CARD NEWS

Gemalto to deliver 3 million ID cards in Kuwait
November 2, 2009

Dutch digital security company Gemalto has revealed plans to deliver electronic multi-application ID cards for Kuwaiti citizens embedding contact and contactless smart card technologies, as well as plastic cards for foreign residents that implement printing features.
The initiative is part of a government program commissioned by the country's Public Authority For Civil Information. Al-Kharafi, an international private Kuwait-based company, is prime contractor for the project. Gemalto will also deliver support and training services, project management, as well as smart card related software.

Kuwait has implemented the national ID card in order to comply with the Gulf Cooperation Council (GCC) regulation meant to enable citizens of all GCC countries to travel freely between member states. Kuwaiti citizens will use the card as the official ID document and as a travel document in the GCC region.

Via the contact feature, in the future, cardholders will be able to access e-government services and perform transactions. As part of a second phase, the card could be upgraded to a microprocessor card. (The Paypers)

New debit card for Somalis
November 3, 2009

Money transfer provider Dahabshiil has launched a debit card that can also be used to remit funds from Somaliland, a breakaway region of Somalia.

The card will function as both an ATM cash card and a regular debit card. Customers have to open an account at the Dahabshiil money transfer offices, and may qualify for a credit card in the future.

The service is expected to reduce queues at money transfer agencies and remove the security risk of handling cash.

Dahabshiil was founded in Hargeisa, a city in the self-declared independent state of Somaliland, due to the area's stability and internet infrastructure.

The scheme is expected to be rolled out further afield to other areas in Somalia. Dahabshiil has money transfer offices around the world in the US, Europe, the Middle East and Africa.

Its launch comes at a time when it is estimated that Somalis working overseas remit up to a $1 billion every year. (Lafferty Card News)

CARD ISSUERS' CORNER

Visa Australia to phase out signature cards by 2013
November 2, 2009

Visa has stepped up its migration to chip and PIN cards in Australia and will ban signature transactions by April 2013.

The move is part of a five year, seven pronged programme embarked on by Visa last year to improve payment system security in the country.

Following discussions with banks and merchants, a timetable has been set for the migration of around 14 million cards, 500,000 point of sale payment terminals and thousands of ATMs.

All new credit cards will be chip and PIN from January, with debit and pre-paid plastic updated from early 2011. Merchant POS terminals need to accept chip and PIN by April 2012 and ATMs by January 2011.

Last year, according to the Australian Payments Clearing Association, credit/charge card fraud in Australia was A$144.7 million. Debit card fraud was A$14.6 million.

In the UK, authorities have credited chip and PIN with helping to cut high street card fraud in recent years. However, overall levels of card fraud in 2007 actually rose, partly due to card-not-present scams and fraud committed abroad - often in countries where chip and PIN is not used. (finextra.com)

Visa Total Volume Grew 19% in Latin America and the Caribbean
November 3, 2009

Visa Inc. total volume on all Visa-branded products in Latin America and the Caribbean Region (LAC) grew 19 percent over the previous year to US$581 billion1 for the year ending on June 30, 2009. Likewise, the number of payment transactions for the same period surpassed the 5 billion mark, reflecting a constant trend in the migration from cash to electronic payments for day- to-day transactions.

"Visa LAC continued to record solid regional performance this period, driven by an impressive usage of our payment solutions at the point of sale," said Eduardo Eraña, president of Visa Latin America and the Caribbean region. "Visa is leading a regional shift from cash to electronic payments through product innovation, reliability and efficiency."

For the quarter ending on June 30, 2009, Visa LAC reported a 15 percent growth in total volume versus the same quarter last year, for a total of US$150 billion. Recent Visa announcements in the region include the introduction of Near Field Communications (NFC) payment technology in Brazil, and the launch of Financial Football in Brazil and Mexico, an innovative corporate social responsibility program that leverages the use of video games for educational purposes. (Payment News)

Visa Money Transfer Service Expands to China, UAE
November 4, 2009

Visa has announced that is has extended the global reach of its Visa Money Transfer Service to greater China and the United Arab Emirates, two of the world's most active territories for international remittance. Visa has also launched a new managed service, available initially in Canada and the U.S., that makes it easier for a financial institution to offer Visa Money Transfer to its customers.

"Visa is well positioned to facilitate secure and cost-effective money transfer services by extending the capabilities of our global network that connects 1.7 billion accounts," said Elizabeth Buse, global head of product, Visa Inc. "This enables our clients to diversify into new fee-based services, while meeting their customers' need for a convenient, secure and affordable way to send money domestically and across borders." (Payment News)

BANKING & FINANCE SECTION

M-Pesa launches UK-to-Kenya mobile money transfer service
November 3, 2009

Wireless operator Safaricom has extended its hugely successful M-Pesa mobile money transfer service, enabling people in the UK to send funds to friends and family in Kenya.

The M-Pesa International Money Transfer (IMT) service lets people in the UK send money directly to the mobile phones of people who have an account with the firm in Kenya.

Western Union, Safaricom and Vodafone - which has a minority stake in the Kenyan telco - began working on the international remittance service last year. At the time, Vodafone said that increased global migration has led to a significant increase in the flow of funds from expatriate migrant workers who send money home, with the World Bank estimating that Kenya received around $1.3 billion in international remittances in 2007.

A three month pilot has now been completed, with Western Union, Provident Capital and KenTV acting as agents in the UK, with a total of 19 outlets selected to cover areas with relatively high number of Kenyans living, including Reading, London, Luton, Wembley & Glasgow.

To use the service, senders have to identify themselves to the agent and provide the recipient's name, Kenyan mobile number and the amount being sent in pounds. Exchange rate conversion to Kenya Shillings is done at the prevailing rate and the money is sent. People can send up to £250 at a time at a cost of up to £6.90. There is also a £1000 limit per month.

Recipients are sent a text message and can then collect the money from over 12,000 agents around the country or use it to pay bills, purchase airtime or send money on to other phones.

Safaricom says it will now work to expand the services to more agent locations in the UK and to other relevant markets, enabling money to be transferred from neighbouring countries in East Africa. (finextra.com)

PayPal adds five new currencies to its system
November 6, 2009

PayPal has added five new currencies, enabling its customers to send and receive payments in Brazilian Real (BRL), Malaysian Ringgit (MYR), Philippine Peso (PHP), Taiwan New Dollar (TWD) and Thai Baht (THB).

The number of currencies the system supports has now reached 24. These include the U.S. Dollar, Australian Dollar, Canadian Dollar, Hong Kong Dollar, Singapore Dollar, Taiwan New Dollar, New Zealand Dollar, Euro, Swiss Franc, Czech Koruna, Swedish Krona, Danish Krone, Norwegian Krone, Hungarian Forint, Mexican Peso, Philippine Peso, Malaysian Ringgit, Chinese RMB, Israeli New Shekel, Pounds Sterling, Brazilian Real, Polish Zloty, Thai Baht and Japanese Yen. (The Paypers)

OTHER NEWS & ISSUES

Pan-European debit schemes may combine
November 3, 2009

A leading advocate for Monnet - the planned pan-European debit network - has opened the door for a possible collaboration with the European card scheme PayFair and the Euro Alliance of Payment Schemes (EAPS).

Monnet, EAPS and the merchant-focused PayFair network all have separate plans to offer pan-European debit card acceptance and establish a credible third scheme to challenge the dominance of Visa and MasterCard in Europe. (Lafferty Card News)

Boost for Singaporean contactless payments
November 3, 2009

Contactless payments in Singapore are likely to be aggregated into one terminal in the coming months following discussions between EZ-Link and Visa and MasterCard.

Most merchants in Singapore carry at least two POS terminals. However, Nicholas Lee, executive director of EZ-Link, says that discussions with the international networks could result in all contactless and prepaid payments being made from just one reader instead.

In Lee's view, there is significant potential for prepaid products in South-East Asia - excluding India and China, but says the issue of KYC remains a challenge to the take-up of prepaid products. (Lafferty Card News)

CARD NEWS

US bill introduced to freeze card rates
October 27, 2009

Christopher Dodd, chairman of the US Senate's Banking Committee, has introduced a bill that aims to freeze interest rates on existing credit card balances.

Dodd says issuers have been increasing their rates ahead of the introduction of regulation on interest rates and has called for the rate freeze to take immediate effect.

The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which was signed into law in May 2009, stipulates that issuers cannot increase interest rates arbitrarily, or increase fees and charges without prior warning to the consumer. The act requires issuers to give 45 days' notice of interest rate increases. Issuers have to comply with the CARD Act by February 2010, but Dodd says that issuers are increasing their rates before that regulatory deadline.

Dodd has proposed a bill that would force credit card issuers to immediately freeze rates on existing balances until the CARD Act comes into effect. For accounts that have already had a rate increase, the CARD Act requires issuers to review every account that has had an increase since January 2009. (Lafferty Card News)

Controversy over inactive cards in South Korea
October 27, 2009

Figures released by South Korea's regulatory authorities show that nearly 17 million credit cards are inactive in the country - sparking debate as to whether issuers are indiscriminately targeting consumers.

In addition to the lack of card usage in South Korea, a local news report suggests the pressure to meet sales targets means that employees of Korean issuers are deliberately signing up new customers that they know have no intention of ever using the cards.

The report by the national newspaper Joongang Ilbo alleged that employees at card companies often sign up their family and friends to new cards, then pay the customers' annual fees themselves. They are willing to do this in order to meet the aggressive sales targets that have been imposed by the issuers.

The article claimed that issuers use the number of cards in issue - regardless of whether they are used or not - to judge their competitiveness. The article quoted an employee at one issuer as saying that each employee has a sales quota of 100 cards a month, and in order to reach this target he would borrow the identity details of his acquaintances, sign them up for the new accounts and tell them to cut up the card when it arrives.

Data from the Financial Supervisory Service (FSS) was recently presented to South Korea's National Assembly. In the first half of 2009, there were 16.7 million cards that had not been used in the last year, a year-on year increase of 22.5 percent. The FSS figures also estimate that nearly 30 percent of bank issuers' portfolios were inactive accounts, with the figure of 16.6 percent for monoline issuers. (Lafferty Card News)

Fuel card transactions given boost
October 27, 2009

Comdata, an issuer and processor of fuel cards, has launched its Smart Solutions suite of POS products, which can be used at convenience stores, truck stops and self-service fuel stations.

The new POS products will include SmartConvenience, a 17-inch, touch-screen interface that is easier to use, and requires little training. Another POS product, SmartDESQ, is specifically for diesel fuel transactions and can be used at pay-at-the-pump terminals. Comdata's SmartStation allows customers to monitor their fuel card spending more accurately. The company has also designed a POS solution called SmartLock, which offers secure payment processing at self-service fuel pumps.

Comdata enables millions of fleet card, credit card and virtual card transactions annually. The company allows payment card data to be captured so that companies with fleet cards, for example, can closely monitor their fuel spending. Comdata provides solutions to six primary industries: fleet, retail, government, aviation, construction and hospitality. (Lafferty Card News)

CARD ISSUERS' CORNER

Inside Contactless in deal with Discover to develop Discover Zip contactless payment devices
October 29, 2009

French contactless chip technology company Inside Contactless has signed an agreement with Discover Financial Services for the development of future Discover Zip contactless payment devices.

Under the terms of the partnership, Inside has committed to support Discover Zip in upcoming versions of its MicroPass contactless payment platform, and has been designated a preferred vendor for card-based Zip implementations.

The MicroPass 4002 contactless payment processor was designed for Discover Zip contactless payment applications; it provides card issuers with access to a suite of form factors, including chip, module, card inlay, fob inlay (mini, 2D, 3D), sticker or paper ticket configurations.

Discover Zip is accepted at over 60,000 U.S. merchant locations and its payment devices can be issued by banks in many forms. In addition to the traditional bank card or key chain fob, a mini-adhesive card can be attached to personal items that are always at hand, such as a mobile phone, PDA or MP3 player. (The Paypers)

PAYMENT PROCESSOR'S POST

First Data joins forces with Yahoo!
October 27, 2009

In a bid to tap into the rapidly growing arena of e-commerce, processor First Data has signed an agreement with Yahoo! to target small businesses.

The new service will help small businesses that want to increase their online presence by giving them access to fast and flexible payment options. First Data will provide merchants with POS terminals and payment processing services that complement Yahoo! Merchant Solutions and web-hosting services. With these products, small businesses will be able to set up online stores.

First Data distributes its merchant services through a variety of channels, including 'feet-on-the-street' agents and independent sales organisations that sign up merchants to the service. The company currently enables more than 5.3 million merchant locations to accept electronic payments in stores, over the phone or via the internet.

The system aims to help merchants by improving the flow of funds, reducing fraud and chargeback expenses, decreasing transaction costs and providing information for loyalty programmes. (Lafferty Card News)

First Data's STAR Network Launches Prepaid Reloads
October 29, 2009

First Data has announced that its STAR Network is the first electronic funds transfer network to launch load and reload support for STAR-branded general purpose prepaid cards. Using patent pending technology, the STAR Network has completed the infrastructure to enable load and reload functionality at participating ATM and POS locations. The expanded transaction set includes activation, load/reload and split tender purchases - with PIN-security and the associated reduction in fraud built in. The new STAR RELOAD service icon denoting load/reload card capabilities will be displayed with the STAR brand on participating cards, merchant point-of-sale and ATM locations.

STAR is a leading EFT network in the U.S. with more than 2 million retail and ATM locations. (Payment News)

BANKING & FINANCE SECTION

Taiwan: Alipay to enable payments with Visa cards
October 28, 2009

Alibaba's online payments division Alipay now allows customers to pay for purchases with Visa-branded cards issued in Taiwan, according to auctionbytes.com.

Alipay collaborates with eleven Taiwan banks which issue Visa cards, to enable consumers living in this province to use this payment solution for online purchases on Taobao, the Chinese auction website, the same source indicates. Prior to this initiative, Taiwan online buyers had to use the Tao-1-Shop online payment channel powered by by Taobao, e-commerce service provider eDynamics and Chinatrust Commercial Bank. With Tao-1-Shop, users need to convert TWD to CNY via Tao-1-Shop to buy online.

Alipay has recently partnered biology identification technology company Live By Touch have partnered to enable Alipay users living in Shanghai to make payments online via a fingerprint verification product, dubbed Pay by Finger. (The Paypers)

Obopay taps into the online games market
October 28, 2009 others

Obopay, a US mobile payments company, has made its mobile payment service available for online game players.

Obopay's online mobile payment solution enables consumers to make purchases in-game with a credit or debit card by using their mobile phone number and a PIN for security purposes. Thus, when playing an online game, customers do not need to leave the platform to make payments on another website.

With the Obopay system, consumers and businesses can purchase, pay, and transfer money through mobile phone using Obopay's mobile application, text message, widget, or the internet. In August 2009, Obopay partnered Nokia for the launch of the Nokia Money mobile financial service which provides consumers with access to basic financial services via their mobile devices. (The Paypers)

Zong adds new feature to enable payments via cards
October 29, 2009

Mobile payment services developer Zong has added a new feature to its mobile payment platform, enabling members to link credit or debit cards to their Zong accounts.

Dubbed Zong+, the service combines mobile operator billing with credit, debit and prepaid cards. In addition to making online purchases through their mobile phone bill, customers can now link any type of payment card to their Zong account through a one-time entry process. Customers can then continue to purchase goods by entering their mobile number and confirming the security transaction code sent to their phone. As a result, transactions are still activated via mobile, but charged to a credit card bill instead of a phone bill.

Zong's mobile transaction platform has processed mobile payments for 10 million unique users to date. (The Paypers)

FRAUD & SECURITY MATTERS

Canada passes ID theft laws
October 27, 2009

The Canadian Bankers Association has welcomed the introduction of "tough" new laws designed to combat identity theft.

The Canadian government re-introduced a bill in April after an initial attempt in 2007 failed to make it through committee debate.

Bill S-4 has now been granted Royal Assent in a move the government says will provide police and justice officials with important new tools in the fight against identity theft.
The act will create three new offences targeting the early stages of identity-related crime, all of which will carry up to five years in prison.

The bill covers obtaining and possessing identity information, trafficking in ID data and holding or trafficking in government-issued identity documents.

It also give courts the power to order an offender to pay restitution to a victim of ID theft or fraud where they have incurred expenses related to rehabilitating their identity.

The Canadian Bankers Association (CBA), MasterCard and Equifax have all welcomed the legislation. (finextra.com)

CARD ISSUERS' CORNER

Payment networks branch into money management
October 20, 2009

American Express and MasterCard are branching into money management in a bid to help cardholders track their spending at a time when they are increasingly concerned about budgeting.

The MasterCard Money Manager is designed for debit cardholders and allows them to track their spending online. Their transactions can be displayed by merchant category or ordered into customised categories so that they can see where their money is going and how well they are sticking to their budget.

The money management tool is less cumbersome than similar programmes, MasterCard says, as it avoids the data entry that is usually needed. Customers can track their spending on multiple cards and on a daily or monthly basis.

Many industry reports suggest that the recession has spurred an increased preference for debit card spending, as cardholders do not want their credit card loans to get out of control. A MasterCard-commissioned study found that 43 percent of customers prefer using a debit card because of the greater financial control it gives them.

MasterCard's online budget management tool has already been implemented by Security Service Federal Credit Union. American Express has also launched an online money manager. This follows its own research that found that more than half of customers worry about monthly bills and exceeding income, and that many lack the time and the tools to sufficiently manage their budgets.

The Money Manager allows American Express cardholders to link their bank accounts, credit cards, investment accounts, mortgages and other financial products into the budget management tool. Cardholders can then view charts that automatically categorise their spending, set budgets and receive alerts to make sure that they stick to those budgets. (Lafferty Card News)

PAYMENT PROCESSOR'S POST

RBS WorldPay to Process National Payment Card Debit Cards
October 23, 2009

RBS WorldPay has announced that National Payment Card Association (NPCA) debit cards can be processed by RBS WorldPay. According to RBS WorldPay, "NPCA offers merchants a card acceptance solution with significantly lower transaction fees than traditional credit or debit cards."

National Payment Card Association first introduced its alternative payment solution in June 2006, earning much attention from industry insiders and consumers. Often referred to as "decoupled debit," NPCA's leading ACH card solution has proven to be a beneficial alternative to traditional card acceptance in both the petroleum industry and other business sectors.

The NPCA PIN based payment system processes transactions through the Federal Reserve Automated Clearing House (ACH), resulting in lower merchant fees and a self-funded loyalty program that provides immediate savings to consumers. Specifically, the program benefits retailers by helping them save on the interchange fees credit card companies normally charge on each transaction. The merchant can then use some of the savings to incent customer behavior by passing some of that savings along to them right at the pump. (Payment News)

BANKING & FINANCE SECTION

JP Morgan Expands Commercial Cards in EMEA
October 19, 2009

J.P. Morgan has announced that it has "significantly advanced its commercial card expansion initiative in Europe, the Middle East and Africa to provide corporate clients with higher degree of visibility and flexibility on spending and expenses in today's challenging economic environment. As part of its continued investment in its global Treasury Services business, J.P. Morgan has introduced several new commercial card product offerings and service enhancements in the region, while a number of new product offerings are due to launch early next year."

New products and service enhancements introduced this year include:
• The launch of the Executive Card, for the frequent corporate traveller who requires premium benefits and services including superior VIP airport lounge access, VIP Luggage Delivery, concierge services, travel accident and lost luggage insurance coverage, and emergency medical and dental coverage.
• The launch of J.P. Morgan's Prepaid Cash Card in British Pounds and Euro.
• Robust information and management reporting in over 15 languages.
• Local language enhancements in Europe including statements, applications, and telephony. New languages added include French, German, Italian and Spanish.
• Increased card program coverage, which grew more than two-fold and is now available in 95 countries and 28 currencies.

New product developments in the region to be delivered by early 2010 include:
• Self issuance capabilities in Switzerland (Swiss Franc). J.P. Morgan already offers self issuance capabilities in British Pounds, Canadian Dollars, Euro and U.S. Dollars.
• The launch of J.P. Morgan's International Dollar Card (USD), a cross-border dollar solution complete with Chip and PIN security, and the ability to support clients' needs in the Middle East, Africa, and Central and Eastern Europe, including Russia.
• Single-Use Accounts, an electronic payables tool that provides customers with the flexibility, float and rebate of a purchasing card while delivering powerful security, antifraud and reconciliation features.
• Carbon Emissions Reduction Fund. Recognizing the importance of corporate and social responsibility, the Carbon Emissions Reduction Fund gives all the benefits of a corporate card program with the value-added option of offsetting carbon emissions associated with employee travel.

J.P. Morgan's corporate card programs are supported by online tools that provide companies with greater visibility, reporting capabilities, flexibility and program controls. From one online system, card administrators can order new cards, modify spending limits, instantly adjust cardholder profiles and monitor corporate compliance. Users also have access to more than 70 standard reports that provide the transaction detail needed, including vendor analysis, unusual activity analysis, hotel spending, car rental spending, and delinquency reports. In addition, cardholders can view their statements and authorizations online. (Payment News)

Ukash to tap into Canadian market
October 21, 2009

UK voucher-based prepaid online payment services provider Ukash has closed a deal with prepaid telecommunication products distributor VendTek Systems under its brand Now Prepay to make its vouchers available on the Canadian market.

Under the terms of the agreement, Canadian customers will be able to purchase Ukash vouchers from 4,000 point of sale terminals in Ontario, in denominations of CAD 25, CAD 50, CAD 75, CAD 100 and CAD 150. By the end of 2009, the vouchers will be available from 15,000 outlets across Canada including independent convenience stores and gas stations. Purchases of Ukash vouchers in Canada will be subject to a fee.

In other news, Ukash has partnered Russian payment services provider Wallet One (W1) to enable W1 account holders to buy Ukash vouchers and pay for their online purchases using the Ukash PIN code. (Lafferty Card News)

Etisalat, Emirates NBD, Gemalto and Visa introduce mobile contactless payments program in the UAE
October 23, 2009

Telecommunications service provider Etisalat, banking group Emirates NBD, digital security services provider Gemalto and Visa have joined forces to launch mobile contactless technology in the UAE.

As a result of the partnership, Emirates NBD Visa cardholders will be able to buy products and services via their Etisalat contactless mobile phones and make payments by waving the NFC-enabled phone in front of the payment terminal. Purchases will be charged directly to the customer's Emirates NBD Visa credit card account. Etisalat has also announced plans to bring NFC enabled mobile phones from handset manufacturers like Samsung to the UAE market.

The company has showcased the NFC solution at Gitex Technology Week 2009. At this event, Etisalat and Gemalto have also exhibited the use of mobile contactless technology as a retail marketing tool via smart posters and coupons.

FRAUD & SECURITY MATTERS

ATM card capture crime soars in EU; pressure grown on US to move to EMV
October 21, 2009

The European ATM Security Team (East) is reporting a sharp rise in losses from 'card trapping' scams at European cash machines for the first six months of 2009.

While card skimming incidents are down by 19% (from 5,693 to 4,629 incidents), card trapping incidents have increased by 640% (from 141 to 1,045 incidents). In the same period, losses due to card skimming dropped 30% from €222 million to €156 million, while losses from card trapping soared nearly 900% from €0.59 million to €5.8 million.

The release of the data coincides with reports of a rash of card capture scams at Barclays cash machines across the UK. The fraud - known as a 'Lebanese Loop' - is understood to be orchestrated by a network of Eastern European criminals.

Data compromise from cases of hacking or other fraud at data processors is another emerging threat that East is monitoring. Initial cases have been reported in the Ukraine, the USA and the Dominican Republic.

Overall, however, ATM card fraud has remained relatively stable, showing a marginal increase of just one per cent, a figure which East attributes to the near-complete European roll-out of the EMV security standard.

Pressure is growing on the US banking industry to convert their legacy mag-stripe cards to smart chip-based EMV cards or face an epidemic of fraud losses as criminals concentrate their activities on US shores. (Payment News)

Growing support for biometric technology
October 22, 2009

Almost two-thirds of UK consumers do not trust financial institutions to keep personal information secure and private, according to a new study.

More than 80 percent of consumers are also nervous about the misuse of their card details, while almost a third of are seriously concerned about the security of online transactions.

The findings were revealed in the latest Unisys Security Index, which examines consumer concerns on a range of security threats. The report found that identity theft is now the biggest security concern for the UK public, above flu pandemics, terrorism and meeting financial obligations - despite the economic downturn.

As a result, 56 percent of Britons are willing to provide biometric data to retailers and financial institutions to verify and authenticate their identity. The index also found that 95 percent of UK consumers would offer their fingerprint and 90 percent are willing to use iris recognition, compared to three quarters of respondents in both categories in 2008.

The Unisys Security Index is a bi-annual global study of consumer opinion on four areas of security: financial, national, internet and personal safety. More than 960 UK citizens responded to the latest survey, which was conducted between 6 to 8 September 2009.

OTHER NEWS & ISSUES

Payroll initiative for migrant workers
October 20, 2009

Mashreq has signed up to a payroll solution for low-wage earners in the United Arab Emirates (UAE) that complies with the country's wages protection scheme (WPS).

Developed by C3 Card, the electronic payment solution allows migrant workers, who typically do not have bank accounts, to receive their earnings in a secure way. By using a payment card, both the employer and employee avoid the security concern of handling large amounts of cash. The funds are loaded directly onto the card, which functions in the same way as an ATM cash card or debit card, but does not need to be linked up to a bank account.

The WPS was introduced this year by the UAE's Ministry of Labour and the Central Bank, and aims to safeguard workers' wages by making sure that they are paid through financial institutions. The scheme will be introduced across the UAE in stages, with the first stage requiring that companies with more than 100 employees must comply with the system by the end of November 2009.

C3 Card is in negotiations with other financial institutions in the UAE to introduce the same payroll system to other banks, as well as making the system available across the Middle East. (Lafferty Card News)

New smart card system for Melbourne passengers
October 21, 2009

People living in the Australian city of Melbourne will soon be able to use a smart card system to travel by bus, tram or train.

It is thought that the system - which automatically calculates the lowest possible fare when the user "touches" on and off - will be up and running by the end of the year and could save public transport users in Victoria a total of A$17 million (£9.59 million) a year.

Similar to the Oyster system in London, passengers using the new smart card system instead of the existing Metcard could save money on their fares.

The smart card system is already in operation in regional centres throughout Victoria, including Ballarat, Geelong and Bendigo.

Contactless smart card technology is also being considered in Brighton, according to the Argus. Transport chiefs in the city are considering a smart card system which would enable people to travel without carrying cash. (Squid /Payment News)

CARD ISSUERS' CORNER

Visa goes on the offensive in interchange battle
October 13, 2009

Visa Inc. has launched a campaign that promotes the benefits of payment cards in a move that coincides with growing activism against interchange fees.

The campaign follows retailer 7-Eleven's petition against interchange, which collected 1.6 million signatures and was recently delivered to Washington's lawmakers.

Hitherto, Visa and MasterCard have done little to respond to the growing merchant discontent about interchange fees. However, as those activist voices have become louder, the networks have begun to act. For example, MasterCard recently released a report showing that consumers were in favour of interchange once they realised that legislation could cut rewards programmes and increase annual fees.

Visa has downplayed the suggestion that the timing of its campaign is related to the interchange debate. Its ‘Currency of Progress' campaign has been launched in a variety of media and aims to highlight the benefits of using plastic over cash and cheques. (Lafferty card News)

AmEx boosts charge card product
October 13, 2009

American Express is focusing on the charge card - the product it built its reputation on - with the launch of the American Express Premier Rewards Gold Card.

The launch is part of the company's drive to persuade consumers that the charge card is the "Smarter Way to Pay" and follows the campaign that had the tag line "Don't Take Chances. Take Charge." It also comes as the company seeks to avoid the difficulties that it has experienced from lending in its credit cards portfolio.

The American Express Premier Rewards Gold Card comes with an annual fee of $175, which has been waived for cardholders in their first year.

The newly-launched Premier Rewards Gold Card has a 3-2-1 structure, whereby airline purchases gain triple points, gas and groceries earn double points, and all other purchases gain single points.

Also this week, American Express launched three co-branded credit cards with Japan's All Nippon Airways (ANA), the first time the company has issued cards with a Japanese airline. The three cards are the ANA American Express Card, the ANA American Express Gold Card and the ANA American Express Super Flyers Gold Card. (Lafferty Card News)

CARD NEWS

US Payment Transactions Projected to Exceed 100 Billion in 2009
October 13, 2009

Economic research firm Moebs Services projects that, for the first time in US history, the number of checks and electronic transactions for debit cards, credit cards and automatic payments will exceed 100 billion by the end of 2009 from all transactions from consumers and businesses. Moebs based its projection on research and projections using information from the Federal Reserve for 1979 to 2006.

According to Moebs Services, transactions in 2009 will break down as follows:

• Debit card transactions, 33 percent
• Paper checks, 24 percent
• Credit card transactions, 23 percent
• ACH payments, 20 percent

"What is noteworthy about the projected 100 billion transactions is that they do not represent an increase in US consumer spending, which began declining in 2008 and is still not back on track as we approach year-end," said Moebs. This research indicates that consumers are doing significantly more transactions for significantly fewer dollars than in the past. This may be due to easy electronic as payment methods replacing cash. (Payment News)

BANKING & FINANCE SECTION

Revenue growth slows for Middle Eastern banks
October 15, 20009

A recent study of banks in the Middle East shows that the growth rate of banking revenues in the region slowed in the first six months of 2009.

Some markets, however, fared better than others, according to the report by The Boston Consulting Group.

Of the countries that were surveyed by the Middle East Banking Performance Index, Qatar was the only country that posted significant growth in terms of profits. The UAE was the market that posted the most significant growth in terms of revenues.

The overall performance of the region, however, showed that growth in revenues had slowed and that profits had fallen below the level of 2005, said the study. It also noted that retail banking profits had fallen less than those for the rest of the banking industry, and that the region's banks had performed relatively well compared to its international peers.

According to the study, the Middle East's banks increased their loan-loss provisions significantly, totalling a compound annual growth rate of 100 percent over four years. The top 25 banks in the region reportedly built up loan-loss provisions of almost $7 billion. (Lafferty Retail Banking News)

New mobile money transfer service for Malaysia
October 15, 2009

A mobile money transfer service is expected to be launched in Malaysia in early 2010 following Western Union's collaboration with mobile operator Maxis Communications Berhad.

The two players are working together to roll out a service that will enable more than 11 million Maxis subscribers in Malaysia to send cross-border remittances from their mobile phones. The recipient will then be able to collect the funds in cash at Western Union agent locations.

By working together, Western Union and Maxis are seeking to target the large numbers of foreign workers in Malaysia - where there are major commercial opportunities.

According to Western Union, more than $6.4 billion was remitted from Malaysia in 2008. The majority of this was sent by the estimated 1.9 million foreign workers living in Malaysia. These workers are largely Indonesians, Filipinos, Bangladeshis, Nepalese and Vietnamese.

Western Union has a number of cross-border mobile money transfer pilots underway around the world. Consumers can visit select Western Union agent locations in the US, the UK, the United Arab Emirates, Singapore and Hong Kong to send funds directly to Globe Telecom and Smart Communications subscribers in the Philippines. In addition, consumers can also visit certain Western Union agent locations in the UK to send funds to Safaricom M-PESA subscribers in Kenya. (Lafferty Retail Banking News)

SMS-based microfinance system unveiled
October 16, 2009

A new system that claims to let microfinance institutions run their entire operations via mobile phones and a single laptop has been unveiled.

The FrontlineSMS:Credit system combines SMS-aggregating software and mobile commerce offerings to let MFIs deliver and track loans via handsets.

It is based on FrontlineSMS - free, open source software that turns a laptop and mobile phone into a central communications hub. Once installed, the program taps the GSM wireless telephone network to enable users to send and receive text messages with groups of people through mobile phones.

The technology has been used by NGOs around the world, with one of the most successful deployments, FrontlineSMS:Medic, helping to improve healthcare in developing countries by collecting patient data and sharing medical records.

The new venture is building a series of free and open source financial modules that will allow FrontlineSMS to communicate with mobile payment systems in real time. The founder says this will turn FrontlineSMS in to a microfinance management information system, a payroll centre for SMEs, a collection and distribution centre for micro-insurance premiums and payouts, and a hub for individual credit histories and scores.

The system will allow MFIs to cut operational costs, increase geographic reach, lower interest on credit and automatically maintain detailed accounting records, says the group.

The first finance module, savings and credit, should be available in the next few months, with insurance, payroll, Islamic banking, and mortgage offerings to follow. (finextra.com)

OTHER NEWS & ISSUES

Canada plans payment card code of conduct
October 13, 2009

Canada's finance minister Jim Flaherty is preparing to introduce a voluntary code of conduct covering the credit and debit card market as the country gets ready for US giants Visa and MasterCard to cross the border.

According to local press reports, the code of conduct is expected to be released within weeks following negotiations with industry players. One of the most controversial issues it is expected to tackle is priority routing of debit transactions over Visa's and MasterCard's networks.

Canada's non-profit national payments association Interac currently charges a flat interchange fee for processing payments over its network but it is about to face competition from Visa and MasterCard which are both looking to break into the country's market. The association has been in talks with the country's competition bureau about becoming a for-profit organisation in a bid to fight off the US firms.

According to press reports, Visa plans to let customers choose at the point of sale whether their debit transaction runs over its network or Interac. Meanwhile MasterCard, says that if Maestro debit is on the merchant's terminal, the transaction will be priority routed over its network.

Consumer and retail groups have argued that this will freeze Interac out, leading to higher fees.The code of conduct is also expected to cover the use of cards that have both debit and credit functions as well as improved transparency of rates and fees. (finextra.com)

Mexico: e-commerce revenues climb 85% year-on-year
October 15, 2009

In 2009, Mexico's e-commerce sector revenues have jumped by over 85 percent, mainly led by the B2C and C2C sector, as compared to USD 1.76 billion reported in the previous year, according to a study by Mexico's Internet Association (AMIPCI) and Visa.

According to the same source, airline tickets represent 79 percent of the overall online sales in the country, while consumer items (especially entertainment, computers and electronics) account for the remaining 21 percent. Nearly 74 percent of online purchases are made with credit cards. The online purchases made by foreign shoppers on Mexican websites have increased by 14 percent, while domestic online purchases and transactions have jumped by almost 50 percent.

Nearly 66 percent of those involved in the study prefer to buy products or services on known or recommended online platforms, while 81 percent of online shoppers seek for the return policies and warranties to be expressed clearly. Nearly 90 percent of online shoppers compare online prices with physical store prices or other internet websites before making a purchase. 77 percent of respondents have expressed their intention to make online purchases in the future as well. (The Paypers)

EPC deliver progress report on direct debit schemes
October 15, 2009

Banks throughout the Single Euro Payments Area (SEPA) are gradually starting to deliver SEPA Direct Debit services to their customers, according to the European Payments Council (EPC).

The EPC made the announcement at the official launch the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme. Both schemes go live on 2 November 2009.

Currently, 2607 banks, representing about 70 per cent of SEPA payment volumes, have signed up to the new schemes and are ready to roll out SEPA Direct Debit services from 2 November 2009. Of those, 2366 banks are offering both the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme, said the EPC.

SEPA Direct Debit services enable customers to make and receive both domestic and cross-border euro direct debit payments throughout the 32 SEPA countries. This includes the 27 EU member states, as well as Iceland, Liechtenstein, Norway, Switzerland and Monaco. (Lafferty Retail Banking News)

CARD ISSUERS' CORNER

Diners Club International cards now accepted by the LINK ATM network in UK
October 9, 2009

Payments services provider Diners Club International, a division of credit card issuer Discover Financial Services, has teamed up with UK cash machine network LINK.

Under the terms of the agreement between the parties, Diners Club International cardholders now have access to LINK. The connection to LINK provides Diners Club Cardmembers with access to the UK's 64,000 cash machines that are part of the LINK Scheme. Diners Club cards issued outside of the UK are now routed through LINK.

The LINK network processes around 250 million transactions each month. It has 46 members and there are more than 130 million LINK cards in circulation from 36 card issuers. (The Paypers)

Visa Canada to showcase contactless debit cards during 2010 Olympic Games                                                                  October 12, 2009

Visa Canada is reportedly planning a massive marketing campaign for its payWave-enabled contactless debit cards during the 2010 Winter Olympic Games, scheduled to take place in Vancouver at the beginning of the coming year.

According to French-based electronic transactions technology company Ingenico, quoted by online news outlet thestar.com, Visa is planning to showcase its contactless debit cards during the Olympics. To that end, the card processor has been signing up merchants in the Canadian Olympic village, providing them with contactless readers. Visa Canada is a major sponsor of the 2010 Games.

Visa's payWave contactless technology is already available for Canadian credit cardholders. Visa's payWave cards target quick-service environments such as restaurants or convenience store, while rthe maximum accepted purchase value is USD 25 or less. (The Paypers)

BANKING & FINANCE SECTION

An Untapped Market for Mobile Banking Among Offline Consumers
October 7, 2009

A survey commissioned by VeriSign's Messaging and Mobile Media Division (in collaboration with Fiserv and M-Com) of more than 500 U.S. mobile phone users finds that financial institutions should mine the untapped market of offline-banking consumers as a potential target audience for mobile banking and payment services.

According to the survey, sixty percent of consumers not currently using online banking would be interested in using at least one mobile banking service if it was offered during a typical month. The survey also shows that non-online-banking consumers are heavy users of traditional bank channels: nearly two-thirds reported contacting their financial institution once a week or more through one or more bank channels such as contact centers and interactive voice response systems. These are among the most costly customer service channels.

Until now, financial institutions have been focused on moving customers from the online channel to the mobile channel. Institutions that continue on this course will likely fail to substantially lower their cost to serve their customers and achieve a substantial return on their mobile banking investments. In effect, they are simply migrating some transactions from one low-cost self-service platform to another.

The survey also demonstrated that financial institutions should target the growing audience of smart phone users for mobile phone banking, many of whom do not bank online. Eighty percent of smart phone users surveyed said they would likely adopt mobile banking services in the future versus just 54 percent of basic cell phone users.

The survey also indicated that financial institutions still need to do more to educate consumers about the security practices that are in place to protect financial activities on cell phones and other mobile devices, and about good habits to protect themselves. While the majority of respondents perceived the positive benefits of mobile banking, 53 percent cited concerns about transaction security as a key barrier that would prevent them from using mobile banking.

VeriSign commissioned Palmer Research, Los Altos, California, http://www.palmerresearchgroup.com, to conduct the study. A sample of 501 U.S. consumers were surveyed, 50 percent by land-line telephone and 50 percent online. This dual methodology provided a more realistic cross-section of American consumers who use a cell phone or other mobile device than typical online surveys. Each respondent was screened to ensure they were a mobile phone user and not an active, regular user of online banking.

Financial institutions can learn more about the survey results by downloading a whitepaper, visit http://www.checkfree.fiserv.com/mobileresearch. (Payment News)

Mobile banking on the rise among urban Indian consumers - survey
October 8, 2009

Mobile banking penetration in India's urban areas has reached 15 percent, with around 43 million Indians in urban areas currently employing their mobiles to access banking services, research shows.

The top three most popular mobile banking services among urban Indian consumers are checking account balances (employed by 39.9 million users), viewing the last three performed transactions (accessed by 28 million mobile users) and checking the status of their cheques (used by 21 million individuals). Other frequently used mobile banking services among urban Indian consumers are payment reminders and requesting cheque books.

The survey, carried out by market research company Vital Analytics, indicates that ICICI Bank is currently the Indian financial services provider with the highest presence of the mobile financial services market, with 17.75 million mobile banking subscribers. HDFC Bank comes second with 9.1 million subscribers, followed by the State Bank of India with 6.13 million mobile banking subscribers. (The Paypers)

Remittances to Central Asia are falling, but less so in ruble terms
October 8, 2009

Remittance flows to several Central Asian countries appear to be declining precipitously in the first half of this year, raising concerns that these flows are less resilient in the Europe and Central Asia region than in other developing regions. Remittance flows in US dollar terms to Kyrgyz Republic, Armenia, and Tajikistan declined by 15 percent, 33 percent and 34 percent respectively in the first half of 2009 compared to the same period last year.

Most of remittances to these three Central Asian countries come from Russia. From a survey of central banks that we conducted last year, Russia reportedly accounts for more than four-fifth of remittance inflows in Kyrgyz Republic and Armenia, and it was the top source country for remittances to Tajikistan. Driven by increasing emigration, primarily to Russia, remittance flows more than doubled in Kyrgyz Republic and Tajikistan US dollar terms between 2006 and 2008, while personal transfers through banks in Armenia increased by some 70 percent.

These remittance flows from Russia tend to be denominated in rubles. Because of the financial crisis, the ruble lost 25 percent of its value in the first half of 2009 compared to its average value in the corresponding period the previous year.

If measured in ruble terms, remittances to Kyrgyz Republic actually increased 17 percent in the first half of 2009 on a year-on-year basis! In Armenia, the year-on-year fall was only 8 percent, and in Tajikistan by 10 percent (see chart 1). Only in Tajikistan, the decline on a year-on-year basis appears to be steep because of the unusually high level in 2008, when remittances surged "abnormally". Also the high degree of seasonality tends to overstate the extent of the decline. As chart 2 shows, remittances are recovering, following a similar trend in 2007.

Going forward, we expect remittances to be resilient relative to other flows such as FDI and private portfolio flows. We expect remittances to the Europe and Central Asia region to fall by 15 percent in US dollar terms in 2009, and recover by 3 percent in 2010. (World Bank)

Overhaul of UK personal current account market
October 8, 2009

UK banks have agreed to make personal current account costs more transparent and the switching process more reliable and trustworthy.

The development comes after the UK's Office of Fair Trading (OFT) published a report in 2008, which identified three major problem areas: transparency of cost to consumers; real and perceived difficulties over switching; and the way in which unarranged overdraft charges function. As a result, the OFT said the £8 billion ($12.9 billion) personal current account market did not work well for consumers.

Since the report was published, the OFT said that it has worked with banks and consumer groups to identify ways in which the market could be improved. As a result, UK banks will introduce an annual summary of the costs of each customer's account to help them to focus on the value they are getting, in a similar way to annual car or house insurance renewal quotes.

Among other commitments, the banks will make charges prominent on monthly statements so that consumers are more aware of the charges they pay. The steps are expected to be implemented by early 2010.

To improve the switching process, measures to reduce the impact on consumers of any problems with transferring direct debits have either been introduced or are being introduced following work with payments processor Bacs, said the OFT.

Work on unarranged overdraft charges is on-going. The OFT is pursuing a separate investigation into the fairness of unarranged overdraft charging terms under the Unfair Terms in Consumer Contracts Regulations 1999.

The OFT said it expects to make more substantive comments on unarranged overdraft charges in due course pending judgment from the Supreme Court. (Lafferty Retail Banking News)

First Data, PayPal Enable STAR Debit Cards for PayPal Funding
October 8, 2009

First Data has announced an agreement with PayPal that allows debit cardholders in First Data's STAR Network to quickly link their STAR debit card to a PayPal account online. First Data says its STAR Network is "the first electronic funds transfer network to offer this innovative service to its member financial institutions."

With the STAR Online Partner service, consumers can enroll for a PayPal account through their financial institution's Internet banking site, and, once registered, immediately use their debit card to fund their PayPal account to make online purchases without having to enter debit card account information or expose their debit card number to merchants for each purchase. Member financial institutions provide authentication for the cardholder, adding an extra layer of security to the account.

According to the 2008 Study of Consumer Payment Preferences conducted by Hitachi Consulting and the Bank Administration Institute (BAI), consumers are not as comfortable using a debit card for online shopping versus other payment methods such as credit cards and prepaid cards. The study, of which First Data was a sponsor, also showed that while credit cards have the highest penetration of all payment methods on the Internet, both debit cards and Internet payment services such as PayPal, have the second highest penetration levels among online shoppers. (Payment News)

NAB considers three-factor authentication system for personal internet   banking                                                        October 12, 2009

Financial services provider National Australia Bank (NAB) is currently considering the implementation of a three-factor authentication system for its online banking customers, online news portal zdnet.com.au reports.

The bank - which reports securing 75 percent of its current transactions using one-time passwords (OTP) and two-factor authentication technology - is planning to add voice authentication as a third authentication factor for online transactions. NAB has been testing the voice authentication technology and voiceprints in its call centres in order to identify callers and prevent identity theft and online banking fraud.

The bank thus considers adding voiceprints to its existing mandatory SMS-based two-factor authentication system for personal internet banking, which has been active since 2005. (The Paypers)

FRAUD & SECURITY MATTERS

Phishing bust sees 100 charged in US and Egypt
October 8, 2009

Authorities in the US and Egypt have charged 100 people in connection with a phishing scam that saw around $1.5 million stolen from the bank accounts of hundreds of victims.

US authorities yesterday arrested 33 of 53 defendants named in an indictment, while officials in Egypt have charged a further 47 people allegedly involved in the scam.

The charges are the cumulation of "Operation Phish Phry", which was launched in 2007 by the FBI working with US financial institutions. Intelligence gathered during the operation led the feds to instigate a joint investigation with counterparts in Egypt.

According to the indictment, the Egyptian-based hackers used phishing e-mails to redirect victims to fake bank sites and trick them into handing over account numbers and related personal identification information.

The alleged US ring leaders, Kenneth Joseph Lucas, Nichole Michelle Merzi and Jonathan Preston Clark, then used "runners," who set up bank accounts where the stolen funds could be transferred and withdrawn, says the FBI.

Each of the 53 defendants named in the 51-count indictment is charged with conspiracy to commit bank fraud and wire fraud, a charge that carries a statutory maximum penalty of 20 years in federal prison. Some of the defendants are named in additional counts that would increase their maximum possible sentences. (finextra.com)

PayPal's plans for a single consumer identity
October 8, 2009

PayPal Inc. is on the road to becoming the "Visa" of the Internet, according to a keynote speech at SecTor in Toronto, where Andrew Nash presented the company's plans to expand into the identity provider business.

The term identity provider (IDP) has existed in the identity technology space, but the actual implementation for consumers is just beginning, explained Nash, PayPayl's senior director of identity services, in a post-keynote interview.

Consumers would essentially have a single online identity for accessing sites and conducting business online. This would remove the need for filling out forms and entering passwords as you travel around the Net.

PayPal would essentially act as a broker between consumers and enterprise. "At some level, we are kind of a little bit like the Visa of the credit card system," he said.

Nash expects competition, but PayPal has already established a level of trust from financial and commercial institutions.

With over 193 million accounts worldwide, PayPal has a significant head start in the space, according to Nash. (Payment News)

OTHER NEWS & ISSUES

Unclear pricing, slow network speeds - the main barriers for UK m-commerce adoption
October 7, 2009

According to research on the adoption of mobile commerce, although 38 percent of UK consumers have tried to make an online purchase via the mobile channel, 28 percent of them consider this shopping method a difficult one.

When asked about the barriers which hamper mobile commerce adoption in the region, 34 percent of the 1,000 UK adults involved in the study mentioned unclear pricing, while 27 percent spoke about slow network speeds. 29 percent have indicated that handset manufacturers should offer phones with bigger screens, more affordable smartphones (29 percent) and Wi-Fi enabled phones in order to connect themselves to the internet at no additional cost (24 percent).

Cinema and theatre tickets rank highest in terms of consumer preferences for items they would buy with their mobile phones, with 31.1 percent claiming that they would make such purchases if concerns were addressed. Other products include music and DVDs (mentioned by 30.7 percent) and takeaways (25 percent).

The study findings also point to a need for secure and easy payment services, as 39 percent of respondents claim they would feel more inclined to use a mobile commerce service if retailers offered such payment services. According to 24 percent of the interviewed consumers, m-commerce adoption could be boosted by mobile-only offers and incentives.

The study was conducted by ATG. (The Paypers)

NuMobile partners Alternet Systems for e-commerce project in China
October 8, 2009

NuMobile, a US smartphone and mobile computing software company has teamed up with Alternet Systems, a mobile commerce and electronic ticketing payment services provider, for a joint e-commerce strategy in China.

Under the terms of this partnership, the two companies will adopt a strategy to pursue mobile computing opportunities with NuMobile's channel partner China Crescent Enterprises. NuMobile and Alternet Systems have previously announced a collaboration to pursue the mobile computing and smartphone market in Central and South America.

