Citi and MasterCard pilot India m-payments
US banking giant Citi is teaming with MasterCard, mobile phone
manufacturer Nokia, telco Vodafone and technology solution provider
ViVOtech to pilot contactless mobile payments in Bangalore,
According to Citi, the trial is the largest of its kind in the
Indian marketplace, with up to 5,000 customers and 500 merchants
participating. Customers will need to use the Nokia N6212
near-field-communication (NFC) enabled mobile phone and then
download their Citi MasterCard credit card onto the phone over the
Transactions will require a PIN validation, with transactions
automatically charged to the customer’s card account. The trial
will also include the use of NFC-enabled interactive posters and
mobile coupon redemptions.
Separately, in the Philippines, Citi has linked up with food
retailer Jollibee to enable Jollibee customers to purchase food
using mobile payments. The partnership will allow Citi cardholders
to place their food order via the Jollibee hotline and charge the
bill to their credit card.
YES Bank and First Data partner for Indian ATM
YES Bank, which recently commenced operations in India, has
partnered with global payment processor First Data to collaborate
on the deployment of an ATM network across India. The alliance is
aiming to install ATMs at convenient locations for Indian YES Bank
Under the terms of a memorandum of understanding (MoU) signed by
the two organisations, First Data will leverage its ATM
capabilities to support YES Bank in identifying new ATM locations
and providing installation and field management services, including
monitoring and vendor management.
Rana Kapoor, founder, managing director and CEO of YES Bank, said:
“The collaboration between YES Bank and First Data is unique and
significant in the Indian banking landscape. It is also a
significant step forward in meeting the Indian regulators’ mandate
to provide convenient ATM access to bank customers across
Celent identifies Indian m-banking
US payment research consultancy Celent says the high level of
mobile phone penetration in India will spur the development of
mobile banking in the country. With 347 million users, including 73
million rural users, the Indian mobile market has experienced
tremendous growth in its mobile subscriber base and has ample room
for further penetration, according to a new report from
Mobile banking in India has evidenced 94 percent growth since 2002,
with teledensity as low as 36 percent. India is the second largest
wireless market in the world next to China (650 million) and the
cost per transaction is lower compared to other channels such as
the internet, ATMs and so on.
Celent expects the penetration of India’s mobile banking active
user base to reach 2 percent (25 million) by 2012, up from the
current 0.2 percent (2.5 million). The registered user base for
mobile banking in India is approximately 25 million or 7 percent of
total users. Of this, active users are only 10 percent.
China bans use of virtual cash
The Chinese government has banned the use of virtual currency for
the trade of physical goods and services in an effort to minimise
the effect of virtual currency on the country’s financial
According to some estimates, trade in virtual money topped several
billions worth of CNY in 2008, having risen around 20 percent
annually. Under new rules, using virtual money for gambling will be
punished by public security authorities, and the Ministry of
Culture has also vowed to step up supervision on the use of virtual
credits in money laundering.
A joint circular from the Ministry of Culture and the Ministry of
Commerce stated: “The virtual currency, which is converted into
real money at a certain exchange rate, will only be allowed to
trade in virtual goods and services provided by its issuer, not
real goods and services.”
Card usage trends
Australians want loyalty and reward benefits
New research from Australia’s central bank, the Reserve Bank of
Australia (RBA), shows Australian consumers increasingly turning to
payment cards, driven by the desire for loyalty and reward
However, the RBA’s study of consumer behaviour found that cash
still accounts for 70 percent of all transactions. Cash is
primarily used for low-value payments under A$10 ($7.90) and for 75
percent of payments between A$11 and A$25 for items such as
take-away food and bar bills.
EFTPOS, MasterCard and Visa debit card payments comprise 15 percent
of all transactions, followed by MasterCard and Visa credit card
transactions (9 percent) and American Express and Diners Club cards
The RBA study found that cards are used extensively across all but
very low transaction values. For transactions between A$25 and
A$200, debit and credit cards account for 45 percent of
The study also found participation in loyalty or reward programmes
and the availability of interest-free periods tended to increase
the appeal and use of credit cards. For the average consumer,
loyalty programmes increase the probability of credit card use by
23 percentage points and reduce the probability of cash use by 14
The research suggests that the introduction of loyalty programmes
accounts for at least some of the rapid growth in credit card use
observed in the second half of the 1990s.
