Best wishes !!

I wish the readers of this weblog all the best for a good 2004, with a lot of payment innovations!



The picture below is an old, nicely designed, booklet with credit-transfer forms, issued by the Municipal Giro of Amsterdam in the 1920s. This municipal giro was the first in many innovations ranging from early automation of the booking process in the 1920s, the design of a photo-machine (1930s), introduction of communications networks, atm's and (almost) a credit card.

LG Card: a nice moral hazard case....

The trouble with LG Card in Korea continues, according to the FD. An additional 2.7 billion dollars should make the company ready for sale, but observers have some doubts.



The case of LG Card (see also previous entries on this blog) is interesting now that speculations arise as to the intervention of Korean government (or the Korean central bank). It is a fine example of a possible moral hazard. Moral hazard occurs when organisations or individuals act upon the assumption that government or central banks may bail them out in case of trouble. It distorts the regular process of taking and assessing risks and may result in financial losses (to be borne by the tax-payer).



With the LG Card, the situation was that the government promoted and supported the use of the credit-card. So all issuing companies did not care for risk management and shifted the Korean society from cash to credit-card oriented. As a result, each Korean individual now has 4 credit-cards and the outstanding credit-card debt amounts to 14 % of Gross National Product.



So the big question is now how the credit-card industry in South-Korea will be restructured. If government is to bail the industry out, it creates a precedent in which other organisations or industries may also start taking risks with the idea that government will help them. So it appears unlikely that this will happen. But then again, it will be hard to find buyers for the South Korean credit-card issuers...



Or would the IMF be willing to intervene.... ? This article on their website suggest that IMF financing has not proved to induce moral hazard.

PayPerMobile: all you need is your Mobile..

Another new provider of mobile payments has hit my radar screen. This time the name of the product/company is PayPerMobile. Their pay-off: The most easy payment method ever!

E-commerce turnover in the Netherlands reaches 1,2 bilion euro...

according to this article in the Financieele Dagblad. Most products boughts are standardized items such as flights, books, cd's etc. The 1.2 billion however, is only a minor part of the 82 billion euro total sales in retail.

Interview with van Rossum (Tootz)

This article at E-biz Platform Amsterdam is based on an interview with Kees van Rossum of ING. He is responsible for the launch of Tootz and explains that this pilot-launch must be viewed as a test to determine the price-sensitivity of merchants and consumers.

Dutch Rail proceeds with chipcard

Todays Financieele Dagblad contains an article about the introduction of the chipcard for the Dutch Railways. Apparently the contract with TLS has been modified to get NS to participate in the chipcard deal. Most likely the price of rail tickets will vary more specifically, based upon the time-slot in which the train-trip occurs.

Wave the credit-card....

See this interesting article in Wired on the current contactless credit-card trials.

Interview with Stolwijk

Todays Financieele Dagblad contains a last interview with W. Stolwijk. It is very much a human interest article and portraits him as a passionate painter. An interesting remark (and shadow of things to come) is that he pities the fact that the fierce competition between banks will make cooperation (and achieving efficiency by working together) more difficult.

Government representatives also still converting euro to guilder

As the EU-surveys show, the Dutch people are still converting sums of money back to guilders. Even our prime minister Balkenende does so in reply to questions of parliament: "Mind you, this sum of 110 million euro still represents 240 million guilders!". Previously our former Member of euro-parliament (now Minister of Transport) Karla Peys repeatedly converted during a debate in parliament to convince the MPs.

LG Card crisis in Korea continues

Het Financieele Dagblad reports this morning that LG Card (see posting of November 25) is still in trouble. It has an additional emergency loan of $ 250 mln. The second biggest issuer in Korea, KEB Credit is also troubled and has stopped servicing cash withdrawals at ATM's.

Global Payments expands into EU-market

The US Company Global Payments has acquired a majority interest in Czech Republic Processing Company MUZO. This is all part of the changing processor market in Europe, where scale advantage will determine the ultimate landscape. See the details of the deal in this fact sheet or read the press release.

