ICICI Bank sells terminals of card payment

ICICI Bank has concluded the sale of its network of electronic point of sales (PoS) terminals that accept Credit Card and Debit Card payments to First Data Corporation (FDC). The bank has hived off its network of over 1.5 lakh electronic swipe machines to a separate company — ICICI Merchant Services. First Data has bought an 81% stake in the company which has been valued at a little over $90 million.
When contacted, ICICI Bank refused to comment on the transaction. The bank has, however, communicated to merchants having ICICI Bank terminals that the PoS network has been transferred to ICICI Merchant Services. “First Data, along with partner banks, is keen to proliferate payment transactions not just at top retailers but also through small cities or towns in India,” said Amrish Rau, country manager, First Data Corporation.
Referring to the transaction with ICICI Bank, Mr Rau said an announcement would be made in due course. Mr Rau, who represents First Data in the country, is likely to head the new payments company. First Data is a US-based company that has been created after banks farmed out their back office processing systems into a separate company. FDC is presently owned by private equity giant KKR.
The Reserve Bank of India has already given clearance for the deal. According to banking sources, the deal value has gone up after RBI said that merchant establishments, including grocery stores and supermarkets, could swipe customer cards and offer them cash.
In addition to unlocking value, ICICI Bank expects that the specialised company will bring down transactions costs and also grow the payment network more efficiently. This is the first time that an Indian bank has hived off its PoS terminal network.
So far it has been foreign banks that have outsourced these functions but their network is of much smaller scale.
ICICI Merchant Services will earn a fee every time a credit cards or debit cards transaction is processed through the point of sale network. The fee is usually borne by the merchant and a large part of it goes to the card issuing bank. This is in lieu of the credit that the issuing bank extends to the cardholder until the end of the billing cycle. A smaller part of the commission goes to the bank owning the PoS terminal (acquiring bank) and smaller portion to the payment company — Mastercard or Visa.
Incidentally, State Bank of India has for some time expressed its intention to set up a network of half a million point of sales terminals. To build this network the bank had earlier sought partners. However, the project was shelved as the bank decided to take a more holistic approach of its payments business.

Aditya Birla Group, SBI Card partner to offer Co-branded Credit Card

Aditya Birla Group and SBI Card today announced a partnership to offer co-branded credit cards to all customers of the Aditya Birla Group companies. This was announced today by Ajay Srinivasan, Chief Executive, Financial Services, Aditya Birla Group, and Diwakar Gupta, Chief Executive Officer, SBI Card.
The Aditya Birla Group - SBI co-branded credit card will be available to over 28 million customers of Aditya Birla Group companies, namely Aditya Birla Retail, Aditya Birla Financial Services Group (which includes Birla Sun Life Insurance & Birla Sun Life Mutual Funds), IDEA and Madura Garments. The initiative will be led by the financial services arm of the Aditya Birla Group – Aditya Birla Financial Services.
"The Aditya Birla Group already has a strong presence in the financial services business, as a significant player in the non bank space. And we are committed to meet all the felt and unfelt financial needs of our target customer. Today, we take yet another step in that direction, with the signing of a MOU with SBI Card, to offer a co-branded credit card to the customers of the Aditya Birla Group. Customers are our biggest asset and with a base of over 60 million customers, group wide, we wish to leverage this initiative across the Group. Towards this end, companies pan the Group have come together. And we are very proud to have SBI Card as our partner." said Ajay Srinivasan, Chief Executive, Financial Services, Aditya Birla Group.
“We are pleased to partner with the Aditya Birla Group.  Through this tie-up we will be able to tap the varied customer segments of the Aditya Birla Group and offer them a relevant value proposition across all retail ventures of the Aditya Birla Group. Bringing new products that offer greater value to our customers has been an ongoing endeavor for us at SBI Card" said Diwakar Gupta, Chief Executive Officer, SBI Card.
The card will be made available across more than 2000 retail outlets of Aditya Birla Group companies.
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Managing Credit Cards In The New Year

An important part of managing your finances well includes keeping debt levels at a minimum. If you are like the average consumer, it is almost impossible to live completely debt free, however as many people have learned, carrying high interest Credit Card debt can destroy any chance of reaching your financial goals.
Each year we all have the opportunity to start “fresh” and outline our goals for the coming twelve months. This year it is especially important to make debt free living one of your main priorities. Why this year? The first reason should be obvious, the economy is still uncertain regardless of signs of recovery. The second reason to avoid incurring credit card debt in the new year involves the changes happening within the credit card industry itself.
For many years we have become accustomed to a credit friendly society. Using credit cards has become second nature to many of us and some people have become quite adept at playing the credit card game. Moving balances to lower interest cards has been a useful strategy for many years and one that saved thousands if done correctly. This year your moves will be limited and with the addition of new regulations placed on credit card companies, expect fewer perks and benefits from using your plastic.
The following changes should make you think twice before using credit in the new year.

