Friday, January 30, 2004

ING Bank eliminates value dating; speeds up payment process

ING Bank announce on their website that they will eliminate value dating as of January 19, 2004 and will use the day of debit/credit to calculate interest for the account holder.

ING also announces that it will speed up the credit-transfers: those account holder that send in their payments by Internet of e-banking will note a one day acceleration in the processing of payments to other banks. This is due to the fact that ING will actively use the interim settlement function (kavelsettlement) that sofar has not been utilized. It should be noted that ABN AMRO and RABO were already using this feature of our settlement system, so ING is not really the first.

A very good thing is that ING further elaborates on processing times and value dating in separate brochures. So despite the commonly heard complaints about intransparancy, we can really see the banks moving towards more clarity and transparance.

Thursday, January 29, 2004

Paypal profits rise substantially...

Oliver Travers (at the weblog Start of Fee) quotes this article in the Internetretailer on Paypals profits:

"PayPal, the payment transactions unit of eBay Inc., reported revenue of $132.6 million for the fourth-quarter ended Dec. 31, up 77.5% from $74.7 million in the year-earlier period. For the full year, PayPal had revenue of $436.7 million, up 85% from $236.6 million in 2002. [...] Most of PayPal?s revenue is from the fees it charges merchants for payment transactions."

We may conclude (contrary to common belief here in the Netherlands...):

1-new payment mechanisms can make a profit,

2-the new retail payments market via new media is international,

3-Paypal is by far the unbeatable first-mover in the new media payments / e-money domain.

Paypals profits show that taking a Dutch approach to a new payments debate may not be the proper way forward. Most likely the number of Dutch customers at Paypal is bigger than the number of Dutch customers at Way2Pay, Minitix, Tootz, Wallie-card etc. altogether. Still, the recent report of our Ministry of Economic Affairs hardly recognizes the role and significance of Paypal as (soon to be) Europe's largest e-money issuer and institution....

Assuming that history will repeat itself, we should not be surprised when Paypal Europe starts using the available EU-legal instruments to correct wrongdoings in the EU-market of e-money. Let's not forget that only some 20-odd years ago Visa were doing the same to enter the protective EU-markets.

I think it would be good to remember that Paypal has a US background and is drilled to understand and respect the regulatory rules in the market. This US-background also means that they will not hesitate to sue other private or public organisations that do not live up to the same rules and that distort the level playing field.

So Paypal will at some point in time undoubtedly demand that any electronic money issuer will abide with e-money rules and with competition rules as to overcharging the merchant. Given both its own resources and those of E-bay, the other players in this market may be in for a bumpy regulatory ride.

Wednesday, January 28, 2004

CASH-ATM.NET: prepaid off-shore Visa card scam ?

I've just been spammed:


Date: Wed, 28 Jan 2004 06:43:32 -0800

From: Kenneth

Subject: Anonymous E-gold Visa Debit Card


but this time it is an interesting one. This company, CASH-ATM.NET offers an off-shore pre-paid ATM Card that needs to be funded first and can be used later. The company states that it will send the Visa Card via Post.

Now why do I think this is fishy... ?

Is it because:

- they claim that no identification is needed while e-money regulation makes these products fall under identification requirements.... ?,

- of the flashy and intriguing sounds on the website...?

- the spam-address is different from the whoisrecord (that indicates the e-mail of the owner of the site is:,

- the terms and conditions state Lebanon to be the state of the issuers and the contact sheet on the website says Black Tree Bank in Barcelona?

- of the Account opening fee of 75 $ and depositing and transaction fee of 2,5 %?

- a Google Spain search does not show Black Tree Bank or Calle Trafalgar?

Who knows?

Amazon: profit at last...

Amazon has finally shown a profit of 35,3 million dollar in 2003 (compared to loss of 150 million in the year 2002). This is a very tiny margin on the total sales revenue of 5,26 billion dollar, but still: a profit. So this might be a good moment to say that e-commerce is business as usual.

Endemol participate in joint venture to sell content

Entertainment company Endemol en GSMBox Italy have founded a joint venture to develop and sell interactive services related to television shows. The joint venture grew out of cooperation in Spain and Italy for the Big-Brother formats. And in my opinion Contopronto may well consider teaming up with this new venture....

Catch 22 in payments via new media?

