used to buy low-value items as an alternative to cash. The European
Payments Council estimates that in 2004, 85 percent of transactions
in Switzerland were made using cash, and Visa Europe said around 80
percent of those were transactions for less than CHF25. Corner Bank
and Telekurs both plan to start using the technology in 2008.
• Visa Europe and Dutch acquirer
PaySquare have completed the first V PAY
transaction in the Netherlands. The payment was carried out at
Schiphol airport in Amsterdam, a location chosen to show the
benefits the system will have for consumers travelling in Europe. V
PAY is Visa’s pan-European SEPA-compliant EMV debit solution.
Already, 22 banks have signed up to the scheme across Europe and
have issued 10 million V PAY cards in eight markets. There are also
4 million POS terminals and over 250,000 ATMs ready to accept V
PAY.
• The British Retail Consortium (BRC) has accused
card companies of exaggerating the extent to which cards have
replaced cash. A recent survey from the BRC claims UK customers
still prefer to use cash when paying for purchases in stores,
despite moves by banks to boost revenues from fees through
increased card spending. The BRC says card schemes should take into
account the low costs associated with cash and reduce charges for
processing card payments accordingly.
• Users of a prepaid MasterCard from UK prepaid solution provider
Tuxedo Money Solutions will soon be able to top up
their cards via text message, as part of a new service called
eccount. Tuxedo says that the top-up service, along with text
alerts to warn customers when their balance is low, will be
available from December. Tuxedo says users will be automatically
signed up to eccount, which also lets customers manage multiple
cards online, share money with friends and family in the UK or
abroad and use the internet to transfer funds to separate cards
within the same account.
• Figures for ATM cash machine crime across Europe in the first
half of this year show EMV chip cards are driving down ATM fraud in
countries that have adopted the technology, according to figures
from the European ATM Security Team. Compared with
the last six months of 2006, the value of domestic ATM fraud losses
for card issuers is down by 55 percent due to EMV technology.
International losses have remained static. ATM security officials
report that it is noticeable that criminals are now actively
seeking out ATMs without EMV chip readers and are sending skimmed
data to countries with ATM networks that are not yet fully EMV
chip-compliant.
• Global technology provider Serverside Group has
announced that the European Patent Office has allowed a European
patent directed to its core card customisation architecture.
Serverside said the European patent significantly enhances its
competitive position. Serverside will be actively seeking licensees
to work with on appropriate commercial terms and will also continue
to pursue its growing portfolio of international patent
rights.
• Citibank Hungary has introduced the MasterCard
Photo Embossed debit card, featuring a photo of the cardholder.
Inclusion of the photo makes this product unique both in the
Hungarian market and across the EU. The cards are linked to all six
current account fee packages offered by Citibank Hungary, and both
new and existing customers can apply for the card.
• Middle East card processor Network International
and National Bank of Dubai have launched a new
consumer-centric, card-based promotion with the aim of setting a
new benchmark in merchant acquisition programmes in the region. The
campaign will include over 20,000 retailers across the United Arab
Emirates, and merchants who have installed either Network
International’s or National Bank of Dubai’s terminals at their
check-outs. The promotion will accept credit and debit cards from
all banks, whether issued in the region or from other parts of the
world. Every consumer making a purchase of AED100 ($27.23) or more
will receive one entry into a prize draw.
• Challenge Card Design, a wholly owned German
subsidiary of biometric identification card specialist
LaserCard, has signed a €5.9 million ($8.5
million) contract with Golden Chip Company, based in Saudi Arabia,
to deliver a turnkey card manufacturing facility by the end of
2008. The new factory will be used to produce and personalise
loyalty cards and credit cards for the telecommunication and
banking sectors.
• UK financial comparison website Money-expert.com
says that credit card rejections have jumped by 17 percent to 3.27
million, while rival comparison website Moneyfacts.co.uk says that
in the past two months 125 fee and rate increases have hit the UK
credit card market. Sean Gardner, chief executive of MoneyExpert,
said: “Credit card companies have had a rough ride with bad debt so
it’s no surprise that they are becoming stricter on who they’ll
lend money to. Many lenders have reduced the amount of available
credit on offer to applicants – another effect of introducing
stricter lending criteria.”
