NAB adopts Visa contactless
Australia’s National Australia Bank
(NAB) has announced that its credit card customers will now be able
pay with Visa’s contactless technology payWave.
The technology will allow customers
to make purchases under A$100 ($90) on their credit card without
the need to sign or use their PIN. Customers hold their NAB Visa
payWave card in front of the contactless EFTPOS reader to complete
NAB’s ‘Low Rate’ Visa card is the first NAB
product to feature the technology, and will be followed with a
progressive roll-out across selected products through 2010.
The new NAB Visa payWave contactless cards
follow the installation of up to 2,500 NAB contactless readers at
merchants across the greater Melbourne and Sydney areas.
In a first for the Australian banking
industry, NAB will be the first financial institution in Australia
to offer a broad-based commercialisation of contactless issuance
and acceptance utilising Visa payWave technology.
Vietin Bank starts merchant
acquiring for JCB in Vietnam
JCB International, the international
subsidiary of JCB, the Japanese payment consortium, has announced
that the Vietnam Joint Stock Commercial Bank for Industry and Trade
(Vietin Bank), one of the largest credit card acquiring banks in
Vietnam, is to facilitate JCB credit card acceptance in Vietnam
based on the agreement signed by both parties in December 2007.
The arrangement includes enabling JCB
cardmembers to use their JCB credit cards for purchases at
approximately 3,500 Vietin Bank merchants by March 2011.
As credit card market potential has expanded –
backed by Vietnam’s strong economic growth after the country joined
the World Trade Organisation in 2007 – JCB has been actively
partnering with a number of banks, including Asia Commercial Joint
Stock Bank, Dong A Commercial Joint Stock Bank, and Sai Gon Thuong
Tin Commercial Joint Stock Bank.
According to the Vietnam tourist bureau, the
number of Japanese visiting Vietnam grew 21 percent in the last
three years, from 320,000 in 2005 to 390,000 in 2008.
China Unicom and China UnionPay
partner on mobile payments
China United Network Communications
(China Unicom), one of the largest Chinese tele-com operators, has
entered into a strategic partnership with China’s sole payment
service network, China UnionPay (CUP) to develop mobile payment
Under the deal, China Unicom subscribers will
be able to use CUP cards to make payments and transfer money among
The two parties will team up to promote mobile
phone payment across the whole country and join hands on mobile
marketplace application services, multi-channel payment, logistics,
and payment instrument confirmation.
“China Unicom and China UnionPay are jointly
researching a number of payment services, including RFID (radio
frequency identification) mobile SIM cards, and fixed-line and
internet payment options,” said a China Unicom source close to the
situation who requested anonymity.
“Payment service trials are currently being
conducted in Shandong Province, Sichuan Province and Shanghai
Municipality and an official national launch is projected for the
second half of 2010.”
AmBank launches mobile banking
AmBank, one of Malaysia’s largest
banking groups, has launched a mobile banking solution called
AmGenie. The service includes balance inquiry, transaction history,
funds transfer, bill payment, cheque order, stop cheque request,
rates inquiry, branch, ATM locator and also offers other services
such as cinema information and Muslim prayer times.
AmGenie is telco-neutral, meaning users from
any mobile operator will be able to access services on AmGenie as
long as their data services are 3G, EDGE or WAP-enabled. AmBank
partnered with Malaysian telecommunications application provider
FSBM Net Media to offer the mobile banking service.
AmBank account holders can use this service by
downloading the AmGenie Pro application onto their mobile phones,
or by accessing the amgenie.com WAP site on their mobile
Alipay to top PayPal
transactions in China
China’s top online payment firm
Alipay is expected to top US payment provider PayPal by transaction
value in two years, becoming the world’s leading e-payment service,
according to Alipay’s president.
Alipay has more than 180 million users daily
whereas PayPal has 75 million active users, although around 90
percent of Alipay’s customers are in China.
In July 2009, the Chinese online payment
platform announced that the total number of its users officially
reached the 200 million user milestone, overrunning PayPal, which
has 180 million users in total, in 190 countries and territories
around the world.
The parent company of Alipay, Alibaba Group,
is 40 percent owned by US internet search provider Yahoo.
