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May 18, 2007updated 24 Jan 2022 7:36am

Region Round-Up

A security index from Unisys, the global IT consultancy, found that Singaporeans were more concerned about identity and credit card theft than they were about terrorism and war... Ukraines UkrGasBank has been certified to issue chip cards according to the current requirements of MasterCard

By Verdict Staff

• A security index from Unisys, the global IT consultancy, found that Singaporeans were more concerned about identity and credit card theft than they were about terrorism and war…

• Ukraine’s UkrGasBank has been certified to issue chip cards according to the current requirements of MasterCard. UkrCard Interbank Processing Centre has also been certified…

• Australian smart card technology vendor Keycorp says Mexico’s Banamex has started issuing both Visa and MasterCard EMV chip cards using Keycorp’s Multos smart card software…

Asia-Pacific

China Construction Bank will partner with Bank of America to set up its credit card business and eventually launch a joint venture. The joint venture will be 63 percent owned by China Construction Bank and 37 percent owned by Bank of America. The venture is expected to break even its seventh year of operation. Bank of America spent $3 billion for an 8.52 percent stake in China Construction Bank in 2005.

• Over China’s one-week May holiday, transactions rose 31.4 percent year-on-year, according to payment technology and services provider China UnionPay (CUP). Transaction value went up 59.8 percent to CNY46.19 billion ($6 billion) over the same time period a year ago. Transaction volume outside China – CUP’s cards are accepted in 24 countries – rose 125.6 percent to 361,000, while the value increased 79 percent to CNY1.11 billion during the period.

Bank of East Asia (BEA) in Hong Kong has launched a promotion encouraging customers to sign up for a BEA current account and credit card. Customers who have their salary credited to a BEA current account will receive a cash bonus based on 3 percent of their net monthly salary. The bonus is credited to the bank’s credit card for the customer to spend.

• India’s entertainment group Pyramid Saimira Theatre will launch a prepaid biometric identification card costing INR100 ($2.45) per month. The card will enable cardholders to watch up to 120 shows a month. The company expects to enrol 5 million members in the first year.

Corporation Bank of Mangalore in India is launching a credit card in association with Visa and aims to have 1 million cardholders in three years.

• India’s UTI Bank has launched a merchant-driven card rewards programme using technology from payment software provider Welcome Real-time. UTI Bank Spice Rewards, as the programme is known, will be available to the bank’s 150,000 credit card and 6 million debit card holders.

• A security index from Unisys, the global IT consultancy, found that Singaporeans were more concerned about identity and credit card theft than they were about terrorism and war. Some 87 percent of Singaporeans said that they were extremely or very concerned about unauthorised access to or misuse of their personal information. Another 83 percent said they were extremely or very concerned about other people obtaining their credit and or debit card details, while 77 percent said they were extremely or very worried about the prospects of a health epidemic. The company surveyed 908 adults aged 18 to 64.

HSBC has refuted allegations that is the target of a probe by India’s anti-monopoly watchdog for violating Reserve Bank of India guidelines by imposing false charges on its credit card customers. In a statement, the bank said: “We comply with requisite rules and regulation in the conduct of the business and strongly deny all the allegations.”

Aeon, a major retailer in Japan, has begun issuing Waon smart cards for electronic payments. The card can be used at 100 Aeon-run outlets in a pilot project and will extend to 23,000 stores by the end of fiscal year 2008. Cardholders can make purchases up to ¥20,000 ($166) and electronically transfer money to Aeon through terminals at retail stores. Cardholders will also receive one point for every ¥100 of purchases. The retailer will begin operating a banking unit and plans to set up ATMs to accept the cards. It expects to issue 8 million cards in the first year.

• In land-scarce Singapore, the Spiritual Grace Memorial Garden columbarium has introduced an interest-free instalment plan paid via credit card for niches in which to store cremated remains. The plan has been introduced following customer requests for family spaces that can cost more than S$10,000 ($6,600). The instalment plan allows people to pay off the amount over six months to two years, depending on the credit card used.

• Thailand’s Provincial Electricity Authority will pilot a prepaid electricity meter service that allows customers to buy a prepaid card costing BHT3,700 ($111) to pay for electricity. Targeted at owners of resort homes in the provinces, the prepaid meter will cater for both contact and contactless smart cards. The authority will buy 3,000 meters worth BHT18.5 million and the cards will be available at 7-Eleven outlets and other stores near the resorts.

• Despite the Thai economic slowdown, non-bank credit card companies in Thailand have expanded their branch network according to Bank of Thailand, the kingdom’s central bank. Branch numbers have increased by 83 quarter-on-quarter and totalled 515 as of the first quarter of 2007. Cetelem opened the highest number of branches.

