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June 12, 2009updated 24 Jan 2022 8:29am

Region Round-up

JCB International teams with Ping An Bank Japanese payment card consortium JCB has announced that its international subsidiary JCB International (JCBI) has signed an agreement with Chinese bank Ping An for the issuance of JCB cards in China. The Ping An Bank BE@RBRICK JCB card features the popular BE@RBRICK bear-shaped block-type figure owned by Medicom, a Japanese toy maker.

By Verdict Staff

ASIA-PACIFIC

 

Card partnerships

JCB International teams with
Ping An Bank

Japanese payment card consortium JCB
has announced that its international subsidiary JCB International
(JCBI) has signed an agreement with Chinese bank Ping An for the
issuance of JCB cards in China.

The Ping An Bank BE@RBRICK JCB card features
the popular BE@RBRICK bear-shaped block-type figure owned by
Medicom, a Japanese toy maker.

The new partnership with Ping An Bank marks
the seventh bank to start JCB card issuance in China. For JCB, the
alliance is aimed at accelerating JCB brand growth in China, while
Ping An Bank says it now aims to aggressively build its credit card
business, expand its product line and further strengthen its
customer base.

JCB has alliances with eleven partner banks
and financial institutions for merchant acquiring in China, and
approximately 80,000 merchants now accept JCB cards. In China, JCB
has launched credit card issuing programmes with the Bank of China,
the Bank of Shanghai, China Everbright Bank, China Merchants Bank,
Shanghai Pudong Development Bank and the China Minsheng Banking
Corporation.

 

Card partnerships

JCB and China Minsheng Bank
launch card with China Eastern Airlines

Chinese banking institution China
Minsheng Banking Corporation (CMBC) has launched a card in
association with JCBI, the international subsidiary of Japanese
payment card consortium JCB and China Eastern Airlines (CEA).

The CMBC-CEA credit card and the China Eastern
Airlines mileage programme also enables cardmember access to JCB
global network and services. The internationally accepted card also
earns China Eastern Airlines miles when used to purchase air
tickets. The CMBC-CEA credit card has a line-up of standard, gold,
and platinum card types, and is the first JCB branded platinum card
to be issued in China.

JCB’s acceptance network includes 12.8 million
merchants and over a million cash advance locations in 190
countries and territories. JCB cards are now issued in 19 countries
and territories, with more than 60.2 million cardmembers
worldwide.

 

Mobile payments

NTT DoCoMo and Mizuho eye
mobile cash transfer service

Japanese bank Mizuho is joining up
with wireless carrier NTT DoCoMo to launch a service that will
enable customers to transfer cash to one another with their mobile
phone handsets, simply by using the recipient’s number.

Provided the sender of the money and the payee
are both NTT DoCoMo users, the planned service will enable the
sender to transfer money to the bank account of the payee by
inputting the payee’s mobile phone number. The service would not
require users to open a new or special bank account.

NTT DoCoMo will transfer the money on behalf
of Mizuho through the bank agency scheme, which allows
non-financial firms to provide services such as withdrawals,
deposits and transfers.

The maximum amount of money users will be able
to transfer is expected to be set at about ¥30,000 ($306) per month
when the service is launched, the company said.

 

Debit cards

Woori Bank China launches debit
services

Woori Bank China, a subsidiary of
South Korea-based Woori Finance Holdings, has said it is to start
offering CNY-denominated debit card services, becoming the first
South Korean bank to do so.

According to the bank, the move is part of a
strategy to localise its operations. Woori Bank China operates its
business from three branches in Beijing, Shanghai and Shenzhen, as
well as its sub-branch in Shanghai Puxi.

The bank itself is fairly new, having only
been established in 2007 in Beijing. The lender currently has
branches in Shanghai, Beijing, Shenzhen, Suzhou and Tianjin, with
total assets of $1.59 billion.

 

Debit cards

Debit card usage grows in
India

The Reserve Bank of India (RBI) has
recently released statistics for the financial year 2009 showing an
increase of 48 percent in the number of debit card transactions
while credit card transactions have grown only 12.7 percent. The
surge is attributed to the ongoing economic slowdown and the
cautious attitude towards spending money as well as the reduced
focus of banks in issuing credit cards.

According to Venture Infotek, a transaction
management company, debit card transactions showed an increase of
88.6 percent, against 34.5 percent for credit cards for the period
ending March 2009 compared to the year-ago period.