Alipay, a unit of Alibaba Group and China’s
largest online retailer Taobao, also reported that it processes
more than CNY1 billion ($146.5 million) in transactions daily,
reaching an annual transaction volume of CNY1 trillion, topping
PayPal to become the world’s largest e-payment firm.
Visa survey: high e-commerce
usage in Asia-Pacific
Online shopping continues to be
popular among internet users in Asia-Pacific, with close to 9 in 10
(89 percent) people who participated in a Visa e-commerce consumer
monitor survey saying they had shopped online in the past 12
Respondents from South Korea (97 percent),
China and Japan (94 percent respectively) and Australia (89
percent) reported the highest number of online shoppers of the six
key countries surveyed.
In terms of quarter-on-quarter growth, when
compared with other respondents, those from China and India
registered the strongest increase in online shopping over the past
The most popular items to buy online in the
past 12 months were clothes/shoes (55 percent), books (50 percent)
and music downloads (49 percent).
The survey found that top reasons for online
shopping are to be able to shop anytime (80 percent), compare
prices and save money (79 percent), find and compare products
easily (78 percent) and search for bargains (75 percent).
Europe, middle east,
Danish banks to offer debit
MasterCard cards to customers
Member banks of the Lokale
Pengeinstitutter (Association of Local Banks in Denmark) have
announced they are to start the migration of their combined
portfolio of debit and ATM cards to debit MasterCard-branded
The Lokale Pengeinstitutter includes almost
100 local banks, savings banks and cooperative banks based in
Denmark, the Faroe Islands and Greenland. Its agreement with
MasterCard Europe will enable Danish consumers to use a debit card
to make payments at over 29 million acceptance locations around the
world and online. The association provides services in more than
860 branches, and in the Danish private customers market, the
Lokale Pengeinstitutter has a market share of about 25 percent.
European prepaid market poised
for growth – First Data
The prepaid card market is set to
see significant growth in the UK, Austria, Germany and Italy over
the next 12 months as people look to control their spending,
according to research from global payment processor First Data.
First Data commissioned Auriemma Consulting to
poll over 500 people in each country, with the survey finding that
there is increasing awareness of, and interest in, gift, general
spending, travel, youth and remittance prepaid cards. Germany and
Austria are considered to be embryonic prepaid markets, the UK
slightly more established and Italy the most advanced in
In Italy, 66 percent of respondents have
purchased a prepaid card in the past 12 months and 73 percent
expect to over the next year. In the UK, only 21 percent have
bought one in the past year but three times as many – 63 percent –
expect to over the next 12 months. In Germany and Austria around a
quarter have acquired a prepaid card in the past year, with nearly
half planning to buy one in the next 12 months.
Of all respondents, 55 percent see benefit in
using a prepaid card to help control spending and manage their
money. However, the survey shows the cards do not only appeal to
those on lower incomes without bank accounts – 57 percent of those
who expect to buy a prepaid card within the next 12 months describe
themselves as credit-worthy consumers with incomes above €40,000
Tunisian card use
Tunisia is witnessing an exponential
rise of the number of ATMs throughout the country. Recent
indicators issued by the Tunisian Professional Association of Banks
and Financial Establishments show that the number of ATMs has
reached 1,385 in 2009 against only 729 in 2005; similarly the
number of banking cards has increased from 1.62 million in 2007 to
2.02 million in 2009.
The report also indicates that there are
currently 1,203 banking outlets in Tunisia, in addition to the
forthcoming launch in 2010 of new branches of Zitouna Bank. The
total number of banking transactions amounted to 27 million in 2009
compared to only 17.5 million in 2007. However, usage of cheques is
slowing, amounting to 45.5 percent of money withdrawal transactions
in 2009 compared to 58.2 percent in 2005.
Oberthur delivers prepaid
contactless card to Italian bank
Oberthur Technologies, the European
prepaid and contactless payment technology specialist, has
announced the European Union’s first prepaid Visa-branded
contactless card for Banca Popolare di Sondrio in Italy.
The Carta di Ateneo is a dual interface
payment card that combines Visa-certified contactless and EMV
payment as well as access control and personal identification
Issued in conjunction with ICBPI Group, the
card will be used by students and faculty employees of two Milanese
learning institutions, the Politecnico di Milano and the University
of Milan Bicocca.