Citibank has launched a mobile reload service in the Philippines which will allow cardholders to reload their prepaid mobile phones by sending a text message to the bank.

• Thailand’s Bank of Ayudhya has introduced a cardless ATM money-transfer service in its first product launch since entering into partnership with GE Money. Customers can transfer up to BHT20,000 per transaction and BHT100,000 per day via the bank’s electronic channels by using a mobile phone. The transaction comes with a BHT30 fee. ATM money transfers at other banks cost BHT20 to BHT35 per transaction.

Thanachart Bank, a bank recently formed from a finance company in Thailand, will launch its credit card business in 2008 and targets 100,000 customers in the first year. Credit cards will be the platform the bank uses to cross-sell into other business such as personal loans. Its Canadian partner, Scotiabank, is expected to transfer its expertise in the credit card business.

Kasikornbank in Thailand plans to target market campaigns at cardholders who are frequent travellers in a bid to make its offering stand out. A senior executive at the bank highlighted that the credit card business in Thailand takes two years to break even and rapid expansion of the customer base is important for economies of scale.

• The National Credit Bureau in Thailand is proposing a revision of credit scoring and reporting laws. Currently the bureau can collect credit information about individuals and sell it only to institutions and individual customers. The proposal allows the bureau to provide credit information to individuals free of charge once a year. Some 4,000 borrowers have checked their credit reports filed with the bureau so far, and 250,000 borrowers have legally registered 3 million credit accounts with the bureau.

 

Europe, Middle East, Africa

Qatar National Bank (QNB) has announced the successful migration of its cards portfolio to Prime 3, the card and merchant management system of payment processor TSYS Card Tech. The conversion of the portfolio involved 81,000 card accounts, 32,000 customers and 2,300 merchants. TSYS Card Tech has 25 financial institution clients in the Middle East region, where its systems are deployed at the top four banks.

• Ukraine’s UkrGasBank has been certified to issue chip cards according to the current requirements of MasterCard. UkrCard Interbank Processing Centre has also been certified. In the near future, UkrGasBank plans to issue over 50,000 chip cards for different MasterCard cards, including Maestro debit card and MasterCard credit cards. UkrGasBank said it would initialise chip cards using its own production capacities. The initialisation office of the bank can also issue chip cards for partner banks, which are served by the processing centre of UkrCard.

American Express Middle East has launched an online payment system that enables Bahrain-based cardmembers to pay their statement bills online. The online services will be offered by 11 banks in Bahrain. Through the new online services, cardmembers will have 24/7 access to their card accounts and can view their payment history, make bill payments or print a copy of their statement.

• Denmark’s Danske Bank is removing all charges on everyday banking services for customers who use the bank’s online banking system and its ATM network. Danske said customers will no longer pay to get a Visa/Dankort card, and using the card in the bank’s ATMs will continue to be free of charge. Fees have also been removed from a number of American Express and MasterCard credit cards with insurance schemes, and ordinary overdraft facilities will be established at no cost, the bank said.

• Benelux banking group Fortis and An Post, the Irish post office, have announced that Postbank, their new community-based banking service, has commenced operations across Ireland. Postbank will extend its banking services nationally to over 1,000 post offices within 12 months and both organisations claim it will have the largest retail banking network in Ireland by the end of next year. Postbank’s initial services as an independent Irish bank will be based on two financial products, a demand deposit account and a guaranteed investment product. Over the next year the bank’s services will be extended in stages throughout the national network of post offices to include current accounts, credit cards and ATM facilities.

Standard Chartered has launched what it claims is the first global Islamic Sharia-compliant credit card, the Saadiq Visa gold card. “Based on international banking standards, the Saadiq gold credit card is tailored to meet our customers’ needs for an interest-free credit card and has been developed in strict accordance with the values of the Islamic faith,” said Owen Belman, head of the bank’s consumer banking, in the United Arab Emirates (UAE) and Oman.

• In Israel, Harel Insurance Investments and Visa CAL are launching a joint credit card and lending company. An agreement between Harel and Visa CAL lays down directives regarding the company’s operations but will need regulatory approval from the Bank of Israel and the Antititrust Authority. Previously, Harel had owned 5 percent of Visa CAL but sold the shares in January 2007 to Israel Discount Bank.

• The European Central Bank (ECB) is proposing a new framework to oversee all payment card systems using the euro in the 13-nation currency zone. The ECB said it had been monitoring risks to which card payment schemes were exposed and had developed an oversight framework for schemes that process euro payments in order to “promote a level playing field across the euro area”. The ECB said that the proposed framework applies to all card payment schemes including debit and credit cards.

