• Australian payment solutions provider OnCard
International said it has reached its 2010 target of 10
million retail loyalty cards in issue in Asia and recorded a profit
for the first time. OnCard’s joint venture in China, Shanghai Smart
Service Company, has leveraged China’s favourable fringe benefits
tax laws to make its employer-issued SmartPass card the leading
legal gift card in China, accepted at 3,000 retailers.
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• China-incorporated foreign banks will have to delay the issuance
of renminbi-denominated cards as the People’s Bank of China will
require them to establish bank card data centres before issuing the
cards. The Bank of East Asia, HSBC, Standard Chartered
Bank and Citibank, the first four locally
incorporated foreign banks in China, have applied to the Chinese
authorities to issue renminbi cards, and had expected to receive
approval soon. The foreign banks are lobbying the Chinese
authorities in order to reach agreement on the bank card data
centres.
• Chinese hotel chain 7 Days Inn and China
Merchants Bank have jointly issued credit cards in Beijing
in order to accelerate 7 Days Inn’s hotel business expansion. The
general manager of China Merchants Bank’s credit card centre, Zhong
Jiwei, said that the initiative is a result of the bank’s
continuous co-operation development with enterprises in other
industries. China Merchants Bank has jointly issued three credit
cards with hotels.
• UK-based Asia-focused banking group Standard
Chartered hopes to launch credit cards in China by next
year. If successful, the bank expects to launch a dual-currency
card for its wealthier customers as well as small- and mid-sized
corporate customers.
• India’s HDFC Bank has launched a Visa Signature
credit card for high-end customers. The card has been positioned
above all other premium products in the market and will be offered
only by invitation. Cardholders will get special offers on various
HDFC Bank products including auto loans, loans against shares and
foreign exchange services, as well as exclusive privileges from a
wide array of global partners. HDFC has 3.5 million of the nearly
28 million credit cards issued in India, accounting for a 15 to 20
percent market share.
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By GlobalData• The Life Insurance Corporation (LIC) of India
has signed a memorandum of understanding with Corporation
Bank, GE Money India, LIC Housing Finance
and LIC Mutual Fund to create a new credit card
company. The companies are expected to finalise definitive
agreements for the proposed joint venture by the end of October
2007. The proposed venture is expected to leverage LIC and
Corporation Bank’s brand and extensive branch, ATM and sales
distribution network, and GE Money’s global expertise in credit
cards, business management processes and technology-driven
platforms.
• Indian state-run lender Bank of Baroda is
scouting for a partner to revive its loss-making credit card
business. The bank is considering merging its banking and cards
divisions or linking up with a strategic partner with knowledge in
the credit card business.
• Japan’s Toho Bank is teaming up with Visa’s
VJA Group to launch its own integrated cash and
credit card in October 2007. The new credit card will combine
functions of credit and cash cards, and also has the security
feature of an integrated circuit chip. Toho says it will continue
to push its credit card business as the core of its individual
retail operations.
• Citibank Korea is planning to launch a new brand
campaign in Korea in a bid to expand the customer base for its
credit card products. Citi said it is aiming to change consumers’
perception of Citi credit cards as being available to only a select
few. Citi currently has about 3.2 million cardholders in
Korea.
• Malaysia’s Citibank Berhad is targeting 25
percent growth in card spending over the next three months with the
launch of Citibank’s KLCC Mall Mania promotion. According to cards
business director Vipin Agrawal, the bank, which had a 20 percent
market share with more than 1 million credit cardholders, will
target its existing credit card customers for this growth.
• Credit card receivables in the Philippines stood at PHP102
billion ($2.16 billion) as of the end of June 2007. The
Bangko Sentral ng Pilipinas, the country’s central
bank, said the latest figure is 5.8 percent higher than the
previous quarter’s total of PHP96.4 billion and 24.6 percent higher
than the year-ago figure of PHP81.9 billion.
