Asia-Pacific
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• Bankcard network China UnionPay recently
announced that more than 1.3 billion debit, credit and semi-credit
cards had been issued in China by end-September 2007. To date,
China has 183 banks issuing cards, 1.08 million points of sale,
650,000 merchant outlets and 120,000 ATMs. Banks on the mainland
also issued 409 different card products in 2007 to date.
• Sky Pearl Credit Card, issued by Guangdong Development
Bank and China Southern Airlines, has
become China’s largest co-branded credit card by issuance level
after it exceeded 1 million cards issued in November
2007.
• South Korea’s Woori Bank will launch a debit
card business in China in 2008 before expanding into credit cards.
It has recently set up a wholly owned subsidiary in Beijing and
plans to expand its network to 53 branches by 2010 from five
currently. The bank is likely to acquire or buy equity stakes in
local banks.
• Mobile telecoms operator China Mobile is
expected to launch contactless mobile phone payment technology by
end-2008. According to a China Mobile executive, the payment chip
will be linked to the customer’s bank account to execute payment
and money transfer transactions.
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By GlobalData• China UnionPay’s online payment website has
launched cross-bank credit card repayments that will allow debit
cardholders to transfer money to their credit cards. China
Construction Bank, China Merchants Bank, Shenzhen Development Bank,
China CITIC Bank, China Everbright Bank, China Minsheng Bank and
Shanghai Pudong Development Bank are reportedly making use of this
system.
• China Merchants Bank and retail brand
FoxTown have launched a co-branded card which will
be the bank’s first national co-branded card, although it has
issued four co-branded cards in Shanghai where it is
headquartered.
• Jiangxi Province’s Bureau of Tourism has
launched the Jiangxi Tourism Changtong Card in collaboration with
China UnionPay. Cardholders will receive discounts
in tourist spots, shopping centres, entertainment facilities and on
accommodation and transport.
• DBS Bank (Hong Kong) has announced the
repositioning of its Black Card to include overseas consumption. A
DBS Bank executive pointed out that holders of DBS Black Cards
spend three times more in foreign countries than holders of other
cards. The bank is targeting youths with an annual income of
HK$150,000 ($19,000) to HK$200,000. The card has the second-highest
issuance after the DBS Platinum Card.
• Australia-based Bartercard is expected to enter
India in 2008, enabling customers to recharge their card with their
own goods and services, rather than cash. Cardholders spend their
credit balance or draw on interest-free line of credit on goods or
services from any other cardholder. According to the company’s
chairman, Wayne Sharpe, deposits have already been taken and
operations will commence in early 2008. Existing barter services in
India service small companies.
• In India, Deutsche Bank and book-store chain
Landmark have launched a co-branded credit card.
Cardholders will earn up to six reward points for every INR100
($2.50) spend and each cardholder will receive a Landmark gift
voucher of up to INR4,000. Landmark has ten stores in six
cities.
• A proposal has been put forth by the India’s Planning Commission
to introduce smart cards to distribute subsidised food items to
deal with corruption which has been a major challenge. The card
will allow the government to monitor and evaluate subsidy schemes
to find out whether the targeted people are receiving welfare
benefits.
• Consumer finance company Toyota Finance and
East Japan Railway will collaborate to benefit
Japanese customers using trains and cars. Toyota Finance will
introduce terminals to process transactions made with cards from
both companies in the Tokyo and Nagoya areas. A joint credit card,
provisionally named Toyota TS Cubic View Card, is also in the
works. Reward points can be used when buying cars at Toyota
dealerships.
• In Japan, ten companies including financial services companies
Mitsubishi UFJ Financial Group, Credit
Saison and Mizuho Financial Group, as
well as TPG Capital, a US private equity
investment firm, are reported to be taking part in the bid for
Japan Airlines’ stake in its wholly owned subsidiary, JAL
Card. The company is selling more than one-half of its
stake in JAL Card with the condition that the acquirer will retain
JAL’s frequent flyer programme. JAL Card has around 1.76 million
cardholders.
