Thursday, January 26, 2006

Saturday, January 21, 2006

Record growth or natural growth...?

Interpay reports over 2005 a record growth in processed and authorized transactions. As good as this is, certainly if processing occurs with a minor number of glitches, these 'records' are not that stunning of course. Where economies and populations increase with a small percentage each year, the amount of payments is bound to grow as well. So as long as one processor captures the majority of such transactions, it is bound to set records. And achieve 'record growth'.

By the way, the numbers:
-3,3 billion giro transactions,
-1,75 billion POS and ATM (guest use) transactions
-peak at POS: 8 million transactions (day before Christmas).

Wednesday, January 18, 2006

Remittances and anti-money laundering

A somewhat under-estimated part of payment business is the remittance industry. Those looking for more information and a discussion on the good, bad and ugly of anti-money laundering for this industry/the public may want to read the following:

  • Remittance, big business by ethan zuckerman

  • Remittance and money laundering by Adam

  • Remittances - the bane of the Anti-Money Laundering Authorities by Ian Grigg


    Update... the US government also dug into the subject... by producing an overview of money laundering techniques for different sorts of players in the market (banks, money transmitters, currency exchangers etc..). The title is US Money Laundering Threat Assesment and the funny thing is that they have completely missed the channel of payments via the telecommunications bill/infrastructure.... (a blind spot that they will eventually come to appreciate.)
  • Friday, January 13, 2006

    Rabobank starts notabox: easier invoice payments via the web

    Planet Multimedia reports that Rabobank has just launched Notabox. With notabox, the regular Dutch acceptgiro (bill payment) is sent in digital format to the e-banking environment of Rabobank. In that environment, the user may choose to pay the bill whenever it suits him/her. The services is a bank extension of TPG's longer existing Privver-service (which had a more cumbersome payment facility for which users had to sign up separately). Later on this year, more Dutch banks will follow and launch the same interface.

    Thursday, January 12, 2006

    PBS acquires PBS International ... the road to SEPA?

    Just a week ago, PBS announced that is buying PBS International, explaining that SEPA is coming and that this is part of a move to anticipate consolidation in the European processing market. Whilst the latter argument may receive most attention, it is the first that may actually be most relevant.

    We should recognize that the road to SEPA is paved with good intentions such as in development in the SEPA Cards Framework (nobody knowing exactly what to think of it). The thing that is clear however is that ECB will stick to its 'demands' to ensure that all payment cards can be accepted at all terminals.

    If that demand would really stick the only sensible solution for the Danish would be to abolish the local card brands and go international. And in that case Danish banks could better own PBS international (and so influence achieving the SEPA Cards goal) than try sell it to the highest bidder.

    Tuesday, January 10, 2006

    The ultimate paper on interchange fees...

    Why I ran into this paper only just now I don't know. But suffice to say that once the renowned Brookings Institution bites into any subject one can only expect an analysis that does away with al the regular mumbo-jumbo on interchange fees. This excellent paper: The Economics of Interchange Fees and Their Regulation: An Overview by David S. Evans and Richard L. Schmalensee dates from July 2005 and comes up with the conclusion that neither regulators nor market players will be able to prove that a certain interchange fee is right or wrong...

    In their words:
    Since there is so much uncertainty about the relation between privately and socially optimal interchange fees, the outcome of a policy debate can depend critically on who bears the burden of proof under whatever set of institutions and laws the deliberation takes place. There is no apparent basis in today's economics - at a theoretical or empirical level - for concluding that it is generally possible to improve social welfare by a noticeable reduction in privately set interchange fees. Thus, if antitrust or other regulators had to show that such intervention would improve welfare, they could not do so.
    (...) ...
    By the same token, there is no basis in economics for concluding that the privately set interchange fee is just right. Thus, if card associations had to bear the burden of proof - for example, to obtain a comfort or clearance letter from authorities for engaging in presumptively illegal coordinated behavior - it would be difficult for them to demonstrate that they set socially optimal fees.


    The only policy relevant conclusion can thus be that whoever has the power (be it legal, be it with the public, with the judge or the power of persuasion) will win the debate on interchange fees...

    Which IMHO is true for both the discussion between players in the market (setting the fee) as for the discussion of market with regulators (is the fee appropriate...).

    Friday, January 06, 2006

    E-money: what the Japanese think....

    Online market researcher Interwired has announced the results of a survey on electric money. The company conducted the survey of 6,430 men and women in Japan from December 7 through 12, 2005. When asked about what they associate e-money with, 1,956 of the respondents answered "Edy", followed by "Suica" (603 persons) and "mobile phones" (477). The most popular e-money type chosen by the current users was "Suica" (31.4%), followed by "Edy (card)" 21.4%) and "Web Money" (8.0%).

    As for the reason for selecting the type of e-money they use now, 52.0% of the Suica users answered that "they shop frequently at train stations", and 42.0% said "it can be used as a train pass", while more than 30% of the Edy users (both mobile and card) said "there are many ways to be charged", and 36.1% of the mobile Edy users answered "it is easy to check the balance".

    When asked about in which situation they wish they could use e-money, 700 users replied "at supermarket", followed by "at convenience store" (446 persons), "for public transportation systems" (427), and "for vending machines" (251).

    When asked about if they want to continue using e-money, about 80% of the current users expressed a continued interest, while 36.8% of the non-users said they are interested in using e-money.

    Webpay, another IPO coming op...

    In some niches payment systems may do well. Webpay operates in the digital content domain and has just raised 20 million euro for further expansion. After which the investment company 3i will sell out to make more money. But will that actually work....?

    Time will tell.

    E-gold under attack

    For quite some years now, e-gold is operating on the web. It is a gold-deposit account with no fixed monetary value. And it allows to some extent anonymous banking (only telling the policy with a warrant, who are its customers). But now that the size of e-gold reserves are well beyond the reserves of many a small central bank, the regulators come in. Ian Grigg reports about it here.