• Payment services provider Vesta’s Chinese
subsidiary, KPay, has launched retail payment
services for the Beijing transit card…
• French payment terminal manufacturer Ingenico
has acquired Planet, its distributor in Turkey,
for a total consideration of €26 million ($36 million)…
Go deeper with GlobalData
• In May 2007, credit card lending by Mexican banks totalled
MXN238.7 billion ($22.22 billion), up from MXN166.9 billion in May
2006 and MXN233.9 billion in April 2007…
Asia-Pacific
• Rupert Keeley, Visa International Asia-Pacific
president and chief executive officer, has said that fraud levels
in the region are at an all-time low. Visa attributed the lower
rates of fraud to its EMV-based chip programme.
• Industrial and Commercial Bank of China claims
that the number of its UnionPay Standard Peony Money Link Cards
exceeded 20 million by the end of June 2007. The bank also said
that by the end of May 2007, the value of the card’s total
international transactions was CNY2.2 billion ($290 million),
accounting for nearly 22 percent of the total international
transaction value of debit cards in China.
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By GlobalData• China Merchants Bank has launched a debit card
co-branded with its securities arm, China Merchants Securities
(CMS). The card is based on the customers’ cleared balance of funds
with CMS and gives customers access to the bank’s foreign exchange
and third-party depository and management services.
• China’s payment network, China UnionPay, has
announced a card issuance agreement with Japan’s Sumitomo
Card to issue 50,000 UnionPay credit cards in Japan in
2008. UnionPay cards transactions in Japan reached CNY103 million
from 1 January 2007 to 15 May 2007, double the total annual figure
for 2006.
• China UnionPay customers can now access over
12,000 ATMs in Japan’s Seven Bank network. Up to 46,000 ATMs are
currently accessible by China UnionPay-branded cards, accounting
for more than 30 percent of Japan’s ATM network. This makes China
UnionPay the second-biggest bank card brand in Japan.
• Payment services provider Vesta’s Chinese
subsidiary, KPay, has launched retail payment
services for the Beijing transit card. Over 12 million transit
cards have been issued in Beijing for use in buses, trains and
taxis. The card uses contactless technology and leverages KPay’s
existing merchant relationships with convenience stores,
supermarket chains and restaurants in Beijing. KPay’s POS terminals
will offer loyalty and discount programmes and other card payments
options for merchants in an attempt to increase merchant acceptance
rates.
• India’s ICICI Bank has launched the Visa
Signature Credit Card with a membership fee of INR25,000 ($620) and
annual fees of INR2,500. The card offers benefits such as a Tag
Heuer watch, travel vouchers and air travel insurance coverage of
INR30 million.
• Development Credit Bank in Hyderabad, India, has
launched an international debit card under its X-Gen Banking
programme for students aged 14 years and above. The X-Gen
cardholder is entitled to discounts at selected bookstores,
restaurants and entertainment centres. The bank plans to have some
10,000 X-Gen accounts set up by September 2007.
• Netherlands bank ABN AMRO has launched a new
credit card in Indonesia which will enable cardholders to set fixed
monthly instalments for their transactions. Branded iPay, the
repayment will be based on an annual interest rate of 20 percent
compared with the average credit card interest rate of 39 percent
in Indonesia. Although ABN AMRO entered the credit card market only
two years ago, it expects to increase its cardholder base from
30,000 currently to 105,000 by the end of 2007, and to double the
number of its credit cards in circulation from around 200,000 to
400,000.
• Malaysia’s largest bank, Maybank, expects 20
percent growth in the combined transaction value of its credit,
charge and debit cards. The bank also expects to increase its
credit cardholder base by 20 percent from 1.4 million currently.
The bank has recently launched an online shopping service that
allows its American Express charge cards to access many e-shopping
and e-commerce sites in the US that did not previously accept cards
issued in Malaysia. The service will be extended at a later date to
cover the UK, Europe and Australia.
• Aeon Credit Service will go public on the main
board of the Malaysian exchange to improve its credit standing and
name recognition. The consumer finance company has been offering
hire purchase, loans and credit cards through an ATM network. It
currently serves 74,000 credit cardholders and has 24 sales offices
in Malaysia.