• In Malaysia, Citibank Bhd and oil company
Shell Malaysia have partnered to launch the Shell
Citibank credit card and expect to attract 100,000 new customers
over the next 12 months. The card will give a rebate of up to 5
percent on fuel purchases at Shell stations nationwide and up to
1.5 percent for all other purchases, including household
expenses.
• Visa is offering 70 packages for two in its
Malaysian Win a Trip to the Olympics promotion between 15 November
2007 and 20 February 2008. Cardholders who spend a minimum of MYR50
($15) per transaction and send their personal and transaction
details via mobile phone text message will quality for the draw to
win a package.
• Citibank Taiwan leads the island’s card issuers
with outstanding revolving credit of $1.33 billion, an annual
increase of 10 percent by end-September 2007. The bank has a market
share of 14.8 percent. Chinatrust has outstanding
revolving credit of $1.012 billion while ABN AMRO
came third with $718.18 million. Most domestic card issuers
experienced a decline in their outstanding revolving credit
although foreign issuers posted an increase.
• Local card issuers in Thailand are urging Visa and MasterCard to
establish a minimum set of qualifications for platinum and titanium
cards. The chairman of the local Credit Card Club,
Shoke Na Ranong, reportedly pointed out that some card issuers
offer platinum cards to applicants with a monthly income of
THB30,000 ($962) or less. Merchants are reluctant to accept these
premium cards because of higher charges of 5 to 6 percent compared
with charges of 1.25 to 3 percent for other cards.
• The State Bank of Vietnam expects 15 million
bankcards to be in use by 2010 and 30 million by 2020. Twenty
commercial banks in the country have reportedly issued 6.2 million
cards. Plans are in place to link the country’s government
employees into the banking system by remitting salary through their
bank accounts.
Europe, Middle East, Africa
• Allied Irish Banks (AIB) has recently announced
an agreement with electronic commerce and payment solutions
provider First Data to form a merchant acquiring joint venture –
AIB Merchant Services – that will provide card acquiring services,
as well as additional services and enhanced functionality to AIB’s
30,000 merchant customers. As part of the agreement, First Data
will have an option to allow the joint venture to obtain AIB’s card
acquiring business in the UK following the initial transaction.
AIB’s card acquiring businesses in Ireland and the UK are expected
to process about 140 million and 13 million transactions
respectively.
• Citibank has announced the appointment of Dean
Proctor as cards business head for the United Arab Emirates,
reflecting a growing focus on this burgeoning market. Citi has been
in the Middle East region for nearly 50 years and currently offers
consumer banking services in the UAE, Bahrain and Egypt. In the UAE
alone, Citi has had a presence for the past 43 years, and is
currently expanding its major operations within the country.
Citibank continues to rank as the number one issuing bank in the
UAE market for retail spending across all categories of credit
cards, according to Visa International’s quarterly member bank
statistics, a position it has held consistently for numerous
years.
• Dubai First, the consumer finance company of
financial conglomerate Dubai Group, recently launched the Royale
MasterCard-branded credit card. The card comes with a golden
metallic border and is embedded with a certified diamond set within
a distinctive crest. Cardholder benefits include no preset spending
limits, a personal relationship manager and a lifestyle manager
supported by a team of customer service professionals. This new
card comes hot on the heels of Standard Chartered’s SCB Platinum
MasterCard credit card launch in the UAE, which offers numerous
privileges and premium incentives for high net worth
customers.
• MasterCard has launched a trial of its
contactless PayPass solution with co-branded cards in partnership
with Banque Accord, the banking arm of French
hypermarket chain Auchan. The six-month trial will take place in
Englos, west of Lille, and includes clothes store Bizbee and
restaurant chain Flunch. Consumers will be able to tap a co-branded
PayPass card on a specially equipped terminal to make purchases
under €25 ($36) at participating retailers. “The ability to reduce
checkout waiting times by an average of 40 percent will undoubtedly
be music to the ears of hypermarkets, specialised retailers and
transport providers alike,” said Damien Guermonprez, CEO of Banque
Accord.
