04/01/2004 • CardFlash® - Payment Card Industry News

JCB International Adds 100,000 Merchants in Turkey

5, Country, JAPAN, PriorityBy Robert McKinley 04/01/2004

JCB International announced that Turkey’s Turkiye IS Bankasi is now authorized for JCB merchant acquiring through a sublicensing agreement. The license was granted to Isbank by JCBI’s direct licensee, Anadolu Kredi Karti. As a result, the number of merchants accepting JCB card in Turkey will increase to more than 100,000. Isbank maintains a network of 113,000 merchants and 121,000 POS terminals, representing 17% of the market. The Bank produces international credit card sales volume of more than US$19 million per annum. Anadolu Kredi Karti says its agreement with JCB in 1993 helped it increase sales at its 11,000 merchants and expects the Isbank deal to drive even more JCB volume.

Savings Banks Renew with GZS through 2006

5, Country, GERMANY, PriorityBy Robert McKinley 04/01/2004

GZS Gesellschaft fÃ¼r Zahlungssysteme reports that nearly all of Germany’s savings banks have extended their contracts with GZS until 2006. Collectively, savings banks have 2.6 million VISA and MasterCards in force. Its customer base includes Hamburger Sparkasse, Frankfurter Sparkasse, Stadtsparkasse, and Kreissparkasse KÃ¶ln. HSH Nordbank which was formed from the recent merger of Hamburgische Landesbank and Landesbank Kiel have also chosen GZS for its credit-card processing and, at the start of 2004, it, too, switched processors, engaging GZS with the handling of a former Landesbank Kiel credit-card portfolio. GZS processes for about 2,200 banks, retailers and industrial enterprises.

Infineon Technologies’ President/CEO Resigns

5, Country, GERMANY, PriorityBy Robert McKinley 04/01/2004

Munich-based Infineon Technologies AG confirmed that President and CEO Dr. Ulrich Schumacher has resigned. The Head of the Corporate Center, Matthias Poth, and the Head of Communications, Christoph Sieder, also resigned their positions at the company. Meanwhile, Infineon opened its RFID Solution Excellence Center and System Lab in Graz. From the 140 employees of the Graz Development Center, around 40 people will be occupied with RFID activities. Infineon is implementing a comprehensive approach to the RFID-based logistics segment, incorporating smart label technology, which consists of the RFID chip and the antenna both integrated into paper or plastic, smart label readers, the system platform to integrate RFID-supported logistics applications into a company?s operations, and accompanying services for development, roll-out and maintenance of logistics systems. Infineon RFID system solutions can be adapted, for example, to applications in the automotive and textile industry, meeting sector-specific requirements for logistics processes in production and supply chain management.

National Payments Network Selects ACI’s BASE24

5, Country, Priority, RWANDABy Robert McKinley 04/01/2004

SIMTEL, an organization set up by the Rwandan government to modernize the national payments network, has chosen ACI’s “BASE24-es” as the foundation for The Republic of Rwanda’s new national inter-bank card payments network. SIMTEL is also implementing the ACI Card Management System for the management of VISA “Smart Debit and Credit” card accounts and for card personalization. “BASE24-es” will enable SIMTEL to acquire, authenticate, route, switch and authorize card transactions on behalf of the commercial banks in Rwanda. BASE24-es is powered by an intelligent scripting engine that enables users to change the rules governing authentication and authorization without having to write new source code. SIMTEL is a privately owned company. Shareholders are made up of the National Bank of Rwanda (the Central Bank), and all six licensed commercial banks in Rwanda, as well as the Savings, Union Bank and the Post Office.

AmEx Loses Ground as the Primary Business Card

5, Country, Priority, UNITED STATESBy Robert McKinley 04/01/2004

A new study suggests that American Express is no longer the primary business card used by small businesses and middle market companies, but is gaining ground as the primary corporate card among micro-market businesses. The research of 2,800 companies found that VISA is the primary corporate expense card for 44% of businesses with annual revenues between $1 million and $20 million, and 45% of businesses with annual revenues between $20 million and $250 million. The Informa Research Services report says the base of micro market companies, with annual revenues below $1 million and that use expense cards, has grown from 21% in 2002, to 31% in 2003. During this period, American Express expanded its share from 14% to 27%, as MasterCard declined from 31% to 18%. VISA’s micro market share increased from 51% to 54% in 2003. In the small business segment, American Express’ primary relationships declined from 36% in 2002, to 23% in 2003. During this period, VISA’s share grew from 40% to 44%, and MasterCard’s increased from 24% to 32%. In the middle market segment, American Express’ primary relationships declined from 50% in 2002, to 45% in 2003. During this period, VISA’s share grew from 35% to 45%, and MasterCard’s increased from 15% to 20%.

BC Ferries to Test Cubic’s Express Vendor Self-Ticketing Machines in July

5, CANADA, Country, PriorityBy Robert McKinley 04/01/2004

BC Ferries of British Columbia is launching a six-month pilot project for an automated cashless self-ticketing system in July. San Diego-based Cubic Transportation Systems has been awarded the contract.
Cubic will deploy its “Express Vendor,” a ticket vending machine which accepts credit card-only payment and issues a paper receipt and boarding pass. There are more than 600 “Express Vendor” machines deployed in New York. The units are designed for wall-mounting or free-standing, and also features user-friendly interfaces and programming in up to eight languages. Since its start in 1960 as a two-vessel, two-terminal operation, BC Ferries now operates a fleet of 35 vessels serving more than 45 ports of call along the British Columbia coast.