• Germany’s Pago eTransaction Services has started
the live processing of MasterCard Maestro international e-commerce
transactions. In mid-2006 Pago became the first acquirer outside
the UK to offer Maestro UK acceptance. Merchants who work with Pago
can now offer Maestro to all their customers for their internet
transactions. Maestro cards are to become e-commerce-enabled in
several other European countries, in addition to the UK.
Approximately 250 million Maestro cards have been issued across
Europe.
• Standard Chartered Bank in Botswana recently
celebrated its 110th anniversary by launching the first smart card
in the country. The bank said the technology, which is also the
first chip card in the country, would offer greater convenience for
customers. It is part of a strategy to develop the cards market in
Botswana, which to date has failed to develop on a wide scale due
to the country’s size and geography.
Latin America
• “Moving to chip and PIN is hard to cost-justify for Latin
American banks on fraud reduction grounds alone,” Rose Del Col,
Latin America regional director at EMV software company
Welcome Real-time, tells CI. “But putting
value-added functions on a chip, such as rewards, or promotions for
bank products at the point of sale, would cost-justify chip in
Latin America.” Visa and MasterCard’s current EMV migration
deadline in Latin America is mid-2008. In 2006, Brazilian Visa
acquirer VisaNet announced plans to roll out Welcome’s chip-based
technology for POS marketing promotions. Brazilian banks are
issuing primarily EMV-based credit cards, but Banco Itaú has put
chips on all its debit cards, Del Col adds.
• “There is a lot of interest from Brazilian banks in tapping the
country’s huge mobile phone market to reach out to the unbanked and
under-banked,” Doug Kidd, general manager sales, Brazil, at
payments software company Postilion, tells CI.
Around 110 million Brazilians have mobile phones. “Brazilian banks
are offering payment cards to under-banked and unbanked consumers,
and want to use mobiles to help them with this,” Kidd says. These
services would enable customers to transfer money via mobile phone
between their various bank cards, or transfer money from their
debit card to a linked card belonging to a family member, Kidd
says.
• UK software company Alaric has won a contract
from Barbados Public Workers’ Co-operative Credit Union (BPWCCUL).
Alaric will supply its Authentic card authorisation and switching
system to link BPWCCUL’s ATMs to the CarIFS (Caribbean Integrated
Financial Services) Barbados ATM network. Alaric says BPWCCUL will
use Authentic to offer its members enhanced debit card services in
a three-year project. The first phase will see Authentic used to
authorise BPWCCUL’s ATM transactions. The second phase will enable
the 36 other Barbados credit unions to access CarIFS. The third
phase will provide BPWCCUL and the other credit unions with
MasterCard and Visa interfaces.
• Experian Brazil has launched InfoRanking, a
service which warns consumer credit providers when potential
customers are being sued by other companies for non-repayment of
debt. InfoRanking searches Experian’s database to find any lawsuits
against consumer credit applicants. Experian says it plans to offer
a real-time search capability with InfoRanking, as well as historic
searches.
• US-based Fidelity National Information Services
says its Brazilian outsourced payment processing unit, Fidelity BPO
Brazil, and its separate Brazilian card processing joint venture
with Banco Bradesco and ABN AMRO will have combined annual revenues
in calendar year 2007 of over $200 million. “This figure will be
achieved once various card conversions are completed,” a Fidelity
spokesperson tells CI.
• Global payment processor First Data has
completed its acquisition of São Paulo-based Check Forte
Processamento de Dados. In July 2007, First Data signed an
agreement to buy Check Forte, which provides data capture,
switching and POS terminal management and network processing
services to banks for bill payment transactions.
• US-based POS terminal vendor Hypercom says its
revenues for the third quarter of 2007 rose by 24.9 percent
year-on-year to $70.8 million. The increase was due to revenue
growth in its South American, Mexico-Caribbean-Central American,
EMEA and Asia-Pacific regions. Sales were flat in North America in
the period. Hypercom CEO Tom Liguori says that
Mexico-Caribbean-Central American revenues were up $1.8 million or
32 percent year-on-year, while South American revenues were up $4.8
million, or 54 percent.
• Oberthur Card Systems says that Latin America
represented 5 percent of the French chip card manufacturer’s €278.1
million ($402.6 million) total sales in the first half of 2007. By
the end of 2007, Oberthur will have opened new bank card
personalisation centres in Brazil and Mexico.