According to statistics released by the China Internet Network Information Center, the number of Chinese online shoppers increased by 18.8 percent, from 74 million in December 2008 to 87.88 million in June 2009. An IDC market research report indicates that trade in China's e-commerce is expected to reach CNY 3.22 trillion by 2010, as compared to CNY1.9 trillion in 2008. (The Paypers)

CARD NEWS

PPC Fees
October 2, 2009

Feeling the breath of federal lawmakers, American Express says it is eliminating monthly fees on all of its gift cards, including those now in stores, those headed to market for the coming holidays, and those already purchased that are in consumers' wallets and purses. With this announcement, American Express is the only major issuer of universal, or "general purpose," gift cards to eliminate all fees after purchase. Unlike other gift cards, AmEx Gift Cards have no fees after purchase -- no fees for activation, no fees for checking a balance, no fees for monthly servicing, no fees for card replacement, and the funds on the cards never expire. In addition, AmEx and Simon Property announced a new, expanded relationship that makes AmEx the primary provider of Simon gift cards, unseating Visa. AmEx Gift Cards are available at more than 70,000 outlets. For more information visit: http://www.americanexpress.com/gift (CardTrack.com)

Romania: online card transactions worth over EUR 69 million, up 75% y-o-y
October 6, 2009

During the first nine months of 2009, the value of online payment transactions the Romanian shoppers made via a credit card reached EUR 69.5 million, up 75% on a year-over-year basis, according to statistics published by curierulnational.com.

During the period under review, the number of electronic payment transactions almost doubled as compared to the corresponding period of the previous year, reaching 886,000, with an average of EUR 83 per transaction versus EUR 84 per transaction recorded in the same period of 2008.

The number of online transactions conducted via the ePayment platform reached 784,000. In Q3 2009, the online stores that use ePayment registered a 7 percent growth in credit card payments volume, as compared to the previous quarter.

Statistics released by RomCard, the Romanian provider of services for card payment systems, indicate that e-commerce is one of the sectors which have been least affected by the economic downturn and therefore, projections for the year-end are optimistic: 1.2 million online transactions worth EUR 93 million. (The Paypers)

BANKING & FINANCE SECTION

Amazon Payments introduces m-payment service for developers, merchants

October 5, 2009

Amazon Payments, an Amazon.com company, debuts the Amazon Mobile Payments Service (Amazon MPS).

The service provides developers, merchants and distributors of mobile applications with a method to process payments from mobile devices, expanding Amazon's 1-Click checkout experience to customers and thus enabling them to make mobile payments using the existing payment and shipping information in their Amazon.com accounts. Amazon customers can also buy items and services on third party websites without the need to use separate payment accounts.

After signing in from an Amazon MPS enabled device or mobile application, buyers can make purchases from their mobile devices via the 1-Click functionality. Via a set of APIs and an mobile browser experience, developers and merchants can extend single or multi-use payment options to their customers. Merchants who already offer Amazon Payments at checkout can also add the mobile payment option without the need for backend technology development. (The Paypers)

Western Union to launch mobile remittance service in Malaysia
October 6, 2009

Western Union is partnering with Malaysian telco Maxis to launch a cross-border mobile money transfer service targetting the country's 1.9 million foreign workers.

With the launch of the service in early 2010, more than 11 million Maxis subscribers in Malaysia will be able to send funds from their mobile phones. The recipient will be able to pick up the funds in cash at more than 345,000 Western Union Agent locations in 200 countries.

The joint service with Maxis will mark the first time that Western Union has enabled mobile money transfer transactions from a mobile phone outside the United States.

In 2008, more than US$6.4 billion (RM22.3 billion) in remittances was sent out of Malaysia. Many of these remittances were sent by the estimated 1.9 million foreign workers living in Malaysia - largely Indonesians, Filipinos, Bangladeshis, Nepalese and Vietnamese. (finextra.com)

FRAUD & SECURITY MATTERS

Fiserv releases latest fraud risk-mitigation, anti-money laundering solutions
October 2, 2009

Fiserv Inc. has announced the availability of Fraud Risk Manager 4.6, the newest version of its multichannel fraud-detection and management solution.

According to a news release from Fiserv, the company also is making available its AML Manager 4.6, an anti-money laundering solution.

Fraud Risk Manager and AML Manager are designed to enhance and optimize financial institutions' financial crime risk-management operations by delivering best-in-class fraud and anti-money laundering transaction monitoring that is integrated with a common platform for automated alert intelligence and investigation, case management and regulatory reporting.

As banks consolidate their fraud and anti-money laundering functions, this unified platform supports an enterprise-wide view of risk, which is of growing concern to FIs throughout the world, says Neil Katkov, PhD and senior vice president of Celent's Asia Research Group:

Fraud Risk Manager 4.6 is an end-to-end, scalable environment combining transaction and customer monitoring for accurate detection. Fraud Risk Manager 4.6 monitors customer characteristics, account information and non-financial events, such as an address change, new debit card and PIN requests or change in ownership.

AML Manager from Fiserv is a fully integrated anti-money laundering system. It combines risk-based transaction monitoring, watch list filtering, CDD/KYC features, investigation tools, case management and automated reporting, delivering a high degree of detection accuracy and operational efficiency. The 4.6 release offers several new or optimized capabilities in areas like list matching, behavioral profiling and reporting. (ATM Marketplace)

UK Card Fraud Losses Decline 23% in First Half of 2009
October 6, 2009

Financial Fraud Action UK, the voice of the industry in the UK for financial fraud matters, (previously known as APACS) has published the latest payment industry fraud losses for the first half of 2009, in conjunction with The UK Cards Association and the Cheque and Credit Clearing Company.

By fraud category, here are the results:
• Card not present - £134m (down 18% vs first half 2008)
• Counterfeit cards - £46.3m (down 48%)
• Lost or stolen cards - £25.1m (down 6%)
• Card ID theft - £23.9m (up 23%)
• Card lost in post - £3.5m (down 33%)
• Total - £232.8m (down 23%)

The fraud to turnover rate on debit and credit cards amounted to 0.1 per cent in the first half of the year - reflecting the fact that around a tenth of a penny is lost to fraud in every £1 spent on cards.

The Dedicated Cheque and Plastic Crime Unit (DCPCU) - the special police unit sponsored by the banking industry to stamp out organised card and cheque fraud across the UK - has certainly played its part in the encouraging fall in card fraud. In the first half of the year, conservative estimated savings to the industry as a result of their fraud prevention work amounted to £12.8 million. This is on top of the £315 million in fraud savings to the industry as a result of the Unit's work since its launch back in 2002.

Various other factors have contributed to the fall in the card fraud figures. Chip and PIN has undoubtedly continued to make it more difficult for fraudsters to commit fraud on our cards in the UK. Additionally, the banking industry continues to work closely with the retail community to raise awareness of the ways in which retailers can protect their chip and PIN terminals from criminal attack.

Losses from phone, internet and mail order shopping fraud have fallen for the first time ever and now stand at £134 million. Reasons behind this decrease include the increasing use of sophisticated fraud screening detection tools by retailers and banks, as well as the continuing growth in the use of MasterCard SecureCode and Verified by Visa (online payment systems that make cards more secure when shopping on the internet), by both online retailers and cardholders.

There has also been a significant decrease in fraud abroad. One of the factors causing this is the fraud detection systems used by the banks and card companies, which monitor for unusual spending - meaning that potential fraud is stopped before it happens.

Online banking fraud losses totalled £39.0 million during the six months to June 2009 - a 55 per cent rise on the 2008 figure. The increase is largely due to criminals employing more sophisticated methods to target online banking customers through malware scams - which target vulnerabilities in customers' PCs - rather than the banks' own systems which have proved more difficult for the fraudsters to attack. There were also more than 26,000 phishing incidents during January to June 2009 - a 26 per cent increase on the amount seen in the same period last year.

Cheque fraud losses during January to June 2009 decreased from £21.2 million to £15.6 million. The overwhelming majority of fraudulent cheque payments get stopped before the cheque is paid, and the industry's ongoing work to prevent cheque fraud coupled with the continuing decline in cheque usage is likely to have played a major part in the 26 per cent fall. (Payment News)

OTHER NEWS & ISSUES

European Commission moves closer to enforcing Sepa end-game
October 1, 2009

The European Commission is in talks with member states about setting a deadline for the migration of national payment schemes to the new Single Euro Payments Area (Sepa) after a public consultation exercise showed widespread support for the move.

The EC initiated consultation with key stakeholders in June on whether and how deadlines should be set for the migration of existing national credit transfers and direct debits to the new Sepa-compliant payment instruments.

The results showed that "a large majority" of respondents support the idea of enforcing dates for the use of legacy payment instruments, says the EC, although users expressed concerns about quality issues relating to direct debits and the need for enough time to become acquainted with the new products.

In July, a coalition of payments systems users published a highly critical report on the Sepa project and the lack of consultation with end-users, warning that the setting of an arbitrary end-date could destabilise the entire scheme.

One option under consideration by the Commission is to set separate deadlines for Sepa credit transfers and direct debits, since both schemes were not launched at the same time and do not have the same level of maturity. (finextra.com)

Brazil agencies urge credit card market overhaul
October 1, 2009

Brazilian antitrust authorities and the central bank will recommend a series of measures aimed at increasing competition and transparency in the nation's credit card industry, the central bank said on Thursday.

The proposals include ending the exclusivity that local card operators VisaNet and Redecard have with Visa and Mastercard, respectively.

VisaNet and Redecard have a combined market share above 90 percent. The agencies are also urging the introduction of greater transparency in the determination of tariffs, among other measures. The proposals still have to be approved by the justice and finance ministers and the central bank president.

Both VisaNet and Redecard authorize merchants, issuers and transactions and act as a clearinghouse. The authorities also want to strengthen the usage of debit cards in Brazil and force operators to share networks.

Shares of Redecard were down 1.28 percent at 26.90 reais. Visanet traded 2.67 percent lower at 17.11 reais in Sao Paulo trading. (Reuters)

CARD NEWS

Debit Fees
September 25, 2009

As pressure builds on bank overdraft practices, particularly with regard to debit card transactions, major banks are announcing they will revamp their policies early next year. This week, Chase, Wells Fargo and U.S. Bank announced changes. U.S. Bank will eliminate overdraft fees when a customerâ€^TMs account is overdrawn by less than $10, regardless of the number of overdraft transactions that may have occurred; limit the number of overdraft fees to no more than three per day; and offer the "opt out" ability to any customer who would prefer to decline or return any transaction on their account, whenever possible, when they are presented against insufficient funds. Wells Fargo will eliminate overdraft fees for customers when they overdraw their accounts by $5 or less and will charge no more than four overdraft fees per day. In addition, Wells Fargo and Wachovia customers will be able to opt out of overdraft coverage. Chase announced it will eliminate overdrafts for debit cards unless the customer opts in to overdraft services; modifying the posting order to recognize debit-card transactions and ATM withdrawals as they occur; eliminating overdraft fees if a customerâ€^TMs account is $5 or less overdrawn and reducing the maximum number of overdraft fees per day to three from six. (Cardtrack.com)

Card customisation reaches Indonesia
September 29, 2009

The trend of allowing cardholders to personalize their payments cards has now reached Indonesia.

Card customisation, which has been introduced to other cards markets around the world, will be available from Dutch payments solutions provider Gemalto's Indonesian personalisation centre by the end of this year.

Gemalto has stated that the new facility will help it support local issuers with a number of services. As well as card personalisation, the company's services also include migration to EMV chip and, as an end-to-end provider, the company is a 'one-stop shop' for issuers wishing to create new products.

The centre has been approved by MasterCard and Visa, and also has plans to develop applications for mobile contactless payments and online banking.

Gemalto specialises in digital security and in 2008 had annual revenues of €1.68 billion ($2.46 billion) and 10,000 employees working in 40 countries. (Lafferty card News)

Perfect Storm
September 29, 2009

Aside from the "Credit Crunch" and the "Great Recession," credit and debit card issuers are facing a "Perfect Storm" of an accelerated implementation of the "CARD Act," the creation of the "Consumer Financial Protection Agency" and swiftly moving legislation to attack overdraft fee policies. Over the past week, four major banks announced plans to adjust overdraft practices early next year, the chairman of the House Financial Services Committee proposed a less powerful version of the "CFPA" to get it passed and several legislators are now calling for the final batch of new credit card rules be moved to December 1st of this year instead of February 2010. The American Bankers Association says credit card banks are working diligently to implement the new "CARD Act" provisions by next February, but it would be extremely difficult, if not impossible, for them to meet the new deadline.

On top of all this the FDIC is now calling for tighter restrictions on overdraft fees amidst the building momentum for federal lawmakers to address the issue that is directly linked to growing debit card usage.

BB&T announced it will eliminate overdraft fees for debit card and ATM transactions when clients overdraw their accounts by less than $5, and will charge no more than four overdraft fees per day. BB&T also will begin to alert clients at BB&T ATMs when they are making a withdrawal that would overdraw their account. Last week, Wells Fargo announced it will eliminate overdraft fees for customers when they overdraw their accounts by $5 or less and will charge no more than four overdraft fees per day. Chase announced it will eliminate overdrafts for debit cards unless the customer opts in to overdraft services; modifying the posting order to recognize debit-card transactions and ATM withdrawals as they occur; eliminating overdraft fees if a customerâ€^TMs account is $5 or less overdrawn and reducing the maximum number of overdraft fees per day to three from six. U.S. Bank will eliminate overdraft fees when a customer's account is overdrawn by less than $10, regardless of the number of overdraft transactions that may have occurred; limit the number of overdraft fees to no more than three per day; and offer the "opt out" ability to any customer who would prefer that we decline or return any transaction on their account, whenever possible, when they are presented against insufficient funds.

Despite the changes, the Center for Responsible Lending says Americans are fed up with bank overdraft practices. Media scrutiny and proposed legislation in Congress prompted three of the nation's largest banks to unveil changes to their overdraft policies this week. But the changes are far from enough and, in fact, underscore the need for comprehensive overdraft reform as quickly as possible. (CardTrack.com)

CARD ISSUER'S CORNER

MasterCard teams up with Citibank, Nokia and Vodafone for contactless mobile payments trial in India
September 29, 2009

MasterCard Worldwide has teamed up with Citibank, Nokia and Vodafone to launch a wide-scale trial of its MasterCard PayPass contactless mobile payments technology in India.

Consumers participating in the Indian trial will have access to promotional offers such as discounts at various popular retail loactions, including department stores, food courts at shopping malls and office buildings, restaurants and fast food chains, bookstores and multiplexes. The trial has looked to establish a secure, scalable and interoperable mobile payments ecosystem in order to gather user insight across a wide range of parameters.

The pilot is also a means to analyse the level of acceptance consumers display towards contactless payments carried out via their mobile phones as well as track consumer response to the next stage of innovation in contactless payments - NFC-enabled interactive posters and mobile coupon redemptions.

Besides the NFC PayPass trial in India and the certification of Gemalto in Taiwan, MasterCard has also recently rolled out a commercial deployment program in Korea and announced the intention to launch an NFC PayPass pilot in UAE. (The PAypers)

Barclays to buy Citi's Portuguese credit card business
September 30, 2009

Barclays has agreed to buy the Portuguese credit card business of Citi, as the UK bank looks to expand its presence in Western Europe.

Financial terms of the deal were not disclosed, although the Wall Street Journal reports that Barclays is paying less than $100 million. Barclays will acquire around 400,000 credit card accounts with gross assets of approximately EUR644 million. The Citi cards will be rebranded over time.

The business, and its staff, will be integrated into Barclays' Portuguese unit, which has over 130 branches.

With many of its rivals scaling back their business after receiving government bail-out money, Barclays is looking to take advantage and make acquisitions. According to the Times newspaper, it is currently mulling a move for the banking division of insurer Standard Life, which could be worth up to £300 million.

In contrast, Citi is selling off parts of its business and earlier this week sold the Diners Club Card merchant-location portfolio in Western Europe to Elavon. (finextra.com)

Visa Launches Global Commercial Card Info & Spend Mgmt Platform
September 30, 2009

Visa has announced Visa IntelliLink Spend Management - calling it "a new global information tool that provides extensive reporting and expense management capabilities for organizations of all sizes on a single scalable platform."

Comprised of three core solutions - reporting, data services, and program support - Visa IntelliLink Spend Management integrates with the entire suite of Visa B2B payment products. The platform is designed to meet the key information management needs of financial institutions and their clients across all small business, commercial, purchasing, corporate, central travel, multinational and fleet programs.

Visa IntelliLink Spend Management will replace, over a migration period, existing Visa Information Source, Visa Information Source Select, and other Visa information management tools with a single, global platform. The Visa IntelliLink suite also includes
a Compliance Management Tool for Government, a leading solution currently used by U.S. banks with Federal Government agencies and states to help ensure card program compliance with agency procurement and travel policies.

Visa IntelliLink Spend Management is available to commercial card issuers around the globe immediately. (Payment News)

BANKING & FINANCE SECTION

Mobile debit payments go on trial in Italy
September 28, 2009

Italy's Credito Valtellinese is to conduct the first European trial of Visa's V Pay contactless debit product using Nokia mobile phones.

The small scale trial is an extension of the Tellcard initiative in the North Italian province of Sondrio, which uses contactless technology to enable payments of up to EUR15 on Credito Valtellinese V Pay cards.

Fifty Credito Valtellinese employees will be given a Nokia mobile phone equipped with the Tellcard Mobile V Pay contactless application which can be used to make purchases at 180 locations in the northern cities of Sondrio, Chiavenna, Morbegno, Tirano and Bormio. Mobile payments can be made using the same contactless acceptance infrastructure already deployed for the Tellcard V Pay project.

Elsewhere in Europe Visa also has contactless card programmes in the UK, Turkey, and Poland and contactless card pilots in France, Germany, Spain and Switzerland. There are Visa mobile contactless pilots in France, Spain, Switzerland and the UK. (finextra.com)

Citi and Microsoft working on Mint rival
September 28, 2009

Citi and Microsoft have joined forces to develop a personal finance management site that will take on Mint, the firm acquired by Intuit last month, according to Bloomberg.

Citing "people familiar with the matter", Bloomberg says the bank and tech firm have poured around $5 million into the project, provisionally called Bundle, since work began earlier this year. The venture is being steered by Jaidev Shergill, an EVP at Citigroup's growth ventures and innovation division.

The service will, like Mint, let users monitor accounts at multiple banks and brokerages and will be developed during the next "one or two years".

Mint - which Intuit agreed to pay $170 million for earlier this month - launched in public beta in September 2007 and by August was claiming over 1.4 million registered users, tracking $175 billion in transactions and $47 billion in assets.

Its success contributed to Microsoft deciding to scrap its Money personal finance management software - which competed with Intuit's Quicken - in June.

Although abandoning the software model, Microsoft thinks the online money management business has potential and, along with Citi, wants to stop Intuit getting too far ahead, says Bloomberg. (finextra.com)

Etisalat to offer mobile money transfer services
September 29, 2009

Etisalat, a telecommunications service provider in the UAE, has received approval from the Central Bank and the Telecommunications Regulatory Authority (TRA) to provide mobile money transfer services in the region, business24-7.ae reports.
As a result, UAE-based customers will be able to pay utility bills, purchase items and services and eventually send money abroad from a mobile device. Etisalat will be able to roll out its mobile wallet account platform, enabling customers use to make payments by uploading digital cash to the mobile and swiping their phone at payment counters or ticketing machines.
Etisalat has already introduced a mobile payment system for parking fees via its Value SMS system, as well as a pilot scheme which allows customers to make payments via mobiles using credit cards. (The Paypers)

Cgap calls on mobile remittance operators to move into savings market
September 30, 2009

World Bank think tank CGAP is calling on telecomms operators in emerging markets to work with the banking industry and begin offering savings products on the back of their mobile remittance offerings.

A recent CGAP brief on Safricom's successful M-Pesa service found that nearly one in three of the informants in Kibera (an informal settlement in Nairobi) kept a balance in their M-Pesa accounts. A survey conducted in 3000 homes in Kenya found this number to be even higher. A majority of users stored money with M-Pesa. Some used the stored value for daily consumption. Others made frequent deposits of "small money" to accumulate a larger amount.

The author of the brief, Olga Morawczynski, a doctoral candidate at the University of Edinburgh says: "The fact that M-Pesa is being used for savings illustrates the latent demand for appropriate savings products in Kenya."

However, since Safaricom is not registered as a financial service provider, providing interest on savings is not an option.

For this to occur, M-Pesa wallets should be linked to accounts managed by formal financial institutions, she says, pointing to the path taken by Zap, Zain's mobile money service.

Safaricom is not alone in shying away from the savings opportunity. This year's Cgap/GSMA Mobile Money Market Sizing Study claimed that by the end of this year there will be 120 mobile money deployments (live or in pilot) around the world. (finextra.com)

Bankrate.com Survey Finds Bank Fees Rise to New Records in 2009
September 30, 2009

Bankrate.com has published results from a new study of bank fees showing that the costs of checking accounts have risen again this year to an all-time high. Bankrate's 2009 Checking Study details the average fees associated with using and maintaining an interest bearing account, including bounced check fees, ATM surcharges, and monthly services fees, plus tips on how to avoid them.

Bankrate's survey of leading banks yielded the following data:

• Bounced check fees, also called NSF fees by banks, increased 2.1 percent from last year to another record high of $29.58. Bounced check fees have grown incrementally but consistently over the past decade, rising 2.7 percent annually on average;
• Tiered structure fees for overdrafts are becoming more popular with 26 percent of banks now charging higher fees after the 2nd overdraft during a rolling 12-month period. The average cost for the 2nd through 4th overdrafts under the tiered fee structure is $33.88 while the average cost for banks that have a third tier, which typically kicks in after the 5th overdraft, came in at $36.19;
• ATM surcharges rose 12.6 percent from last year to an average of $2.22. Banks increasing the fee outnumbered those reducing the fee by more than a 7-to-1 ratio. ATM surcharges have increased at a 7 percent annual clip over the past decade;
• With interest bearing accounts, monthly service fees hit a new high at an average of $12.55, up nearly 5 percent from last year; For non-interest bearing accounts, monthly service fees hit a new low with an average of $1.77. Additionally, 76 percent of non-interest accounts now qualify as no fee, no minimum balance accounts, up from 73 percent last year.

Bankrate.com surveyed one interest checking account and one non-interest checking account at of the five largest banks and the five largest thrifts in 25 large U.S. markets to find the latest trends on checking account and ATM fees. There were 245 interest accounts and 228 non-interest accounts surveyed at 248 banks and thrifts. In addition, 16 interest and 5 non-interest accounts were surveyed from a sampling of 17 online banks. Surveys were conducted during the month of August 2009. (Payment News)

US number of mobile banking users to hit 99 million by 2014 - study
September 30, 2009

By 2014, the number of mobile banking users in the US is expected to undergo "explosive" growth, a recent survey shows.

According to the research, carried out by Javelin Strategy & Research, 36 million US adults currently employ mobile banking services, and the number is expected to reach 99 million by 2014. Javelin also claims the growth of mobile banking will entail added risks and new opportunities for authentication services providers, with the greatest advantages being gained by financial institutions that combine affordability, consumer usability and effectiveness.

Thus, six out of ten polled consumers were revealed to prefer simple authentication methods such as image recognition, while 59 percent of users also regard security questions for identity control. . In contrast, three in ten consumers ranked biometrics as easy to use. Simple security questions - or knowledge based authentication (KBA) - ranked highest in effectiveness by 65 percent of consumers. Moreover, consumers ranked an additional security question (also KBA) as the preferred method of authentication with three in ten trusting it as their method of choice.

While mobile banking comes with risks, according to Javelin, mobile authentication can help mitigate the risk of fraud across all banking channels, from ATM to branch. Collectively, new account and existing account identity fraud was revealed to add up to USD 48 billion, with an average per-victim cost of nearly USD 550. (The Paypers)

OTHER NEWS & ISSUES

MoneyGram ordered to pay Western Union $16.5m in patent case
September 25, 2009

A federal jury in Texas has ordered MoneyGram to pay rival outfit Western Union $16.53 million in damages for patent infringement.

Western Union filed the suit in May 2007, claiming MoneyGram Payment Systems' "FormFree" offering infringed patents related to its own "Money Transfer By Phone" service.

Western Union says its investigation had found that MoneyGram was "essentially replicating" its system, which is a way of staging money transfers through a call centre and completing transactions at an agent location.

The jury in the case returned a verdict in favour of Western Union on Thursday and awarded damages totalling $16.53 million. (finextra.com)

Interac ATMs accept CUP cards
September 29, 2009

Canadian national debit network Interac has signed an agreement with China UnionPay (CUP) that will allow Chinese cardholders to withdraw cash in Canada.

CUP cards have not worked at cash machines in Canada until now. Therefore, the initiative shows how Interac is seeking to achieve a competitive edge over Visa and MasterCard who are moving to challenge its dominance in the Canadian debit card market.

The Canadian association aims to benefit from the increase in Chinese tourists travelling abroad as ATM volumes - and therefore acquiring fees - will increase. There are approximately 1.9 billion CUP-branded cards in issue. The agreement between CUP and Interac potentially affects all Canadian acquirers. Canadian Imperial Bank of Commerce (CIBC) and payment technology company Open Solutions are expected to be the first financial institutions to offer this service.

The two parties are reportedly holding talks to discuss a reciprocal arrangement whereby Canadian Interac cardholders will be able to use their cards in China.

Interac's agreement with CUP follows its deal with the US-based PULSE network at the end of August 2009 that allows Diners Club, Discover and PULSE cardholders to withdraw cash at Canadian ATMs. (Lafferty Card News)

Russian authorities consider launch of national electronic payments network                                                                                     September 29, 2009

Russian central authorities are reportedly considering plans to set up an electronic payments network whose functions would include managing payments among various financial services providers, retailers, businesses and consumers, Russian news outlet The Moscow News reports, quoting commerce-oriented publication the Kommersant.

The main objective of the prospective electronic payment system would be to challenge the dominance of established brands such as MasterCard and Visa, which currently hold around 85 percent of the Russian cards market. The plans for a Russian-operated electronic payment network come after in June 2008, Russia's two largest banks - Sberbank and VTB Group - have teamed up to create the United Russian Payment System (URPS).

According to the same source, one of the motivations behind the Russian Central Bank's decision to green light the initiative is an attempt to lower Russia's dependency on foreign companies. (The Paypers)

CARD NEWS

WU Cards
September 22, 2009

A new paid or reloadable prepaid Visa cards have been introduced that carry no monthly maintenance, purchase transaction and customer service fees. The new "Western Union MoneyWise" and "Gold Card Visa" prepaid cards are now being offered nationwide. Western Union recently piloted the "MoneyWise Visa" prepaid card as part of its "Overnight Home Delivery" service in Kansas City and St. Louis. The service will be offered soon via westernunion.com and over the phone. Currently Western Union is selectively offering its eight million "Gold Card" loyalty program members, with the convenience of the reloadable "Gold Prepaid Visa" card. Consumers can sign-up for the fee-friendly "Western Union MoneyWise" and "Gold Card Visa" prepaid cards by simply visiting WesternUnion.com. (CardTrack.com)

Back to basics for BoA card
September 22, 2009

In line with the industry trend of simplifying product offerings, Bank of America (BoA) has launched a credit card that takes a 'back to basics' approach.

The BankAmericard Basic Visa card, which will become available in October 2009, aims to cater to consumers who are looking for a credit card with simplified rates. The card carries one basic rate for all types of transactions, including balance transfers and ATM cash withdrawals.

Ric Struthers, BoA's president of global card services, said: "Today, consumers are telling us more than ever that they need products that offer simple and straightforward solutions. For those consumers who just want the basics, our goal is to offer products with features that are predictable, easy to understand and help them manage their finances responsibly."

The card also aims to simplify its cost by not charging an over-the-limit fee and by charging one flat fee of $39 for late payments. (Lafferty Card News)

NetSpend Adds "Virtual Card", Online Financial Management Tools
September 23, 2009

NetSpend has announced the availability of the first "virtual" card to be tied to an existing prepaid debit card account and a suite of online financial management and budgeting tools including a visual spending history report, online budgeting application and budgeting "report card." NetSpend says these new products and applications "provide a level of convenience and security currently not provided to the estimated 50-100 million underbanked consumers in the United States."

A first in the prepaid debit card industry, the NetSpend virtual card acts just like an additional card on the account and is available to current cardholders through the company's online account center at NetSpend.com. The virtual card can be created or deleted on demand, can be accessed-or created-via a mobile phone and can be used for any card-not-present transaction. The virtual card is designed to add a level of security and convenience for NetSpend cardholders. Because it can be instantly deleted after a purchase, the virtual card adds an extra layer of protection for account holders who are shopping online or on the phone. Its instant issue functionality allows it to also act as a temporary backup when a customer loses their physical card-eliminating the waiting period to receive a replacement. (Payment News)

CARD ISSUER'S CORNER

Discover Financial Services sees Q3 2009 net income reach USD 577 million
September 21, 2009

US credit card issuer and electronic payment services company Discover Financial Services has seen its net income for Q3 2009 reach USD 577 million, up USD 397 million compared to the same interval in 2008.

According to a statement released by the company, Discover's net income for the quarter ended on 31 august 2009 includes approximately USD 287 million (after-tax) related to the Visa/MasterCard antitrust litigation settlement.

During Q3 2009, Discover has managed loans worth USD 51 billion. The company's sales volume for the Discover Card dropped 7 percent in the interval under review to USD 23 billion, while the Q3 managed net charge-off rate rose to 8.39 percent. Moreover, deposit balances originated through direct-to-consumer and affinity relationships surpassed USD 10 billion, an increase of USD 2 billion compared to Q2 2009.

Discover's total company expenses volume for Q3 2009 decreased by 14 percent compared to the same interval of the prior year, while the third-party payments segment volume was USD 36 billion, a 2 percent year-on-year increase. (The Paypers)

NAB and Visa in contactless payments push
September 22, 2008

National Australia Bank (NAB) and Visa have embarked on a major roll-out of contactless payments readers that will see 2500 delivered to merchants by Christmas.

The first stage of the deployment will involve 500 merchants - including Sumo Salad and Pancake Parlour - in Melbourne this month.

Customers will be able to pay for purchases of up to A$100 by holding their Visa payWave-enabled cards against the readers. The readers are based on EMV chip technology with payments made via radio frequency. The payment information includes an encrypted security code that is unique to each transaction.

Steve Aliferis, executive general manager, working capital solutions, NAB, says: "The motivation for merchants to go contactless is customer convenience and the cost savings and revenue uplift associated with faster throughput and reduced cash handling costs."

Earlier this year the bank revealed it is looking at a commercial launch of contactless mobile payments after a three-month trial at Melbourne's Docklands "exceeded expectations" and indicated a strong consumer appetite for the technology.

Commonwealth Bank of Australia and MasterCard are also pushing the technology and aim to install 5000 readers by the end of the year. (finextra.com)

Hungary fines Visa, MasterCard and banks over interchange fees
September 24, 2009

Visa, MasterCard and seven of the biggest banks in Hungary have been fined a total of $10.42 million by the country's competition authority for running an interchange fee cartel.

The GVH watchdog levied the fines after concluding that the introduction of a uniform interchange fee structure by Visa, MasterCard and the commercial banks in 1996 inhibited competition.

According to Reuters, Tihamer Toth, chairman, GVH ruling panel, told a news conference that by charging retailers a uniform fee for card payments "competition between the two card firms and the card-accepting banks was distorted and limited".

Visa and MasterCard were fined Ft477 million each - around $2.6 million. The commercial banks - OTP Bank, Budapest Bank, MKB Bank, CIB Bank, Erste Bank, K&H Bank and ING Bank - were fined a total of Ft954 million ($5.2 million).

Visa and MasterCard have been under fire over interchange fees around the world in recent years. US lawmakers have been seeking to pass legislation that would give retailers a seat at the negotiating table with banks and credit card companies over interchange fee levels. In Europe both firms have been battling the EC, which has accused them of infringing European competition law. (Finextra.com)

BANKING & FINANCE SECTION

South African start up rolls out MobiCash contactless mobile payments system
September 21, 2009

South African start up MobiCash has gone live with its contactless mobile payments platform, which allows consumers to carry out secure cashless transactions via their mobile phones.

MobiCash's technology partner is French company Tagattitude, which has developed a trademark authentication technology dubbed Near Sound Data Transfer (NSDT). The latter enables contactless mobile payments by transmitting an electronic signature, one time password and cryptographic key via a mobile phone's audio channel.

Customers looking to employ the MobiCash service must first register for a MobiCash account by calling a pre-defined number from their mobile phones. Once they have registered, they can access their client space on www.mobicashonline.co.za and load money on their account using a bankcard. Accounts can also be credited directly at participating merchants using any accepted payment method.

To receive customer payments, merchants equipped with MobiCash's Payment Terminals (MobiPads) input the due amount into the devices; customers then input their mobile phone number and assigned PINs on the terminal keypad, then touch their phones to the MobiPad payment terminal to electronically sign and confirm the transaction via the NSDT technology. Transactions are confirmed by SMS, vocal-message, email, or printed receipt.

MobiCash is planning to create an African Payment Network with points of presence in all major African cities. A fully operational Pan African Payment Network will allow African nations to link directly with each other, rather than having to switch through one of the major US or European hubs.

MobiCash has established a foothold in Africa via a number of joint venture agreements with partners in South Africa, Namibia, Angola, Botswana, Zimbabwe, Swaziland, Mozambique, Tanzania and Rwanda. (The Paypers)

Nacha to rewrite rule book for mobile payments
September 22, 2009

US electronic payment association Nacha is proposing amending its rules to cater for an expected surge in mobile payments processed over the national ACH network.

The proposed rule change would expand the definition of Internet-Initiated Entries (WEB) to include ACH debits authorised and/or initiated via mobile networks.

Nacha says the changes would clarify the entry classifaction standard for mobile payment processing over the ACH network and provide a framework for basic risk management and security procedures.

While current mobile payment volume is low, industry analysts predict significant growth over the next five years as more consumers acquire smart phones and payment solution providers begin marketing more aggressively.

Insight Research Corporation estimates that 2.2 billion consumers will generate $124 billion in financial transactions by 2014. A more conservative estimate still predicts huge growth: Mercator Advisory Group estimates that payments from remote devices will grow from an estimated $389 million in 2009 to $8.6 billion in 2014.

In a statement, Nacha says: "Should mobile payments continue their rapid growth in the absence of rules and a serious security breach occurs, it might be considered a liability for Nacha and damage the reputation of the ACH Network."

Nacha has set an implementation date for the rule changes for 17 December.

"Because Nacha does not anticipate that this rules proposal will require major software changes, the industry should have sufficient time to prepare for compliance with the provisions of these proposed rules," the statement continues. (finextra.com)

Wells Fargo introduces customer-to-customer mobile money transfers
September 24, 2009

Wells Fargo has added a customer-to-customer money transfer option to its mobile banking service.

To use the free service, customers log on to Wells Fargo online banking, add the account number of the person they want to send money to - up to $1000 a day - and make a first-time transfer.

Subsequent transfers can be made from customers' handset by logging onto WF.com and following the prompts, or online from their computers.

Arah Erickson, head, retail mobile banking, Wells Fargo, says: "The added ability to transfer funds while on the go will be especially helpful for parents who have kids in college this fall as well as for students who need quick access to money at the last-minute to cover living costs, textbooks, or to split an expense with a roommate."

The bank's mobile site - which works with BlackBerries and iPhones - also lets customers review account balances and activity, transfer funds, pay bills and find the nearest ATM. (finextra.com)

PAYMENT PROCESSOR'S POST

ICICI may sell POS terminals to First Data
September 22, 2009

India-based ICICI Bank has reportedly reached a deal with First Data that will see the bank's POS assets being transferred into a joint venture.

According to local news reports, processor First Data will hold an 81-percent stake in the new company, while ICICI Bank will hold the remainder.

ICICI Bank is expected to pay approximately $15 million for the stake, with the total value of the deal estimated to be more than $75 million. A spokesperson for ICICI Bank told local press that the agreement would allow the bank to grow its POS network more efficiently, while also bringing down the cost of each transaction.

According to The Economic Times, ICICI Bank has been seeking a suitor for its POS terminals - the largest POS network in the country - for a number of months. Visa emerged as a contender for the POS network and reportedly put in a higher bid than First Data. However, according to a local news report, Visa was unsuccessful because the US-based company had not bought a similar business in other markets and it was felt that there could be a conflict of interest if Visa were to own a network of POS terminals as well.

The new company, which will be formed through the joint venture between First Data and ICICI Bank, is expected to earn fees for each card transaction that goes through its POS terminals. (Lafferty Card News)

FRAUD & SECURITY MATTERS

India Begins Project to Issue Biometric Identity Cards to All Citizens
September 24, 2009

India has embarked on an ambitious project to give biometric identity cards to its 1.2 billion citizens. If implemented, the project could help millions of poor people gain easier access to public services.

The government has embarked on a massive project to address their problems. In the next four years, it plans to provide all its citizens with a national identity number. The unique number will be put on an identity card which will have biometric authentication, such as fingerprints and photographs. The data will be stored online, creating the biggest such national database in the world.
One of the country's best know information technology tycoons, has taken charge of the Unique Identification Authority of India, which will implement the project. Nandan Nilekani, a cofounder of one of India's biggest technology companies, Infosys, calls it an "unprecedented project."

The project's main aim is to help improve the delivery of inefficient public services and cut corruption, which the government admits results in siphoning off benefits intended for the underprivileged. For example, fake identity cards are sometimes used to take away subsidized food grains meant for the poor and which are then sold for profit.

The first identity cards are expected to be issued in about 18 months. (VOANews.com /Payment News)

OTHER NEWS & ISSUES

Ukraine paying the price for rapid expansion
September 22, 2009

The Ukrainian cards market provides the perfect illustration of how loose credit risk assessment in a market with a lack of credit history information may lead to easy profits during the economic boom, but to an instant failure once the wider market faces economic recession.

Ukraine's credit cards market has come to an abrupt halt as a result of the global economic downturn. With an estimated annual drop in GDP of 15 percent, unemployment close to double digits and credit losses above 20 percent of outstandings in certain consumer finance segments, the period of rampant growth between 2002 and 2008 is a distant memory.

As a result of severe losses in the banking sector and ever-increasing credit losses, the market is likely to contract by 40 percent year-on-year in 2009 in terms of the number of active credit cards in issue. In addition, as a result of the fact that loans (with a grace period) are often extended through debit cards, the number of debit cards in circulation is likely to sink by around 20 percent in 2009.

Since the beginning of the economic downturn, most banks have focused on granting credit exclusively to their most reliable clients - salary account holders. They have also lowered credit limits and placed borrowing restrictions on those categories of customers who are mostly affected by the crisis, such as employees in the machinery and extraction industries. Central bank regulations that prohibit loss-making banks from lending to consumers that are not salary account holders with the bank have also stifled customer acquisition efforts.

The market landscape is likely to change once the credit crisis has abated; three of the top five credit card issuers are currently facing among the biggest losses in the banking system and two of these have been placed under the temporary administration of central bank. As a result, the banks have stopped issuing new credit cards and have eliminated or reduced a significant number of credit lines granted though payment cards. (Lafferty Card News)

CARD NEWS

US consumer prepaid card sector sees strong growth - report
September 14, 2009

The US prepaid card industry is experiencing strong growth, a recent survey indicates. According to the research, US consumers have access to increasingly diverse prepaid products, made available to them via distribution channels such as prepaid malls and online vendors.

Moreover, the survey found that consumers have started employing prepaid cards in areas such as household budgeting and as replacements for their checking or debit accounts, particularly as payment alternatives for online purchases.

The report, published by consumer payments industry research services provider Mercator Advisory Group, indicates that private label retail cards were the most frequently used prepaid cards among the 45 percent of consumers making prepaid card purchases over the past 12 months. Also, the internet has become a critical sales channel for consumers looking to acquire a specific retailer's gift card. The survey also shows that US retailer bankruptcies consumers have not discouraged consumers from applying for retailer-branded prepaid cards, but have made them more selective of the retailers they choose.

Also, the report has revealed that while gift-giving motivates most purchases, consumers have a wide variety of purchase motivations. In particular, nearly one in five card purchasers use cards to help them manage the household budget, or the budget of a friend or family member outside the household. (The Paypers)

CARD ISSUER'S CORNER

Visa Updates July, August US Payment Volume
September 14, 2009

Visa has filed an 8-K providing information about its US payments volume for July and August. According to Visa, "in August, U.S. aggregate payments volume growth was negative 1% versus the prior year period. This represents an improvement over the July period end of negative 2%. Further broken down, U.S. credit payments volume growth was negative 10% and debit payments volume growth was positive 7%. Compared to the July period end, U.S. credit payments volume was down slightly from negative 9%, while debit payments volume improved from positive 4%."

August cross border payments volume on a constant dollar basis was negative 7% over the prior year period and down slightly compared to the July period end of negative 6%.
August processed transactions grew positive 9% globally. This was an improvement over the July period end of positive 8%. (Payment News)

BANKING & FINANCE SECTION

PayPal enters the Israeli market
September 14, 2009

Internet auctions company eBay has announced plans to open a PayPal office in Israel, according to globes.co.il.

The initiative will enable Israeli users to withdraw shekels from their PayPal accounts via their Israeli bank accounts, thus allowing Israelis shoppers to make online purchases without disclosing credit card or bank account information. eBay has already launched a Hebrew-language website eBay Israel, were customers can purchase products and pay for them in both USD and ILS, but in order to pay with PayPal, they have to open an account using an international credit card. Presently, they cannot withdraw money from the account , as the company is not involved in any agreements with Israeli commercial banks.

Oded Zahavi, who currently holds the position of vice president of International Business Development at Leumi Card, will also manage PayPal operations in Israel, the same source indicates. (The Paypers)

Citi taps Microsoft for new e-banking service for corporates
September 15, 2009

Citi has enlisted the services of Microsoft for the development of its new online corporate banking service, which was launched at the annual Sibos event in Hong Kong.

The CitiDirect BE platform will be based on Microsoft's Office SharePoint Server 2007 and will serve the bank's corporate and public sector clients. It will also be available as a white labelled service for Citi's banking customers.

Following its launch, Citi plans to phase in a series of subsequent releases over the next 18 to 24 months that will feature an array of Microsoft services and applications.

According to Citi, the service will aim to provide more than the usual transaction capabilities, including access to its Electronic Bank Account Management (eBAM) self-service module and various media to report on economic news. It will also be based on service-oriented architecture (SoA) and open standards as Citi looks to capitalise on the growing demand among mid-sized banks for white-labelled corporate banking services as they look to minimise their development and infrastructure costs. (finextra.com)

World Bank calls for financial services expansion in emerging markets
September 15, 2009

The cost of financial transactions in the developing world could be reduced by as much as 80% through a reform of inefficient payment and securities systems, according to the World Bank.

The recommendations follow the release of a report, Financial Infrastructure: Building Access through Transparent and Stable Financial Systems, that analyses the various systems used to process credit reports, payments, workers' remittances and collateral registries.

The report, written by the International Finance Corporation (IFC), a division of the World Bank that promotes private sector investment in developing countries, also predicts that access to financial services could be extended to cover half of the population of these emerging markets.

According to 2008 figures credit bureaus cover 390 million people and support $800 billion worth of credit while remittances cover 700 million people at a value of $328 billion. A focus on building and reforming credit reporting, collateral registries and payment and securities systems could see these figures grow sizeably and the full potential of transaction banking in emerging markets could be realised, concludes the report.

The report's release coincides with the annual user conference of banking co-operative Swift, this year held in Hong Kong, where the high cost of processing payments and other transactions in the developing world has been one of the more prominent issues.

At a press conference on the opening day of the show, Swift chairman Yawar Shah and CEO Lazaro Campos raised the prospect of transposing the Swift networking infrastructure for use in domestic national markets - with emerging economies such as China cited as key targets. (finextra.com)

SIBOS 2009: Microsoft partners M-Com for the delivery of mobile payments worldwide
September 16, 2009

Microsoft and US-based mobile banking and payments services provider M-Com have announced at SIBOS 2009 an offering which provides banks and payment processors with mobile payments functionality.

Based on Microsoft's technology, including Windows and Microsoft SQL Server, as well as Internet Information Services (IIS), M-Com BankAnywhere provides security and risk management capabilities, enabling banks to manage the exposure of their services in the emerging market for mobile technology. Enterprise users of BankAnywhere will thus gain access to technology management tools and practices. As a Microsoft Gold Certified Solution Developer, M-Com supports BankAnywhere worldwide by implementing Microsoft resources and practices.

As revenues generated by traditional cards have declined, financial institutions are focusing on adopting technologies which encourage the use of mobile payments instead of cash-dominated lower value payments, as part of strategies to generate new revenue streams. This is an important step for banks and retailers "as cash handling is both expensive and a security risk", according to a press release. (The Paypers)

Ukash wins contract from First Atlantic Commerce for the delivery of payment methods in Europe, Latin American Caribbean
September 17, 2009

Online payment and risk management services developer First Atlantic Commerce (FAC) has formed a partnership with UK voucher-based payment services provider Ukash to offer an alternative payment method to FAC's merchants across the Latin American Caribbean region, UK and Europe.

Under the terms of the deal, FAC has added Ukash to its PCI-certified payments platform, enabling its online merchants to accept cash payments on their website. Via its payment gateway, FAC also provides its merchants with other payment options, among which Visa, MasterCard, American Express and PayPal. The vouchers are available through payment terminals in retail outlets across Europe and South Africa or on the internet on the company's website in most European territories.

Most recently, Ukash partnered Mobytop, a provider of mobile phone top up services, to enable customers to use cash to load international airtime. (The Paypers)

Canadian banks prepare for expansion
September 17, 2009

Signs are emerging that two of Canada's largest banks - Scotiabank and Royal Bank of Canada - are focusing on their international expansion plans.

Bank of Nova Scotia, more commonly known as Scotiabank, will focus its expansion on Asia and the Americas, CEO Rick Waugh told his audience at the Scotia Capital Financials Summit. Among the markets that the bank is targeting is Peru, where Scotiabank aims to have a market share of 20 percent by the end of 2010. Scotiabank already has a presence in the Caribbean and Latin America, which has been encouraged in part by regulatory restrictions in Canada that prevent the largest banks from merging with each other.

Royal Bank of Canada (RBC) is another Canadian bank is likely to look overseas for acquisition targets. In a regulatory filling, RBC stated that it could possibly raise up to C$15 billion ($13.9 billion) through offerings until October 2011. The bank may offer debt securities or preferred shares through the offerings, but the specific details would be outlined in an additional prospectus, should an offering go ahead.

Industry observers have commented that the regulatory filling signals the Canadian bank's intention to make an acquisition without dipping into its capital base. However, the existence of the regulatory filling does not necessarily mean that RBC will raise the funds. (Lafferty Retail Banking News)

MERCHANT'S CONCERNS

UK retailer to challenge major banks
September 17, 2009

UK retailer The Co-operative Group is pushing ahead with plans to challenge traditional high street banks.

The Co-operative Group is based on a mutual business model that is owned by its members, and is seeking to take advantage of its position as a financial services provider that has not been tarnished by the financial crisis.

The group plans to introduce financial services at some of its 5,000 retail outlets in a pilot programme that could result in The Co-operative Financial Services (CFS) having a much broader presence in the UK market.

The group's financial services division has been expanding since Co-operative Bank acquired Britannia Building Society at the beginning of August 2009, creating a combined entity that has assets of £70 billion ($115 billion).

When the company announced its financial results last week, the chief executive noted that the landscape for retail banking is changing in the UK and is providing fertile ground for retailers such as The Co-operative Group to expand. The comments echo that of Tesco's chief executive, who has also noted recently that now is a good time for retailers to expand into financial services.

For 2009 up to the end of July, The Co-operative Group had made £41.7 million ($68.75 million) profit from banking activities, compared to £46.2 million ($76.2 million) for the whole of 2008. The bank is wholly funded by customer deposits.

Neville Richardson, chief executive of CFS, said: "We are moving forwards from a position of strength, and the merger with Britannia creates a powerful force within UK financial services. The new and stronger CFS will be a pioneering business, providing high-quality financial products to Co-operative customers and members. We are at the start of creating something quite special within UK financial services, a business that is member-owned, customer-led and ethically guided.

The Co-operative Group is the UK's largest mutual retailer with 4.5 million members and a turnover of more than £14 billion ($23 billion). The group's business includes food stores, financial services, travel and funeral care. (Lafferty Retail Banking News)

Study: U.S. Pays More for Interchange Fees
September 18, 2009

A new study by the Merchants Payments Coalition (MPC) found that if U.S. consumers paid the same low credit and debit card swipe fees as consumers in Australia pay, then the net benefit would have totaled $125 billion over the last four years.

