Friday, June 29, 2007

Dutch migration & transition scenario for SEPA published

See the article here and the transition plan (in English) here.

Essentially it describes that Dutch banks will slowly start moving towards SEPA without committing to a firm deadline. Banks stress that they will not give in to political pressure to phase out instruments quickly, but prefer a gradual migration allowing time to judge developments and develop alternatives for current domestic products. In 2009 banks and stakeholders will have a further look to determine the exact future of the domestic products. For the debit-card system PIN, this means that it will stick around for some more years; thus allowing a smooth transition. Both banks and retailers explain to the media that they're happy with this decision. And the same goes for bill payment mechanisms as acceptgiro and the e-purse Chipknip.

Meanwhile the retailer lobby against banks and credit-cards continues with a new set of questions in parliament, this time about the liability shift that accompanies the migration to EMV. And once more the whole SEPA-developments are misused by retailers to complain about regular price shifts and incentive structures in the market. It is getting to become a bit boring, although one must applaud the retailers' lobbying power (considering that over the last months I think there have been three instances where almost literal retailer complaints were fed to MP's to demand a reply by the Minister of Finance).

Banks in the mean time try to explain to the public that yes, due to the new regulations in payments (which demands more clarity in pricing structures) there will be visible price increases in the future. But they refuse to be blamed for this, given that - as the Minister of Finance explains - it is the desire and effort of all EU politicians and EU parliament to increase efficiency in payments by means of more transparent, cost-oriented and transaction based pricing.

Thursday, June 28, 2007

New statistics on Dutch payments: 20 % market share for non-bank payment instruments

The central bank published a new statistic on Dutch payments which is on page 13 of its statistical bulletin. See also the press-release.

It is one of the very few statistics that is compiled on a voluntary basis together with banks. Generally the central bank obliges banks to report all kind of stuff. But while the central bank may sometimes have to deal as a supervisor with payments (in its role as a supervisor of banks) it has no formal responsibility for payments as such. Which means that there is no detailed reporting obligation.

Still, in their apparently continued move to openness, banks now provide all their data to the central bank to compile this statistic. Which shows that the debit-card at POS (PIN) is still on the rise (with 9 % last year) to reach the number of 1,45 billion.

Interestingly the central bank also roughly estimates the number of transactions, apart of cash, that are outside the scope: retailer cards, tank cards of petrol stations, gift cards, payments via 0900, sms and wap-billing. And states that this accounts for at least a number of 1 billion transactions and EUR 4 billion in value.

While I personally think this is seriously too low an estimate (with the real number of non-bank payment transactions via the phone-channel in itself almost reaching a total of 2 billion transactions) even the low estimate already demonstrates that in terms of numbers already 20 % (1 billion out of 5) of the Dutch payment transactions is effected by non-bank players with non-bank instruments.

Tuesday, June 26, 2007

Mixed legal advice on ABN AMRO verdict of Enterprise court

The advice of the attoreny general ni the ABN AMRO case is that article 2.8 of our civil law book cannot be used to deny ABN AMRO the right to sale LaSalle. In that respect the previous court ruling was incorrect. The advice does continue however, stating that it leaves open the question whether or not the ABN AMRO board acted unlawful/unreasonable towards its shareholders, given the desire of the RBS consortium to also buy ABN AMRO.

My guess, if anything, is that the supreme court in the Netherlands may thus rule that the initial verdict of the enterprise court was article-wise wrong, but morally and in a broader legal sense right.

Monday, June 25, 2007

ABN AMRO share price drops as attorney general will advise supreme court tomorrow

The Het Financieele Dagblad outlines that tomorrow the attorney general will advise our supreme court on the disputed ABN AMRO sale of LaSalle.

Meanwhile the ABN AMRO shareprice drops from € 34.9 to € 34.4. Fortis rises from € 30,71 to € 30,90. And Barclays is opening 715 and now at 714.5. Meaning that Barclays still has the better odds?

Perhaps not so much after tomorrow...

Sunday, June 24, 2007

Previous ING/ABN AMRO merger talks: ING refused Groenink board-seat

Het Financieele Dagblad has some further news on the merger discussions between ING and ABN AMRO in 2006/early 2007. Apparently Groenink was denied a seat on the merged board. And ING did not wish to pay more than 31 euro a share. And after that ABN AMRO turned to Barclays, with Groenink most likely being anxious not to demand a prime role in the board....

