Smaller Cyprus banks reopen as tourism season nears

Smaller Cyprus banks reopen as tourism season nears

By Ian Taylor

The two biggest banks in Cyprus remained closed on Tuesday despite other island banks reopening following a €10-billion deal to stave off financial collapse.

The deal came as Cyprus’s tourism season is poised to begin, with more than 200,000 UK visitors expected in the next three months.

Smaller Cyprus banks reopen as tourism season nearsCyprus’s banks have been closed for a week and a half. The biggest of them, Bank of Cyprus, is now due to re-open on Thursday. But the second largest, Laiki Bank, will be wound up.

The bail-out is expected to end the immediate crisis and keep Cyprus in the eurozone.

The Cyprus finance minister had said a disorderly exit would be “disastrous”.

However, analysts warned Cyprus faces a deep recession, with its economy expected to shrink sharply.

One estimate put the likely contraction at 20% as the island’s main industry – offshore banking – shuts down.

The chair of the Cyprus parliament’s finance committee warned: “We are heading for a deep recession [and] high unemployment.”

European Union commissioner for economic affairs Olli Rehn said: “The near future will be difficult for the country and its people.”

The deal saw the ‘troika’ of EU, European Central bank and International Monetary Fund (IMF) agree to make €10 billion available to Cyprus’s banks in return for Laiki Bank being wound up.

Deposits under 100,000 will be transferred to the Bank of Cyprus and an unspecified amount of larger deposits seized after an earlier deal – which would have spread the pain to smaller savers – was rejected by the Cyprus parliament.

The deal will fall heavily on Russian investors who hold about one-third of deposits in the country. The Russian Prime minister, Dmitry Medvedev referred to it as “stealing”.

The Russian and German tourism markets to Cyprus are expected to be severely hit by the crisis

However, industry figures have expressed confidence the UK market to the island will not be adversely affected.

Sunvil managing director Noel Josephides said last week: “I don’t see a problem for the UK market.”

Yet there are concerns the crisis will have a knock-on effect on the wider eurozone and therefore on the UK economy, providing a fresh dampener on demand.

TTE Preview: Multicom enters the virtual payment arena with new tech

TTE Preview: Multicom enters the virtual payment arena with new tech

A new payment facility called MultiCommerce is being introduced by travel software firm Multicom in a bid to save agents money.

The online card payment processing facility is fully integrated with the company’s FindandBook system. Multicom is among the exhibitors at next month’s Travel Technology Europe trade show in London’s Earl’s Court exhibition centre. Registrations are free.

It claims to provide agents with a secure and reliable yet cheaper option when handling consumer payments. By selecting the optimal card type for a booking MultiCommerce virtual cards will save agents up to 4.5%, according to the company.

In some cases where flat fees are applied as high as 7% of the total transaction value by avoiding credit card charges. MultiCommerce payment processing will offer better deals than are currently being offered by many competitors on the market,  Multicom claims.

It also offers “innovative ways” to save on supplier payments in multiple currencies and provides detailed information allowing firms to effectively manage cash flow.

3-D secure virtual cards will provide agents with benefits to both protect their business and reduce overheads, while removing the need to share a card around the office.

They are expected to also eliminate fraud checks by banks due to excessive or unusual use of a credit or debit card, leading to lost margin and failed bookings. A card per booking facility will also make it easier for agents to track amendments and supplier refunds through a comprehensive reporting system.

The new facility will be backed by a management information system, which is currently under development to enable users to monitor and track both spend and margins. Multicom managing director John Howell said MultiCommerce will be available at unspecified “attractive, competitive rates”.

“We are confident agents will welcome the opportunity to improve booking transaction security, reduce the scope for fraud and make significant efficiency savings to their bottom line,” he said.