The total value and volume of point of sale
transactions through credit cards in March declined by 11.9 percent
compared to 3.9 percent in April, says the RBI data. It also shows
the number of credit cards in circulation declined from 28.3
million cards in April 2008 to 24.6 million cards in March 2009,
whereas debit cards in issuance have increased by 30.9 percent,
reaching 137.4 million at the end of March 2009.

 

E-money

VietUnion signs e-wallet
service agreement

VietUnion, a Vietnamese online
payments services provider, has signed an agreement with four
Vietnamese banks to use the e-wallet service Payoo.

VietUnion signed the agreement with the
Vietnam Bank of Agriculture and Rural Development (Agribank),
Vietnam Bank for Industry and Trade (VietinBank), Sai Gon Thuong
Tin Commercial Joint Stock Bank (Sacombank) and Nam Viet Commercial
Joint Stock Bank (NaviBank).

The Payoo service, which has been running on a
pilot basis by the State Bank of Vietnam, will allow consumers to
shop online without submitting credit card details or personal bank
information. Customers will be able to register their e-wallet
accounts at one of the four banks participating in the project and
transfer funds from a banking account to a Payoo account via mobile
or online.

“Significant rises in the numbers of mobile
and internet subscribers have created a favourable condition to
develop electronic commerce, especially in the context of global
recession,” said Nguyen Hoang Ly, general director of the VietUnion
company.

 

Card acceptance

Merchant Solutions, China
UnionPay form alliance

Merchant acquiring services
developer Merchant Solutions and Chinese bankcard association China
UnionPay (CUP) have announced an alliance that enables merchants
outside China to accept CUP debit and credit cards.

The agreement means merchants in Singapore,
Malaysia, Brunei, Bangladesh, India and Sri Lanka will now be able
to accept CUP cards, while merchants in Hong Kong and Macau already
accept CUP cards as a payment method.

CUP’s member banks currently have issued more
than 1.8 billion cards, many of which are now used by the growing
number of Chinese people travelling throughout Asia and beyond.

 

EUROPE, MIDDLE EAST,
AFRICA

Corporate
cards

SEB and Eurocard launch Latvian
corporate cards

Swedish bank SEB and payment
processor Eurocard have teamed up to launch a new range of credit
cards in Latvia.

The cards, under the banner Eurocard Corporate
Gold, are designed for companies and offer control over assets,
liquidity and misuse, as well as allowing payments to be made
without interest charges.

“By making use of SEB Group experience in
Scandinavia, SEB Group in Latvia starts its co-operation with
Eurocard as well, thus offering a business credit card to companies
that are active in Latvia and whose cash management is an important
issue due to the scope of the business.

“SEB bank will offer a credit card with
unprecedented opportunities – not only the use of assigned credit
funds, but also an effective planning, control and easier
accounting of the assigned credit resources,” explains Kaspars
Dçliòð, vice-president for SEB’s large corporate banking and
capital markets division.

 

Payment processing

Emirates Airline selects
payments provider GlobalCollect

Netherlands-based payment service
provider GlobalCollect has announced it is to become the online
payments provider for United Arab Emirates airline Emirates
Airlines.

The service will include payments by local
credit and debit cards, local bank transfers, real-time bank
transfers, cash (Western Union Quick Pay), direct debits, and
e-wallets (PayPal). Future plans include adding further countries
and payment products.

GlobalCollect’s WebCollect platform allows
Emirates to offer payment options which are often locally preferred
and result in lower processing fees, as well as allowing customers
that do not own or prefer not to use a credit card access to online
booking

“As a full-service payment service provider,
GlobalCollect simplifies the process of settlement of funds across
the various markets and payment options, while helping Emirates to
keep the payment processing costs low and achieve a more effective
management of payment risks,” according to Richard Vaughan,
Emirates divisional senior vice-president of worldwide commercial
operations. GlobalCollect provides e-payment services for
international cardholder-not-present (CNP) channels such as
internet, mail and telephone orders.

 

SEPA

EC consults on SEPA migration
deadline

The European Commission (EC) has
launched a study to decide whether a date should be set for the
migration of credit transfers and direct debits to the Single Euro
Payments Area (SEPA) scheme.

The SEPA project aims at creating an
integrated market for electronic payment services across the
eurozone, with harmonised sets of business rules and technical
standards.

The EC said setting clear deadlines for the
migration of legacy credit transfers and direct debits to SEPA
credit transfers and direct debits would send a strong signal to
all stakeholders that SEPA migration is an irreversible process. It
would provide certainty and predictability and act as a strong
incentive for both industry and users to speed up migration.

Charlie McCreevy, internal market and services
commissioner at the EC, said: “Significant progress has been made
on the road to SEPA since 2002, but migration remains slow. We
should therefore assess whether some deadlines should be defined
for the migration to the new SEPA credit transfers and direct
debits.”

