US banks leave door open to
New York taxis take VeriFone
Seeking global
TSYS lands Citibank China
Ottawa transit to go


Credit unions put their trust in Metavante

Banking and payments technology vendor Metavante has further
strengthened its position in the US credit union market with its
appointment by Corporate Network eCom, (eCom) as its exclusive
supplier of mobile banking and payments solutions. eCom, a
majority-owned subsidiary of credit union clearing house US
Central, provides electronic financial services to the Corporate
Credit Union Network, which in turn serves nearly 8,400 consumer
credit unions.

Mobile solutions will be supplied by Monitise
Americas, a joint venture between Metavante and UK mobile banking
and payments specialist Monitise. Initial features of the solution
will include registration via mobile phones and credit union
websites, bill payment and funds transfers between accounts. Future
services such as access to mini-statements and the option of making
faster than normal expedited payments are planned.
Metavante’s mobile banking and payments
alliance with eCom comes a year after its appointment by eCom as
its provider of online bill payment and presentment


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US banks leave door open to criminals

Many US banks need to do a serious reassessment of their security
measures, warns security compliance and risk management solutions
company TraceSecurity.

TraceSecurity based its warning on the results
of more than 1,000 “attacks” it executed between 2003 and 2008 as
part of assessments of clients’ security measures. The security
tests employed three methods: hacking attempts on a bank’s network
via the internet, phishing and social engineering – the onsite
impersonation of a trusted third-party.
Social engineering proved particularly
effective. TraceSecurity found that in 95 percent of cases
sensitive data including bank account records and social security
numbers could have been stolen in 30 minutes or less.“Personally,
I’ve been able to bypass security policies, procedures and
technology of any bank or credit union where I’ve performed social
engineering engagements 100 percent of the time,” said
TraceSecurity’s co-founder and chief technical officer, Jim


The US debit card industry’s big shake-up

Bank of America’s (BoA) position in the US debit card market will
be considerably enhanced by its acquisition of Merrill Lynch (ML),
believes Brian Riley, research director in consultancy TowerGroup’s
bank cards practice. Enhancement will be in two key areas: volume
and the high net worth (HNW) sector.

Already the biggest player in what Riley termed
“the growth product in US plastic payments,” ML will add $13
billion in debit card processing to BoA’s $120 billion debit card
business. The latter volume is twice that of Wells Fargo, the
second largest issuer, and almost triple that of Citi.
In the HNW sector ML’s card business will
enable BoA to create “a dominant card product for the high end
market, by leveraging ML’s innovations in deferred debit, cash
sweeps and access to pooled assets,” said Riley.
He added that American Express, “a card issuer
that is currently experiencing marketplace stress,” will experience
the most pressure given that BoA currently offers the BoA/Amex
Accolades card which targets the same high-end market as ML’s


New York taxis take VeriFone onboard

US payment systems vendor VeriFone’s taxi business VeriFone
Transportation Systems (VTS) has notched up another success with
completion of the installation of a real-time integrated payment
and information system in 6,600 New York taxis. The project was
undertaken in collaboration with communications company Sprint
Nextel which is responsible for secure credit card transactions via
its Sprint Mobile Broadband and Sprint Data Link networks.

VTS’ system features a passenger information
monitor with a touch screen that allows passengers to review the
fare, add a tip and pay by swiping a credit card through a reader.
The system also supports contactless payments.
Additional passenger convenience is added by a
number of TV channels and GPS-based location and mapping service
available via the monitor.
Sprint and VTS will also deliver a similar
solution to taxis in Philadelphia, Chicago and Las Vegas.
In August VTS was awarded a contract to supply
20,000 advanced onboard POS systems to Australia’s largest taxi
payments company, Cabcharge Australia.


Popular with the cognoscenti

It would appear to be a case of love at first use for US consumers
who have gone the contactless payment route, reveals a study
undertaken by industry body the Smart Card Alliance (SCA).