Gemalto unveils world’s first
bio-sourced degradable smart cards
Gemalto, the European digital
security specialist, has announced the launch of the world’s first
bio-sourced degradable smart cards. The card body is made from
renewable material, is recyclable and compostable, and can be
incinerated without emissions of toxic fumes. Additionally, Gemalto
offers packaging that significantly reduces the product’s
environmental impact. Gemalto’s bio-sourced smart cards will be
ready for mass production in the first quarter of 2010.
“Gemalto has always believed an alternative
solution was achievable,” commented Tan Teck Lee, Gemalto’s chief
innovation and technology officer. “We are extremely proud to have
developed the world’s first degradable smart cards. These product
launches lie within the scope of Gemalto’s corporate strategy to
commit to sustainability, with products and manufacturing processes
that have a reduced environmental impact.”
Barclays extends co-operation
with processor First Data
UK bank Barclays and global payment
processor First Data have signed a global agreement under which
Barclays will migrate a variety of card portfolios to First Data’s
issuing and consumer finance platform.
This new contract builds on an existing
relationship through which Barclaycard’s partnership card
programmes have been deployed over the last two years. End-to-end
processing and other systems such as customer contact centres and
fraud and risk services have been provided by First Data.
Nadeem Shaikh, head of the financial
institutions line of business at First Data, said: “We are very
pleased to be expanding our successful relationship with the
Barclays group through this new agreement. We are confident that
First Data’s issuing solution and expertise will assist Barclays in
creating a more standardised and efficient process to support the
growth and continuing enhancement of their world-class consumer
DnB Nor launches mobile
DnB Nor, Norway’s largest bank and
mobile financial services provider, has announced its plan to
launch a mobile payment services trial for its MasterCard
cardholders. Using the MasterCard Mobile over-the-air provisioning
service, which enables issuers to perform over-the-air
personalisation of PayPass in mobile devices, DnB Nor cardholders
will be able to use their near-field-communications (NFC)-enabled
mobile phones to make payments. Telecom operator Telenor is also a
partner in the trial.
The MasterCard over-the-air provisioning
service is a web-based service that securely transfers encrypted
consumer payment card details via the carrier network into the high
security area of the consumer’s NFC-enabled mobile phone, on demand
and in real time. The service allows financial institutions to
launch contactless payment programmes on their MasterCard and
Maestro cardholders’ mobile phones.
MasterCard develops m-payment
app for Brazil
Payment network MasterCard is using
Philippines-based mobile telecom firm Smart Hub to develop a mobile
phone payment system which will be initially deployed in Brazil.
The service will be deployed through Itaú Unibanco and Redecard,
and will be delivered via Brazilian telecom firm Vivo. The service
allows issuers, acquirers, merchants, and mobile network operators
to provide customised mobile payment services.
End-users of this service will be able to pay
for a range of services and products using their mobile phones,
including bill payment, fund transfers, remittances,
person-to-person transfers, payroll, ATM transactions, and mobile
phone credit reloading, among others.
After the pilot stage, MasterCard plans to
introduce the service to selected countries.
Brazil’s VisaNet to rebrand as
Brazilian card processor and service
provider VisaNet will change its brand name to Cielo in order to
reflect the wider scope of its network and services. VisaNet
currently has over 1.6 million affiliated merchants covering 97.5
percent of Brazil’s territory. VisaNet is majority-controlled by
Brazilian banks Banco Bradesco, Banco do Brasil and Banco
“The company chose the name Cielo – meaning
sky – because it also wants to emphasise the scope of its actions
and extension of its network,” the company said in a statement.
Fraud reduction drives EMV
Reducing payments fraud is the top
driver for issuers and acquirers to adopt EMV in Brazil and Mexico,
according to a new study from the Smart Card Alliance Latin
America, produced in participation with Visa Inc.
Other findings were that respondents are also
driven to adopt EMV in order to position themselves as innovators
and technology leaders, and they all expect to have 100 percent of
their credit and debit card portfolios migrated to EMV within one
to five years.
“With the global payments industry migrating
to chip technology for credit and debit cards, it’s important to
understand the drivers and best practices for implementation,” said
Edgar Betts, associate director of Smart Card Alliance Latin
“Mexico and Brazil are ideal markets to study,
as they are well on their way to full migration.”