• Malaysia’s Maybank will be launching a range of
new card benefits to target Singaporean visitors travelling to
Malaysia for business and leisure. This is intended to boost
overseas credit card transactions in Malaysia by 30 percent
annually. Credit card transactions in the country currently
contribute to slightly over 30 percent of Maybank Singapore’s
overseas revenue, and this contribution is targeted to grow to
almost 40 percent of overseas revenue.
• GE Consumer Finance and American
Express have launched a co-branded card in Japan. The card
is designed specifically for people in their late 20s and early 30s
seeking to enhance their status. According to both companies, there
is a strong unmet demand in the market for a credit card that
caters to this particular customer group. GE Money has also gained
the right to offer other co-branded American Express cards to
organisations in Japan.
• Japanese card consortium JCB and its
international subsidiary, JCB International, have
announced the launch of the Breeze Center JCB Card with the
J/Speedy contactless payment programme, in alliance with
Union Bank of Taiwan. This will be the first card
in the world to feature the J/Speedy contactless functionality.
J/Speedy is a global standard-based contactless payment solution
developed by sharing Visa Asia-Pacific’s contactless specification
for common merchant acceptance.
• Taiwan’s outstanding revolving credit decreased by NT$150 billion
($4.55 billion) from the end of last year to NT$299.3 billion at
the end of July of this year, according to the statistics released
by the Financial Supervisory Commission (FSC). In
the last six months there was a total of 19.56 million credit cards
in use, a sharp fall of at least 5 million to 6 million from the
end of last year. The drop in revolving credit was primarily a
result of most issuing banks recently suspending the issuance of
new cash cards to avoid possible bad loan risk.
• The Bank for Foreign Trade of Vietnam
(Vietcombank) and Visa
International have issued a new debit card, the
Vietcombank Connect24 Visa card. According to Visa International,
118,000 Visa debit cards have been issued so far in Vietnam.
Europe, Middle East, Africa
• Global payment processor First Data
International has been selected to handle credit card
processing for Germany’s Dresdner-Cetelem
Kreditbank, a specialist consumer finance company
providing consumer credit and credit card solutions to retail
businesses. Dresdner-Cetelem Kreditbank is a joint venture of
Cetelem, which is a subsidiary of the French BNP Paribas Group, and
Dresdner Bank.
• Saudi Arabia’s National Commercial Bank (NCB),
the country’s leading banking institution, has launched a unique
monetary bonus programme with multiple levels of earning for NCB
credit cardholders on all domestic and international card payments,
applying to everyday spending on goods and services. According to
NCB, this is the first time such a scheme has been launched in the
Middle East. Existing cardholders do not need to pay for the
programme and they are automatically enrolled. NCB is partnering
with selected merchants where customers will earn extra bonuses
varying from 2 to 15 percent when using their NCB credit
card.
• Cairo Amman Bank (CAB) has launched a special
Visa card offer for public university students. The tailor-made
offer enables students to independently manage their financial
needs through the provided benefits of the CAB revolving credit
card, which can be obtained free of charge for the first
year.
• First Data International has announced that it
is the first independent payments processor approved to offer debit
card processing services for both cross-border and domestic
payments in Germany. First Data successfully applied to Germany’s
ZKA (Central Credit Committee, owner of the
national electronic cash system) to act as a central gateway for
the processing of national debit card transactions in Germany. This
means that First Data is now permitted to offer routing and
switching services for German banks on both the issuing and
acquiring sides of the business. Card issuers can now also call
upon authorisation services from First Data in support of their
national debit card business, consolidating service provision for
the processing of all their debit card transactions.
• Payment processor TSYS Europe has appointed
Arnold Sneijers, a veteran of the European payments industry, as
its European sales director. He will be responsible for all sales
efforts in continental Europe. Most recently, he was director of
commerce and business development at SiNSYS, the first pan-European
interbanking company serving the card payments industry.