Among users of contactless credit and debit
cards surveyed, 92 percent reported that it was “fast and easy.”
Generally, users also had positive experiences at merchants,
reporting that 85 percent of cashiers knew how to accept
contactless payments.
However, while 9 percent of US consumers are
using contactless cards and appreciating the convenience, the vast
majority of the population is poorly informed.
According to the SCA 75 percent of consumers
are unfamiliar with contactless payments, a rather disappointing
increase compared with the 85 percent found to be unfamiliar with
contactless payments in 2006. Not surprisingly Randy Vanderhoof,
executive director of the SCA stressed: “Communicating and building
awareness of contactless benefits to get consumers to try it is
critical, and an important priority for all of the


Seeking global interoperability

UK payment processor VocaLink and online payment software developer
eWise Systems are among founding members of a new industry body,
the International Council of Payment Network Operators (ICPNO)
established with a key objective of creating global
interoperability between national online alternative payments

The goal of the ICPNO is to enable consumers in
one country on one network to purchase goods or services from a
merchant in another country on another network. Members of the
ICPNO will be required to agree a set of international operating
standards and rules which will include:
• Legal compliance;
• security standards;
• international settlement procedures;
• fee structure;
• exchange rate mechanisms;
• participant protection;
• international relationships;
• technology integration;
• communications such as branding, consumer
awareness and marketing; and
• ongoing governance.


Equens spreads its reach into Italy

Pan-European payments processor Equens has clinched a deal with
Italian banking services company Istituto Centrale delle Banche
Popolari Italiane Group (ICBPI) that will increase its transaction
volume by 19 percent and its market share and consolidate its
position as a key contender in the Single Euro Payment Area. Under
the terms of the deal Equens and ICBPI will establish a 50:50 joint
venture, Equens Italia, which will assume all card and payments
processing activities of the ICBPI and its subsidiaries.

As a result of the transaction ICBPI will
become a shareholder of Equens, joining existing shareholders in
Belgium, Germany and the Netherlands.
In a second phase of the deal, which is set to
occur within a maximum of three years, Equens Italia will become a
wholly owned unit of Equens.
Equens Italia will boost Equens’ total payment
transaction volume by about 1.4 million annually and its POS and
ATM transactions by about 1 million.


TSYS lands Citibank China deal

US bank Citibank’s China unit (Citi China) has awarded a debit card
processing contract to China UnionPay Data Services (CUP Data), a
joint venture between US payment processor TSYS and China’s only
bank card organisation, China UnionPay (CUP).

In August 2008 Citi China became the first
foreign bank to issue a renminbi (local currency) debit card in
association with CUP. The card provides access to more than 140,000
ATMs in China, 380,000 ATMs overseas in 45 countries and some 1
million merchants in China and 27 other countries.
Established in 2003, CUP Data – in which TSYS
has a 44.5 percent stake – is China’s largest third-party processor
of bankcard accounts and now has more than 50 signed credit and
debit card processing client banks.


VocaLink and Equens forge SEPA alliance

In a move linking two of the largest players in Europe’s payment
processing and clearing market, VocaLink and Equens have
implemented a bilateral link for the exchange of Single Euro
Payment Area (SEPA) payments. The agreement was described by the
partners as a major step in the implementation of the European
Automated Clearing House Association’s (EACHA) framework for
interoperability between banks and European clearing and settlement
mechanisms announced in October 2007.

UK-based VocaLink processes 6 billion
transactions annually while Equens, the product of a merger between
Netherlands payments processors Interpay and it German counterpart
Transaktionsinstitut in September 2006, processed 7.3 billion
transactions in 2007.
In April 2008 Equens and payment processors
Iberpay (Spain) and Seceti (Italy) exchanged the first SEPA
transactions based on the EACHA interoperability framework.


Londoners applaud paying by mobile

Europe’s largest-yet trial of mobile phone’s equipped with
contactless payment capabilities has been declared a success by
communications company Telefónica O2 UK (O2), one of seven key
participants. The six-month trial in London ended in May 2008 and
involved 500 consumers using Nokia 6131 near-field
communications-enabled mobile phones.

All trial participants were able to use their
phones for payment on London’s public transport system, replacing
the conventional Oyster travel card.
Two-thirds of participants reported that they
found it more convenient to use than an Oyster card while 22
percent said they had increased the number of journeys made on
public transport during the trial. About 50,000 journeys on
London’s underground were paid for using mobile phones during the
In addition to Oyster, 225 trial participants’
phones were equipped with the Barclaycard Visa’s payWave
contactless payment application.
Over two-thirds of these participants said they
were interested in using contactless payments on their mobile in
future while 47 percent stated that being able to use their mobile
to make payments would influence their choice of handset.