• AirAsia, a Malaysia-based regional low-cost
carrier, is keen to launch a Citibank co-branded
credit card for the Thai and Indonesian markets. The carrier
recently launched a Citibank-AirAsia card in Malaysia, a revamp of
its previous co-branded card with RHB Bank. AirAsia hopes for 1
million co-branded credit cards to be in circulation and has given
cardholders with existing Citibank cards an option to convert to
the new card. The carrier previously had about 250,000 cardholders
through its partnership with RHB Bank. Cardholders
can earn free AirAsia tickets when they use the card for their
daily purchases. AirAsia also has a co-branded card in Thailand
with Singapore’s DBS Bank.
• Citibank Singapore is to offer credit cards to
Singapore consumers with an annual income of less than S$30,000
($20,000). It is the first card issuer to that market as, until
now, central bank regulations limited credit cards to those earning
more than S$30,000. The revised rules now allow card issuers to
grant S$500 in unsecured credit to the previously unserved market.
Citibank plans to target young adults aged 18 to 35 with its Citi
Clear Card. The bank estimates that this group makes up 50 percent
of potential customers earning below S$30,000 per annum. Citibank
will suspend use of the card for customers who fail to make the
monthly minimum payment.
• Maybank Singapore’s platinum card customers can
receive a day’s free use of a Porsche Cayenne or Porsche Boxster if
they charge a minimum of S$12,000 to their credit cards within a
three-month period. Between 1 August 1 and 31 October, however,
cardholders need charge only S$6,000 to get one-day free usage. The
bank hopes to attract at least 10,000 new platinum card customers
within a year and said that more than 15 percent of its cardholders
are already spending S$6,000 in three months.
• Singapore’s DBS Bank and American
Express have launched a credit card for frequent
travellers, which will allow customers to convert credit card
points into air miles three times more quickly than the current
market average. Customers may choose from the frequent flyer
networks of KrisFlyer, Star Alliance, Asia Miles and One
World.
• Hanoi-based VP Bank has launched chip-based
platinum MasterCard credit and debit cards for customers with a
minimum income of VND15 million ($929) per month. Debit cardholders
are required to have at least VND20 million in their account
balance.
Europe, Middle East, Africa
• French payment terminal manufacturer Ingenico
has acquired Planet, its distributor in Turkey,
for a total consideration of €26 million ($36 million). Planet was
founded in 1998 and forecasts 2007 revenues of approximately €27
million and an operating profit of approximately €2.7 million.
Ingenico said Planet’s IT and services development platforms will
enable it to enter the payment applications market and to
capitalise on the growing Turkish terminal market, which is being
driven by the switch to EMV standards and high demand for bespoke
payment systems.
• UK supermarket chain Tesco is to extend a trial
of euro-dispensing ATMs to 20 sites following positive feedback
from an initial pilot programme. The euro ATMs are free to use and
located close to transport hubs across the UK. Tesco said the move
is designed to make travel money more accessible for its
customers.
• MasterCard Worldwide and Allied Irish
Bank (AIB) have announced an agreement to convert the
bank’s full debit and ATM card portfolios to MasterCard’s Maestro
debit scheme. Under the agreement, all of AIB’s debit and ATM cards
will be co-branded Laser Maestro. This will double AIB’s portfolio
of Maestro-branded cards.
• Visa Europe’s V PAY debit scheme has been
launched in Italy with the introduction of the CarigeCash Europe V
PAY card. The card is compatible with the Bancomat and PagoBancomat
Italian networks and the European V PAY network. The new payment
system is a collaborative venture between Carige Bank, Visa Europe,
Convenzione per la Gestione del Marchio Pagobancomat (which
regulates and develops the Bancomat payment service at POS
terminals) and Italian payment processor SIA-SSB.