• TSYS Europe has been chosen by the UK’s
Nationwide Building Society to handle credit card
processing, and the construction, operation and management of a
customer call centre. TSYS replaces rival processor First Data as
the building society’s card processor, and will begin servicing
Nationwide’s 1 million-plus credit card Visa accounts in early
2008.
• UK prepaid solution provider IDT Finance has
announced the UK launch of a range of prepaid MasterCard products.
The launch of the Prime reloadable and twin cards follows the
successful trial of the disposable Prime card in the London region
earlier this year. The base prepaid card can be upgraded through
registration to become reloadable and/or to have additional
cardholders on one account.
• Citibank is to offer fee-free instant money
transfers between accounts in the UK and Poland through a link-up
with sister bank Citibank Handlowy in Poland. The Citibank Easy
Account features no monthly fee for account maintenance and a Visa
debit card that can be used to make purchases and to withdraw cash
at 35,000 ATMs across the UK. According to the Polish Ministry of
Finance, in 2006 Polish immigrants sent €4.5 billion ($6.2 billion)
to their families in Poland. The countries with the largest Polish
populations are the US (9 million), Germany (2 million) and the UK
(1 million).
• UK newspaper The Sun has teamed with UK prepaid
solution provider Tuxedo Money Solutions to launch
a prepaid chip and PIN MasterCard. The newspaper is marketing the
card to its readers across the newspaper and website as an easy way
to manage money and avoid overspending. The card can be topped up
free of charge at PayPoint facilities until March 2008, and at high
street bank branches, by bank transfer, credit or debit card, or
directly from the salary or benefits of users.
• UK banking group HSBC is investigating ‘out of
band’ authentication security for online banking – in which unique
ID log-in codes are communicated by telephone – as a possible
alternative to the two-factor card reader programme backed by UK
payments association APACS.
• Following its recent appointment as the principal
Visa member for Malawi, the National Bank
of Malawi has chosen payment processor Nomad’s Cortex
software platform to support its migration to Visa EMV debit card
issuing and ATM/POS acquiring. Cortex is a fully EMV-enabled
scalable card processing solution, and will provide the technology
the bank needs to offer full Visa compliance, thereby enabling it
to issue Visa-branded cards in addition to proprietary cards.
• German card solution provider FundsTech has
signed an agreement with its prepaid cards solutions provider,
ProCard Technologies, which will provide a prepaid
debit card solution to its South African customers. David Fann,
president of FundsTech, said: “With ProCard joining our network of
strategic partners we have increased our backlog of prepaid cards
in South Africa to over 1 million cards. When you add this to our
recent announcements in the United States and pending expansion
into Europe, 2008 should be a break-out year for FundsTech.”
• National Bank of Abu Dhabi has announced plans
for the roll-out of its new partnership with LUUP,
a mobile payment service provider in Europe and the Middle East, to
permit secure money transfers and payments to registered users
worldwide. The plan will be rolled out in phases over a six-month
period. In its final phase, LUUP’s payment technology will allow
registered users in the UAE to use their mobile phones to make
secure payments and money transfers to any bank, merchant or
government service (such as utility bill payments), or
person-to-person, across the world.
• Global payment processing solution provider
Postilion has been selected by Lukas
Bank of Poland to provide the payment processing engine
for its credit and debit card issuing and processing services.
Lukas Bank selected Postilion to support the growth plans of its
cards business and to allow it to bring selected outsourced
operations in-house. Lukas Bank, part of the Crédit Agricole group
and one of the largest issuers of credit cards in Poland with over
1.3 million cards in circulation, provides co-branded and store
cards for a range of retailers.
Latin America
• US banking consultancy First Annapolis says
Latin American credit card issuers are taking advantage of economic
stability to expand their customer bases. They are targeting
previously underserved segments such as low-income households by
increasing the breadth of their product offerings, prospect
marketing and approval processes, it says. Colombia and Mexico are
examples of this trend, which First Annapolis has also observed in
many other Latin American countries. Colombian credit bureau
DataCrédito says the number of individuals in
Colombia with at least one general-purpose or private-label credit
card account grew 80 percent in four years to 3.1 million in 2006.