Mexico bank loans flat in
Mexico’s banks reported MXP1.889
trillion ($145.28 billion) in loans on their books at the end of
October 2009, nearly unchanged from the year-ago period as a
recession curtailed lending, according to Mexico’s banking and
securities regulator CNBV.
While commercial loans, mortgage
lending and loans to government bodies all rose, consumer loan
balances fell 18.3 percent to MXP397.16 billion, with credit card
loans dropping 24 percent to MXP235.65 billion.
Mexico’s recession is the country’s worst
since the 1995 economic crisis, and has reduced both the supply and
demand for credit amid high levels of unemployment. The
unemployment rate was 5.9 percent in October, down from 6.4 percent
in September, but higher than the 4.1 percent reported in October
In credit card loan portfolios, where banks
have suffered the highest levels of defaults after several years of
easy lending, the percentage of non-performing loans continued to
decline, falling to 9.63 percent from a high of 12.6 percent in
May, and above the 9.37 percent recorded in December 2008.
Also, according to the central bank of Mexico,
overdue credit card payments fell by MXP2.5 billion in September
2009. Payments due totalled MXP23.54 million, compared to MXP25.97
million in August.
According to the central bank, the decline in
overdue payments could be attributed to three main factors: the
increase in restructuring programmes; greater accountability in the
use of plastic; and less loan placements.
Argentine credit card spending
on the rise
According to payment network and
issuer American Express (Amex), credit card spending in Argentina
is expected to increase at least 10 percent in 2010 as consumer
activity rebounds in Latin America’s third-largest economy.
Jose Maria Zas, the company’s
president for Latin America and the Caribbean, stated he is
expecting near double-digit growth.
Amex said the bad loans rate in Argentina is
stabilising at about 4 percent despite the economic slowdown that
began in late 2008. However, Zas said that, although the bad loans
rate had risen over 2009, the rate was stable and within normal
Visa LAC reports volume
Visa Inc has reported that the total
volume on all Visa-branded products in Latin America and the
Caribbean (LAC) region grew 19 percent over the previous year to
$581 billion for the year ending on 30 June 2009 (Visa’s quarterly
earnings are reported on a fiscal basis).
The company also stated the number
of payment transactions for the same period surpassed the 5 billion
mark, reflecting a constant trend in the migration from cash to
electronic payments for everyday transactions.
For the quarter ending on 30 June, Visa LAC
reported a 15 percent growth in total volume versus the same
quarter last year, for a total of $150 billion.
Recent Visa announcements in the region
include the introduction of near-field-communications payment
technology in Brazil, and the launch of ‘Financial Football’ in
Brazil and Mexico, a corporate social responsibility programme that
leverages the use of video games for educational purposes.
“Visa LAC continued to record solid regional
performance this period, driven by an impressive usage of our
payment solutions at the point of sale,” said Eduardo Erana,
president of the Visa LAC region. “Visa is leading a regional shift
from cash to electronic payments through product development,
reliability and efficiency.”
Trustwave expands in Mexico and
Trustwave, a provider of on-demand
data security and payment card industry compliance management
solutions, has opened new offices in Mexico City and Bogota,
Colombia, in order to enable regional support of data security and
compliance initiatives with the Payment Card Industry Data Security
Standard (PCI DSS).
An increase in Latin American demand for
compliance validation with the PCI DSS necessitated the additional
locations, according to Trustwave.
These office openings continue Trustwave’s
expansion into the Latin American market. Trustwave has regional
headquarters in São Paulo, Brazil, as well as a location in
US interchange study throws up
The US Government Accountability
Office (GAO) has published its long-awaited study on
The GAO has been developing the
report over the past six months, compiling data, conducting surveys
and interviews between May and November 2009, as mandated by a
clause in the Credit Card Accountability, Responsibility and
Disclosure (CARD) Act President Obama signed in May 2009.
The law required GAO to investigate and report
to Congress on interchange rate disclosure, merchants’ ability to
negotiate rates, the costs incorporated into the rates, fee
disclosure and transparency, merchants’ ability to offer discounts
for cash use instead of cards, and competition.
