Ron Onrust referred me to an article in the New York Times that highlighted how US Banks try to convince consumers to start paying bills online (for example by offering amounts such as $ 150 to obtain the customer's direct debit authorisation for bill payment).
More info on bill payment can be found at Comscore. Their research showed that:
- online bill payment users were more than twice as likely to remain active online banking customers compared to non-bill payment users,
- online users of online bill payment services hold an average account balance of approximately $4,800, which is double the $2,400 balance carried by the average online banking customer.
Is the same true for the Netherlands? That remains to be seen. In an article in E-merce it becomes clear that Privver, currently the only Dutch bill consolidator, has lost NUON (utilities customer) as the business customer in their system. So it may be the case that on-line bill payment (using direct debits) is a great driver in the US, where it is not in the Netherlands.
Wednesday, April 23, 2003
Sunday, April 20, 2003
Consultation on market entry for banks
The Dutch Ministry of Finance has started a consultation on the issue of market entrance for banks. See this link (in Dutch). Their main question is if and how credit-institutions (that are subject to prudential supervision of the Nederlandsche Bank) should be subject to behavioural supervision (by the Autoriteit Financiële Markten) if they base their credit to customers on stocks and bonds. Should the supervisory activities be combined or should they be supervised independently?
Friday, April 18, 2003
Competition authority presents first findings on Interpay-fees
The NMa, the Dutch competition authority, yesterday presented its preliminary findings of the investigation into the fees that Interpay charges for the debit-card authorisations at the point of sale. Their conclusions are that Interpay has charged too much for the debit-pin-authorisation service. And Interpay is the sole contractor for this service in the Netherlands. Its eight shareholders (ABN AMRO Bank, Rabobank, ING Bank, Fortis Bank, SNS Bank, Friesland Bank, Van Lanschot Bankiers en Bank Nederlandse Gemeenten) now have some time to react.
It should be noted that change is underway. As a result of the Wellink report, banks have already agreed to take over the pin-authorisation contracts of Interpay. As a result a merchant will soo be able to negotiate (and compare) the POS-authorisation fee of individual banks.
The next logical next step would be that other companies than Interpay will be allowed to also provide pin-authorisation services in the Netherlands. But that may come later.
It should be noted that change is underway. As a result of the Wellink report, banks have already agreed to take over the pin-authorisation contracts of Interpay. As a result a merchant will soo be able to negotiate (and compare) the POS-authorisation fee of individual banks.
The next logical next step would be that other companies than Interpay will be allowed to also provide pin-authorisation services in the Netherlands. But that may come later.
Wednesday, April 16, 2003
What is electronic money in the Netherlands?
A very peculiar thing has happened over here in the Netherlands. De Nederlandsche Bank, the Dutch central bank/supervisor, has given a second interpretative ruling on what should be understood with the term electronic money. The full details and Dutch text can be found at the website of DNB and the website of 1.1a2, Association for Electronic Money Institutions in the Netherlands.
To summarize the current situation in the Netherlands:
1-the supervision law of July 1, 2002 says that electronic money is moneyvalue on an electronic device,
2-De Nederlandsche Bank has further clarified the definition of electronic money in a ruling of January 9, 2003 that stated that the electronic money could reside on a device that is in the hands of the user or that resides 'at a distance' in a so called account-based system where there is a central account administration with balances due that are registered on name and/or number,
3-De Nederlandsche Bank yesterday stated (without further technical explanation, except for a reference to European discussions) that it is of the opinion that the pre-paid phone balances of mobile operators are not to considered to be electronic money under the definition in the law. Consequently mobile operators are not electronic money institutions.
Legally, most e-money watchers in the Netherlands are now all dazzled by this second ruling. It is clear that De Nederlandsche Bank for some reason wants to exempt the mobile operators from the supervision law. Yet, both the process and content of this decision are quite hard to follow. Why hasn't been there a formal consultation with market players, just as the FSA is currently doing? Should prospective e-money operators in the Netherlands only have to buy an antenna and a mobile network to be exempted of e-money rules or does the ruling simply means we're now going back to the pre-2002 regime where all e-money issuers needed to be full credit-institutions?
Of course this issue will not end here and now, given the European and local situation. So we may undoubtedly expect more interesting rulings. Personally, this latest ruling has brought back memories of a 70s tv-series, more specifically the voice over at the end of each episode:
Confused ?
You won't be after next weeks episode of ......
