Driving ATM...

The Rabobank has received quite some press with an ATM that is built into a money transport van. The idea is new (at least for the Netherlands).

First Data acquires Austrian APSS...

Banking Business Review reports that First Data has signed an agreement to fully acquire APSS. Let's see if the same happens as with Encorus.

Encorus was the promising mobile payment entity, also taken over by First Data. Having reviewed the business, First Data announced earlier this week that it will write-off its investment.

Bill has a couple of thousand users

Emerce reports that the MSN-payment system Bill now has about 5000 users. It's often a guy and he is about 29 years old. Each month an amount of 30 euro is spent, mostly on top-ups and sms-messages.

SNS Bank will further use the experience with Bill, the banking buddy, to improve the positioning and expand services.

Mr Duisenberg and the privatization of the Postbank

Yesterday, mr Duisenberg, former President of the European central bank and of the Dutch central bank, former director at Rabobank, former Minister of Finance, deceased. A lot of in memoriams will now appear. But they will most likely forget the role of Duisenberg in the 70s, which has been quite significant to the payment industry.

Being PvdA, Minister of Finance and supporting a privatised Postbank was kind of an interesting combination. When Rabobank asked him to become a director, Duisenberg agreed to this. As a result Rabobank's negative stance on the privatisation of the Postbank then softened. This opened the road towards privitisation of the Postbank (quite some years later) and building towards a national payment circuit in the Netherlands (the two were a package deal).

There is more to tell of course, but not here, not now.

Postbank installs instore ATM's at retailer Albert Heijn

Today news came out that Postbank installs in-store ATM's in all shops of retailer Albert Heijn. Fun thing is that the cash withdrawals will be free to the consumer. Yet, if non-Postbank customers take out cash, their own bank will renumerate Postbank a service fee. And that is an interesting driver behind all this.

Now let's take a look at the future. It is not unlikely that eventually Dutch banks end up doing the same as the Belgians. Which is to leave atm-withdrawals in the home-bank ATM for free, while pricing those at other banks. So that leads to a renewed battle between banks, that will all want their own ATM in good places in order to provide their customer the best service possible.

Commission publishes draft Regulation to fight terror

Immediately after the september attacks in New York, US regulators found the leverage to impose, by means of the FATF, a set of draconic rules. These would mean that all payment transfers had to be accompanied by the name/address of the payer. This measure against fraud/terror is of course useless. Who expects that B.Laden from Pakistan will send money in his own right...?

Still, such things then continue to become a rule in their own right. And US and EU have agreed to implement the so called Special Recommendation Number 7 (wire transfers). And, given the current UK chairmanship of Europe, and the bombs going off in London, UK decided to step up the pace. Consequently the Commission published its draft regulation this week; in mid-summer.

Meanwhile, Dutch government published a report on underground banking, undercutting the regulations completely. Conclusion: there is not much to be done to get these organisation to follow the regular bank rules. So if any terrorist needs to get his money somewhere, it'll get there...

Payments and Settlements News Nr 23 is out

See this 23rd edition with news on:
-Paypal expanding to China
-the European Association of Payment Service Providers for Merchants
-E-Invoicing in Europe – Standardisation efforts at the European level
-Changes in the cash infrastructure as announced by the US Feds.
- and much much more

Digital Dutch bill paying in 2006...

Trouw reports that four large banks (Rabo, ABN AMRo, ING and Postbank) have chosen to introduce the digital bill payments. Currently, most Dutch bills are paid by so-called: acceptgiro. Payment of these bills requires people to do a 16-digit data-entry per payment.

TPG Post, which set up the digital bil payment via Privver, is the partner in this set-up. The new functionality will mean that people will find their bills electronically prepared in their home-banking internet-application. So payment will then be quite easy.

Oyster - London aims to incorporate low value payments to travel card

Digital Media Europe: News reports that Transport for London aims to incorporate low value payments to its Oyster travel card. It has announced that the potential partners for developing this e-money capacity are: Alphyra; Barclays; BBVA/Accenture/MTR/Octopus; EDS/JPMorgan; Nucleus/Dexit/Ericsson/Hutchison 3G UK/Euroconex; Paypal and RBS. These companies may negotiate with Transport for London over provision of the proposed service this summer.

TfL aims to incorporate e-money to its contactless ticketing and payment smart card, Oyster, allowing holders of the card to use it to make low value payments for goods and services at news agents, parking machines, fast-food restaurants, supermarkets and other locations where the transaction speed is important and cash is inconvenient.

TfL expects to confirm a partner by the end of the year and aims to commence trials for Oyster e-money in late 2005 or early 2006.

Europe to review e-money rules.....

Finextra reports that the European Commission is to review e-money rules. This is just as scheduled. There are only some minor glitches here.

First of all, the last three years should be the years in which all players in the e-money world were to be properly supervised. But the commission struck a deal with mobile operators so these would be exempted from the regulation. As a result, many small innovative companies (for whom the directive meant to establish a level playing field to compete with banks) went out of business, leaving basic only the bigger guys (Paypal) in the e-money market. See also this website of former Dutch m-payment players, which apparently documents the rise and fall of non-bank, non-telco m-payments providers in the Netherlands.

So while the Commission is keeping up appearances and pretending that this is an official evaluation, the only question that remains is which trick they will pull to ensure the competitive advantage of mobile operators in the m-payment business.

Internal market commissioner Charlie McCreevy words can thus only be viewed as a major cover up. Should we really believe this:
'I am personally committed to ensuring that the Directives we adopt fulfil their objectives and improve the functioning of the single market. Should the evidence prove that this is not the case, we will not hesitate to take decisive action.'

Time will tell...

Datadump at ESCB: P&S news 22

Issue No 22 of Payments and Settlements News is a major linkdump which covers (1) payment and settlement systems oversight issues; and (2) financial stability issues; and which provides (3) links to payment statistics.

To balance all the central banking oriented stuff (claiming that oversight is required for financial stability... bla bla bla) I'd like to point the readers to these remarks made at the St. Louis Banking Conference by Professor George Kaufman:
I also come from the perspective that "systemic risk" in banking is not a threat and has not been a great danger in world history. It is a scare term, much like the use of the word "fire" in a crowded theater. Systemic risk is used shamelessly by regulators to justify their own actions, and by novelists and movie script writers to provide plots for horror stories. This is my bottom line, and if I had two hours I could go on and give you all the evidence.

Chipcard only in parking meters is not a (legal) problem

The highest Dutch Court rules last week that city councils are allowed to place parking meters that only accept Chipknip-payments. There is no need that these parking meters accept cash, as long as the cities comply with the rule to have separate pre-paid chipcards on sale near the parking meters.

The ruling corrects an erronoues judgment of a lower court. And it also puts aside an advice of the legal council to the court. Both these incorrect legal findings made the public believe that there would be a legal requirement to accept cash at all times. Yet, this is however a common misconception.

In general there is no requirement to accept cash, provide one states it beforehand. An additional rule for government entities is that, as far as it concern a payment of tax, sufficient ways exist to pay with cash (or use cash to buy a pre-paid chipcard nearby).

I'm glad that the High Court made this one clear once and for all.

Conference "Past and Future of Central Bank Cooperation"

The BIS publishes the proceedings of the Conference "Past and Future of Central Bank Cooperation" held: 28 - 29 June 2005. The conference was held to mark the 75-years existence of the BIS.

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?

Japanese Edy e-money transactions to top 10 mln in June

Forbes.com 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.....? ... www.MobileMoney.com

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 www.MobileMoney.com and determine for yourself if what they offer is a paneuropean payment facility or not.

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.

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....

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...