Stormy wheather for contactless card for public transport

Planet reports that the introduction of a contactless card for public transport is in danger. The NS (the Dutch Railways) is willing to invest but seeks a commitment from other players in the sector in order to be sure of sufficient transactions. Apparently it has not succeeded in finding this committment and as a result TLS (the company that arranges the introduction of the card) will soon meet its shareholders to discuss the situation that has arisen.



Other news on the new chipcard (Automatiseringsgids) is that this Saturday the Minister of Transport started the new payment system in Amersfoort, meanwhile opening the new offices of TLS. Also, one of the participating companies, Connexxion, issued a press release to inform the public that it will start its trials with the new system at the end of 2004.



Most interesting link that I can provide is the discussion on the new system at Tweakers net. This provides a nice insight into consumer perception themes.

Peak in pin-transactions

As always, the saturday before Christmas turned out to be the busiest moment for online debit-card transactions. Het Financieele Dagblad reported that Interpay processed 5,9 million authorizations. This is what I expected and means that we will see a total of 1,1 billion of these transactions in 2003.

Central Bank president dislikes small eurocents..

Today our central bank president was on the radio, stating that he disliked (and never used) the one and two eurocent coins. He would not mind if these were not to be used further. Also he stated that falsifications of euro notes are a thing of all times and that the recent increase in falsifications should be viewed in that respect.

Webwereld reports launch of Tootz; mobile payment instrument by ING

This morning WebWereld reports the launch of Tootz, a mobile payment product by ING. Essentially this is a similar product as Rabo's Minitix: the user opens a separate account and puts some money on it (maximum of 100 euro) in order to pay for ringtones etc.



The payment protocol is interesting in the sense that within three minutes after a purchase, the user needs to phone the number 0800-8668968 (TOOTZNU) to confirm payment. The phone won't be answered by voice response mechanisms; just calling is enough to effect the actual payment.

Donate with Way2Pay

I've just finished the Way2Pay application and made a donate button for this post. It took me about 20 minutes to give you this:



Test Way2Pay en doneer hier 1 euro / Test Way2Pay and donate your euro here:

Credit-card procedure Postbank

For those interested in the renewal procedure of the Postbank credit card:

- a letter arrives with an activation code,

- the postman rings the door on Saturday and delivers the card (signature/driving license needed),

- the card is activated (but with a voice response dialogue which vaguely states that the activation order has been received.. one must assume that as of that moment it is possible to use the card but that is not really confirmed),

- the customer is instructed to not only cut the old card in two, but also to send it back to the Postbank.

KPN renews prepaid-platform: chooses Alcatel

Planet Multimedia reports that KPN Mobile has chosen Alacatels Intelligent Network (IN)-technology for its pre-paid customer base. The specifics are:

-8690 Open Service Platform (OSP)

-payment suite with Alcatel 8618 Rating Engine and 8698 Lite Service Creation Environment (SCE).

Essential is the open architecture of the system which allows easy addition of newer services to the network.

Dutch hold on to the guilder to determine price...

Todays Volkskrant reports that the Dutch can not let go of the guilder as the unit of account: 68 % of us are still recalculating the price in guilders as opposed to a European average of 54 %.

March 1, all contracts move to banks...

Trouw reports today about the fact that CCV van der Velden is ready to perform some of the switching for debit-card as of March 1, 2004. This is the date when banks will be responsible for the debit-card contracts with retailers. At the same time competition should take place with respect to the switching, allowing others than Interpay to also process transactions.

pre-Report of GTIAD meeting is out

Apparently some journalists have laid their hands on the draft minutes of the GTIAD meeting on e-money, in which the conclusion was that pre-paid premium sms can be considered electronic money. See the articles in:

-AVN Online,

-NewMediaAge.

Moxmo and Idols

Last week, the second run of Idols started in the Netherlands. In the promotion area, we can see the e-money provider Moxmo on a prominent place on the Idols- website. As one of the features to attract customers, it is possible to vote for Idols and not use the pre-paid money of the telco-operators, but the money that is in the Moxmo-wallet. As a result, the SMS will be 10 cents cheaper. Again, a feature that may attract quite some users.