• UK building society Halifax recently issued its
first contactless debit cards. The new Visa payWave debit cards are
being given to approximately 25,000 existing customers across
London, who are taking part in the initial phase of the contactless
payment roll-out. Halifax customers will be able to use the new
Visa debit cards featuring contactless payment functionality in
addition to the usual debit card functions such as payments and
cash withdrawals at ATMs.
• International Bank of Qatar (IBQ) and
Virgin Megastore have launched a co-branded
MasterCard card. IBQ recently established a branch and ATM/cash
deposit machine inside Virgin Megastore’s branch in Doha, the
capital of Qatar, which also provides an instant issuance facility.
The co-branded card is the first of its kind to be launched in
Qatar, and comes in two lifestyle card packages. The Red offering
comes in both prepaid and credit card options and targets the youth
segment, while the Blue credit card is targeted at an older market.
The key feature of both packages is the instant discount on all
purchases of books, CDs, DVDs and games at Virgin Megastore simply
by paying with the card.
• MasterCard has announced the UK launch of
MasterCard SpendingPulse, one of the largest, fastest retail sales
data sources available for the economic, fixed income and foreign
exchange marketplaces. This macro-economic indicator provides a
comprehensive monthly snapshot of UK retail sales performance and
trends based on estimates of retail payments together with adjusted
spending information based on aggregated sales activity through the
MasterCard network. SpendingPulse figures will be available
approximately seven to ten days ahead of official UK government
data.
• UAE-based Emke Group has announced that it will
be launching a co-branded credit card with Abu Dhabi
Commercial Bank (ADCB). The Emke Group, known throughout
the region for its Lulu chain of hypermarkets, said that the new
card will offer many unique features and a host of benefits jointly
offered by the group’s retail outlets and ADCB. Following a flurry
of innovations, such as the chip loyalty programme and the new
Flash Contactless credit card, the bank’s cards business has grown
strongly. The Emke Group currently operates 64 hypermarkets and
department stores across Yemen and the Gulf region.
• UK payments association APACS estimates that
spending on cards, cash and cheques will reach £53 billion ($110
billion) this December, a 4.2 percent increase on December 2006.
Card use is forecast to account for just over £34 billion,
equivalent to 64.3 percent of the total predicted spend, up from 61
percent in 2006. The figures show that as credit card spending
remains flat, debit card use continues to grow as the most popular
method of plastic payment. Credit card spending is expected to
remain fairly static at £11.7 billion from the £11.4 billion figure
for December last year.
• Ethiopia’s Dashen Bank has won a membership
licence from MasterCard to distribute MasterCard-branded payment
cards to its customers. The bank launched a Visa card service 18
months ago, and has 13,000 Visa card users in the country. Dashen
Bank is preparing to distribute ten ATMs to its branches and is in
the process of importing another 20 units.
• The credit card charge-off index in Europe improved for the third
quarter of 2007, dropping to 7.1 percent from 7.3 percent in the
second quarter, according to a report released by analysts
Standard & Poor’s. The company delinquency
index also showed signs of improvement in the third quarter,
falling to 6.1 percent from 6.3 percent in June. The trend is
expected to continue as credit card issuers exercise more cautious
lending strategies. Standard & Poor’s does not expect overall
issuance in 2007 to exceed £700 million to £900 million.
• UK-based m-banking company Monitise is working
with Visa on a mobile prepaid account facility for
European consumers. This service would allow users to create
prepaid Visa accounts on their mobile phones that could be loaded
with funds from either a bank account or a credit/debit card. The
account could be used for online purchases, or for sending funds to
a third party.
Latin America
• Latin American banks need to replicate the anti-money laundering
and anti-terrorist financing standards that regulators impose on US
banks if they want to continue to do business in the US, said David
Schwartz, president of the Florida International Bankers
Association. Schwartz was speaking at a Latin American
banking event in Miami in November 2007.
