Cards

ERIC KONIGSBERG and SEWELL CHAN; C. J. Hughes contributed reporting. New York Times

BRAD STONE New York Times

The Reserve Bank of India, the country's central bank, has told financial institutions to put mobile-banking services on hold so financial authorities can create and issue guidelines for mobile transactions, a Reserve Bank spokesperson tells CardLine Global. "The guidelines on mobile banking are likely to be announced soon, and we have advised banks to put on hold their plans till then," the spokesperson says without specifying when authorities would finish the guidelines . "This is to ensure that mobile banking takes off in a sound and robust manner to benefit both the banks and their customers." The spokesperson declines to discuss any mobile-banking related complaints financial authorities may have received. Also unclear is whether the directive applies to mobile payments-transactions that go beyond simple banking services. Clear guidelines from the Reserve Bank could help spark interest in mobile banking and payment services, Prathima Rajan, an India-based analyst with United States-based research firm Celent LLC, tells CardLine Global. She adds that while some private Indian banks, along with some foreign banks operating in the country, have launched mobile banking for debit or credit alerts and balance checks, mobile payments has a smaller foothold. "Mobile payment is still in a nascent stage in India, but the fact that India constitutes around 261 million mobile subscribers makes it a potential market for such transactions in the future," Rajan says.

The southeast section of London represents the capital for card fraud in the United Kingdom, according to a joint study from two UK-based security firms. The firms based the study results on their analysis of more than 30 million "good," or nonfraudulent, and "bad" card transactions between 1 Jan. and 30 June, according to a joint statement from The 3rd Man Group PLC and 192business.com. Other card-fraud hotspots include Coventry, Dartford, Manchester, Nottingham and Romford. Wales and Northern Ireland experienced the least fraud, according to the study. The companies claim card fraud occurs more frequently than official figures suggest because victims do not report all fraud attempts. Earlier this month, Cifas, a UK-based fraud-prevention service, named London the top hotspot for overall fraud, including credit cards, loans, mortgages and bank accounts (CardLine Global, 16 July). 3rd Man says Liverpool and Kilmarnock have reduced card-fraud because "local policing activity has targeted these criminals, and it's having a clear effect," Andrew Goodwill, director of 3rd Man, says in a release.

The Chicago Police Department announced this week that residents of the city turned in more than 6,800 guns on Saturday in exchange for MasterCard prepaid gift cards. Chicago offered residents $100 gift cards in exchange for turning in guns and $10 prepaid MasterCards for turning in gun replicas, BB guns and air rifles (CardLine, 7/24). The city exchanged the cards for guns at 25 churches as part of its fourth campaign to collect firearms since 2006. Chicago collected 6,700 guns during a similar initiative last summer.

Givex Corp., a Toronto-based gift card and customer-loyalty company, has signed an agreement with Tree Canada, a nonprofit organization that encourages Canadians to plant and care for trees. Under the agreement, Givex will plant trees to counter the carbon dioxide created when cards are made. Givex paid for the planting of 2,500 trees Sept. 13, Jim McCready, registered professional forester and program forester for Tree Canada, tells CardLine. Members of the Sagamok Anishnawbek First Nation, a Native American tribe. will plant the trees near Espanola, Ontario, the company says. McCready says First Nation has a registered professional forester on staff, so Tree Canada decided to work with the organization. Tree Canada is based in Ottawa, Ontario.

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SEWELL CHAN; Andy Newman and Mathew R. Warren contributed reporting. New York Times

While operators of transit fare-collection systems in London, New York, Washington, D.C., and a few other places consider enabling riders to pay fares with contactless cards issued by banks, no similar push to accept open-loop payment cards exists at the pioneering Octopus Cards Ltd. scheme in Hong Kong, according to one executive. Octopus, one of the largest fare-collection systems in the world, has been building its system and brand since 1997, and more cardholders are using the cards to make retail purchases, says Brian Chambers, head of Octopus Knowledge, the consulting arm of the holding company that owns the Hong Kong transit card scheme. "What's the effect of losing your brand, losing your customer relationship?" Chambers tells CardLine Global sister publication Cards&Payments. Octopus and Citibank earlier this month announced the planned launch of the first co-branded credit card that carries the Octopus application. But that application is separate from the Citi credit feature. Octopus estimates it has 17 million cards in circulation that cardholders use more than 10 million times each day. The transactions total more than HK$85 million (US$10.9 million euros or 6.9 million euros) per day. While estimates vary on the share retail and other nontransit transactions make up, Chambers places it at 30% of the total value cardholders spend with the prepaid Octopus cards. He says about 2,500 merchant locations accept Octopus. Those are part of roughly 50,000 terminals where users can tap their cards to pay, most of them on buses and at gates of subways, ferries and other modes of transport throughout Hong Kong. All of these terminals would have to be modified to accept payment from contactless debit, credit and prepaid cards from Visa Inc. or MasterCard Worldwide. "The cost of retrofitting would be enormous," Chambers says. The transit system or its banking partners also would have to update their back-end systems to calculate the variety of fares and discounts that transit operators offer customers who use bankcards. Chambers says he does not believe banks are interested in capturing the "micropayments" that transit fare collection represents.

Bank of China has launched a prepaid card with China UnionPay that is designed to appeal to visitors travelling to Beijing for the Olympics, a bank spokesperson tells CardLine Global. Cards will come in amounts that range from 300 yuan (US$43.90 or 27.90 euros) to 1,000 yuan, the spokesperson says. Cards expire after one year. "Foreign travellers can purchase the card at any of our branches in Beijing," the spokesperson says. The bank hopes to issue 2 million cards. The bank will refund unused funds. At least 1.4 million point-of-sale terminals in China will accept the card.