• UK card issuer Barclaycard has unveiled its
OnePulse card product, which will combine the London transit
ticketing application Oyster with credit and contactless
functionalities. Barclaycard said the card is on track to be
launched across London from September 2007. OnePulse cardholders
can pay for fares on the Transport for London network using Oyster,
either by pay-as-you-go or season ticket. Oyster is hosted on the
same card but is entirely separate from the cardholder’s credit
card account.
• European payment processor TSYS Card Tech has
announced the introduction of EMV cards to Cyprus through
partnerships with three Cyprus-based banks, Marfin Popular
Bank (formerly Laiki Bank, Cyprus), Hellenic
Bank and Universal Bank. The banks will
roll out the new cards during the next two years, as they replace
existing magnetic stripe cards with EMV cards as their expiry date
approaches.
• Visa Commercial’s European Commercial
Consumption Expenditure (CCE) measurement index shows that total
business and government spending in Europe topped €16.7 trillion in
2006, the largest spend for any of the world’s geographical
economic regions. The UK has the biggest CCE total in Europe, with
a national spend in excess of €3 trillion, a figure that accounts
for 18 percent of the total European CCE for the 2006 period. The
UK’s public sector CCE spend was the highest in Europe, accounting
for €224 billion and contributing 7.5 percent to the total UK CCE
figure.
• Interbank processors MBU, GBC
and Borica – from Croatia, Hungary and Bulgaria,
respectively – and the National Payment Card
Centre of National Bank of Serbia have
confirmed their active participation in the Berlin
Group, which sets technical standards for the use of
payment cards in Europe.
• UK card issuer and fraud prevention specialist Retail
Decisions has been selected by Opodo, a pan-European
online travel company specialising in worldwide travel, to provide
fraud prevention services for its UK, German, French and Italian
websites.
• Emirates Bank of the United Arab Emirates (UAE)
is teaming up with US technology consultancy
Infospan to launch an electronic remittance
service that will enable unbanked consumers to send and receive
funds via ATMs, call centres and mobile text messaging. The service
is aimed at unbanked migrant workers in the UAE and will enable
users to send and receive money instantly around the world. Jamal
Bin Ghalaita, general manager, consumer banking and wealth
management, Emirates Bank, said the bank has received interest from
employers, merchants and government agencies to use the service by
creating a prepaid reloadable card.
• In co-operation with Visa International, Bank Audi
Syria has launched a new credit card programme, the Visa
gold card, which is the first of its kind in Syria. The card is
denominated in US dollars. Cardholders can settle their bills
through monthly payments that suit their income (10 percent of
their monthly bills), or in full, at 0 percent interest. Bank Audi
Syria said that it is aiming to issue a range of cards, including
debit and prepaid.
• Spain’s Banco Sabadell has reported that its
ClickOK programme, aimed at young people, has brought in 300 new
accounts every day since its launch in June, or more than 6,000
accounts overall. Banco Sabadell plans to gain over 50,000 new
accounts by June 2008. The ClickOK account, which comes with free
payment cards, can act as a current or savings account, with no
maintenance fees and an interest rate of 1 percent annual
percentage rate.
• Nordic banking group Nordea has contracted with
digital security vendor Arcot Systems to support
the implementation of Verified by Visa and MasterCard SecureCode
with chip and PIN authentication for customers shopping online. In
June, Nordea signed a deal with Swedish security solutions vendor
Todor Data Systems for the supply of 1 million portable smart card
readers for use in internet banking. Arcot’s TransFort system will
additionally be used in conjunction with the bank-issued smart
cards and readers to authenticate customers paying online.
• American Express has introduced its Selects
loyalty programme in Saudi Arabia. The programme provides
cardmembers with access to exclusive shopping, dining and travel
offers in over 50 countries worldwide. American Express said that
the high volume of transactions conducted by its cardmembers brings
strategic benefits to its merchant network in the Middle
East.
• Barclaycard and Kenyan retailer
Nakumatt have launched a co-branded Nakumatt Visa
credit card in Kenya. Benefits offered to cardholders include low
interest rates starting from 2.5 percent, 50 days interest-free
credit and flexible payments of a minimum of 10 percent after the
interest-free period. Barclaycard has a 65 percent market share in
the Kenyan credit card market, having 60,000 cards in issue to
date.