“While interest-free periods induce substitution to credit cards
from debit cards, loyalty programmes induce substitution from
cash,” the study stated.
TSYS to provide processing services for Toyota
Global payment processor TSYS has extended its agreement with
Japanese home loans and credit cards provider Toyota Finance to
deliver prepaid payment and processing services.
Toyota Finance is the issuer of Tressa Style Card Plus, a reward
card which integrates both prepaid and QUICPay contactless
functions. Toyota Finance will offer the Tressa Style Card Plus to
consumers at Tressa Yokohama, a Japanese shopping mall. In 2008,
the company registered 7.2 million active cardholders.
“As the world’s third-largest card market, Japan has pioneered the
development of e-money products, often presenting some of the most
innovative ideas,” said Gaylon Jowers, president of TSYS
“Toyota Finance has been a marquee client since 2006, and we are
honoured to extend our relationship to include processing services
for its new prepaid product.”
EUROPE, MIDDLE EAST, AFRICA
First Data signs terminal service deal with Polish
Global payment processor First Data has announced a new terminal
services agreement with LPP, a Polish fashion retailer, for the
provision of terminals at LPP’s Cropp, Esotiq and Reserved outlets.
Under the terms of the agreement, First Data will install almost
500 POS terminals, providing card acceptance at 307 locations in
almost 220 towns and cities across Poland.
The terminals are able to process microchip cards, which enable
transactions to be authorised in compliance with EMV standards,
providing enhanced security for Cropp, Esotiq and Reserved
customers’ card transactions. This new generation of terminals also
supports ‘dynamic currency conversion’ that allows foreign
cardholders to pay for their goods and services in the currency of
Separately, First Data has extended its processing agreement with
Euro Bank, the Polish affiliate of France’s Société Générale. Under
the terms of the new three-year deal, First Data is to broaden the
scope of the services it is set to provide for Euro Bank to include
chip-based card products.
First Data will also continue to provide a range of issuer
processing services including ATM transaction authorisation on Euro
Bank’s ATM network, fraud monitoring and customer services, as well
as providing support for the upcoming launch of Euro Bank’s new
chip-based Visa-branded payment cards.
MoneyGram inks NCB ATM remittance deal
National Commercial Bank (NCB) of Saudi Arabia is to offer
MoneyGram international money transfer services at 1,400 ATM
locations in Saudi Arabia. The agreement significantly expands
MoneyGram’s presence in Saudi Arabia, home to more than 6 million
expats. Remittances in the kingdom grew to more than $17 billion in
2006, according to the World Bank.
Anthony Ryan, president and CEO of MoneyGram International, said:
“Saudi Arabia is the second-largest send market in the world behind
the US, and our alliance with a premier financial institution like
National Commercial Bank represents a significant opportunity for
MoneyGram’s expansion plans in the Middle East.”
NBAD and Luup to offer mobile transfer
National Bank of Abu Dhabi (NBAD) of the United Arab Emirates is
linking with mobile payment provider Luup to provide a mobile money
transfer service across the bank’s global network of 42 locations
in nine countries.
The new service will be an addition to the Arrow mobile payment
service provided by NBAD, via Luup’s mobile payment platform.
Arrow, an SMS-based payment service, allows customers to access
their bank accounts via mobile phones to pay, send, and receive
money around the clock.
The new service will enable customers to make international money
transfers regardless of their mobile phone or network. Initially,
the service will be available to NBAD customers but it is planned
that it will be offered to a wider audience.
Visa $13m deal with UK mobile payment outfit
Visa is to take a 14.4 percent stake in UK mobile payment service
provider Monitise after signing a $13 million partnership deal.
Concurrent with the strategic alliance, Visa has agreed to make a
minority equity investment in Monitise, subject to Monitise
Tim Attinger, head of global product innovation at Visa, said:
“With the ever-expanding growth in handsets coupled with increasing
sophistication of mobile networks, mobile payments and services
present significant opportunity for Visa.