The Bank of Mexico says total Mexican credit card accounts rose by
23 percent between 2002 and 2006 to 10.7 million, including 2.1
million new accounts.
• Purchases made with credit, debit and private-label cards in
Brazil in the first half of 2007 rose by 20 percent year-on-year to
BRL139.9 billion ($71.14 billion), says ABECS
(Association of Brazilian Credit Card Companies and Services).
Total payment card transactions rose by 16 percent to 2.35 billion
in the first half of 2007 from 2.02 billion a year earlier. In June
2007, there were 406 million credit, debit and private-label cards
in Brazil, up from 360 million in June 2006, ABECS says.
• In July 2007, there were 422 million payment card transactions in
Brazil, up 17 percent year-on-year, ABECS says. Total card
purchases rose 22 percent year-on-year to BRL25.3 billion.
ABECS says July 2007 was the second month – the
first being December 2006 – when Brazilian credit card transactions
exceeded 200 million. In July 2007, there were 201 million credit
card transactions, 155 million debit card transactions and 66
million private-label card transactions.
• Banco do Brasil and telecom operator
Telefonica have launched a credit card in Brazil
for Telefonica’s 12 million subscribers in the state of São Paulo.
The card enables users to pay for retail purchases as well as for
long-distance telephone calls and other telecoms services. Banco do
Brasil has also launched a co-branded Visa credit card with
bookstore chain Livraria Saraiva.
• Brazil’s Banco Itaú has launched a promotion for
its Itaucard credit cardholders with the tagline ‘Itaucard pays for
your shopping’. Provided they use their cards during the promotion,
which ends 31 December 2007, cardholders are automatically enrolled
in a sweepstake for thousands of prizes each worth BRL400.
• Dublin, Ireland-based processor Freestar
Technology says it is planning to roll out card payment
services in the Dominican Republic. Freestar has signed a contract
to buy Hypercom’s EMV-compliant Optimum T2100 card
readers. This deal represents the first major order of POS
terminals in the Dominican Republic, Freestar says. Following its
deal with Hypercom, Freestar says, it expects increased sales of
both terminals and transaction processing services in the Dominican
Republic. European tourists visiting the island state spend over
$1.3 billion a year, it claims.
• European smart card manufacturer Gemalto has
opened a new chip card personalisation service centre in Brazil.
The centre, in the state of São Paulo, will serve Gemalto’s finance
and public sector customers in Argentina, Brazil, Paraguay and
Uruguay. Gemalto also has a production facility in Paraná, Brazil,
which has been making chip cards since 1999. Gemalto says it
decided to open the new personalisation centre in Brazil because of
the strong demand for EMV chip cards in the country. Over 20
million bank-issued credit and debit cards have already been
migrated to EMV in Brazil, it says.
• National Commercial Bank of Jamaica says its net
fee and commission income rose by J$404 million ($5.83 million), or
17 percent, year-on-year in the nine months to 30 June 2007. The
rise was mainly attributable to growth in card and other retail
banking related fees, it says.
• Trinidad and Tobago-based Republic Bank has
launched the Republic Bank AAdvantage/MasterCard Gold which offers
5,000 free miles for travel on American Airlines and its One World
Alliance partners. The card carries a minimum credit limit of
$5,000. Cardholders earn one mile for every one US dollar or
Trinidad and Tobago dollar equivalent spent on the card.
• Grupo Scotiabank, the Mexican subsidiary of
Canada’s Scotiabank, says its personal lending
book including credit cards rose by MXN836 million ($75.52
million), or 5 percent, year-on-year to MXN18.57 billion in the
second quarter of 2007. Credit quality remained stable, but there
was a slight increase in delinquency in the bank’s credit card
portfolio. In the second quarter of 2007, the bank had MXN181.9
million in credit card commissions compared to MXN161 million in
the second quarter of 2006. In May 2007, Grupo Scotiabank launched
the Scotiabank Fiesta Rewards Platinum credit card, targeted at its
most affluent customer segment.