Yesterday, the Dutch Ministry of Economic Affairs held a brief conference to outline the results of an investigation in payment methods for new media. The research suggests that there is sufficient demand for new payment methods, but that this demand is not properly met by sufficiently cheap or standardized payment products. The policy conclusion is that, due to the lack of payment mechanisms, information services are not being as widely distributed as possible. The thinking is that in fact a real Catch 22 situation exists and the Ministry will now take action to solve this by quickly establishing which regulatory or standardization hurdles could be eliminated.

Interesting enough Fons Westerloo of RTL Nederland illustrated this policy conclusion by demonstrating that the Idols website allows for 5 different payment methods. His most fundamental complaint with respect to premium-SMS was that too much money was going to mobile operators. So he called upon the Dutch banks to come with a better (cheaper) product. As he did before when he called upon all smaller players in the market to develop a new product for him (which they did: thus turning up on his website).

So what I can see is a perfectly functioning market with lots of payment mechanisms and commercial and technical means to ensure payment of content via new media. And I see large players such as Endemol, RTL and SBS6 pushing the market to come with cheaper solutions to be able to choose the best or cheapest one. So, although I see irregularities in the market (the position of DNB with respect pre-paid funds of mobile operators) I don't see a lack of payment instruments hampering commerce via new media.

Tuesday, January 27, 2004

E-mail: the future of consumer electronic payments ? features this article that contains three case studies (Yahoo Direct, Yahoo Direct, Yahoo Direct) from the experience of the two authors (Yahoo Direct and HSBC). Despite this small bias, the authors have a point. Listening to consumers is key to success.

Monday, January 26, 2004

Mail-based payment service "Mobile Edy"

JCN Network reports that prepaid e-money service operator bitWallet will introduce a new mail-based payment service with the name 'Mobile Edy'. Mobile Edy will enable Felica i-mode handset users to pay via mobile mail.

Mobile top-up for Orange via Interpay.. first figures

Telecom.paper publishes the first data on the mobile top up system that Interpay has developed for Orange. It allows all pre-paid Orange customers to top up their mobile regardless of the bank they have (Interpay routes the transactions).

Since the start in december there are some 70.000 users, which grew to 90.000 this month. Already 14 % of all top-ups in December were done through this channel. Te sum total of top-ups has now reached the sum of 1 million euro.

Friday, January 23, 2004

E-bay does well... so will Paypal

The Automatisering Gids informs us that E-bay has increased its profits with 64 % to 142,5 million US dollar in its fourth quarter of 2004. Over the full year its revenues increased with 78 percent (from 1,21 billion to 2,17 billion) and its profit from 249,9 million dollar to 441,8 million dollar.

The consequence is that there are more than sufficient funds to sustain and support the operations of its payment product and company Paypal. So the only one left to really beat Paypal in the worldwide e-mail payment game is Microsoft.

Gift Cards Go Contactless: ViVOtech

Ron Onrust sent me this link to an article in the RFID Journal on the ViVOtech contactless payment solution.

ViVOtech's reader connects directly or wirelessly to a retailer's existing POS system to enable contactless payments without requiring the retailer to invest in a new infrastructure to add xontactless payments. The reader receives a unique card number and a security code from the contactless gift card and transmits that data to the retailer's POS system in a format identical to what is generated when credit cards and gift cards with magnetic stripes are swiped at a POS device.

The new ViVOgiftcard adheres to ISO standard 14443B and can operate over multiple frequencies, including 134 KHz, the same frequency used by ExxonMobil Speedpass system. The only information stored on the ViVOgiftcard is the customer's card number and a security code that changes at each reading. The monetary value on the card is stored centrally on a retailer's back-end server.

Thursday, January 22, 2004

DNB website overhaul....

Our Dutch central bank has redesigned its website. This has some advantages and some disadvantages. A good thing is that the looks have improved and that there is a separate page on the Social Forum on the Payment Systems.

But there are many disadvantages. The links to documents on the old website are now all broken and remain unfixed. More specifically, it is impossible to find the older policy research reports on retail payments and electronic money. In some cases, where DNB-reports have been at the basis of policy discussions in retail payments (on value dating) these reports can not be found on the website any more. Which is not good for the accidental researcher, nor for the transparancy of the policy and activities of the central bank.

Monday, January 19, 2004

Business case for micropayments..? -> SMS and ringtones

Wired News reports that sales of mobile-phone ring tones, those tiny song recordings programmed into millions of cell phones around the world, jumped 40 percent in the past year to $3.5 billion. The article also notes that ring tones and games still lag well behind basic text messaging, which generated $40 billion last year for mobile phone companies.