PayPal takes small UK businesses online

UK retailers relying solely on high-street stores to sell their
wares are reeling under the impact of the most serious decline in
sales in almost 20 years while those who have harnessed the power
of the internet are enjoying robust sales growth on their websites.
It is an opportunity that PayPal has seized to bring an e-commerce
solution to small businesses in partnership with US e-commerce
service provider Venda.

Small businesses understand the benefits of
going online but are deterred by technical complexity and the costs
involved, explained Venda’s chairman Dan Wagner. This, he believes,
need no longer be the case with the Venda/PayPal solution.
“Drawing on the experience gained by supplying
our solutions to larger retailers and manufacturers, we have
developed a self-serve solution that is low cost, simple-to-use and
requires no technical expertise. As a result, businesses can now
get online with a sophisticated eCommerce solution within sixty
minutes,” said Wagner. The total monthly cost of the service, which
is fully integrated with PayPal’s payment solutions, is £49.99


Data breach mayhem

Two bizarre data breaches, one involving a computer sold on eBay
and the other the world’s largest hotel chain, have again
highlighted the need for all entrusted with consumers’ personal
details to take the utmost care.

In the eBay incident a computer with its hard
drive crammed with personal details, including bank account and
credit card numbers, of some one million customers of Royal Bank of
Scotland, its subsidiary bank Natwest and American Express, was
purchased for the princely sum of £35 ($63). Fortunately the buyer,
Andrew Chapman, an IT engineer, immediately reported his
Far less certain are personal details –
including credit card numbers – of up to 8 million guests that
patronised the Best Western Group’s hotels during a 12-month period
up to about August 2008.
According to reports in the Sunday Herald, the
UK newspaper that exposed the data breach, an unknown Indian hacker
gained access to the hotel group’s online booking system.
Best Western has downplayed the severity of the
data breach. Only time will tell.


European banks face huge euro problem

Up to 41 percent of the some 1.4 billion cross-border commercial
payments executed each year fail, according to the European banking
industry. The cost of putting these payments back on track averages
€36 ($52) per transaction, adding up to a staggering total cost of
almost €21 billion born by banks annually, warns UK software and
services company Misys.

Human error is a key contributor to the high
failure rate. “Little more than a third of cross-border commercial
payments are completed using STP today,” said Barry Kislingbury,
Misys’ payments and financial messaging global product
Specifically, Misys identified a number of
human-related causes of cross-border payment failures of which one
of the prime causes is missing or incorrect reference data.
This is responsible for 30 percent of all
failures according financial messaging body the Society for
Worldwide Interbank Financial Telecommunication.
Other causes of failures include weak payment
initiation controls, poor monitoring of processes and problems
during clearing and settlement. 


Australia’s first card in a mobile

In an Australian first, National Australia Bank, mobile network
operator Telstra and Visa have launched a trial project to assess
consumer and retailer reaction to mobile phones equipped to
undertake contactless payments. The trial involves 200 consumers
equipped with mobile phones sporting Visa credit card and payWave
contactless software and 12 retailers in Melbourne’s Docklands


Sentenial lands key SEPA deal

ABN Amro Bank has selected Irish direct debit processing specialist
Sentenial’s EuroDebit solution for its pan-European direct debit
processing requirements. According to Sentenial, the fully
SEPA-compliant solution will enable ABN Amroto rationalise a number
of legacy and in-house direct debit systems and achieve high
straight-through processing levels. 


Ottawa transit to go contactless

Canada’s capital city Ottawa is to deploy a smartcard-based
contactless fare payment solution on its public transport system.
The decision forms part of C$1.5 billion ($1.4 billion) expansion
of the city’s train and bus system which carries 100 million
passengers annually. Implementation of the new fare system, at a
cost of C$21 million, will begin in mid-2010 with completion due in


Ivobank spreads its wings

UK internet-only bank Ivobank has begun offering payments and money
transfer services to customers in France, Italy and Germany. This
brings to seven the number of country’s served by Ivobank which
launched in the UK, Ireland, Spain and Canada in March 2008. The
bank aims to attract 1 million customers over the next three to
five years.


Chip targets closed-loop demand

Texas Instruments has launched a chip which addresses strong demand
for closed-loop contactless applications, particularly in Asia and
Central and South America. A multi-purpose chip, it is capable of
supporting up to five applications including micropayments and
personal identification on one card or token. Other features
include a 128-bit unique key generated for each transaction and the
ability of card and reader to mutually authenticate each other
during a communication session.