Tesco PLC, a supermarket chain based in the United Kingdom, said Monday it will assume full ownership of its financial-services arm by buying the 50% stake owned by the Royal Bank of Scotland. Tesco Personal Finance Group Ltd. offers credit cards, insurance and related products, and it operates a network of about 2,700 ATMs, according to a statement from Tesco. The company will spend £950 million (US$1.9 billion or 1.2 billion euros) for the stake from Royal Bank of Scotland. The bank and supermarket chain created the financial-services arm in 1997 as a joint venture. Tesco expects the arm to generate an estimated pretax profit of £240 million this year, up 16.5% from £206 million last year. The supermarket chain says assuming full ownership will enable the company to "to extend its financial-services business from a collection of popular financial products to that of a full-service retail bank offering more choice, innovation and value to customers, and better returns to shareholders," according to the statement. Tesco claims to have 6.9% of the UK credit card market.

RocketBux Inc. has signed an agreement with Thanks Again LLC to enable consumers to register for Thanks Again products and receive promotions using mobile phones, RocketBux says. The phones of consumers who register their credit cards with Thanks Again will receive images of coupons with bar codes that merchants can scan at the point of sale, the company says. Consumers can begin to use mobile phones to register their credit cards with Thanks Again, which is based in Tyrone, Ga., and receive coupons starting Sept. 1, Walt Granville, RocketBux vice president of sales, tells CardLine. RocketBux and Thanks Again plan to place ads in the Continental Airlines Inc. in-flight magazine to promote the initiative to members of the OnePass frequent-flyer program, Granville says. In October, RocketBux plans to promote the service to members of US Airways Inc.'s frequent-flyer program, Granville says. Bend, Ore.-based RocketBux operates a dedicated Web site that mobile-phone users can use to register their cards, Granville says. Once consumers register, they can begin to receive discount coupons on their mobile phones based on what they purchase with their credit cards, Granville says. Consumers do not need to pay to register, and merchants pay fees to have their businesses included in the promotions, he says.

Visa Inc. has equipped more than 5,000 London retailers with its contactless payWave technology and expects that number to reach 13,000 by the end of the year. By 2012, when London plays host to the Olympic Games, payWave readers will be ubiquitous, according to Visa executive Guido Mangiagalli, who spoke to retailers late last month in London about the contactless rollout. Visa declines to say how many payWave terminals it has deployed for the Beijing Olympics, which begin in August. So far, Visa says it has worked with Olympic sponsor Bank of China to install an ATM network and hundreds of point-of-sale acceptance devices at competition venues and elsewhere in Beijing. Throughout China, Visa has installed more than 90,000 ATMs and has signed up some 190,000 merchant locations or outlets for card acceptance to help prepare for the Olympics and beyond, a spokesperson says. http://www.cardforum.com http://www.sourcemedia.com

Moneris Solutions Inc. today announced it is acquiring Alabama National BanCorp.'s merchant-payment business in an agreement that expands the payment processor's presence in the Southeast. Moneris, whose U.S. headquarters is in Schaumburg, Ill., will service 103 Alabama National banking centers in the Southeast and the bank holding company's established merchant-processing portfolio, according to Moneris. Additionally, Moneris will handle all credit card processing sales-and-servicing functions. The companies did not disclose the financial details of the transaction. The companies did not state when they expect the deal to close. The acquisition increases Moneris' portfolio size, bank network and brand presence in the Southeast, the company says. "Moneris has very aggressive growth plans," Greg Cohen, president of Moneris U.S., said in a statement. A Moneris representative was unavailable to comment by CardLine deadline. http://www.cardforum.com http://www.sourcemedia.com

Jul. 22--Patience is not always virtuous.

A few weeks ago, I wrote a column about the wisdom of taking loans against your 401(k) account. The story mentioned a company called Reserve Solutions that allows customers to access their loan via a debit card at an A.T.M. or any merchant that accepts Visa.

United Kingdom-based Standard Chartered bank has begun issuing yuan-denominated debit cards in China after signing a card agreement with China UnionPay, a bank spokesperson tells CardLine Global. The bank earlier this month received permission from Chinese financial authorities to issue the cards (CardLine Global, 14 July). The bank is among the first foreign financial institutions to issue yuan cards in China. To promote the launch, the bank will waive its 20-yuan (US$2.90 or 1.90 euros) annual fee for the card. The bank also has applied for permission to issue yuan credit cards, the spokesperson says.

Dover Corp. expects to sell financially troubled off-premise ATM manufacturer Triton Systems of Delaware Inc. before the end of the year, Paul Goldberg, Dover treasurer and director of investor relations, tells ATM&Debit News, a CardLine sister publication. Dover, a New York-based $7.4 billion company with a large manufacturing portfolio, said Wednesday it is close to selling Triton to an undisclosed buyer. Robert Livingston, Dover president and chief operating officer, says the company has "a viable buyer currently in place that [will] allow us to move the process forward." Goldberg said, "There are several interested parties." When ATM&Debit News pointed out the discrepancy between his statement and Livingston's, Goldberg declined to say more. Dover is selling Triton because it is not a core product to Dover's business, and Triton does not control the market share Dover expects from its companies. "If you know our company, they are either No.1 or No 2 in their markets," Goldberg says. "We did not feel we could become one of the bigger players in the [ATM] market." Triton is one of the nation's largest off-premise manufacturers. In 2006, the Long Beach, Miss.-based company shipped 12,300 ATMs, placing it fourth behind NCR Corp., Diebold Inc. and Tranax Technologies Inc. Triton's 2006 shipments, however, were down 16.4% from 14,782 shipments in 2005. Triton has not disclosed how many ATMs it shipped last year.