So let's get back to an old discussion on micro-payments and the lack of a business case and thus lack of payment solutions. Micropayments and business opportunities are todays reality; they may just haven't arrived come in the Internet-based form and shape that most expected...

OV-chipcard turns TLS into sort of Interpay

Het FD reports that last week all public transport companies involved in the development of the OV-chipkaart (card for public transport payments) have agreed to committ to the system. This turns the oiperator company TLS into an Interpay for public transport. The Dutch Railways will finance the company/investment from the money of their Telfort sale.

Egg for sale

Het Financieele Dagblad reports that Internetbank Egg will be put up for sale by its owner Prudential. It turns out that the French expansion has not succeeded and that essentially Egg remains a credit-card bank (2,4 million Uk customers, 5 % market share).

Thursday, January 15, 2004

Why we don't want direct fees for payments...

In todays Het Financieele Dagblad Henri√ętte Prast refers to a book by Gerrit Antonides with the title: 'Psychology in economics and business'.

She refers to the prospect-theory that explains that winning a lottery and earning 100 euro, followed by immediate payment of 80 euro feels different than winning a mere 20 euro in the lottery. Although rationally both situations are the same, emotionally, the first one is experienced as less pleasant.

Applied to payment systems, the theory explains that the fact that a separate fee payment needs to be made to pay for the cost of having a bank account (or getting a debit-card etc..) leads to stronger dissatisfaction than if the fee is indirectly paid.

Interesting enough, the above is something that practicioners could have told you years ago, while scientists were still working under assumptions of rational behaviour. At last, theory has adapted to reality.

Monday, January 12, 2004

The Swedish banks have decided to discontinue their Proton-based Cash

Leo van Hove reports in his unique database of e-money developments, that the Swedish banks will discontinue their card-based e-money system. Will mobile phone's take over?

Catching up... e-money license for Contopronto ... soon also Paypal Europe

Leo van Hove was so kind to notice, during my holiday, that Contopronto, a Norwegian issuer of mobile wallets, has been granted a license as electronic money issuer. Contopronto will also expand its business into Europe, from their London base.

Meanwhile, Ben Putter informed me that Paypal is preparing to introduce PayPal (Europe) Ltd., a company incorporated in the United Kingdom, as the service provider for PayPal customers in the European Union. It is anticipated that PayPal (Europe) Ltd. will begin operating in February 2004, subject to receiving authorisation from the Financial Services Authority (FSA) in the UK. As a consequence European customers will have to sign up with Paypal Europe or end their affiliation with Paypal.

Sunday, January 11, 2004

Holiday news leftovers

Always there's a pile after the holiday. To keep track of the developments I hereby note:

- article in FD on changing bank accounts (Dutch banks increasingly try to get each other's payment clients),

- the savings card NU (NU spaarpas) has come to and end in 2003, by lack of further resources, succes and / or investments,

- Citibank and HSBC will enter the Chinese credit-card market as first foreign players,

- a young man of 18 has been caught in Alkmaar with a bunch of false euro notes,

- falso Euro's got back into the news, especially the fact that they are hard to discover,

- Ticketbox sold 1,5 million tickets for dance/events in 2003 and will further diversify to tickets for conferences/trade events.

Saturday, January 10, 2004

Hanco goes public at Horecava

In the FD of this saturday, the last page contains the diary of Carel Storm, salesmanager of Hanco Nederland. Hanco cooperates with Finansbank to deliver service ATM's in the Dutch market as of January this year. It is thus a third example of service-ATM's here. First we had Moneybox and SNS, then KBB/Vendex and Staal bankiers and now Hanco/Finansbank.

The ATM's are targeted to be used in café's, beach locations, supermarkets, hotels, gambling locations etc. The service fee to the consumer is 0,25 eurocent. Special feature of the Hanco-ATM is that the shop owner can fill the ATM with money from the shop till.

Philips and Visa showcase contactless payment in Vegas

Philips and Visa International showcase the potential of contactless payment and

connectivity at the Consumer Electronics Show in Las Vegas. Visa shows the 3D Secure application, which is linked to ordering music using Philips' Near Field Communication (NFC) technology. The practical example is not ordering coca cola from a vending machine but ordering music, promoted on a smart poster (with an embedded micro-chip).

Thursday, January 01, 2004

The spanish experience....

..was to start the new year 2004 on the Plaza Nueva of Sevilla, Spain (see the picture below). And eat 12 grapes, one for each bang of the clock. And to notice the different ATM-interface (number 8 at center below on the keyboard, the repeated pressing of 'continuar' and the possibility to do more than withdrawals...).