Third (employee driven) scenario coming up for ABN AMRO as a solo company...

See the news in De Financiƫle Telegraaf that outlines that the employees of ABN AMRO sent a letter to its management to consider a third option in the take-over discussion. This would be that ABN AMRO continues as itself, without any daugthers at all. Some politicians have immediately backed this plan and stated that ABN AMRO management should very seriously discuss this option and asks its shareholders what they think about it. Meanwhile Fortis, RBOS and Santander speed up their offer, in order to make an even more convincing case.

Saturday, June 23, 2007

Amsterdam incident to capture Nigerian fraudsters

Last week De Koopman reported that Amsterdam police have captured 111 Africans, in an effort to capture 419-scam artists. Local TV station AT5 discovered that the police just raided a cafe where, just before an African-music concert, a lot of concert-goers were present.

In the end it turned out that only 2 fraudsters were captured and that the mayor of Amsterdam wasn't informed beforehand of the raid. And he stated he was a bit embarassed about the whole situation.

Wednesday, June 20, 2007

European banks agree crossborder Mastercard rival |

See the article here that outlines that European banks have agreed to link their national debit card systems from September in a bid to break Mastercard's grip on crossborder payments, a German banking official said on Wednesday.

On Sept. 4 banks will launch a scheme, called EAPS, to enable debit cards issued in Germany, Britain, Italy, Spain, Portugal and Austria to work in cash machines and shops in the other countries, Peter Blatsche from German public-sector banking association VOeB said. For debit cards to work outside their country of issue, they currently need to be part of either Mastercard's dominant Maestro scheme or V-Pay operated by Visa Europe.

The pricing of the Euro Alliance of Payment Schemes (EAPS) scheme will be no more than the 0.3 percent rate changed under Germany's Electronic Cash debit card system, Blatsche said.

This will be a sort of 'good news' for the worried central banks (see my earlier post here) who have for unknown reasons decided to find themselves responsible for competition in the market rather than maintaining the European interest rate.

Dutch customers very satisfied with banks, no demand for branches but for differentiation

Consultancy firm CapGemini published a press release on Dutch bank customer research with the following findings:
- Dutch customers are very satisfied with their bank and give a 7,5 grade,
- banks do look a bit alike, especially niche-banks can distinguish themselves,
- access to banks is important, but not via means of bank branches; more than half of the customers doesn't ever use the bank branche,
- price is not an important factor in the appreciation of the bank but it is in the choice for another bank (most likely the mortgage/savings product change that we see here).

It will be interesting to note how the Dutch policy makers will react, given that there is still a draft law (by MP Crone) on the table that obliges banks to open up braches if necessary (see link here). And it will also be fun to see how policy makers accross Europe will be re-framing this customer research (done by an independent consultancy) into a position that consumers still do not like their banks, are unsatisfed and wish to choose other banks but are unable to.

They can (and will) most likely only revert to the false-consciousness arguments. This means that representatives of consumer or merchant organisations deny the results of research among their constitution that outlines that their members are happy and satisfied, by stating that their member may not be aware of the fact that they have a bad deal with their own bank. And that the fact that those memeber stick with their bank thus reveals the opposite: that they are unable and not free to leave the bank.

Dutch company CCV now to compete with Equens as an acquiring host processor license for PIN/POS

See the article in Het Financieele Dagblad to find out that as of June this year, after 18 years of monopoly, Equens is no longer the single central switch for routing/processing the domestic debit-card payments at the point of sale (PIN). As a result the market for debitcard transactions with PIN at the point of sale is now completely open. Merchants can compare banks, banks may compare switch processors at the acquiring side and card issuing service companies on the issuing side.

Sunday, June 17, 2007

Bank of Amercia sued for blocking take-over ABN AMRO

So everybody is suing everybode. Some news:
- the Dutch hight court will rule in July on the sale of LaSalle,
- a US court has decided not to deal with a Bank of America law suit, pending the Dutch trial
- and some Dutch shareholders are completely fed up with Bank of America and now take BoA to court.

Thursday, June 14, 2007

Fortis promises no lay offs when taking over ABN AMRO

As stated in this article. Barclays doesn't dare to do the same, but tries to charm the Dutch city of Amsterdam by telling they will finance a huge financial university programme.