“In aligning with Monitise, we expect to expand the delivery of
Visa mobile services to consumers around the globe, enabling them
to seamlessly use their mobile phones to purchase goods and
services, make payments, receive valuable information and offers,
and transfer money between accounts, in a safe and secure
paysafecard teams with Spanish bank
European online payment provider paysafecard has joined forces with
Spanish bank Caixa Galicia and payment processor TelePay to enable
the bank’s customers to purchase prepaid vouchers at any of the
“Our partnership with Caixa Galicia and TelePay is another
milestone in the history of paysafecard,” said Michael Mueller, CEO
of paysafecard. “We are proud to be the first online payment method
provider offering its customers to purchase vouchers at an ATM. We
believe this step will have a tremendous influence on the market
and see a huge potential for this as it is specifically designed
for customer convenience.”
MasterCard extends PayPass in Turkey
MasterCard Europe has partnered with Turkey’s Akbank and retailer
Carrefour to introduce the first contactless version of Akbank’s
popular Axess credit card, which can be used to make payments at
more than 170 Carrefour locations throughout the country.
The new card programme, Carrefour Axess, merges two of Turkey’s
most popular loyalty platforms: Axess, the multi-merchant scheme
which allows cardholders to accumulate cash points through
purchases at over 160,000 merchants; and Carrefour’s proprietary
loyalty scheme, Carrefour Plus, with a cardholder base of
two-and-a-half million consumers.
The card will be offered from Carrefour through the extension of
Akbank’s Credit Express branches, located in supermarket
environments in Turkey. Cards can also be instantly issued
in-store, and will also include MasterCard’s contactless PayPass
functionality for purchases of €16 ($22) or less.
Gemalto deploys instant issuance solution in
European smart card manufacturer and digital security vendor
Gemalto has announced that Nigerian payment solution provider
InterSwitch is deploying Gemalto’s Dexxis instant issuance solution
to accelerate EMV chip migration in Nigeria. InterSwitch comprises
25 member banks which will be replacing 30 million magnetic stripe
cards in the next few years.
The Gemalto solution enables InterSwitch members to carry out
on-the-spot personalisation and delivery of chip cards to their
customers directly at their branches, compared to an average two
weeks timeline with conventional issuance.
As part of the contract, Gemalto supplies the software that allows
InterSwitch to offer the instant issuance service. It also enables
InterSwitch to provide its member banks with a turnkey solution to
perform instant issuance themselves.
Smartphone market could hit 150 million handsets by
According to new research, the number of smartphone handsets in
Latin America could grow to 150 million within the next five years,
with 48 million new units in 2014 alone.
The report by Pyramid Research examines the potential for growth in
Latin America’s smartphone market, as well as the factors driving
this trend, by analysing operators’ and vendors’ strategies.
The smartphone segment will become one of the most important
sources of data revenue growth over the next five years in Latin
America, notes Omar Salvador, senior analyst at Pyramid and author
of the report.
“The market is still in its infancy, representing only 3 percent of
total handset unit sales in 2008; globally the figure was 12
percent,” Salvador added. “However, Pyramid predicts the segment
will grow from 7 million smartphones sold in 2009, representing 5.4
percent of total handsets sales, to 48 million in 2014, or 30
percent of the total.”
Card market growth
Brazil card market on the rebound
Brazil’s credit and debit card market could grow more than the
industry forecast of 15 percent this year as the economy recovers,
according to Brazilian banking group Banco Bradesco.
Many of Brazil’s residents are now switching to credit cards as the
country’s infrastructure improves, with outlet numbers and
acceptance on the rise, and the improving economy spurring on their
use in retailers. Card usage in Brazil has grown at double-digit
rates in recent years, as companies and consumers shift to more
electronic payments instead of cash and cheques.
Credit card and debit card transactions totalled BRL375 billion
($192 billion) in 2008, according to the Brazilian Association of
Credit Card Companies, Abecs. However, April default levels were
still 8.9 percent higher than the year before, according to Abecs
Bradesco bought Banco ibi for BRL1.4 billion on 5 June, adding 30.6
million card users to its already considerable portfolio. Bradesco
has a 22 percent share of the country’s credit card market.
Banco Atlantida selects Smartvista for retail
Russian e-payment provider BPC Banking Technologies has announced
that Banco Atlantida of Honduras has signed a contract to implement
a fully functional in-house retail payment processing centre.