Latin America
• A major barrier to the development of credit and debit card
markets in Latin America is the informal nature of local economies,
Romina Abal, consultant with independent global financial services
consultancy Edgar Dunn & Co, told CI. “In
urban areas, one in two jobs is informal,” she said. “In addition,
merchants may prefer not to accept cards as they don’t wish to pay
tax and people prefer to manage their finances in cash.” Low-income
people in informal, cash-only jobs are not eligible for bank loans
or credit cards as they have no credit history. However, large
retailers are playing an important role in providing consumer
credit to under-banked people in Latin America, said Edgar Dunn
& Co consultant Ginger Schmeltzer: “In Mexico, private-label
cards issued by ten major retailers account for 50 percent of the
credit card market.”
• A McKinsey & Co survey of Latin American
retail banks reveals banks in the region have high staffing costs
because of their high volume of paper transactions and low-income
customers’ dependence on branches rather than ATMs and other
electronic channels. The top-performing banks in its survey have
staffing costs up to 42 percent less than the average Latin
American bank, it said. This is because they have kept their
teller-to-customer ratio as low as possible while persuading
customers to move their transactions to other channels. Some banks
have increased the number of branch transactions handled by their
tellers by using technology solutions such as scanning customers’
debit cards in order to confirm their identity, Mc-Kinsey
notes.
• In May 2007, credit card lending by Mexican banks totalled
MXN238.7 billion ($22.22 billion), up from MXN166.9 billion in May
2006 and MXN233.9 billion in April 2007, according to the
Banco de México. The central bank said that credit
card lending rose by an annual rate of 37.6 percent between May
2006 and May 2007 in real terms.
• US consultancy First Annapolis said that over
half the $21 billion in total global acquiring revenues is
concentrated in five large markets: Brazil, Canada, France, the UK
and the US. Unlike the four other countries, which are all
multi-party acquirer markets, Brazil has two brand-aligned
acquirers, VisaNet and MasterCard-affiliated RedeNet. However, this
structure is under pressure, First Annapolis said. It said that
Brazil generates an “enormous” revenue stream from the factoring of
credit card receivables. “The Brazilians settle with merchants on a
28-day cycle, but will settle in two to three days for a fee,” it
said.
• Brazil’s Redecard, a card processor and merchant
acquirer jointly owned by Citibank, Banco Unibanco and Banco Itaú,
has raised a total of BRL4.07 billion ($2.15 billion) from an
initial public offering on the Brazilian stock exchange.
• Brazil’s 83.8 million credit cardholders are expected to spend
BRL15.6 billion on their credit cards in July 2007, 20.1 percent
more than in July 2006, predicts Banco Itaú. The
forecast average value of an individual credit card transaction in
July is BRL92, up from BRL90 in July 2006. In June 2007, Brazilians
spent BRL14.8 billion on their credit cards, up from BRL12.3
billion in June 2006.
• American Express Bank (México) has been included
in Revista Expansión’s list of the 500 most important companies in
Mexico. The Mexican business magazine published the latest edition
of its annual list in its June 2007 issue. According to Revista
Expansión, American Express Bank, with MXN3 billion in sales and
MXN340 million in net profits in 2006, is among the 15 largest
banks in Mexico. The rankings by Revista Expansión are based on the
number of employees, sales growth, efficiency and profits in
2006.
• Experian said its Americas division increased
its sales volume by 8 percent in its first quarter ending 30 June
2007. The Americas division includes Brazil and the US. During the
first quarter, Experian bought two Brazilian agencies, credit
reference firm Serasa and direct marketing
services provider Informarketing.
• Amsterdam-based chip card vendor Gemalto said it
has delivered Mexico’s first smart card driving licence to the city
of Monterrey in Nuevo León state. The contract calls for Gemalto to
supply 900,000 driving licences over three years. The smart card
can also act as an identification document. There is the potential
for other e-schemes such as health care to be loaded on the card,
said Gemalto.
