Tuesday, 19 April 2011
China Cards Profits to Soar as UnionPay Monopoly Set to End
Lafferty Group, a global financial industry research company has announced that: Strong and credible rumours are circulating in China that China UnionPay, the state-owned payments company, will lose its nationwide cards network monopoly in two years. This follows a recent complaint by Visa, the largest of the two global cards networks, to the World Trade Organisation (WTO). Such a move is likely to lead to substantial increases in merchant fees for cards transactions in China, leading in turn to substantial increases in income for cards issuers. Currently, average merchant fees in China are 0.57 percent, compared with 2.37 percent in the US and 1.29 percent in Western Europe.
"People's Bank of China (the central bank, which owns CUP) told UnionPay that the present position was a cut-and-dried case of unfair competition that could not be defended and said it has two years to prepare for competition from Visa and MasterCard", a Chinese cards executive told Lafferty Cards Insights. Visa and MasterCard had not returned calls by the time this story went public.
China's credit cards industry recorded a small pre-tax profit in 2010 for the first time in its history, according to Lafferty Group's World Cards Intelligence research service. The industry's $251m overall profit represents a demarcation line for China's cards business as issuers finally begin to see a return on the enormous investment pumped into the market over the last 10 years. Lafferty Group forecasts that pre-tax profits will continue to expand, reaching $2.4 billion by the end of 2015.
China's credit card industry represents one of the fastest growing markets in the world and has the potential to become one of the most lucrative. Between 2002 and 2010, the total number of credit cards in China grew almost six-fold to 230 million, while billed volume increased from $4.8 billion to $748 billion in the same period. By 2015, Lafferty Group forecasts China will be the largest market in the world in terms of the number of credit cards in issue.
Despite rapid growth, profit per card of just $1 is a long way behind most other credit card markets. A traditional savings culture in China has discouraged borrowing and consequently net interest income, a key revenue driver for credit cards around the world, is still loss-making. With more than four-fifths of customers paying off their entire bill each month, encouraging consumers to rollover their balances will be an important requirement in driving China into the world's top tier in terms of credit card profits. The other alternative for issuers is to increase merchant service fees. Several continental European countries with low revolve rates nevertheless have very profitable cards businesses thanks to strong merchant fee income.
Michael Lafferty, Chairman of Lafferty Group, comments "This is great news for China's credit card industry, which has historically been plagued by over-expansion in its early development. In particular, the drive to grow market share has seen banks go on an issuing frenzy, often giving cards to customers who did not request one or who were unaware of how to use it. Consequently, profits have been held back by high costs. As the ratio of operating costs to revenue continues to decline in China, the outlook for the industry is very positive."
MorphoTrak Technology Helps FBI
MorphoTrak (Safran group), the FBI and Lockheed Martin have successfully introduced their latest Next Generation Identification (NGI) system. NGI will replace the FBI's Integrated Automated Fingerprint Identification System (IAFIS). The system includes Morpho Biometric Search Services (MBSS) as the core processing and matching system using 10 fingerprints.
MorphoTrak's MBSS solution was incorporated into Next Generation Identification through a subcontract agreement with Lockheed Martin, who is leading NGI development for the FBI.
MorphoTrak's innovative technology has several algorithms in its solution, including one from BIO-key International, a key U.S. partner. According to news sources, law enforcement agencies throughout the U.S. and civil agencies doing background checks will also use the NGI system.
Mobile Phones Will Replace Debit Cards by 2014: Juniper Report
According to a new Juniper Research Report, one in every five smartphone will support NFC contactless functionality by the year 2014. There will be almost 300 million NFC capable smartphones by 2014 that will allow users to offer payments via NFC coupons and smart posters instead of paying through debit/credit cards.
The 2014 growth will be driven in the short term by mobile network operators launching services in 20 early adopting countries before the end of 2012. Juniper Research Report also predicted paying for goods and services using NFC-based smartphones will become a common feature in Western Europe, North America and other developed regions within 3 years time.
Supporting the report's conclusions, NFC Retail Marketing & Mobile Payments Report author Howard Wilcox stated: "Juniper's market analysis highlighted that, although there are still hurdles ahead, NFC prospects have been boosted by the succession of mobile operator and device vendor announcements. France is a case in point where operators expect to sell one million NFC devices this year".
HID Global Displayed Authentication Solutions at the National Strategy for Trusted Identities in Cyberspace
HID Global has showcased its strong authentication solutions at the release of the National Strategy for Trusted Identities in Cyberspace on April 15, 2011.