MasterCard Worldwide has launched Europe’s first watch equipped with MasterCard’s contactless technology PayPass, in partnership with Garanti Bank of Turkey. Consumers can tap their new watches on PayPass readers to make the equivalent of a credit card purchase at more than 600 merchant locations in Turkey. The PayPass watch allows purchases under €15 ($20), with no signature or PIN required. Larger purchases will still require a signature.

• According to figures from MasterCard, residents of the UAE hold nearly one-third of the credit cards in the 275-million strong Middle East and Pakistan region, making it the most important local market for the credit card industry. Around 8.5 million credit cards have been issued in these emerging markets. In the UAE, the second-largest Arab nation by GDP, 2.2 million people of an overall population of 4.1 million collectively own 2.4 million credit cards. This represents 59 percent of UAE residents.

• Chinese national bank card operator China UnionPay (CUP) and Austrian payment card operator Europay Austria have signed an agreement allowing Europay to perform acquiring for CUP cards at ATMs and POS terminals in Austria and possibly other European countries. The agreement is intended to capitalise on the growing number of Chinese tourists visiting Austria and Europe.

• UK card issuer Halifax has launched a new version of its One Card product, which will incorporate a 0 percent anniversary offer. The card also offers 0 percent for nine months on balance transfers, subject to a 3 percent balance transfer fee and a typical APR of 13.9 percent, which is 2 percentage points lower than the majority of standard credit cards in the UK. The One Card will be available in three different colours to suit and can be customised at the point of application.

Visa Europe has launched SEPA HealthCheck, a new consulting service to help its member banks with the strategic and tactical choices brought about by the Single Euro Payments Area (SEPA). Visa said that SEPA HealthCheck will give banks an objective view of their SEPA programme, reviewing and benchmarking the practices and performance of core business functions on a regular basis. Jeremy Nicholds, executive vice-president of commercial development at Visa Europe, said: “Given the high costs of SEPA compliance, banking executives need to make sure that their implementation project is well thought through and stays on track.”

• German payment service provider ConCardis has agreed to open its merchants for V PAY, Visa Europe’s SEPA-compliant debit card. ConCardis will start in summer 2007 to get its customers ready to accept V PAY and to equip them with V PAY decals for the point of sale. Europe-wide, V PAY cards are accepted at more than 3.75 million payment terminals and 210,000 ATMs.

 

Latin America

• American Express (Amex) has named Carlos Pascual Jr as regional president, Global Network Services for Latin America and the Caribbean. Pascual is responsible for growing Amex’s local currency card business through alliances with financial institutions throughout the region.

• Australian smart card technology vendor Keycorp says Mexico’s Banamex has started issuing both Visa and MasterCard EMV chip cards using Keycorp’s Multos smart card software. Richard Cusson, Keycorp’s general manager, smart card technologies, tells CI that Banamex will be issuing several million EMV cards a year using Multos. “We have implemented Multos in our card personalisation centre so that we can issue both MasterCard and Visa cards using the same smart card platform,” Luis Cirerol, Banamex’s new technologies manager, says in a statement. Cirerol says Banamex has also launched a contactless payments pilot using a Multos dual-interface card (see CI 378, p6).

Banamex has rolled out 2,250 Opteva 520 ATMs since the Mexican bank started deploying the Diebold-manufactured cash dispensers in November 2004. In February 2007, Banamex also began rolling out Diebold Opteva 720 ATMs which enable customers to deposit cash into their bank accounts and pay Banamex credit card bills 24 hours a day (see CI 376, p6). Jesus Berumen Cantu, Banamex’s vice-president, remote banking, tells CI that so far the bank has installed 28 Opteva 720 ATMs. “Transactions involving these advanced ATMs are linked in real time to our customers’ accounts,” he says.

• Market research company Euromonitor predicts that the total number of payment cards in issue in Latin America will rise from 632.8 million in 2006 to 993.4 million in 2011. The total value of Latin American payment card transactions will rise from $697.9 billion in 2006 to $972.3 billion in 2011, it says. Euromonitor’s figures include debit, credit, charge and store cards. It says Latin American debit transactions will rise from $106.6 billion in 2006 to $167.9 billion in 2011.

• French transactions and payments solutions provider Ingenico says it has received orders for 90,000 Aqua POS terminals as well as a commitment for another 100,000 from customers in Latin America. The company says that it currently has over 50 percent of the Latin American POS terminal market and that it has developed strong business relationships with the region’s main acquirers. The Aqua is a new POS terminal designed for emerging markets.