• In August 2007, Brazilians made BRL26.1 billion ($14.7 billion)
worth of credit, debit and private-label card purchases, according
to the Association of Brazilian Credit Card Companies and
Services (ABECS). This figure was BRL5 billion higher than
in August 2006. Debit cards were the main driver of growth in card
transactions in August 2007, with a 27 percent year-on-year growth
rate, ABECS says. Credit card transactions rose by 22 percent
year-on-year, while private-label cards grew by 17 percent.
• Payments software provider ACI Worldwide has
launched a prepaid card issuing platform in Latin America as part
of a global roll-out of its prepaid card services. Its system
provides card account management as well as authorisation,
settlement and clearing services. “We are marketing the platform to
Latin American banks, processors and service providers,” Jim
Schlegel, ACI Payments Management’s marketing manager, Americas,
tells CI. He says ACI recently signed an unnamed Latin American
company that is involved in the employee benefits and services
business. “Its business is providing (clients’) employees with
vouchers that can be redeemed for food, petrol, and cross-border
remittances,” Schlegel says. “It has a substantial paper-based
distribution model and wants to automate the model through prepaid
cards that are processed using our platform.”
• US-based ATM operator Cardtronics says it has
added 275 ATMs to its network in Mexico. The ATMs were installed at
convenience stores owned by Mexican retailer Oxxo. Cardtronics has
a long-term agreement with Oxxo to operate ATMs at its stores.
Currently, Cardtronics has over 1,000 ATMs in operation in
Mexico.
• First Global Bank, a Jamaican subsidiary of
GraceKennedy, the Caribbean financial services group, plans to
launch a Visa Classic credit card in Jamaica before the end of
2007. “We’re confident that the launch of the Classic card will
allow us to widen our reach in the market, giving us a bigger chunk
of the pie,” Kerry-Ann Betton Stimpson, the bank’s assistant
vice-president, marketing and public relations, tells CI. According
to press reports, First Global plans to “aggressively” promote its
credit cards in Jamaica. It first entered the Jamaican credit card
market in December 2005 with a Visa Gold Card and a Visa Platinum
Card. By the end of 2006, its credit card operation had become
profitable, according to the GraceKennedy website.
• North and South America contributed 26 percent of card
manufacturer Gemalto’s total revenues in the third
quarter of 2007. The two regions combined had €106 million ($157
million) in revenues in the quarter, up from €92 million in the
year-before period.
• MasterCard Inc. said in a US Securities and
Exchange Commission regulatory filing that it intends to expand its
payment processing activities in Latin America. The company already
processes domestic MasterCard-branded transactions in Brazil. The
filing showed that MasterCard’s investment income increased
year-on-year by $112 million and $135 million respectively in the
three and nine months to 30 September 2007. These increases were
primarily due to gains realised in the sale of 25 percent of its
stake in Brazilian MasterCard acquirer Redecard during the third
quarter of 2007. Redecard held an initial public offering in July
2007. MasterCard says regulatory authorities in Brazil, Colombia
and Mexico are reviewing MasterCard’s interchange fees.
• MasterCard Worldwide LAC has launched Consumo
Inteligente (Smart Spending), its first consumer education
programme in the LAC region. Initially available in Brazil and
Mexico, the programme offers consumers advice on how to manage
their personal finances as well as on the responsible use of
payment cards. MasterCard plans to launch the programme soon in
other Latin American countries. In Brazil, the programme is called
Consumidor Consciente. In addition to a website, the programme also
offers videos, posters and brochures which banks can distribute to
their customers. The programme is supported by Mexico’s consumer
protection authority, the National Commission for the Defence and
Protection of Users of Financial Services.