• Global Pay Solutions Inc (GPSI) has signed an
agreement with the Liga Municipal Dominicana (LMD,
Municipal Dominican League) to provide payroll cards to 70,000
municipal workers in the Dominican Republic. The deal will provide
US-based payroll card issuer GPSI with initial revenues estimated
at $400,000 from the purchase of the cards by the government body.
GPSI said that it expects to receive card service transaction fees
of around $3 per card each month, worth total estimated annual
revenues of $2.52 million, as a result of the deal. LMD provides
payroll services and payment facilities to municipal agencies in
the Dominican Republic. GPSI said that GPSI-Dominica has plans to
provide prepaid payroll card services across Latin America and the
Caribbean region.
• InComm says its Mio Money Prepaid MasterCard and
Mio Now cards are now available to consumers with no monthly fees
attached. The US-based prepaid card issuer says that offering
reloadable prepaid cards without monthly fees represents a
significant breakthrough in the prepaid card market and will save
individual cardholders hundreds of dollars in fees. The two InComm
cards, which are issued by Sioux Falls, South Dakota-based
BankFirst, are available in the US and Puerto Rico. All InComm’s
prepaid cardholders have automatically been transferred to the
company’s new no-monthly fee programme.
• Wells Fargo has launched the ExpressSend money
remittance service, which offers free or low-cost international
fund transfers for customers who have Wells Fargo checking or
savings accounts. These customers can send funds directly from
their Wells Fargo account to unbanked recipients in Mexico, El
Salvador, Guatemala, Vietnam and the Philippines. “Whether or not a
customer pays a transaction fee depends on the accounts they hold
with Wells Fargo,” a bank spokesperson told CI. “People who do have
to pay a fee will see it discounted by 50 percent.” To promote the
service, all ExpressSend customers will have no transaction charges
until 30 September 2007. Customers can choose to have money sent
from their Wells Fargo account either to a recipient’s bank account
or to a bank branch if they are unbanked. Recipients are able to
withdraw the funds at ATMs if they have an ATM card.
North America
• Total outstanding consumer credit rose by an annual rate of 6.4
percent in May 2007 to $2.4 trillion, according to the US central
banking system, the Federal Reserve. Revolving consumer credit,
including credit card debt, rose by an annual rate of 9.8 percent
in May 2007 to $894.8 billion. In May 2006, total consumer credit
rose by an annualised rate of 2.4 percent to $2.2 trillion, while
revolving consumer credit rose by an annualised rate of 9.9 percent
to $812.5 billion.
• Banks and credit card associations are not liable when credit
cards are used to purchase pirated material on the internet,
according to a US court case. The ruling was made by the San
Francisco, California-based US Court of Appeals Ninth Circuit in a
case brought by publisher Perfect 10, whose website and magazine
feature nude models. Perfect 10 was suing Visa, MasterCard and
several affiliated banks and data services providers for processing
credit card payments made to websites that infringe Perfect 10’s
intellectual property rights.
• AccountNow, a San Ramon, California-based
marketer of MasterCard- and Visa-branded prepaid cards, has secured
$12.75 million in a third round of venture funding led by Trident
Capital. The funds are to be used for introducing new services and
expanding AccountNow’s share of the unbanked consumer market, the
company said. Other investors in the latest funding round include
Invesco Private Capital, Oak Hill Investment and AccountNow’s CEO,
Tim Coltrell.
• American Express (Amex) is ending its prepaid
Travelers Cheque Card programme, introduced in 2003. Spokesperson
Robert Sherman told CI that Amex found users of the company’s
paper-based Travelers Cheques had proved reluctant to migrate to
prepaid cards. “We are winding down sales of our Travelers Cheque
Cards, and giving existing cardholders until 31 October 2007 to use
up the funds stored on their cards,” Sherman said. “There is a
strong loyalty among our customers to paper Travelers Cheques.”
Amex charges holders of its Travelers Cheque Cards a $14.95
issuance fee, a $5 reload fee and a $2.50 fee for ATM use.