Bank of Thailand Raises Minimum Payments After Raising Minimum Income for Credit Cards

5, Country, Priority, THAILANDBy Robert McKinley 04/01/2004

Bank of Thailand is raising minimum payments from 5% to 10% on all new cardholders and will require that the new payment schedule be applied to existing credit card users in 2007. The decision by the central bank is effective April 1st. Card issuers in the country will also be required to cancel cards that are 90 days past due. Issuers are also now prohibited from enticing consumers with free gifts to generate applications. In 2002, the central bank required a minimum monthly salary requirement of 15,000 baht for credit card applicants. Interest rates on credit cards were also capped at 18%. Last year, the number of credit cards in the country rose 23% to 4.22 million, and card loans increased 34% to 76.2 billion baht. Delinquency currently runs about 5%.

MasterCard Hires a Top Australian Federal Policeman to Combat Fraud in Asia/Pacific

5, Country, Priority, SINGAPOREBy Robert McKinley 04/01/2004

MasterCard International has hired a former Director of National Investigations for the Australian Federal Police to spearhead its development of solutions to manage risks and enhance fraud control in Asia/Pacific. Tim Morris, who served with Australian Federal Police for 18 years, will become MasterCard vice president & regional head for Security & Risk Management for Asia/Pacific. He will be based in Singapore, working closely with law enforcement agencies to combat payment card crime, as well as work with government institutions to provide support in aid of legislation for card fraud. During his tenure with AFP, Morris created a new counter terrorism division and led the Australian contribution to the successful investigation into the bombings in Bali. He was also a member of the Australian Prime Minister’s business task force on critical infrastructure protection and a member of the inter-governmental committee on identity fraud.

Solicitations Drop 12% as 50% of Issuers Pull Back

5, Country, Priority, UNITED STATESBy Robert McKinley 04/01/2004

Direct mail credit card offers declined 12% last year to 4.3 billion after peaking at 5.0 billion two years ago. Over the past five years, Americans have received 20.5 billion solicitations, responding to about 125 million of the offers. Synovate’s “Mail Monitor” reports that during 2003, U.S. issuers sent 1.27 billion reward offers and 900 million cash rebates offers to consumers. In 2002, 810 million rewards offers and 680 million cash rebate card offers were sent. Response rates remained at 0.6% compared 0.7% in 2000. Synovate says that, on average, each month 69% of U.S. households received 4.8 offers during 2003 compared to 75% of households receiving 5.1 offers during 2002. The researcher says that 90% of credit card direct mail comes from the 10 largest card issuers. Half of those issuers cut back last year causing the overall decline in mail volume.

ING Selects Axalto Smart Cards for the New Sony PlayStation Co-Branded MasterCard

5, BELGIUM, Country, PriorityBy Robert McKinley 04/01/2004

ING has selected Axalto to provide smart cards for its MasterCard co-branded program. The “ING/Sony PlayStation MasterCard” is targeted at students -and professionally active customers in the 20-30 age bracket. The smart card features discount prices on “PlayStation 2” consoles and games as well as a differentiated card body. The bank is using SMS to promote the card. Axalto, formerly known as Schlumberger Smart Cards & Terminals, as delivered 3 billion smart cards to date.

Bank Card Company to Test MasterCard Europe’s P2P Money Transfer System

5, BELGIUM, Country, PriorityBy Robert McKinley 04/01/2004

Bank Card Company announced its has signed up to test MasterCard Europe’s new person-to-person money transfer system. BCC is joined by SPRON in Iceland which is also launching a pilot of “MasterCard MoneySend.” They join the Royal Bank of Scotland group in the UK and CartaSi in Italy, both of whom have been testing the service. The first cross-border transaction was successfully authorized and cleared on MasterCard’s transaction processing network in January 2004. The transactions between MasterCard NatWest cards and BPM (Banca Popolare Di Milano) cards were processed through the MasterCard “MoneySend” service and customized for the card processing service of the Royal Bank of Scotland Group, and through the CartaSi’s “MasterCard MoneySend” service. Under the “MoneySend” program the receiver of the money is identified as an e-mail address, a mobile phone or the MasterCard card number or Maestro personal account number. The MasterCard “MoneySend” platform translates the recipient’s email or mobile phone number into an associated PAN and then routes the transaction over the MasterCard network. The recipient then receives an email or SMS message notifying them that the money has arrived. The process takes less than a minute.

Circuit City Posts Decent Finance Profit Post Sale

5, Country, Priority, UNITED STATESBy Robert McKinley 04/01/2004

Richmond, VA-based Circuit City Stores yesterday reported that its finance operation produced pretax income of $10.3 million in the fourth quarter, compared to $1.8 million one-year ago. The retailer says a significant factor in the increase was the conversion to a co-branded credit card, which began in the second quarter and led to a higher yield from an increased level of interest-bearing receivables. However, the increase was partially offset by increased charge-offs. Circuit City is currently in the process of closing the sale of its private-label credit card operation to Bank One. The deal should close this quarter. In the third quarter, Circuit City sold its bankcard operation to FleetBoston. Circuit City and Bank One agreed to an ongoing arrangement under which Bank One will offer private-label and co-branded credit cards to both new and existing customers. For complete details on Circuit City’s latest performance visit CardData ([www.carddata.com][1]). (CF Library 10/22/03 and 1/21/04)

[1]: http://www.carddata.com

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