• In the third quarter of 2007, MasterCard
cardholders in the Latin America and Caribbean (LAC) region used
their MasterCard-branded cards, excluding Cirrus and Maestro, for
522 million transactions. LAC MasterCard cardholders generated
gross dollar volume (GDV) of $39 billion in the period, up 20.2
percent in local currency on the same period in 2006. Purchase
volume reached $20 billion in the third quarter, up 23.9 percent
from the same period in 2006. GDV represents purchase volume plus
cash volume and includes balance transfers and convenience cheques.
The number of MasterCard-branded cards was up 10.9 percent at the
end of the third quarter of 2007 to 92 million cards, with the
total number of LAC MasterCard acceptance locations at 2.5 million.
The Maestro debit brand mark appeared on over 112 million cards in
LAC at the end of the third quarter of 2007, up 13.2 percent on the
third quarter of 2006, and is accepted in over 1.3 million LAC
merchant locations.
• Visa is to launch a trial in 2008 in Brazil to
test mobile remote payments. These are transactions where consumers
make payments using a mobile device while on the move. They take
place over a mobile phone network as opposed to occurring in the
proximity of a POS terminal. The trial, which will examine consumer
preferences for mobile remote payments, will be conducted with
Companhia Brasileira de Meios de Pagamento (VisaNet do Brasil), the
Brazilian Visa debit and credit card acquirer.
• VisaNet do Brasil is using Brazilian security
technology firm Modulo’s software to ensure that merchants comply
with the Payment Card Industry Data Security Standard (PCI DSS).
“VisaNet has mandated that any assessor which is checking its
merchants’ PCI compliance uses our software,” Charlie Warhaftig,
Modulo’s director of North American operations, tells CI. Modulo’s
software automates the process of PCI compliance by an acquirer or
merchant. VisaNet also uses Modulo’s PCI compliance software
internally itself, according to Warhaftig. “Additionally, Santander
Banespa in Brazil uses our PCI software,” he says. “VisaNet has
been using our software for the last six months. “So far, 40
percent of its merchants are PCI-compliant.” VisaNet’s goal is to
have 70 percent of its merchants compliant in 2008 and 100 percent
by December 2009.
North America
• US consumer confidence reached its lowest level in over two years
in November 2007, the November issue of RBC Royal
Bank’s RBC CASH (Consumer Attitudes and Spending by
Household) index reveals. The monthly index, which measures the
attitudes of 1,005 Americans, fell to 64 in November from 80.6 in
October 2007 due to concerns over oil prices, continued housing
market problems, and higher inflation. “November’s consumer
sentiment has collapsed to a level similar to that in the wake of
Hurricane Katrina in 2005,” TJ Marta, RBC capital markets’ economic
and fixed income strategist, says.
• American families are using credit cards to bridge the gaps
created by stagnant wages and higher costs of living, according to
Demos, a US non-partisan public policy group.
Credit card debt held by Americans grew by 315 percent from $211
billion in 1989 to $876 billion in 2006, Demos says. Over the last
six years, homeowners have cashed out $1.2 trillion in equity, it
notes. All figures have been restated as 2006 dollars.
• The Federal Reserve says US revolving consumer
credit, which includes credit card loans, rose at a seasonally
adjusted annual rate of 4.4 percent in September 2007 to $920.1
billion. In August 2007, revolving credit rose by an annual rate of
9.3 percent to $916.7 billion. In the third quarter of 2007,
revolving credit was up 7.6 percent on the same period in
2006.
• The US Senate Judiciary Committee has approved
the Identity Theft Enforcement and Restitution Act, which, if
passed, would toughen penalties for cybercrime and online identity
fraud. The Act would provide new tools for the prosecution of
cybercrime and bring in civil and criminal forfeiture for such
crimes. It would allow the victims of identity theft to seek
restitution for the loss of time and money spent repairing their
credit records.
• Hispanics living in the US have taken enthusiastically to gift
cards, both for their own use and as presents to others, says
Comdata Stored Value Solutions. A survey by the US
prepaid card firm found that Hispanics receive gift cards with an
average balance of $71, higher than the $60 given on average to
African-Americans and the $41 given to Caucasians. Another use of
gift cards among Hispanics is as a budgeting tool for children or
in lieu of an allowance; 26 percent of Hispanics surveyed by
Comdata said they used gift cards for such purposes. The survey
results are based on 800 Internet questionnaires collected between
12 and 18 September 2007.
