ICICI Bank launches the super premium Sapphiro Credit Cards

ICICI Bank launched Sapphiro credit card – a super premium product targeted at the growing super affluent segment and the Bank’s Wealth Management clientele.

ICICI Bank Sapphiro is the third in the exclusive ‘Gemstone Collection’ of Credit Cards,

closely following the launch of the ICICI Bank Coral and the ICICI Bank Rubyx.

Card members will receive two cards - the ICICI Bank Sapphiro Platinum American Express Credit Card and the ICICI Bank Sapphiro Platinum Chip MasterCard Credit Card. The cards, which are linked to a single card account with a single statement and a single fee, provide access to a host of exciting privileges from American Express and MasterCard.

The ICICI Bank Sapphiro Credit Cards offer attractive benefits to card members:

• Complimentary membership to the exclusive ‘Leaders Club’ of the Leading Hotels of the World. Ltd., the largest luxury hospitality organization in the world
• Direct membership to the Gold Elite tier of Flying Blue, the leading European frequent flyer programme, upon purchase of a return trip air ticket from Air France-KLM
• Exclusive privileges at Atlantis the Palm, Dubai
• Worldwide airport lounge access through complimentary membership to Priority Pass, the world’s largest airport lounge access programme, American Express affiliated Altitude lounges, MasterCard affiliated Clipper airport lounges and 300+ lounges of the Air France-KLM and Sky Team alliance
• 2 complimentary Jet Airways business class tickets on joining
• Complimentary golf programme at more than 100 of the finest golf courses across India and worldwide
• Complimentary movie tickets and benefits at leading spas in India
• A minimum 15% savings at 550+ restaurants across India with the ICICI Bank
• Culinary Treats programme
• Rewards on all purchases powered by PAYBACK, India’s first and largest multi-partner loyalty programme
• 50% more rewards on all spend on the ICICI Bank Sapphiro American Express Credit Card American Express Selects, Exclusive Events, New Hotel Program, entréTM ,Reserved For You, 10X rewards and globaleshop privileges on the ICICI Bank Sapphiro American Express Credit Card
• Enhanced security to card members against possible misuse in the form of counterfeiting and skimming through the embedded microchip present in the ICICI Bank Sapphiro MasterCard Credit Card, in line with the global EMV (Europay, MasterCard, VISA) standard.

To apply online, click https://loans.icicibank.com/credit-card.html

Web: www.icicibank.com

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.

Credit Cards Spends

As per RBI bulletin, number of outstanding credit cards in India at December-11 was at 1.77 crores down from 1.8 crores at March-11. However, number of transactions and value of credit card transactions are showing a steady increase despite stagnation in number of credit cards.

Firstly, let’s have a look at count of credit card transactions. Number of credit card transactions for the first 3 quarters of FY 2011-12 was 234.8 million; a rise of 19.8% compared with that of the first 3 quarters of FY 2010-11.

Also the number of credit cards transactions is showing an average increase of 19.8% compared with same month of the previous year.

Credit card transactions for the first 3 quarters of FY 2011-12 were Rs. 707.11 billion; a rise of 27.6% compared with that of the first 3 quarters of FY 2010-11.

Credit card transactions touched Rs. 755.16 billion in value terms in FY 2010-11. Spends of the first 3 quarters of FY 11-12 has already crossed 94% of last financial year spends. Considering we can expect the current FY spends to be Rs. 963.85 billion on conservative basis and it will not be a surprise if it touches the magic figure of Rs. 1,000 billion.

Credit card transaction value	FY 2010-11 (Rs. billion)	FY 2011-12 (Rs. billion)
Till December (in first 3 quarters)	554.01	707.11
During the year	755.16	963.85 (projected)

Credit cards transaction in value term is showing an average increase of 27.9% compared with same month of the previous year.

However, average value of transaction per card is hovering in the range of around Rs. 2,700 to Rs. 3,100.

Note: Please note as per one of the reputed business newspaper websites, credit card transaction value in Dec-11 was up 53%. However, the correct percentage is 23%. Link of the site is:
http://articles.economictimes.indiatimes.com/2012-02-13/news/31055228_1_debit-card-card-transactions-credit-card
Refer the comment section also.

Source: RBI Bulletin (http://rbi.org.in/home.aspx)

Visa and Monitise Set to Transform Mobile Payments Services in India

Movida, a mobile payments joint venture backed by Visa and Monitise , has signed an agreement with HDFC Bank, India's second-largest private bank, to introduce a first of its kind mobile payment service. The new service allows HDFC Bank customers to pay bills, top up prepaid airtime and buy tickets from their mobile phone and is designed to operate across all mobile networks using any Visa and non-Visa branded payment account. It can be used by any mobile subscriber, anywhere and accessed by even the most basic mobile phone.

Naushad Contractor, Movida's President and head of the Monitise and Visa joint venture in India, commented: "This is a service designed for Indians. As we rollout the service to other banks more Indians will be able to benefit from mobile payments. Wave goodbye to waiting in long queues or visiting post offices or payment machines to pay bills as you will now be able to do that right from your mobile phone. This service is going to drastically reduce the time & energy Indians waste every day waiting to pay bills."

