Sunday, June 26, 2005

The new Payments and Settlements News - 20

is out once again at: Payments and Settlements News. It has the news that Italian banks (those that make 500 euro per year on payments by pricing the credit-transfer at 1 or 2 euro) have decided to move their domestic processing to panEuropean solution Step-2.

This is no wonder. If all banks would charge 1 or 2 euro for domestic payments, the European credit-transfer processors would quickly thrive...

Danish card holders affected by data theft in the USA

All over the world, credit cards are under fire due to the large scale theft discovered earlier in May. About 30.000 in the Netherlands. And less than a thousand in Denmark. See PBS news.

Bank of Tokyo Mitsubishi introduces telebanking and e-money services

See the article in Finextra

Simpay ends immediately......

On its website, Simpay announces:
Following the decision of one of its founding Members not to launch Simpay for the foreseeable future, the decision was made today at a General Meeting of Simpay not to pursue its activity on a pan-European scale as originally planned.

Instead, Simpay’s operations will be scaled back with immediate effect. Member operators will be able to exploit Simpay’s intellectual property rights at a national level, although international interoperability remains a goal. The members will make known their individual plans in due course.

All of the operators involved in Simpay continue to share the vision of the enormous potential of the mobile commerce market and the importance of providing a robust and straightforward payment facility to content providers.

In other words:
Mobile operators make money by exploiting their own quick-and-dirty payment mechanisms and (inter)national roaming agreements for the interoperable use of these instruments. With Simpay they found out what it would cost to build and operate a system that really accounts for all transactions. Also, they may have started to discuss interchange fees for Simpay, the applicable Regulation 2560 as well as the future legal framework for payments in the European Market.

The conclusion could then well have been that they are far better of with the current grey-area, less-visible payment arrangements than with a formal payment processor that has no business case to work on. The benefit: more income from payments business while maintaining less visibility and transparance.

What's interesting is that EU-regulators keep on telling the banks that they should do what telco's do. If the telco's can do it, why can't banks? Furthermore the EU DG Internal Market is keen on having banks deliver panEuropean payment mechanisms.

Let's see what the repercussion is of the Simpay decision. This can go two ways:
1. If telco's can't deliver coordinated panEu payment products beyond what they already have, banks should also stop trying to deliver EPC
2. If banks are held to deliver EPC, telco's must be held to deliver Simpay for all customers and merchants in Europe

Or would the Commission now say that the analogy with mobile operators is no good after all?

Friday, June 24, 2005

Japanese Edy e-money transactions to top 10 mln in June informs us that Japanese Edy e-money transactions reach 10 mln in June. This outlines a general trend in Japan. Also competitor Suica is achieving critical mass.

The secret to this success is being able to top-up e-money from your bank towards the e-money storage on the phone. And the stuff is contactless at the point of sale. Which is also good for consumers. Interestingly though users that want to top up may need use their bankPIN on the mobile phone. Which appears to be somewhat risky if the PIN is the same as the PIN for the bankcard...

What is e-money.....? ...

Now, would mobile money be a payment service provider or not?
Today, officials in Brussel have debated the future of the e-money directive. Already for a number of years they're turning a blind eye to the mobile and phone payment industry, pretending it is not payment that happens when you pay with your mobile.

Have a look at and determine for yourself if what they offer is a paneuropean payment facility or not.

Tuesday, June 21, 2005

Internet payments: credit card or Google?

While Visa and Mastercard shamefully need to acknowledge that one of their processors has not acted according to their guidelines (leaving 40M card-numbers etc in the open), Google seeks to expand its business model towards Internet payments.

Will Google succeed in competing with Paypal?
The stock market doesn't think so.
Shares fell after the word got out.

And Ian Grigg has an interesting analysis here:
Where Google will fall short is in the higher layers. Particularly, their regulatory and relationships side is likely to be their archilles heel, that being a reflection of the company as full of geeks that think there isn't a problem that can't be solved by a neat algorithm. They will shine in the lower layers and muddle along in governance and accounting.

Sunday, June 19, 2005

Commission taking the interventionist approach for banks / cards

While the banks, united in the European Payment Council, work hard to achieve a single Euro Payment Area for basic payment instruments (including cards), the Commission has decided that it no longer wants to wait. This week, they announced the launch of inquiries into competition in financial services. More specifically, the cards market has their attention.

So where does this leave the European banks? What can be expected to happen as a result of these enquiries? Peter Jones provides an interesting analysis.

He also estimates what would happen if Europe were to apply a common multi-lateral interchange fee for cards-payment. France, Spain, Italy and Portugal would stand to lose considerable sums of money, while the Netherlands and Belgium would reach a more profitable situation.

Imagine that the Commission would provide guidelines or orders which boil down to the application of a low uniform MIF. That would be a considerable intervention and most likely a boost for further dissemination of cross-border card schemes. And eventually, such a ruling might make the current work of European banks and the European Payment Council redundant.

As a matter of fact: why would these banks even consider further walking the road of self-regulation if a could of sheer intervention is hanging above the market? A wait-and-see approach might be better than the continued struggle to achieve consensus on card frameworks and what have you....

Sunday, June 12, 2005

The joy of government endorsement in payments...?

Dutch Automatisering Gids reports that the Minister of Transport has 'suggested' the transport companies, introducing a contactless card, not to change fee structures too much.

Pilots for the introduction of the card have already been postponed twice. But the Minister, who sponsors and funds the new card, is still optimistic that it will work properly. As long as the involved companies keep to the suggestions of the Minister of course.

Well, that's the price one pays for being under the 'wings' of government...

Friday, June 10, 2005

Possible agreement between banks and retailers on payment fees

Trouw reports that retailers are willing to drop their litigations with respect to banks (claiming that the fees for pin-authorisation services were too high). The move will be part of a set of agreements in which:
- the fee for pinauthorisations will be lowered considerably,
- parties agree to work together towards more efficient payments in the Netherlands by stimulating their clients.

Given that some conceivable forms of client stimulation may be arousing and effective, but legally forbidden, the 'stimulating' here can only be interpreted as: campaigns and fees. But before we get there the agreement is yet to be reached (and most likely also involves an endorsement of regulators...).

Wednesday, June 08, 2005

Retail Decisions, Voca and Mi-Pay form joint venture: Digital Payments

Bobsguide News informs us that:
-Retail Decisions (ReD), a world leader in card fraud prevention and payment processing,
-Voca, a leading secure payments processor (formerly BACS Limited)
-Mi-Pay, an m-payments and stored value provider,
today announced the formation of a joint venture company, Digital Payments.

Digital Payments will be a enabling retailers to manage consumer payments on digital sales channels including digital television, the internet and mobile phones. Consumers will be able to pay by Direct Debit across these channels for the first time in the same way as they use a credit card. By using Direct Debit, consumers can organise direct withdrawals from their bank securely and with ease.

Will this then become a serious multi-channel payments competitor for Paypal?

Saturday, June 04, 2005

Phishing scam Postbank: first real attempt in the Netherlands

Today, we register the first real phishing attempt in the Netherlands, targeted at Dutch Postank customers:

Dear Postbank Customer,

This email was sent by the Postbank server to verify your e-mail address. You must complete this process by
clicking on the link below and entering in the small window your Postbank online access details. This is done for
your protection - because some of our members no longer have access to their email addresses and we must verify it.
To verify your e-mail address, click on the link below:

Immediately, customers phoned Postbank and the the bank sent out a warning via all media. Undoubtedly to be continued...

UPDATE: Techies may want to read the technical analysis by Vincent 'rastakid' van Scherpenseel.