• Fees- It is almost impossible to avoid fees these days and most credit card companies have or will be increasing their fees in the coming months. You can expect to be charged higher amounts for late payments and going over your limit making it especially important to always get your payment in on time.

• Less credit- If you haven’t already seen your line of credit drop, be prepared for lower limits in the future. This will be true for existing accounts or new accounts you may open in the next several months.

• Fewer options-  Moving a high interest balance to a zero or low interest card is no longer a reasonable option. The offers which were plentiful just a few years ago are now either non-existent or extended only to people with immaculate credit.

• Benefits not so beneficial-  We all love the rewards programs which pay us back for doing what we already do…spend money. Unfortunately the rewards programs might not be as rewarding moving forward.

• Higher rates and payments-  Good luck finding interest rates in the single digits anytime in the near future. If you have excellent credit you might see rates in the low teens and if your credit is not so good…..watch out, you’re looking at interest rates in the 30’s. In addition to higher rates, your minimum payment will more than likely increase as well.

The regulations put in place to protect the consumer, will certainly prevent some consumers from making costly mistakes in the future. In the meantime, anyone with balances on credit cards today should consider themselves forewarned. When you restrict the credit card companies ability to make money in one area, they will find another area to make it up.
The only way to avoid debt using a credit card has not changed. Paying off your balance in full each month has and always will be the best way to use credit cards. If you can’t afford to pay the balance- don’t use the card.
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Understand Your Credit Card

Credit Card has always made our shopping too easy and convenient. From a Pen to Plasma, you can buy anything through the plastic card. They are easy to use and are widely acceptable.
You might be using lot of cards but do we know the smart way to use them?
There are few things that you need to keep in your mind before you go for a credit card like
1) what is your billing cycle?
2) How much grace period the bank is offering on your credit card?
3) What are the special offers available on your credit card?
4) What would be the transaction charges on online shopping or on filling petrol?
Now to understand more about them, you can do following these things
1) Billing Cycle: – Suppose your billing cycle is of 3rd of every month and due date of payment is 23rd, here you are getting 20days as a payment grace period. So you should do shopping after 3rd of every month, so that the shopping due will be added in the next billing cycle. For example today is November 3rd and if you will do you’re shopping today then this amount will be reflected in your next billing cycle, where your due will be 23rd of December. So you are almost getting a grace of around 50 days.
2) Grace Period: – You should be absolutely clear about the grace period that is available on your credit card. There are different ranges to it some Banks offer a grace period of 25days, some of 30days or it can be maximum to 55 days. Through this you can plan your shopping and can do your expenditures accordingly.
3) Special Offers on your Card: – There are different offers that are available on your card. But mostly we are not aware of them and above that we don’t have idea how to use them. So you should be aware of special offers, schemes and services offered on your card. Through this you would be able to get best out of your card.
4) Transaction Charges: – Most commonly we are not aware of the transaction charges that will be applicable on a particular transaction. Like while booking a railway ticket online there are few Banks that takes transaction charge which is 1.8%. Same is the case when we use the card for petrol purchase; the surcharge is charged @2.5%.
So do keep these things in mind before going for a credit card.
(Source: - http://www.deal4loans.com/loans/credit-card/)

CREDIT CARD DUES – All possible ways to payoff

Everyone has a credit card or two to their name. Sadly due to few wrong or unforeseen choices and situations few among us get burdened by credit card dues… But no need to worry as we at deal4loans brings you all possible choices available to solve your problem.
How can you pay your Card Dues?
By…
ü      Loan against Life Insurance Policies – Borrowing against liquid asset like life insurance works out cheaper than pure personal loans because of the low interest rate and convenient repayment schedule. One can deduct the loan amount at the time of claiming payments or loan can be raised by pledging the insurance policy with a bank.
ü      Loan against securities & Fixed Deposits – If one does not wish to liquidate their investments in equity shares, mutual funds, fixed deposits, national savings certificates, etc., one can consider borrowing against the same.
ü      Loan against gold jewellery – Gold loans are easy and are cheaper than some set of loans and which are less than Card rate of interest.. Recently gold loans have become a quick and easy way to get short term Loans.
ü      Employer loans – Most employers provide low-cost loans in the form of advances.
ü      Personal loans & loans on credit cards– These unsecured loans or Personal loan have exorbitant interest rates and hence, not advisable.