Interchange fees, or "swipe fees," cost Americans an average of $2 on every $100 they spend with credit cards - a higher percentage than anywhere else in the industrialized world. Why? Because other countries and their governments have been able to negotiate with the big banks and credit card companies for fair rates and transparency, the MPC notes. NACS is one of the founding members of the MPC.

But, in the United States merchants and their customers are still forced to pay sky-high interchange fees.

Interchange fees started out in the 1960s as a way for banks to cover the cost of processing credit card transactions. But even as technology has dropped that cost dramatically, the banks and credit card companies have pushed swipe fees higher and higher, turning it into a cash cow. For many businesses, credit card fees are now their single-highest non-labor operating cost.

With almost any other equipment, supplier or service, retailers can comparison-shop, negotiate or otherwise influence its final cost of doing business. Store owners can conserve on energy usage and seek out the most competitive prices for merchandise, just to cite a few examples.

Not so with credit card interchange fees. Visa and MasterCard control more than 80 percent of the marketplace. They set the fees in secret, give businesses no ability to negotiate and virtually insist they be buried in the price of merchandise. Unfortunately, the card companies' hidden fees get passed on to all consumers in the form of higher prices and lower value for nearly everything they buy.

Though Congress and the White House have addressed other credit card reforms, the MPC is arguing that any fix will be incomplete without addressing interchange fees. Consider:

• Banks raked in an estimated $48 billion in interchange fees in 2008 - an average of $427 per American household in just one year.
• This $48 billion total is more than triple the amount collected as recently as in 2001.
• Hidden interchange fees cost Americans more than all credit card annual fees, cash advance fees, over-the-limit fees, and late fees combined.
• U.S. interchange fees are the highest in the developed world. The U.S. pays approximately 60 percent of interchange fees globally - about double the U.S. percentage share of global GDP.

Compared to the rest of the world, U.S. interchange fees are more than two times the rates in the U.K. and New Zealand, four times the rates in Australia and more than six times the cross-border rates recently agreed upon by MasterCard and the European Union. (Payment News / NACS Online)

FRAUD & SECURITY MATTERS

Smart Card Alliance slams end-to-end encryption
September 14, 2009

The US payments industry should use contactless chip cards along with dynamic cryptograms - rather than end-to-end data encryption - in the fight against fraudsters, according to an industry association.

In a new paper, the Smart Card Alliance says the flurry of interest in end-to-end encryption systems that has emerged in the wake of high-profile breaches, such as the Heartland case, is misguided.

The alliance says that many issuers are already providing contactless payment cards with dynamic cryptograms in order to provide consumers with a fast, convenient way to pay.

But contactless transactions can also improve security because dynamic cryptograms make each payment unique. The chip card must be present to generate a valid cryptogram, which is verified online when the transaction is authorised.

Therefore, expanding use of contactless cards throughout the US payment system would lower fraud because stolen payment information could not be used to make fraudulent cards, argues the group.

In contrast, end-to-end encryption is less secure because it does not end reliance on magnetic stripe cards. Since payment cards would still use static cardholder data for processing, they would remain vulnerable to the primary type of fraud that end-to-end encryption is trying to prevent, which is credit card cloning using stolen data. (finextra.com)

Online fraudsters hit one in eight Brits - survey
September 18, 2009

According to a survey commissioned by Internet security outfit VeriSign, one in eight of the UK's adult population have fallen victim to online ID fraud in the last year.

The YouGov survey of over 2000 Brits found that these fraud victims have had on average £463 stolen, with a quarter claiming to still be in dispute over compensation for the money taken. In total, £2.65 billion was stolen online from UK consumers in the last 12 months.

Despite the high proportion of victims, VeriSign says British Web users are conscientious when it comes to online shopping. Over three quarters (82%) of respondents claim to buy only from sites with enhanced security settings.

Young people are less likely to be hit by criminals, with only five per cent of 18 to 25 year olds stating that they have been online ID fraud victims, compared to 14% of people aged 45 to 54.

Londoners are the most careless about buying online, with 25% stating that they don't bother checking whether a Web site has enhanced security settings before buying from it, as opposed to only 10% of respondents from Northern Ireland.

The Welsh are the biggest victims of online fraud, with 20% stating that they had experienced ID fraud in the last year, compared to only eight per cent of Scots. (finextra.com)

OTHER NEWS & ISSUES

EU: tighter regulation necessary to prevent e-commerce malpractice
September 14, 2009

After announcing the results of an investigation related to unfair practices on online platforms selling consumer electronics and involving 26 EU member states, the European Union is likely to introduce stricter rules to impede misleading advertising and such by e-commerce providers selling electronic devices.

The survey conducted by the European Commission indicates that over half of European websites selling electronic goods do not respect EU rules. Nearly 66 percent of the 369 checked websites provide online buyers with misleading information about consumer rights, including their "right to return" - the right to cancel an order bought a distance within a minimum of 7 days and return the product without giving a reason. 45 percent of problem websites offer misleading information about the total price of a product, while 33 percent of the websites involved in the survey do not provide the customer with complete contact details of the trader.

"This is a Europe-wide problem which needs a European solution. There is a lot of work to be done in the months ahead to clean up this sector. Europe's consumers deserve better." the EU consumer commissioner Meglena Kuneva states.

In 2007, online retail sales of consumer electronic devices reached almost EUR 6.8 billion in Europe. (The Paypers)

Sibos targets remittance failings
September 16, 2009

Banking co-operative Swift is set to unveil its latest service for bank to bank remittance payments on Wednesday morning at the Sibos event in Hong Kong

The inefficiency and high expense associated with remittances has been highlighted all week at the conference. On Monday, Dave Mitchell, head of National Payment Systems Development at the South African Reserve Bank, pointed out that the use of remittance had declined by 7-10% in 2009 due, in part, to the high cost involved, particularly in the developing world.

For example, the fee involved in sending a sum of $200 between certain African countries such as Botswana, Swaziland and South Africa, can be as much as $54. Mitchell said that this inefficiency had been noted by the G8 which has endorsed the 5x5 objective, which aims to reduce the average cost of remittance from 10% to 5% of basis points over the next five years.

The Swift workers' remittances framework, launched today, consists of contract templates, a market practice for service levels and product definitions, reference data services, ISO 20022 standards and a messaging service.

The Brussels-based co-operative says the scheme has been tested with a group of pilot banks and showed a decrease of 80% in cost, and a reduction from six to two months in the time taken to set up a new counterpart compared to proprietary bilateral arrangements. (finextra.com)

Intuit confirms Mint.com acquisition
September 16, 2009

US financial and tax preparation software company Intuit has confirmed it has signed a definitive agreement to purchase online personal finance management service Mint.com.

Unconfirmed reports of the takeover first emerged earlier in the week. Intuit has now confirmed the acquisition, indicating that the addition of the popular consumer brand to its products portfolio is set to enhance its presence on the online financial services market.

Intuit has also indicated its intention to keep both the Mint.com and Quicken Online offerings, with each serving separate purposes. Thus, the Mint.com online personal finance management service will be offered directly to consumers by Intuit. Meanwhile, Quicken Online will connect Quicken customers across desktop, online and mobile to provide consumers with anytime-anywhere access to their finances.

Once the transaction is complete, Mint.com will become part of Intuit's Consumer Group, which includes both Quicken and TurboTax products. The transaction is expected to close during the Q4 2009 and is subject to regulatory review and other customary closing conditions. (The Paypers)

CARD NEWS

World Payments Report 2009
September 9, 2009

Non-cash payment volumes continued to grow in 2008 after an increase of 8.6 percent globally in 2007 to 250 billion transactions, according to the World Payments Report 2009 , released today by Capgemini, RBS and Efma. The use of cards continues to be the single strongest driver for this growth with llobal card transactions (credit and debit) growing 14.5% in 2007 and 11.2% in 2008.

Global markets are dominated by the US and Eurozone, which together account for 61% of transactions with developing economies continuing to grow their share of global transactions every year.

Amidst weak economic conditions and a challenging time for the banking industry, Global Transaction Services (GTS) divisions were cited as a stable and profitable source of revenue for financial institutions. The report finds that while some GTS divisions suffered from deteriorating market conditions and reduced business volumes in the first quarter of 2009, GTS still accounts for 5-20%of group revenues, and remains an important source of revenue for banks, with a cost/income ratio as low as 50%.

In addition, transaction banking services generate recurrent revenues as well as providing an important source of liquidity.

To create successful GTS businesses In Europe, the political will to drive a unified financial system remained intact and efforts continued to move ahead with SEPA implementation. The risk of a mini-SEPA1 remains real unless stakeholders get certainty on key issues: an end-date for full migration to SEPA; evidence that SEPA solutions can provide tangible improvements in operational performance; and clarity on standards to be used for SEPA payments (e.g., around data) so participants can prioritize IT investments and SEPA-implementation plans. In response, European regulators are increasingly supportive of the need to encourage quicker implementation by setting a common end date.

Fully realising the goals of the SEPA Cards Framework (SCF) will involve overcoming a number of potential hurdles, such as issues over scheme compliance, ongoing standardisation activities and the continuing uncertainties surrounding interchange fees.
In other regions, such as Asia, innovations in payments are leading to revenue benefits according to the report.

For banks seeking to grow and enhance payments revenue streams, best practices and a range of initiatives out of Asia have demonstrated that payments innovation is a potential source of revenue, particularly with non banks. The Asian market offers valuable insights on the success factors for developing different payment tools, and the opportunities for banks to generate new revenues from emerging payment instruments. (Payment News)

Debit cards set to take centre stage, says Visa Europe CEO
September 10, 2009

Visa Europe CEO Peter Ayliffe has stressed the growing business case and revenue-generating potential of debit card issuance.

Ayliffe told delegates at a cards and payments conference in Paris held by the European Financial Management & Marketing Association (EFMA) that with 40 percent of debit cards inactive, there is a "blue-ocean opportunity" in this product area.

He also pointed to a study that shows that there is the potential for banks to earn an additional €10 ($14.54) for every debit card issued:

In addition to the increased prominence of debit cards, Ayliffe said prepaid cards will also have a major role in the changing financial world in terms of replacing cash and travellers cheques.

Discussing the new rules of success for card payments in the evolving financial landscape, Ayliffe said the challenges are in developing prepaid products, contactless services and turning mobile phones into payment devices. (Lafferty Retail Banking News)

Summer Debts

September 10, 2009

Consumer revolving credit, mostly credit card debt, took another dive as Americans cut more than $6 billion off in July, bringing the year-to-date total reduction to $52 billion. Posting its eleventh consecutive monthly decline, U.S. consumer revolving credit dipped to $906 billion in July. Since peaking at a revised $975 billion in the third quarter of last year, Americans have chopped-off nearly $70 billion in revolving credit to-date. According to new and revised data released by the Federal Reserve, revolving credit declined at an annual rate of 8% in July, following a revised 6% decline in June and a 12% drop in May. In June revolving credit declined to a revised $912 billion and to a revised $917 billion in May. March posted the largest contraction over the past nine months, dropping more than $14 billion. Bank credit card debt (excluding store and gas credit cards) at the end of the second quarter was about $775 billion or roughly 85% of total revolving credit, according to CardData (www.carddata.com). Store and gas credit cards had about $105 billion in outstandings at year-end 2008. At the end of July, Americans were $2472 billion in debt, excluding home mortgages. (CardTrack)

REVOLVING CREDIT HISTORICAL ($billions)
Jul 09 Jun 09 May 09 Apr 09 Mar 09 Feb 09
GRWTH: -8.0% -6.4 -12.1 -11.7 -9.6 -13.9
$OWED: $905.6 911.7 916.6 927.9 934.3 948.4
Source: Federal Reserve; revised figures as of 9/8/09;
For complete historical data, visit CardData (www.carddata.com)

BANKING & FINANCE SECTION

Swift rolls out workers' remittances platform
September 8, 2009

Banking co-operative Swift is to showcase a new service for streamlining bank-to-bank remittance payments at its annual user conference in Hong Kong next week.

The Swift workers' remittances framework consists of contract templates, a market practice for service levels and product definitions, reference data services, ISO 20022 standards and a messaging service.

The Brussels-based co-operative says the scheme has been tested with a group of pilot banks and showed a decrease of 80% in cost, and a reduction from six to two months in the time taken to set up a new counterpart compared to proprietary bilateral arrangements.

Financial institutions see the workers' remittances market as a rich source of new customers and revenue. Traditional correspondent banking arrangements, however, have not delivered the price and time transparency or ease of use that customers expect, leaving the market open to non-bank competitors and innovative mobile-phone based services.

Swift says the contract templates, reference data and XML standards enable banks to use any payment product at both ends of the transaction. Critically, the service is commercially neutral, giving bank participants flexibility in consumer branding, pricing and foreign exchange for these payments. (finextra.com)

Wells Fargo ExpressSend Remittance Service Now Available Online
September 9, 2009

Wells Fargo & Company (NYSE:WFC) has expanded its ExpressSend remittance service to the online channel. Wells Fargo customers are now able to send an ExpressSend remittance transaction through WellsFargo.com - making it possible for customers to initiate remittance transactions 24-hours a day, 7-days a week.

Wells Fargo offers international remittance products to the top seven countries from the U.S. - Mexico, El Salvador, Guatemala, India, the Philippines, Vietnam, and China. According to Javelin Strategy & Research, 77 percent of online Asians and Hispanics actively bank online.

ExpressSend Online Features

• Among top banking institutions with proprietary remittances services, Wells Fargo offers one of the largest country distribution for account deposit and cash pick up of remittances in overseas locations.

• Wells Fargo ExpresssSend includes e-mail notification and a detailed "Alert" in their online session.

• Customers will be able to see all of their valid, open ExpressSend Service agreements and up to 18 months of remittance transaction history.

ExpressSend Service

Wells Fargo remittance products are economical, convenient and dependable. Customers can send money directly to their beneficiary for one low transfer fee. Customers may also qualify for fee discounts based on their account relationship with Wells Fargo.

Wells Fargo ExpressSend customers can send funds to their beneficiaries in most countries through their choice of four options - account to account, account to cash, cash to cash, or cash to account. (Businesswires)

Google plans micropayments platform for newspapers
September 10, 2009

Search giant Google is developing a micropayments platform that it hopes will be used by newspapers to charge for access to online content.

The plans were outlined in a document sent by the search firm to the Newspaper Association of America in response to a request for proposals on paid content sent to several technology firms.

The system will be an extension of Google Checkout, the PayPal rival rolled out in 2006 and "available to both Google and non-Google properties within the next year".
Payments of a penny to several dollars will be possible and integration for publishers and merchants will be "extremely simple".

Single sign-on capability will let users access content from various sites in a package with a central place to manage subscriptions and payments.

Hit hard by the financial crisis and falling advertising revenues, newspapers have been looking at new ways to make money from their Web sites. Earlier this year it emerged that the Wall Street Journal is planning to introduce micropayments for access to articles on its Web site. (finextra.com)

FRAUD & SECURITY MATTERS

EU agency 'alarmed' by rise in cash machine fraud
September 7, 2009

European security agency Enisa is calling on banks and law enforcement agencies in EU member states to raise awareness of cash machine safety issues following an alarming 149% rise in ATM attacks in 2008.

With the annual cost of ATM crime in Europe approaching EUR500 million, the European Network and Information Security Agency is urging consumers to be more aware of the risks and take precautions to avoid personal loss.

During 2008 alone, notes Enisa, a total of 10,302 skimming incidents were reported in Europe. Other methods used to extract money include trapping and then retrieving users' cards, stopping withdrawals in the middle of a transaction only to complete them when the victim has left and even trapping cash in the machine.

Organised criminal gangs are also using sophisticated phishing techniques and hacking into bank computer systems and web sites to obtain PIN and account information, says the agency.

ATM burglaries and physical attacks have also seen an increase by 32% over the last 12 months from ram raids and explosions to the use of rotary saws, thermal lances and diamond drills.

Enisa has published a paper - 'ATM Crime: Overview of the European situation and golden rules on how to avoid it' - which offers a list of Golden Rules to maximise protection, and recommends that further information and advice are provided nationally in EU Member States by banks, financial institutions, payment schemes and law enforcement agencies. (finextra.com)

Nigeria's InterSwitch deploys Gemalto authentication technology
September 7, 2009

Bank-owned Nigerian e-payments firm InterSwitch is deploying Gemalto's Ezio authentication technology to secure customer transactions.

InterSwitch - which comprises 25 member banks - has signed for the vendor's Ezio strong authentication server as well as card readers and unconnected tokens. The EMV card readers and tokens create one-time-passwords to secure payments made by customers of InterSwitch member banks. The technology will secure customers when paying bills and taxes online and accessing Internet banking services, such as fund transfer. (finextra.com)

OTHER NEWS & SERVICES

T-Mobile, Orange to Merge U.K. Operations
September 8, 2009

Deutsche Telekom and France Telecom plan to merge their respective T-Mobile and Orange brands in Britain, the companies announced today.

The deal would create the U.K.'s largest mobile operator and remove Telefonica SA from its current spot as market leader through its O2 brand. Verizon Wireless parent company Vodafone holds the nation's No. 2 spot with a 24 percent market share.

The joint venture will dominate the British market if approved by European regulators. Together, Orange and T-Mobile would have 28 million customers and a 37 percent market share.

Deutsche Telekom and France Telecom said they plan to spend between $984 million to $1.3 billion through 2014 to merge operations. The merger will also result in cost-savings of more than €4.0 billion, or $5.7 billion, and each operator will have an equal stake in the venture, they said. T-Mobile and Orange will continue under their own brands for 18 months after the deal goes through to allow time for a new branding strategy.

The deal faces scrutiny by both British and European regulators and must also be approved by each company's supervisory board. (WirelessWeek)

PULSE, TRIONIS Sign European ATM Acceptance Agreement
September 10, 2009

PULSE, the Discover Financial Services business unit responsible for expanding global cash access for the company, has signed a long-term ATM acquiring agreement with TRIONIS, a European interbank processing network. TRIONIS is jointly owned by retail banks from nine European countries, the European Savings Banks Group, and First Data.

Under the terms of the agreement, when fully implemented, more than 74,000 TRIONIS ATMs across Europe will be able to process ATM transactions for Diners Club International® and Discover® cards.

The service went live in several countries on July 1, with acceptance of Diners Club cards at the ATMs of banks in Austria, Switzerland, Portugal, Spain, Luxembourg and Belgium. Discover cards are expected to begin being accepted at TRIONIS European ATMs in October 2009. (Payment News)

UK bank pre-empts regulatory action on fees
September 10, 2009

Royal Bank of Scotland (RBS) has cut overdraft charges amid growing discontent about the structure of current account fees, which could spell the end of 'free banking' in the UK.

RBS has cut overdraft fees on 12.5 million current accounts. The part-nationalised group said the policy will come into effect in October, following an announcement late last year that it will proactively refund all bank charges to customers if the country's eight largest banks lose their legal battle with the Office of Fair Training (OFT).

RBS Group has been criticised by consumer activists for levying fees higher than its rivals. The dispute over fees for exceptions handling - such as overdraft charges - mean that banks may have to find another way to fund current accounts, which currently are 'free' for most customers in the UK. UK banks typically provide a current account service free of charge because they are able to cross-subsidise accounts with the penalty charges they earn from bounced cheques or overdraft charges, for example.

It is estimated that UK banks earn £2 billion ($3.3 billion) a year from charging fees to their customers who go overdrawn without permission.

In 2007, RBS refunded £119 million ($196 million) in overdraft fees to customers who appealed against the claims. However, it has put refunds on hold while seeking clarity following an agreement with the Financial Services Authority.

The bank will reduce fees for returning bounced cheques and standing orders from £38 ($63) to £5 ($8), and fees for making payments while overdrawn will be halved from £30 ($50) to £15 ($25). RBS has also cut its monthly maintenance charges for unauthorised overdrafts from £28 ($46) to £20 ($33), with guaranteed card payment fees down from £35 ($58) to £15 ($25). (Businesswires)

CARD NEWS

Dankort provides obstacle to development in Denmark
September 1, 2009

The infrastructure of the Danish payment cards market is highly developed, supporting local, regional and international card networks. The high penetration rate and affordability of Dankort debit cards has translated into a lack of development for other types of card products in Denmark, and has resulted in a low credit card penetration rate of approximately 26 credit cards per 100 adults in 2009.

The Dankort card was launched in 1983 and has become a highly popular payment method. Danes tend to use cash or the Dankort for everyday purchases, and generally do not favour revolving credit facilities. The Dankort is available to people over the age of 18, and applicants are subject to a credit assessment.

Personal loans and overdrafts are often linked to Dankort debit card accounts and provide an attractive - and cheaper - alternative to credit cards. The Dankort offers similar payment benefits to revolving credit cards at a fraction of the price. Furthermore, the flexibility of the Dankort means that it can be used effectively in conjunction with unsecured bank loans and overdraft facilities.

The success of the Dankort has not come about merely through free market forces. Danish legislation ensures that the use of the Dankort is free of charge for both consumers and retailers, and there is no transaction fee to the acquirer for accepting the Dankort. This has significantly hampered the opportunities for credit card products to capture market share.

Due to the higher merchant service charge (MSC) for the use of non-Danish cards, retailers have traditionally only accepted Dankort cards. Recent reductions in MSCs are expected to provide additional incentives for merchants to accept a wider range of card payments and to stimulate competition against the Dankort. The Dankort may face competition in future as banks become more proactive in developing their credit card offerings, and competition in cyberspace is likely to increase with the broad appeal of e-commerce payments providers, such as eBay-owned PayPal. (Lafferty Card News)

CARD ISSUER'S CORNER

American Express Ranks Highest in Customer Satisfaction Among credit Card Companies for the Third Consecutive Year
September 1, 2009

American Express ranks highest in customer satisfaction among credit card issuers, according to the third annual nationwide study by J.D. Power and Associates. The study, which was released earlier today, ranks American Express highest in overall satisfaction among 21 of the largest card issuers in the U.S. The J.D. Power and Associates 2009 Credit Card Satisfaction Study(SM) looks at six factors to determine overall satisfaction - Customer Interaction, Billing and Payment Process, Fees and Rates, Rewards Programs, Benefits and Services, and Problem Resolution. (Payment News)

Citi sells managed credit card assets worth USD 1.3 bln
September 2, 2009

US financial services company Citigroup has sold ownership of three North American partnered credit card portfolios worth an estimated USD 1.3 billion in managed assets.

The portfolios were part of Citi Holdings, one of the two segments resulting from the company's restructuring which took place in January 2009. Citi Holdings deals with brokerage and retail asset management, as well as local consumer finance activities and a special asset pool. Its management focuses on managing risks and losses and maximizing the value of these assets.
The sale is part of the company's strategy to offload weak businesses and troubled assets which have led to significant losses over the past quarters. According to the AP, Citigroup will continue to service the card portfolios during the first half of 2010, when the acquirer is set to assume those responsibilities.

The terms of the deal and the name of the acquirer were not as yet made public. (The Paypers)

BANKING & FINANCE SECTION

ANZ continues Asia regional focus
September 3, 2009

Australia and New Zealand Banking Group (ANZ) is aiming to keep up with the rapid pace of growth in China by increasing its staff in the country to more than 500.

The bank says it intends to multiply its staff in the world's fastest-growing major economy ten-fold by opening more than 20 branches by 2012 - in addition to the three branches the bank currently operates.

Early next year, Chinese regulators are due to announce whether or not they will give the go-ahead for ANZ's plan to set up a locally incorporated banking unit. Under Chinese rules, local incorporations can help foreign banks to expand rapidly and offer a full-range of retail products.

Household deposits in China reached 25.4 trillion yuan ($3.72 trillion) at the end of June.
If ANZ is successful, it will be among more than a dozen banks - including Citigroup and HSBC - to have local incorporation in China. Once it is given the go-ahead, the bank hopes to launch its own yuan-denominated debit card.

This year, ANZ was given regulatory approval to open its first rural bank in south west China, tapping into the rising demand for financial services from the country's 730 million residents who live outside cities.

Through strategic partnerships, ANZ owns 20 percent of Tianjin City Commercial Bank and 20 percent of Shangai Rural Commercial Bank. (Lafferty card News)

Citi sets up kiosks in UAE Virgin stores to hawk credit cards
September 3, 2009

In a bid to attract the United Arab Emirates' "young professionals", Citi is setting up kiosks in Virgin stores where customers can apply for credit cards using touchscreen computers.

Customers who sign up for the Citibank Lifestyle credit card at the branded kiosks will receive hampers containing goods from the retailer.

Cardholders will also receive a 10% discount on all non-electronic purchases at the stores. Other perks include discounted concert tickets and free access to golf courses.

William Keliehor, head, card division, Middle East, Africa and Pakistan, Citi, says: "This product focuses on providing instant discounts and benefits to 'live life' in a bigger more personal way today." (finextra.com)

MERCHANT'S CONCERN

Walmart, MasterCard, First Data to roll out electronic pay program
September 3, 2009

Walmart, MasterCard Worldwide and payment processing services company First Data have joined forces to roll out a payroll program in September 2009.

The electronic pay program will include the deployment of the Money Network MasterCard Paycard and electronic pay stubs, as part of an initiative meant to reduce paper consumption and offer Walmart associates access to their wages. Walmart and Sam's Club associates can receive their pay by direct deposit or via the First Data Money Network program and can also access their wages through the Money Network MasterCard Paycard or Money Network Checks.

Under the terms of the partnership, First Data is to make the processing and reload network available for the program, as part of First Data's Money Network Payroll Distribution Service. (The Paypers)

FRAUD & SECURITY MATTERS

Thales launches SafeSign Single Sign On
September 4, 2009

Thales, leader in information systems and communications security, announces SafeSign Single Sign On, the latest addition to the SafeSign strong authentication and ID management product line.

SafeSign Single Sign On delivers simplified strong authentication for organizations concerned with ever increasing security threats, rising help-desk costs and frustration with managing multiple and complex passwords.

SafeSign Single Sign On provides simplified secure access to sensitive applications through strong authentication, requiring the user to identify himself only once at the start of a session. SafeSign Single Sign On enables suitable authentication logon policies to be enforced in order to meet a diverse set of business requirements. Different strengths and types of authentication can be presented to different user groups including static passwords, one-time password tokens, USB tokens, EMV/CAP cards and PKI smart cards.

The SafeSign family of products offers a comprehensive end-to-end security solution, providing high security issuance, management and advanced authentication of a diverse set of identity credentials in a single solution. All of the SafeSign products integrate seamlessly with each other as well as integrating with other third party products. (finextra.com)

OTHER NEWS & SERVICES

RBA continues interchange regulation
September 1, 2009

Australia's central bank, the Reserve Bank of Australia (RBA), has voted to continue its oversight of the country's interchange fees.

Following its drastic reforms of the payments industry in 2002, the central bank's Payments Systems Board considered whether it could take a step back from regulating the industry's interchange fees. However, at a meeting in August, the board decided that the conditions have not been met for the removal of interchange regulation.

In September 2008, the payments board released its conclusions of a review of the 2002 reforms and said that it would consider taking a step back from regulation if it was convinced that the industry could regulate itself.

The board identified two ways that the industry could take the necessary steps toward self-regulation: the industry could improve competition by developing the debit network EFTPOS so that it could compete with the international networks and increase competitive pressure on interchange fees; or industry parties could voluntarily agree that interchange fees would not go over a certain level. In the September 2008 review, the RBA said that if progress was not made by August 2009, the central bank would continue to regulate interchange and that the benchmark for credit card interchange fees would be 0.3 percent.

The statement from the board said that it considers the difference in regulation between Visa and MasterCard and the EFTPOS payment network may be detrimental to competition. The RBA intends to consider changing the interchange regulation of EFTPOS so that it is consistent with the international networks. (Lafferty Card News)

Brazil's regulator suspends ban on VisaNet
September 1, 2009

The Brazilian Antitrust Authority (CADE) has suspended the ‘provisional remedy' that was imposed on VisaNet by the Justice Ministry.

Companhia Brasileira de Meios De Pagamento, the full company name of VisaNet, has been investigated regarding claims that its business practices are anti-competitive.

The Justice Ministry, through its division Secretaria de Direito Econômico (SDE), had also investigated Visa do Brasil and Visa International, and decided to impose a ban on VisaNet's exclusivity. The ministry argued that VisaNet was creating exclusivity by forcing companies to process Visa-branded cards on the VisaNet processing network. This, the SDE said, harmed competition since other processors were unable to compete in processing Visa transactions.

VisaNet announced in a statement that CADE has suspended the action taken against the processor. The anti-competition regulator will listen to the case against VisaNet on 16 September and will make a final decision on the matter then.

There are concerns that the profitability of the major processors in Brazil - VisaNet and Redecard, which processes MasterCard transactions, - will be affected by the action of the anti-trust regulators. There have also been news reports that the processors could face increased competition from state-controlled banks. Correio Braziliense, a local newspaper, reported that Banco do Brasil and Caixa Economica Federal will soon offer credit cards under their own brand.

Redecard, like VisaNet, has also come under the gaze of the Brazilian competition authorities. In August, the Justice Ministry ordered Redecard to remove clauses from its contracts with online payment networks - such as PayPal - that meant the payment network had to disclose their client lists to Redecard, which PayPal argued affected their ability to compete in the market. (Lafferty card News)

With Pulse Deal, Interac Expands Its Cross-Border Utility
September 3, 2009

Canada's Interac Association PIN-debit network this week announced a deal with the Houston-based Pulse network that will let holders of Pulse, Discover, and Diners Club cards withdraw cash at Canadian ATMs. More such deals with other networks are likely as Interac seeks to let foreigners use their cards while visiting Canada.

Pulse is the big electronic funds transfer network owned by Riverwoods, Ill.-based Discover Financial Services, which also owns the Diners Club International travel-and-entertainment card. Allen Wright, Interac's vice president of product strategy, would not identify other networks Interac may be talking with, but he hints that talks similar to those that produced the Pulse agreement are or will be under way, and that they may not be confined to U.S.-based networks.

The pact with Pulse covers only ATMs, or automated banking machines (ABMs) as they're called in Canada. Under it, Interac recruits ABM acquirers to accept Pulse and its affiliated cards. The Pulse-Interac connection eliminates network setup and ongoing costs for Canadian acquirers, Interac says.

U.S. Diners Club cards received Canadian ATM utility in July; Pulse and Discover cards will get access in October. While the pact does not provide for point-of-sale PIN-debit purchases, Wright says without giving details that "it's fully contemplated" that POS functionality might become part of cross-border network pacts. Interac affiliate Acxsys Corp. struck a deal with the NYCE EFT network in 2004 that lets Canadian debit cardholders make PIN-debit purchases at NYCE-accepting merchants in the U.S.

The only acquirer participating in Interac's cross-border ATM program today is Open Solutions Canada, operator of a retail, or "white-label," network of about 8,000 ATMs. But Wright says Interac is talking with more acquirers, both of the white-label and bank variety. Canada has 57,864 ATMs, Interac reports.

Pricing will be up to ATM owners. On the consumer end, the typical surcharge when a Canadian uses an ATM not owned by his or her financial institution is C$1.50.
Pulse, one of the major remaining U.S. EFT networks, and its parent company Discover have a goal similar to Interac's. But the urgency of international utility is likely greater for Interac than for Discover. Interac has had a near monopoly on Canadian debit for years, but is seeking new growth avenues as Canada's banks contemplate issuing Visa- and MasterCard-branded debit cards (Digital Transactions News).

CARD NEWS

US Bank Adds Visa payWave to Unembossed Instant Issue Debit Cards
August 3, 2009

U.S. Bank has announced that it is "the first card issuer in the United States to add Visa payWave technology to an unembossed debit card that is issued instantly to an account holder upon opening an account. The instant-issue Visa payWave pilot is being tested at select U.S. Bank branches in Denver and Salt Lake City as part of U.S. Bank's on-going innovation in payments."

The pilot allows U.S. Bank and its customers to explore the benefits of combining three new technologies into one card - instant issuance, unembossed personalization and contactless payment. The instant issue debit card provides many benefits to the customer because the permanent debit card can be issued in the branch at the time the customer opens a checking account, rather than that same customer getting an initial temporary card, then waiting for the permanent one to arrive days later in the mail. Unembossed personalization provides greater security and customer satisfaction and Visa payWave allows the customer to pay for purchases by simply waving the card in front of a reader instead of swiping it, speeding up the payment process.

U.S. Bank chose the metropolitan areas of Denver and Salt Lake City for its strong U.S. Bank presence in both cities and because customers there are familiar with contactless payment. Many merchants currently offer Visa payWave readers as a payment option.
Visa provides the Visa payWave feature in this program, while Dynamic Card Solutions (http://www.instantissuance.com ) is providing the software and hardware necessary to personalize and issue the debit cards instantly at the branches. (Payment News)

Card Mail
August 10, 2009

The drop-off in credit card offers is adding to the pain of the U.S. Postal Service which reports mail volume is declining at a pace not seen since 1971. Credit card solicitations, which contributed as many as 6 billion pieces per year, will likely fall below 1.2 billion pieces this year, the lowest level in more than 20 years. CardWatch (www.cardwatch.com) reports that direct mail was off at least 70% this year, with American Express and Discover dispatching the largest credit card solicitation mailings. Secured credit card and sub-prime credit card issuers have also ratcheted up direct mail. According to Synovate's "Mail Monitor," U.S. households received 372.4 million offers during the first quarter, compared to 1131.6 million offers received during first quarter of 2008. The Q1 sharp drop follows a 55% decrease in the fourth quarter and a 20% decline in the third quarter. For the full year of 2008 there were 3.8 billion solicitations mailed, compared to 5.2 billion in 2007. Chicago-based Mintel Comperemedia estimates 5.4 billion credit card direct mail offers for 2008, the lowest annual total the firm has reported since 2000. (CardTrack.com)

Rewards Shift
August 11, 2009

During a recession... shift happens. New research shows membership in credit card rewards programs is decreasing significantly while debit card rewards programs are gaining popularity. Also, most consumers are not willing to pay a higher interest rate for rewards and those that do are only willing to pay slightly more. The study by First Data Competitive Intelligence found that the number of cardholders holding a rewards credit card declined from 71% in 2008 to 67% this year, while the number of cardholders holding a rewards debit card jumped from 34% last year to 45% this year. About 70% of those who have a credit card with a rewards program are not willing to pay a higher interest rate for the rewards. Cardholders who are willing to pay extra will only pay an average of 1.6% more for a bank credit card with rewards. First Data found debit card rewards programs are used "every time" or "most of the time" by 66% of debit card rewards members. This compares to 51% of credit card rewards members who use their credit card rewards program "every time" or "most of the time." The April study involved more than 2,000 consumers. (cardTrack.com)

Consumers Union Reports on Prepaid Card Fees, Weak Protections
August 13, 2009

A new Consumers Union report finds that "prepaid cards come with high fees and don't offer consumers the same kinds of protections as other forms of plastic payment.

Prepaid cards are reloadable cards that can be used to make payments similar to debit cards and are becoming the foundation of a second tier banking system used by a growing number of low income consumers." A copy of the report can be found at: http://www.defendyourdollars.org/Prepaid%20WP.pdf .

Consumers Union reviewed the terms and conditions of 18 different prepaid cards and found that consumers face multiple fees and other costly "gotchas":

• Activation Fees: 17 of the 18 prepaid card issuers reviewed charged consumers a fee for activating their cards. These activation fees ranged from a low of $3 for the Walmart Money Card to a whopping $99.95 to apply for and initiate the Millennium Advantage card.

• Monthly Fee: 15 of the 18 prepaid card issuers charged monthly fees ranging from $2.95 per month for the FinanSe card to $10 per month for the Rush Card. Most prepaid card issuers will waive the monthly fee if a direct deposit is set up. Some card issuers will waive the monthly fee if the consumer chooses the "pay as you go" option.

• Fees to Get Cash: All 18 card issuers reviewed charged fees for withdrawing cash from ATMs in the U.S. On the low end, the FinanSe, SVC Revel, and Espree cards charge $1.50 per withdrawal. The NetSpend Visa card charged the highest fee - up to $2.50 for each withdrawal. Charges are usually even higher for international withdrawals.

• Balance Inquiry and Statement Fees: 17 of the 18 card issuers charged fees for checking balances at ATMs, ranging from 50 cents to $1. This does not include any additional fee charged by the ATM owner.

• Customer Service: Most prepaid card issuers provide free customer service, but consumers using the Millennium Advantage card will be charged $1 per minute when they call customer service, while users of the Espree card will pay $3 for each customer service call. Some pre-paid card issuers charge customer service fees after a limited number of free calls.

• Fees for Inactivity: Eight of the 18 card issuers charged fees when cards are not used after a certain period of time. These dormancy fees range from $1.95 per month for the Rush Card (after 90 days of inactivity) to $9.95 per month for the Exact card.

• Overdraft Fees: A number of prepaid card issuers claim that they do not charge fees when users spend more than the available amount on their cards. However, Consumers Union found that 10 of the 18 cards it reviewed included overdraft or "shortage" fees. These range from $24.90 charged by Espree for overdrafts to $29 charged by Eufora and AccountNow.

Routine use of prepaid cards can result in significant costs for consumers as all these fees add up.

Finally, consumers with traditional bank accounts have peace of mind that their money will not be lost as long as their bank is FDIC insured. But consumers who use prepaid cards have no guarantee that they will be able to recover all their money in the event of a bank failure because the funds may not be insured by the FDIC. (Payment News)

Debit card transactions volume overtakes credit card spending in the US - research
August 17, 2009

The current economic downturn, coupled with the changes in the credit market and a shift in US consumer spending habits are likely constitute a favourable climate for debit cards through 2015, a recent study indicates.

According to the research, over the past 15 years debit card transactions in the US have gone from 1 percent to over 50 percent of all noncash transactions. The same study estimates that debit card transaction volume and card spend are likely to continue on an upward spiral through 2015.

Moreover TowerGroup, the research and advisory services firm which carried out the study, attributes the increasing use of debit cards to changes in consumer behaviour and cautious lending strategies adopted by credit card issuers. As consumers have become increasingly oriented towards saving, many of them have turned to debit cards in order to better manage their finances.

In contrast to credit cards, which require qualification and lending extension, debit cards provide a means of settlement against funds on hand for consumable and durable purchases. In addition, they provide consumers with the flexibility to pay electronically for items using multiple platforms, including contactless payment devices and mobile phones. As a result, debit cards and accounts are set to see even faster growth as mobile payments mature in the US. (The Paypers)

Rate Uptick
August 19, 2009

Thanks to the new credit card rules that go into effect shortly, core credit card interest rates have been rising and will likely rise higher by early next year. At the start of the recession average credit card APRs hovered around 16%, dropping to slightly below 14% earlier this year. However, rates have been rising for the past three months despite a prime interest rate stuck at 3.25%. According to CardTrak, credit card APRs declined from 16.02% in December 2007 (recession start) to 14.55% in September 2008 (credit crunch) to 13.96% in April 2009. The "CARD Act" was passed by Congress in late May. Since then variable rates have climbed to 14.39%. A study of 150 credit cards released last week by BillShrink found that purchase rates are up nearly 20%; balance transfer fee maximums have increased 34% (from a maximum average of $94 in January to maximum average of $126 in July); issuers have not changed their rates equally; issuers that have changed their rates the least include American Express and Bank of America; and issuers that have increased rates the most are Capital One, US Bank, Discover and Citi. BillShrink found that Capital One has increased purchase and balance transfer rates 50%; US Bank has increased purchase and balance transfer rates 33%; Discover has increased purchase and balance transfer rates 30%; and Citi has increased purchase and balance transfer rates 27%. (CardTrack.com)

nFinanSe adds Visa-branded prepaid card to managed card products suite
August 19, 2009

US prepaid card services provider nFinanSe is set to add a Visa-branded general purpose reloadable prepaid card to its suite of managed card products.

The cards are to be issued by financial services provider Palm Desert National Bank and will be distributed to retail chains via nFinanSe's distributor relationships, as well as through its direct relationships with retailers.

In a statement, nFinanSe announced it intends to use its existing consumer pricing model for the new Visa prepaid cards. The cards can be reloaded at 80,000 nFinanSe Network locations nationwide. nFinanSe prepaid Visa cardholders can opt to have purchase and available balance information sent to their mobile phones or email address after each transaction. (The Paypers)

Credit card debt rises in some areas but is down overall
August 19, 2009

Credit card balances are falling across the nation as lenders tighten credit and consumers pare back debt. But in areas hit hard by housing problems or job losses, plastic is still a way of life.

In the Visalia, Calif., and Reno metro areas, total credit card balances climbed 4.6% and 2.4%, respectively, in the second quarter from a year ago, according to Equifax, a credit information provider. Phoenix and Miami residents are also adding to card debt. These areas are all seeing higher-than-average unemployment or declines in home values.

The rise in card balances, while not dramatic, is significant amid a 3.3% overall decline in U.S. card debt in the second quarter.

Consumers are generally saving rather than spending, says Myra Hart, an Equifax senior vice president, especially in areas where they've lost a lot of wealth or have shaky job security.

As home prices decline, consumers are losing the ability to tap home equity. Some are turning to cards to fund expenses, says Stan Humphries, chief economist at Zillow.com, a real estate information site. Also, rising unemployment is having a "major impact" on debt loads, says Thomas Krolik, a Bureau of Labor Statistics economist. Still, the sharp pullback in credit could force even plastic-reliant consumers to trim spending in upcoming quarters.

For now, credit card balances are growing in roughly one of five metro areas in the country. Economic woes are one reason, but there are others.

   - In the Provo, Utah, area, total credit card balances grew 6.8% in the second quarter. This region, home to Brigham Young University, tends to have more young families who are establishing credit, which could partly explain growing card balances, says Lars Lefgren, a BYU associate economics professor.

  -  Durham County, N.C., boasts the highest average wages in the state, so people may feel comfortable spending, says Ted Conner, a vice president at the Durham Chamber of Commerce. The region's card debt rose 6.8% in the second quarter.

  -  In the entrepreneurial Boulder, Colo., region, people may be using cards in part to finance their companies, says Jennifer Pinsonneault of the Boulder Economic Council. (USA Today / Payment News)

Card Fade
August 28, 2009

Since the start of the recession the number of Visa and MasterCard credit card accounts has dropped like a rock. Credit cards hit turbulent waters in the final three months of 2008 and have fallen out of favor as debit cards have taken over. According to CardData, compared to January 2008 the number of accounts has declined by at least 40 million in the U.S. and could exceed 80 million once final second quarter data are released. The number of Visa and MasterCard credit card accounts peaked at 496 million one year ago. At the end of March of this year the number had fallen to 446 million. MasterCard reports that its credit card accounts declined from 206 million as of March 31st to 184 million at mid-year. Visa reported that its credit card accounts dropped from 258 million as of December 31st to 240 million as of March 31st. (Visa will release official Q2 figures in late October.) According to CardData, the 9% drop through the first quarter and MasterCard's second quarter figures, projects to 404 million credit card accounts at mid-year or an 18% year-on-year decline.

CREDIT CARD ACCOUNTS
(Visa and MasterCard)
1Q/08: 490 million
2Q/08: 496 million
3Q/08: 492 million
4Q/08: 479 million
1Q/09: 446 million
2Q/09: 404 million (projected)
Source: CardData (www.carddata.com)

ANZ targets teens with MySpace pre-paid card
August 28, 2009

Australia's ANZ Bank is targeting teenagers on social networking site MySpace with a pre-paid card that can be used for online purchases.

The re-loadable Visa card costs A$5.95 and is available to teenagers aged 13 and older with MySpace accounts. It is not linked to a deposit account and has a maximum balance of $1000.

MySpace says the card is aimed at teenagers who are not eligible for credit cards but want to make online purchases. (finextra.com)

SmartCard to roll out prepaid gift card
August 31, 2009

US prepaid cards provider SmartCard Marketing Systems is to develop an instant-issue prepaid gift card product to customers.

The company is to market the prepaid gift cards via its Velocitymoney.com website. As a result of the deal, online customers can activate, load and select shipping options on the cards on this website. SmartCard Marketing Systems markets MasterCard and Visa-branded prepaid cards, as well as prepaid wireless and long-distance cards and payment processing services. (The Paypers)

CARD ISSUER'S CORNER

Visa extends global payment services in Iraq
August 5, 2009

Visa has added financial services provider Bank of Baghdad, electronic banking services company Al Amwal and other 13 Iraqi banks to its global payment network.

As a result, Bank of Baghdad and Al Amwal will enable the acceptance network for Visa-branded cards at ATM and POS locations within the country and will also issue additional Visa payment cards to Iraqi customers. Thus, Iraqis and those visiting the country will be able to pay for goods and services at local merchant locations such as airport duty free shops, select hotels, travel agencies and a number of restaurants and stores, as well as access funds both at home and abroad with Visa-branded debit and credit cards. (The Paypers)

First Internet Bank debuts contactless debit card
August 5, 2009

The USD 540 million-asset US financial services provider First Internet Bank (First IB) has started issuing debit cards which integrate the Visa payWave feature.

Visa payWave is a contactless payment solution which allows customers to wave their Visa card in front of a terminal at checkout. The First IB debit cards also incorporate a computer chip that uses radio frequency to perform the transaction.

Within the past twelve months, First IB has also introduced mobile banking, personal budgeting and account aggregation services. The bank provides services including interest-bearing checking accounts, regular and money market savings accounts, credit cards and check cards. The bank also offers personal lines of credit, instalment loans, real-time transfers between accounts, and the ability to display checking, savings and loan information on a single screen. (The Paypers)

The USD 540 million-asset US financial services provider First Internet Bank (First IB) has started issuing debit cards which integrate the Visa payWave feature. (ThE Paypers)

Discover, American Express end fees for exceeding limit
August 11, 2009

Discover Financial and American Express plan to stop charging fees when consumers spend past their credit card limits.

The move, reported by American Banker Monday, comes six months before a new law clamps down on such fees. The law doesn't require issuers to eliminate over-limit fees, but it will prohibit them from imposing these charges unless consumers say they want the ability to exceed their credit line.

These fees provide a significant boost to the industry's bottom line. In 2009, issuers are expected to reap $3.7 billion from over-limit fees on credit cards, up 16% from 2008, according to R.K. Hammer Investment Bankers. The firm says over-limit fees average $35.

It's unclear whether, and to what extent, other issuers will also eliminate over-limit fees. Indeed, amid the difficult economy, most issuers have either raised fees or interest rates for credit card borrowers. Many have done both, citing the difficult economy, high costs and consumers' increased riskiness.

American Express (AXP) says it began notifying consumers last week that it will do away with over-limit fees in October. At the same time, though, consumers were told that late fees for certain borrowers were rising. American Express also told some borrowers their purchase APR was going up - by an average of 4 percentage points - due to the "business and economic environment," says spokeswoman Desiree Fish.

Discover Financial (DFS), meanwhile, says it will notify consumers "soon" that it will no longer charge over-limit fees.

Analysts say over-limit fees don't make up a huge part of American Express' and Discover's revenue, which may explain why they're willing to eliminate them. Other issuers, however, may not be so eager to ax over-limit fees.

These charges are a "meaningful component" of Capital One's fee income, says a June 2009 report from researcher Keefe Bruyette & Woods. Capital One spokeswoman Pam Girardo says the company will "ensure we're in compliance when the new law goes into effect," but hasn't changed its over-limit policy.

Wells Fargo, Chase, HSBC and Citigroup also say they haven't altered their over-limit policies, under which consumers may be allowed to spend beyond their credit line and charged a fee. (USA Today)

China Cracking Down on Credit Card Issuers
August 13, 2009

Credit cards gained popularity among Chinese as the middle class expanded and living standards rose and as the government tried to encourage use of the cards to stimulate domestic consumption.

But rising debt, especially among young Chinese who were poor candidates for credit cards in the first place, has put a strain on some families, and the government is putting restrictions on the credit card industry.

The China Banking Regulatory Commission told banks in July not to offer gifts to new credit card holders, set quotas for their sales staff or, perhaps most important, issue cards to people younger than 18.

The regulator's admonition followed the disclosure by the People's Bank of China that credit card payments totaling 4.97 billion yuan were at least 60 days late in the first six months of 2009, a jump of 133.1 percent from a year earlier.

Policy makers are eager to ensure that if credit cards do take off in China, there is no repeat of the sort of uncontrolled issuance that took place earlier this decade in South Korea, which left as many as four million Koreans unable to pay their card debts.

