Credit

Standard Chartered India has begun issuing a platinum version of its "Manhattan" credit card, a bank official tells CardLine Global. The bank hopes to gain more customers between the ages of 30 and 35 who earn at least 500,000 rupees (US$11,700 or 7,500 euros) annually, says R.L. Prasad, the bank's general manger for credit cards and personal loans. The bank has issued some 250,000 regular Manhattan cards and hopes to issue 100,000 platinum cards by 2009, Prasad says. The platinum cards offer 5% cash-back rewards for purchases made at supermarkets and department stores. Cardholders pay an annual fee of 2,000 rupees. Standard Chartered has issued 1.6 million cards in India, Prasad says.

Cam Commerce Solutions Inc., a Fountain Valley, Calif., provider of payment processing systems for small and midsize merchants, said Tuesday that it has agreed to sell itself to Great Hill Partners LLC, a Boston private-equity company.

MIAMI — Despite a slowdown in the growth of international remittance volumes that began last year, Wells Fargo & Co. said its remittance business achieved triple-digit growth in the 12 months through May, reflecting what it sees as an ongoing shift to banks from nonbank providers.

JPMorgan Chase & Co. has started offering a reward program that lets people earn points on multiple accounts.

Equifax Inc. and Fair Isaac Corp. have agreed to market new FICO score analytic products jointly, ending a legal dispute.

In one of the latest efforts to reach out to environmentally conscious cardholders, two organizations have launched a test in the United Kingdom during which consumers can use debit and credit cards to track their carbon emissions. The Royal Society for the Encouragement of Art, Manufactures and Commerce, based in the UK, and France-based card processor Atos Worldline say they are testing a personal carbon-emissions calculator that uses Nectar-branded loyalty cards. The test is scheduled to last five months and will involve up to 1,000 participants, the Royal Society says in a statement. Test participants will receive carbon credits, though the amount was unspecified. Carbon credits give financial value to the cost of polluting the air. They are used in an effort to reduce greenhouse gas emissions. Each time a participant uses a Nectar card to buy fuel at a BP petrol station, Atos will deduct carbon credits from that participant's online account. Cardholders can track their carbon use online and trade surplus carbon credits through an online trading system. Atos is providing the technology for the immediate carbon calculations. Neither Atos nor the Royal Society responded to CardLine Global requests for comment. The trial will help show how a personal carbon-trading scheme could operate in practice, Matt Prescott, director of the society's CarbonLimited project, says in a statement. Adil Moussa, an analyst for United States-based Aite Group LLC, tells CardLine Global the card effort represents a "really interesting" addition to environmentally friendly card schemes already offered in Europe. "This one is clever in the sense that this carbon card is being tied into a credit card or prepaid card," Moussa says. "It's giving you a reason to use it." Other "green" credit cards, such as Barclaycard's Breathe Easy card, offer discounts on purchases of "green" merchandise such as household cleaners. (CardLine Global, 27 Nov. 2007). MBNA Canada Bank enables cardholders to earn points the bank uses to buy carbon-offset credits that support environmental projects (CardLine Global, 15 Nov. 2007). Moussa says such cards are about marketing. Companies "find a segment of the population and come up with products to cater to them," he says. "These products really strike a chord with some people." The U.S. Federal Trade Commission earlier this year said it was working to clarify carbon-offset claims made by issuers and other companies.

Visa Europe has introduced a payment card that enables consumers to enter one-time passcodes designed to reduced fraud for online transactions, a Visa Europe spokesperson tells CardLine Global. Visa says the technology is suitable for chip-based debit or credit cards. "Visa is now offering this to members as a pilot," the spokesperson says, declining to discuss which banks have expressed interest in the technology, how long the tests will last and how many of the "Visa PIN cards" issuers will distribute. Visa wants consumers to use the cards while making an online transaction or logging in to online-banking sites. A cardholder would press a button on the card to start the authentication process and, when prompted, enter the appropriate PIN. The card's display panel provides a one-time passcode, which the cardholder enters into the site's Verified by Visa window, the spokesperson says. "This is then forwarded to the issuing bank, which validates the passcode," the spokesperson says. "For online banking, once you've logged in and put in your account number, the passcode would be in place of the password. Again, it would be the issuing bank that validates."