Just too bad that Amsterdam VU University already has such a programme and specialisation, so the Barclays proposal is a bit of a bummer for all those hardworking academics over there, whose work is not properly being appreciated.

Monday, June 11, 2007

Sale of HEMA to UK investors doesn't stir the Dutch

Interestingly we can see the Dutch at present as very involved in their money and Dutch banking and discussing that we are now losing ABN AMRO to UK companies or foreign investors. Sentiments roar like: another Dutch institution gone. Also the fact that ING strikes it domestic brand Postbank creates quite some uproar. Yet, the sale of other huge Dutch brands/institutions such as the former KLM (merged with Air France in a slow takeover mode) or HEMA (a Department store group being sold to UK investment company Lion Capital for about € 1 billion) doesn't seem to stir us here into a similar mode of arousal.

It is interesting to see that in public opinion Dutch banks always do everything wrong, are crooks, cartel-champions, thieves, umbrella lenders when the sun shines and so on. But when the internationalisation-push comes to shove all the negative emotions disappear like snow in the sun, demonstrating that instead, the Dutch public may be quite committed to their banks.

My impression is that this so-called negative sentiment/caricature about the Dutch banks may in reality be nothing more than a (long-term ;-) lovers spat?

Postbank website has hitches and glitches

See the article to discover that Postbank is suffering technical problems with their internetsite. That doesn't do them a lot of good, since lately they moved all their business customers from the dial-up application Girotel to a paid version of web-banking. And now the web-banking is out of order repeatedly.

Sunday, June 10, 2007

Web-parody on ABN AMRO take-over may lead to yet another court case...?

On this Buro Renkema webpage with the Dutch title: 'taken by the bank', there is an interactive animation that makes fun of the ABN AMRO take-over. It shows a flash animation with choices for: balance enquiry, savings, securities and payments. There are a number of funny items in the animation:
- a systems check in the beginning,
- the name of the bank keeps on changing to include merger partners as well as the bank of africa,
- the savings applications ridicules outsourcing to other countries,
- the securities choice implies that you don't need experience to invest in shares
- the payments application asks the customer to choose what the payment is for (daily goods, etc), states that the annual shareholder meeting wants to know if this is really necessary and upon the yes says: fine if you want to buy it but not with our money,
- an ending that says: new name: Rijkman Groenink Bank; you save, we grab.

The animation is out on the web since May 15, but only now has hit the radar of national news. And ABN AMRO has formally demanded the makers to get rid of the animation as it considers it to be unnecessarily grieving. Which is an interesting line of thought in a situation where regardless of the outcome of biddings, the losing CEO takes a lot of money home (which could be viewed as a bit grieving towards shareholders or customers..?)

Well, with so many court cases in the air, why not add this one to the list. More in particular as the case of: The bigger they are, the harder they fall...?

Update June 11: reports that ABN AMRO will not pursue litigation. Most likely as a result of all the media and weblog attention and the fact they had a weak case in the first place.

Saturday, June 09, 2007

Use of Chipknip increases in niche; debit card takes over the rest

See this article on MKBnet and find out that the Dutch e-purse Chipknip is a real succes in the niches for parking (+28 %), vending (+17%) and catering (+27%). This is data from 2006 and shows that the Chipknip is a succes in the PARVENCA niche and not so much elsewhere.

For Point of Sale terminals (at retailers), one out of ten shoppers uses the Chipknip. It can be assumed that this percentage will become lower as Currence recently launched a campaign to promote the use of the debit-card (PIN) for low value payment at the retailer ('Klein bedrag, pinnen mag!').

EBALink (Equens) extended to SEPA

See the press release of equens to see that on June 6, Equens announced it will extend its EBALink service to SEPA. This means that through Equens, Dutch banks will be able to send and receive SEPA payments (Credit Transfer and Direct Debit) to and from banks that are connected to the Euro Banking Association (EBA), but not to Equens or one of its partners such as Seceti. Within SEPA reachability is a crucial necessity. Therefore this is again an important milestone for Equens towards the realisation of SEPA reach for the Dutch community.

The Dutch Central Bank (De Nederlandsche Bank – DNB) will continue its facilitating role as direct participant in EBA. Equens will take care of the interfacing to EBA and the clearing and settlement preparation of SEPA payments to and from the Dutch banks. Furthermore, Equens will also enable other EBA participants to make use of this service.