The centre, based on BPC’s SmartVista software, is designed to
replace the currently outsourced processing system for acquiring of
ATM and POS transactions as well as processing and issuing of both
debit and credit cards. The project aims to replace separate card
centres with a centralised card management centre.
“We see SmartVista implementation as a valuable means to make the
most of the emerging e-payment opportunities,” said David Bueso,
vice-president of Banco Atlantida.
“Not only will BPC software solution enable us to offer innovative
card based products to clients across the Americas, but it also
means we can continuously extend our product range to meet new
trends and to offer an even wider choice of retail financial
Credit crisis in Costa Rican looming
According to a leading economist, Costa Ricans may soon have to
rein in their spending as credit card debt in the country spirals
out of control. Carlos Arguedas of National University told a local
website the situation is a “bubble that can burst at any
Arguedas says Costa Ricans have been spending more on their credit
cards than they could ever hope to repay, creating an estimated
CRC571 billion ($980 million) of debt.
Currently there 401 credit card products offered by Costa Rican
banks and financial institutions, and Arguedas says it is these
institutions that are largely to blame for the upcoming crisis, as
they offer easy payments, extend credit limits and allow
cardholders to fall further and further into debt.
There are few rules in Costa Rica governing credit cards, which
have only been in the country a relatively short time. Credit card
issuers are not bound by regulations like those in the US and other
countries and there is no limit on the amount of interest,
additional fees and costs associated with credit cards in the
Playspan expands into Brazilian market
PlaySpan, a digital microtransactions and payment services
provider, has announced that its prepaid gaming card, Ultimate Game
Card, has been launched in Brazil, Turkey and several other
In Brazil, the Ultimate Game Card will be distributed in more than
1,400 internet cafés, and in over 4,000 retail locations. Brazil is
one of the fastest-growing multiplayer game markets in the world
with more than six million players actively playing via LAN houses
and cyber cafés. Another 18 million Brazilians actively use the
internet from home via broadband connections.
“The Ultimate Game Card provides a convenient new payment method to
our customers and increases their access to premium services within
online games and social networks,” said Andre Avelino, marketing
manager for E-prepag, a Brazilian company specialising in e-billing
for online game market needs.
“We are very excited about the benefits it provides to us and our
Visa Vale launched in Colombia
Payment network Visa and Visa group member Credibanco have
announced the launch of Visa Vale in Colombia. Visa Vale is a
prepaid employee benefits card, and Colombian cardholders will be
able to use it at affiliated restaurants, supermarkets and petrol
stations throughout the country.
The card works electronically with the use of a PIN entered at the
POS terminal. The card is exclusively used for purchases and does
not provide access to cash at ATMs. Cardholders do not need to open
an account at any bank to use the product.
“With Visa Vale, purchase vouchers are entering the digital era and
everyone – employees, employers, financial institutions, merchants
and governments – wins with a product that provides increased
control over resources, simplifies processes and ultimately saves
time and money,” said José María Ayuso, regional director of
products for Visa’s Latin America and Caribbean Region.
“Our banks in Colombia have played a fundamental role in the
development of Visa Vale and are confident regarding its business
potential in terms of offering an innovative product that provides
tangible benefits and expands the added-value offer to companies
and their employees,” said Orlando García Torres, president of
Bank of America, First Data to form payments
US financial giant Bank of America and global payment processor
First Data have allied to form a new company, Banc of American
Merchant Services, aiming to deliver payments solutions to
merchants ranging from small businesses to commercial and corporate
Bank of America will contribute approximately 240,000 merchant
relationships and First Data will contribute approximately 140,000
merchant relationships to the new company. Following a transition
period, First Data will provide the merchant processing and related
services. The combined entity will process over one billion
transactions per month.
Banc of America Merchant Services will be approximately 46.5
percent owned by Bank of America and 48.5 percent by First Data,
with the remaining stake held by Rockmount Investments, an
investment vehicle controlled by a third-party investor.
TSYS affected badly by new joint venture
Bank of America’s current processor TSYS has said the new joint
venture between Bank of America and First Data could cost it as
much as 4 percent of its total revenue. Bank of America has
indicated to TSYS that it is in the process of formulating its
plans with respect to changes in its merchant processing
relationship but has not yet communicated the timing or extent of
the shift over from TSYS’s systems.