Innova Card, a French developer of secure chips for POS terminals and PIN pads, has signed an agreement with Brazilian smart card technology company Planeta Informática. The deal calls for Planeta Informática to distribute Innova Card’s chips in Brazil to local manufacturers of smart card readers, PIN pads and POS terminals.

• According to Euromonitor, three Chilean store card issuers – the Falabella, Ripley and Almacenes París retail chains – had three times as many credit cards in issue as all the combined Chilean Visa, Diners, MasterCard and Amex bankcard issuers in 2006. Several store card issuers including Ripley, Falabella and La Polar have signed agreements with Chilean banks to allow their store cardholders to use the banks’ ATMs to withdraw cash, Euromonitor says.

• Brazil’s Banco Itaú says that in the first quarter ending 31 March 2007, its credit card business posted a net income of BRL162 million ($80 million), up 9 percent from BRL153 million in the fourth quarter of 2006. The figures relate to credit cards held by Itaú current account holders, including Itaúcard, Redecard and Orbitall customers. In the first quarter of 2007, the total volume of Itaú credit card transactions fell by 12.1 percent to BRL5.6 billion from BRL6.4 billion in the fourth quarter of 2006. Traditionally, credit card volumes are higher in the final quarter of the year, Itaú says. In March 2007, 82 percent of Itaú’s credit cardholders were active, according to the bank.

MasterCard says its debit, credit and charge card programmes in Latin America grew 21.8 percent year-on-year in their gross dollar volume (GDV) to $34 billion in the three months to 31 March 2007. Purchase volume totalled $16 billion at the end of the first quarter of 2007, up from $13 billion in the first quarter of 2006, while cash volume was $18 billion, up from $15 billion a year earlier. The total number of purchase transactions involving MasterCard cards in Latin America rose to 354 million in the first quarter of 2007 from 294 million a year earlier.

• In March 2007, credit card lending by Mexican banks totalled MXN226 billion ($20.91 billion), up from MXN155 billion in March 2006 and MXN221.3 billion in February 2007, Banco de México says in its latest monthly bulletin. Credit card lending rose by an annual rate of 40 percent between March 2006 and March 2007 in real terms, the central bank says.

• In 2006, BBVA Bancomer recorded the largest increase in a past due loans ratio of all the major Mexican banks, according to a Fitch Ratings report on Mexican banks. BBVA Bancomer’s past due loans ratio rose from 1.6 percent in 2005 to 2.2 percent in 2006, which is largely explained by its dominant position in credit cards and other retail products, Fitch says.

• France’s Oberthur Card Systems, providers of card-based solutions, software and applications, has won the 2006 Best Vendor Award from Santander México. Since 2004, Oberthur has supplied Santander with over 1 million smart cards for its EMV migration process, participating in all the Mexican bank’s EMV projects.

• Payment systems provider PayPal says that customers in 87 new countries, including Belize, Colombia, El Salvador, Guatemala, Guyana, Honduras, Nicaragua, Peru and Suriname, can now send money online with PayPal. In addition, customers using PayPal.com can view the site in Spanish, French and simplified Chinese.

Scotiabank Mexico says its credit card and unsecured personal lending rose by 25 percent to MXN18.18 billion in the three months to 31 March 2007 from MXN14.6 billion in the first quarter of 2006. In the three months to 31 December 2006, Scotia-bank Mexico’s credit card and unsecured lending book stood at MXN17.9 billion.

Visa International LAC says at the end of December 2006, 21.4 million Visa EMV-compliant smart debit cards were in issue in LAC. From December 2003 to December 2006, the number of Visa EMV cards in issue in LAC increased annually at an average of 129 percent. Currently, 20 percent of all Visa credit cards in LAC are smart cards, and there are over 1 million EMV card acceptance locations in the region, Visa says.

 

North America

• US consultancy Packaged Facts says that the number of contactless credit and debit cards in circulation in the US will rise from 27 million in 2006 to 109 million in 2011. It says that total US contactless card purchase volume was nearly $15 billion in 2006 and 777 million contactless transactions took place last year.

• Discount store Costco is offering a 5 percent annual rebate on sales of petrol at Costco petrol stations for customers using co-branded Costco-Amex TrueEarnings Business cards. Other benefits of the True-Earnings card include 3 percent cashback for spending at restaurants; 2 percent cashback for airline travel, hotels and car rentals; and 1 percent cashback on other spending. The rebate is received as an annual coupon that can be redeemed at branches of Costco.

First Data has made an investment in ViVOtech, a US-based provider of near field communications-based wireless payment systems. First Data is acting as lead investor in ViVOtech’s Series C round of financing. No financial terms were disclosed.