The new service uses menu-based USSD mobile technology making it one of the easiest services to use and the most widely available. After linking their HDFC Bank Visa or non-Visa payment card to their mobile phone number, cardholders can access the service via USSD over Movida's secure connection. From then on it is just a matter of selecting the payment service require and making the payment. The simple menu can complete a transaction in only a few steps.

And not only is the service simple, it's secure and backed by two of the world's most trusted brands in electronic and mobile payments. The system encompasses various security measures to maintain account integrity, including a unique PIN number set up on the phone to access the account information. Only the user's bank-registered phone can be connected to the service.

Contractor added: "This technology will be a game changer the way the iPhone was for mobile phones. This is a smart service for smart people and epitomizes everything Visa and Monitise stand for: it is fast, reliable, secure, and simple - and it will change the way consumers in India pay, forever."

Rahul Bhagat, Head-Retail Liabilities, Marketing & Direct Banking Channels, HDFC Bank, said: "HDFC Bank has always been at the forefront of technology to ensure that our customers have greater choice and convenience at their disposal. The partnership with Movida is a crucial step whereby we will enable our customers to carry out multiple mobile commerce transactions from the most basic handsets."

This service reaffirms HDFC Bank's commitment to bring the latest service and convenience to our customers. All our customers throughout the country can now pay their bills and top up talk time with a few clicks of their mobile phones. This will save them considerable time and help them focus on more important things in life."

As India continues the upgrade of its Internet and telecoms infrastructure to rural areas, the new mobile service finally allows millions of Indians currently excluded from enjoying the benefits of mobile and online payment services to become part of the digital age via their basic prepaid mobile phone.

The service is initially being offered to a select number of valued customers before being rolled out across the country later in the year.

USSD: Unstructured Supplementary Service Data

USSD is a protocol used by GSM cellular telephones to communicate with the service provider's computers. USSD can be used for prepaid callback service, mobile-money services, location-based content services, menu-based information services. USSD messages are up to 182 alphanumeric characters in length. Unlike Short Message Service (SMS) messages, USSD messages create a real-time connection that remains open and allows for a two way exchange of a sequence of data. This makes USSD more responsive than services that use SMS.

About Movida India Pvt. Ltd:

Movida India Pvt. Ltd. is a 50:50 Joint Venture between Visa /quotes/zigman/502306/quotes/nls/v V +0.13% and Monitise that establishes mobile handsets as the core device for making electronic payments, Movida works primarily with financial institutions and mobile service operators to provide services to consumers across India and epitomizes the fundamental technologies of Visa and Monitise to deliver a fast, reliable, secure, and simple service using existing technologies and networks. Movida aims to revolutionise mobile based payment options by providing cost effective and secure solutions that are easy to implement for Movida's clients, and are easy to use and secure for consumers. For details please visit www.movida.in

About Visa Inc.:

Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks--VisaNet--that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com .

About Monitise

Monitise plc is a technology and services company delivering mobile banking, payments and commerce networks worldwide with the proven technology and expertise to enable financial institutions and other service providers to offer a wide range of services to their customers in developed and emerging markets.

With live services in the UK, the US, India and Africa, the company is working with international partners to extend trusted and secure mobile banking, payment and commerce services in territories worldwide, including Europe, Asia Pacific and Latin America. Monitise has strategic partnerships with Visa Inc., Visa Europe, RBS Group and FIS. Other leading partners and clients include HSBC, Lloyds Banking Group, First Direct, U.S. Bank, Standard Chartered Bank, Travelex, Vocalink, Vodafone, Orange, O2, T-Mobile, 3 UK, Research In Motion, Best Buy Europe, The Carphone Warehouse, First Eastern, Astra, JETCO and PCCW mobile. More information is available at www.monitisegroup.com

http://www.marketwatch.com/story/visa-and-monitise-set-to-transform-mobile-payments-services-in-india-2012-02-22

Citibank India renews focus on credit cards

Citibank India is once again growing its unsecured business (credit cards and personal loans), that had taken a hit following the financial crisis of 2008. Unsecured loans constitute 50 per cent of the retail book, while the remaining 50 per cent comes from mortgage loans, advance against shares and deposits.

"The new client acquisition for credit cards has grown by 50 per cent compared with last year. Going forward, we expect a growth of 20-25 per cent in credit cards. We have 2.2 million cards inforce as of December 2011," said Anand Selva, country business manager, global consumer group Citibank India.

The bank is also working on increasing its market share among the emerging affluent class to 15 per cent in the next two to three years from the existing 10 per cent. In line with its new strategy, the bank on Monday launched Citibanking, a new range of products, services and benefits for customers who maintain a relationship value of minimum Rs 2,00,000 with the bank.

Mckinsey India estimates the emerging affluent segment in India constitutes of 16 million households, with 37 per cent in the top 14 cities. This segment consists of salaried professionals and also includes 35-40 per cent of self employed individuals with an annual income ranging from Rs 3,00,000 to Rs 1,500,000. The segment is expected to grow at a CAGR of 9 per cent, while the existing Rs 25,000 crore revenue pool is expected to grow at a CAGR of 16 per cent.