HID has demonstrated various authentication scenarios using a Blackberry, a PC token and a web token on a sample website. A consumer can use strong authentication technology to access various different internet banking or other online sites on her/his phone. HID's authentication solution eliminates the need to remember multiple user names and passwords for all of the different applications an individual might access.
GlobalPlatform Introduces TSM Messaging Specifications
Standards organisation GlobalPlatform has unveiled the first version of trusted service managers messaging specifications. The specifications will let trusted service managers speak a common language when talking to one another to download and manage applications on NFC-based smartphones.
The standards are especially designed to avoid communication problems among the expected fragmented base of trusted service managers or TSMs and others in the NFC ecosystem.
It was a challenge for GlobalPlatform to draft a messaging standard, since a good number of companies are offering TSM services, including both independent and in-house TSMs, NFC Times reported.
The messaging standard could represent or be part of service providers like banks, transport operators and retailers. Mobile operators could also have their own TSMs that the bank, transport operator or retailer TSMs will have to talk to.
Moreover, the NFC phones will come with multiple secure elements, such as SIM cards and embedded chips that could play host to the payment and other applications.
Worldwide Semiconductor Revenue Rose By $70 Billion in 2010: Gartner
Total worldwide semiconductor revenue reached $299.4 billion in 2010, up by more than $70.7 billion or 30.9 percent from 2009. Gartner, Inc reports the increase to be largest for the semiconductor industry in any one fiscal year.
According to Gartner, the top 25 semiconductor suppliers accounted for 69.1 percent of the worldwide semiconductor market revenue in 2010.
Intel held the top position for the 19th consecutive year, with 14 percent share, down from 14.6 percent in 2009. The second position was captured by Samsung electronics with 9.4 percent share. Toshiba held the third position with 4.1 percent share, while Texas Instruments, STMicroelectronics and Renesas Electronics have shares at 4.0 percent and below.
Google Improves Security with SSL Encryption on Developer APIs
From September 2011 onwards, search giant Google will insist all developers to use SSL technology for requests through Google Documents List, Google Spreadsheet and Google Sites APIs. The company believes SSL technology will improve security measures by encrypting data communications between users and Google itself, and thereby prevent any third party intervention.
Thus from September 15, the chosen Google APIs will only function through requests made via HTTPS (Hypertext Transfer Protocol Secure). If a developer makes a request to an old HTTP address, it will become a non-functioning action.
One of today's post on the Google code developer blog reads, "For most APIs, our technical documentation, client libraries, and code samples already use SSL. Many new APIs and versions will be SSL only. Further, the Google Maps API, which previously offered SSL only to premier customers, is offering SSL to all developers starting today".
In other words, if a developer is not using Google Data client libraries, which are all SSL encrypted, he or she will have to change all HTTP URLs in the code base to HTTPS.
Computacenter and Egress Wins Contract for Email Encryption and Secure Large File Transfer
Egress Software Technologies and Europe's leading IT services provider Computacenter have won a contract to deliver email encryption and secure large file transfer services to multiple London Councils. The contract aims to improve communication between the local Government and external third parties.
Ruth Jones, Projects and Development Manager for Camden Council said: "Local Authorities across London fully recognise the need to replace legacy systems such as courier services and fax machines which are often still used to share confidential data externally".
The procurement was initiated by Capital Ambition and ISfL and the subsequent invitation to quote (ITQ) was led by the London Borough of Camden utilising the Office of Government Commerce buying Solutions (OGCBS) Framework.
Ruth Jones further stated, "The time was right to put an end to fragmented and ineffective point solutions and promote a collaborative information security strategy as part of an ongoing commitment to improve service delivery. These new and exciting services will help connect public and private sector organisations, giving Local Councils the confidence they need when sharing sensitive data".
Egress Switch is cost-effective, versatile, easy to use, has flexible licensing model, and a unique 'follow the data' protection." Egress Switch also offers control and real-time auditing throughout the lifecycle of sensitive data, preventing unnecessary loss at the hands of third parties. The product uses AES 256-bit encryption, and secures confidential information sent by email, copied to USB removable media, burnt to CD/DVD, or uploaded to FTP/Cloud Servers.
Access privileges can be modified or revoked in real-time, even after the information is sent or shared, which allows users to instantly 'pull information back' should there be evidence that data has been lost or mishandled.
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