• Scotiabank has signed agreements to buy 79
percent of Banco del Desarrollo, Chile’s
seventh-largest bank, for $810 million. Scotiabank says it plans to
purchase up to 100 percent of the bank. It is buying the 79 percent
stake from the Chilean bank’s main shareholders and the deals are
expected to close in November 2007. Banco del Desarrollo
specialises in consumer finance and business lending, and has 74
branches. Scotiabank’s Chilean unit, Scotiabank Sud Americano, has
57 branches. The combined operations will create Chile’s
sixth-largest bank, but the two brands will remain separate,
Scotiabank says.
• Indian software firm Sybase 365 has launched a
mobile banking platform for banks in the Americas. The platform
uses a one-time PIN, which is transmitted via text messaging, to
validate account access and authorise transactions. Sybase 365 also
surveyed mobile phone users in Argentina, Brazil, Canada, Mexico
and the US. It says 66 percent of respondents are interested in
being able to check bank balances via mobile phones. Also, 63
percent of respondents are concerned about the security of banking
online via PCs.
• US-based processor TSYS says its Mexican
revenues for the three months to 30 June 2007 were $3.3 million, up
from $2.9 million a year earlier. Mexican revenues for the first
half of 2007 rose to $6.5 million from $5.4 million in the same
period of 2006.
• POS terminal vendor VeriFone says its Latin
American revenues in the three months to 31 July 2007 rose by 78
percent year-on-year to $42.7 million. Latin American revenues for
the nine months to 31 July 2007 rose by 68 percent year-on-year to
$124.8 million. VeriFone says it has made inroads into equipping
Mexico City taxi cabs with card readers..
North America
• Most US baby boomers and their children, known as echo boomers,
believe cash is on the way out, a Visa USA study
says. Some 79 percent of baby boomers, born between 1946 and 1964,
and 74 percent of echo boomers, born between 1979 and 1989, believe
that eventually all payments will be conducted electronically, the
study reveals. By 2015, these two groups together will account for
50 percent of US consumer spending.
• Net US credit card charge-offs rose by $393 million, or 12.1
percent, to $3.6 billion in the second quarter of 2007 from $3.2
billion in the second quarter of 2006, the Federal Deposit
Insurance Corporation (FDIC) says. In the first quarter of
2007, net credit card charge-offs rose by 29.2 percent from an
unusually low first quarter of 2006. Credit card loans rose by
$18.7 billion, or 5.3 percent, to $372.9 billion at 30 June 2007
from $354.2 billion at 31 March 2007. An FDIC spokesperson says
there was a large surge in bankruptcy filings before the
introduction of new bankruptcy rules in October 2005. “This led to
a one-time spike in credit card charge-offs in the fourth quarter
of 2005, followed by a sharp drop-off in charge-offs in the first
quarter of 2006,” he says.
• The American Bankers Association (ABA) has
created an online resource to help consumers understand their
credit cards. Visitors to http://www.aba.com/ will be told about
annual percentage rates, grace periods, late payments and minimum
payments. They will also learn how charges are allocated to
outstanding balances and how to choose the right card. The ABA
initiative comes against a background of increasing federal
regulation of credit card disclosures.
• Greetings cards retailer American Greetings says
its stores will sell gift cards on behalf of other retailers. From
mid-September 2007, its US stores, which operate under the American
Greetings and Carlton Cards brands, will sell gift cards for 16
companies, including American Express, Blockbuster and Starbucks.
Starting late autumn 2007, American Greetings’ Canadian stores will
also sell gift cards on behalf of other retailers.