A government-owned entity, China UnionPay, controls the credit card system as well as A.T.M.'s across the country. It has joined partnerships with companies like Visa and MasterCard and with local banks to issue credit cards.

In fact, the number of credit cards issued in China nearly tripled to 142 million in 2008 from 2006, with total transaction volume hitting 3.5 trillion yuan, the country's central bank said in a report in April.

About 1.9 billion credit cards are believed to have been issued in China since 1985.

About a third of credit card payments, or 1.1 trillion yuan, was generated from consumption spending in 2008. Credit cards accounted for almost 15 percent of retail sales of consumer goods in 2008, up sharply from 4.8 percent in 2006.

Nevertheless, the total amount of credit card debt is still tiny, compared with national household deposits of 25.7 trillion yuan as of the end of June.

Credit cards offer China some potential benefits. They may help people feel comfortable spending more, assisting Beijing in its efforts to increase domestic consumption to stabilize the Chinese economy and protect it from external downturns. (Reuters)

Visa blinks first in NZ interchange case
August 13, 2009

Visa is to adjust its interchange rules in New Zealand and pay NZ$2.6 million to the country's competition authority to settle a two-year old civil suit brought against the card scheme. Anti-trust claims against MasterCard and six banks remain outstanding and will be heard at the High Court in Auckland in October this year.

The New Zealand Commerce Commission issued civil proceedings in November 2006 against Visa, Mastercard and 11 banks and other financial institutions for alleged price-fixing in relation to credit card interchange fees.

In settling the claim, Visa has agreed to allow individual card issuers to set their own interchange fees up to an agreed maximum and to open the scheme to non-bank acquirers. Merchants will also be allowed to apply surcharges to credit card transactions and encourage customers to pay by other means.

The NZ$2.6 million payment by Visa is intended to cover the Commission's costs in raising the proceedings.

The Commission's claims against ANZ National Bank Limited, Bank of New Zealand, Westpac New Zealand Limited, ASB Bank Limited, Kiwibank and TSB Bank Limited in relation to interchange fees in the Visa scheme continues, as does its claim against those banks, MasterCard and The Warehouse Financial Services Limited in relation to the MasterCard rules.

The Commerce Act provides for penalties for price-fixing of up to the higher of $10 million per breach, or either three times the commercial gain resulting from the breach or 10% of a company's turnover. (finextra.com)

Citigroup to Initiate New Annual Fees on Some Credit Cards
August 19, 2009

Citigroup Inc. is instituting annual fees on some current credit-card accounts in an attempt to offset strict new legislation that could dent its profits.

The move comes on the heels of several warnings from the banking industry, which has said that issuers would be forced to rewrite the playbook on plastic because new credit-card laws would take a bite out of their income.

These laws include new limits on interest-rate increases on existing balances and greater disclosures.

Typically, annual fees are associated only with cards that offer generous rewards programs. In recent years, few issuers have risked losing market share by charging annual fees across the board.

Now, Citigroup's attempt to charge annual fees-perhaps the first time a large card lender has used such fees in response to the legislation-will be watched closely by competitors.

Citigroup is experimenting with a range of annual fees, some in excess of $30.

Cardholders notified of these annual fees have two months to opt out, paying off their balances under current rates and terms over the rest of their contract.

The new legislation, the bulk of which will be implemented in February 2010, aims to limit fluctuating interest rates and fees, and arm consumers with more information about their debts. (WSJ)'

MasterCard follows Visa in NZ settlement
August 25, 2009

Following Visa's agreement to settle with the New Zealand Commerce Commission, MasterCard has also reached a settlement regarding the setting of its interchange fees.

The two parties signed the agreement after claims made by the commission that MasterCard's rules over interchange fees were in breach of New Zealand's Commerce Act.

MasterCard's settlement with the New Zealand Commerce Commission is similar to the one agreed by Visa on 12 August. As part of the agreement, MasterCard will contribute NZ$3 million ($2 million) towards the commission's costs in bringing the proceedings against the network, and in return the commission will drop its legal action against MasterCard. Visa agreed to a settlement of NZ$2.6 million ($1.7 million).

MasterCard has agreed to a number of changes, like Visa, which include allowing issuers to individually set interchange rates independently of the network's multilateral interchange fee. Merchants will also be able to surcharge customers for card payments to cover the cost of the interchange fee that the merchant has to pay the acquirer. (Lafferty Card News)

Cardholders notified of these annual fees have two months to opt out, paying off their balances under current rates and terms over the rest of their contract.

The new legislation, the bulk of which will be implemented in February 2010, aims to limit fluctuating interest rates and fees, and arm consumers with more information about their debts. (WSJ)'

Support Grows for MasterCard Advanced Authentication for Chip
August 26, 2009

MasterCard has announced that it has approved personal card readers and authentication servers from four vendors for MasterCard Advanced Authentication for Chip - a new EMV authentication solution that leverages the hundreds of millions of EMV cards already in the wallets of cardholders. According to MasterCard, "banks looking to manage the growing threat of online fraud can today deploy this best-of-breed two-factor authentication solution by working with leading providers to the payments industry: DSSS, Gemalto, Logos and Thales."

The Advanced Authentication for Chip is the latest evolution of the Chip Authentication Program (CAP) solution that allows cardholders to authenticate themselves using their existing EMV banking card and a personal card reader issued by their bank. The reader generates single-use password that can be used for e-banking transactions, e-commerce, telephone authentication or a whole host of other uses where the customer is not face-to-face with the bank or merchant: these transactions are known as Card Not Present.

With a MasterCard-commissioned survey showing that 84% of UK and Benelux cardholders think that their bank should have responsibility for online banking security, it is important for the reputation of banks for them to deploy effective and simple security systems. As Advanced Authentication for Chip replicates the same simple process that cardholders are accustomed to from chip-enabled retail environments, it makes remote authentication easy for them to understand, and easy for them to use.

Unlike a standard authentication token or paper-based system, Advanced Authentication for chip allows part of the transaction data to be included in generation of the password - this means that banks can get cardholders to create a unique signature for the transaction and is a major leap forward in the prevention of man-in-the-middle attacks, a huge problem in e-banking and e-commerce. (Payment News)

Citi Launches Multicurrency Virtual Card With MasterCard
August 28, 2009

Citi (New York) has partnered with MasterCard (Purchase, N.Y.) to launch a virtual card product for its treasury clients.

Citi Virtual Card Accounts is designed to provide institutions with greater security, flexibility and control. The new service generates unique "virtual" card numbers for transactions, allowing administrators to dynamically set spending and reconciliation controls on each virtual card account.

The key with a virtual card account is that businesses are enacting these spending controls before a transaction is made, versus after-the-fact, as is the case with physical purchasing cards.

But what really makes Citi Virtual Card Accounts stand out is its global, multicurrency capabilities, something made possible due to Citi's large footprint in the card space.

What's also different about Citi Virtual Card Accounts is the role of MasterCard in this current venture. It will be running in part on the card company's inControl platform, technology gained through its acquisition of Orbiscom this January, says Michael Fiore, VP, emerging solutions development, with MasterCard.

The system is Web-based and operates via the same front end Citi uses for its card business. "It ties in with our overall treasury/cash management offering," Simpson explains.

Clients generate a unique virtual card number and assign custom reference data for each transaction to facilitate the reconciliation process. According to a release, Citi Virtual Card Accounts are a secure, electronic solution for post-invoice payments and "card-not-present transactions" made via the Internet, phone or mail order. They can complement an organization's existing commercial card program to better manage recurring business. (Payment News)

BANKING & FINANCE SECTION

MoneyGram, Affinity Global Services Launch Mobile Money Transfer Service
August 3, 2009

MoneyGram International and Affinity Global Services have announced an agreement "that will enable mobile money transfer receives in important markets around the globe, bringing greater convenience and extending the benefits of MoneyGram services to a new category of consumers. The MoneyGram and Affinity Global Services alliance will allow consumers to use MoneyGram's agent network of over 180,000 locations around the world to send money to an account associated with a mobile device."

Affinity Global Services is the first Mobile Gateway to facilitate MoneyGram services, and will provide technical connectivity between MoneyGram and various mobile network operators. The MoneyGram mobile money transfer service will use Affinity Global's MADE^TM Platform, enabling MoneyGram to connect to virtually any mobile network operator. The parties are currently in discussion with a mobile network operator which is expected to be the first to launch the service to consumers later this year. (Payment News)

BT and paysafecard unveil e-commerce m-payments system
August 3, 2009

BT has teamed with paysafecard on a service that enables Brits to make online purchases from their mobile phones without handing over card details.

Customers can make purchases at around 2700 Web sites using paysafecard's pre-paid voucher system without disclosing financial details.

The scheme works with all the UK's major mobile phone operators - Orange, Vodafone, T-Mobile, 3 and O2 - because it taps the industry-developed PayForIt system.

PayForIt launched in 2007, allowing subscribers to use their handsets to pay for low value purchases. The scheme was set up by the telcos to provide a standardised payment system to customers - no matter what mobile operator a customer is signed up to or which handset they use. (finextra.com)

eBanks Soon
August 4, 2009

Money and Credit Council has given the go-ahead for establishment of electronic banks with an initial capital of $70 million.

Applicants of electronic banks could follow up on their scheme with $70 million as the initial capital, deputy economic minister for banking affairs said.

The official said the establishment of electronic banks is a great step forward in the Ministry of Economy's efforts to boost electronic banking in the country.

Faster customer services, reduced banking costs, easy access and transactions of money are among the advantages offered by electronic banks, he said. "I predict that e-banks will be received well. We are planning to establish more financial institutions in the near future." (Iran Daily)

Royal Bank, WestJet Airlines enter alliance to launch MasterCard-branded card in Canada
August 7, 2009

Royal Bank of Canada has entered an agreement with WestJet Airlines to roll out a MasterCard credit card in Canada.

Aimed at North American and Caribbean travellers, the co-branded card, which will be issued by RBC with MasterCard by the end of 2009, will enable customers to gain WestJet rewards. The Royal Bank of Canada also issues Visa credit cards. Before November 2008, the country's regulations did not permit financial-services firms across Canada to issue both Visa and MasterCard credit cards, blooomberg.com reports. (The Paypers)

Dubai to construct real-time payments system
August 10, 2009

Dubai has enacted a new Payment System Settlement Finality (PSSF) Law that creates the legal foundation for building a regional transaction processing hub for local processing of payments and other ancillary services.

The first such legislation in the Gulf, the new PSSF Law paves the way for the launch of a Real-time Automated Payments platform (Rapid) in the Dubai International Financial Centre, to provide transaction processing services to banks and their customers both in DIFC and the wider Middle East and North Africa (MENA) region.

Omar Bin Sulaiman, governor of the DIFC says DIFC has adopted legal best practices from Europe, Hong Kong and New Zealand, among others, to ensure finality of designated payments.

The legislation will assist Gulf-based companies in conducting legally sound payments within the region instead of having to use offshore infrastructures which often do not settle within local operating hours. (finextra.com)

The National Credit and Commerce Bank launches remittance payment card in Bangladesh
August 10, 2009

The National Credit and Commerce Bank (NCC), a Bangladesh-based financial services provider, has introduced an electronic remittance payment card.

With the new payment card, dubbed 'mBridge', cardholders can withdraw remittance by swapping the card at NCC Bank branches and 250 rural outlets of TMSS, a local non-governmental organisation, as well as pay for purchases at any VISA affiliated outlets. NCC conducts traditional commercial banking functions as well as foreign exchange business and provision of other financial services. (The Paypers)

KeyBank to deploy Mobile Money suite from Fiserv
August 10, 2009

US financial company KeyBank has teamed up with financial services technology provider Fiserv to deploy the latter's Mobile Money platform.

Under the deal, KeyBank is set to employ Mobile Money in order to provide its customers with technology that enables them to access their accounts using any of the three primary mobile access modes: a downloaded application, mobile browser or SMS (text messaging). The text messaging capabilities are provided by VeriSign.

The Mobile Money suite is delivered by Fiserv under a technology partnership with mobile banking and payments services provider M-Com. The Mobile Money solution combines banking and payments capabilities, and includes functions such as balance inquiries, transaction history, account transfers, bill payments and one and two-way account alerts. Informational services such as an ATM and branch locator are also included. (The Paypers)

Online payments under the spotlight in Australia
August 11, 2009

The Reserve Bank of Australia (RBA) is examining whether there is sufficient competition and choice for consumers making online payments.

This follows concern that the established card networks could be preventing new players from entering the market.

The central bank, which has made a number of reforms to the payments system since 2002, is considering taking a step back from its role as regulator and allowing the industry to self-regulate, provided that it is satisfied that there is enough competition in the marketplace. As online payments and e-commerce is a rapidly growing area of payments, the RBA reasons that sufficient competition in this area is important for the industry as a whole.

The Australian Payments Clearing Association (APCA), responding to the regulator's concerns, has investigated the online payments market and whether there are insurmountable barriers to entry for new players.

The APCA report found that there was already enough competition, with players such as PayPal and BPAY already providing a significant challenge to the dominance of Visa and MasterCard.

The report also noted that successful alternatives need to offer immediate assurances of value to merchants, as well as be capable of quickly developing domestic reach through critical mass usage by Australian consumers and acceptance by Australian merchants. It added that services which use accounts at existing financial institutions, as well as existing payments infrastructure, have the best prospects of success. (Lafferty Card News)

Maybank expands Asian presence
August 13, 2009

Maybank, Malaysia's largest bank by assets, is expanding its presence in Asia by opening another branch in Cambodia.

Maybank opened its fifth branch in Cambodia this week, located at Chbar Ampov, southeast of Phnom Penh, and will offer retail banking as well as commercial and wholesale banking services.

Maybank has had its sights on expanding in Cambodia, a market where the potential for retail banking is growing rapidly, since it began operations in the country in 1993. The bank has been developing its mortgage lending, ATM network and payment services in the Cambodian market, and is planning to increase its operations across the region.

At present, Maybank has an international network of more than 400 offices in 13 countries, as well as 384 branches in Malaysia, and strategic investments in Pakistan via MCB Bank and Vietnam's An Binh Bank. (Laffery Retail Banking News)

Monitise Strikes Partnership to Extend 'Mobile Money' Across Africa and the Middle East
August 13, 2009

Monitise, the world's leading mobile banking services provider, is extending its business further into Africa and the Middle East with a joint venture with Paynet, an electronics payment company.

The agreement, signed in principle, combines the strengths of Monitise and Paynet to give millions of people access to banking and financial services on their mobile phones.

It also helps cement Monitise's position as a worldwide leader in mobile money following a global deal with Visa Inc, the world's largest electronic payments network, in June.

The British company already works with some of the world's biggest banks and mobile operators to deliver an increasing range of services to their customers over their mobile phone.

Its agreement with Paynet, which has a well-established electronic payment network in Kenya, Tanzania and Uganda that connects to 35 regional financial institutions, will allow Monitise to further expand its operations in Africa and the Middle East.

Services are expected to start early next year, enabling participating banks and mobile operators to offer banking and financial services to existing customers, as well as opening new markets. (Press release)

China's ICBC signs for Swift workers' remittance service
August 17, 2009

Industrial and Commercial Bank of China (ICBC) has signed for a new remittance service from Swift to support cross-border person-to-person payments.

The bank will use Swift's Workers' Remittances 1.0 for its existing global P2P cross border payments in countries such as the US and South Africa.

With more than 17,000 domestic and overseas institutional clients, servicing 170 million individual customers, ICBC is also looking to expand its workers' remittance business with the service.

Swift says the remittance market is huge, estimating over 200 million migrants initiate between one and 1.5 billion cross-border payments each year with industry revenue exceeds $15 billion annually.

The co-operative says its new system is designed to enable banks to clear and settle these payments in a more efficient and transparent way, using its global network and standards.

Following the completion of a pilot in April, six banks are now certified for the Workers' Remittances live service and a further 24 are in implementation. (finextra.com)

HSBC stocks ATMs with £5 notes in BoE pilot
August 21, 2009

HSBC has begun stocking 100 UK cash machines with £5 notes as part of a Bank of England (BoE) trial designed to boost their numbers.

Although ATMs in the UK must be able to stock notes of all denominations, the vast majority only hold £10 and £20 notes.

According to the central bank's figures, there are around 230 million £5 notes in circulation, compared to 630 million £10 notes and 1.4 billion £20 notes.

This means they get used more regularly and only last around a year in circulation before becoming too damaged to use.

In February, the BoE's chief cashier Andrew Bailey told the BBC that the bank was keen to get more of the low denomination notes in circulation.

HSBC is now stocking fivers in 100 machines in the South West and Midlands as part of the BoE bid to increase their circulation by making them last longer. (finextra.com)

Nokia Introduces Nokia Money for Mobile Financial Services
August 26, 2009

Nokia has introduced Nokia Money - a new mobile service operated in conjunction with Obopay - calling it "a new mobile financial service offering consumers with mobile device access to basic financial services. For many consumers, this will be the first time they have had any access to such financial services."

According to the company, Nokia Money will enable consumers to send money to another person just by using the person's mobile phone number, as well as to pay merchants for goods and services, pay their utility bills, or recharge their prepaid SIM cards (SIM top-up). The services can be accessed 24 hours a day from anywhere. Nokia is building a wide network of Nokia Money agents, where consumers can deposit money in or withdraw cash from their accounts."

The Nokia Money service will be operated in cooperation with Obopay, a leader in developing global mobile payment solutions, which Nokia invested in earlier this year. The service is based on Obopay's mobile payment platform, with unique and newly developed mobile elements. Nokia intends the service to be open and interoperable with other payment services as well.

Nokia Money is the result of a powerful collaboration Nokia is forging between different partners in different markets around the world. It is designed to work in partnership with mobile network operators and financial institutions, involving distributors and merchants in a dynamic ecosystem to seamlessly provide the new services. The Nokia Money service is planned to be rolled out gradually to selected markets, beginning in early 2010. (Payment News)

Facebook teams up with Zong to trial mobile payment service
August 27, 2009

US social networking website Facebook has teamed up with mobile payments company Zong to trial a mobile payment service which allows users to purchase Facebook Credits and bill the amounts spent to their mobile phones, businessinsider.com reports.

Currently, Facebook is trialling its Facebook Credits virtual currency with a limited number of users, who can chose the mobile payment option when paying for items at the website's Gift Shop. Users are thus presented with the new mobile payment option at checkout. after they choose the mobile option, users enter their phone number and a confirmation PIN is sent via SMS message to their phones. To confirm the purchase, users enter the assigned PIN and the Facebook Credits are billed to their accounts with the mobile carrier. (The Paypers)

Virgin Mobile rolls out Zoompass m-payment service in Canada
August 31, 2009

Virgin Mobile Canada and m-commerce services provider EnStream have launched Zoompass, a mobile money transfer service.

In order to be able to send money using their Zoompass account, Virgin Mobile customers can link a personal bank account or credit card, plug in to Zoompass on their computer or download the Zoompass application to their phone. Zoompass users can send and receive money using their mobile phone, as well as check their account balance and review their transaction history.

With Zoompass, Virgin Mobile Canada customers can send money to anyone belonging to a participating Canadian wireless carrier, including those who do not have a Zoompass account yet. The latter receive a notification on their mobile phone when they receive money, being asked to register. The service also enables customers to pay for products in stores or online using the balance of their Zoompass account with the Zoompass Prepaid MasterCard which is accepted at any location which displays the MasterCard logo.

Virgin Mobile Canada is a wireless communications services provider, a joint venture between Virgin Group and Bell Canada and a wholly owned subsidiary of Bell Mobility.
A joint venture company owned by Canadian wireless operators Bell Mobility, Rogers Communications and TELUS Corporation, EnStream focuses on developing mobile payment capabilities that work with existing credit, debit and prepaid capabilities offered by financial institutions and across wireless carriers. (The Paypers)

FRAUD & SECURITY MATTERS

India enforces extra security for online payments
August 4, 2009

The Reserve Bank of India has implemented security precautions that aim to combat cardholder-not-present fraud.

From the beginning of August, online card payments in India will have to use an extra layer of security, such as Verified by Visa or MasterCard SecureCode.

The extra level of authentication means that when Indian consumers are shopping online and reach the checkout, they will be directed to the issuer's MasterCard or Visa authentication page. They will be asked to verify additional information that is unique to the cardholder and enter their password.

In February 2009, the central bank released guidelines for India's banks to help improve the security of online payments, which have been growing rapidly in the Indian market.

The proposals should have already been implemented by the country's banks, and those who do not adhere to the guidelines may face penalties. Banks are also expected to provide a service that provides an 'online alert' so that cardholders know when their card has been used for online transactions worth more than $100. (Laferty Card News)

Credit Card Payment Security Goes Beyond PCI, Says ProPay
August 17, 2009

In light of recent security breaches and announced plans by other companies in the industry to address End-to-End (E2E) data security solutions, ProPay has been implementing an End-to-End data security solution over the past several months. To that end, ProPay is announcing a complete End-to-End data security solution which reduces, and even eliminates, the risk merchants bear of having sensitive payment data compromised.

The foundation of ProPay's approach starts with removing the existing sensitive data from a merchant and then providing a means of accepting and processing payments that don't require a merchant to store, transmit, or process sensitive payment data. From the point-of-sale where sensitive payment information is obtained, and a large percentage of credit card data is stolen, ProPay's products and services safely capture the data and protect it throughout processing, transmission and storage. With this data removed from a merchant's system, the merchant's PCI scope is significantly reduced and the associated risks of losing the data are removed.

ProPay's full E2E strategy takes a four-pronged approach:

• E2E Security - From the point where sensitive payment information is obtained and throughout transmission, processing and storage of the data, ProPay removes sensitive payment information from the merchant so they never touch the data. Removing the data removes the risks.
• E2E Compliance - ProPay alleviates most of the merchant's PCI validation requirements. Rather than having to deal with the burdens of evolving security standards and then hope that they are not breached, business owners can offload the information to ProPay, which specializes in the secure storage and handling of such sensitive data.
• E2E Data Storage - From payment card transaction data to financial, health care information and other sensitive personal information, ProPay ensures that sensitive data is archived and stored in a secure environment. A unique ID or token is used by the merchant for further transactions on the data.
• E2E Single Vendor Partner - ProPay has more than a decade of experience providing simple, safe and affordable merchant payment solutions to its customers, having gained knowledge and expertise in all areas relevant to acquiring, issuing, processing, and storing sensitive data.

For more information about ProPay's end-to-end suite of products and services, visit www.propay.com. (Press Release)

Card breach at Radisson Hotels
August 25, 2009

The payment card details of customers at Radisson Hotels & Resorts may have been compromised after its computer systems were hacked.

Fredrik Korallus, executive vice president and chief operating officer of Radisson Hotels & Resorts, revealed the breach in an open letter to customers.

The hotel said that between November 2008 and May 2009, the computer systems of some of its hotels in US and Canada were hacked into. The hotel is recommending that its customers check their statements carefully and report any unauthorised activity to their issuer.

The statement comes amid industry debate about the effectiveness of the PCI-DSS security standards for storing cardholder data. In the most widely reported case of a breach of payment card data - at processor Heartland Payments Systems - a man was charged in August 2009 with stealing the details of 130 million cardholders. (Lafferty Card News)

UK government sets guidelines to combat contactless m-payments fraud
August 28, 2009

The UK government has laid down guidelines designed to tackle fraud associated with mobile phone-based contactless payments.

Contactless m-payments - where users can make low value purchases by tapping their handsets against specially equipped terminals - is being trialled by several phone companies and banks.

The government department has now issued guidelines, asking firms to make sure bank details, phones and SIMs are disabled as soon as possible once phones are reported lost or stolen.

In addition, verification, such as a PIN, will be required for any transactions above the maximum contactless payment value (currently £10) and if more than a certain number of smaller charges are carried out in a row.

The Home Office also wants to encourage those who sign up for a contactless payment handset to add their details on the National Mobile Phone Register (NMPR), making it easier for stolen phones to be identified and recovered. NMPR is linked to voluntary databases designed to make it easier for police to identify and recover stolen phones. Approximate 22 million phones are currently registered on it.

Barclaycard, currently trialling the technology with wireless operator Orange, has welcomed the guidelines. (finextra.com)

PAYMENT PROCESSOR'S POST

First Data's owner reportedly planning IPO
August 4, 2009

The owner of payments processor First Data is reportedly preparing the company for an initial public offering that could take place in six to 12 months' time.

According to the Financial Times, private equity firm Kohlberg Kravis Roberts (KKR), is seeking to sell shares in an initial public offering in order to repay loans, rather than cashing out on its initial purchase.

KKR bought First Data in September 2007 in a deal that was estimated to be worth $29 billion. KKR, which was established in 1976 by Henry Kravis and George Roberts, has undertaken many such high-profile leveraged buyouts. When the First Data deal went ahead, it was the second-largest buyout in the US. The largest was KKR's purchase of Energy Future Holding for $48.4 billion in 2007.

In its 2008 annual review, KKR noted the many changes it had made to First Data since the purchase, such as the introduction of a new management team, the elimination of redundant costs, reorienting the company to meet the needs of its customers and focusing on technological innovation. The areas of innovation that the company focused on were mobile commerce, loyalty, security and fraud, and data analytics.

First Data currently offers payment processing services for more than 5.4 million merchant locations and more than 2,000 card issuers. KKR did not comment on the news report that it plans an IPO for First Data. (Lafferty Card News)

Heartland Payment Systems Launches New Prepaid Services Program
August 6, 2009

Heartland Payment Systems® (NYSE:HPY), one of the nation's largest payments processors, now offers prepaid calling services including wireless and long-distance minutes through its new ePIN It! program. Business owners can download the program directly to their point-of-sale (POS) terminals and allow customers to purchase more than 110 offerings from most major wireless carriers. The offering also includes domestic and international long-distance products.

When customers purchase minute allotments, personal identification numbers (PINs) are printed on receipts generated from the POS terminals. Customers can then quickly and conveniently access their minutes by calling a toll-free number directly from their phones and inputting their PINs.

The ePIN It! program operates on VeriFone Vx500 series and Omni 3740/3750 terminals, as well as Radiant POS systems. (Press release)

Global Payments Launches Broadband Payments For Asia Pacific
August 6, 2009

Global Payments Asia-Pacific Limited, a joint venture between HSBC and Global Payments, has introduced Global BroadbandPay - calling it "an Internet Protocol (IP)-based point-of-sale solution that provides merchants with fast, secure and reliable card acceptance services across the Asia-Pacific region. Merchants and processing partners no longer need to rely on slow dial-up networks or invest in expensive dedicated communication links to their card acquiring banks. Instead, this new product enables use of their existing internet connection to enjoy a "plug-and-play" experience. Global BroadbandPay is now available to merchants in Brunei, Hong Kong, Macau, the Maldives, the Philippines, Singapore and Sri Lanka." (Payment News)

SIX Multipay adds Diners Club and Discover to credit card processing portfolio
August 14, 2009

Swiss acquiring company Six Multipay has added the Diners Club and Discover credit card brands to its range of products. The company's existing portfolio includes of Visa, MasterCard and JCB credit cards, V Pay, Visa Electron and Maestro debit cards and the CASH value card.

Six Multipay is set to initiate the expansion of its product range and start processing Diners Club and Discover cards at the beginning of 2010. Merchants who choose to activate Diners Club will also automatically accept the Discover Card under the same conditions.

The Diners Club Card is used by around 40,000 cardholders in Switzerland and approximately 8 million worldwide. It is currently accepted today at over 9 million merchants in over 185 countries. The Discover cards are used by over 50 million cardholders and are accepted by around 4 million merchants, primarily in the USA and Mexico. (The Paypers)

New e-commerce service launched
August 25, 2009

The processor Global Payments Europe and UniCredit Bank have launched a new e-commerce service that provides more protection during the online payment process.

The new service is based on a 3D Secure technology standard, which adds an additional layer of security for e-commerce payments. The service is supported by MasterCard and Visa, which have branded the security layers as MasterCard SecureCode and Verified by Visa.

When cardholders are shopping online, they enter their card details into a secure area that is managed by Global Payments. Global Payments receives the data, processes and authorises the transaction, and sends a message to the merchant to say that the transaction has been confirmed. This means that merchants do not have to accept and authorise the payment themselves, and are also not faced with the risks involved with storing cardholder data on their websites. (Lafferty card News)

MERCHANT'S CONCERN

VeriFone unveils ATM cash and payments system for Latin America
August 24, 2009

VeriFone Holdings (NYSE: PAY), today introduced the MX ATM, a new convenience retail payment kiosk with cash dispensing and deposit functionality, designed for the Latin America market.

PROSA, Mexico's largest electronic switch and processor, partnered with VeriFone for a customized solution that it plans to roll out nationally throughout retail locations in Mexico.

The VeriFone MX ATM is a family of secure, simple-to-use payment and cash dispensing kiosks, intended for environments such as hotels, department stores, night clubs, and enterprises.

MX ATM decreases cash management and security costs for retailers by providing a tool for cash recycling. The MX ATM can also be configured to include other peripherals such as barcode readers, biometric readers and coin acceptors for deployment in different environments, such as parking and mass transit. (finextra.com)

OTHER NEWS & ISSUES

EU to give US access to payments data
August 3, 2009

The European Union has approved the framework for talks that will give the US Treasury Department access to banking data processed over the international Swift interbank network.

The approval for opening negotiations with US authorities was buried in a 32-page document released by the Council of the European Union last week.

It follows a long-running controversy over the covert tapping of Swift messaging data by the US under subpoenas issued in the wake of the 9/11 attacks that brought down the Twin Towers in New York in 2001.

The top-secret exercise provoked uproar among EU consumer bodies and politicians when the news was leaked in 2006. In June 2007, the Swift board approved a four-year EUR150 million systems re-architecture programme designed to allow intra-European data to be stored only in Europe.

The Commission has stated that the new agreement will include guarantees on the limits of access, on the use and retention of data, and on the sharing of the data. (finextra.com)

PayPal hit by global outage
August 4, 2009

PayPal users around the world were unable to make purchases for much of yesterday because of an internal network hardware failure.

The outage began at around 10.30am Pacific Standard Time (PST), leaving all PayPal users worldwide unable to make or accept payments. In addition, payments via the firm's application programming interface (API) were intermittently unavailable. By 12.40pm PST the site was working for most users and full service was restored by around 3.00pm PST.

The world's most popular online payments system, PayPal claims around 75 million active users in 190 markets around the world and processes around $2000 a second.

Last year, glitches with the PayPal service left merchants unable to accept some international payments for almost two weeks. (finextra.com)

Huge potential for Nigeria's credit cards market
August 4, 2009

Nigeria's credit cards market is definitely one to watch. While still at an embryonic stage of development - the industry's pre-tax profit pool is estimated at a paltry $10 million - the huge market potential is there for everyone to see. One could easily draw parallels with the Russian market of six or seven years ago.

Indeed, the similarities are quite stark. Back in 2003, Russia had just 250,000 credit cards in issue, just 50,000 less than what Nigeria had at the end of 2008. Today, Russia has more than 12 million credit cards in issue. Also like Russia in 2003, Nigeria has huge reserve of untapped consumers to exploit, an emerging middle class, a growing economy and a gradually changing consumer attitude towards credit.

Some insiders are even arguing that an explosion of the credit cards market in Nigeria in the coming years is not a question of if, but when. While that may seem a little too optimistic for many - who do not subscribe to a mechanical, deterministic approach to market development - there are three key areas that the banking industry needs to address to help facilitate this future growth.

Firstly, access to consumer finance is considerably restricted. Of the adult population of 84 million, it is estimated that 26 million are salaried employees, and that just 5 million meet requirements for consumer loan products, including credit cards. While banks will be looking at ways to attract those customers that currently meet requirements, it will also need to work on its general retail banking provisions and infrastructure in order to expand the market further. The growth in the number of consumer reference agencies in Nigeria in recent years will be a positive step in overcoming this issue and widening the pool of potential customers.

Secondly, card infrastructure in Nigeria is considerably undeveloped. For example, there are just 10,500 POS terminals serving a total payment cards market of 28 million. of which just 300,000 are credit cards. To put this in perspective, this represents just six terminals per 100,000 consumers, compared to the European Union average of 1,600 per 100,000 consumers.

As a result, the ability to use credit cards for the principal purpose of helping to fund short-term purchases is greatly diminished and will restrict demand. The industry will need to work hard on improving this infrastructure, coupled with POS consumer education and promotional campaigns.

Lastly, rightly or wrongly, fraud is considered to be a major problem in Nigeria - discouraging both consumers and merchants alike -often making life unnecessarily difficult for Nigerian credit cardholders when they are abroad. The industry, in conjunction with the relevant authorities, needs to recover its reputation in this area and to reinstall confidence in credit cards as a consumer banking product. The introduction of EMV standards at the end of June 2009 was a welcome step in this direction. (Lafferty Card News)

Mobile financial services to become mainstream by 2014 - report
August 5, 2009

Although the mobile financial services market is currently still in its infancy, it has enough potential to become mainstream by 2014, penetrating one-third of mobile users in emerging markets, a study reports.

According to the same source, cited by pcworld.com, within the past two years the activity of m-payment services has accelerated on such markets, with over 100 mobile mobile financial services having been launched so far. Mobile financial services penetration is more likely expected to reach between 30 percent and 40 percent of the mobile users in emerging markets by 2014, but if market barriers are properly addressed, the study mentions a scenario where mobile financial services could penetrate between 60 percent and 70 percent of mobile users.

Among the main factors driving the uptake of mobile financial services the study mentions the low penetration of access to financial services and the higher penetration of mobile services. The 'Mobile Money in Emerging Markets' study has been released by market research firm Ovum. (The Paypers)

RFID smartcard market marked by continued growth - report
August 9, 2009

Despite the current economic downturn, the RFID smartcard market has generated revenues worth an estimated USD 700 million throughout 2008, a recent survey indicates.

Also, by 2013 RFID smartcard revenues are expected to grow by a compound annual growth rate (CAGR) of 26 percent. According to technology market research firm VDC Research Group, the ISO 14443 standard (defines a proximity card used for identification, and the transmission protocols for communicating with it) will continue to account for the vast majority of current and future global smartcard revenues and unit shipments due to the large number of applications it supports. The demand for RFID smartcards is expected to remain stable, while applications such as contactless payments and ticketing ticketing will reportedly drive product development due to their expanding functionality. (The Paypers)

Ukash enters Polish market
August 10, 2009

As Ukash, the online payment specialist, continues in its quest to make online shopping available to everybody, anywhere in the world, the company has signed a significant global deal with epay, a Division of Euronet Worldwide, Inc. - a leading provider of payment services and technology - to extend the availability of its e-cash vouchers to epay retailers across Poland.

The Ukash partnership with epay enables Ukash to expand into 6,000 epay locations across Poland, and the deal offers all internet users the opportunity to pay, play and shop online using cash without having to pay for a prepaid card.

With the growth of the e-commerce market in Poland - one that is dominated by payment methods of cash on delivery and bank transfers - the Ukash deal with epay allows online merchants to tap into the large base of consumers preferring to use cash as a safer method for online purchases.

Unlike some other financial products in Poland, Ukash vouchers do not attract a service or convenience fee. Consumers simply exchange their cash for a unique 19-digit code to use online. This provides them with a secure payment system where they don't need to reveal any financial information, enabling those without access to credit or debit cards that can be used online - or those with fears of online fraud - to enjoy online shopping.

From today, Ukash vouchers will be available at 6,000 physical point of sale terminals operated by epay at independent supermarkets, petrol stations, call shops, drug stories and convenience stores in Poland. The vouchers will be available in PLN 20, 25, 100, 200, 500, 750 and can be combined, split and/or converted.

Ukash is undergoing a period of rapid global growth and in the last few months has expanded its offer in Germany, Australia and Spain with epay. This deal is expected to lead to further new countries being added in the coming months. (finextra.com)

France: e-commerce revenues reach EUR 5.24 billion in Q2 2009, up 30%
August 10, 2009

The French e-commerce market has seen a 30 percent increase, reaching EUR 5.24 billion in Q2 2009, as compared to the corresponding period of the previous year, while the number of transactions has reached 50.5 million, according to e-commerce association Acsel.

On a quarter-over-quarter basis, the e-commerce segment registered a 3 percent growth in revenues. The top 100 e-commerce websites by volume using the Powerboutique platform generated EUR 38 million of revenues from April to June 2009, an increase by 19 percent over Q2 2008, while the number of e-commerce transactions reached 264,558 (up 41 percent), the same source indicates. (The Paypers)

UK regulator introduces bonus rules
August 13, 2009

The UK's regulator, the Financial Services Authority (FSA), has introduced a remuneration code aiming to address the issue of bankers' bonuses.

Bonuses have been blamed for causing the crisis by encouraging risky behaviour that threatened the stability of retail banks. The FSA's remuneration code will therefore seek to ensure that banks' remuneration packages are consistent with good risk management, and that pay structures carry the right incentives for individuals.

The new rules mean that banks will not be able to enter into contracts that guarantee bonuses for more than one year. It is also expected that senior executives will receive bonuses spread across three years.

Banks must submit a remuneration policy statement to the FSA by the end of October 2009. (Lafferty Retail Banking News)

New credit card law set to start next week
August 13, 2009

The rules of the credit card game are about to change.

Starting Aug. 20, when the first phase of the new Credit CARD Act goes into effect, credit card users will be armed with a new right to say "no" to -- that is, opt out of -- interest rate hikes and other changes in their credit card agreements. (See the Comprehensive guide to the Credit CARD Act of 2009.)

Under the first phase of the new law, consumers must be given:

• At least 45 days advance warning of changes to their credit card accounts. Currently, only 15 days' notice is required unless customers default on their accounts and interest rate hikes can take effect immediately.
• At least 21 days to pay their monthly credit card statements without threat of late fee penalties.
• The right to opt out of interest rate hikes and fee increases, and cancel their accounts while paying off the balances under the old, lower interest rates. Currently issuers offer opt out options at their discretion and it is not a consumer right.

Other aspects of the new credit card law -- such as restrictions on interest rate hikes, bans on issuing and marketing credit cards to young adults and gift card regulations -- take effect in February 2010 and later. In addition, starting July 1, 2010, a host of requirements for disclosing fees, rates and terms on monthly statements, credit card applications and mailers will become law as a result of new rules drafted and approved by the Federal Reserve Board and other banking regulators.

Taken as a whole, the Credit CARD Act and upcoming federal rules mark a dramatic shift in how credit cards will be marketed, issued and billed. (CreditCards.com)

New payment rules in Sri Lanka
August 19, 2009

Sri Lanka has introduced new payment card regulations to bring the industry in line with international standards and practices.

The regulations mean that the Central Bank of Sri Lanka (CBSL) will regulate payment systems and have the necessary powers to regulate service providers in the payment card industry.

All payment card service providers will now have to register with the central bank, which will act as the supervisor of those companies and will issue directives, guidance and rules.

The central bank said the changes are aimed at minimising the potential losses of the payment service providers and increasing the efficiency of the Sri Lankan payments system. By adapting international best practices, the central bank also hopes to boost the public's confidence in the security of card payments.

The regulatory changes come a year after Golden Key Credit Card Company, an unregulated subsidiary of the Ceylinco conglomerate, collapsed. The company took deposits but was unable to repay them, leading to a run on the financial institution that had repercussions for the wider company and confidence in the financial sector as a whole.

The central bank will also monitor all new products before they enter the market to ensure that they conform to existing regulations and international standards. (Lafferty Card News)

UK plans to ditch paper transport tickets for mobile phones and bank cards
August 20, 2009

The UK government is proposing the introduction of an England-wide smart ticketing system that will let travellers pay for bus and train journeys using their NFC-enabled bank cards and mobile phones.

The national plans come in the wake of London's successful Oyster card system, which is now used for 78% of bus and tube journeys.

Central to the plan is a national ticketing infrastructure using the government-backed ITSO smartcard specification which will enable 'tickets' to work anywhere in the country.
Travellers could then use mobile phones and bank cards to pay directly for journeys by tapping them against specially equipped readers.

The department for transport estimates that the benefits of a universal 'integrated smart' system could be as much as £2 billion per year through improved journey times and faster, more convenient and reliable purchasing and use of tickets, with benefits for local government and operators too.

Transport for London recently revealed the Oyster card could be dumped by 2010 in favour of a system that uses mobile phones or bank cards. (finextra.com)

The Intuit PaymentNetwork
August 20, 2009

Intuit has soft-launched a new Intuit PaymentNetwork, calling it a "new and affordable way to send and receive payments over the Internet" for individuals and small businesses." A comprehensive set of help and support Q&A is available online.

For small businesses, the Intuit PaymentNetwork provides a low-cost payment alternative to credit cards for receiving payments - charging 50 cents per payment received irregardless of the amount (subject to certain limits). There are no monthly charges, equipment or set-up costs.

For individuals sending funds, you can send to anyone who is a member of the Intuit PaymentNetwork. If they're not already a member, they can join to receive their funds. At the present time, individuals can't receive funds. (Payment News)

Monitise buys out Vocalink to take control of Monilink network
August 24, 2009

Monitise has bought out joint venture partner VocaLink to take full control of UK mobile banking and payments network Monilink. Monitise will pay an initial £1.5 million in cash over three years for debt-free, 100% ownership of the network.

VocaLink will continue to provide Monilink with access to its banking and payments infrastructure, in return for services fees. The firm could also earn up to £1.5 million in further consideration, subject to Monilink beating financial performance targets, between now and June 2013.

Monilink was formed as a 50:50 joint venture in 2003 by Monitise's then parent company Morse - which later spun the unit off - and the Link Interchange Network.

The network now provides mobile banking and payments services to banks representing over 55% of UK current account holders, including HSBC, Lloyds TSB, NatWest, RBS and Alliance & Leicester.

However, despite signing up major clients, the network posted a loss before tax of £5.7 million for the year ended 30 June 2008 and had net liabilities of £9.3 million.
Monitise - which reported a pre-tax loss of £14 million last year on revenues of £1.5 million - posts its preliminary results for this year tomorrow.

In June Visa agreed to take a 14.4% stake in Monitise after signing a $13 million partnership deal with the UK mobile banking outfit.

Under the agreement, Monitise is a strategic development partner to Visa. The five year deal has a contract value of $13 million in addition to ongoing licence, service and development fees. (finextra.com)

PayPal develops use of wireless technology
August 25, 2009

Transaction Wireless, which specialises in mobile point-of-sale solutions, has developed a product that allows PayPal customers to use a mobile phone for online transactions.

Transaction Wireless, which has developed the wCharge Credit Card Terminal, will enable merchants to accept credit card payments ‘on the go' by using only a mobile phone and a PayPal account.

Since payments can be authorised in real-time using the mobile phone, there is less risk for the merchants to be handling fraudulent transactions - or cards that have insufficient funds - which can happen when merchants are handling offline transactions. (Lafferty Card News)

Getting to Know the Mobile Population
August 25, 2009

Mobile users are inseparable from their devices. Whether they have a smartphone or a traditional feature phone, it goes with them at all times. And as these devices become more capable, they are evolving into extensions of users' desktops and home communications and entertainment systems.

Penetration will near 100% by 2013, reflected in a modest 2.7% compound annual growth rate (CAGR) in the number of subscribers between 2008 and 2013.

The mobile subscriber population is hardly uniform-in either its demographic composition or usage habits. For example, women enjoy a slight lead over men in the overall composition of the mobile subscriber population. According to comScore data, the split is 53% women, 47% men.

However, men are better represented in the key 18 to 44 age range. Variations in usage by age, income, ethnicity and device type also exist, with each subsegment representing its share of opportunities as well as a unique set of potential challenges.

Usage continues to center around various forms of communication, and text messaging has superseded voice calling as the pre-eminent means of communication on mobile devices. Figures from Nielsen show that in Q1 2009, the average US mobile subscriber sent or received 486 text messages per month but made just 182 calls.

As might be expected, heavy texting is not uniform across all mobile users. Nielsen data shows that users ages 13 to 24 text disproportionately more than those in other age groups. In fact, in Q1 2009, 13-to-17-year-olds sent and received more than three times as many texts on a monthly basis as the next-most-avid group of texters, those ages 18 to 24, and over 50 times as many as the least active texters, those ages 55 to 64.

Mobile Internet usage has been steadily rising, with some of the traditional barriers-namely cost, complexity and user experience-beginning to fall away. eMarketer predicts that growth will persist over the next five years, albeit at a slower pace. In the US, the number of mobile users accessing the Internet will jump from 73.7 million in 2009 to 134.3 million in 2013, a CAGR of 17.7%.

The mobile Internet user population in the US is now roughly one-third the size of the wired Internet audience, a gap that will narrow by the early part of the next decade. Smartphones constitute the bridge between the desktop and mobile Web.

Smartphone users are a far more attractive group, both for the audience demographics and usage patterns, but marketers that ignore the other 80% to 85% of the user population do so to their detriment.

Get the full picture of the mobile population. Download the new eMarketer report, "Mobile Users and Usage: It's Personal," now. (eMarketer.com)

NTT claims 10 million mobile wallet users
August 25, 2009

Japanese wireless operator NTT DoCoMo says it now has ten million regular users of its DCMX contactless credit card phones.

Launched in April 2006 under the Osaifu-Keitai mobile wallet brand, DCMX reached 1 million subscribers just seven months after launch. The ten million milestone was passed on Monday 24 August.

The wireless operator ascribes the rapid penetration of the platform to a large estate of reader-writer terminals at 420,000 merchant locations nationwide, as well as its customer loyalty programme.

Subscribers earn loyalty points that can be redeemed against future transactions each time they make a purchase using the phone. In addition, there are bonus point programmes at selected retailers or DoCoMo's online shopping mall.

NTT DoCoMo says over 30 million DCMX phones equipped with Sony's Felica contactless payment chips are in circulation. The phones can be locked remotely over the wireless network if misplaced or stolen. (finextra.com)

CARD NEWS

PayPass Rules
July 1, 2009

The bandwagon for making "tap 'n go" payments with your credit card is growing day-by-day worldwide. For example, the number of "MasterCard PayPass"-enabled cards and devices has soared by 62% over the past year after more than doubling in 2007. The number of global merchants accepting the contactless payment option has grown by 46% during the same period. As of March 31st there were 55 million "MasterCard PayPass" cards and devices in use worldwide, compared to 28 million one-year ago. At mid-year 2009 it is estimated there are 60 million "MasterCard PayPass" cards and devices, compared to 37 million for mid-year 2008 and 17 million for mid-year 2007. As of March 31st there were 146,000 global merchants accepting "PayPass." MasterCard reports that the top merchants that have received a visit from a new customer because of their "PayPass" acceptance include quick-service restaurants (20%), pharmacies (17%), and supermarkets (13%). A 2009 survey found that 77% of consumers that have a "PayPass"-enabled card or device use it as their primary form of payment, which demonstrates its ability to bolster relationships for financial institutions with cardholders.

PAYPASS CARDS/DEVICES
1Q/08: 28 million
2Q/08: 37 million
3Q/08: 44 million
4Q/08: 50 million
1Q/09: 55 million
Source: CardTrak (www.cardtrak.com)

Fitch: June US Credit Card Chargeoffs Up 62% vs 2008
July 1, 2009

Fitch Ratings reports that credit card chargeoffs in June were 10.44%, 62% higher on a year over year basis. 60+ day delinquencies set yet another record high at 4.45% this month after dropping seven basis points (bps) in May. Given delinquency and bankruptcy trends, Fitch expects chargeoff increases to decelerate in the coming quarter, although actual improvements are not foreseen at this time. (Payment News)

Late Payers
July 8, 2009

Credit card delinquencies, based on total dollars outstanding, rose to its highest level ever in the first three months of this year. According to the American Bankers Association's "Consumer Credit Delinquency Bulletin," delinquencies based on total dollars outstanding for the first quarter were 6.60%, compared to 5.52% in the fourth quarter and 4.59% one-year ago. Based on the number of accounts past-due, the figures were 4.75% for the first quarter, 4.52% for the fourth quarter, and 4.51% one-year ago. The ABA also reported the following changes between the fourth quarter and the first quarter: Home equity loan delinquencies increased from 3.03% to 3.52%; property improvement loan delinquencies decreased from 1.75% to 1.46%; indirect auto loan delinquencies decreased from 3.53% to 3.42%; direct auto loan delinquencies increased from 2.03% to 3.01%; marine loan delinquencies decreased from 2.35% to 2.04%; RV loan delinquencies increased from 1.38% to 1.52%; mobile home loan delinquencies increased from 2.96% to 3.70%; and rsonal loan delinquencies increased from 2.88% to 3.47%. (CardTrack.com)

1Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
2000: 3.94%
2001: 4.13%
2002: 4.50%
2003: 4.51%
2004: 4.65%
2005: 3.76%
2006: 3.44%
2007: 3.46%
2008: 4.59%
2009: 6.60%
Source: ABA Delinquency Bulletin

A Look at Prepaid Reloadable Mobile & Utilities Cards in Latin America
July 8, 2009

NovoPayment has announced its regional forecast for prepaid general-purpose reloadable mobile and utilities cards - estimating a potential market of nearly US$160 billion annually by 2015.