• US cruise line Princess Cruises and Barclays US
have introduced the co-branded Princess Rewards Visa Signature
card. Rewards offered by the credit card include free cruises,
credits for onboard purchases, and discounts on cruise fares and
air travel. Cardholders pay no annual fees, and will be able to
book reward travel through regular travel agents, Barclays
says.
• BMO Bank of Montreal has integrated
bcpbank Canada, formerly owned by Portugal’s BCP,
into the BMO Financial Group of companies. To celebrate its
acquisition of the bank, BMO has launched the Luso Card, a BMO
Mosaik MasterCard specifically designed for the Portuguese-Canadian
community. BMO says former bcpbank Canada customers can remit money
to Portugal from any BMO ATM as well as through their branch or via
online banking.
• Capital One has called off its acquisition of
NetSpend Holdings. Instead, Capital One plans to
take a minority stake in the US prepaid debit card marketing firm,
and jointly distribute prepaid cards with it.
• Quebec, Canada-based co-operative financial group
Desjardins plans to start issuing EMV chip and PIN
cards next spring. The first chip cards will be introduced in the
Saint-Jerome region, north of Montreal. Desjardins says it has
successfully carried out POS transactions with chip-based credit
and debit cards. It is participating in the Canadian banking
industry’s trial of EMV cards currently taking place in
Kitchener-Waterloo, Ontario.
• While competitors as a group have remained flat since January
2007, issuer Discover Card has managed to almost
double its number of US monthly online credit card applications,
says US market research group Compete. Discover’s monthly volumes
have gone from an average of 320,000 applications in February-May
2007 to 580,000 in July-September. Discover’s online application
volume now exceeds key rivals such as Bank of America, Capital One,
Chase and Citi. One factor in the growth of Discover’s online
applications has been its media spending. Between February and
September 2007, Discover more than doubled its monthly media spend,
Nielsen Monitor-Plus reports.
• Prepaid card provider Transcard has teamed up
with Discover Financial Services to issue Discover
Network-branded prepaid debit cards. Chattanooga, Tennessee-based
Transcard will offer a variety of prepaid card programme, including
payroll, general-spend, fuel and student cards on the Discover
Network. Transcard says it hopes the partnership will enable it to
offer its card services to larger companies.
• First Data is to make 1,700 staff, equivalent to
6 percent of its work force, redundant. The layoffs are taking
place two months after the US-based processor was acquired by
private equity firm Kohlberg, Kravis & Roberts.
• US-based POS terminal vendor Hypercom has signed
an agreement with Keycorp, under which the
Australian POS terminal manufacturer will distribute Hypercom’s new
Optimum T4200 countertop, mobile and multi-lane terminals in
Canada. Both companies say they will co-operate on joint Canadian
sales and marketing opportunities.
• Hypercom says Canada’s total installed base of
POS terminals now exceeds 600,000, a figure which is expected to
grow at a minimum rate of 6 percent per year. “This growth excludes
the terminal upgrade requirements to meet Canadian EMV
requirements,” Hypercom says.
• Online payments system provider PayPal is
offering its customers single-use prepaid MasterCard debit cards
tied to their PayPal stored-value accounts. The cards are for use
at websites that do not accept PayPal accounts. The PayPal Secure
service uses technology from Ireland’s Orbiscom. PayPal is seeking
to increase the use of its payments system beyond eBay.
• VeriFone has launched Secure PumpPay, which
enables filling station pay-at-pump systems to comply with the
Payment Card Industry Data Security Standard. The US-based POS
terminal vendor estimates that there are 700,000 unsecure automated
pay-at-pump fuel dispensers in the US and Canada which are
vulnerable to card fraudsters.