• Miami-based telemarketers who fraudulently marketed pre-approved,
advance-fee Amerikash MasterCard cards have been banned from
telemarketing by the Federal Trade Commission
(FTC). As an incentive to buy the cards, consumers were offered
free phone cards. The ban also prevents the defendants from selling
similar goods and services in the future by any method. The FTC
says the fraudsters took $4 million from Spanish-speaking
consumers, but in many cases did not deliver the promised cards.
The defendants – Remote Response, Instant Way and their owners –
were ordered to reimburse $4 million to consumers.
• Oil company Chevron’s Chevron USA and
Chevron Credit Bank subsidiaries are to sell their
proprietary credit card businesses to GE Money,
the consumer financial services arm of General Electric, and US
fuel card processor FleetCor Technologies. Chevron
says GE Money will own and operate its Chevron- and Texaco-branded
consumer cards, while FleetCor will own and operate its branded
commercial credit cards. The transactions, which require regulatory
approval, are expected to close later this year.
• German online payment processor ClickandBuy has
opened its second US office in San José, California in order to be
closer to Silicon Valley internet start-ups. The company already
has an office in New York.
• Discover Financial Services says it is making
its Discover Gift Cards available in retail locations for the first
time. It has signed an agreement with real estate company
General Growth Properties to make the cards
available in the latter’s malls across the US. The deal marks the
first time that the cards are available for purchase by
non-Discover credit cardholders.
• The University of British Columbia has become
the first Canadian university to offer Interac
Online payments for tuition fees. Interac Online, which is
operated by Canadian debit card scheme Interac, enables consumers
to pay for internet purchases directly from their bank accounts
without using a card.
• The Canadian government wants to create a voluntary code for
electronic funds transfers and electronic banking. Federal Finance
Minister Jim Flaherty has asked industry representatives, consumer
groups and provincial governments to participate in a working group
to develop the code. He says the new code will build on the
existing Canadian Code of Practice for Consumer Debit Card
Services. The government wants the new code to address new payment
methods such as Interac Online.
• MBNA Canada has teamed up with Canadian retail
loyalty scheme Futura Loyalty Group to issue the
Futura Rewards MasterCard credit card. Cardholders will earn up to
2 percent in Futura Rewards on eligible retail purchases up to an
annual maximum of C$750 ($748).
• US home and office furnishing retailer Office
Depot is to accept Visa payWave, MasterCard PayPass and
Amex ExpressPay contactless cards at its 1,100 US retail stores.
Most contactless card purchases under $25 will not require a
signature. According to Visa, Office Depot is the first US office
supply retailer to accept contactless cards.
• RBS Lynk, Royal Bank of Scotland’s US processing
arm, is to provide card processing services for D’Agostino
Supermarkets, which has 20 stores in the New York area. The chain
accepts over 5 million card-based purchases annually.
• RBS Lynk has appointed Nicholas Sommerio as CFO.
He previously worked for First Data and Global Payments.
• US discount chain and credit card issuer Target
posted net credit card revenues of $453 million for its second
quarter ended 29 August 2007, up 17 percent on the year-ago figure
of $388 million. Credit card operations made a $163 million
contribution to Target’s second quarter earnings before taxes, up
$41 million, or 34 percent, from the year-earlier quarter. Target
attributes the rise to a growth in net interest income and other
finance charges. It issues a Visa card and a private-label store
card.
• Visa Inc has appointed Byron Pollitt, Jr as CFO.
He was previously CFO at US retailer Gap. Visa Inc also named the
members of its post-restructuring board of directors, which will be
set up once it becomes a publicly traded company. As well as Visa
Inc. chairman and CEO Joseph Saunders, the board will comprise ten
independent directors and seven directors from each of Visa’s
geographic operating regions. The directors will include Segismundo
Schulin-Zeuthen, chairman of Visa Latin America and Caribbean, and
former BBVA Bancomer senior executive Francisco Javier
Fernandez-Carbajal.