• Brazilian MasterCard and Maestro acquirer
Redecard says its recurring net profits rose by
30.3 percent in the third quarter of 2007 to BRL191.3 billion
($108.7 billion) from BRL146.8 billion in the year-before period.
Redecard processed BRL25.3 billion of credit and debit card
transactions in the quarter, up 22.8 percent from the same period
in 2006. At 30 September 2007, Redecard had a total of 1.1 million
affiliated merchants, 9.9 percent higher than in September
2006.
• Scotiabank’s Mexican subsidiary, Grupo
Scotiabank, says its revenues from credit card commissions
rose to MXN190.7 million ($17.8 million) in the third quarter of
2007 from MXN157.3 million in the same period in 2006. For the nine
months to 30 September 2007, credit card commissions totalled
MXN539 million, up from MXN467 million a year earlier. Credit card
lending was up by 31 percent – or by MXN1 billion – year-on-year in
the first nine months of 2007. The bank’s credit card and other
unsecured loan portfolio totalled MXN18.853 billion as at 30
September 2007.
• Tio Networks, a North American financial
services kiosk network operator, is to offer Nexxo
Financial’s money remittance services at its kiosks and
ATMs. By early spring 2008, customers will be able to send funds to
relatives outside the US at Tio kiosks and ATMs located in US
convenience stores. Recipients will be able to pick up the funds at
Nexxo agent locations in Latin America. Nexxo, which has 20,000
agent locations, primarily in Mexico and other Latin American
countries, will offer Tio’s cash-based bill payment services at its
(Nexxo) California-based network of 100 money remittance
kiosks.
• Payment system provider VivoTech’s VivoPay 5000
contactless payment readers have been certified for use with
MasterCard PayPass programmes in Latin America, Canada and EMEA.
The readers are also compatible with Visa’s contactless standard.
“In Latin America, we have rolled out VivoPay 5000 readers in
Guatemala in association with Visa, Banco Cuscatlán, Banco
Industrial and Banco Uno,” Mohammed Khan, VivoTech’s president,
tells CI. “In Mexico, Banamex is using VeriFone MX 870 readers with
VivoTech contactless technology to accept PayPass cards at
McDonald’s locations.” VivoTech expects to sign up a second bank in
Mexico for its contactless technology this quarter, Khan says. “The
VivoPay 5000 is certified for use in countries where EMV is being
rolled out,” he says.
• Western Union has taken a 25 percent stake in
GraceKennedy Money Services Caribbean (GKMS),
which owns the GraceKennedy group of Caribbean remittance, foreign
exchange, banking and bill payments companies. The Kingston,
Jamaica- based group also renewed its agreement for another ten
years to act as a Western Union agent in the Caribbean.
North America
• Credit cards were the most commonly used method of payment by US
consumers who were victims of scams in 2005, accounting for 37
percent of all such fraudulent transactions, according to the
Federal Trade Commission (FTC). Debit cards were
used in nearly 10 percent of cases. The Consumer Fraud in the
United States report, which was published in October 2007, contains
the most recent FTC data on a range of different scams. In total,
30.2 million Americans fell victim to fraud during 2005, the report
says. Credit card-related scams in 2005 included bogus card
insurance, credit repair and credit card advance fees.
• The average amount loaded onto US gift cards has increased by 32
percent over the past three years, according to research from
Brentwood, Tennessee-based processor Comdata. For
the 2007 holiday season, the average US gift card purchaser expects
to spend $203 on gift cards, up from $186 in 2006. Comdata says 38
percent of people who have never purchased a gift card are likely
to purchase gifts cards this holiday season, representing an 81
percent rise in new gift card users over last year.
• BMO Bank of Montreal has added PayPass to its
Mosaik MasterCard magnetic-stripe credit cards. All new and
reissued Mosaik cards will contain the MasterCard-developed
contactless feature. BMO says it is the first of the ‘big six’
credit card-issuing banks in Canada to integrate ‘tap and go’
technology into a credit card. Several major Canadian fast food,
retail and fuel station chains have committed to accepting PayPass
in 2008, including McDonald’s.
• US bank Chase says it will pick up the tab for
every 500th purchase charged to a Chase debit card during November
and December, up to a value to $500. However, the purchases need to
have been made without using a PIN. “For this promotion, PIN
purchases qualify only for a lump of coal,” says Chase.