The EC has given interested parties until 3
August to provide opinions as to whether and how deadlines should
be set.

 

Premium cards

IBQ launches new credit card
suite in Qatar

Qatari bank IBQ has launched a range
of premium credit cards in country, all of which offer 5 percent
cashback on purchases made using the card.

The IBQ Gold MasterCard, IBQ Platinum Visa and
IBQ Infinite Visa cards are all fully EMV-enabled, and the 5
percent cashback will be offered on all purchases made by the
cardholder, both retail and online, made locally or across the
world.

Each of the new cards offer free travel
insurance and purchase protection, free supplementary cards for
life, no annual fees for the first year, SMS notification for every
transaction, online account access, 24-hour service through the
bank’s call centre and worldwide acceptance across millions of
establishments and ATMs.

“The rapid economic growth of the Qatar
economy has helped shape the personal financial needs of its
residents. As consumers are becoming more selective about their
preference for personal financial products, IBQ’s new suite of
cards is entering the market at an opportune time,” said George
Nasra, managing director of IBQ.

 

Legal

Court sides with Halifax in
chip card clone case

UK bank Halifax has won a landmark
court case against one of its customers in the country’s first ever
phantom withdrawal lawsuit involving a chip card.

The case against Halifax, part of the recently
merged Lloyds Banking Group, was brought by customer Alain Job who
claimed that fraudsters cloned his chip-based card and withdrew
£2,100 ($3,458) from his account at ATMs.

The judge ruled against Job after print-outs
from log files indicated that his real card had been used for the
transactions and that the machine had not just read data from the
magnetic stripe.

The suit was filed after two critical pieces
of evidence held by Halifax were destroyed, including the original
ATM card and the Authorisation Request Cryptogram that could have
proved that the card’s chip had been read and authenticated by the
machine. Job has not said whether he intends to appeal against the
ruling.

 

Card technology

Customised banking card
programme to be introduced France

European card manufacturer Gemalto
and French bank Le Crédit Lyonnais (LCL) have launched a customised
bank card in France.

LCL, a subsidiary of Crédit Agricole, a
leading banking group in France, will issue the card while Gemalto
will provide a web-based solution enabling users to easily upload
their identity photograph onto the bank’s website. The company also
supplies picture validation services and personalises the
cards.

The EMV card is targeted at students and aims
to combine the advantages of a payment card with those of the ISIC
(International Student Identity Card) international student card.
Cardholders can make purchases worldwide and benefit from coupons
from ISIC partners: 8,000 in France and 40,000 throughout 120
countries, for leisure, travel, accommodation, food and
multimedia.

“Gemalto is proud to support LCL in the launch
of France’s first banking card with a personal photograph,” added
Philippe Cambriel, executive vice-president of the secure
transactions business unit at Gemalto.

 

LATIN AMERICA

Prepaid cards

paysafecard enters Latin
American market

Online prepaid specialist
paysafecard has announced it is moving into Argentina via a
fully-owned subsidiary.

From June, paysafecard will be distributed
from 3,500 outlets in Argentina, which will be the company’s base
for further expansion into Latin America. The company has, in
addition, expanded to Italy, Sweden and Luxembourg, raising the
total number of countries in which it is available to 20 since it
was founded in 2000.

“The South American continent has a gigantic
market potential for prepaid payment solutions”, explains Michael
Muller, CEO of paysafecard group. “We are witnessing a significant
demand for international alternatives, one reason for this is
because of the low number of local providers. Cash solutions are
welcome in Latin America, because international web-shops rarely
accept national credit cards.”

The card is designed for users who don’t have
a credit or debit card or who don’t want to use their credit card
for online purchases and other micro payments on the internet.
paysafecard is available in £10 ($16), £25, £50 and £75 e-vouchers
at more than 230,000 outlets across Europe and South America.

 

Security and fraud

PROSA and FAC to reduce online
card fraud

Payment and risk management
solutions provider, First Atlantic Commerce (FAC), and Promocion y
Operation S.A de C.V (PROSA), the largest provider of electronic
transactions in Latin America, have collaborated to reduce online
credit card fraud in the region.

FAC has implemented a cardholder
“authentication only” solution for PROSA that allows the processor
to submit secure requests to FAC in advance of the payment
authorisation to provide more versatility for PROSA and their
acquiring banks in Mexico and Latin America.