(Source:- http://financeloans11.wordpress.com/ )

Credit card industry breathes easy

Tighter norms, better economy reduce credit card non-performing assets.
SBI Cards, one of the four largest credit card issuers in the country, saw its non-performing assets (NPAs) fall to 9.77 per cent of total assets as on September 30, against 10.5 per cent at the same time last year. At the peak of the downturn, its NPAs were as high as 16.28 per cent.
The lender has also managed to put a lid on losses, which fell to Rs 91 crore at the end of the September quarter, from Rs 96 crore in the first half of 2008-09, according to a release by Crisil.
“We are definitely in a much healthier shape now and our delinquencies are lower than the industry average. More important, our default rates on new cards are very low,” said a senior executive of SBI Cards. “We only have to ramp up our card base. Already, we are issuing 50 per cent more cards per month now than we were in April.”
SBI Cards is among the many issuers reaping the benefits of tightening credit norms and an improving economic environment. This sets the stage for a revival of the industry and a pick-up in card issuances in coming months, observers say.
Others are also upbeat. “There are signs the market may improve in the coming few quarters. Our NPAs have been well under control and we see the trend continuing,” said RL Prasad, head of credit cards at Standard Chartered Bank.
“For the industry, issuances are likely to pick up six to nine months from now once we see sustainable improvement,” he added. StanChart has 1.3 million credit cards in circulation at the moment.
A spokesperson for ICICI Bank, which has the largest credit card base in the country, said, “We are witnessing encouraging results in our credit card portfolio performance,” but declined to share specific numbers. At its peak, it had more than nine million cards in circulation; it currently has a base of 5.2 million.
Questionnaires sent to HSBC and Citibank, among the top five players in the market, weren’t answered.
One of the lessons banks have learnt from the downturn is that existing savings account customers are a much safer customer class.
HDFC Bank, the largest issuer of new cards in the country, has made it a policy to issue 85 per cent new cards to its existing customers. This allowed it to keep up new issuances when other players were whittling their credit card base.
According to sources, HDFC Bank is issuing 70,000-80,000 new credit cards per month and has recently tightened credit norms. It has about 4.7 million credit cards in circulation.
Bankers say the market has also shifted towards the high-end, which is less susceptible to delinquencies. “Our focus for the last three years has been the premium segment and losses from this segment are significantly less than from other segments,” said StanChart’s Prasad.
While the pool of premium customers is much smaller than the mass segment, high-end customers make up by spending more. “I would prefer to have 5,000 high-end customers rather than 20,000 premium segment customers,” said the credit cards head of a large foreign bank.
Apart from being a more secure credit category, high-end categories such as Platinum cards also earn banks a higher interchange fee from merchants every time a customer swipes his or her card at a terminal.
With Platinum cards, issuers earn a 1.75 per cent interchange on the transaction amount, whereas with Gold cards, the interchange is just 1.25 per cent.
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Credit card debt, terms limit holiday spending

The holiday season has always been a time to lavish her family with gifts — regardless of whether there was money to pay for it.

“If there was no money the card came out,” “Anything that was on the list, so to speak, would be purchased, whether or not we could afford it. We always had plastic.”

This year, things are different: Fed up with rising fees and determined to pay off her debt from years past, Getz has cut up her credit cards. That means she’ll be spending less on Christmas presents for her kids and grandkids this year and thinking more about the spiritual side of the holiday season. “It’s still going to be Christmas, but we’re not going to be overburdened with credit card debt or any other type of debt,"

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As holiday season shoppers struggle with a difficult economy, one of the big issues many face is onerous credit card bills left over from years past, when credit was generally easier to come by and cheaper to maintain.

In response, consumers are cutting back on spending and paying with cash instead of credit. Many say they are frustrated by changes in credit card fees, limits and interest rates stemming from the financial crisis that have made it more expensive to finance the holidays with plastic.

The reduction in debt is probably an outgrowth of rising unemployment, which limits spending, and a reduced availabilty of credit.

Many consumers also are working hard to get their balance sheets in order, following years in which debt for some spiraled out of control.

Some 6 percent of consumers, or 13.5 million people, are still carrying debt from last year’s holiday season, according to Consumer Reports.

A potential reduced reliance on credit cards would add another headwind for retailers, who depend on the holiday season for a large chunk of profits but are facing another year of potentially sluggish sales.

‘It has affected my Christmas spending’
Over the past year Leo Corona has seen the interest rate on both his credit cards raised, and one card company has lowered his credit limit.

“It has affected my Christmas spending because if I wanted to use the option of (credit cards) I know I’m going to be bogged down with a higher payment and a higher interest rate,” Corona said. “So naturally, I’m going to spend less.”