To summarize the current situation in the Netherlands:
1-the supervision law of July 1, 2002 says that electronic money is moneyvalue on an electronic device,
2-De Nederlandsche Bank has further clarified the definition of electronic money in a ruling of January 9, 2003 that stated that the electronic money could reside on a device that is in the hands of the user or that resides 'at a distance' in a so called account-based system where there is a central account administration with balances due that are registered on name and/or number,
3-De Nederlandsche Bank yesterday stated (without further technical explanation, except for a reference to European discussions) that it is of the opinion that the pre-paid phone balances of mobile operators are not to considered to be electronic money under the definition in the law. Consequently mobile operators are not electronic money institutions.
Legally, most e-money watchers in the Netherlands are now all dazzled by this second ruling. It is clear that De Nederlandsche Bank for some reason wants to exempt the mobile operators from the supervision law. Yet, both the process and content of this decision are quite hard to follow. Why hasn't been there a formal consultation with market players, just as the FSA is currently doing? Should prospective e-money operators in the Netherlands only have to buy an antenna and a mobile network to be exempted of e-money rules or does the ruling simply means we're now going back to the pre-2002 regime where all e-money issuers needed to be full credit-institutions?
Of course this issue will not end here and now, given the European and local situation. So we may undoubtedly expect more interesting rulings. Personally, this latest ruling has brought back memories of a 70s tv-series, more specifically the voice over at the end of each episode:
You won't be after next weeks episode of ......
Tuesday, April 15, 2003
New York City Eliminating Subway Tokens
Netster News reports that New York City is eliminating its subway tokens. We'll definitely see more of that in the future. Public transport will be a special segment for quick and easy non-physical payments; perhaps the segment may even be a sufficient basis for payment systems that compete with current bank-offered e-money systems.
Thursday, April 10, 2003
Looking For A Venture Capital Company To Finance The First And Only Financial Payment System
There will always be new business ventures. The other day, someone mentioned an initiative named Solvicard to me. The concept is equal to Paysafecard. So if you have about $ 2.3 million leftover somewhere, do take a look at the this page with more information.
Competition authority requests clarification on billing UPC
The NMa informs us that it has requested clarification on the billing and payment procedure of UPC. UPC is a cable provider that has switched to a new billing system at the end of 2002. Unfortunately it didn't work properly, leading to a number incorrect bills (automatically paid by direct debit !!) and consumers that were denied services.
The NMa states that UPC should not disconnect consumers as long as it is not clear if the bill is correct.
The NMa states that UPC should not disconnect consumers as long as it is not clear if the bill is correct.
Tuesday, April 08, 2003
KBB Vendex installs in-store ATM's, also trials tv-programme
RTLZ reports that retailer Vendex KBB will install approximately 100 ATM's in it's stores this year. The mottto (,,Pinnen doe je veilig binnen'') is a Dutch rime, that would translate as: one better uses the pin inside.
Of interest is also that KBB Vendex is also trying to broaden its service concept by broadcasting their own tv-show on SBS 6 (see this press-release). This can be viewed as a more generic trend or a reaction to the Wehkamp initiative (a tv-programme with the name: Wehkamp Welkom, broadcasted on SBS 6 as well...).
And then, if we broaden our view even more, we should note that there is an increasing amount of (badly produced) tv-commercials for 'loan-products' that actually involve taking a second loan on your house and combining it with a life insurance (with Gelink as a nice annoying example..).
So the overall picture is that TV is increasingly being used for immediate (financial) product sales and not only for image improvement. It must be a sign of the times.
Of interest is also that KBB Vendex is also trying to broaden its service concept by broadcasting their own tv-show on SBS 6 (see this press-release). This can be viewed as a more generic trend or a reaction to the Wehkamp initiative (a tv-programme with the name: Wehkamp Welkom, broadcasted on SBS 6 as well...).
And then, if we broaden our view even more, we should note that there is an increasing amount of (badly produced) tv-commercials for 'loan-products' that actually involve taking a second loan on your house and combining it with a life insurance (with Gelink as a nice annoying example..).
So the overall picture is that TV is increasingly being used for immediate (financial) product sales and not only for image improvement. It must be a sign of the times.
Buying museum tickets over the web
Automatiserings Gids reports that Museum the Mauritshuis in The Hague, allows visitors to order and pay their tickets over the web. I was unable to find the feature on their website however (it should be the Holbein exposition).
Monday, April 07, 2003
First report on the MOB
The Ministry of Finance has today informed Parliament on the first meeting of the MOB, the 'society council on payments services'. The MOB will constitute of subgroups that discuss issues such as:
- efficiency
- technology
- accessability of services
- security.
The next meetings will take place in June and November.
- efficiency
- technology
- accessability of services
- security.