The central conceit of the GAO’s report is
“the amounts merchants pay to accept credit cards is increasing, as
Federal Reserve data indicates consumers increasingly use credit
cards to make payments, but also because network competition in the
credit card market may be contributing to rising interchange
Economists at the Federal Reserve estimated
the value of interchange fees paid on Visa and MasterCard credit
and debit cards has increased from about $20 billion in 2002 to
approximately $35 billion in 2007.
Despite concerns raised in the study, the GAO
remains noncommittal when it comes to recommending any course of
action to level the playing field between merchants and the
Options such as regulation and capping of
interchange, disclosure of rates to consumers, prohibition of
imposing network rules on merchants and granting of anti-trust
waivers are all examined in the report, but the GAO said “if
interchange fees for merchants were lowered, consumers could
benefit from lower prices for goods and services, but proving such
an effect is difficult, and consumers may face higher costs for
using their cards.
“With lower card acceptance costs, merchants
may pass on their interchange fee savings through lower prices to
consumers; however, the extent to which they would do so is
Twitter founder launches iPhone
Jack Dorsey, founder of social
networking phenomenon Twitter, has announced the launch of Square,
software that enables someone with an iPhone or iPod Touch to begin
accepting credit or debit card payments instantly (see p9).
The product is aimed at cutting out the need
for small business owners to have merchant accounts with the likes
of Visa and MasterCard, but is also intended to allow individuals
exchanging money to exchange funds without the need for carrying
Square plans to initially charge $1 for the
iPhone application required to use the system. The paperless
payment company is based in San Francisco. Square has already
raised $10 million in a first round of fundraising, valuing it an
initial $40 million.
VeriFone announces VeriShield
Protect for EMV Smart Cards
US mobile security provider VeriFone
has announced its VeriShield Protect end-to-end encryption solution
for card payment security will be available for use with the EMV
smart card standard and will also support contactless payments.
First introduced in the US to help merchants
and acquirers secure cardholder information and comply with PCI
data security requirements, VeriShield Protect is being expanded
for use worldwide in support of all card payment types. VeriShield
Protect eliminates usable cardholder data from a retailer’s POS
applications, networks and servers by encrypting it end to end, so
in the event of a security breach no usable data could be
compromised and any stored data is secure.
Veritec to offer
Veritec, a US developer of mobile
banking debit card solutions, has announced its subsidiary, Veritec
Financial Systems, (VTFS), entered into a memorandum of agreement
with technology vendor Cities in Touch (CIT) of Hot Springs,
Arkansas to integrate VTFS’ mobile banking software platform with
CIT’s ATM and debit card issuing kiosk systems.
VTFS markets and sells prepaid card programmes
and provides back-end prepaid card processing services on behalf of
Security First Bank to card sponsoring organisations. VTFS markets
its prepaid card programmes under its ‘MTC’ and ‘Blinx On-Off’
brands. In addition to serving as an ATM machine, CIT’s kiosk
systems enable consumers to cash cheques, pay bills, transfer money
and obtain pay-day loans.
Fiserv offers vertical payment
cards, teams up with Tesco Bank
Fiserv, a US provider of financial
services technology solutions, has announced it is to offer the new
vertical-format Visa card – a design option that displays all card
information vertically rather than horizontally.
“Fiserv is continually innovating to deliver
product and service enhancements that help clients differentiate
card offerings and grow transaction volumes,” said Jorge Diaz,
division president of output solutions at Fiserv.
The announcement comes just after UK
supermarket chain Tesco said it would be using Fiserv to provide
the IT systems for its banking subsidiary.
Tesco Bank is currently the UK’s largest
supermarket bank, with over six million accounts across 28
financial products and services, principally insurance, credit
cards and personal loans.
GE Capital extends credit card
programme with retailer Meijer
GE Capital Retail Consumer Finance,
a consumer lending unit of General Electric, has announced a
five-year extension of its credit card programme with retailer
Meijer, providing credit services to shoppers.
The programme started in 2003 with
the launch of the first private-label credit card programme for
Meijer. Since then, the relationship has expanded to include a
general-purpose Meijer MasterCard, and a prepaid card programme
accepted at establishments outside of Meijer. GE Capital Retail
Consumer Finance has more than $30 billion in assets and over 40
million account holders.
First National M