FATF published this report on new payment mechanisms. It would be a nice try for a second year student, trying to come to grips with reality in modern payments. But if one considers this effort to be the result of heavily government funded research by public servants paid out of our tax money the result is astonishing, notably in the lack of capability to grasp what is really happening in todays markets.
Take for example the use of premium services via the telephone as a mechanisms of transferring money. The fact that 0900 services are being phoned over 2 billion times each year in the netherlands: not mentioned. A feeble attempt at stating that mobile phones may be used for payments. But not a mention of market reality. As planet multimedia outlines today: revenue for data services in sms/mms in 2006 in the Netherlands will be 1 billion euro (on total revenues of 6 billion euro). Quite a solid channel to smurf some money away to other venues.
The issuers of such phone-based payment mechanisms do not comply with FATF-special recommendation VI (all alternative payment mechanisms should be brought under a license regime) and local governments apparently do not (want to?) know of their existence. So the only main conclusion of FATF is not to look inside their own markets for unregulated alternative payment channels but to fear off-shore providers of payment/bank services. As if we're still in the 1995 point in time when people tried to come to terms with the internet and its consequences.
If this quality of analysis also underlies the rest of the FATF-work, we may well reconsider the relevance/efficiency of all FATF-measures. Then again, it may not be the counter-measure itself that is effective, but the threat of it. Thus, paradoxically, the FATF-efforts may work, even if they miss the target. And by that same paradox, we could also consider this to be a good report.