The next meetings will take place in June and November.
Site about Point of Sale Payment Terminals
Dutch retailers have taken the initiatieve to improve the transparancy of the market for POS-terminals by setting up a special site with information. Alhough not all suppliers/terminals haven been included, the site BETAALTERMINAL.NL provides a very good starting point.
BIS-Glossary on payment terms ... not completely fleckless !
The BIS has recently published a revised glossary of payment terms. This is of course very much worth the download. In it is a tasteful word (that came from the 1996-Security of Electronic Money report) that I'd like to further highlight:
fleckless
from the German “fleckenlos”, which means spotless; a device (card) or a system is said to be fleckless when it can provide evidence that it has not been tampered with.
Let me explain the background of this definition. In 1996 an international group of central bank employees (we may also call this a task force) were in a hurry to make a report on safety of electronic money instruments. As a part of their work they held interviews and at some point in time one of the members started using the non-existent word fleckless (with the above meaning). As a running joke, the word came back in all later interviews. And the Task Force decided to put the word into the glossary of the report to see if this little joke would be appreciated and to find out which percentage of the readers would actually thoroughly read the report.
To date, I'm not aware of any readers that by themselves noticed the word and its strange explanation. It does keep coming back in all kinds of compiled payment glossarys. It's in the BIS glossary; I believe it is also in an ECB-glossary and from the looks of it, it will be in many more to come....... meaning that these glossaries are not completely fleckless !
fleckless
from the German “fleckenlos”, which means spotless; a device (card) or a system is said to be fleckless when it can provide evidence that it has not been tampered with.
Let me explain the background of this definition. In 1996 an international group of central bank employees (we may also call this a task force) were in a hurry to make a report on safety of electronic money instruments. As a part of their work they held interviews and at some point in time one of the members started using the non-existent word fleckless (with the above meaning). As a running joke, the word came back in all later interviews. And the Task Force decided to put the word into the glossary of the report to see if this little joke would be appreciated and to find out which percentage of the readers would actually thoroughly read the report.
To date, I'm not aware of any readers that by themselves noticed the word and its strange explanation. It does keep coming back in all kinds of compiled payment glossarys. It's in the BIS glossary; I believe it is also in an ECB-glossary and from the looks of it, it will be in many more to come....... meaning that these glossaries are not completely fleckless !
Sunday, April 06, 2003
Visa, MasterCard suit decision - 2003-04-02
Puget Sound Business Journal in Seattle reports that last Tuesday, a federal judge told Visa and MasterCard that they will have to go to trial to prove they did not conspire to monopolize the lucrative debit-card market. The background is that since quite some years, Visa and Mastercard forced merchants that accepted credit-cards to also accept debit-cards with the Visa and Mastercard logo (not allowing merchants the choice to deny the debit-card while accepting the credit-card).
See the orginal sentence here.
Saturday, April 05, 2003
The quiet SMS-revolution...
is the title of the column of Peter Olsthoorn at the Emerce website. Peter explains that the maximum value of 1,10 euro per Premium SMS remains to be high because of a lack of competition. I've understood his break up of the consumer fee to be like this:
- 36 cent for the telco operator (0,18 cents for transport of SMS and 0,18 cents for provision of payment services),
- 36 cent for the content provider,
- 21 cent for the government (tax),
- 9 cent for the costs of top-up via scratchcards, IVR etc,
- 9 cent for the sms gateway that does service-delivery and billing for the content provider.
- 36 cent for the telco operator (0,18 cents for transport of SMS and 0,18 cents for provision of payment services),
- 36 cent for the content provider,
- 21 cent for the government (tax),
- 9 cent for the costs of top-up via scratchcards, IVR etc,
- 9 cent for the sms gateway that does service-delivery and billing for the content provider.
Postbanks implementation of EU regulation on price: free European credit-transfers
Postbank announces in an e-mail that as of July 1, 2003 all European credit-transfers that fulfill certain criteria (mention of IBAN etc.) will be just as free as the domestic credit-transfers. Consumers are urged to order the new credit-transfer forms, as the old ones will not be usable as of July 1, 2003. What happens to internet-based credit-transfers (as well as the on-line banking programs) is not mentioned.
Accessibility of financial services...
Last week, the Ministry of Finance issued a letter on the 1st of April (Fool's day.... not a smart day to write letters to Parliament) about the accessibility of financial services. Bottom line is that the Foundation for Economic Research (SEO) has found five issues to be most important to consumers:
- physical availability of bank branches and services,
- too much credit,
- intransparency of insurance products,
- fear of genetic research,
- unavailability of insurance services to some groups of consumers.