PROSA operates a payment processing service
facilitating the majority of transactions made at point of sale
terminals throughout Mexico and Latin America, including those of
American Express, Visa and MasterCard, as well as the ATMs of HSBC,
Santander, Scotiabank, Banorte, Banjercito, Banca Afirme,
Interacciones, Ixe, Invex, Banregio, and other financial
institutions in Mexico, Puerto Rico, and Latin America.

Andrea Wilson, CEO of FAC, said: “Our Verified
by Visa and MasterCard SecureCode-only solution is expected to
significantly reduce credit card fraud for online merchants in
Mexico and Latin America based on the card association rules
governing 3D-Secure online chargeback liability shifts.”

 

Debit cards

EPAY announces launch of debit
card

Panama-based money transfer
specialist EPAY has announced the launch of the EPAY debit card.
The card is aimed at consumers and small business owners and offers
point of sale transaction and online purchase capabilities.

It can be used as a pay-out card and
it also allows cardholders to send and receive money from around
the world.

Business owners can make use of an
EPAY-branded debit card to pay affiliate commissions worldwide. The
card also gives businesses the ability to issue up to 300 cards to
their employees, giving them a variety of payroll, commission and
benefits payment options, while reducing the expense of managing
these functionalities in-house.

EPAY provides financial services, payroll
services, e-wallet services, money transfer services, electronic
payments processing, and debit card issuance. Its prepaid
MasterCard programme has around 41,000 members worldwide for
offerings such as debit cards, payroll cards and loyalty cards.

 

Mergers and acquisitions

Bradesco buys credit card
issuer Banco ibi

Brazilian private sector bank Banco
Bradesco has entered into an agreement to acquire Banco ibi, a
credit card issuer, from holding company Cofra for approximately
BRL1.4 billion ($725.5 million).

The deal will mean that all of the shares in
Banco ibi, ibi Corretora de Seguros, ibi Promotora de Vendas, and
ibi Participacoes will be transferred to Bradesco. The transaction
also includes the right of use of the ibi brand in Brazil for an
unlimited term. Banco ibi is controlled by Cofra, the Swiss-based
holding company that also owns C&A.

With 30.6 million clients generating annual
revenue of BRL9.9 billion, the acquisition of Banco ibi will help
Bradesco almost double its credit card base. Banco ibi had 20.8
million private-label cards and 9.8 million branded cards at the
end of last year, while Bradesco had 33.3 million and 22 million,
respectively, for the same periods.

Bradesco is one of the largest card issuers in
Brazil, and the bank said the Banco ibi purchase is aimed at
growing its presence in that segment.

 

Financial results

20% drop in Mexican banking
profit

Net profit in Mexico’s banking
industry dropped by 20 percent in the first quarter of 2009,
according to recent data released by the government.

The recently published figures by the National
Banking and Securities Commission (CNBV) show net profit fell to
MXN17.74 billion ($1.35 billion) from MXN22.18 billion in the first
quarter of 2008, while the sector’s return on equity, a measure of
profitability, fell to 11.2 percent from 21.4 percent in the same
period last year.

The report by CNBV also said bank assets grew
15.5 percent to MXN5.03 trillion at the end of March, while total
loans rose 7 percent to MXN1.88 trillion compared to 2008. Total
deposits increased 15.8 percent to MXN2.32 trillion.

Despite this, attempts to shore up bank
balance sheets are seemingly having an effect as the top five banks
– BBVA Bancomer, Banamex, Santander, Banorte and HSBC Mexico – all
reported an average capitalisation ratio of 14.1 percent in March,
well above the regulatory minimum of 8 percent, according to the
CNBV.

 

Regulation

Venezuela Central Bank takes
tight rate control

The Venezuelan Central Bank (BCV)
has banned commercial banks and other financial institutions from
charging interest rates above what it sets itself with the
exception of credit card operations.

The move comes shortly after President Hugo
Chávez announced the nationalisation of Banco de Venezuela, one of
the four big commercial banks in the country. BCV recently cut
interest rates, including interbank rates, in an attempt to inject
liquidity into the system, leaving rates at 20 percent for
seven-day funds, 21 percent for 14 days and 22 percent for 28
days.

Chávez recently stated that he did not intend
to take over any other bank at the moment. The BCV said that the
cuts were aimed at encouraging economic growth.

 

NORTH AMERICA

Contactless
payment

US Bank pilots contactless
payments and access cards

US Bank is piloting a card that can
be used for magnetic stripe purchases, contactless transactions and
as an access card.