According to the company, "the forecast is part of a larger regional study for prepaid cards covering 15 countries - Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Guatemala, Ecuador, El Salvador, Honduras, Nicaragua, Panama, Peru, Mexico and Venezuela - that measured factors such as size of labor force, poverty rates, wages, banking and other metrics based on the company's experience in the field."

According to NovoPayment, the overwhelming majority of mobile customers in Latin America - between 80% and 90% -- are already on prepaid plans, representing a huge business opportunity for service providers and a value-added proposition for users who currently rely heavily on single-use, scratch-off cards.

Linking prepaid general-purpose reloadable cards to mobile and utility services provide low- to middle-income consumers the ability to buy airtime and pay electricity bills, among others, via text messaging, Internet, phone or via scheduled debit, without an underlying bank account. The cards have the appearance and function of debit cards, except that they must be reloaded via a retail network. (Payment News)

Credit and debit card spending falls in New Zealand - report
July 9, 2009

Consumer purchases carried out by New Zealanders using debit, credit and store cards have dropped by 1 percent in June 2009 compared to the previous month, with spending on furniture and appliances registering the most pronounced drop.

Thus, the value of electronic cards transactions in the country has decreased 1 percent compared to May 2009, when it registered a 0.7 percent increase, according to Statistics New Zealand. The decrease, brought about by the continued economic crisis and mounting job losses in particular, has occurred despite cuts in income taxes performed by the government in April 2009. The New Zealand Reserve Bank has also lowered the official cash rate to 2.5 percent in a bid to encourage demand.

Overall, the same data indicates that credit card spending as a percentage of the overall consumer spending has fallen for the ninth consecutive month in June and represents 45 percent of total consumer spending. (The Paypers)

Charitable Giving via Plastic Cards Up 18% in UK
July 27, 2009

Figures published by The UK Cards Association show that donations to charitable organisations on plastic cards reached £1.19 billion in 2008 - up from £1.01 billion in 2007 - an increase of 18%. In terms of the number of donations made on plastic cards there was an overall increase of 13% from 2007 to 2008. Donations on debit cards increased by 16% (up from 13 million in 2007 to 15.1 million last year) while credit card transactions rose 9% (9.6 million in 2007 to 10.5 million last year).

Interestingly, whilst more payments to charities are put on debit cards we tend to donate more on credit and charge cards. Last year the total amount donated on credit and charge cards was £639.2 million and £546.9 million on debit cards. One of the reasons for this is that many people donate online and this is one environment where more people prefer to use their credit card instead of a debit card. However, we would expect the gap to narrow in the future as charitable giving on plastic cards follows the overall trends in the market towards debit cards.

Another way of donating to charities is by using an affinity card. With total spending of £6.7 billion on these cards in 2008 and, on average, 0.25% being the percentage donated to charities, approximately £16.7 million will have been raised through the use of these cards. (Payment News)

Financial Edge
July 29, 2009

A new survey reveals that the average credit card debt of low- and middle-income indebted households in the U.S. is now $9,827. More than 1 out of 3 households reported using credit cards to cover basic living expenses, on average for 5 out of the last 12 months and are now on the financial edge. The Demos research also found that the average interest rate paid on a familiesâ€^TM card with the highest balance was 14.8% with close to 1 in 4 indebted households paying more than 20% interest on their card. Other findings: in the past five years credit card indebted homeowners used an average of $14,344 in home equity to pay down credit card debt and the majority of credit card indebted households cited using tax refunds toward debt reduction and nearly half of respondents cited working extra hours or taking on an extra job in order to get out of debt. (Cardtrack.com)

CARD ISSUER'S CORNER

MasterCard extends PayPass in Turkey
July 1, 2009

MasterCard Europe has partnered with two of Turkey's most prominent retail and banking players to introduce the first credit and contactless 'Tap&Go' ^TM Axess offering in over 170 Carrefour hypermarkets and supermarkets throughout Turkey.

The new card programme, 'Carrefour Axess', combines a number of significant merchant and consumer benefits:

• The card programme will seamlessly merge two of Turkey's mos t successful loyalty platforms: Axess the multi-merchant scheme which allows cardholders to accumulate cash points through purchases at over 160,000 merchants; and Carrefour's proprietary loyalty scheme, Carrefour Plus, with a cardholder base of two and half million consumers. Importantly this will be offered direct from Carrefour through the extension of Akbank's 'Credit Express' branches - the first bank and retail partnership to bring banking services directly into the supermarket environment in the country.

• As a MasterCard card the programme also includes MasterCard's leading contactless PayPass technology and will be the first PayPass co-branding programme to bring contactless payments into the retail sector in Turkey. Over 170 Carrefour supermarkets are already equipped to accept the world's leading Tap&Go^TM technology.

Speed and flexibility is at the heart of the card programme. With the in-store capability offered by Akbank, potential cardholders can benefit from a card instantly issued instore, shopping flexibility through an enhanced loyalty and installment programme and - for purchases of 16 euros or less - the fastest way to pay at the Carrefour till. (Press release)

Citigroup (C) To Jack Up Credit Card Rates On 15 Million Account
July 1, 2009

Citigroup (C) plans to increase fees on credit cards and it will affect nearly 15 million of the bank's customers. The action leaves the federal government in a bind. It owns options to 34% of the firm's shares which means that the Treasury should want the bank to do extremely well for its stockholders. On the other hand, the Administration has been a strong supporter of programs to cut credit costs for consumers.

According to the FT, "Citi's rate increases emerged on the day the government proposed legislation to create a new regulator with sweeping powers on consumer protection."

It is hard to blame Citi for the move. Credit card default rates track the unemployment rate, as a rule of thumb. That means that 10% of card holders will not pay their bills. The largest credit card issuers, mostly big banks, are faced with massive write-offs just as they are recovering from their mortgage-backed securities losses. Combined with more write-downs on commercial real estate, LBO loans, and corporate credit, financial firms will have to book reserves which could force them to go to the capital markets to raise additional money just as they believed that they had put their balance sheets in order. (Payment News)

Discover U.S. Spending Monitor Falls for First Time in Four Months
July 8, 2009

Discover has announced that its U.S. Spending Monitor fell for the first time in four months from 86.2 to 85.6 (based out of 100) finding that "consumer attitudes toward the economy reversed course from the previous three months with more consumers expressing concern over the current state of the U.S. economy. Overall, 59 percent rated current economic conditions as poor, a 4-point increase from the previous month and the first increase since February."

While consumers are clearly concerned over current economic conditions, the number feeling the economy is getting worse remained at a Monitor-low 49 percent in June.
The drop in economic confidence also appeared to have little effect on consumer attitudes toward personal finances. Thirty-three percent currently rate their finances as good or excellent, the same number reported last month.

But the reversal in consumer attitudes toward the economy appears to be affecting discretionary spending intentions. Higher gas prices, along with uncertainty as to whether the economic recession has bottomed out has consumers either holding the line or cutting their discretionary spending intentions in the month ahead.

For more Discover U.S. Spending Monitor survey data, charts and information, please visit http://www.discoverfinancial.com/surveys/spending.shtml .(Payment News)

HSBC introduces electronic Payroll Card service
July 9, 2009

HSBC Bank Middle East has unveiled a Payroll Card service, as a result of a partnership with C3 Card, a UAE-based prepaid card and payroll services provider.

The service will enable customers to process salary payments electronically and employees to access their salaries via a MasterCard-branded debit card. The PIN protected card will have the user's name and passport/labour card number imprinted on it. Users can access the funds at ATMs which are connected to the UAE's network. The
UAE-based Kibsons International, a supplier of fruits and vegetables, has already piloted the service.

HSBC provides a full range of personal financial and wealth management services in the Middle East. These include current and savings accounts, mortgage finance, term deposits and credit cards, financial planning, and investment services. (The Paypers)

Visa glitch hits cardholders with $23 quadrillion charge
July 16, 2009

A technical glitch has led to the statements of some Visa pre-paid cardholders showing charges of over $23 quadrillion for everyday purchases.

The snafu, caused by a programming error at Visa Debit processing services earlier this week, meant around 13,000 transactions were charged at $23,148,855,308,184,500.

Josh Muszynski, from Manchester, New Hampshire, was one customer to get a shock when he checked his statement online, discovering he'd been charged the incredible sum for a packet of cigarettes purchased a few hours earlier at a petrol station.

After two hours on the phone to Bank of America the error was corrected and his $15 overdraft fee was also waived.

In a statement, Visa says: "A temporary programming error at Visa Debit Processing Services, caused some transactions to be inaccurately posted to a small number of Visa prepaid accounts. The technical glitch, which impacted fewer than 13,000 Visa prepaid transactions, has been corrected and erroneous postings have been removed. Importantly, this incident had no financial impact on Visa prepaid cardholders." (finextra.com)

Canada's Interac Association is partnering with Inside Contactless to develop chips capable of handling contactless payments.

Visa tests SMS alert service
July 22, 2009

Visa Europe is trialling a mobile phone-based notification service that sends customers a text message every time their card is used

Card holders will receive an update with the time, location and amount of each transaction to their phones. As well as SMS notifications, users can opt for e-mail alerts or download an application to smartphones.

Visa is currently trialling the real-time alert service with its staff in the UK and is "working closely" with member banks through which it will make the technology available to consumers.

The service will give cardholders constant control of payments and provide peace of mind, claims Visa, which plans to tweak it in the future to allow people to customise the format and content. This could enable users to instantly convert transactions into their home currency while abroad, making it easier to keep on top of budgets.

In the US earlier this year Visa was hit with a lawsuit for allegedly infringing a patent covering the notification and authorisation of transactions via text message. (finextra.com)

Citi streamlines global tech operations
July 22, 2009

As part of Citi's efforts to streamline its information-technology infrastructure, the bank has opened a centre in Singapore that consolidates many of its technological operations.

Despite its woes in the US, the bank has pushed ahead with its technology investment and has opened the first stage of a $220 million project.

The global operations and technology centre, which was opened this week, will be a processing hub for Citi's Asia-Pacific operations, as well as many global businesses. The building, which is situated in Singapore's Changi Business Park, will host processing units for business areas such as global wealth management, securities and fund administration, cash processing and data services. (Lafferty News)

ANZ signs issuing agreement with Amex
July 28, 2009

American Express has announced an agreement with ANZ that will enable the Australian bank to issue cards on its network.

ANZ - which will own the customer accounts and the receivables associated with them - will be able to take advantage of the American Express brand, which is often associated with rewards programmes for high-spenders in the travel and entertainment sector.

The American Express-branded portfolio will be aimed at ANZ's frequent flyer customer base, which will be offered frequent flyer points, point boosters and upgrades for Qantas, Australia's national carrier.

ANZ, which has more than 6 million customers, will issue four American Express-branded products: ANZ Frequent Flyer Classic, ANZ Frequent Flyer Gold, ANZ Frequent Flyer Platinum, and ANZ Frequent Flyer Private Bank.

For American Express, the move is part of its long-term strategy to develop its Global Network Services (GNS) business and partner with more issuing banks. (Lafferty Cards News)

Visa Announces 3Q2009 Financial Results
July 29, 2009

This afternoon Visa Inc. reported financial results for its fiscal third quarter 2009. The company reported adjusted quarterly net income of $507 million (excluding the gain on the VisaNet do Brasil shares) on net operating revenue of $1.6 billion, an increase of 2% over the prior year. Visa's payments volume growth declined 5% over the prior year to $617 billion and total volume, on a nominal basis and inclusive of cash volume, was $969 billion, a 7% decline over the prior year. Total processed transactions, which represent transactions processed by VisaNet through June 30, 2009, totaled 10.3 billion, an 8% increase over the prior year. (Payment News)

MasterCard Announces 2Q2009 Financial Results
July 30, 2009

MasterCard has announced financial results for the second quarter of 2009. MasterCard reported net income of $349 million, up 26.4% year over year. Net revenue was $1.3 billion, a 2.7% increase.

MasterCard's gross dollar volume was down by 0.6% on a local currency basis, versus the second quarter of 2008, to $595 billion. Worldwide purchase volume during the quarter was down by 0.7% on a local currency basis, versus the second quarter of 2008, to $450 billion. US purchase volume declined 8.8% - reporting the largest decline of any of MasterCard's regions. (Payment News)

BANKING & FINANCE SECTION

Bling Nation rings up $8 million in funding
July 2, 2009

US mobile payments outfit Bling Nation has secured $8 million in Series A funding, with $6.3 million coming from lead investor Lightspeed Venture Partners and the remaining $1.7 million raised primarily from Meck.

Founded in 2007, the company enables consumers to pay merchants with the tap of a mobile phone instead of using a credit card or cash.

After tapping the phone at the merchant point-of-sale, the consumer receives an instant text message with the transaction information, an updated account balance and rewards balance. If the rewards balance meets preset thresholds, a customer can pay for their purchase using those rewards.

The company secured its first bank customer earlier this year, when Colorado-based The State Bank went live with the Bling Nation's Payments Service. Marketed as Redi Pay Bling, the system offers a lower-cost alternative to traditional payments networks and accompanying rewards programmes.

Bling Nation says that withing three weeks of implementation, the bank had activated 25% of its customers on the network and opened more merchant accounts in that span than in the past two years combined. (finextra.com)

DoCoMo launches mobile remittance service in Japan
July 2, 2009

Japanese mobile operator NTT DoCoMo is set to launch a new service allowing individual subscribers to remit money to other DoCoMo users via their mobile phones.

DoCoMo customers who employ i-mode, a mobile Internet service provided by the Japanese telecom on the FOMA 3G network, will be able to remit up to around USD 200 (JPY 20,000) per transfer by inputting the payee's mobile phone number.

Upon completion of the transfer, the payee receives a mail notification via their DoCoMo mobile phone and is given the option of depositing the money in a domestic bank account or having the amount credited to their monthly DoCoMo phone bill. The payee can receive monthly remittances adding up to a maximum of USD 2,000 (JPY 200,000).

The DoCoMo mobile remittance service does not require that the payee registers for the service or open a new bank account. In addition, since the payer basically only requires the payee's phone number to make the remittance, no private banking details are exchanged.

The service will not be available to corporate subscribers. (The Paypers)

Citi in Indian contactless m-payments trial
July 3, 2009

US banking giant Citi has teamed with MasterCard, Nokia, Vodafone and ViVOtech to pilot contactless mobile phone payments in the Indian city of Bangalore.

Participants in the 'Tap and Pay' trial can make credit card payments by waving their NFC-enabled mobile phones over contactless readers at the point of sale at participating merchants.

The bank says it is the largest ever marketplace pilot. Up to five thousand customers and 500 merchants are expected to take part. The pilot will also cover NFC-enabled interactive posters and mobile coupon redemptions.

To participate, customers need to buy the NFC-capable Nokia N 6212 classic phone pre-loaded with an application enabled with MasterCard's PayPass contactless technology. They can then download their Citibank MasterCard credit card onto the phone over the air.

Transactions require a PIN validation and payments are automatically charged to the customer's card account through the same network that processes traditional credit card transactions. (finextra.com)

MoBank launches
July 6, 2009

MoBank, a mobile banking service founded by former First Direct and Egg bankers Steve Townsend and Dominic Keen, launches on the Apple iPhone today.

The service works with an existing bank account to let users buy and pay for items and check balances online using their mobile phone. Subscribers use a PIN to instruct the MoBank system to authorise payments direct from their debit/credit cards.

The company says new services will soon be launched that let users manage their money, pay bills, make person-to-person transactions, and transfer cash between accounts. Additional services such as a special date reminder alert, and a budget tracker to help customers keep on top of spending are also in the pipeline.

Initially the tool will only be available to iPhone users but the firm says versions for Blackberry and Google Android handsets will be introduced within a year.

The service will use a bespoke hosting platform from NTT Europe Online while transaction fee services technology from txttrans means that no banking data, card details or PIN are stored on the mobile phone itself.

Yodlee is providing current banking services and Portrait has been tapped for a CRM platform and database. (finextra.com)

Mi-Pay, Small World Financial Services launch global money transfer, prepay phone top-up service
July 6, 2009

UK-based mobile money services provider Mi-Pay has teamed up with Small World Financial Services, a European money transfer services provider, to offer operators a service for mobile money transfer and international prepay phone top-up.

Under the terms of the deal, Mi-Pay's mobile money payment platform is to be integrated into Small World's money transfer hub, to provide a service for domestic and international money transfer. According to the agreement, Small World Financial Services will implement the Mi-Pay Globaltopup service hub to provide customers with an international prepay phone top-up service. (The Paypers)

Orascom Telecom to launch mobile banking service in Pakistan, plans IPO - report

July 6, 2009

Egyptian mobile services operator Orascom Telecom (OT) is set to launch a mobile banking operation in Pakistan, forbes.com reports quoting Reuters.

The same source indicates that OT is also set to list shares in two North African subsidiaries, most probably Tunisia and Algeria, by the beginning of 2010. According to the report, the company is planning to float 20 to 30 percent of its shares in its Algerian and Tunisian subsidiaries via an initial public offering (IPO) and could use the gathered capital for further acquisitions. (The Paypers)

European banks to join forces for the creation of a new debit card system
July 9, 2009

In October 2009, European banks are to form an alliance and take part in a project which aims to create a debit-card system to challenge Visa and MasterCard, according to Deutsche Bank representatives cited by Bloomberg.com.

The project, dubbed Monnet, will include banks from 31 European countries which are expected to join the initiative. The French banks Societe Generale and BNP Paribas, as well as Deutsche Bank are already collaborating on the development of a pan-European debit system which will compete with MasterCard's Maestro and Visa Europe's V PAY. "A duopoly of the two international card companies is an unsatisfying vision for both political and economic reasons for us in Europe," according to Bundesbank board member Hans Georg Fabritius, cited by the same source. (The Paypers)

Iraqi telco and finance firms team on m-banking
July 13, 2009

Iraqi wireless telco Asiacell has inked a deal with Amwal, a consortium of the country's private banks, aimed at letting customers manage their finances through mobile phones.

Under the deal, Asiacell subscribers and the consortium's clients will be able to use their handsets to make interbank transfers, settle bills, make purchases on Visa and MasterCard cards, check account balances and transfer funds. Asiacell's customers will also be able to use the service to purchase credit for their mobile phones. (finextra.com)

Remittance flows to developing countries forecasted to drop 7.3% in 2009
July 14, 2009

Remittance flows to developing countries are expected to be 304 billion US dollars in 2009, down from an estimated 328 billion in 2008, said the World Bank Monday, releasing a new migration and remittances brief to coincide with an International Diaspora and Development Conference running from July 13-14.

In Latinamerica the fall is estimated in 6.9%, mainly because of the slowdown of the construction industry in the US.

The predicted decline in remittances by 7.3% this year is far smaller than that for private flows to developing countries. According to the World Bank, remittances are relatively resilient because, while new migration flows have declined, the number of migrants living overseas has been relatively unaffected by the crisis.

However, sources of risk to the outlook include uncertainty about the depth and duration of the current crisis, unpredictable movements in exchange rates, and the possibility that immigration controls may be tightened further in major destination countries.

Remittances have slowed in many corridors since the last quarter of 2008. In line with a recent downward revision in the World Bank's forecast of global economic growth, the new update (2009-2011) highlights the impact of the present financial crisis on the remittance flows and, describes broad regional and country specific trends.

Remittance flows to Latinamerica have been falling in large part because of a slowdown in the US construction sector. The new forecasts show a 6.9% decline in remittances for the Latinamerica and Caribbean region. However, flows to South Asia and East Asia have been strong; but remittances are expected to decline somewhat in 2009.

India, China and Mexico retain their position as the top recipients of migrant remittances among developing countries. (Merco Press)

Egg hatches mass-affluent card offering
July 15, 2009

Online bank Egg has launched a new credit card for the UK's mass-affluent market at time when issuers are increasingly targeting this segment, according to MasterCard.

The Egg Money World MasterCard, which carries a fee of £1 ($1.61) per month, is targeted at mass-affluent consumers in the UK and will be available from 14 July.

David Lloyd, business leader, affluent consumer credit and charge products at MasterCard Europe, explained that Egg's decision to launch the credit card comes at a time of when competition for affluent customers is very high.

For example, in Lafferty Retail Banking Insider (issue 2008/13, pages 6 & 7), it was reported that a new trend emerging in the mass-affluent cards market was the focus on "experiences" and offering clients VIP access to events, such as fashion shows and dinners with famous chefs.

In response to this trend, Greer said MasterCard is exploring this area and was something that could potentially be added to its World platform.

The Egg Money World MasterCard offers a number of features, such as 1 percent cashback on all purchases at 28.8 million MasterCard locations worldwide, from a minimum of £5 ($8.05) to a maximum of £200 ($322.14) per year.

Deals and discounts at selected online retailers are also offered with the product, in addition to personal travel accident insurance. (Lafferty Card News)

MoneyGram expands multi-currency payout in Romania
July 14, 2009

MoneyGram International (NYSE:MGI), a leading global money transfer provider, announced today its expansion of multi-currency payout in Romania that provides more choices for customers to instantly select euros, local lei or U.S. dollars.

The introduction of U.S. dollar and local lei currency payout in addition to euro payout in Romania demonstrates MoneyGram's continued success in its strategy to enhance its product offerings and provide consumers around the globe with a superior value.

Today, MoneyGram offers local or multi-currency payout options across approximately 80 percent of the countries it serves. MoneyGram serves consumers in Romania through MoneyGram agents Romanian Commercial Bank, ProCredit Bank, Libra Bank, Smith & Smith, OTP Bank, Alpha Bank, Unicredit Tiriac Bank, and Speed Transfer. (finextra.com)

Mobile phone giant O2 moves into personal finance
July 15, 2009

UK wireless telco O2 has set up a personal finance unit and launched two pre-paid cards as it looks to tap into the burgeoning mobile banking market.

The Telefónica subsidiary has partnered high street bank NatWest on the free Visa cards; Cash Manager, for adults and Load & Go, targeted at teenagers.

Available next month, the cards can be topped up online and in stores, with customers receiving real-time balance updates sent to their mobile phone. They can be used in store, online and at ATMs.

O2 says the cards will help people better manage their money and ring-fence disposable income, never spending more than has been loaded onto the card.

Global mobile banking take up is set to soar over the next five years, with the number of people using the technology growing from 20 million in 2008 to 913 million in 2014, according to recent research from Berg Insight.

Contactless mobile payments also offer an opportunity for telcos. O2 has already worked with Transport for London and Nokia to trial a scheme enabling customers to pay for tube journeys using mobile handsets. (finextra.com)

Fifth Third joins Western Union money transfer network
July 20, 2009

Western Union has struck a deal to offer its money transfer services at Fifth Third Bank's 1300 branches in 12 US states.

The agreement is part of Western Union's North America "go-to-market" strategy as it looks to take advantage of the rapidly growing remittance market. The company is expanding its offering, tapping into banking channels such as cash-to-cash, account-to-cash, and account-to-account transfers.

The services will be available to Fifth Third account holders and walk-in customers within the next few months. (finextra.com)

Monitise share subscription raises £5.1m
July 20, 2009

Monitise, the mobile money specialists, announces that at a General Meeting of the Company earlier today, all resolutions in connection with the subscriptions for 73.2 million new ordinary shares at 7p each were duly passed.

The issue price represents a 33% premium to the closing price on 29 June 2009.

Subscription agreements entered into by Visa International Service Association ( "Visa International"), a subsidiary of Visa Inc., the world's largest retail electronic payments network, and others were announced on 30 June 2009 alongside a five year Global Alliance Agreement, with a contract value of $13 million, between Visa International and Monitise.

Visa International is a new investor. Existing investors, UBS Global Asset Management (UK) Ltd and The Capital Group are also participating in the subscription on the same terms.

Subscription monies amount to £5.1m (before expenses), giving the Company a cash position post subscription of approximately £15m. The directors believe that this will provide additional flexibility for the Company to continue to implement its development strategy and grow its business across a number of international territories.

As notified in the pre-close trading update issued on 30 June 2009, preliminary results for the year ending 30 June 2009 will be announced on 25 August 2009. (finextra.com)

India's Syndicate Bank and PayMate team on m-banking
July 20, 2009

PayMate, India's leading mobile commerce company, has partnered with Syndicate Bank, one of India's leading nationalized banks, to provide mobile banking solutions to their customers across over 2000 branches.

This is PayMate's first foray into the lucrative Mobile Banking solution space. While PayMate has till date tied up with 22 leading banks and provided them with its mobile payment services & applications, PayMate will now also be offering holistic mobile banking applications which will include non-financial transactions as well.

Syndicate Bank customers will be able to download a mobile banking application on their GPRS enabled cell phones and this application will allow them to carry out their daily banking functions like funds transfer, stop-cheque, balance enquiry, cheque book request etc. Additionally, they will also be able to use their mobile to pay for mobile recharge, utility bills, movie & flight tickets and other online & retail purchases at over 15,000 PayMate registered merchants across India. (finextra.com)

IT firms gear up to tap mobile banking
July 20, 2009

Increased categories of transactions in mobile banking is expected to be the next big thing in the UAE banking sector and software companies are gearing up to tap into the opportunity, a senior executive of a software firm told Emirates Business.

Raqmiyat ,UAE-based systems integrator, recently came out with a new solution designed to work with the UAE Central Bank's 'Wages Protection System', an initiative by the Ministry of Labour and the bank.

The new software provides an interface for banks and exchange houses to connect to the Central Bank's WPS system based on stipulated file formats, which will facilitate automation across all WPS cycles and help streamline the timely payment of wages to more than four million blue collared employees in the UAE. The WPS system is designed to enable the Ministry of Labour to monitor payment of wages and create a complete database of the workforce.

When it comes to technology, the UAE is at a par with most of the countries worldwide. The past five to six years have witnessed rapid progress on this front. With the banking sector active on introducing the latest of technologies, analysts said "mobile banking is expected to be the next big thing".

Raqmiyat was involved in the development process of image-based clearing introduced in the UAE banks. (Emirates Business)

Payment systems users warn of risks of Sepa failure
July 21, 2009

European business and consumer organisations are warning that plans to create a Single Euro Payments Area (Sepa) are doomed to failure unless payment systems end users are more widely consulted.

In a critical paper on the Sepa Direct Debit scheme - scheduled for introduction in November this year - the Payment Systems End User Committee (EUC) says businesses have little incentive to switch to the new payments instrument.

The Committee, which represents the views of eight major business trade associations, is also calling for an urgent review of the Sepa governance structure.

On Direct Debit, the EUC says that the current scheme proposed by the European Payments Council (CMF) offers fewer services than the existing national schemes. According to the EUC, end users have little incentive to switch to the new system. The position paper instead proposes a "CMF+" scheme offering a basic service coupled with tailored optional services at an extra cost.

The European Commission is currently contemplating the introduction of a final end-date for the migration from legacy national payment systems as a means to stimulate wider uptake of the new Sepa-compliant intruments.

However, the EUC cautions that such a move could destabilise the entire Sepa project.
"No decision on end dates should be taken until the remaining areas of disagreement have been resolved to the satisfaction of end users," states the report. "The setting of arbitrary end dates by legislation would result in a failure of Sepa." (finextra.com)

Citibank Launches Citi Mobile For Smartphones
July 28, 2009

Citibank has announced it is expanding its mobile offering for US consumers to smartphones - including most BlackBerrys, Palm devices and iPhones. The bank says that "now, more Citibank customers can access and manage their bank accounts -- anytime and anywhere -- via their smartphone's mobile browser."

The new Citi Mobile offering allows users of web-enabled mobile devices including BlackBerry(R) smartphones, Palm(R) devices and iPhone(TM)( )devices to easily:

• View Citi account balances and account activity
• Pay bills and set up recurring payments
• Make transfers between Citi accounts
• Locate Citi branches and ATMs
• Connect to Customer Service

Citi Mobile for smartphones provides easy navigation on virtually any device that has a mobile browser and an internet connection. And signing in is easy -- customers enter the same personal User ID and password they would use on their home computer.

With millions of Citibank customers banking online, many visiting the site at least once a week, and more consumers switching to smartphones everyday, Citi Mobile's new offering provides consumers with more choices than ever for quick and easy banking. (Payment News)

Wells Fargo Introduces Online, Same Day Bill Payment
July 28, 2009

Wells Fargo has announced the nationwide availability of its newest online bill pay feature - allowing customers to make "just in time" online bill payments to merchants, such as utility, auto finance and mortgage companies.

According to the bank, the new service helps customers avoid missing payments or making late payments. Wells Fargo has teamed up with Western Union to provide the new same-day service.

Currently Wells Fargo offers same day payment options for a fee with a select group of payees; additional payees continue to be added on an ongoing basis. Wells Fargo teamed up with Western Union for the service.

Wells Fargo integrates customers' bill pay data with optional online tools, such as its online budgeting tool My Spending Report with Budget Watch and archiving service Wells Fargo vSafeSM.

• Wells Fargo's bill pay service presents bills online for nearly 460 merchants, lenders and other billers.
• Wells Fargo's online and mobile bill pay alerts give customers more control by notifying them when bills arrive, if a bill didn't arrive, when a bill is due, when a payment is sent, among other notifications.
• With Wells Fargo Mobile, bill pay customers can schedule payments and pay bills with their mobile device while waiting in line, on a break, or anywhere else they want to access the mobile web or WF.com. (Payment News)

Monitise Americas plans P2P payments strategy
July 28, 2009

Mobile banking and payments provider Monitise Americas plans to launch a peer-to-peer payments strategy and product within the next six to 12 months.

Monitise Americas CEO Lisa Stanton revealed the development while speaking exclusively to Lafferty Cards News. She said the product, which will also feature a peer-to-peer money transfer facility, will enable consumers to conduct payments while they are "on the go".

In terms of other new developments, Stanton said Monitise Americas intends to team up with Everlink, a Canadian payment processor, before the end of the year. She explained: "Everlink is a payments network to credit unions in Canada. We will be connected to Everlink's payments network and then they will resell us to the credit unions they are partnered with."

Stanton's remarks follow the launch of Monitise Americas' mobile money application on the App Store. This will enable iPhone and iPod touch users to perform banking and payment transactions using a single interface - regardless of their choice of mobile operator. The mobile money application is also likely be compatible with other touchscreen devices in the near future, said Stanton.

Commenting on the evolution of the mobile payments market, Stanton said she has been impressed by the uptake of mobile payments this year by financial service providers. (Lafferty Cards News)

Masabi and Mi-Pay target developing world with m-payments system
July 30, 2009

An SMS-based mobile payments system designed to work in remote regions of Africa with limited communications infrastructure has been launched by Masabi and Mi-Pay.

The vendors say their Street Vendor application allows mobile operators, banks and other providers to offer their services in remote regions without additional investment in infrastructure or hardware, using the existing mobile phone base.

The technology works in any part of the world that has SMS reception, which means that unlike mobile operator-led payment services, it does not require new SIM cards to be issued or integration with local network infrastructure.

In addition, the application is compatible with many standard handsets, up to seven years old, and doesn't rely on smartphones or 3G and GPRS connectivity which are not always available in rural areas.

The application enables handsets to act as an electronic point of sale terminal, enabling street vendors to use their phones to offer people services such as international remittances, micro-loans and insurance.

For transactions, the handset communicates with a central server for authentication and approval over encrypted SMS in areas where other data connections are unavailable. The system complies with all international anti-fraud and money laundering guidelines, says Masabi.

Street Vendor is already live in Sudan with other roll-outs planned across the Middle East and North Africa. (finextra.com)

Australia plans first Islamic retail bank
July 30, 2009

Australia could soon have its first Islamic retail bank if plans by the Muslim Community Cooperative Australia (MCCA) go ahead.

The institution's chairman, Akhtar Kalam, recently stated the MCCA intends to become the first full-service retail bank in Australia to operate according to the principles of Islamic finance.

Speaking at a recent conference, Kalam said that more consumers have been looking for banking alternatives as a result of the financial crisis. He added that MCCA is in discussions with the Australian government about how it could become a small retail bank and expand by offering more Islamic financial products to consumers. As a cooperative, MCCA is currently owned by its members who share in the profits of the institution.

Australia's assistant treasurer, Nick Sherry, also attended the Islamic banking and finance symposium. He noted that Islamic finance - which does not allow the charging of interest - is an area of growing appeal in Australia at the retail banking level for both Muslims and non-Muslims.

Chaaban Omran, MCCA's managing director, said that the plans for the Australian Islamic retail bank would be modelled on the Islamic Bank of Britain, which claims to be the first full-service Islamic retail bank in the UK.

MCCA was founded in 1989 and is one of the leaders in Australia for Shariah-compliant finance and investment. MCCA has worked in the area of mortgages and has enabled Muslims in Australia to own their own homes with a Shariah-compliant product that means they do not have to pay interest. (Lafferty Card News)

EC issues guidelines for bailed-out banks
July 30, 2009

The European Commission (EC) has outlined new guidelines that will force some banks receiving state aid to restructure in order to become self-sufficient.

The rulings mean that retail banks that have received government aid may be forced to sell assets and put their acquisition plans on hold before their bailout requests are approved by European regulators.

The reforms aim to address the unfair competitive advantage that some retail banks have because they have received government bailouts.

As part of the EC's plans, banks will have to perform stress tests and come up with long-term strategies that allow them to become free of government support. Actions that the banks may have to take include revising their business models, disclosing and dealing with their bad assets, withdrawing from loss-making activities, being taken over by a competitor, or closing some business lines.

Bailed-out banks, and their shareholders, would have to bear responsibility for the bank's past performance and contribute to the bank's restructuring with as much of their own resources as possible.

A total of 70 banks in the EU have received government assistance. The proposals are due to come into force in December 2010. (Lafferty Card News)

Chase Completes Conversion of 7.6 Million WaMu Accounts in Seven States
July 31, 2009

Chase announced today it has successfully upgraded products and technology in seven states to link 694 former Washington Mutual branches with about 3,550 Chase branches.

The conversion of 7.6 million accounts in Florida, Georgia, New York, New Jersey, Connecticut, Texas and Illinois represents $40 billion in deposits. Nearly 300,000 loan accounts with approximately $15 billion in balances were also converted to Chase systems.

To ensure high-quality customer service, more than 2,500 Chase tellers and bankers traveled from around the country to work side by side with 17,000 counterparts in the seven states, supplementing 100,000 hours of training on the new software and hardware.

The seven-state conversion is the second of three retail conversions to bring all former WaMu branches onto Chase's computer systems - and under the Chase brand. By the end of the year, customers will have full access to 25 million checking accounts at any of more than 5,100 Chase branches and 14,000 Chase ATMs across the country.

JPMorgan Chase acquired the banking operations of Washington Mutual from the Federal Deposit Insurance Corporation in September, 2008.

The conversion, completed over the past weekend, follows two other major Chase conversions:

• May's consumer banking conversion of 2.9 million accounts in Washington, Oregon, Idaho and Utah
• March's conversion of 20 million credit card accounts onto Chase computer systems

Both increased Chase's effectiveness for customers while reducing costs. (Business wires)

Fiserv launches Mobile Money, Mobile Money FastTrack for mobile banking
July 31, 2009

Fiserv Inc. announced this week its new mobile financial services solutions Mobile Money and Mobile Money FastTrack. The solutions were developed with M-Com and incorporate M-Com's RenderRight, a new rendering engine that customizes the mobile-banking interface to a user's specific mobile device.

RenderRight accesses a database of information about specific mobile devices to automatically populate pertinent service attributes onto the mobile device - ensuring the user has an accurate view of the application, with text or icons located in the correct area of the screen, and that all functionalities displayed are supported by the device.

RenderRight can be used on BlackBerry smartphones, the Apple iPhone and the Palm Pre, to name a few.

Mobile Money from Fiserv is the industry's most complete mobile banking and payments solution, supporting consumers on all three mobile access modes: mobile browser, SMS (text messaging) or a downloaded application. Mobile Money can include functions such as balance inquiries, transaction history, account transfers, bill payments and one and two-way account alerts, and it offers both online and offline enrollment capabilities. (ATM Marketplace)

FRAUD & SECURITY MATTERS

France: payment card fraud slightly on the increase in 2008
July 9, 2009

In 2008, payments with credit and debit cards in France registered fraud levels of 0.069 percent, as compared to 0.062 percent in the previous year, Nasdaq reports.

According to the same source, citing a Bank of France representative, fraud levels on domestic transactions remained constant during the period under review, while the fraud rate for international transactions stood at 0.427 percent. In the UK, in 2008 the fraud rate stood at 0.12 percent. (The Paypers)

'Dynamic' security system developed as cash card fraud spirals out of control
July 16, 2009

The cost of plastic card fraud in Britain is spiralling out of control, forcing banks and credit card companies to develop a new generation of 'dynamic' cards with constantly-changing passwords.

Card fraud cost the UK £610million last year - up by a massive 43 per cent in just two years - and more than three quarters of all offences now involve internet, telephone or mail order shopping where chip-and-pin technology currently offers no protection.
Latest crime figures show the introduction of chip-and-pin technology three years ago has failed to curb the dramatic rise in theft and fraud involving cards as criminal gangs become more sophisticated and imaginative in their tactics.

Card companies stung by the crippling losses are now experimenting with a new design of high-tech plastic card featuring a built-in miniature keypad and tiny display screen.

When shopping on-line, a customer has to enter their normal four-digit PIN number into the card itself which then flashes up an eight-digit number - valid for only one transaction - which the customer enters onto the website to prove they are the rightful owner of the payment card.

Card providers hope that the elaborate and costly system will help reduce so-called 'card not present' fraud from the fast-growing on-line and telephone shopping sectors.

Today's crime figures show there were a total of 2.8million fraudulent card transactions last year, up four per cent year-on-year, and the proportion of cardholders who are victims has risen from 3.7 to 6.4 per cent in the past three years.

Card not present fraud accounts for 77 per cent of all incidents - almost 2.2million last year - and losses rose by 13 per cent to £328million.

Losses from counterfeit cards rose by almost a fifth to £170million, while card identity theft, in which fraudsters apply for a card using a stolen identity or take over somebody else's account, rose by 39 per cent to £47.4million.

Criminal gangs are also side-stepping chip-and-pin protection by cloning cards in the UK and using illegal copies in foreign countries which have not yet adopted chip-scanning technology.

The only category where fraud declined last year was in use of lost or stolen cards in shops, where losses have fallen from £68million to £54million since chip-and-pin technology went live in 2006.

A spokesman for the UK Cards Association trade body said the figures were 'not good', but insisted they should be seen in the context of the massive rise in on-line shopping.
Between 2001 and 2008, card-not-present fraud soared by 243 per cent from £95.7million to £328.4million.

But over the same period the total value of on-line shopping in the UK leapt by 524 per cent, from £6.6billion to £41.2 billion.'

Both Visa and MasterCard have introduced password protection system for on-line shopping in the form of the 'Verified by Visa' and 'MasterCard SecureCode' systems, under which customers must enter a pre-registered password when buying goods through a website.

But currently barely a quarter of Britain's 145million credit or debit cards are covered by the schemes, and many on-line retailers are not yet registered.

Visa is experimenting with what may become the next generation 'dynamic password' credit card technology. Cards are of standard credit card size and each carries a small battery which lasts three years, powering a 12-button keypad and tiny digital display. (Mail Online /Payment News)

India to roll out large-scale biometric ID cards initiative Monday
July 20, 2009

The Indian government has launched the Unique Identification Authority of India, a new initiative looking to create a centralised identity database and assign unique, verifiable identification numbers to all Indian citizens.

The new government body is chaired by Nandan Nilekani, founding member of Infosys Technologies, and aims to issue all Indian citizens with a biometric smart card containing such personal details as an individual's name, sex, fingerprints, credit history, address, marital status, photo, identification marks and criminal background information (if any). Currently, an Indian citizen can be issued with up to 20 documents which can serve as proof of identity, however none of these documents are universally valid.

The details on the biometric cards will be linked to a centralized online database. The cards are to serve multiple purposes, serving both as user ID and voting ID, thus signaling a move towards more efficient e-governance structures. (The Paypers)

FSA fines HSBC units £3.2m for losing customer data
July 22, 2009

The Financial Services Authority has hit HSBC with fines totalling £3.2 million for security failings at three units that led to the loss of sensitive customer data, putting thousands at risk of identity theft.

In April 2007, HSBC Actuaries lost an unencrypted floppy disk in the post, containing the personal information of 1,917 pension scheme members, including addresses, dates of birth and national insurance numbers.

Despite a July 2007 warning by the bank's insurance compliance team about the need for robust data security controls, in February 2008 HSBC Life lost an unencrypted CD containing the details of 180,000 policy holders in the post.

The FSA says the units did not have adequate systems and controls in place to protect their customers' confidential details from being lost or stolen.

An investigation by the watchdog revealed that large amounts of unencrypted customer details had been sent via post or courier to third parties. Confidential information about customers was also left on open shelves or in unlocked cabinets and could have been lost or stolen. In addition, staff were not given sufficient training on how to identify and manage risks like identity theft.

HSBC Life was fined £1,610,000, HSBC Actuaries and Consultants £875,000 and HSBC Insurance Brokers £700,000. All three firms agreed to settle at the early stage of the investigation and qualified for a 30% discount. (finextra.com)

Payment card fraud trends revealed
July 28, 2009

Almost one in five consumers have experienced credit or debit card fraud in the past five years, according to payments software provider ACI Worldwide.

The provider surveyed more than 2,400 consumers in Australia, Brazil, China, Dubai, Germany, Singapore, the UK and the US, and found that 18 percent of those questioned have been victims of credit or debit card fraud in the last five years.

Some 22 percent of respondents would change financial institutions, and a further 27 percent would consider changing financial institutions, if they or someone they knew was hit by card fraud, stated the research.

The survey also highlights variations in fraud trends around the world. For example, in the US and the UK, 27 percent of respondents have been hit by card fraud in the past five years, compared to seven percent in Dubai, eight percent in Germany and 15 percent in Australia, China and Singapore.

David Nussenbaum, vice president and product line manager at ACI Worldwide, said the international research it has conducted shows that although card fraud trends vary around the world, it is still a persistent problem for banks. (Lafferty Cards News)

MERCHANTS' CONCERN

The Home Depot to Accept MasterCard PayPass Contactless Cards
July 27, 2009

MasterCard has announced that The Home Depot, the world's largest home improvement specialty retailer, will begin accepting MasterCard PayPass cards at its 1,974 retail locations across the United States.

Consumer preference for contactless forms of payment is on the rise. As of Q1 2009, over 55 million PayPass-enabled cards or devices had been issued, more than doubling the number of cards and devices in circulation around the world in one year. In addition, according to MasterCard research, 41 percent of consumers say they use cash less often today than they did two years ago. Of the consumers who have a PayPass-enabled card or device, 77 percent say they use it as their primary form of payment. (Payment News)

TECH NEWS

RFID will be in all new mobiles by 2010, says Ericsson
June 24, 2009

All new mobiles will be packing a RFID chip by summer 2010 - ultimately opening up the possibility of your phone also becoming the keys to your car or your house.

That's the prediction of Ericsson's VP of systems architecture, Håkan Djuphammar, speaking at the mobile infrastructure company's Business Innovation Forum in Stockholm on Tuesday.

Djuphammar said devices with RFID chips will have a secure environment on the SIM card where "trusted identities" or "secure elements" can be downloaded - enabling the phone to take on other roles, such as the keys for your car or house, or a credit card or concert ticket. He said Ericsson is currently working with a utilities company that has 700 separate unmanned facilities and around 15,000 keys - a logistical nightmare it wants to eliminate via the use of RFID-enabled mobile phones.

Using RFID in this way would enable a mobile to be assigned to open a door for a certain period of time only - meaning the company could better manage access to its facilities, while also replacing the hassle of dealing with thousands of physical keys.

Mobile phones could also soon become instruments of fraud detection. Djuphammar said credit card companies could make use of mobile user location data and IP mapping to ascertain whether a credit card transaction is taking place in the vicinity of the official card holder and thus judge whether that transaction is likely to be genuine or not.

Another example of leveraging location data is to create real-time road traffic maps generated by analysing the speed of mobile phone base station hand-off to ascertain how fast cars are travelling on roads. This data could then be sold to GPS device companies enabling them to provide dynamic travel information to motorists.

Djuphammar said selling access to mobile user information in this way would open up new revenue streams in a "win win" scenario for all parties involved - the end user, the operator and the broker who manages the sharing of that user data. (cnet.uk)

OTHER NEWS & ISSUES

NYCE Finds Consumers Interested in Secure Online Payments
July 1, 2009

NYCE Payments Network has published results from a consumer survey finding that "consumers who limit their online shopping say they would make more purchases online if their financial institution offered them a safe payment method." A summary presentation on the survey findings is available online.

The research, conducted by marketing research firm Analytica Inc., surveyed 2,608 consumers for their attitudes about shopping online and their reasons for choosing the payment methods they use. The findings indicated that consumers remain concerned about the security of their personal information when shopping online.

The NYCE study also asked whether respondents would be interested in trying a secure payment method offered by their financial institution. Even those who rarely or never shop online now indicated interest in such a solution:

• Eighteen percent of those who had never purchased anything online indicated they would likely try online shopping using a secure payment method offered by their financial institution.
• Among those who rarely shopped online, 27.6 percent indicated they would likely make more purchases using such a method.
• Nearly half (49.9 percent) of the frequent Internet purchasers who were reached for the survey online indicated they would consider replacing their current method with one offered by their bank or credit union, as long as they felt it was safe and secure.

In 2008, NYCE introduced SafeDebitTM, a secure Internet purchase solution. The SafeDebit solution enables consumers to pay for Internet purchases directly from their deposit accounts without disclosing their debit card information online. The system validates shoppers through their online banking credentials, and generates a pseudo card number for one-time use on a merchant's site. (Payment News)

EBA Clearing banks launch direct debit implementation forum
July 1, 2009

Future participants in the Sepa Direct Debit (SDD) Services of EBA Clearing convened today to launch an implementation forum. The central objective of the forum is to ensure a smooth start-up of the EBA Clearing SDD Services and promote commercial development of the SDD Core and B2B payment instruments.

The EBA Clearing SDD Services are scheduled to go live on the company's PE-ACH platform Step2 on November 2 2009. EBA Clearing says it is already actively preparing for the launch, with 68 banks committed to using the Core SDD service. Of these, 45 have also signed up for its business to business SDD service.

The clearing body says the SDD Implementation Forum will serve as a communication platform for banks participating in the Step2 SDD Services. It will allow for regular exchange on SDD matters in the months preceding and following the go-live of the services.

The new EBA Clearing forum will also support the Step2 SDD community in developing enhanced business practices and value-added services around the Step2 SDD offerings in a direct dialogue. In this context, a particular focus will be placed on evolving the Step2 SDD B2B Service in order to help the banks roll out B2B products of great commercial value to their corporate customers.

The Sepa Direct Debit Services Implementation Forum of EBA Clearing convened for the first time at EBAday, the European banking industry's key payments event. This initial meeting will be followed by a series of conference calls and a meeting scheduled in preparation of the run-up to the November launch date as well as the first months of operation. (finextra.com)

Paysafecard teams with Caixa Galicia to sell pre-paid vouchers at ATMs
July 3, 2009

Europe's leading online payment method provider paysafecard has teamed up with the Spanish bank Caixa Galicia and the Spanish processing partner TelePay to widen its distribution channels.

This unique, pioneering service enables customers to purchase the prepaid voucher for the Internet at any of the bank's cash machines. The process is as easy as withdrawing money, making it a safe and convenient option available 24/7.

Now reaching 20 countries, paysafecard is the leading online prepaid payment solution enabling web-shoppers to make purchases on the Internet in a matter of seconds, without disclosing bank details or personal data. (Press release)

Latin American smartphone market to reach 150 million handset units by 2014 - study
July 3, 2009

The Latin America smartphone segment is set to represent an opportunity of 150 million handset units by 2014, a research report indicates.