The Minister concludes that, given the report of SEO and the current policy measures, no specific extra attention is required.
- physical availability of bank branches and services,
- too much credit,
- intransparency of insurance products,
- fear of genetic research,
- unavailability of insurance services to some groups of consumers.
The Minister concludes that, given the report of SEO and the current policy measures, no specific extra attention is required.
M-tickets for pop-podium
Adfo Web Online reports that a pop-centre in Tilburg (013) will start a trial with tickets. Consumers pay using Rabo Direct Betalen or with credit-cards. They then receive a 2-dimensional barcode on their cellular phone to be used to be able to enter the music hall.
Friday, April 04, 2003
Next series of skimming-crooks apprehended today !!
Today Interpay announced that the police have apprehended 6 people, suspected to be involved in debit-card skimming in the Netherlands. Which goes to show that the fun of skimming never lasts long (in this case no longer than a year...). Interpay further announced that a special phone number will be opened that allows consumers to call in and inform Interpay about unsafe, suspicious locations, environments or pinning circumstances (030-283 6555).
Digital money.. any time soon .... ?
Last week I've visited the Digital Money Forum in London, which was a very lively and interesting event. The knowledgeable audience participated in an SMS-poll on two questions (one each day).
Day one, Consult Hyperion asked the audience if they thought there would be a cashless society by 2050: they were pretty evenly split, but of those who felt that there would be a cashless society by then the majority thought that it would be driven by retailers rather than banks.
On day two, the question was whether wireless payments would be mass market in a shorter period (by 2010). In this case the audience voted 75% yes and the majority put the mobile phone operators in the driving seat. Those who voted no put the fragmented value chain way ahead of infrastructure cost as the main barrier.
Many more interesting issues were dealt with; most important was the general appreciation/understanding of the scope and impact of regulation. Some UK telco's already are viewed and treated as electronic money institutions (notably Vodafone's MPay); others are probably very soon to follow.
And for those really up to investigating the future of money: check the open money website of Michael Linton.
Day one, Consult Hyperion asked the audience if they thought there would be a cashless society by 2050: they were pretty evenly split, but of those who felt that there would be a cashless society by then the majority thought that it would be driven by retailers rather than banks.
On day two, the question was whether wireless payments would be mass market in a shorter period (by 2010). In this case the audience voted 75% yes and the majority put the mobile phone operators in the driving seat. Those who voted no put the fragmented value chain way ahead of infrastructure cost as the main barrier.
Many more interesting issues were dealt with; most important was the general appreciation/understanding of the scope and impact of regulation. Some UK telco's already are viewed and treated as electronic money institutions (notably Vodafone's MPay); others are probably very soon to follow.
And for those really up to investigating the future of money: check the open money website of Michael Linton.
Thursday, April 03, 2003
Bieslog - ATM story
For our Dutch readers I'm pointing out an amusing story of Wim de Bie. It is about a very speedy ATM withdrawal by Mr. H.G. Foppe (former teacher in German). See: this blog-entry.
Policy issues for central banks
The BIS has just released the report: Policy issues for central banks in retail payments. As situations differ in quite some countries, the Working Group that made the report has defined some base line options for as well as possible further actions that a central bank can take (assuming it has the legal competence). In general central banks ought to pursue efficient payment systems and:
1-address legal/regulatory impediments to market development and innovation,
2-foster competitive market conditions and behaviours,
3-support the development of relevant standards and infrastructure arrangements,
4-provide their own bank services in the manner most effective to the particular market.
As I observed earlier in this log; it is a pity that the report does not deal with cash payments. Todays provision of cash is often free (which means alternative means of payment may not find a business case) and results in quite some crime. In some countries there may be an urgent need for a debate on the pricing structure of cash and perhaps on scenario's to start eliminating it from the economy. And can it be expected that central banks will be the first to start such a debate? Not as long as issuing bank notes remains the prerogative (and the income source) for central banks.
1-address legal/regulatory impediments to market development and innovation,
2-foster competitive market conditions and behaviours,
3-support the development of relevant standards and infrastructure arrangements,
4-provide their own bank services in the manner most effective to the particular market.
As I observed earlier in this log; it is a pity that the report does not deal with cash payments. Todays provision of cash is often free (which means alternative means of payment may not find a business case) and results in quite some crime. In some countries there may be an urgent need for a debate on the pricing structure of cash and perhaps on scenario's to start eliminating it from the economy. And can it be expected that central banks will be the first to start such a debate? Not as long as issuing bank notes remains the prerogative (and the income source) for central banks.