• US online auction firm eBay is now selling
eBay-branded gift cards. The gift cards are available in $25 and
$50 denominations and can be bought at around 10,000 grocery stores
across the US, eBay says.
• First Data has launched a merchant acquiring
business in Canada called Posnet. The new company will serve
merchants of all sizes, it says. Wayne Clarke, First Data’s senior
vice-president, Latin America and Canada, says services offered by
Posnet will include EMV chip and PIN card acceptance. First Data
also has a merchant acquiring business in Argentina and Uruguay
named Posnet. It says it will continue to expand this business
across the Latin American region.
• Atlanta, Georgia-based processor Global Payments
is expanding its presence in Canada by entering a merchant services
referral agreement with HSBC Bank Canada. Under
the exclusive, long-term arrangement, Global Payments will provide
card acceptance services, POS products, credit card processing and
account settlement to HSBC Canada’s merchant customers.
• Global Payments has integrated its systems with
the payments processor Discover Network, which
means that it can now offer Discover card processing to the
majority of its merchants. The new service, which will offer
merchants a single point of contact for all Visa, MasterCard and
Discover transactions, will expand the reach of Discover cards to
small and mid-sized merchants, Global Payments says. Currently,
Global Payments is integrating Discover Network transaction
processing for its independent sales organisation clients.
• Israeli smart card solutions provider On Track
Innovations (OTI) has provided mobile payment technology
to Heartland Payment Systems for a contactless
payment system at Slippery Rock University in Pennsylvania. US
acquirer Heartland has issued university staff and students with an
OTI smart sticker, which, when placed on a mobile phone, enables
contactless payments to be made at an OTI contactless card reader.
Heartland has installed OTI contactless readers at campus-based
vending machines, photocopiers, printers and merchant
outlets.
• RBC Royal Bank is to launch a mobile payments
trial involving near field communication-enabled mobile phones
containing Visa payWave contactless technology. Participants will
download their RBC Visa credit card details to their mobiles. They
will then be able to pay for purchases by waving their mobile at a
contactless card reader, instead of using a physical credit card.
The Ontario-based pilot, which will include in-lab tests, an RBC
employee trial and a consumer trial, will be completed in 2008, RBC
says. Separately, RBC says it will issue EMV chip and PIN cards
featuring Visa payWave to customers participating in its EMV trial,
also set in the province of Ontario.
• Payment processor Moneris Solutions has renewed
its merchant processing agreement with Sage Payment
Solutions. Sage provides merchant services to 115,000 US
businesses. Moneris provides bank sponsorship for Sage via Harris,
BMO Bank of Montreal’s US subsidiary. “Moneris is providing Visa
[bank identification number], MasterCard [interbank card
association] and Discover [merchant acquiring programme]
sponsorships as well as monetary settlement services for credit and
debit card processing in the US,” a Moneris spokesperson tells CI.
Moneris, a joint venture between RBC and BMO, serves 350,000 North
American merchant locations directly as well as through agent banks
and alliances with partners such as Sage.
• RBS Lynk, a US processor owned by Royal Bank of
Scotland, has teamed up with Trustwave to help merchants identify
risks and vulnerabilities associated with their payment card
acceptance practices. The two companies’ Risk Profiler service is
designed to aid merchants in complying with the security
requirements of the Payment Card Industry Data Security Standard
(PCI DSS). Trustwave is a US-based data security company.
• Westsphere Systems, which operates a white-label
ATM network in Canada, is moving into ATM and POS acquiring via an
outsourcing deal with payments software provider ACI
Worldwide. The Calgary, Alberta-based company will be
using ACI’s Base24 and ACI Payments Manager processing software on
a hosted basis at ACI’s data centre. Westsphere’s initial network
will consist of 1,500 ATMs and POS terminals. ACI says Westsphere
plans to expand its network using ACI’s software.
• Visa says 65 percent of large US merchants and 43 percent of
medium-sized US merchants were compliant with the PCI DSS data
protection standard by 30 September 2007. Visa’s deadline for PCI
compliance by large US merchants – defined as handling more than 6
million Visa transactions annually – was 30 September 2007. The
deadline for compliance by medium-sized merchants handling between
1 and 6 million transactions annually is 31 December 2007.