The bank is currently trialling the programme
with employees in Minneapolis. Those involved in the pilot can make
purchases and enter their secure work location using a US Bank
AccelaPay Visa card, a prepaid payroll account. The cards contain
the MicroPass 4006 platform consisting of two applications: the
Visa payWave application, which allows for contactless payment at
the point of sale, and the HID iCLASS application, which allows for
contactless access to secure facilities at US Bank.

“We are always looking for new and innovative
ways to improve the overall experience for our customers and
business partners,” said Dominic Venturo, chief innovation officer
of US Bank’s retail payment solutions unit. “By working with our
business partners, we have been able to bring several technologies
together to simplify the end solution for the cardholder.”

 

Contactless payment

American Airlines goes
contactless

American Airlines, the US airline,
has announced it is to go cashless aboard flights within
continental US, as well as on flights to and from Hawaii, Alaska,
and Canada. The new contactless service will mean for in-flight
purchases such as headsets, fresh meals, snacks and alcoholic
beverages, American Airlines will accept American Express cards and
other major credit or debit cards as payment.

“We believe that, by moving to a cashless
cabin, the transaction process is more convenient for both our
customers and flight attendants,” said Lauri Curtis, American
Airline’s vice-president of on-board services.

Flight attendants utilise a hand-held on-board
sales recorder to process credit and debit cards, eliminating the
need to search for small bills or change. Cashless cabins will not
be implemented aboard American Eagle and American Connection
flights – only cash will continue to be accepted aboard those
flights.

 

Regulation

US Congress pushes interchange
negotiation bill

US lawmakers are seeking to pass
legislation that provides retailers with the authority to come
together to negotiate on an equal footing with Visa and with
MasterCard regarding interchange rates and merchant terms of
acceptance. The bi-partisan Credit Card Fair Fee Act is being
pushed through Congress by democratic House Judiciary chairman John
Conyers and republican representative Bill Shuster.

Similar to legislation introduced last
Congress by Conyers, the bill seeks to help level the playing field
for retailers by giving them a seat at the negotiating table with
banks to determine the fees assessed for every sale made by credit
card, and ultimately reduce the costs of everyday goods for
consumers.

Visa and MasterCard, along with their bank
issuers, set the interchange structure and control almost
three-quarters of the volume of transactions on general-purpose
cards in the US. Revenue from interchange in the US credit card
industry reached $48 billion last year, up from $42 billion in 2007
and $36 billion a year earlier.

 

Card delinquencies

US card delinquency rate up 11%
from 2008

In the US, the bank card delinquency
rate has increased to 9.1 percent compared to the last quarter of
2008 and 11 percent year-on-year compared to the first quarter of
2008, according to a report recently published by credit
specialists TransUnion.

Average bank card borrower debt (defined as
the aggregate balance on all bank-issued credit cards for an
individual bank card borrower) inched upward nationally 0.82
percent to $5,776 from the previous quarter’s $5,729, and 4.09
percent compared to the first quarter of 2008 ($5,548). The highest
state average bank card debt remains in Alaska at $7,476, followed
by Tennessee at $6,869 and Nevada at $6,677.

Nationally, the bank card delinquency rate
(the ratio of bank card borrowers 90 days or more delinquent on one
or more of their bank cards) increased to 1.32 percent in the first
quarter of 2009, up 9.1 percent over the previous quarter.
Year-on-year, bank card delinquencies increased 11 percent from
1.19 to 1.32 percent. Incidence of bank card delinquency was
highest in Nevada (2.44 percent), followed closely by Florida (1.9
percent) and Arizona (1.68 percent).

 

Payment networks

American Express to repurchase
$3.39bn preferred shares

US payment network and card issuer
American Express has announced that it is to repurchase the $3.39
billion of preferred shares that were issued to the Treasury
Department as part of the Capital Purchase Program (CPP).

The company recently raised $3 billion of
long-term funding through issuance of unsecured debt which was not
backed by government guarantees, then in early June raised $500
million in equity capital through issuance of common shares as a
precondition to repurchasing the preferred shares issued to the
Treasury.

“American Express has met all the requirements
of the CPP and we believe that repurchasing our preferred shares at
this time is in the best interest of our shareholders as well as
good public policy,” said Kenneth Chenault, chairman and chief
executive officer of American Express.

In total, 10 financial institutions, including
Goldman Sachs, Morgan Stanley and JPMorgan Chase, have been told
they can return a total of $68 billion to the Treasury, issued in
an attempt to shore them up late last year.

 

Prepaid and mobile
payments

Futura Card Services to include
mobile financial services into prepaid card platform

Futura, the US prepaid, gift and
funds disbursement card services developer, is to add mobile
financial services to its prepaid card product line. The new
service is a product of payment processor Metavante, and powered by
M

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