"The emerging affluent segment is a top priority for Citibank in Asia. The segment is large and growing quickly as a result of urbanisation, globalisation and economic expansion. Today, we are excited that India is launching a new value proposition for the emerging affluent class," said Daniel Baranowski, head of emerging affluent segment for Citi in Asia Pacific.

For customers who maintain a relationship value of a minimum Rs 2,00,000 with the bank, there would not be any cash withdrawal charges at any ATM anywhere in the world, in addition to zero fees on a host of banking services such as draft issuance, delivery, duplicate statement, funds transfer and stop payment. The bank will provide a dedicated personal banker as the single-point-of-contact for financial planning, emergency cash services of up to $1,000 through Citibank's overseas branches.

The bank has also launched a debit card that offers evergreen reward points that can be redeemed for air-miles or cashback. Its customers can avail of a Citibank Rewards credit card with 1,500 bonus reward points, complimentary access to select airport lounges and dedicated concierge services via debit card.

Citigroup hopes to flood China with credit cards

Citigroup (C) is set to become the first global bank to issue its own credit cards in China. The financial giant said Monday that Chinese banking regulators have given the company the green light to begin issuing credit cards in the country.

Although credit cards are fairly new to China (local banks introduced them to the mainland only in the mid-1980s), the market is growing fast. Some 268 million credit cards are in use in China (compared with more than 1 billion in the U.S.), roughly five times as many as were in circulation on the mainland as of 2006. Amid persistent economic weakness in the industrialized world, large Western financial institutions are eager to tap the country's enormous market. 

For Citi, consumer lending in Asia-Pacific is already big business, generating profits last year of $1.9 billion on $8 billion in revenue. The company disclosed last year that expansion in the region has been the largest contributor to the bank's earnings. To this end, Citi CEO Vikram Pandit has made the push into China and other emerging markets, such as Brazil and India, a pillar of the company's growth strategy. As much as three-quarters of incremental consumer spending will come from these economies by 2020, according to some industry estimates. By that measure, Asia would surpass North America as the world's biggest consumer market in less than a decade.  

Until 2008, foreign banks were required to partner with Chinese banks to issue credit cards. The only bank outside the mainland to offer its own credit cards in China to date is Hong Kong's Bank of East Asia. Such restrictions have left the card market largely under the control of a single local payments processing company, UnionPay. 

But non-Chinese financial firms have been pushing the People's Republic for years to open the industry to foreign players. Now, Citi is expected to introduce a bank-branded credit card in China by year-end, which is certain to spur other big financial institutions to try to follow suit. One key in how China's credit-card sector will develop in the coming years -- whether Chinese authorities will end UnionPay's monopoly on card processing by permitting MasterCard (MA) and Visa (V) to launch rival networks. 

Why Chinese savers could thwart Citi

Several factors are driving the growing use of credit cards in China. The country has a burgeoning middle class, especially in the large coastal cities that dominate trade on the mainland. Younger, tech-savvy consumers are also increasingly comfortable using credit, especially with the emergence of online shopping. 

Still, as of last year only some 6 percent of all commercial transactions in China were conducted using a credit card. That reflects the significant obstacles that could slow the adoption of credit cards in China and impede Western banks. For one, China's payments infrastructure outside its biggest cities remains rudimentary. 

More important is the traditional focus in China on saving money. Chinese households save about one-fourth of their discretionary income, six times the average savings rate in the U.S. A corollary to such concerns is the widespread cultural aversion to debt. Debit cards are a far more popular form of payment in China, with more than 2 billion of the cards believed to be in use (for a population of 1.3 billion). As one marketing expert who has studied Chinese consumer attitudes told Shanghai Daily last year:

"There is a great reluctance to go into debt and to then pay interest on that debt, which of course is a defining feature of credit card products," says [the] study's co-author Steve Worthington of China and Australia's Monash University.

Help for the U.S. trade deficit?

Yet such social attitudes are changing, easing Chinese consumers' reluctance to buy on credit. In 2010, credit card-based transactions in China amounted to $1.6 trillion, the Financial Times notes. During last month's week-long Chinese Lunar New Year holiday, mainland consumers racked up $15.9 billion in credit-card charges, up more than 30 percent compared with the same period last year, according to UnionPay.

Growing credit-card use in China could have repercussions for the broader global economy. It could foster a pick up in domestic consumption, long a goal of Western governments eager to boost exports to China. That, in turn, could stimulate growth in the U.S. and in Europe. 

It also could help shrink America's enormous trade deficit with the People's Republic, a persistent source of tension in U.S-China relations. Since

2001, that gap has cost the U.S. 2.8 million jobs, according to the Economic Policy Institute, a Washington think-tank. Alluding to his concerns about the deficit, President Obama said in his State of the Union speech in January that the U.S. will form a trade enforcement group to investigate "unfair trade practices in countries like China."