2011 Global Credit Card Transactions Rose 12.1% over 2010- The Nilson Report‏

Transactions at merchants on general purpose payment cards carrying the American Express, Diners Club, JCB, MasterCard, UnionPay and Visa brands totaled 135.33 billion for 2011, up 14.56 billion or 12.1% over 2010(1), according to the annual special report on Global Credit Card Brands published by The Nilson Report, a respected trade newsletter on the payments industry.

"These results reflect a continuation of the worldwide movement from cash and checks to payment cards, both debit and credit," said David Robertson, publisher of The Nilson Report.

The number of credit, debit, and prepaid cards in circulation reached 6.54 billion at the end of 2011, up 12.4% or 718.7 million. UnionPay added the most cards (534.0 million) for a 22.1% increase. Visa followed with an increase of 88.5 million cards, up 3.9%. MasterCard added 86.4 million cards, up 8.9%, JCB added 3.3 million cards, up 4.6, American Express added 6.4 million cards, up 7.0%, and Diners Club added 0.2 million cards, up 3.1%.

Of total payment cards in circulation carrying these global brands, 68.80% were debit, up from 66.60%. Total volume of consumer and commercial purchases and cash on these global card brands, credit and debit cards combined, increased by $2.295 trillion in 2011. Purchase volume for goods and services, which excludes cash advances on credit cards and cash withdrawals on debit cards, increased by 18.5%. Visa and MasterCard purchases accounted for $70 of every $100 in purchase volume, compared with $73 in 2010.

Credit cards issued to U.S. cardholders with the Visa, MasterCard, and American Express brands generated 36.78% of their total credit card purchase volume worldwide, down from 37.65% in 2010.

(1)These purchase transactions include commercial and consumer credit, debit, and prepaid cards. Prepaid cards are included in debit figures. Visa figures include both Visa Inc. and Visa Europe.

HSBC India Unsecured Lending Strategy

Hongkong and Shanghai Banking Corporation (HSBC), the second-largest foreign bank in the country in terms of branch network, has resumed offering unsecured loan products after more than two years.

While the lender is offering personal loans only to clients with whom it has a prior banking relationship, it is acquiring new customers in the credit card space. The bank, however, is now more cautious than ever before in sourcing these businesses.

“This time we are doing things differently,” Gannesh Bharadhwaj, head of retail banking and wealth management at HSBC in India, told Business Standard. “The last time all of us went into the market, things blew up and we shut shop. Now, everybody is going back to the market again. If we do the same thing, why would we get a different result? Hence, this time around, we are being very careful about the customer we target.”

In the credit card business, where close to 90 per cent of the new sourcing is likely to be of customers who previously did not have a banking relationship with HSBC, it has planned to partner organisations that can share the database of their clients. The bank has partnered travel portal MakeMyTrip for a co-branded credit card. As part of this tie-up, the travel portal will share its clients’ database with the bank, that will allow the lender to assess the profiles and target customers. Through a ‘Corporate Employee Programme’, the bank is offering credit cards to employees of top companies in the country.

“We try and look for proxies where we feel we can find the customers we want. We are a bank for the mass affluent. We are not out there to compete with large Indian banks,” Bharadhwaj said.

The bank’s strategy to acquire new customers for credit cards will also allow the lender to cross-sell financial products, he added. HSBC’s credit card base in India is less than a million and the bank is now issuing close to 10,000 cards every month.

The bank had stopped secured and unsecured retail lending in India following the financial crisis of 2008-09. The move was aimed at improving profitability, which was stressed due to deteriorating asset quality. The losses in the retail banking and wealth management businesses narrowed to $14 million in 2011 from $83 million a year earlier.

Bharadhwaj said the bank had resumed mortgage lending in 2010 and was currently ramping up this business. The average ticket size of these loans was higher than the industry average and the mortgage product was aimed at the bank’s premium clients.