Japanese banks seek to cash in on growth of e-money

The Daily Yomiuri On-Line reports that Japanse banks seek to introduce multifunctional cards that also work as electronic money.

Before throwing the idea away from the US or European perspective we should recognize that the Japanese society is very cash oriented. Thus, e-money might very well work in Japan as a replacement of cash.

After Sony Corp. and its partners launched Edy e-money in November 2001, the number of such cards had reached 9.2 million as of March, double the figure a year earlier. The number of stores where Edy e-money can be used increased fivefold in the same 12 months.

Of the 11 million Suica cards issued by East Japan Railway Co. as of the end of February, about 5.7 million have the e-money function.

Using special machines or the Internet, users can deposit money on cards with integrated circuit chips and cell phones that have an e-money function. They can then pay for purchases simply by having the cards or cell phones scanned by reading devices in stores.

Unlicensed Money Transmitter Charged in Michigan

A case decided on April 11, (United States v. Uddin), held that a person may be prosecuted for operating an illegal money transmitting business under 18 U.S.C. 1960 where the government shows that the person operated a money transmitting business knew the business was not registered with FinCEN.

According to FinCEN:
The judge rejected the defense argument that the government also must show that the person operating the money transmitting business knew that the business had to be registered, thereby following the general rule that ignorance of the law is no defense. This case illustrates that money services businesses are responsible for knowing their registration obligations under the Bank Secrecy Act and implementing rules.

See: http://www.fincen.gov/rosenopinion1960.pdf for a copy of the Opinion.

Ideal payment system launched in August

Dutch Internet payment system Ideal, developed by banks will be launched in August this year. Which is on schedule .... ;-)

EMV: the end of credit-card as we know it

Belgium shows the first signs that introduction of EMV for credit-cards (which includes use of another PIN) leads to a reduced use of the credit-card. The situation is similar to that in the Netherlands where purse-scheme Chipper demanded a different second pin-code.

The Belgium rollout of PIN-based EMV credit cards has now fuelled an unexpected increase in debit card use, as consumers prefer to use the PIN for their debit cards. Issuers in the UK had expressed concerns that UK consumers would reduce their credit card use when PINs were introduced, but so far a significant drop has not been documented.

Belgium’s e-purse cards are predicted to benefit from the country’s EMV migration as debit cards will carry an EMV chip that can support e-purse and check guarantee functions. Until EMV cards were issued, Proton was the only financial smart card in Belgium, but the gains it achieved in the post-euro currency environment have caused speculation that Proton will be used for more small-value purchases once it is bundled on chip-based debit cards. Ultimately, Proton is predicted to take market share from debit cards, given the recent increases in the average amount per transaction on its cards.

Operator's fee stall m-commerce and m-payments

This article discusses the e-money directive and it's application in the UK. It outlines that fees of operators for payment via premium SMS are considerable.