The main reasons for the forecasted expansion of the Latin American smartphone market are the growing interest in smartphones manifested by operators, the intensified competition among vendors and the significant potential for growth in Latin America compared with other regions. According to the research, at present the Latin American market represents merely 3 percent of the total handset unit sales in 2008, however the segment is expected to grow from 7 million smartphones sold in 2009, representing 5.4 percent of total handsets sales, to 48 million in 2014, or 30 percent of the total by 2014.

The study was carried out by research and technology analysis company Pyramid Research, the telecom research arm of the Light Reading Communications Network. (The Paypers)

Internet Subscribers Rise 9pc
July 5, 2009

MUSCAT - The number of Internet subscribers in Oman grew by more than nine per cent in the first four months of the year, according to statistics released by the Ministry of National Economy. Their count rose to 87,633 from 80,167 at the end of last year, up 9.3 per cent.

Mobile phone subscribers totalled 3.4 million, compared with 3.2 million, an increase of 5.4 per cent, with pre-paid customers accounting for three million. The number of land line connection recorded a 1.2 per cent increase to 270,708 from 267,475. Post-paid subscribers totalled and pre-paid customers 50,525. (Khaleej Times)

China's Alipay Reports Over 200 Million Users
July 8, 2009

Chinese online payment platform Alipay has announced that the company has gained over 200 million users, exceeding the world's largest e-commerce payment platform Paypal.

According to news on Sohu.com, at the end of August 2008, the number of Alipay users reached 100 million. It took five years for Alipay to accumulate the 100 million users since it first appeared on Taobao.com in October 2003. During the past ten months, the number of Alipay's users further increased from 100 million to 200 million.

Prior to this, the world's largest third-party payment platform Paypal said it had about 180 million users in 190 countries and regions around the world. With the 200 million users, Alipay exceeds Paypal for the first time to become the world's largest third-party online payment platform by user scale, and its users are mainly from the Chinese market.

Alipay's rapid development has close relationship with the fast growth of the number of Chinese netizens and the development of the Internet economy of the country. Statistics released by China Internet Network Information Center show that by May 2009, China had 320 million netizens and about 62.5% of these netizens are users of Alipay. In addition, the number of Chinese netizens is expected to reach over 600 million in the next two years. (Payment News)

Google's new operating system to take on Microsoft
July 8, 2009

Google is developing a new operating system for laptop computers in its boldest challenge yet to Microsoft's control over people's computing experience.

The new operating system will run through Google's nine-month-old Web browser, Chrome, according to a post late Tuesday night on the Mountain View-based company's Web site.

Google plans to introduce the operating system during the second half of 2010.

The new operating system is being designed for "netbooks," a low-cost, less powerful breed of laptops that is becoming increasingly popular among consumers primarily interested in a having a computer to surf the Web. The Chrome browser could threaten Microsoft's Windows system, which has been running most personal computers for the past two decades. (AP)

Romania: e-commerce transactions worth over EUR 43 million in H1 2009
July 8, 2009

During the first six months of 2009, Romanian shoppers made 570,000 payment transactions on the internet reaching EUR 43.5 million in value, up 68 percent as compared to the corresponding period of 2008, wall-street.ro reports.

Data indicates that the travel and transportation sectors registered the highest growth in the number of transactions year-over-year (158 percent), followed by telecommunication and services (85 percent) and non-IT e-tail (67 percent), while the online sector registering negative growth rates is the IT e-tail segment (down 2 percent). Online transactions made with banking cards have registered a slowdown in terms of growth at quarterly levels, from 18 percent at the end of Q1 to 4 percent at the end of Q2, while online sales for Q2 climbed 34 percent as compared to the previous quarter, reaching EUR 25 million.
Statistics have been released by RomCard, the Romanian provider of services for card payment systems. (The Paypers)

eBillme Introduces Cash Back Rewards
July 9, 2009

eBillme has announced it will give consumers 1% cash back for every purchase made using its cash checkout option. According to the company, "in order to qualify, online shoppers select eBillme for checkout at one of over 800 online merchant sites offering the credit card alternative payment option. Consumers can then sign-up for eBillme's cash back rewards and immediately start earning 1% cash back for every order. Once $10 in rewards has been earned, the cash can be redeemed on eBillme merchant sites, or shoppers may choose to continue earning before redeeming." (Payment News)

Australia: first market for PayPal developer program rollout after US
July 10, 2009

PayPal has selected Australia as the next market for the introduction of its developer program, after its recent launch in the US, itwire.com reports. The new program allows developers to access technical tools, applications and online payments resources, as well as integration and education training resources via its developer portal, the PayPal developer certification and by taking part in training seminars called Developer Days. The certification enables accredited Australian developers to get listed on a certified developer directory to connect them with potential customers, according to the same source. After receiving PayPal certification, developers will be able to display the PayPal Certified Developer logo on their emails and website. (The Paypers)

IBM in 7-year biometric passport deal with UK government
July 13, 2009

US computer technology and IT consulting corporation IBM has entered a seven-year agreement to provide the UK government with the core elements needed for the latter's plan to issue biometric passports.

Under the deal, IBM is also set to provide a replacement for the UK Border Agency's (UKBA) Immigration and Asylum Fingerprint System (IAFS), which currently records and holds biometric data collected from UK visa applicants. The contract is worth an estimated GBP 265 million and includes IBM providing both UKBA fingerprinting capabilities as well as management of the database which will store the facial images and fingerprints needed to align UK passport requirements to the international standards.

For the development of the project, IBM is set to collaborate with information technology services company Atos Origin, which will provide systems integration and operations support, as well as with Sagem Sécurité, which will provide biometric services and software.

The next generation of UK passports is set to be issued in 2011. (The Paypers)

Corporates crying out for remittance data - AFP
July 14, 2009

US corporations are overwhelmingly supportive of bank moves to incorporate remittance information in wire transfers, according to a study by the Association for Financial Professionals.

Ninety-five percent of the 331 respondents to the AFP survey believe remittance information would be valuable to their organisations if it were made available in the wire transfer message. The absence of supporting information in the past has hindered attempts to boost straight-through processing rates between bank cash management platforms and corporate treasury systems.

Both the public Fedwire Funds Service and privately-held Chips network have committed to expanding their messaging formats to provide remittance information with wire transfers by late 2010.

As the new format comes onstream, businesses will be able to accurately identify incoming payments and post them to the correct accounts without manual intervention and research. The initiative is likely to boost wire transfer volumes, says AFP, steering companies away from alternative solutions and strengthening the ties between banks and their corporate customers. finextra.com)

Interac partners with Inside for Canadian contactless chips
July 15, 2009

Canada's Interac Association is partnering with Inside Contactless to develop chips capable of handling contactless payments.

The Canadian banking industry is currently one-year in to a long-term programme to replace mag-stripe cards with chip and PIN technology. Interac says the introduction of contactless payments will open up new territory for bank cards to replace small-ticket cash payments at the check-out.

Shyam Krishnan, industry analyst at Frost & Sullivan says the cash replacement market has been difficult to penetrate in the past due to the lack of the right technology at the right price. (finextra.com)

Consumer Expectations
July 16, 2009

The latest barometer of consumer attitudes and spending went into the toilet this month. Americans are apparently waking up to the notion that the U.S. faces a lengthy, drawn-out recovery. The RBC "CASH (Consumer Attitudes and Spending by Household) Index" dropped to 22.4 for July, an 11.9 point decline from the prior month. The Index is composed of four sub-indices: "RBC Current Conditions Index"; "RBC Expectations Index"; "RBC Investment Index"; and, "RBC Jobs Index."

The "Current Conditions Index" for July declined to 23.3 from June's 23.8. The "Expectations Index" plunged sharply, dropping 36.1 points to 4.8, compared to 40.9 in June. The "Investment Index" showed little movement this month, standing at 30.9 for July. Despite the unemployment rate reaching the highest level in 26 years, the "Jobs Index" for July saw a minor uptick to 50.5, up 3.8 points from the 46.7 observed in June. For more information visit: www.rbc.com/newsroom/rbc-cash-index.html (Cardtrack.com)

PCI council sets out wireless security guidelines
July 20, 2009

The Payment Card Industry Security Standards Council (PCI SSC) has published guidelines for retailers on securing wireless networks.

The council set up a special interest group to look into wireless network security for card transactions after the technology was implicated in several data breaches, including the TJX case.

The group of over 40 organisations - including POS vendors, network security companies, acquiring banks and large merchants - is aimed at firms that store, process or transmit cardholder data that may or may not have deployed 802.11 wireless LAN technology as well as assessors that evaluate PCI DSS compliance.

The group has identified nine applicable requirements for PCI DSS compliance in relation to wireless networks. These include making sure passwords are not on default, ensuring strong authentication and setting specific wireless usage policies.

Companies should also ensure they don't allow the copying, moving, or storing of cardholder data onto local hard drives when accessing it via wireless access technologies. The paper also says firms must separate wireless networks that process or store card data from those that do not.

The PCI SCC has set up another three special interest groups, covering scoping, virtualisation and pre-authorisation, which will publish their findings soon.

You can read the wireless guidelines here. (finextra.com)

Payter to roll out m-payment readers
July 20, 2009

Dutch mobile payments provider Payter has launched the P10 and P25 contactless readers which integrate serial, USB and TCP/IP connection into a single device.

Designed for mobile commerce services, the readers support payment, loyalty and ticketing. The Payter P25 and P10 are based on an ARM processor, allowing for multiple applications and they come with a provision for SAM module and GPRS interface, enabling connections for payment and transit schemes. P25 can be incorporated into turnstiles, parking terminals and vending machines, while P10 can be placed on countertops or wall mounted for drive thru, box office windows and more. (The Paypers)

Regulatory threat hangs over Turkey's innovative issuers
July 21, 2009

Turkey's propulsion into one of world's most profitable and dynamic credit cards markets has been one of the big success stories in retail banking over the last few years. This ‘rags to riches' story has seen the country's cards market rise from obscurity and the lows of 2001 financial crisis, into the third-largest market in Europe in terms of number of credit cards.

Indeed, while the Lafferty Group has been monitoring and reporting on the success of Turkey's credit cards market over the last couple of years, it is still worth mentioning some of the top line figures to label the point: 43.4 million credit cards up from 15.7 million in 2002, POS credit card spend of $108.9 billion, and pre-tax profits of $1.9 billion, are just some of the highlights for 2008.

At the heart of this triumph is an industry that is not afraid to innovate. Rather than simply mimic existing models in other cards markets, issuers have combined the experience and know-how of their international partners and owners, whilst leveraging local conditions.

For example, with an average population age of under 28, Turkish issuers have seized the opportunity to appeal to the country's young and tech-savvy population by introducing some of the latest credit card payment technology - from the first contactless and textured credit cards in Europe, to stickers infused with chip technology which can be attached to iPods and used for payments.

Unable to compete on price, due to traditionally high base rates, issuers have adapted to concentrate their efforts on developing sophisticated reward and loyalty programmes to help bolster spending and borrowing. As a result, Turkey has some of the most advanced and lucrative rewards programmes found anywhere in the world. The competition among issuers to sign up merchants and develop special privileges for cardholders is fierce, and is highlighted by recent trends whereby larger issuers such as Yapi Kredi and Garanti Bank license out their rewards programmes to smaller issuers who are unable to compete at the merchant level.

Unfortunately, despite this seemingly glowing review, it's not all good news for issuers in Turkey, with the credit cards market arguably becoming a victim of its own success. Faced with the strong and sustained growth in credit card debt, rising albeit manageable non-performing loans, as well as memories of the 2001 financial crisis, Turkish authorities have adopted a hands-on approach to regulation. In 2009, the government made its latest intervention by introducing restrictions on the amount of annual fees that can be charged. It is also currently circulating proposals that will introduce a central credit limit for consumers, meaning if they have multiple cards, the collective limit will not be able to exceed the central total. This could have considerable affect on the future profitability of the Turkish credit cards market. (Lafferty News)

PayPal Launches Global Payment Platform for Developers
July 23, 2009

PayPal has announced plans "to open its payment platform to third-party developers with the release of new APIs (Application Programming Interfaces) that allow developers to embed PayPal's secure global payment system into their applications and platforms. In opening up the PayPal platform, developers can now create new ways to send and receive payments for services beyond traditional e-commerce. According to a recent McKinsey report, the global payments market represents a $30 trillion opportunity."

PayPal has spent over a decade creating a secure, global payments network for e-commerce and person-to-person transactions, which seamlessly integrates 27 financial networks, 15,000 local banks, 190 global markets and supports 19 currencies.

Several developers have integrated PayPal's new APIs as part of a beta program. Some of these companies include Twitpay, a Twitter-based payment service; LiveOps, with its new on-demand workforce service called LiveWork; and Microsoft's Windows® Azure^TM platform, a cloud development environment.

For more information on the PayPal platform, visit http://www.x.com (Payment News)

Hypercom Brings mobile Self-Service Ticketing to Germany's Railways
July 28, 2009

Hypercom Corporation (NYSE: HYC) today announced that three of the major regional rail transit operators in Germany are now using Hypercom's Artema Modular unattended payment terminals with GPRS to speed ticketing in more than 370 trains serving over 200 million commuters and other travelers per year. The PCI-approved devices accept both debit and credit cards. The installation was recently completed at key transit hubs served by Abellio, Rheinbahn and Westfalen Bahn-operated trains.

Hypercom teamed with leading system integrators Atron Electronic GmbH and ICA Traffic GmbH.

Artema Modular, Hypercom's best-in-class unattended card payment solution, was first introduced at the end of 2005, and can now be found in self-service machines deployed in Europe, the Middle East, Asia Pacific and North America. (Press Release)

Card News

Cash and card use remain strong by U.K. cardholders at ATMs and POS
June 8, 2009

Recent research conducted by the U.K. Cards Association shows that 317 million overseas transactions were conducted with cards issued in the United Kingdom - totaling just more than 3 percent of all transactions on U.K. cards.

According to a news release, in 2008, Britons used their plastic for £27.8 billion in overseas transactions - £19.9 billion on credit and debit card purchases and £7.9 billion on cash taken out of cash machines. This was up just more than 10 percent from the total in 2007.

The value of these overseas transactions for 2008 breaks down into £15.1 billion on credit/charge cards, £12.4 billion on debit cards and £0.3 billion on ATM-only cards.

Fraud abroad on U.K.-issued cards totaled £230.1 million in 2008 - an increase of 11 percent from 2007, when it totaled £207.6 million.

In-country, the use of debit and ATM cards also was strong in 2008. According to the association, 71 percent of all cash acquired by U.K. consumers came from ATMs, and 2.9 billion ATM cash withdrawals were made last year - equal to 91 withdrawals per second.

Cash-payment volumes are expected to fall 27 percent over the next 10 years, and if current trends persist, 2010 will mark the first time debit-card spending overtakes cash spending, based on value of the total transactions.

That written, the number of ATM withdrawals continues to rise and is forecast to peak in 2011. Consumers are increasingly using ATMs for withdrawing cash, where previously they would have withdrawn money in bank branches or at post offices; five years ago only 54 percent of cash came from ATMs. Last year, 71 percent of cash was acquired that way. This shift has been driven by an increase in the availability and number of ATMs in the U.K., as well as the migration of payment for state benefits and pensions to automated methods.

U.K. ATMs paid out £192 billion in 2.9 billion transactions in 2008. By contrast, in 2008, debit cardholders made 5.5 billion purchases and spent £247 billion on their cards. (ATM Marketplace)

EPAY introduces debit card for personal, business usage
June 9, 2009

Panama-based online payment services developer EPAY has launched an EPAY debit card for both individuals and business owners.

The new card incorporates POS transaction and online purchase capabilities, it can be used as a payout card and it also allows cardholders to send and receive money from around the world.

EPAY is engaged in financial services, payroll services, e-wallet services, money transfer services, electronic payments processing, debit cards issuance, and other related activities. (The Paypers)

April Debt
June 9, 2009

Consumer revolving credit, mostly credit card debt, continued its downward trend in April, posting its eighth consecutive monthly decline and its third straight month of double digit contraction. Since peaking at $977 billion in the third quarter, Americans have chopped-off about $46 billion in revolving credit. According to new and revised data released by the Federal Reserve, revolving credit now stands at $931.0 billion and declining at an 11.0% annual rate. In March, revolving credit declined to a revised $939.6 billion reflecting an annual contraction ratio of 11.2%. February posted the largest contraction over the past eight month, dropping nearly $13 billion, declining at an annual rate of about 14%. Lower credit limits, reduced personal income and a building aversion to personal credit continue to be cited as factors for the sluggish growth. Bank credit card debt (excluding store and gas credit cards) at the end of the first quarter was about $800 billion or roughly 85% of total revolving credit, according to CardData (www.carddata.com). Store and gas credit cards had about $105 billion in outstandings at year-end 2008. At the end of March, Americans were $2524 billion in debt, excluding home mortgages.

                                                    REVOLVING CREDIT HISTORICAL ($billions)
                                            Apr 09 Mar 09 Feb 09 Jan 09 Dec 08 Nov 08
                                GRWTH: -11.0% -11.2 -13.9 -0.7 -6.5 -7.1
                                $OWED: $931.0 939.6 948.4 961.0 960.9 968.1
                            Source: Federal Reserve; revised figures as of 6/5/09;
                       For complete historical data, visit CardData (www.carddata.com)

Visa says U.S. payment volume decline stabilizes
June10, 2009

Visa Inc said the pace of decline in U.S. payment volumes stabilized in April and May, helped by a more intensive use of debit cards, but the contraction of cross-border volumes accelerated, as consumers cut back on spending and travel.

However, Chief Financial Officer Byron Pollitt said at an investor conference on Wednesday that the growth in the number of global processed transactions accelerated in April and May, as people used their cards more often but for smaller transactions. He said the trend reflected a movement from cash and checks to electronic payment systems such as debit and credit cards.

Pollitt said U.S. payment volumes -- the amount cardholders spend using Visa's network -- fell 3 percent in April and May, compared with the same period of 2008, in line with the decline seen in the January-March second fiscal quarter.

Spending on debit cards surpassed credit volume in the United States in the first three months of 2009 for the first time in the history of Visa, the world's largest payment network.

Cross-border payment volumes continued to fall, by 9 percent in April and May compared with the same period last year -- a deterioration from the 6 percent decline reported for the second quarter.

Pollitt also said global processed transaction growth accelerated to 8 percent in April and May, from a 6 percent increase in the January-March period, as more people around the world replace cash for credit or debit cards.

Visa shares rose 0.26 percent to $68.81 in afternoon trading on the New York Stock Exchange. The stock is up 28 percent in 2009. (Reuters)

State Debt
June 16, 2009

The nation's five largest states, based on overall credit card debt outstanding at year-end 2008, posted a slight decline of less than 1%, compared to the prior year. The biggest decrease was recorded for Texas and California, where year-on-year card debt slipped by 0.6% and 0.5%, respectively. Nationally credit card debt declined by 0.3% last year. According to CardData, total credit card debt for 2008 was $958.1 billion, compared to $961.0 billion for 2007. The total includes bank-issued credit cards as well as retail credit cards. According to a survey recently released by TransUnion, the aggregate balance on all bank-issued credit cards for an individual bankcard borrower inched upward nationally by 0.8% to $5,776 from the previous quarter and by more than 4%, compared to the first quarter of 2008. TransUnion also found that the steepest increases in average bankcard debt over the previous quarter occurred in Alabama (+5.6%), Mississippi (+5.4%) and Tennessee (+4.7%). The District of Columbia experienced the largest drop in average bankcard debt (-1.5%), followed by the Wyoming (-1.2%) and New Jersey (-1.1%). (CardTrack.com)

People's Bank of Georgia and Oberthur team on contactless payments
June 16, 2009

People's Bank of Georgia has teamed with Oberthur Technologies to launch a combined contactless Visa payWave payments and transport ticketing card in central Europe.

The Voyage Card incorporates Visa's payWave contactless payment application to enable users to make low value purchases by tapping it against specially equipped terminals.

The bank plans to issue cards to students and teachers in Georgia's capital Tbilisi, with payWave technology introduced in pharmacies, railway stations, fast-food stores, schools and universities.

The card's Mifare application will also let users purchase personalised e-tickets for use in Tbilisi's public transport system.

The Voyage Card also uses Oberthur's 'hot foil stamping' card-design technique which sees part of its design stamped with holographic material. (finextra.com)

Card Pain
June 22, 2009

Credit card losses, a/k/a charge-offs, continued to mount in May, topping 9% for the first time as more consumers deplete their mad money. It is the third consecutive monthly record in the payment card industry's history. There are already indications that charge-offs will likely head even higher in the third quarter. According to CardData, charge-offs industry-wide for May stood at 6.16%. Earlier this week, Capital One reported that its charge-off ratio rose from 8.56% in April to 9.41% for May, however the figure was about 0.50% lower due to a change in the issuer's bankruptcy policy. American Express reported its charge-off ratio edged down from a peak of 10.1% in April to 10.0% for May, thanks to the sale of some cardholder loans that had been previously written-off. Discover reported a managed net charge-off rate for the quarter ending May 31st of 7.79%, up 1.31% and 2.80% from the prior quarter and the prior year, respectively. Discover noted that it expects the next quarter to produce charge-offs between 8.5% and 9.0%.

CHARGE-OFFS
May 2005: 6.16%
May 2006: 4.24%
May 2007: 4.65%
May 2008: 5.93%
May 2009: 9.01%
Source: CardData (www.carddata.com)

2008 Global Payment Card Market Survey Results
June 30, 2009

The Smart Payment Association (SPA), a group of the industry's largest manufacturers of payment smart cards, has announced findings from its 2008 market monitoring activity - undertaken in order to get a better understanding of the current status of the payment smart card market and its key trends.

Key findings:

• With more than 580 million payment smart cards delivered by its members, SPA represents the vast majority of the payment smart cards market. This figure corresponds to a 39% year-on-year growth (2008 vs. 2007), showing the ongoing momentum of EMV deployment.
• Over 25% growth in all regions with the fastest growth seen in North America, where shipments have more than doubled, CISEEMEA (CIS countries, Eastern Europe, Middle East and Africa) with +65% and South Asia with +49%.
• Open-platform is gaining ground and now represents 15% of all shipments, a 72% increase compared to last year. This can be explained by the development of multi-applicative EMV cards. The 70% year-on-year growth in large memory product shipments and the large increase in open-platform dual interface card shipments confirm this trend.
• Both dual interface and pure contactless cards confirm SPA's expectations, outperforming the market with year-on-year growth rates of 140% and 66% respectively.
• DDA technology is continuing to gain importance, with 69% growth year-on-year, representing 25% of SPA members' shipments in 2008. Migration to DDA has started worldwide, and both Visa and MasterCard mandate that all cards should support DDA by 2011 in Europe. The SPA is about to publish a whitepaper that will present the status of DDA migration and highlight DDA success stories. This document will also outline the impact of DDA migration on banks at both technical and business levels.

The detailed figures of the SPA 2008 market monitoring are only available to its contributing members. (Payment News)

Card Issuer's Corner

Advanta, American Express close deal for customers accounts
June 10, 2009

American Express Travel Related Services has won a contract from US credit card issuer Advanta to provide some of its customers with an American Express card.

The initiative follows the recent closing of its small business credit-card accounts to new use, Philadelphia Business Journal reports. Under the terms of the deal, select Advanta customers will receive an invitation to apply for a card account with American Express and such an agreement is to last for up to 60 days - one year.

Advanta closed its small-business customers' credit cards to new charges in a bid to survive the economic turndown. Such a move affected almost one million accounts. (The Paypers)

MasterCard, Ukash to introduce MasterCard rePower service on European market
June 16, 2009

UK voucher-based prepaid online payments provider Ukash has entered an alliance with MasterCard to roll out the MasterCard rePower service in Europe.

MasterCard rePower is a payment mechanism that provides cardholders with a way to reload a prepaid or stored-value account using their MasterCard debit or credit card. In order to load money with MasterCard rePower, consumers must swipe their card in order to load it with funds and money can be spent at any location which accepts MasterCard.

According to the deal between the parties, the service will initially enter the UK market and then other European markets via partners within the Ukash issuing estate. In addition, Ukash is collaborating with prepaid partners to provide customers with voucher-based reloads as a complementary service. (The Paypers)

MasterCard Launches Mobile MoneySend for U.S. P2P Transactions
June 17, 2009

MasterCard Inc. on Wednesday announced its person-to-person payment service for mobile phones has launched in the U.S. with one issuer on board and an untold number waiting in the wings. The card network's Mobile MasterCard MoneySend service, which has been in the works for at least a year (Digital Transactions News, June 19, 2008), relies on its established MoneySend P2P platform, which processes transactions primarily in Asia and Europe.

The mobile version allows users to transfer funds on their handsets using text messaging, a mobile Web site, or a downloadable application, and works with any mobile phone.

The sole issuer participating in Mobile MoneySend so far is The Bancorp Bank, a subsidiary of Wilmington, Del.-based The Bancorp Inc., which provides prepaid accounts in which and to which users store and send funds.

Users can fund their prepaid accounts with any MasterCard card account or from a checking account. Recipients of money can access their funds by moving the money from the prepaid account to a checking account. Recipients can also get a prepaid card linked to The Bancorp Bank account. And, with the account number, they can make online purchases.

Consumer pricing is set by each bank. For now, senders pay The Bancorp Bank 29 cents per transaction for transfers up to $50. The fee goes to 99 cents for amounts between $50 and $200, and to $2.95 for sums over $200. It's free to receive money. MasterCard, which is relying on carrier connections and other technical resources from Obopay Inc., a Redwood City, Calif.-based mobile-payments processor, will collect undisclosed fees from each participating institution. (Digital Transactions.com)

Citi pre-paid services live in Germany, Belgium, Portugal, Switzerland and Ireland
June 17, 2009

Citi today announced that its Global Transaction Services business' Emea platform for Citi Prepaid Services is now live in Germany, Belgium, Portugal, Switzerland and Ireland.

Citi Prepaid Services will provide these five new markets with customised prepaid card solutions, in pounds sterling, Euro, Swiss Franc and US dollar, for corporate and public sector clients looking for simple and convenient ways to deliver payments, including payroll, consumer rewards and employee incentives that the recipients can then use worldwide. Citi, the global market leader in prepaid card services, initially launched its payment solutions to the United Kingdom in November 2008 and will continue to expand this offering across the region in 2009 with a view to launching in the United Arab Emirates next. (finextra.com)

Discover Reports Second Quarter 2009 Results
June 18, 2009

Discover Financial Services has reported results for its second quarter ending May 31, 2009. According to Discover, US sales volume decreased 4% versus the second quarter of 2008, reflecting lower gas prices and a general decline in consumer spending. Managed loans ended the quarter at $51 billion, essentially unchanged from the prior quarter and up 7% from the prior year. The managed net charge-off rate increased to 7.79% for the second quarter of 2009, up 131 basis points and 280 basis points from the prior quarter and the prior year, respectively. The managed net charge-off rate for the third quarter of 2009 is expected to be between 8.5% and 9%. (Payment news)

Visa launches Peru m-payments service; teams with NeuStar
June 23, 2009

Visa has stepped up its push into mobile payments with a commercial roll out of the technology in Peru and the formation of a global alliance with NeuStar, an interconnection service provider for wireless network operators.

The card network has teamed with VisaNet Perú and Telefónica to launch its first commercial m-payments service in Latin America. Pago Móvil con Visa (Visa Mobile Pay) lets account holders with credit or debit cards issued by Banco de Crédito, Interbank, BBVA Continental and Scotiabank pay for products and services over the wireless network.

Initially, Visa account holders will be able to use their mobile phone to pay for cab fares and send flower arrangements, as well as to top up their wireless pre-paid account. Other areas are scheduled to be added, such as deliveries of pharmaceutical products, gas distribution and catalogue orders.

In a separate move, the card giant has teamed with NeuStar in a bid to accelerate the adoption of mobile financial services around the world.

NeuStar's carrier grade infrastructure provides interconnection services to global network operators and their partners. Visa will tap the service to get a single point of entry to operators as it seeks to extend its mobile services around the globe.

In addition, it will help deliver mobile financial services to consumers in places with low penetration of payment products and financial services. (finextra.com)

JPMorgan to Charge 5% on Card Balance Transfers, Cash Advances
June 24, 2009

JPMorgan Chase & Co. is raising some balance-transfer fees on credit cards to 5 percent, the highest among the nation's largest banks, citing increasing regulations and costs after the U.S. put new curbs on the industry.

JPMorgan, the biggest credit-card issuer, disclosed the increase in a notice mailed to customers this month that referred to "new federal regulations." The New York-based lender starts charging more in August, just as the law designed to curb interest-rate increases, fees and marketing practices begins to take effect.

The rate increase at JPMorgan also affects cash advances, and fixed rates will become variable, the notice said. JPMorgan's 5 percent fee tops the 4 percent that Bank of America Corp. implemented June 1, citing increasing costs. Bank of America ranks third by cards outstanding, according to industry newsletter the Nilson Report. (Bloomberg)

VisaNet IPO totals $4.3m
June 26, 2009

Visa's Brazilian affiliate VisaNet is raising around $4.3 billion in its initial public offering, the biggest in the world for over a year.

The Sao Paulo-based credit card company's shareholders - including Visa, Banco Bradesco, Banco do Brasil and Banco Santander - sold 559.81 million shares at a price of 15 reais each.

Book-building in the IPO closed out yesterday with shares set to begin trading on the Brazilian Stock Exchange on Monday.

According to a Reuters report, on Wednesday 19 brokerages were banned from participating in the IPO for allegedly releasing unapproved advertising material about the sale.

VisaNet was the first Brazilian IPO of the year and the country's biggest ever.

The shares were sold at the high end of the expected range, suggesting investor confidence in the potential for growth in Brazil's credit card market, which has grown at around 20% a year for the last 10 years. (finextra.com)

Visa signs $13 million deal and takes minority stake in Monitise
June 30, 2009

Visa is to take a 14.4% stake in Monitise after signing a $13 million partnership deal with the UK mobile banking outfit.

Under the agreement, AIM-listed Monitise will be a strategic development partner to Visa. The five year deal has a contract value of $13 million in addition to ongoing licence, service and development fees.

In addition, Monitise has entered into agreements with Visa International and existing shareholders UBS Global Asset Management and Capital Group to subscribe for an aggregate of 73.2 million new ordinary shares at a price of 7p, representing a premium of 33% to the closing price of 5.25p on 29 June 2009.

Following the subscriptions - which are expected to raise £5.1 million before expenses - Visa International will own 14.4% of the enlarged issued share capital of Monitise, UBS Global Asset Management will own 12.9% and Capital Group will own 5.8%.

Upon completion, Tim Attinger, head of global product innovation at Visa will take a seat on the Monitise board.

News of the deal comes as the UK firm released an underwhelming set of financial results in a trading update for the year ending 30 June. Revenues are expected to be in the region of £2.7 million, an 80% increase year-on-year, but some way below market expectations. The firm says it has trimmed the cost base to compensate and that operating losses will be "slightly better" than market forecasts.

The group reported a pre-tax loss of £14 million last year on revenues of £1.5 million.

In the UK, the company says it is in discussions with joint venture partner VocaLink about increasing its stake in Monilink, "although no agreement has been reached in this respect". (finextra.com)

Payment Processor's Post

First Data, Wells Fargo Expand Card Processing Relationship
June 9, 2009

First Data has announced that Wells Fargo has expanded its agreement for card processing services and will move its newly-acquired Wachovia credit card portfolios to First Data for card processing services.

Wells Fargo will add the Wachovia credit card accounts, the Wells Fargo Private Label card accounts and the Personal Credit Management line of credit accounts to the existing Wells Fargo portfolios serviced on First Data's system. Additional terms are not being disclosed. (Payment News)

Heartland Payment Systems expands card processing services to all major card brands
June 12, 2009

US credit, debit and prepaid card processing, payroll, cheque management and payments provider Heartland Payment Systems has enhanced its partnerships with Discover and American Express and is currently providing card transaction authorizing and settling services for all four major card brands, namely Visa, MasterCard, Discover and American Express.

Heartland customers can thus receive funding, statements and customer service for the four major card brands directly from Heartland, using the payment processor as their funding source. Merchants can opt to receive a single statement summarizing card transactions details from all the four brands and also access Heartland's Online Merchant Centre to visualise their transactions and account information in real time. (The Paypers)

Bank of America and First Data set up merchant processing JV
June 29, 2009

Bank of America has outsourced its merchant processing to a new joint venture company established with First Data.

Under the agreement, Bank of America will contribute approximately 240,000 merchant relationships and First Data 140,000 clients to the new company. Following a transition period, First Data will provide the merchant processing and related services. The combined entity will process over one billion transactions per month.

Banc of America Merchant Services will be approximately 46.5% owned by Bank of America and 48.5% by First Data, with the remaining stake held by Rockmount Investments, an investment vehicle controlled by a third party investor. (finextra.com)

Banking & Finance Section

Yahoo integrates PayPal's Send and Request Money application within mail service
June 9, 2009

Yahoo has added a series of third-party applications and widgets to Yahoo Mail, among which a PayPal widget for sending and receiving money.

As a result of the initiative, which is part of part of Yahoo's Open Strategy program, PayPal account holders can send money directly to email contacts within the Yahoo! Mail service via the Send and Request Money application.

By clicking on the PayPal icon on the Yahoo! Mail sidebar, customers who have a PayPal account can either send or ask for money. If users want to use the application to request money, they must provide the email address of the person who will send the money, specify the amount and insert a short description. The information will be included in a Yahoo Mail email which will be sent to that person. In case they want to send money, users must introduce the recipient's email address and the sum of money, choose a certain payment option (bank, balance or credit card) after which they are re-directed to the PayPal website for payment confirmation.

The applications are currently in beta phase. Other third-party applications which have been made available include online photo-editing suite Picnik and cloud-storage service Zumo. (The Paypers)

US Bank introduces Western Union money transfer service
June 9, 2009

The Western Union Company , a global leader in money transfer services, and U.S. Bank, the sixth largest commercial bank in the United States and lead bank of U.S. Bancorp, announced today the rollout completion of the Western Union global money-transfer service across 2,791 U.S. Bank branch locations in 24 states.

Future plans also include expanding the Western Union global money-transfer service to U.S. Bank online consumers. (Press release, Western Union)

Microsoft kills off Money
June 11, 2009

In the face of increasing competition from banks, brokerage firms and dedicated Web sites, Microsoft is scrapping its Money personal finance management software.Microsoft's decision to quit the market comes after years struggling to compete with market leader Intuit. Recently it has also faced competition from online outfits such as Mint and Wesabe. (finextra.com)

EC consults on SEPA migration deadline
June 9, 2009

The European Commission has launched a consultation on whether to set a deadline for the migration of credit transfers and direct debits to the Single euro payments area (Sepa) scheme. The commission has given interested parties until 3 August to provide opinions whether and how deadlines should be set. (finextra.com)

Canadian mobile operators launch new money transfer and payments service
June 15, 2009

Three of Canada's largest wireless operators have launched Zoompass, a new mobile money transfer and payment service. Zoompass has been launched by EnStream, a four-year-old mobile commerce joint venture company owned by Bell Mobility, Rogers and Telus.

Customers can access the service via the Internet, from the mobile web, or by downloading the Zoompass application to their wireless phone. At enrollment, subscribers set up a Zoompass account linked to their personal bank account or credit card. The application also interfaces with the address book on select phones, allowing users to quickly send or request money from their contact list.

Every transaction is PIN-protected and customer financial information is stored on secure servers, not on the mobile phone, adding an extra layer of security if the phone is lost or stolen.

Subscribers may also make purchases in stores and on the Internet by transferring the balance in their Zoompass account to an optional prepaid contactless MasterCard, issued on behalf of EnStream by Peoples Trust. (finextra.com)

Dubai Trade, Mashreq sign agreement on internet banking-based payment method
June 15, 2009

UAE-based online services provider Dubai Trade has closed a deal with local financial services provider Mashreq to allow for online payments via the bank's Direct Debit services.

Under the terms of the agreement, the bank's customers who use Dubai Trade's e-payment gateway Rosoom can access the bank's online Direct Debit Services platform, dubbed Mashreqbusinessonline, for transactions with global marine terminal operator DP World and Jebel Ali Free Zone (Jafza), a free economic zone offering business and tax incentives to corporations. Thus, the online payment option enables funds transfer from the customer's Mashreq account to the DP World and Jafza accounts.

Via the Rosoom e-payment gateway, clients can pay for products and services provided by companies involved in commercial transactions and which are subsidiaries of Dubai World Group, a holding company which operates in transport and logistics, investment and financial services. (The Paypers)

M-payments start-up Boku raises $13 million; acquires Paymo and Mobillcash
June 16, 2009

San Francisco-based online mobile payments start-up Boku has raised $13 million in venture funding and acquired micropayments outfit Paymo and m-payments firm Mobillcash.

The Boku payments service enables global consumers to make online purchases of digital and virtual goods with their mobile phones.

The company has been operating in stealth mode for about a year, but has now launched with $13 million in venture funding led by Benchmark Capital, with participation from Index Ventures and Khosla Ventures.

The company currently claims carrier coverage in 53 countries and a potential 1.6 billion global consumer base. Boku will be targetting the mass-market for virtual goods and gaming, which is currently estimated to be worth some $8 billion.

Consumers need only enter their mobile phone number to pay for goods and services online, with payments charged to the monthly phone bill. No registration and bank accounts are required, thereby offering a medium for the unbanked to participate in online pay-to-play commerce.

Boku is not alone in tapping this emerging market. US rival Zong launched in early 2008 and currently has tie-ups with popular Web destinations such as RockYou, MyYearbook and Meez. (finextra.com)

Bangkok Bank rolls out Fiserv m-banking technology
June 16, 2009

Bangkok Bank has signed up for Fiserv's Mobile Money service, enabling customers to access its Internet banking platform from their handsets.

The M-Com powered browser-based application, available in Thai and English, lets users view account information, pay bills, transfer funds and top up their mobile phone account.

Fiserv says that Thailand's mobile penetration rate is over 80%, one of the highest in the Asia Pacific region, rapidly growing from 44% in 2004. (finextra.com)

Celcom and Sybase 365 team on Malaysian mobile money transfers
June 17, 2009

Malaysian telco Celcom has tapped Sybase 365 to power a new 'instant messaging'-based mobile money transfer service. The AirCash service, run on the Sybase 365mCommerce mobiliser platform, will be made available to over nine million Celcom customers.

Customers will be able to use their handsets to transfer money to fellow users, remit cash to other countries (initially Indonesia), and top up their mobile airtime. Users can also top up or withdraw money from their AirCash accounts at Celcom branches. (finextra.com)

PayPal Updates Send Money Pricing for US P2P Payments - Now Free!
June 19, 2009

PayPal has announced that, effective today, "you can send money via PayPal to friends and family in the US for free" - as long as the payment is funded from your bank checking account or your PayPal account balance. You can also pay using a credit card and, if so, "you can choose to pay the fee or have the recipient pay it."

Zain partners Western Union on cross-border mobile money transfer services
June 23, 2009

Middle East and African mobile telecommunications provider Zain is partnering with Western Union to offer customers of its Zap m-banking service the option of receiving cross-border money transfers to their handsets.

Zap enables Zain customers to interact with bank accounts, top-up or transfer airtime, and move money to businesses, friends and family. The service also allows customers to pay bills such as electricity, and can even be used to settle grocery bills in the supermarket.

The service has been live in Kenya, Tanzania and Uganda for several months, with plans for an expansion into 22 markets.

Zain is now teaming with Western Union to let Zap customers receive money transfers sent from Western Union agent locations directly to their mobile phone.

Customers who receive funds in their mobile wallets will be able to pay bills, buy airtime or cash out through the service at more than 12,000 Zap agent locations in East Africa.

The service will be introduced in "select countries" when regulators give the go-ahead.

Zain says the Western Union tie-up will help the Zap service tap into the massive remittance market. The firm cites figures from the World Bank which suggest Sub-Saharan Africa alone received around $10.8 billion in remittances in 2007. (finextra.com)

CashEdge Launches POPmoney P2P Payments Service for Banks
June 23, 2009

CashEdge has announced the launch of POPmoney - calling it "the first person-to-person payments (P2P) service for banks, enabling banks to provide simple and secure P2P payments from their online or mobile banking applications."

POPmoney allows bank customers to "Pay Other People" (POP) anywhere, at any time, directly from within a bank's online or mobile application. With POPmoney, bank customers can send an electronic payment by simply using the email address or mobile phone number of the recipient. POPmoney includes an SMS text messaging application, as well as downloadable mobile applications, enabling banks to extend their P2P

Spurred by the growing use of online banking, including online account opening, bill pay and online funds transfers, consumers are demanding additional online money movement services.

POPmoney leverages the proven reliability, security and robustness of CashEdge's money movement platform, which in 2008 processed nearly $50 billion in online funds transfers for bank customers. For current CashEdge clients, POPmoney is an easily integrated extension of TransferNow^TM. (Payment News)

Mobile Money Ventures, Citibank Launch Mobile Banking in Philippines
June 23, 2009

Mobile Money Ventures has announced it has teamed up with Citibank to offer the first browser-based mobile banking solution in the Philippines. Citi Mobile Banking allows customers to securely manage their banking needs from their mobile handsets at any time and from any location. Customers can check account information, pay bills, and transfer money by accessing the web-based banking platform on their mobile phones. To ensure the highest level of security, MMV's mobile solution utilizes two-factor authentication. In addition, no financial information is stored on the mobile device. (Payment News)

U.S. Banks Fight Obama's Consumer Agency to Protect Their Fees
June 25, 2009

U.S. banks are fighting the Obama administration plan to create a consumer agency for financial services as they seek to protect fees, such as credit-card penalties that have almost doubled to $19 billion in five years.

Fees imposed by banks accounted for 53 percent of industry income in 2008, up from 35 percent in 1995, according to R.K. Hammer Investment Bankers, a credit-card advisory firm. JPMorgan Chase & Co., the second-largest U.S. bank by assets, said such revenue doubled in the first quarter. A U.S. Consumer Financial Protection Agency also may add costs by expanding scrutiny.

Obama's plan for an independent agency in the overhaul of financial regulation has won endorsement from Senate Banking Committee Chairman Christopher Dodd and Financial Services Chairman Barney Frank, who will write the legislation. Frank yesterday said the agency is needed because regulators focused on banks' financial health may downplay consumer complaints.

Banking trade groups such as the American Bankers Association said Obama's "highly controversial" agency will raise costs for responsible consumers and mandate the types of products banks and financial institutions should offer. ABA President Edward Yingling yesterday testified the agency will "saddle consumers and providers with a new regime
of fees."

‘Plain Vanilla'

The agency will have the power to write rules strengthening consumer protections, supervise and police a bank's compliance and force institutions to offer "plain vanilla" products that are easy for consumers to understand. The Federal Reserve and other regulators would cede consumer oversight to the agency.

Credit-Card Fees

JPMorgan Chase said revenue from fees related to lending and deposits more than doubled to $948 million from the previous year. The New York-based company's credit-card income also doubled to $367 million from $174 million. JPMorgan is raising some balance-transfer fees on credit cards to 5 percent, the highest among the largest banks, citing increasing regulations and costs to comply with new U.S. curbs on the industry.

The industry's credit-card fees for late payments generated $19 billion in 2008, almost double the $10.7 billion from late, over-the-limit and insufficient-funds fees in 2003, data from Thousand Oaks, California-based R.K. Hammer showed.

Citigroup Inc., JPMorgan Chase and Bank of America had about 287.3 million credit-cards accounts at the end of 2008, or 58 percent of the cards issued by the 50 biggest issuers, according to the Nilson Report, an industry newsletter.

Banks may have benefited from dispersed consumer protection activities among the Fed, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and the Office of Thrift Supervision, which are required to ensure the institutions they oversee remain healthy and solvent.

Obama's proposal said the Fed's recent consumer rules were "quite late in coming" and regulators needed 18 months to tackle subprime mortgages. Guidance was adopted in June 2007 to combat abuses in the loans, many written in 2005 and 2006.
The OCC, which supervises 1,650 national banks including Citicorp Inc.'s Citibank, took five public enforcement actions from 2005 to 2008 for unfair and deceptive practices, according to the agency's Web site. (Bloomberg)

Indian Mobile Banking: Unexplored Opportunity
June 29, 2009

Mobile banking in India is in a budding stage, with the high penetration of mobile phones acting as a growth driver. India's existing mobile phone user base consists of 347 million users, including 73 million rural users. Celent expects the mobile banking active user base to reach 2% by 2012, up from the current 0.2%.

In a new report, Indian Mobile Banking: Unexplored Opportunity, Celent examines the potential for mobile banking growth in India's urban and rural markets. Mobile banking is currently free of cost to encourage customers to adopt this new channel. Despite this, the registered user base is only 25 million people, and the active user base is just 10% or 2.5 million of registered user base.

One major reason for the current low adoption of mobile banking, especially among the urban population, is the availablity of alternative modes of banking, such as accessibility to ATMs, online banking, etc. Additionally, there are security concerns about mobile banking among Indian customers," says Celent analyst Prathima Rajan, author of the report.

Mobile payments have evidenced better usage among youth. The young, banked, urban working population are tech-savvy and present short-term potential for the growth of mobile banking in India.

Rural India is a huge and challenging market to reach, and service providers need to develop a long-term strategy to serve this untapped market. Many banks have initiated pilot projects, because banks consider mobile banking to be one of the cheapest ways to reach the roads less traveled. India has close to 600,000 villages, making it nearly impossible to establish brick and morter banks everywhere.

India's rural markets are also harder to tap due to illiteracy, lack of accessibility for services and technology, regulatory barriers, etc. To serve this market, banks should make use of pre-existing networks like regional rural banks, microfinance institutions, local delis and post offices, and field officers and authorized outlets. It is also important to leverage the latest technology in reaching out to this market.

The report analyses urban and rural India as two distinct markets requiring different products, service offerings, networks, and technology. The report also highlights possibile opportunities and limitations, providing suggestions for overcoming market constraints. It gives examples of the experiences of foreign countries where mobile banking has already proven successful, which will help Indian service providers develop similar strategies. (Celent)

RBI urges Indian banks to join NECS program for online payments
June 29, 2009

The Reserve Bank of India has asked the local banks to increase the number of branches enabled to participate in the National Electronic Clearing Service (NECS) program.

Inaugurated in September 2008, the NECS scheme covers online transactions including periodic payments of interest/ salary/ pension/ commission/ dividend/ refund or bulk collection of utility bills/insurance premium/school fee/ loan installments by companies and corporations.

In order to encourage the use of the online payment system, the Reserve Bank has asked the banks to assist customers in preparing formats for crediting amounts in the accounts of beneficiaries across India. Presently, only the credit variant of NECS is available, but the Reserve Bank also plans to introduce NECS-debit, a system that would enable Indian institutions and companies to collect payment online from their customers.

During May 2009 alone, almost 2 million transactions worth Rs. 30 billion were processed. (The Paypers)

MoneyGram International and Saudi Arabia's National Commercial Bank Announce Strategic Relationship to Launch Kingdom's Largest Global Money Transfer Network
June 30, 2009

MoneyGram International, a leading global money transfer company, and National Commercial Bank (NCB), the largest bank in the Middle East, announced today an agreement to offer MoneyGram's international money transfer service at NCB's 1,400 ATM locations, creating one of the largest money transfer networks in Saudi Arabia.

The agreement, which significantly expands MoneyGram's presence in this important country, provides consumers in Saudi Arabia with more convenience and greater access to money transfer services through a network more than 10 times larger than any other money transfer network currently available in Saudi Arabia.

A global remittance leader and home to more than 6 million expatriates, Saudi Arabia saw remittances grow to more than $17 billion in 2006, according to the World Bank. In addition to the fact that 27 percent of Saudi Arabia's population is foreign born, the demand for money transfer services is also driven by the growing number of Saudis studying, traveling and working abroad.

MoneyGram money transfers at NCB will be sent over NCB's Quickpay platform. Initially, only send services will be available.

MoneyGram has been operating in Saudi Arabia since 1998 and manages its services to the region from an office in Dubai. The company began offering ATM-based money transfer service last year. MoneyGram ATM money transfer services are available in the U.S. at 7-Eleven locations, in Poland at BillBird's My Money Transfer locations, and now through NCB in Saudi Arabia. (Press Release)

MERCHANT'S CONCERN

Retail association hits Visa Europe with interchange antitrust complaint
June 16, 2009

Retail association EuroCommerce has lodged a complaint against Visa Europe, accusing the card network of infringing European competition law over interchange fees.