Shanghai Rural Commercial Bank plans to issue its first credit card in China later this year, a bank spokesperson tells CardLine Global. "Our first credit card will be issued in Shanghai, and initial customers will be from our existing debit cardholders," the spokesperson says. The bank, founded in 2005, has issued more than 3 million debit cards. Australia-based ANZ Bank bought a 19.9% stake in the bank in 2006, and that investment should help the Chinese bank in its credit card efforts, an analyst says. "One of the major strategic cooperation areas between Shanghai Rural Commercial Bank and ANZ is retail banking, of which the credit card is an important part," Wenli Yuan, a senior analyst at the China office of United States-based Celent LLC, tells CardLine Global. "The [Chinese] bank will, however, face a challenge in attracting people who already have credit cards from other banks."

Woori Bank may slow the expansion of its credit card business to maintain profitability, a spokesperson for the Seoul, South Korea-based bank tells CardLine Global. The spokesperson declined further comment, but published reports indicate the bank's incoming CEO, Lee Chonghwi, is worried that rapid growth has eroded profit margins. The bank previously announced plans to issue debit cards in China and establish more than 50 branches in that country (CardLine Global, 4 Feb.). "Woori Bank has chosen long-term growth instead of short-term revenue," Yumiko Manchu, a Tokyo-based analyst with Celent LLC, tells CardLine Global. "Card companies need to be keen on market demands and should be flexible enough to adjust their strategy according to them."

South Korea's household debt, which includes credit card bills and loans, reached 640.5 trillion won (US$623.1 billion or 402.8 billion euros) by the end of the first quarter ended 31 March, up 9.2% from 586.5 trillion won in the same period a year earlier, according to the Bank of Korea, the country's central bank. Payments for goods made with credit cards increased to 35.5 trillion won during the quarter, up 13.8% from 31.2 trillion won in the same period last year. Bank officials were unable to offer immediate comment to CardLine Global.

Bank of America Corp. announced today that more than 1 million customers are using the bank's mobile-banking service. "They are definitely a leader in the space," says Gwenn Bézard, senior analyst for the Aite Group, a Boston-based consultancy. Mobile-banking users can check account balances, pay bills, transfer funds and view transactions using cell phones and other mobile devices. BofA's mobile-banking users performed more than 4 million mobile sessions in May, and two-thirds of the active users are younger than 35 years old, according to the Charlotte, N.C.-based bank. Residents of large cities, such as Los Angeles, Atlanta and Washington, D.C., are among the fastest adopters of mobile banking, according to BofA. Bézard suspects the bank's high rate of mobile-banking adoption stems from its "already large base of online banking users." The bank has nearly 25 million online-banking customers, according to BofA, which introduced mobile banking as one of its online-banking services in May 2007. "It's a pool they can tap into to market mobile banking," he says. BofA is "at the forefront of offering this service," contends a BofA spokesperson, who declined to compare BofA's mobile-banking numbers with those of industry competitors.

Credit card reform is emerging as a key issue on the campaign trail for presumptive Democratic presidential nominee Sen. Barack Obama, D-Ill., who is touting industry reform at public appearances this week. Kicking off his general campaign in Raleigh, N.C. on Monday, Obama promised new laws to curb what he calls abusive credit card practices. At another stop on his two-week, cross-country tour, Obama met today in Chicago with hard-pressed borrowers and consumer advocates. Obama vowed legislation that would prohibit credit card issuers from retroactively raising cardholders' interest rates on balances without their approval. He also promised to establish a federal credit card-rating system to help inform consumers of credit card choices. Obama last fall introduced the Credit Card Safety Star Act of 2007 with Sen. Ron Wyden, D-Ore. The legislation, which was referred to the Committee on Banking, Housing and Urban Affairs, would create a federal five-star rating system for credit cards (CardLine, 11/28/07). Late last year on the campaign trail, Obama began advocating a Credit Card Bill of Rights that would crack down on issuers that use what some consider deceptive practices (CardLine, 12/5/07).