TSYS provides accounting, settlement, authorisation and other
services to Bank of America pursuant to a contract that will expire
in April 2010, which accounted for approximately 4 percent of
TSYS’s total revenues for 2008 and approximately 4.6 percent of
TSYS’s total revenues for the first quarter of 2009.
Approximately 29 percent and 31 percent of the total revenues
derived from providing merchant processing services to Bank of
America are attributable to reimbursable items for 2008 and the
first quarter of 2009 respectively.
TSYS provides a number of additional services to Bank of America,
including commercial card processing, small business card
processing and card production services.
Western Union launches prepaid loyalty card
Money transfer specialist Western Union announced it is to launch a
new prepaid card in the form of a Western Union Gold card. Western
Union’s global consumer loyalty programme has been combined with a
reloadable Visa prepaid card to produce the new product and Western
Union will selectively offer the programme from July, targeting 8
million Western Union Gold card loyalty members in the US.
According to a recent Western Union consumer survey, one in four
Americans say they are using cash more often than they have in the
past; 88 percent say an important reason they use cash is to avoid
high interest rates and fees charged by credit card companies; and
91 percent say it is important for them to use cash more often so
they avoid building credit card debt.
“The prepaid Western Union Gold card will now offer consumers the
flexibility they need and want,” said Stewart Stockdale, executive
vice-president of the Americas for Western Union.
Health care cards
MasterCard extends OptumHealth deal
MasterCard Worldwide has declared a multi-year contract extension
with US health insurer OptumHealth Bank to issue MasterCard cards
for health savings accounts (HSAs), flexible spending accounts
(FSAs) and health reimbursement arrangements (HRAs).
The MasterCard cards can be used as a form of payment tied to these
accounts for eligible medical expenses, such as co-payments,
deductibles, prescriptions, vision care and certain
“With related expenses continuing to rise, prepaid cards provide an
efficient, electronic payment solution to replace cumbersome
paper-based administration,” said Chris McWilton, president of US
markets at MasterCard Worldwide.
The US payments industry handles transactions worth approximately
$2 trillion each year, according to global consultancy McKinsey.
Accepting HSA, FSA and HRA card payments can help physicians and
other health care providers streamline and manage medical payment
A recent MasterCard survey shows physicians cite patient
convenience, safety and security for their office, guaranteed
payment, and ease of record keeping as among the top benefits of
payment card acceptance.
IDHS to use prepaid
The Illinois Department of Human Services (IDHS) has said it is to
use Affiliated Computer Services’ (ACS) electronic payment card
(EPC) solution to improve the distribution of state payments to
child care providers and specialised personal assistants.
The five-year agreement with the State of Illinois expands the
market of ACS’ EPC programme, and means IDHS will be able to
accelerate payments to recipients by using a reloadable MasterCard
The card will be offered as an option to traditional paper cheques
for payments to service providers participating in the state’s
Child Care Assistance Program, which offers child care to families.
Additionally, it will be available to personal assistants who help
with household tasks and personal care to people with
ACS serves four million cardholders with 24 EPC programmes for
state and federal clients, disbursing payments for programmes such
as child support, Temporary Assistance for Needy Families (TANF),
unemployment insurance, disability and state employee
EDS wins Amex tech services deal
American Express has awarded a five-year technology services
contract to Hewlett Packard subsidiary EDS in a deal the card
outfit hopes will help slash IT costs. Under the agreement, signed
in December 2008, EDS will be managing the American Express
end-user desktop computing environment and its global voice and
In addition, the tech firm will provide on-site services for about
60,000 employees in more than 130 countries around the world.
Hit hard by the credit crisis, in October American Express outlined
plans to axe 7,000 jobs and scale back technology spending and
other expenses in a bid to generate $1.8 billion in savings in
This was followed up in May by news that another 4,000 jobs – 6
percent of its global workforce – would go as part of a programme
aimed at reducing costs by $800 million this year.
Matthew Robinson, chief technology officer of American Express,
said: “Our goal is to drive American Express’ growth, innovation
and customer service using secure technology that enables a more
productive, efficient and collaborative workplace.”
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