In April the EC hit Visa Europe with an antitrust charge, accusing the card network of violating competition rules over cross border interchange fees.

EuroCommerce, which counts Tesco and Carrefour among its members, has now entered the fray and called on the EC to impose the same ruling on Visa as MasterCard faced in December 2007.

As a formal complainant the association has full access to the case file and can add statements. EuroCommerce first lodged a complaint against MasterCard and Visa 12 years ago as part of the tortuous interchange battle in Europe.

This contributed to Visa signing an antitrust agreement with the EU's Competition Commission in 2002, agreeing to reduce levels of interchange fees for processing card transactions in return for immunity from legal action.

However, following the expiration of the deal, last March the EC launched a probe into whether the interchange fees charged by Visa Europe "forbid restrictive business practices such as price fixing".

The firm moved to adopt a new methodology for setting cross-border fees, cutting the average from 0.7% to 0.61% but this did not satisfy the commission or EuroCommerce. MasterCard currently caps fees at a much lower rate of 0.3% for credit cards and 0.2% for debit cards. This was agreed with the EC as an interim measure in April pending a legal appeal against the Commission's ruling that the firm should scrap fees altogether. (finextra.com)

Fraud & Security Matters

UAE Under Constant Attack from Cyber Criminals
June 8, 2009

Organized cyber crime is the biggest security threat globally, and the UAE is not immune as the Middle East had more than 436,551 botnet computers and the UAE account for 42,662 of them, says a senior security expert from Trend Micro.

Internet usage in the UAE has grown 212 % exponentially from 2000, and as a result 49.8 % of the country's citizens are prone to cyber crime today. In the first four months of 2009, Trend Micro has cleaned more than one million affected computers across the Middle East, and the UAE accounted for 187,881 of these. (zawya.com)

Financial institutions have lost battle to protect customer data - TowerGroup
June 16, 2009

US financial services firms have lost the battle to protect the personal information of customers and must now assume that all their clients' data has been, or will be, compromised, according to TowerGroup.Over 100 data breach incidents containing millions of data records were reported in just the first four months of 2009.

According to a recent study from Verizon, hackers stole 285 million electronic records in 2008, more than in the previous four years combined, with the vast majority of breaches targeting the financial services industry.

Massive breaches involving Heartland Payment Systems, RBS Worldpay, Checkfree and BNY Mellon Shareowner Services have been reported over the last year.

TowerGroup says government regulators need to implement meaningful data breach prevention requirements and penalties that compel businesses to actually protect information.

The firm says that until legislative and regulatory bodies implement these penalties, data loss incidents will persist and worsen. Highly effective and usable data loss prevention practices and technologies are readily available to businesses but are "grossly underutilised", says TowerGroup's Tubin. (finextra.com)

Which? calls on bank regulator to tighten card fraud loss rules
June 24, 2009

UK consumer body Which? is calling on the Financial Services Authority to provide more detailed guidance on the evidence banks have to give in card fraud cases, as it releases research which indicates that approximately one-in-five ID fraud victims fail to get their money back.

Chip and PIN is the most secure method of payment, but Which? says that a fraudster can discover and use someone's PIN by looking over their shoulder at a cashpoint or retailer terminal before stealing the card.

Card fraud at cash machines increased by 31% between 2007 and 2008, and around £609.9m was lost in the UK through card fraud last year.

The Financial Services Authority has been tasked with taking over retail banking regulation from this November, and Which? is expecting the watchdog to provide more detailed guidance on the evidence that should be provided by banks in card fraud cases. (finextra.com)

IBM says cryptographic breakthrough could benefit financial services
June 25, 2009

IBM says it has cracked a longstanding cryptographic challenge, enabling the deep and unlimited analysis of encrypted information - data that has been intentionally scrambled - without sacrificing confidentiality.

The vendor claims its researcher, Craig Gentry, has used a mathematical object called an "ideal lattice" to achieve "fully homomorphic encryption" which allows the same detailed analysis as if the original data was fully visible.

IBM says the technique could have massive implications for the financial services sector, particularly in relation to cross-border regulation.

The system would enable regulatory bodies to process complex analytics on confidential data from multiple sources and domains. Until now individual national privacy and data protection laws have prevented pooling of data across regulatory boundaries for this purpose.

Homomorphic encryption could also help strengthen the business model of cloud computing, enabling vendors to perform computations on clients' data at their request, such as analysing sales patterns, without exposing the original information. (finextra.com)

Criminal malware infection hits Eastern European cash machines
June 29, 2009

ATMs in Eastern Europe have been infected with a sample of Windows malware that enables criminals to harvest card data and PIN codes via the machine's recipt printer.

The malware - uncovered by UK-based Trustwave - is installed and activated through a dropper file by the name of isadmin.exe and has been found on machines running the Windows XP operating system. Once installed, the attacker can interact with the ATM by simply inserting a controller card and accessing an array of command options via the machine's keypad.

Trustwave says the command options allow for the output of harvested magstripe card data via the ATM's receipt printer or by writing the data to an electronic storage device using the machine's card reader. Analysts also discovered code indicating that the malware could eject the cashdispensing cassette.

Trustwave recommends that all financial institutions perform analysis of their ATM environment to identify if this malware or similar malware is present. (finextra.com)

Other News & Issues

SURVEY: Russia overtakes Spain, U.K. as largest ATM market in Europe
June 8, 2009

LONDON - In the latest edition of its 2009 survey, "ATMs and Cash Dispensers Central and Eastern Europe," Retail Banking Research Ltd. says the 15 countries it has tracked in CEE have once again shown exceptional growth. Over the last 12 months, the region's number of ATMs increased by 28 percent, and the number of new installations in the 15 countries studied was the highest ever.

The new RBR survey shows that a combination of economic growth and a rapid increase in the number of cards issued over the past few years has driven the expansion of many CEE ATM markets, most notably Russia, Ukraine and Poland.

Kazakhstan and Russia experience highest growth rates

Kazakhstan was once again the fastest growing ATM market in the region during the year, following a period of economic prosperity that has attracted foreign investment into the retail banking arena and resulted in an increase in ATM expenditures. It was followed by the much larger markets of Russia and Ukraine.

For the eighth year running, the greatest absolute growth occurred in Russia, where an additional 19,000 ATMs were installed during the year; the country still has huge potential for expansion because of its large population and area. Heavy deployment by Russian banks over the past eight years has driven the market to 70,500 units. In 2008 Russia overtook France, Germany, Spain and the United Kingdom to claim the mantle of Europe's largest ATM market.

Not only has Russia become Europe's largest ATM market, but SberBank has become its largest deployer, increasing its installed base to 17,500 ATMs. SberBank and the three other large Russian state-owned banks - Bank of Moscow, GazPromBank and VTB24 - accounted for one third of new ATM installations in Russia in 2008.

IADs make limited contribution to growth

Although independent ATM deployers have expanded into CEE markets over the last few years, they accounted for only around 3 percent of new terminals in 2008. One country that did see an increase in IAD activity was Poland, which in 2008 experienced its highest absolute increase in the number of ATMs this decade; non banks now account for 19 percent of the installed ATM base in the country.

Euronet's deployment of terminals in Bulgaria and the removal of Euronet's ATMs from Slovakia means that the number of countries in the region in which IADs operate remains at five: Bulgaria, Czech Republic, Poland, Serbia and Ukraine.

Availability of automated deposits becoming more widespread

The number of automated deposit terminals in the CEE region has more than doubled over the past year. Eleven percent of ATMs now offer automated deposits, compared to only 2 percent that offer envelope deposit. In 2008, deployers in all markets except Bulgaria and Hungary had installed ATMs with automated-deposit functionality, although the former is the only country where no form of deposit may be made at cash-dispensing ATMs.

Most of the region's automated-deposit ATMs have been deployed in Russia, where the provision of automated-deposit facilities for loan and bill payments is particularly important as checks and online and phone banking are not yet widely available. The share of ATMs with automated-deposit facilities in Russia increased to 20 percent during the year. The Russian market now accounts for 83 percent of all automated-deposit ATMs in the region. The only other countries with more than 400 automated-deposit ATMs installed are Kazakhstan, Poland and Ukraine.

When it comes to cash-recycling ATMs, deployers in the CEE region are still weighing the benefits of the costly recycling technology. At present, only 200 automated-deposit terminals in the region contain recycling units.

Transaction volumes grow by 17%

Cash withdrawals at ATMs in CEE totaled 4.2 billion transactions in 2008, up 17 percent from the previous year. While annual growth in the total number of cash withdrawals was strong, it was lower than in 2007, with two countries - Estonia and Slovenia - experiencing a decline in the number of cash withdrawals made at ATMs. Average usage in CEE fell by 9 percent to 2,267 cash withdrawals per terminal per month, as the increase in the number of ATM installations continued to have a diluting effect on per-terminal transaction volumes.

Estonia's machines recorded the heaviest usage, at 4,961 cash withdrawals per ATM per month, while Kazakhstan witnessed the lowest usage level, at just 1,148 transactions. The high level of usage in Estonia is attributable in part to the tendency of domestic cardholders to visit ATMs frequently and withdraw only small amounts on each occasion. In contrast, at EUR 127, the average value of cash withdrawn by Kazakhi cardholders is well above the regional average of EUR 113.

Large jump in use of Windows

Windows XP has been the most popular ATM operating system in CEE since 2006. In 2008, the Windows share of the market grew by 17 percentage points to 85 percent, as deployers continued to migrate their terminals from legacy systems such as OS/2 and older Windows-based systems such as Windows NT. Windows XP is now the most popular ATM operating system in every country except Bulgaria.

Outsourcing of cash replenishment at ATMs falling

The proportion of terminals at which cash is replenished by a third party fell slightly to 21 percent in 2008. The low proportion of CEE deployers that outsource this function can be explained by the fact that in many markets, dedicated registry departments provide in-house ATM-replenishment services.

First-line maintenance is outsourced for a somewhat higher share of the CEE installed base. When it is not kept in-house, the region's deployers tend to call on their CIT partners for the services. Second-line maintenance, which encompasses more complex repairs, including the replacement of parts, is almost universally outsourced. The small share of the market that does not outsource this function comprises mainly ATMs belonging to IADs, which, in some cases, perform all their own maintenance. (ATM Marketplace)

E-commerce spending in Asia Pacific remains constant in Q4 2008 - study
June 9, 2009

Online spending levels registered by consumers living in the Asia Pacific region have shown only slight fluctuations in Q4 2008, as compared to the previous two quarters of the same year, a study indicates.

Thus, for the period ended December 2008, Asian Pacific online buyers spent USD 3,109 on average for their purchases, as compared to USD 3,009 and USD 2,784 for the twelve months ended June and September 2008 respectively.

In Q4 2008 online buyers from Singapore, Hong Kong and India spent the highest amount of money for their online purchases (USD 4,018, USD 3,791 and USD 3,442). These countries also rank highest in terms of quarter-on-quarter average online spending.

The most frequently visited e-commerce websites for shopping-related purposes are airlines' websites (26 percent), online travel agents (15 percent), travel accommodation websites (14 percent), clothes/shoes (9 percent) and car/motorcycle (8 percent). As far as cross-border online transactions are concerned, online spending has climbed by 40 percent in the entire region, from USD 263 in Q3 2008 to USD 368 in Q4 2008, with Japanese and Singaporean shoppers spending most on international purchases (USD 517 and USD 372 respectively).

The E-Commerce Consumer Monitor survey was conducted by Visa. (The Paypers)

M-Commerce Ringing Up (Some) Sales
June 10, 2009

If there is going to be a mobile commerce revolution in the US, it's not coming soon.

A 2008 Nielsen Mobile poll found that only 9.2 million US mobile subscribers purchased goods or services with their handset-a low figure when compared with a JPMorgan projection of 233 million total subscribers. Even lower next to eMarketer's estimate of 270 million US mobile phone subscribers in 2008.

In fact, an Internet Retailer survey found that only 7% of online retailers had an m-commerce site in late 2008.

Still, consumers are at least starting to grow comfortable with the idea of m-commerce.

According to a poll conducted by Harris Interactive on behalf of Billing Revolution, 71% of US adults felt that it was safe to make a purchase via their mobile phone.

However, there is little consensus on what people are willing to buy on their "fairly safe" mobile devices.

In the Harris poll, 59% of respondents said they were willing to purchase pizza over a mobile phone; 58% said movie and event tickets, followed by hotel rooms, fast food, music and travel tickets.

On the other hand, PriceGrabber.com research found that the most popular mobile purchases were digital mobile content such as ringtones and music, followed by consumer electronics, computers and related equipment, books, apparel and jewelry. (eMarketer.com)

Prepaid and remittances to drive m-payments growth - report
June 10, 2009

Mobile phones are expected to become a preferred option for prepaid and particularly remittance service providers, a recent report indicates. The research points out that some of the key features which are likely to boost the use of mobiles in prepaid schemes are the high mobile phone usage in the unbanked and youth markets, as well as easier reload capabilities and the ability to carry multiple schemes onto a single phone.

According to the report, the cross-border remittance market is currently worth around USD 300 billion, and is expected to increase to USD 500 billion by 2012. Due to the acceleration of mobile phone usage among the unbanked and the growing volume of remittance transfers made by migrant workers, mobile payments schemes are expected to flourish, particularly in developing countries where less than 30 percent of individuals own bank accounts but over 80 percent of the population owns at least one mobile phone.

The research highlights the fact that unbanked customers have traditionally been targeted by prepaid schemes and there are increasing opportunities for cashless transactions. Whereas banks currently account for just 30 percent of cross-border remittance business, the report suggests that potential new solutions could allow banks to increase their market share via mobile technology, undercutting current fee structures in the process.

The research was carried out by research, intelligence and advisory services provider to retail financial services institutions Lafferty Group. (The Paypers)

NCR to build new Brazilian ATM plant
June 15, 2009

US ATM supplier NCR is to invest R$73 million to build a new manufacturing plant in Brazil that will create 250 new jobs. NCR says the site will produce cash machines for Brazil, Latin America, and Caribbean markets, with production slated to being by the end of the year. The new plant will take over production currently outsourced to a local contract manufacturer. (finextra.com)

US online bill payment to penetrate 63 million homes by 2014 - Forrester
June 16, 2009

The number of US households paying bills online will grow from 48 million this year to 63 million by 2014, driven by consolidator sites like Yodlee, according to Forrester Research.

Forrester says that while the 5.4% compound annual growth rate is slowing, the market is still far from saturated.

The firm foresees a shift in the market as more consumers turn to banks and bill payment consolidators like Yodlee and Corillian. This will be driven by several factors, including the convenience of having multiple bills aggregated at a single Web site and the elimination of fees.

By 2012, consolidators' share of the online bill payment market will surpass direct billing by merchants for the first time, says Forrester.

Young consumers - who so far have shown less interest in using aggregators such as banks - will be a key battleground among financial services firms as the market matures. (finextra.com)

IBM to Invest $100 Million in Mobile Communication Research
June 17, 2009

IBM (NYSE: IBM) today announced it plans to shift $100 million investment over the next five years into a major Research effort which aims to advance mobile services and capabilities for businesses and consumers worldwide.

Through this effort, IBM is aiming to drive new intelligence into the underpinnings of the mobile web to create new efficiencies in business operations and people's daily lives. The three focus areas for IBM's research investment are: mobile enterprise enablement, emerging market mobility and enterprise end-user mobile experiences. Analytics, security, privacy and user interface, and navigation will be concentrated on across the Research effort. (Press Release)

US Treasury: "Financial Regulatory Reform: A New Foundation"
June 17, 2009

Saying that "we must act now to restore confidence in the integrity of our financial system", the US Treasury Department has released the Obama administration's plans to tighten regulatory oversight of the US financial system. Titled "Financial Regulatory Reform: A New Foundation ", the plan will:

• Require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation
• Increase market discipline and transparency to make our markets strong enough to withstand system-wide stress and the potential failure of one or more large financial institutions
• Rebuild trust in our markets by creating the Consumer Financial Protection Agency to focus exclusively on protecting consumers in credit, savings, and payment markets.
• Provide the government with the tools needed to manage financial crises so it is not forced to choose between bailouts and financial collapse
• Raise international regulatory standards and improve international coordination (Payment News)

Chinese m-commerce segment to hit CNY 55 million in revenues in 2009, up 130% year-on-year
June 19, 2009

The mobile e-commerce sector in China is to witness a 130 percent increase in revenues year-on-year, from EUR 2.52 million (CNY 24 million) in 2008 to EUR 5.78 million (CNY 55 million) in 2009, research indicates.

According to the same source, commerce spending via the mobile channel will reach EUR 17.86 million (CNY 170 million) by 2011 in the region. The increasing mobile phone internet user base (which has reached 120 million in February 2009, up 133 percent year-on-year) is expected to contribute to the development of the mobile phone online shopping segment.

The e-commerce volume is expected to maintain an ascending trend and reach EUR 263.76 billion (CNY 2.51 trillion) in 2009 and EUR 338.37 billion (CNY 3.22 trillion) in 2010, as compared to EUR 169.19 billion (CNY 1.61 trillion) in 2007. In 2008, almost 100 million shoppers made online purchases, a 185 percent increase from 2007. By 2010, this consumer segment is projected to represent over 40 percent of China's internet users.

Data has been released by iResearch Consulting Group. (The Paypers)

Online ID interoperability initiative launched
June 19, 2009

A new initiative has been launched by a group of tech firms, including Oracle and PayPal, to promote interoperability among identity verification applications and services for Internet users.

The Kantara Initiative aims to foster broad adoption of interoperable identity management technology and practices across industries, regions and fixed and mobile networks. The initiative has already set up nearly 20 work and discussion groups, with all output based on open standards, frameworks, protocols and specifications, covering IAF, ID-WSF, IGF, Information Card, OAuth, OpenID SAML 2.0, WS-*, XACML and XDI.

Last year PayPal teamed with Google, Microsoft and others to promote the use of virtual online identity cards - rather than user names and passwords - for conducting transactions via the Web. (finextra.com)

Ericsson to Help Etisalat Enter New Markets
June 21, 2009

DUBAI - Emirates Telecommunications, also known as Etisalat, has signed an agreement with Sweden-based technology and services provider Ericsson for the supply of advanced technologies, which will facilitate its expansion to new markets.

The two companies have signed a Memorandum of Understanding, or MoU, in Stockholm, which will establish a joint committee to collaborate on common business objectives, Etisalat announced in a statement on Saturday.

The committee's task will be to pinpoint areas, which will help drive positive business solutions and opportunities for growth for both companies. In that, Ericsson's leading edge in the technology market will consolidate expertise with Etisalat's infrastructural base.

Etisalat has planned to invest Dh3.68 billion ($1 billion) in the burgeoning Indian market where it has a minority stake in Swan Telecom. Etisalat Chairman Mohammed Hasan Omran told Khaleej Times in March that the telecom operator's commercial launch in India was planned in the second half of 2009.

He further said that the investment would complement Etisalat's other regional investments in Pakistan, Afghanistan and Indonesia - which represent one of the fastest-growing markets in the telecommunication world.

Major areas outlined in the MoU include streamlining collaboration on international projects in order to assist Etisalat bring services to new markets faster, drive network transformation evolving towards an all IP Network in order to retain Etisalat's technology innovation leadership in the region, optimise capital expenditure and operational expenditure to ensure that investment in equipment and manpower achieve new efficiencies across the Etisalat Group. (MENAFN)

Qtel, Vodafone-Qatar to develop joint M-Commerce platform
June 22, 2009

Qatar telecommunications services provider Qatar Telecom (Qtel) has teamed up with Vodafone-Qatar in a bid to develop a joint mobile commerce platform.

A version of the platform has already been implemented by Vodafone-Qatar, which is set to develop it by adding further m-commerce services such as mobile banking, mobile purchase and mobile marketing and advertising to enable Qtel subscribers to carry out payments and complete transactions via their mobile phones. The upgraded version of the platform is set to be released later in the year.

Vodafone-Qatar representatives have stated that the M-Commerce service is being trialled and has already been made available to selected first subscribers who have purchased Vodafone-Qatar monthly plans. In addition to mobile banking, mobile marketing and advertising, Vodafone is looking to add a bill payment feature to the platform. (The Paypers)

EMV migration growth levels slowing down - report
June 22, 2009

The growth in worldwide adoption of the EMV interoperability standard between chip cards (IC cards) and IC-capable POS terminals and ATMs has slowed down, a recent report on the state of EMV migration indicates.

According to the research, while EMV benefits continue to be acknowledged particularly in Europe, Latin America and Canada, growth has decreased due to the global economic downturn, which has driven financial services providers to reconsider or postpone migration plans. As far as the outlook of EMV migration beyond 2010 is concerned, market saturation can be expected in Europe, with growth opportunities also expected to spiral downwards.

At the same time, as more countries have adopted EMV, some of the inherent limitations of EMV became exposed, particularly in what regards the standard's minimal effect in handling Card-Not-Present (CNP) and counterfeit/overseas frauds (despite its effectiveness in reducing mail-non-receipt and lost-and-stolen card fraud).

The report anticipates that demand for EMV products and services is set to be driven by the SEPA initiative in Western Europe as well as by the development of emerging markets in Latin America, Central and Eastern Europe.

The report was published by independent research and advisory services firm Mercator Advisory Group. (The Paypers)

Alternative Online Consumer Payments - New Javelin Research
June 23, 2009

Javelin Strategy & Research has released a new report evaluating providers of alternative payment solutions for online retail transactions. The report, Predicting Alternative Payments Vendor Success: Balancing Needs Among Banks, Merchants, and Consumers reviews services provided by nine vendors: Acculynk, eBillme, HomeATM, Mazooma, Moneta, NACHA SVP, Noca, SeerGate, and Verient.

Key Findings from the Report Include:

• The three vendor solutions that come closest to widespread success are those offered by Acculynk, eBillme and Moneta - with Verient's platform finishing close behind.
• Many former alternatives for online retail transactions are quickly going mainstream.
• Emerging payment methods from traditional payment providers have the advantage of trusted brands and established networks for issuance, acceptance and processing.
• To retain and grow valuable customer relationships, financial institutions must offer dynamic, alternative payment solutions that meet consumer, merchant and bank needs. (Payment News)

Global contactless smart cards market to surpass USD 2.35 billion by 2015 - report
June 25, 2009

After becoming an established name in access control and transport applications, contactless smart card technology is moving into other sectors and application areas, a recent global report indicates.

According to the research, the global contactless smart cards market is expected to cross USD 2.35 billion in revenue by 2015, with Asia-Pacific representing the largest market for contactless smart cards. The research also indicates that EMEA currently represents the market with the fastest growth potential for contactless smart cards over the period between 2006 and 2015. The region is also expected to offer the highest growth opportunity in revenue terms.

Due to the adoption of a common communication protocol for contactless smart cards by Visa and MasterCard, the payments segment of the contactless market is expected to develop, particularly in the UK, Europe and Turkey. The report outlines the fact that the major driving factors for contactless smart cards are the need for a secure IT environment, consumer acceptance, micro-payment and Government applications.

Convenience in making payment, high acceptance among consumers as well as issuers, high interoperability, and Cardholder Verification Method (CVM) Limits are the major factors driving the contactless smart cards technology in the payments sector. Increasing violence, as well as the growing incidence of data thefts is leading to smart cards emerging as the leading technology for access control in both public and private domains.

The "Contactless Smart Cards: A Global Strategic Business Report" was devised by US market research company Global Industry Analysts (GIA). (The Paypers)

Japanese regulator slams Citi AML systems
June 26, 2009

Japan's financial regulator has ordered Citi to stop sales operations at its retail division for a month after the banking giant failed to improve poor anti-money laundering systems.

The Financial Services Agency says there are "fundamental problems" with Citi's compliance and governance system, which is inadequate for monitoring suspicious transactions.

The FSA has publicly upbraided Citi in the belief that the US bank failed to catch and report money-laundering by a Japanese yakuza criminal syndicate. The watchdog says Citi has not sufficiently carried out a business improvement order it was given in 2004, when it was told to shut down its private banking arm for similar failings.

The FSA says "control systems necessary for the detection, monitoring, and follow-up of suspicious transactions have not been developed" and that "despite the fact that it mainly relies on screening based on the database, input data is extremely limited; in addition, the database has not been updated since 2004".

The regulator also slammed Citi's management in the country, accusing it of a "lack an understanding of the rules applied in Japan".

Despite establishing an internal audit department, the bank has not accurately identified a series of problems.
The bank has now been told to submit business improvement plans by 31 July which should be executed immediately, with a progress update provided on every three months.

Citibank Japan operates in 35 locations and two Internet-only branches throughout the country. (finextra.com)

Facebook Is Going After PayPal, Google Checkout
June 30, 2009

Facebook is coming after eBay's (EBAY) PayPal and Google Checkout and it's hiring-up to do it.

The guy who used to run Google Checkout, Prashant Fuloria, left Google (GOOG) after six years last month and now works for Facebook. He is responsible for the "Pay With Facebook" product, reports Inside Facebook.

Though Mark Zuckerberg has only suggested it's a long-term goal, it's looking more like "Pay WIth Facebook" will compete not just with the for-social-networks-only payment systems from startups Zong, Boku, Social Gold and Slide, but also with the Web-wide biggies PayPal, Amazon and Google Checkout.

We have two main reasons Facebook stands a better than fighting chance against those established players:

Facebook Connect's success with publishers. Small and large publishers alike tell us allowing users to login to their sites through Facebook Connect has wildly increased user-interaction. Some Web publishers have told us user registrations and comments multiplied almost immediately. Facebook Connect proves that when users are offered a one-click alternative to a series of forms to fill out, they'll take it. "Pay With Facebook" would offer this same alternative at e-commerce sites.

Facebook's ridiculous scale. PayPal has under 50 million registered users. Last weheard, Facebook has around 250 million users who come to the site at least once a month. Obviously, not all of them will sign up for Pay With Facebook, but all the users fueling the booming virtual goods business will. So will younger users who don't have their own credit cards. (Payment News)

China bans use of virtual cash for trade in the wider economy
June 30, 2009

China has banned the use of virtual currency in the trade of real goods and services in a bid to limit its possible impact on the financial system.

In a joint circular from the Ministry of Culture and the Ministry of Commerce, the government stated: "The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services."

The Chinese government and financial regulators have become increasingly concerned about the transfer of virtual currency - typically earned in online gaming - into the physical economy. According to some estimates, trade in virtual money topped several billion yuan last year after rising around 20% annually.

Under the new rules, using virtual money for gambling will be punished by public security authorities, and minors may not buy virtual money.

The Ministry of Culture also vowed to step up supervision on the use of virtual credits in money laundering. (finextra.com)

CARD NEWS

Discover® Card Wins Brand Keys Customer Loyalty Award for 12th Consecutive Year
May 5, 2009

Discover Financial Services today announced that Discover® Card ranked No. 1 in customer loyalty among leading credit card brands, according to the 2009 Brand Keys Customer Loyalty Engagement Index®. Discover Card has won the credit card category 12 years in a row.

Discover Card finished first in the credit card category in the annual survey from Brand Keys, Inc., the New York-based research consultancy that conducts a yearly study of brands that generate the highest customer loyalty.

Brand Keys' methodology identifies the most important drivers of customer loyalty in a given product or service category. Drivers for the credit card category include rates, fees and flexibility; rewards and services; ease and speed of interactions; and protection and precision. (Press Release)

Egypt's First Visa Corporate Credit Card launched by BNP Paribas
May 7, 2009

BNP Paribas (BNPP) and Visa have announced the launch of the first Visa corporate credit card in Egypt. Developed to meet the evolving needs of business enterprises, the latest payment solution enables organizations to effectively manage spending, streamline procedures and reduce costs. It also offers management and employees a complete expense tracking mechanism which facilitates analyzing spending patterns and forecasting future spending.

The BNPP Visa corporate credit card is a globally accepted currency that can be used for purchases and cash withdrawals locally and internationally. Visa's network ensures acceptance at 30 million merchant outlets and 1.4 million ATMs worldwide. This allows easy and convenient management of travel expenses.

For more information on acquiring a BNPP Visa corporate credit card, applicants may visit the nearest BNPP branch, contact the call centre on 16664 or visit www.egypt.bnpparibas.com (zawya.com)

New Fees for Card Usage Abroad
May 12, 2009

It's getting more expensive to use your credit cards for overseas purchases.

Starting this month, Discover Financial Services began charging a new 2% fee for foreign transactions, while more credit-card customers at Bank of America Corp. will get hit with foreign-transaction fees in June. Late last year, American Express Co. raised its transaction fees to 2.7% from 2%.

For years, banks have charged consumers a fee for using their cards overseas if the purchases were made in a foreign currency. Visa Inc. and MasterCard Inc. charge a 1% fee for converting foreign currencies into U.S. dollars -- a fee that most banks pass along, along with their own markups ranging from 1% to 2%.

Some consumers found a way around those fees by using cards that didn't charge foreign-exchange fees or by shopping at merchants that charged consumers in U.S. dollars.

Now, banks are closing that loophole. Citigroup Inc. recently expanded its policy to impose its 3% foreign-transaction fee on foreign purchases made in U.S. dollars. In June, Toronto-Dominion Bank's TD Bank will convert customers holding Commerce Bank's credit cards, which did not charge any foreign-exchange fees, to the combined banks' new credit cards that charge 3% on foreign transactions, regardless of the currency.

The changes will make it more expensive for U.S. consumers to make online purchases from foreign merchants. Travelers going to a country where the purchases are often in U.S. dollars, such as the Bahamas and some Caribbean countries, will also be affected.
The changes come at a time when banks have been raising fees and interest rates to offset losses from rising delinquencies and a bad economy. Bank of America and Discover, for example, are also raising balance-transfer fees to a record 4% from 3% across many of their cards. (WSJ)

Travel Bank to issue first Visa pre-paid card in Japan
May 14, 2009

Japan's Travel Bank has partnered TSYS to launch a pre-paid Visa card designed as an alternative to paper travellers' cheques for people going overseas. TSYS will provide processing services for the cards, which can be used to make payments at overseas Visa merchants and cash withdrawals from ATMs. (finextra.com)

Brits ditch credit for debit cards - Apacs
May 15, 2009

Brits are turning away from credit to debit cards during the recession, according to payments association Apacs.

In the first quarter total spending on plastic cards was up 5.4% at £94.2 billion. The number of purchases made was up 6.5% to 1.9 billion.

Debit cards accounted for 74.5% of all plastic card purchases in 2009, seeing a four per cent rise in spending compared to Q1 2008. In contrast, spending on credit cards fell three per cent.

The popularity of cheques continued to decline, with the number cleared falling by 10.6%, and the total value down by 9.4%

Meanwhile, there were 696 million withdrawals from cash machine during the three months, with £45.1 billion taken out.

The Faster Payments Service, launched in May 2008, continues to gather momentum, with 60.1 million payments processed to a value of £20.6 billion in the first quarter of 2009. Since launch, a total of 142.9 million payments have been processed, reaching a total value of £53.5 billion. (finextra.com)

Card Gap
May 29, 2009

The current recession has dampened credit card usage, but has been a boon to debit cards. Based on current growth rates for credit cards and debit cards in 2008, debit cards will likely overtake credit cards as the preferred way to pay in the USA by 2012. According to CardData, since 2004, purchases made on Visa and MasterCard credit cards has increased from $1 trillion to $1.4 trillion, or 40%. Purchases made on Visa and MasterCard debit cards has jumped from $500 billion to $1.1 trillion or 120%. In the last three months of 2008 when the recession became a "great recession" the amount of purchases made on credit cards went down 8% while purchases on debit cards rose 6%. Credit cards have fallen out of favor as consumers struggle with heavy debt and are frustrated with higher fees and interest rates and lower credit limits, according to CardTrak.com. While debit card usage continues to grow, prepaid cards have also experienced solid growth, according to Cardweb.com. There are also indications that cash is regaining some luster. (CardTrack.com)

Reliance Money rolls out Travel Currency Card
May 26, 2009

Reliance Money, a subsidiary of India's private sector financial services company Anil Dhirubhai Ambani Group's Reliance Capital, has launched the Travel Currency Card, as a result of a partnership with Citibank. The prepaid card is aimed at overseas travellers, it is available in USD, EUR and GBP, it can be used in the local currency of any country of visit and it is ATM access and POS-enabled. With the multi-currency Reliance Money Travel Currency Card, cardholders can buy items and services goods and services through 13.5 million Visa enabled point-of-sale terminals and 900,000 Visa ATMs globally. (The Paypers)

CARD ISSUERS' CORNER

Visa PayWave trial in Switzerland deemed successful
May 4, 2009

A pilot in Switzerland which tested Visa payWave contactless payments by card and mobile phone has been deemed successful by the project's partners Credit Suisse, PostFinance, SIX Multipay, Swisscard, Swisscom and Visa.

Over 90 percent of the employees of Credit Suisse, Swisscard and SIX Multipay which took part in the trial liked using the NFC-based mobile payments technology and said they would use the technology when the service becomes commercially available.

The aim of the pilot was to test the technical and operating feasibility of contactless payments, as well as their usability and the preferences of the Swiss consumers.

Between September and November 2008, trial participants used NFC-enabled mobile phones or contactless Visa credit cards to make small purchases in their staff restaurants. Trial participants had to wave their cards or mobile phones against contactless readers to make payments of up to EUR 25 (CHF 40). Purchases were deducted from users' Visa card accounts. For security reasons, trial users were periodically requested to enter a PIN or mobile PIN.

In the next phase in Switzerland a working group will gauge the best available solutions for expanding the number of acceptance points in Switzerland. (The Paypers)

MasterCard Europe sees 6.4% increase in card purchase transactions volume
May 6, 2009

MasterCard Europe has seen its card purchase transactions volume (including e-commerce) increase to 1.5 billion in Q1 2009, up 6.4 percent compared to Q1 2008.

Moreover, the company has also seen its Q1 2009 gross EUR volume grow 3.9 percent year-on-year, while in the first three months of 2009 MasterCard Europe's purchase volume and cash transactions also increased by 4.2 percent and 4.3 percent year-on-year, respectively. MasterCard customer financial institutions across Europe have issued a total of 195 million MasterCard cards (Maestro and Cirrus excluded) as of 31 March 2009, a 7 percent climb year-on-year, with MasterCard cards being employed for transactions at 8.4 million accepting locations Europe-wide.

Finally, in Q1 2009 MasterCard issued 312 million cards under its Maestro brand mark, a 4.4 percent year-on-year increase. Maestro cards can currently be used for purchases at over 7.1 million European merchant locations. (The Paypers)

MasterCard tops 55 million PayPass cards and devices in Q1 2009
May 8, 2009

The total number of MaterCard payPass cards and devices has increased to 55 million in Q1 2009, up from 50 million in Q4 2008. At present, PayPass-enabled devices can be used today at over 146,000 merchant locations, compared to 141,000 in Q4 2008.

As part of its recent PayPass initiatives, MasterCard teamed up with Carrefour in France, Barclaycard and Orange in UK, ING Bank Slaski in Poland, Bell Mobility in Canada, Delta City and Banca Intesa in Serbia, Wurttembergische Bank (BW-Bank) and VfB Stuttgart in Germany, transport authorities in Turkey and with Kaohsiung City Government and Kaohsiung Rapid Transit Corporation in Taiwan. (finextra.com)

MasterCard mobile P2P payments platform set to go live
May 14, 2009

MasterCard has teamed with the Bancorp Bank for the launch of its person-to-person mobile payment platform for US issuers.

The service - offered via MasterCard's P2P money transfer system MoneySend - has been developed with m-payments specialist Obopay.

Although initially only for Bancorp Bank pre-paid cardholders, all issuers can sign up for the platform, enabling their customers to use MoneySend with debit, credit, pre-paid or checking accounts.

Senders initiate transfers to any domestic mobile phone number via SMS message, mobile Web browser or a downloadable MoneySend application.

Upon initiation of the transfer, the sender approves the request by entering the MoneySend mobile PIN which only the accountholder knows. Pre-registered recipients then receive a text message confirmation of the transfer. Non registered users get an SMS informing them the payment is pending.

The funds can then be accessed through an account designated during the registration process - initially, the Bancorp Bank pre-paid offering. Recipients can obtain the money through the mobile phone or, if they have a MasterCard card associated with the account, at ATMs, in branch or at the point-of-sale. (finextra.com)

HSBC may rethink U.S. credit cards
May 22, 2009

LONDON (Reuters) - Europe's biggest bank HSBC Holdings <HSBA.L> said business will remain challenging for much of 2010 and it may not keep its U.S. credit card arm if the problems facing the business intensify.

HSBC said its U.S. credit card business broke even in the first quarter in "very adverse" conditions, and financial and regulatory headwinds remain. If those become too strong, and they are not able to leverage this business more fully on a group basis, they may have to rethink it. That decision is unlikely to be made within the next 18 months. (Reuters)

American Express, Discover Top Credit Card Provider Rankings
May 26, 2009

Credit card providers took sixth place out of 12 industries included in Forrester Research's Customer Experience Index (CxPi), ending up with an overall "okay" rating of 68%.

The average score for credit card providers increased by one percentage point compared with last year. USAA came out on top with an "excellent" rating of 91%, followed by two
firms with "good" ratings: American Express and Discover. At the other end of the spectrum, HSBC received a "very poor" rating, while Washington Mutual and Bank of America ended up with "poor" ratings.

Most firms meet consumers' basic needs, Forrester says in Customer Experience Index 2008 Snapshot: Credit Card Providers. When it comes to meeting needs, USAA ended with a near perfect score. American Express also ended up with an "excellent" rating, and five other firms wound up with a "good" rating. HSBC was the only credit card provider with a "poor" rating. (Payment News)

BANKING & FINANCE SECTION

Emirates NBD launches PayPass
May 04, 2009

Dubai: In collaboration with MasterCard Worldwide, Emirates NBD on Sunday launched the Middle East and Levant's first wrist-watch equipped with MasterCard PayPass.

The "Contactless" payment feature provides consumers with a fast and convenient alternative to cash for their everyday small ticket purchases, and it benefits merchants through lower cash handling and faster transaction time.

Shoppers can now simply tap their new watch on PayPass-enabled terminals at checkout to make a credit card purchase at MasterCard PayPass merchants worldwide. The watch will allow consumers to make purchases under Dh100 without the need for a signature or PIN at select merchants within the UAE. Purchases exceeding Dh100 will, however require a signature.

Emirates NBD and MasterCard developed this watch in collaboration with LAKS, a well-known Austrian watchmaker, and Austria Card, the leading supplier of smart cards and personalisation services in central and eastern Europe. This limited edition watch is being issued as a supplementary device to MasterCard credit cards. The watch has a classy exterior, with a black strap and showcases the Emirates NBD logo on its face.

The UAE is a market where consumers are extremely tech-savvy and Emirates NBD is dedicated to staying at the forefront of innovation and providing customers with solutions that make their lives easier, especially in traditionally cash-only environments. (Gulf News)

Paymo extends market reach to 52 countries
May 4, 2009

US mobile payments services provider Paymo has extended its market presence, adding seven new countries to the list of 45 where its mobile micropayments service is available. Some of the countries where the service is available include Australia, Canada, Chile, France, Hong Kong, Lebanon, Norway, Russia, Saudi Arabia, South Africa, Spain, Thailand, United Kingdom, US, Vietnam (the full country listing).

At present, Paymo reaches 1.5 billion consumers and manages transactions across more than 150 carrier networks. In the US alone, the service is available to 1 billion mobile subscribers, including those using AT&T, T-Mobile and Virgin. (The Paypers)

Alipay to launch mobile payment service in China
May 5, 2009

Chinese online payment services provider Alipay has signed a deal with China Mobile that will enable China Mobile users in the Zhejiang province to carry out m-payments for items such as new handsets or text message news updates.

The service is going to be officially launched in 2009, following more than a year of internal testing. Alipay has closed a similar deal with another Chinese carrier China Telecom.

In order to make m-payments via Alipay, users will need to link their mobile number to their Alipay accounts and configure their mobile payment service. By sending SMS commands to a specific number, mobile phone users will be able to make transfers and buy goods of up to CNY 200 (approximately EUR 22) per transaction.

The Chinese m-payment market is dominated by UMPay, a joint venture between an inter-bank credit card organisation China UnionPay and mobile operator China Mobile, the world's biggest mobile carrier in terms of subscriber numbers (415 million customers). Since it was launched in 2004, UMPay's main mobile payment service has reached over 40 million registered users, including inactive accounts.

Three Chinese mobile carriers will launch 3G networks in China in 2009, which is likely to boost the number of people who use their phones to access online services. (The Paypers)

mFoundry Launches Complete Three Mode Mobile Banking
May 5, 2009

mFoundry has announced that its mBanking product has been enhanced to include integrated support for text banking (SMS) and alerts, as well as support for mBanking within the mobile web browser (WAP).

The addition of these two new modes makes mFoundry's mobile banking product the most complete solution in the market with integrated SMS, WAP, and mobile applications including native support for iPhone and iPod Touch.

mFoundry's three mode mobile banking solution now enables financial institutions of any size to deploy all mobile modes with the ease of one integrated product. Customers benefit from having comprehensive device coverage ranging from lower-end devices to smartphones. Having deployed more iPhone apps than any other mobile banking vendor, mFoundry also offers customers rich application functionality for iPhone and iPod Touch, which represent a significant percentage of mobile financial services users.

mFoundry's three mode mobile banking product has already been adopted by key partners and jointly sold to several new customers. Announcements will follow in the next few weeks. The mFoundry platform supports complete mobile banking and mobile payments and serves as an ideal foundation for mobile wallets. Adopted by some of the largest banks and mobile operators in the U.S., the mFoundry platform has become the leading mobility platform for financial services. (Payment News)

Sybase 365 teams with Swisscontact on mobile money for the unbanked
May 5, 2009

Sybase 365, a subsidiary of Sybase, the global leader in mobile messaging services, today announced it will team with Swisscontact, the Swiss Foundation for Technical Cooperation, a leading global development organization, to provide sustainable development of Mobile Money Transfer (MMT) and Mobile Money for the Unbanked (MMU) services in emerging markets.

The number of mobile phone subscribers is expected to reach 5 billion by 2012, largely due to growth in emerging markets. In absolute terms, this is also the potential size for mobile money opportunities, as all mobile phones are capable of sending and receiving data via SMS. The uptake for mobile money services in emerging markets will be driven largely by domestic or cross-border person-to-person fund transfers. Today, less than 15% of the population in emerging markets has access to bank accounts, while mobile phones provide access to basic financial services and micro finances for both the unbanked and the under banked. One in 10 people around the world undertake remittances and 70 percent of migrant workers remit funds on a regular basis.

The Sybase 365 end-to-end mCommerce solution enables subscribers to buy, pay, bank and remit money via a mobile device. For example, in partnership with Globe Telecom in the Philippinesnes, and as a certified GSMA Mobile Money Vendor, Sybase 365 has already deployed MMU and micro finance solutions in emerging markets including Egypt, Nigeria, Kenya, South Africa, Columbia and Chile, as well as MMT solutions in markets including the Philippines, the UAE, Malaysia and the United States. (finextra.com)

Riyadh to host GCC central bank
May 6, 2009

Gulf Cooperation Council (GCC) leaders yesterday chose the Saudi capital to host the group's first regional central bank, a key step toward a push for greater economic integration in the region.

GCC Secretary-General Abdul Rahman Al-Attiyah said Riyadh was chosen as the location for the region's Monetary Council, the precursor to the new central bank.

The announcement marked a major step toward advancing the Gulf's monetary union plan that also includes a unified currency. The effort, in the works for years, has stalled on a number of issues, including Oman's decision not to participate in the single currency and Kuwait's move to drop the US dollar as a currency peg.

GCC officials had set a target of 2010 for the new currency, but they have since acknowledged that this deadline would not be met.

Following a meeting in December, the GCC set the end of this year as a deadline for ratifying the charter of the monetary council, which would subsequently work to establish a timetable for the unified currency. (Arab News)

Kenya Commercial Bank signs M-Pesa deal with Safaricom
May 8, 2009

Financial service provider Kenya Commercial Bank (KCB) has partnered with local mobile operator Safaricom to integrate Safaricom's mobile money transfer service M-Pesa into its operations.

Kenya Commercial Bank intends to broaden access to M-Pesa by linking it to its ATM network as well as to offer its own banking products through M-Pesa. The move is expected to resolve recurring liquidity issues with Safaricom's M-Pesa supply chain. As a result of the deal, M-Pesa agents are able to deposit money at KCB branches to ease the flow of over KES 17 billion (USD 218, 222 million) transferred using the mobile money transfer service on a monthly basis. Safaricom's service has around 6.5 million customers and 9,000 distribution agents across Kenya. Almost USD 10 million in M-Pesa transactions are handled each day by the Kenyan operator. Despite the service's growth, Safaricom CEO Michael Joseph declared at a mobile payments conference in Johannesburg that the mobile money transfer service is still not profitable. (The Paypers)

Standard Chartered launched internet banking portal in Ghana
May 8, 2009

UK-based financial services provider Standard Chartered Bank (SCB) has launched a new internet banking platform in Ghana, online news outlet allafrica.com reports.

Dubbed ‘iBanking', the new web portal allows SCB customers to check their account balances online, carry out money transfers, review transaction details, apply for chequebooks and pay utility bills over the internet. The SCB online banking platform launched in Ghana is part of a broader initiative undertaken by the bank in 2008 to expand its operations in Africa by developing and implementing a series of alternative banking channels such as ATMs, mobile banking and e-statements. (The Paypers)

ICICI Bank to Issue Visa Debit Cards in the U.S.
May 12, 2009

India's ICICI Bank and Visa have announced a strategic relationship that will enable ICICI's New York Branch to issue Visa Debit cards in the U.S. The bank will offer Visa Debit cards to its Global Indian Account and other checking account customers at its New York branch. The Global Indian Account service addresses the banking needs of Indians moving overseas who require access to local banking facilities in the United States.

The Global Indian Account provides customers with simultaneous access to a US$ Checking account at the Bank's New York Branch for use in the U.S. and a Rupee NRE account at ICICI Bank Limited for their use in India. The US$ Checking account will come with a Visa Debit card that can be used at millions of merchant locations and ATMs worldwide; the accounts will have Internet banking capabilities for electronic fund transfers - including cross border remittances - and will primarily be targeted at the large Indian expatriate community working in the U.S. (Payment News)

Previer says money remittances at ATMs can increase cash deposits
May 13, 2009

Privier Inc. provides payment solutions to financial institutions that offer funds-transfer services to banked and unbanked consumers using existing ATM infrastructures. Using that technology, Privier now is working with FIs to encourage cash deposits at ATMs that can be used for money remittances to friends and family.

According to a news release issued by Privier, cash-recycling technology at ATMs will enable not only remittances, but also will lead to a reduction in ATM cassette replenishment.

In Korea, Japan and China, cash-recycling technology is more accepted than it is today in North America. About 60 percent of ATMs in Korea are cash recycling, and ATM users there are very accustomed to depositing cash at the ATM.

Privier has developed a patented ATM-remittance technology called Privier Self-serv, which leverages envelope-free ATMs with Lexis/Nexis InstantID's Q&A technology to create the world's first cash-to-cash remittance service that requires no enrollment.

To use the technology, an FI must place two buttons or options on the ATM screen - one for sending cash and the other for picking up cash. When a user chooses one of the options, she is prompted to enter a Social Security Number. InstantID's Q&A then prompts the user to authenticate her identity using challenge questions. If the user is sending cash, the ATM counts the cash and prints out an ATM receipt with transaction details and a unique withdrawal code. (ATM Marketplace)

Virgin plans Internet bank
May 18, 2009

Virgin Money is planning to launch a UK Internet bank in a bid to take advantage of public anger at traditional high street outfits, according to the Observer newspaper.

The financial services arm of Richard Branson's empire is preparing to apply to the Financial Services Authority for a banking licence that would allow it to take deposits and offer mortgages.

Virgin Money was launched in 1995 and claims over two million UK customers, offering credit cards, personal loans, savings products and insurance. Sales rose from around £70 million to £100 million in 2008 with profits estimated at £30 million.

The unit is now looking to follow the lead of Tesco and push much further into financial services, taking advantage of public anger at traditional banks. Tesco bought out RBS to take complete control of Tesco Personal Finance in December and plans to open 30 bank branches in its stores by the end of the year. Branson is said to be considering three options: launching a new bank with a branch network; teaming up with another finance firm; or joining a consortium to buy a troubled bank like Northern Rock. (finextra.com)

Bank of America's m-banking website ranks first in performance top
May 14, 2009

A benchmark study of six US banks' m-banking websites ranks Bank of America's m-banking website first by taking into consideration a combination of five metrics.