• Citigroup’s US wealth management arm
Smith Barney has joined Citi’s ThankYou Network
rewards programme. Smith Barney clients will now be able to earn
ThankYou Points for using Smith Barney products and services. Smith
Barney will offer the rewards programme to clients with a Financial
Management Account (FMA). Clients will receive one ThankYou point
per dollar spent on purchases made with their FMA card linked to
their FMA account. They will also be able to pool Smith Barney
ThankYou points with points earned through their Citi credit cards,
Citibank accounts and Expedia purchases.
• Although data breaches involving sensitive personal information
are frequent in the US, evidence of resulting identity theft is
limited, say a report by the US Government Accountability Office
(GAO). Between January 2005 and December 2006, the GAO counted 570
data breaches occurring at federal, state and local government
agencies, retailers, financial institutions, colleges and
universities, and medical facilities. However, most breaches have
not resulted in detected incidents of identity theft.
• MasterCard has signed an agreement with US
prepaid card network operator Green Dot to allow
MasterCard- and Maestro-branded prepaid cards to be reloaded at
merchants belonging to the Green Dot Financial network. The
agreement involves only cards that are enrolled in MasterCard’s
US-based rePower POS load network. Green Dot has over 40,000 retail
locations across the US in its prepaid card issuing and reloading
network, including outlets of Wal-Mart, CVS, Walgreens and Radio
Shack.
• Canadian retailer Hudson’s Bay Company (HBC) has
signed an agreement with MasterCard to introduce EMV chip
technology in its 570 stores across Canada. HBC said several of its
stores in Kitchener-Waterloo, Ontario will participate with
MasterCard in Canada’s market trial of chip cards. The trial, which
will involve MasterCard, Visa and Interac – Canada’s debit scheme –
along with a number of retailers, issuers and acquirers, will be
launched in early 2008. HBC said it is committed to making its
retail locations chip-ready by 2011.
• National Bank of Canada is to carry out an EMV
chip and PIN card pilot in St-Jérôme, Quebec, in summer 2008. The
aim of the pilot is to test the Montreal, Quebec-based bank’s ATMs
and transaction processing systems for compatibility with EMV.
National Bank also plans to participate in Canada’s industry-wide
chip technology trial in Kitchener-Waterloo.
• US payment gateway provider Merchant Link and
POS technology provider Panasonic Systems
Solutions are jointly rolling out credit and debit card
processing in 40 restaurants belonging to 17 fast food restaurant
franchisees. Through its siteNet system, Merchant Link will connect
the restaurants to the Amex, Discover, MasterCard and Visa payment
card networks. Additional agreements with other franchisees and
national chains are expected.
• San Diego State University (SDSU) has selected GE Money to
provide affinity credit cards to its 150,000 alumni. The MasterCard
credit cards issued by GE Money will carry an SDSU
brand and offer rewards such as university-branded merchandise and
tickets for sporting events. The university’s proceeds from the
card scheme will go to support its alumni association
programmes.
• Canada’s Scotiabank has appointed Robin Hibberd
as executive vice-president, Domestic Personal Lending &
Insurance, and as president and CEO, Scotia Mortgage. Hibberd is
responsible for Scotia-bank’s domestic consumer lending business
units, including mortgages, credit cards, personal loans and
insurance, as well as credit risk management.
• TD Visa, the credit card arm of Canada’s TD
Bank, has redesigned the TD Visa Travel Rewards Centre website as a
travel-booking site. TD Gold Travel Visa and TD Business Visa with
Travel Rewards cardholders can now use the site 24/7 to redeem
their TD Points for trips, it said. They can also research and
purchase travel on the site, using their TD cards to make up any
shortfall in their TD Points. Cardholders who book trips via the
site before 31 August 2007 will be entered in a contest to win a
week for four at Club Med as well as 160,000 TD Points.
• Wells Fargo and Visa USA are to
launch a mobile payments trial this summer involving 30 to 50 Wells
Fargo employees. The trial will test the use of mobile phones
equipped with near field communication technology to make Visa
payWave contactless payments at the POS. This autumn, the pilot
will be widened to include 300 to 500 Wells Fargo credit card
customers, the companies say.