A phone call to the wrong individual may have helped put the kabosh on a credit card scam in Wisconsin. A Wisconsin Bankers Association employee received a phone call two weeks ago from someone promising to lower his credit card rate to 6.99% if he would supply personal information, according to Eric Skrum, an association spokesperson. When the employee asked for basic information, such as who was making the offer, the scammer hung up, Skrum says. So the association issued a press release Monday warning consumers not to release personal information, such as account or Social Security numbers, to unknown callers. If someone calls with an offer, consumers should call back only after obtaining the company's phone number from an independent source, the release states. The association does not know how many other consumers received the calls or whether anyone has been victimized by the scam, Skrum says.

Thirty-seven million consumers have no credit scores but would fall into the prime credit category if credit agencies assessed the individuals' loan risk, Mark Greene, CEO of Fair Isaac Corp., said yesterday at SourceMedia's third annual Underbanked Financial Services Forum in Miami. The company's research suggests 41 million "subprime" consumers live in the United States, as do 50 million underbanked consumers. But those groups overlap only to the extent that some 12 million consumers are subprime and underbanked, Greene said. "I am concerned that many of your colleagues still believe the subprime and underbanked credit markets are the same," Greene told the audience, noting lenders lose a large business opportunity by failing to offer such consumers credit. Lenders that want to reach those consumers can find alternative ways to create credit scores, he said. Fair Isaac and other companies, such as Pay Rent Build Credit Inc., offer alternative credit scores based on payment histories for rent, utilities and other household bills, Greene said. Lenders also may want to create their own systems to produce alternative credit scores, he said. Companies that want to lend to consumers with little or no credit history should start with small loans to minimize risk. They also should become the first in their area to offer loans to those consumers, if possible, and they should be prepared to make modifications based on what does and does not work, Greene said. Some lenders may want to consider providing financing for nontraditional purchases such as for furniture and other consumer needs. SourceMedia publishes CardLine.

Employee training and automated processes ranked high on a list of best practices for commercial cards that Visa Inc. released today. "Leading companies not only provide commercial card training to their employees but also require cardholders to pass a test to ensure the highest level of compliance," the commercial card study says. "Study participants that implemented mandatory training and testing requirements established a minimum passing score of between 80% and 100%." In other best practices, a $7.5 billion manufacturing company saved more than $350,000 in one year by requiring purchasing card use for transactions of less than $1,500 that do not require a purchase order. Automating a business's process for obtaining goods and services, from procurement to payment, is one of the 60 recommendations of the study. Automation should extend to reporting and spend analysis tools, Visa says. Not surprisingly, Visa also recommends businesses encourage reluctant suppliers to accept card payments. Deloitte Consulting conducted the study in 2007 on behalf of Visa Commercial Solutions. Research included 90 interviews with more than 60 large- and medium-sized companies throughout the world.

Total System Services Inc., known as TSYS, Wednesday expanded its presence in the Mexican card market by signing a multiyear payments-processing agreement with Globalcard S.A. Financial. Terms of the deal were not disclosed. Globalcard issues Visa and private-label credit cards to unbanked Mexicans. Globalcard launched its consumer card portfolio in April, a TSYS spokesperson says. Globalcard eventually may offer debit and prepaid cards, the spokesperson tells CardLine. Under the agreement, TSYS will provide account-processing, risk-management, portfolio-management and reporting services. TSYS now processes for eight Mexican financial institutions, including banks and credit card companies.

NetSpend Corp. will develop a prepaid debit card for QC Financial under an agreement announced Monday.

Fiserv Inc. is working to offer its walk-in bill-payment service in branches of banks that are trying to reach the underbanked, a large and potentially lucrative market.

The Treasury Department hopes that encouraging the unbanked to receive their Social Security benefits on a prepaid card will save $42 million a year, despite several fees.

MIAMI — Wal-Mart Stores Inc. has sold more than 1 million of its prepaid MoneyCards, and customers have loaded more than $1 billion on to them, since they were introduced nearly a year ago, said Jane Thompson, the president of the retailer's financial services business.