The m-banking websites have been monitored in April 2009. Separate classifications have been created by taking into acount five core metrics, namely discoverability (the easiness of finding the mobile website using different URLs), readiness (mobile website's rendering on popular mobile devices), availability (the percentage of successful transactions or the availability of a web page), response time (the time each page takes to download and the duration of an entire transaction) and consistency (website performance on different mobile carriers, in different geographies and timeframes

The benchmark study was conducted by web application experience management services provider Gomez and mobile internet services company dotMobi. The Gomez/dotMobi benchmarks combine Gomez's web experience measurement methodology for the traditional PC-based web with tools from dotMobi to test mobile web performance across major wireless networks. Gomez/dotMobi benchmarks also include data related to airline companies websites and search engine websites (The Paypers)

MoneyGram International Announces Major Expansion of Money Transfer Services in India
May 26, 2009

MoneyGram International, a leading global money transfer company, announced today that Punjab National Bank, the second largest government bank in India, will begin offering MoneyGram's money transfer service across its network of more than 4,600 bank branches in India. The expansion is part of an agreement signed through MoneyGram super agents Thomas Cook and UAE Exchange Financial Services, Ltd. (Yahoo Finance)

ICICI Bank issues electronic cards supported by mChek
May 26, 2009

ICICI Bank on Tuesday has come out with electronic cards for its customers in association with mChek, India's one of the leading mobile payment solutions provider. These cards will be issued to the mChek application on the customer's mobile phone.

Visa International, the leading international electronic payment network had earlier approved mChek as a platform to which the issuer can issue an electronic mChek Visa card to deliver the convenience of mobile transaction with added security. (The Economic Times)

NTT DoCoMo and Mizuho eye mobile cash transfer service
May 27, 2009

Japanese wireless carrier NTT DoCoMo is teaming with Mizuho Bank on a service that will let customers make cash transfers through their handsets simply by entering the recipient's mobile number.

NTT DoCoMo will transfer the money on behalf of Mizuho through the bank agency scheme, which was introduced in 2006. Transfers will be charged to the sender's phone bill, with a monthly limit of 30,000 yen. The service is expected to launch this summer if the telco receives approval from the Financial Services Agency. (finextra.com)

US Bank pilots contactless payments and access card
May 27, 2009

US Bank is piloting a card that can be used for for traditional magnetic stripe purchases, Visa payWave contactless transactions and to gain access to secure facilities.

The bank is trialling the technology with staff in Minneapolis, enabling participants to use their pre-paid payroll account cards to make purchases and enter their secure work location.

The card contains Inside Contactless' MicroPass 4006 platform, which consists of Visa's payWave application and Hid Global's contactless access technology. (finextra.com)

Jump in mobile payments users this year - Gartner
May 28, 2009

The number of people around the world making payments using their mobile phones is set to soar from 43.1 million in 2008 to 73.4 million this year, a 70% rise, according to analyst house Gartner.

By 2012, the company predicts the number of people making m-payments will hit 190 million - more than three per cent of total mobile users - as it become "mainstream."

Gartner expects Asia Pacific and Japan to lead the way in mobile payment penetration, rising from two per cent this year to 3.8% in 2012. In Western Europe penetration is expected to rise from 0.9% in 2009 to 2.5% in 2012, while in North America the figure will jump from 1.7% to three per cent. Eastern Europe, the Middle East and Africa and Latin America markets are also expected to exceed three percent penetration within three years. (finextra.com)

TimesofMoney's DirecPay product to officially hit the market within a month
May 29, 2009

India-based online money transfer services developer TimesofMoney is expected to officially launch the DirecPay online payment service on the local market in a month, Business Standard reports.

The DirecPay enables merchants who have an e-commerce-enabled platform to integrate their websites to the payment processing gateway and to accept payments from customers via credit cards, net banking and debit cards.

TimesofMoney offers remittance services from the US, the UK, Canada, Europe, Australia to India. The company currently remits USD 1.5 billion annually. (The Paypers)

MERCHANT'S CONCERN

UK e-tailers at a loss due to limited payment options - survey
May 8, 2009

A survey indicates that UK online merchants are losing business as a result of the limited number of payment methods they provide.

Nearly 50 percent of the 2,000 UK internet users involved in the research are willing to cancel purchases if they do not find their preferred method of payment available on a certain e-commerce platform, the same source reports. The percentage of respondents (40 percent) claiming that a variety of payment methods available on a certain website would make them feel more comfortable when shopping online comes to support such findings.

Furthermore, some online shoppers are still preoccupied with possible security risks they are exposed to while shopping online. More than half of the respondents who have stated that buying online is not one of their regular activities on the internet have mentioned fraud-related fears as the main reason. 84 percent of interviewees are convinced that the increase in the number of individuals attempting to commit fraud online is related to the fact that more people across the world use the internet.

The study was carried out by independent survey firm YouGov and data have been published by econsultancy.com. (The Paypers)

GoPayment
May 26, 2009

A new mobile credit card processing solution has been introduced for a one-time merchant account setup cost of $59.95 and a $19.95 per month fee. Transaction ranges from 1.64% to 3.54%, with no additional fees or long-term contracts. The new Intuit "GoPayment" enables small businesses to process credit card payments via a mobile phone. The new service also offers optional Bluetooth hardware. These small and lightweight mobile accessories include a card swipe that automatically reads credit card data, reducing manual entry. For more information visit:: http://mobilepayment.intuit.com/.

PAYMENT PROCESSOR'S POST

Vocalink secures £60m shareholder investment
May 5, 2009

UK payments processor VocaLink has tapped its shareholders for a £60 million equity capital investment as it looks to continue to expand its European presence.

The company, owned by around 20 UK banks and building societies, was created in 2007 through the merger of the Bacs payments and clearing network and ATM network operator Link.

Since then it has embarked on an aggressive expansion programme into Europe in a bid to take advantage of the introduction of the Single Euro Payments Area (Sepa). The firm has signed a number of major banks - including ABN Amro, Bank of America, Citi, Dexia Bank, Fortis, Lloyds TSB, RBS and Santander -to its €CSM partnership, which provides banks and clients with Sepa-related services.

Earlier this year it completed pilot testing of Sepa direct debit exchanges between corporate customers and three European banks, ABN Amro, Bawag and Royal Bank of Scotland.

It has also signing an outsourcing deal with Sweden's national processor Bankgirocentralen to take on the majority of its payments processing and provided the platform for the UK's Faster Payments service. (Press Release)

FRAUD & SECURITY MATTERS

Report: ATM/Debit Card Fraud On The Rise
May 13, 2009

Credit card fraud may get most of the publicity when it comes to identity theft, but ATM and debit card theft is expected to grow 10 to 14 percent this year, according to a survey of financial institutions released today.

Nearly 70 percent of the respondents to the survey, conducted by antifraud firm Actimize, said they had experienced an increase in ATM/debit card fraud claims in 2008 compared to 2007. Around 23 percent said those claims jumped by 5 to 9percent; around 16 percent, by 10 to 14 percent; 17.5 percent, by 15 to 19 percent; nearly 9 percent, by 20 to 24 percent; 11 percent, by 25 to 49 percent; and 5 percent, by a whopping 50 to 74 percent.

Around 80 percent of the survey respondents said the massive data breaches can decrease consumer confidence in ATM/debit card use. Last year, respondents lost an average of $744,321, with some as high as $12 million, to ATM fraud alone, and an average of $145,560, or as high as $1 million, to data breaches, according to the survey. (ATM Marketplace)

Visa tests out card with inbuilt computer to stop fraud
May 14, 2009

Visa is testing out a new card with a computer screen and keypad embedded into it in the latest move to counter internet fraud.

The battery-operated card, fractionally thicker than a standard credit card, should be in consumers' hands by next year if a three-month trial is successful.

The technology in the card gives users one extra level of security when they are shopping over the phone or internet and has been designed to cut down on the £328 million of credit card fraud that occurred last year.

While chip-and-pin technology has managed to cut down on criminals using stolen cards in shops, fraudsters have turned their attention to the internet where chip-and-pin does not extend. This has enabled them to use cloned cards and stolen cards with great ease.

The new Emue cards are designed to put an end to this so-called "card not present" fraud.

When a user is on a retailer's website, they will type in their credit card number and three-digit security code as normal. The website will then ask purchasers to type in their Emue code. To get this code, consumers will turn over their card and use the keypad on the back of the card to type in their Personal Identity Number (PIN), as they would in a shop.

A randomly generated unique four-digit number will then pop up on the card's mini screen. The shopper types that four-digit number into the website.

This extra code - which changes every time the owner of the card uses it - will be verified by the credit card company's servers and allow the transaction to go through.
Visa estimates the cards will be distributed to customers from next year. The battery life should last at least three years, ensuring it runs out after the card has expired. (Telegraph.co.uk)

Furthermore, some online shoppers are still preoccupied with possible security risks they are exposed to while shopping online. More than half of the respondents who have stated that buying online is not one of their regular activities on the internet have mentioned fraud-related fears as the main reason. 84 percent of interviewees are convinced that the increase in the number of individuals attempting to commit fraud online is related to the fact that more people across the world use the internet.

The study was carried out by independent survey firm YouGov and data have been published by econsultancy.com. (The Paypers)

OTHER NEWS & ISSUES

Over 25 e-commerce services providers to integrate Amazon Payments
May 4, 2009

More than 25 shopping cart and e-commerce services providers, including CardinalCommerce, Miva Merchant, Magento, ShopVisible, Mercantec and Zoovy are to integrate the Amazon Payments e-commerce checkout service.
Amazon Payments is a payments service run by Amazon.com which allows users to send and receive payments using web-based or mobile phone interfaces. The service includes Checkout by Amazon and Amazon SimplePay checkout options. (The Paypers)

France delays Sepa Direct Debit launch
May 1, 2009

French banks have pushed back the date for implementation of the Sepa Direct Debit scheme by a year to November 2010, setting the stage for a confrontation with the European Central Bank and the European Commission.

In a communique issued on Wednesday, the French National Sepa Committee said the decision to hold off on implementations stemmed from delays in the transposition of the Payment Services Directive to national law and the need for further investigation and clarification of the economics of new interchange fee levies.

The Committee, which is jointly chaired by the Banque de France and the French Banking Federation, said it would inform the relevant European authorities of its decision.

The move comes less than a month after the European Payments Council agreed on a November 2009 launch date for the implementation of Sepa Direct debits, following a strong push by the ECB and the European Commission.

Speaking in September last year, ECB executive board member Gertrude Tumpel-Gugerell said it would "not be acceptable that bankers are not able to deliver the Sepa direct debits by a November 2009 deadline". (finextra.com)

China UnionPay targets online payments market expansion
May 5, 2009

Chinese credit card organisation and interbank operator China UnionPay (CUP) aims to provide its online payment services to companies which are active in the Chinese e-commerce sector, Interfax China reports.

For this purpose, ChinaPay E-payment Service, CUP's online payments division, has become involved in negotiations for partnership purposes with various Chinese online retailers, including online book retailer Dangdang.com, B2C e-commerce company 360buy.com and Joyo Amazon. Furthermore, CUP has opened branches across the region and has signed agreements with banks across 61 countries and regions in order to tap into the online payments market.

According to Chinese consulting firm iResearch Consulting Group, revenues generated by internet payment transactions in China in Q1 2009 have reached USD 17.26 billion, growing 146.9 percent over Q1 2008. (The Paypers)

Feds: Close rate-hike loopholes in credit card rules
May 6, 2009

Federal credit card regulators are taking steps to close potential loopholes that, if left unaddressed, could allow card issuers to get around limits on when interest rates can be increased on existing credit card balances.

In proposed rules publish May 4 in the Federal Register, regulators are seeking public comment on "clarifications" to the sweeping credit card rules finalized in December 2008. Those rules limited interest rate hikes on existing consumer credit card balances to four circumstances: when a cardholder is more than 30 days late paying a bill, when an introductory APR or teaser rate ends, if a card has a variable interest rate or after the first annivesary of a new account. Issuers must give 45 days' advance notice of changes to accounts.

Extending consumer protections

The proposed clarifications make it clear that APR's also cannot be increased:
• On balances of closed accounts. As currently written, the rules apply to open accounts.
• When an account is acquired by another credit card issuer (such as when one bank buys or acquires another or purchases their credit card portfolio).
• When the balance on the account is transferred to another account with the same issuer.

Deferred interest changes

Other clarifications involve deferred interest programs offered by many retailers and card issuers. They are advertised with "no interest payments until" some future date.

According to the Fed, "Institutions and retailers may continue to offer deferred interest and similar programs, but these programs are subject to all of the protections in the final rules.

For example, if a consumer makes a purchase under this type of program, the terms governing interest charges on that purchase cannot be changed through a "hair trigger" or "universal default" rate increase. In addition, institutions and retailers must comply with enhanced disclosure requirements."

The public has until June 4 to comment on the proposed changes. According to the Fed, the revisions do not affect the implementation time line for the federal rules. Issuers still must comply with the new federal rules by July 1, 2010.

To comment on the changes, go to the Federal Reserve's Web site.

Pulse launches surcharge-free ATM network
May 7, 2009

Pulse, one of the nation's leading ATM/debit networks, today launched Pulse Select, a surcharge-free ATM network alliance with the MoneyPass Network.

The PULSE Select/MoneyPass Surcharge-free ATM Network provides financial institution participants with access to more than 16,000 surcharge-free ATMs across the country.

The PULSE Select/MoneyPass network enables PULSE participants to provide their cardholders with increased access to surcharge-free ATMs at banks, credit unions, grocery stores, convenience stores, restaurants and other convenient locations in all 50 states.

Debit cardholders who use an ATM not owned or operated by their financial institution typically are charged a surcharge fee ranging from $1.50 to $3.00 per transaction. Financial institutions participating in the PULSE Select/MoneyPass network not only provide a desired service to cardholders, but also may be able to reduce expenses associated with providing rebates of surcharge fees.

Financial institutions participating in the PULSE Select Program will add their ATMs to the MoneyPass Network. (finextra.com)

European Commission publishes online resource on consumer digital rights
May 8, 2009

The European Commission has launched an online guide to consumer rights on the internet.

Dubbed eYouGuide, the online tool is meant to provide European consumers with clear information on their rights regarding their broadband provider, shopping and paying on the internet, downloading music and protecting personal data online and on social networking platforms. These include the right to access clear details on prices and conditions related to a purchase online, to assess whether their personal data is properly dealt with and to receive protection against rogue vendors, unfair contractual terms and commercial practices.

According to EU telecoms commissioner Viviane Reding, such an initiative looking to help the public use the internet is expected to boost consumer trust in e-commerce as well as "unlock the full economic potential of Europe's single online market, worth EUR 106 billion in revenues". Statistics released by a Eurobarometer survey indicates that lack of confidence is one of the main reasons for which many consumers refuse to get involved in e-commerce activities and make online transactions. (The Paypers)

BIS releases new cover payments guidelines
May 12, 2009

The Bank for International Settlements has provided final guidance on due diligence and transparency regarding cover payment messages in cross-border wire transfers.

The new rules are intended to clamp down on the use of cover payments to hide the identities of wire transfer recipients in support of regulatory initiatives on anti-money laundering and terrorism financing.

The stripping of information allowed more than $350 million in transactions to be processed by US correspondent banks that might have otherwise been blocked or rejected due to sanctions regulations or for internal bank policy reasons.

New regulations for banks transmitting cover payments through the Fedwire Funds Service and Chips, the US wire transfer systems are set to be introduced some time in the fourth quarter of 2010. Swift, the bank-to-bank payment network is also introducing new messaging standard, MT 202 COV, that will go live in November 2009.

In releasing its guidance, the BIS says the new measures are consistent with private sector initiatives. The document describes the supervisory expectations for the information that must be included in payment messages related to cover payments, the mechanisms that must be used to ensure that complete and accurate information has been included in such messages, and the use that should be made of the information for anti-money laundering purposes and to combat the financing of terrorism.The fine-tuning follows the publication of an earlier draft that was released for public consultation last year. (finextra.com)

Facebook to initiate its own payment system testing
May 13, 2009

After rumours regarding a payment platform of its own for almost a year and a half, Facebook is to start testing a payment system with application developers "in several weeks", venturebeat.com reports.

Although tests involve a small number of developers and details are still being discussed, such an initiative would provide developers with the possibility of integrating a Facebook-branded payment system into their applications. Thus, application developers would accept payments directly inside their Facebook application and users could conduct transactions and purchase virtual and physical products and services without using third party payment platforms such as PayPal.

According to the report, such a platform would incorporate a "universal currency" associated to a user's login, allowing members to offer their payment related details only once, while transactions could be made both within Facebook and across third parties using Facebook Connect. Facebook Connect is a technology allowing members to connect their profile data and authentication credentials to external websites. The application allows members to log onto other websites using their Facebook identification and see their friends' activities on those platforms.

The company has not made any official announcement regarding the payment system testing yet. (The Paypers)

UAE authorities, National Bank of Abu Dhabi partner to expand online revenue collection system
May 13, 2009

The UAE Ministry of Finance has signed a memorandum of understanding (MOU) with financial services provider the National Bank of Abu Dhabi (NBAD) to expand E-dirham, the country's payment tool for online revenue collection.

The second generation system, dubbed G2 E-Dirham, is set to make a series of additional payment channels and methods available to consumers. The new payment options include the payment and collection of government and non-government services fees, bill and fine payments, e-commerce and online banking payments as well as mobile payments, payments at the ATM, via prepaid cards and prepaid smart cards, credit cards and direct debit. Additionally, the extended system will be connected to a series of international payment networks.

STS, a local electronic payments services provider, has been selected by NBAD to assist in the implementation process and take over the administration of G2 E-Dirham. (The Paypers)

Hypercom Expands High Security Product Portfolio in Germany
May 26, 2009

Hypercom Corporation (NYSE: HYC - News) today announced that its 32-bit multi-application Optimum T4200 and M4200 countertop and mobile transaction terminals are officially approved as compliant with the current EMV POS terminal specification from the Central Credit Committee (Zentraler Kreditausschuss - ZKA) in Germany. The approval covers the Optimum T4200 terminals with options for ISDN, IP and GPRS connectivity, as well as the M4240 Bluetooth and M4230 GPRS mobile models, all with integrated smart card readers. With ZKA approval, Hypercom strengthens its position as a leading provider of payment and digital transaction solutions to the German market. (Yahoo Finace)

CARD NEWS

Uncollectable credit card debt hits record high
April 1, 2009

Credit card write-downs soared to record levels in February, representing an all-time high in the 20-year history of the Moody's Credit Card Index, as job losses mounted, the rating agency said Wednesday.

Credit card charge-offs, the write-down of uncollectable debt, advanced decisively to 8.82% in February, marking the sixth consecutive month of increases. The level is more than 300 basis points higher than a year ago. (CNN Money)

Indian Banks Promoting Debit Cards Usage
April 16, 2009

New research report, the "Indian Payment Card Market Forecast to 2012" says that India has seen remarkable growth in its debit card market over the past few years. The number of debit cards issued by banks grew at a CAGR of more than 43% from FY 2006 to FY 2008. However, the usage of debit cards in India is largely confined to instant withdrawal of cash from ATMs. There were over 102 Million consumers with slight more than Rs. 125 Billion debit card spending during FY 2008 compared to around 27.5 Million consumers who spent Rs. 580 Billion through credit cards in the same period. (Press Release)

U.S. Bank Issues 30 Millionth Gift Card
April 17, 2009

U.S. Bank recently issued its 30 millionth gift card - saying it remains "the top Visa gift card issuer and a leader in prepaid cards across the United States." For more information, visit http://www.usbank.com/prepaid. (Press Release)

UK Payments Industry Publishes 2008 Spending Data
April 28, 2009

APACS has released new figures from the UK payments industry that give an authoritative overview of UK consumers' spending habits last year.

According to APACS, "the figures show that 2008 followed the key trends seen over recent years with cash and credit card spending remaining comparatively flat, cheque use falling and spending on debit card and electronic payments continuing to rise. In particular last year, the growth of debit card spending at retailers remained strong with spending rising by 6.8%: debit cards now account for two-thirds of spending on plastic cards.

The retail spending statistics, which cover all online and offline retail transactions in 2008, show that of a total £269.9bn spent by consumers, 43 per cent (£116.1bn) was by debit card, 32 per cent (£86bn) was by cash, 23 per cent (£60.7bn) was by credit card and only 3 per cent (£7.1bn) was by cheque."

Total consumer spending statistics for the UK, also released today, show that for general consumer spending - which includes financial payments and payments for travel and entertainment among others - debit card and automated payment use also grew strongly between 2007 and 2008. Last year, debit card spending grew by 9.5% to reach £245 billion, and automated payments by 6.9% to reach £333 billion. That year, cheques accounted for less than three quarters the amount spent by UK consumers on their debit cards. (Payment News)

A Look at US Debit Card Spending
April 30, 2009

In an article titled "Debit-Card Use Overtakes Credit ", Robin Sidel writes for the Wall St. Journal about the increasing usage of debit cards by US consumers. Sidel notes that Visa reported yesterday that during the last quarter of 2008 debit card purchase volume slightly exceeded credit card purchase volume for the first time in Visa's history. (Payment News)

CARD ISSUER'S CORNER

Visa Launches World's First Commercial NFC @ POS Service
April 10, 2009

Visa has announced the launch of what it is calling "the world's first commercial Visa mobile payments service for point-of-sale transactions using Near Field Communications (NFC) technology. The service marks the first time consumers can purchase an NFC-enabled mobile device off the shelf and use that device to make Visa payWave-enabled transactions at the point-of-sale instead of using their payment card." The new service is being launched first in Malaysia with Maxis, the largest wireless carrier in Malaysia with more than 11 million subscribers; Nokia - the world's leading handset manufacturer; and, Maybank - a leading financial institution in Malaysia as its partners. (Payment News)

MasterCard completes Canadian m-payments trial
April 16, 2009

MasterCard Canada, in partnership with Citi Cards Canada and Bell Mobility, has completed the first near-field communications (NFC) trial of Mobile PayPas in Canada.

This was the first trial in Canada to use Bell Mobility's wireless network allowing trial participants to make purchases using their mobile device at MasterCard(R) PayPass acceptance locations across Canada. The four-month closed trial was a major step towards bringing mobile payments to Canadian mobile phone users. (finextra.com)

Silicon Valley Bank Becomes Business Credit Card Issuer
April 28, 2009

Silicon Valley Bank, the premier commercial bank for companies in the technology, life science, venture capital and premium wine industries, announced that it is now the issuer of business credit card products under the MasterCard brand. A longtime provider and guarantor of business credit cards, as part of a full suite of banking products for its commercial clients, Silicon Valley Bank has now assumed the role of issuer, allowing it to take more direct control over service and product expansion. Silicon Valley Bank partnered with a leading credit card provider, New England Bankcard Association, which will manage SVB's commercial credit card processing services.
(Press Release)

BANKING & FINANCE SECTION

NACHA Reports More than 18.2 Billion ACH Payments in 2008
April 6, 2009

The number of ACH payments in 2008 topped 18.2 billion, representing an increase of 1.2 billion over 2007, according to statistics released today by NACHA - The Electronic Payments Association at its PAYMENTS 2009 conference. The dollar value of consumer ACH payments made via the Internet is nearing $1 trillion annually ($939 billion in 2008).

The portion of ACH payment volume passing through the ACH Operators grew in 2008 to nearly 15 billion transactions. The number of ACH Network transactions in 2008 was 14,960,689,587, which is 7.1 percent more than 2007. The dollar value of these payments was $29.96 trillion, an increase of 4 percent over 2007. (Payment News)

CGAP and Wizzit team on m-banking for South Africa's rural poor
April 8, 2009

Launched in 2005, South African Bank of Athens-owned Wizzit targets the unbanked population, offering an account that lets customers use their mobile phones to make person-to-person payments, transfers and pre-paid purchases.

It is now working with CGAP's technology programme to trial an m-banking service for the major wholesalers serving more than 500 microentrepreneurs, who run small 'spaza' shops, in the township of Motherwell, where three in five people are unbanked.

In addition, a pilot programme designed to make it easy to open accounts, and get preferred pricing, at clothing retailer Dunns' has been launched. If successful, this trial will expand to 289 stores throughout the country. Wizzit will also work with South African Post Office for distribution. (finextra.com)

BofA to Boost Rates on Cards With Balances
April 9, 2009

Bank of America Corp. is raising interest rates on as many as four million U.S. credit-card customers who carry a balance, becoming the latest bank to crack down on people who don't pay off their bill every month.

Starting with June account statements, any credit-card customer who carries a balance and has an interest rate below 10% will see his or her rate jump into double-digit territory. A company spokeswoman declined to provide an exact number, saying the changes would affect less than 10% of the bank's card customers in the U.S. The bank has 70 million card customers world-wide, but doesn't break out the number of customers who are in the U.S. (WSJ)

MoneyGram introduces cash to card money transfers in Morocco
April 15, 2009

MoneyGram International (NYSE: MGI) a leading provider of global payment services, announced today it has expanded its money transfer services in Morocco with the introduction of a cash-to-card program offered by the company's agent Credit du Maroc.
In addition, MoneyGram has doubled its network in Kenya, Angola and Ethiopia through several newly signed agents. (finextra.com)

PAYMENT PROCESSORS' POST

Fed, Equens Partner for Cross-Border Payments Between US & Europe
April 9, 2009

The Federal Reserve Banks and Equens have announced "signing a Memorandum of Understanding for the processing of payments from the US to Europe and vice versa. Starting in early 2010, both parties will offer banks a cost-efficient channel for processing cross-border payments in multiple currencies, including the US dollar and euro."

The strategic partnership between the Federal Reserve Banks and Equens is based on an increasing market demand for efficient processing of low-value cross-border payments on a global level. Both organisations are also members of the International Payments Framework (IPF) - a collaborative effort among public and private payment groups in Africa, Europe, North America and South America. (Payment News)

First Data Becomes Visa Merchant Acquirer in Canada
April 23, 2009

First Data has announced that it has entered into a relationship with Visa in Canada, becoming the first merchant acquirer in the country to directly participate in all three major schemes: Visa, MasterCard and Interac. (Payment News)

OTHER NEWS & ISSUES

Gemalto Delivers Electronic ID Cards to Saudi Arabia
April 1, 2009

Gemalto, a digital security firm has delivered electronic ID cards to the National Information Centre (NIC), the IT entity of Saudi Arabia's ministry of interior.

According to information made available to Khaleej Times here on Monday, as part of the new contract, Gemalto will provide NIC with e-ID cards for the next three years, as well as support and maintenance for the centralised personalisation centre in Riyadh. (Khaleej Times)

Oracle to buy Sun Microsystems for $7.4bn
April 20, 2009

Just weeks after takeover talks with IBM collapsed, Sun Microsystems has agreed a surprise $7.4 billion cash deal to be acquired by Oracle.

Under the definitive agreement, Oracle will pay $9.50 a share for Sun, a 42% premium on Friday's closing price, valuing the deal at around $5.6 billion net of Sun's cash and debt. Oracle expects the acquisition to add over $1.5 billion to non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. The deal has been unanimously approved by the Sun board and is expected to close this summer, subject to stockholder and regulatory approval. (finextra.com)

Credit Cardholders' Bill of Rights Clears Financial Services Committee
April 23, 2009

Yesterday, the US House Financial Services Committee approved legislation that would "provide credit card customers crucial protections against unfair, deceptive, and anti-competitive credit card practices, which include double-cycle billing, due-date gimmicks, and retroactive interest rate hikes. The bill would also increase the advance notice of impending rate hikes and give consumers the information and rights they need to manage their credit responsibly."

The Credit Cardholders' Bill of Rights (H.R. 627), sponsored by Rep. Carolyn B. Maloney (D-NY), was passed by a vote of 48 to 19. The bill now moves to the House of Representatives for consideration.

Specifically, the Credit Cardholders' Bill of Rights would:

• Protect cardholders against arbitrary interest rate increases
• Prevent cardholders who pay on time from being unfairly penalized
• Protect cardholders from due-date gimmicks
• Prevent companies from using misleading terms and damaging consumers' credit ratings
• Empower cardholders to set limits on their credit
• Require card companies to fairly credit and allocate payments
• Prohibit card companies from imposing excessive fees on cardholders
• Protect vulnerable consumers from high-fee subprime credit cards
• Bar issuing credit cards to vulnerable minors (Payment News)

RBI to introduce new rules for issuing prepaid mobile vouchers
April 27, 2009

India's financial regulator the Reserve Bank of India (RBI) is set to introduce guidelines which will allow banks as well as qualified non-banking entities to issue prepaid instruments such as prepaid mobile vouchers and mobile wallets, Indian newspaper Business Standard reports.

According to RBI, the maximum value of any prepaid payment instrument should not exceed EUR 758 (INR 50,000). The RBI's decision comes after it received comments on a draft proposal that sought to allow banks and eligible non-banking financial Companies (NBFCs) to issue pre-paid vouchers with a cap set at EUR 758 (INR 50,000).

The money stored on the prepaid instruments in question will be equivalent to the value paid by the holder either in cash or through a debit/credit card. These prepaid payments services will allow consumers to purchase goods and withdraw cash from ATMs. The vouchers can only be redeemed at identified establishments which had earlier entered into a contract with the issuer for honouring such instruments.

Once the operating guidelines are issued by the RBI, the banks and non-banking entities could issue instruments such smart cards, magnetic strip cards, internet accounts, internet wallets, mobile accounts, mobile wallets and prepaid vouchers.

Under the new guidelines, the regulator forbids payments with prepaid mobile phone credit for goods and services other than mobile content. Only banks and finance companies will be allowed to issue pre-paid cards which are accepted outside a closed group. (The Paypers)

CARD NEWS

South African banks issue a million MasterCard Chip and PIN cards
March 18, 2009

According to MasterCard Worldwide, South African banks have issued in excess of one million MasterCard Chip and PIN cards. As a result, retailers are seeing a rapidly growing number of Chip and PIN cardholders at pay points.

The majority of South Africa's retailers have already upgraded their systems to accept Chip and PIN cards, and are now gearing up to accept the multitude of cards in the market. The industry is now working together at full force to ensure that all stakeholders are comfortable and up to speed with this new transaction process. (Payment News)

CARD ISSUERS' CORNER

Visa pre-paid card load network introduced at MoneyGram locations
March 10, 2009

MoneyGram International (NYSE: MGI), a leading provider of global payment services, and Visa (NYSE: V) today announced plans to introduce Visa ReadyLink - Visa's prepaid load network - in MoneyGram's 40,000 agent locations across the United States, providing financially underserved consumers with more convenient options to add funds to their Visa reloadable prepaid cards.

By becoming a Visa ReadyLink participant, MoneyGram enables consumers with any Visa ReadyLink-enabled prepaid card to add funds - in real-time - anywhere MoneyGram Money Transfer and ExpressPayment are offered. (finextra.com)

U.S. credit card defaults rise to 20 year-high
March 16, 2009

U.S. credit card defaults rose in February to their highest level in at least 20 years, with losses particularly severe at American Express Co and Citigroup amid a deepening recession.

AmEx, the largest U.S. charge card operator by sales volume, said its net charge-off rate -- debts companies believe they will never be able to collect -- rose to 8.70 percent in February from 8.30 percent in January.

In addition, Citigroup Inc -- one of the largest issuers of MasterCard cards -- disappointed analysts as its default rate soared to 9.33 percent in February, from 6.95 percent a month earlier, according to a report based on trusts representing a portion of securitized credit card debt. (Yahoo Finance)

MasterCard CEO sees emerging markets growth
March 18, 2009

MasterCard Inc, the world's second largest credit card network, may increase investments in emerging markets despite the global financial crisis, its CEO said on Tuesday, adding that the U.S. economy could start recovering by the end of this year.

President and Chief Executive Robert Selander said in an interview that Brazil and China are among the markets where he expects strong growth opportunities. Both countries, with huge populations and a low penetration of credit and debit cards, are part of MasterCard's 15 biggest markets. Those 15 markets constitute 90 percent of the company's businesses.

Emerging regions from Asia to Latin America have reported double-digit growth in gross dollar volume in credit and debit transactions in the fourth quarter, while they fell 5 percent in the United States. Selander said it was a priority to expand MasterCard's debit business, seen as the fastest growing electronic payment tool. (finextra.com)

Diners Club Signs Multi-Year Acquiring Agreement with SIX Multipay
March 23, 2009

Diners Club International, a business unit of Discover Financial Services, in conjunction with Discover, and SIX Multipay, a leading Swiss-based payment services provider, have announced that they have signed a long-term merchant acquiring agreement. This is the first multi-country, acquirer agreement to further European acceptance of Diners Club and Discover Network cards.

Under the terms of the agreement, SIX Multipay will provide merchants with single source electronic payment services for the acceptance of Diners Club and Discover Network card products in key European regions including Switzerland, the United Kingdom, France, Germany, Ireland, Belgium, Netherlands and Luxembourg. (Payment News)

BANKING& FINANCE

M-banking users to reach 7 million globally by 2009
March 2, 2009

The number of mobile banking users is expected to double to 7 million in 2009 globally, from 3.1 million in 2008, according to a report.

Researchers also expect the number of mobile banking users to hit 32 million by 2013. The report estimates that in 2007 there were about 400,000 mobile banking users, a figure which skyrocketed to 3.1 million in 2008. The data was released by US technology market research firm ABI Research. (The Paypers)

Nigerian banks to stop issuing magnetic stripe cards
March 2, 2009

The Central Bank of Nigeria (CBN) has asked banks to stop issuing cards with a magnetic stripe for payments, starting 1 April 2009.

The decision aims to encourage banks to make the transition towards chip cards (smart card) as the standard, within the coming five years. CBN has decided to replace magnetic stripe cards because they have not enough storage space, cannot store applications, are easy to duplicate and do not provide many security features, as vanguardngr.com reports. The magnetic stripe cards which are already in circulation are to be withdrawn on their expiration and not on 1 April 2009. (The Paypers)

Barclaycard and Orange team on contactless m-payments
March 9, 2009

Barclaycard and wireless operator Orange have formed a strategic alliance that will see them push through the development and adoption of contactless mobile payments services.

Barclaycard and Orange will work together on rolling out the technology, which they call "the biggest revolution in payments since plastic cards were introduced over 40 years ago". They say they will also look to expand the partnership to include other contactless services within ticketing, transport and rewards. MasterCard will provide the payment capabilities for the transactions. . (finextra.com)

China, Hong Kong join forces for multi-currency payment system
March 16, 2009

China and Hong Kong are to launch a multi-currency payment system on 16 March 2009 in order to facilitate transactions between the two countries, Reuters reports.

In this respect, the Hong Kong Monetary Authority (HKMA) and The People's Bank of China have signed a memorandum of understanding for the set-up of multi- currency cross-border payment arrangements between China and Hong Kong.

The new system is to include payments in HKD, USD, EUR and GBP and will not make transactions in CNY, while China Construction Bank, Bank of China, Industrial and Commercial Bank of China, Shanghai Pudong Development Bank and Citibank are among the participating banks. (The Paypers)

FRAUD & SECURITY MATTERS

APACS Reports UK Card Fraud Statistics for 2008
March 19, 2009

UK card fraud loss figures released by APACS, the UK payments association, show that card fraud losses totalled £609.9m in 2008.

Card-not-present fraud losses have increased by 13 per cent over the last year and account for 54 per cent of all card fraud losses. Counterfeit fraud losses increased by 18 per cent in 2008, but the growth is markedly down on last year's 46 per cent rise.

Card ID theft losses have increased by 39 per cent to £47.4 million. Lost and stolen card fraud losses decreased by 4 per cent to £54.1 million. Online banking fraud losses totalled £52.5m in 2008 - a 132 per cent increase from 2007 losses. (Payment News)

OTHER NEWS & ISSUES

US Noncash Person-to-Person Market Reaches $1.1 Trillion in 2008
March 18, 2009

New research from TowerGroup finds that the gross dollar volume (GDV) of the U.S. noncash person-to-person (P2P) market in 2008 was $1.1 trillion in over 3 billion transactions. Checks are in decline, but they remain the most significant person-to-person payment method, amounting to over $1 trillion of the noncash P2P payments volume. (Payment News)

Etisalat Plans $1b Investments in India
March 24, 2009

The Emirates Telecommunication Corporation , or Etisalat, plans to invest $1 billion in the burgeoning Indian market where it has a minority stake in Swan Telecom. The telecom operator's commercial launch in India is planned for 2009, Etisalat Chairman, Mohammed Hasan Omran told Khaleej Times, after chairing the company's annual general meeting on Monday evening.

He said the investment would complement Etisalat's other regional investments in Pakistan, Afghanistan and Indonesia -- which represent one of the fastest-growing markets in the telecommunication world. (Khaleej Times)

PULSE to Pilot Internet PIN Debit Technology from Acculynk
March 23, 2009

PULSE has signed an agreement with Acculynk under which PULSE will test Acculynk's PaySecure Internet PIN debit technology in a pilot program. The pilot will involve selected PULSE merchant and financial institution participants and is slated to begin in the second quarter of 2009.

The goal of the pilot test is to assess consumer acceptance of Internet-based PIN debit transactions. Acculynk's technology enables consumers to use their debit cards with a personal identification number (PIN) to pay for online purchases. (Payment News)

SEPA direct debit interchange fees to be eliminated by 2012 - report
March 25, 2009

In a joint statement, the European Commission and the European Central Bank (ECB) provide clarifications on the long-term scenario regarding the launch and implementation of the SEPA Direct Debit scheme (SDD), which is to debut on 1 November 2009.

The statement indicates that the Commission Regulation on cross-border payments is set to provide a three-year transitional regime for the SDD business model, which is to end on 1 November 2012. By the end of the interim period, the multilateral interchange fee (MIF) currently charged by Eurozone banks and creditor companies for direct debits have to be eliminated and replaced by alternative national and cross border mechanisms, the Commission and the ECB have warned. This is due to the fact that MIFs are considered incompatible with EU antitrust rules. (The Paypers)

Nokia invests in Obopay
March 25, 2009

California-based m-payments outfit Obopay has received a major investment from mobile phone giant Nokia, which it will use to move into new markets.

The size of the minority investment has not been revealed but is believed to be around $70 million. Obopay says it will use the Nokia investment to aggressively extend its product suite and enhance its global presence. (finextra.com)

Global economy to shrink in 2009, World Bank says
March 31, 2009

The World Bank forecast is largely in line with the latest forecast from its sister institution, the International Monetary Fund. Two weeks ago, the IMF projected a global contraction of between 1% and 0.5% in 2009 and growth of 1.5% to 2.5% next year.

The developing economies excluding China and India are expected to have no growth at all this year. China's growth is expected to slow to 6.5%, and India's to 4%.

Among advanced economies, Japan and the 16-nation euro zone are being hit the hardest by global economic slump. Japan is expected to contract 5.3%, and the euro zone 2.7%. In the developing world, the worst-hit regions will be Eastern Europe and Central Asia (down 2%) and Latin America (down 0.6%), the bank said.

Russia's economy could be the hardest hit of all, with a 10% turnaround in its growth rate, from 5.6% growth in 2008 to a 4.5% decline this year. The U.S. economy is expected to shrink 2.4% in 2009.

South Asia is expected to grow 3.7% in 2009. The Middle East and North Africa is expected to grow 3.3%. Sub-Sahara Africa is expected to grow 2.4%, half its 2008 pace. (MarketWatch)

CARD ISSUERS' CORNER

American Express joins EMVCo as fourth owner-member
February 3, 2009

EMVCo(Europay, Mastercard and Visa), an organisation focusing on the management and maintenance of the EMV integrated circuit card specifications, has added American Express as the fourth owner-member. By joining EMVCo, American Express acquired a one-fourth share from the holdings of JCB, MasterCard and Visa, the three companies which own the body. (The Paypers)

BANKING & FINANCE SECTION

Citi launches online remittance platform for Indian community
February 5, 2009

Citibank N.A. today announced the launch of Citi Online Remit, a new online money transfer service to India. Citi Online Remit provides Non Resident Indians (NRIs) the facility to transfer funds to India from any US Checking/Savings account or using a US Credit/Debit Card as a direct transfer into the beneficiary's Bank account or as a draft couriered to the beneficiary's mailing address in India. (fineextra.com)

Is Noca The Next PayPal?
February 9, 2009

Noca, an online payments start-up we wrote about last year, is officially launching its payment service today. Formed by ex-Visa employees, Noca originally offered a micro-payments system via two Facebook applications, OneClickPay and HelpYourWorld. The company is now offering payment services for unlimited amounts. Currently, Noca has two clients; digital content provider Klatcher.com and a local little league site. The advantage of Noca's system is that it allows online merchants to bypass high transactional fees (usually 2-3 percent plus $0.30) imposed by credit card companies on consumer purchases. (TechCrunch.com)

CGAP Sees Mobile Banking Growth in Developing Markets
February 12, 2009

CGAP, the global microfinance center, is releasing new research and data to encourage telecom operators, financial institutions and governments to see the business potential in expanding access to financial services for poor people in developing markets.

Banking beyond branches -- by the numbers

• In the Philippines, a bank branch transaction costs US$2.50 but only US$0.50 if on a mobile phone, and some m-banking commissions still fall short of what merchants earn from other products -- for example; toothpaste, 10-12% margin; performing a mobile banking cash-in transaction; just 1%.
• In Pakistan, the cost of setting up and operating an agent is 76 times lower than that of a bank branch.
• Brazil is probably the most developed market where correspondent banking has taken hold: More than 70 institutions are currently managing around 105,000 agents reaching nearly 6,000 municipalities. (Payment News)

Zain targets 100 million East Africans with new m-banking service
February 17, 2009

Middle East and African mobile telecommunications provider Zain has partnered with banks including Standard Chartered and Citi to offer mobile banking to over 100 million people in East Africa with the launch of its new service, Zap.

Zap will be initially available in Kenya and Tanzania prior to launch in Uganda. The service will allow Zain customers in the three countries to use their mobile phone to pay bills and pay for goods and services, make peer-to-peer payments to other Zain customers or transfers to bank accounts, manage bank accounts, withdraw cash and top-up and transfer airtime to others. (finextra.com)

PAYMENT PROCESSSORS' POST

Global Payments launches Global HomeCurrencyPay in India
February 17, 2009

Card processing company Global Payments Asia-Pacific has made its Global HomeCurrencyPay service available to India-based merchants.

Global HomeCurrencyPay is a data processing service which converts the transaction amount into the cardholder's home currency at the point of sale. As a result of the initiative, Indian merchants can offer international customers the possibility to pay in their home currency or in Indian Rupees using a Visa or MasterCard-branded card. Global Payments Asia-Pacific has also introduced the currency conversion service for merchants across China, Malaysia and Taiwan. (The Paypers)

Canada's Moneris awards VeriFone $10m EMV terminal contract
February 27, 2009

Bank-backed Canadian card payments processor Moneris is gearing up for the country's migration to EMV by awarding eftpos vendor Verifone a $10 million contract for the supply of terminals.

Canada's payments association Interac began the national roll out of Chip and PIN debit cards in October after participants in a trial gave the technology the thumbs up. Interac says the migration will take several years, with each bank and payment processor following their own timeline, but insists all merchant terminals must be compliant by 31 December 2015. (finextra.com)

FRAUD & SECURITY MATTERS

Click Fraud Climbing
February 4, 2009

The firm's "Click Fraud Index," now in its third year, shows that the overall industry average click fraud rate grew to slightly more than 17% for Q4 2008, up from 16% in the previous quarter.

The US was responsible for most of the current cybercrime wave, but Canada (originating 7.4% of total click fraud), Germany (3%) and China (2.3%) also contributed to the rising click fraud rate. (eMarketer.com)

CARD NEWS

Debit card payments on the rise in India
January 7, 2009

Recently released data indicates that while major players on the Indian credit card market have started exercising closer control on their credit card portfolios, debit card usage is registering consistent growth.

According to personal finance news and information portal Rupee Times which quotes data from the Reserve Bank of India (RBI), debit card spending is rising at a more rapid rate than credit card spending. The report stipulates that the total debit card payments volume registered during the first seven months of the current fiscal year already represents 80 percent of the total debit card payments volume for the entire previous fiscal year. The total debit card payments transactions value registered between April and October 2008 also represents 84 percent of the total transactions value for the previous fiscal year. Between April and October 2008, debit card transactions in India were worth USD 2.1 billion (Rs 105 billion), compared to USD 2.5 billion (Rs 125 billion) registered during the entire 2007 - 2008 fiscal year. Credit card transactions registered between April and October 2008 add up to USD 8.2 billion (Rs 400 billion). (The Paypers)

CARD ISSUERS' CORNER

Visa Europe reports 10 percent increase POS card spending for 2008
January 23, 2009

Electronic payments processor Visa Europe reports a 10.3 percent increase in card spending at point of sale (POS) in 2008, marking an 11 percent increase in Europe compared to 2007.

Moreover, the company indicates that during financial year 2008, over 70 percent of Visa cardholder spending was carried out using debit cards, thus marking a shift in consumer mentality towards debit card payments as an alternative to cash and cheques. According to the report, Visa's European card processing system processed 6.4 billion transactions in 2008, a 13 percent increase compared to 2007. (The Paypers)

FRAUD & SECURITY MATTERS

US payment processor Heartland reports massive data breach
January 21, 2009

In a statement, Heartland Payment System says the malware, planted last year, has compromised data that crossed its network. Credit card numbers and expiration dates have been exposed, the firm's president, Robert Baldwin, told reporters.

The company has not revealed how many people are at risk or precisely how long the malware was in its computer system. However, according to its Web site, Heartland serves more than 250,000 businesses around the country and handles over four billion transactions a year.

The firm says no merchant data or cardholder social security numbers, unencrypted PINs, addresses or telephone numbers were involved in the breach. (finextra.com)

OTHER NEWS & ISSUES

Over six million customers hold a Moneybookers eWallet account
January 5, 2009

For the period ending 31 December 2008, UK-based online payment services provider Moneybookers reports that the number of its eWallet account holders has reached over 6 million, as compared to 4 million registered in 2007. The company has also witnessed a 300 percent increase in e-commerce transactions volume and its transactions volume run rate has reached EUR 3 billion. Moneybookers provides more than 60 local payment methods in 200 countries, up from 35 registered in 2007.

Customers can use the Moneybookers eWallet to send and receive money as well as to buy goods online by using their email address, without revealing sensitive credit card or bank data. (The Paypers)

Card processing made in India to be managed locally
January 7, 2009

Processing of credit card transactions made in India will be shifted locally over the next few years with India Pay, according to Indian newspaper Business Standard citing the Indian Banks' Association (IBA). Credit card transactions processing is currently done abroad.

India Pay is to deal with all domestic transactions and will work with payment networks like Visa and MasterCard when it comes to international transactions made by Indian cardholders or foreigners visiting India. Transactions costs will be reduced as the processing work shifts to India, according to sources. (The Paypers)

China's Web Population Edges Toward 300 Million
January 13, 2009

China says about 298 million of its citizen are Internet users, a figure that represents a 42 percent growth rate over last year. As the nation builds out 3G wireless networks, that number is expected to keep growing. However, the current figure still represents just 23 percent of the country's total population, and the financial size of the country's online market still trails smaller nations.

China's fast-growing population of Internet users has risen to 298 million after passing the United States last year to become the world's largest, a government-sanctioned research group said Tuesday. The latest figure represents a 42 percent increase compared with a year earlier, the China Internet Network Information Center said in a report. (e-Commerce Times)

TrialPay hits 20 million user milestone
January 27, 2009

The US online payment platform TrialPay reports that the number of users who are using its services has reached 20 million. In September 2008, TrialPay witnessed a 20 percent increase in merchant and user numbers within a month and a half, boasting 6,000 merchants and 12 million users. (The Paypers)

Remittances by GCC expats exceed $30 billion
January 28, 2009

The total amount of remittances by an estimated 14.5 million expatriate workers in the GCC (Gulf Cooperation Council) exceeded $30 billion last year. The economic downturn has resulted in mass job redundancies in the GCC and stirred a new debate about how to handle the delicate situation of downsizing in both private and public sectors.

The Middle East has become the fastest growth region for the money transfer and remittance industry due to the huge development projects requiring increasing numbers of expatriates.

Statistics show that money transfers by foreign workers to countries outside the Gulf region is estimated at $30 billion a year - this makes a 9 percent loss annually of the gross domestic product (GDP) of the region. (Arab News)