Friday, June 08, 2007

Government simulates chaotic payments after hacking attack

See the article here that outlines that Dutch Government simulated its response to a hackers attack that lead to stops in payment systems, wrongly paid unemployment benefits, trains going wrong etcetera. The government stated that the simulation went fine and response of its officials was ok.

So we can rest assured that the government watches over us...

Tuesday, June 05, 2007

Equens and Italian Seceti collaborate on SEPA

See the press release here and discover that Equens and Seceti agreed on collaborating to clear their SEPA “cross community” payments via Equens and Seceti as of 1 January 2008. This collaboration allows both payment processors to offer European banks an alternative for clearing their payments throughout Europe.

Michael Steinbach, Chairman of Equens' Board of Directors: "According to our strategy we will offer a variety of clearing possibilities via e.g. an Equens clearing community, collaboration with partners and other ways to ensure reachabilty and interoperability. We can act as a single point of entry for our clients". The list of Equens’s prominent current clients includes several leading European banks such as ABN AMRO, Citigroup, DZ BANK, ING, KBC Bank, OP Bank Group, Rabobank, etc.

The client base of Equens is located in most of the European countries. “Seceti as one of the biggest domestic payment processors in Italy is looking forward to create a maximum service level for our clients. The collaboration offers an alternative, ex tremely competitive, for clearing services in Europe" stated Giuseppe Capponcelli, General Manager of Seceti. With the start of SEPA on January 1, 2008, a euro-domestic market will arise and Seceti is SEPA ready.

Saturday, June 02, 2007

Another letter to ABN AMRO employees from Mr Groenink

With the Commissioners now in the driving seat Management Team reports that Mr Groenink has sent yet another letter to his employees. In this he asks understanding for the ongoing uncertainty with respect to the companies future. He explains that the LaSalle future/sale is crucial to the discussion, as well as the High Court rulings. Which means that the story will have some ending in a period between end of June and August...

More cynically one could argue that Groeninks role has been reduced to PR, writing letters to employees, while the real stuff happens elsewhere....

Friday, June 01, 2007

Currence: Dutch debit card phased out gradually / ECB re-engineers policy history

The Financieele Dagblad reported on a presentation session that occured yesterday as a part of the presentation of the annual report of Currence: scheme owner of Dutch collective payment products PIN (POS-payment), Chipknip (e-purse), direct debit and acceptgiro (bill-payment). Main news is that Currence announces that it seeks to maintain the brand PIN until the future market situation (in particular fees) is clear.

Essentially this is no news, as banks had already outlined that they would not phase out PIN without looking at market developments and consulting retailers. but still this may provide some comfort to Dutch retailers. Interestingly ECB-policy department chief Ruttenberg stated that he noticed a change in banks' behaviour: while they were first eager to phase out the pin-product, they would now seem to think otherwise. He noted a change in attitude there.

Ruttenbergs' statement can be best viewed as a projection in psychological terms. He notcies a change with the banks, which tells us something about what happens to the ECB. Because the real change in attitude is not with banks but with the ECB. In 2004 the ECB had no clue as to the market reality for cards payments. This speech of Tumpell Gugerell essentially discussed anti-fraud measures and standardisation. Then came the rush to implement SEPA. Both ECB and Commission urged the banks to quickly move towards panEuropean products and phase out domestic products by the end of 2010 (see the speech here). At this time the banks strongly complained about this deadline setting by ECB and outlined the business (interchange fees etc) and customer issues (need for a gradual migration rather than big bangs) involved. So the ECB slowly understood that indeed there was something as interchange issues that could stand in the way.

Then, somewhere in 2005 or 2006, having banged the panEuropean quick migration drum for some years now, the ECB changed its mind and did no longer demand changeover to international schemes. Rather it pursued the idea of a third Euro-scheme to compete with the other schemes (needless to say that VISA already transformed their business in Europe into a European scheme; a fact that has apparently went by unnoticed in Frankfurt). So the analysis from the Frankfurt towers is now that there might be a business case for such a card scheme and that banks should not rush into migration towards US dominated international schemes take over.

It is quite interesting to note that a mere change of responsibilities and roles within the ECB also leads to a re-interpretation of reality by the ECB-policy makers. They now re-engineer the policy history as if banks wanted to go quick and they as ECB need to slow them banks down and point out a different policy option (setting up a third scheme) which some years before, was absolutely not the desired goal of the ECB.

Updated June 8: see also the speeches by the ESCB and Commission.