JPMorgan Chase’s Chase Card Services unit has appointed Robert Paterson as Canada card executive for Chase Canada. Paterson will be responsible for expanding Chase’s credit card business in Canada and managing day-to-day Canadian operations including marketing, customer service and strategy.

Chase Card Services has given a $38,500 grant to The George Washington University School of Business to support a research programme examining the factors that contribute to a successful debt management plan. The grant to the Washington, DC-based university is part of an overall $3.9 million in financial literacy grants that Chase is donating over three years to US organisations.

• US prepaid card processor eCommLink and South Dakota-based First Bank and Trust have developed a prepaid debit card that enables cardholders to transfer money between the card and their prepaid mobile phone account. The MasterCard-branded card will be launched in August 2007, eComm-Link says. Converting mobile phone airtime minutes to cash or cash to minutes using the card takes a few seconds, it says.

• The Massachusetts Bankers Association has launched a class action law suit against US retailer TJX to recover the multi-million dollar cost of replacing cards compromised in the company’s data breach (see CI 378 p7, CI 376 p7, CI 374 p7). The Connecticut Bankers Association and the Maine Association of Community Banks are co-plaintiffs in the class action which was filed in the US District Court in Boston, Massachusetts. The three associations together represent around 300 banks. TJX says that information on at least 45.7 million cards was stolen from its data systems.

MasterCard has teamed up with global technology company TRX to develop a tool for reporting and analysing corporate travel expenditure. The Travel Dashboard is a web-based data reporting tool that draws data from MasterCard’s corporate card programme to create reports and charts. The tool will help corporations to improve agreements with travel vendors and ensure compliance with travel policies, TRX says.

• Jim Baumgartner, president and CEO of Canadian processor Moneris Solutions, has been elected president of the Electronic Transactions Association (ETA), with effect from 1 June 2007. The ETA is a trade association for payment processors and has over 500 members from seven different countries.

• The PCI Security Standards Council (PCI SSC), the independent body that oversees the global Payment Card Industry Data Security Standard (DSS), is to hold a three-day meeting in Toronto in September. The council was set up by Visa, MasterCard, American Express, JCB and Discover in 2006. The standards provide mandatory criteria for the storage and processing of payment card data.

• Payments processor Tempo Payments (see CI 377 p11) is expanding the reach of its retailer-issued and -branded debit cards by signing an agreement with US acquirer Chase Paymentech. Tempo cards can be used at 200,000 US merchant locations which are linked to the bank-independent Tempo Payment Network. The agreement with Paymentech extends the reach of the Tempo network by another 600,000 merchant locations.

• Bill payment network Tio Network’s financial services kiosks located at Exxon and Mobile convenience stores across the US are offering reloadable MasterCard prepaid debit cards. The cards, which are aimed at unbanked customers, are issued by Meta Bank and processed by NetSpend. Once they have bought a Tio card from a Tio kiosk, cardholders can load funds onto their cards at retailers that belong to NetSpend’s US prepaid card reloading network. They can also deposit their pay cheques onto the cards. Tio’s 2,000 automated self-service kiosks in the US also offer bill payment, money transfers and cheque cashing.

• The US president’s Identity Theft Task Force has published its plan to reduce identity theft. Recommendations include reducing the use of Social Security numbers by federal agencies and educating consumers as well as public and private agencies on consumer data protection. The task force is calling for more effective prosecution of identity criminals and the provision of assistance to victims of identity theft.

Wells Fargo says it is the first US financial institution to make clean, renewable energy reward options available to its cardholders. The Wells Fargo Rewards programme now allows the bank’s consumer and business credit card and debit cardholders to redeem reward points to support renewable energy projects.

• US consumer credit excluding mortgages rose by $13.5 billion – or 6.7 percent year-on-year – in March 2007 to $2.425 trillion, the Federal Reserve says. By contrast, consumer credit rose by $5.5 billion in February 2007 and the annual increase for the whole of 2006 was 4.5 percent. Revolving loans, which include credit and charge cards, rose by 9.2 percent in March to $888.2 billion, compared to a 2.9 percent rise in February 2007 to $881.4 billion.

• Six additional US vending companies are installing USA Technologies’ e-Port cashless payment technology on their vending machines so they can accept MasterCard PayPass cards and devices. The companies participating in the MasterCard/USA Technologies roll-out are North County Vending, Five Star Food Service, A & B Vending, First Class Vending, Mid-Atlantic Vending and PGI Services. These new vending machines are part of a roll-out of 5,000 PayPass-enabled vending machines announced last year by MasterCard and USA Technologies.

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