SECURITY
Go deeper with GlobalData
New thrust against phishing
Online auction and commerce group eBay and its electronic payments
unit PayPal have joined forces with internet service provider
Yahoo! to protect consumers from criminals sending fraudulent
e-mails and claiming to be from PayPal and eBay.
The initiative entails the launch of an e-mail authentication
called DomainKeys. This technology safety upgrade will be rolled
out globally over the next several weeks to all users of Yahoo!
mail.
According to PayPal, DomainKeys’ technology enables verification of
the authenticity of e-mail messages, thereby allowing internet
service providers to determine if messages are real and should be
delivered to a customer’s inbox.
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By GlobalDataHowever, while DomainKeys should reduce the incidence of phishing
attacks, Michael Barrett, chief information security officer at
PayPal, conceded that “there is clearly no silver bullet for
solving the problems of phishing and identity theft”.
MOBILE PAYMENTS
Yodlee and Obopay join forces
US mobile payments service provider Obopay and payments solutions
provider Yodlee have joined forces to offer Obopay users a new bank
account verification application.
According to Obopay, Yodlee’s account verification service enables
mobile banking customers to authenticate their bank account
ownership in real time by entering their internet banking user name
and password.
The service is an alternative to Obopay’s verification that
requires users to provide their bank routing number and account
number.
“Obopay is a perfect use of our patented Instant Account
Verification technology, giving people the convenience of immediate
authorisation with the highest security,” said Peter Hazlehurst,
Yodlee’s senior vice-president of product development.
According to Yodlee, it provides ownership confirmation for bank
accounts at more than 650 financial institutions that carry more
than 80 percent of US account volume.
PREPAID CARDS
Congressman targets prepaid call industry
US Congressman Eliot Engel has introduced legislation that he said
aims to curb “abuses” and “deceptive practice” within the prepaid
telephone calling card industry.
He explained: “Because the money is paid up front before the card
is used, many companies have successfully hidden additional fees,
shorted minutes and had terms that are nearly impossible to
appeal.”
Engel said consumers find that calling card rates are sometimes
higher than advertised or that they must pay surcharges or
undisclosed taxes.
In other cases, calling card companies deduct minutes even if the
consumer is unable to connect with the party they attempted to
call. He also found that some companies short the consumer on the
number of minutes they receive, compared with what is
advertised.
“To help combat some of these issues plaguing calling card users, I
introduced legislation to require disclosures related to terms and
conditions on all advertising, cards or packaging,” said
Engel.
The legislation would also require calling card companies to
provide a detailed description of any additional fees, its name and
contact information.
ONLINE BANKING
HSBC may opt for out-of-band security
UK bank HSBC is considering an out-of-band authentication (OBA)
after rejecting two-factor online authentication for its retail
internet banking service. With OBA, a bank’s internet portal
authenticates users by generating a PIN and then confirming this
PIN by calling the customer on a designated phone number.
OBA is unlike the two-factor authentication that is recommended by
UK payments processing industry body APACS. This requires customers
to use a card reader that generates an eight digit password.
HSBC’s rejection of two-factor authentication is based on its view
that it does not eliminate the risk of a customer’s personal
computer being compromised by online criminals.
MERGERS AND ACQUISITIONS
Cardpoint and alphyra to merge
Cardpoint, the UK’s largest independent ATM operator, and
Ireland-based payments processor alphyra have announced plans to
merge and incorporate and list new parent company Payzone on the
London Stock Exchange’s Alternative Investment Market.
Cardpoint, which operates about 5,100 ATMs in the UK and 800 in
Germany, processes around 100 million transactions annually.
The company – which, according to its management, “has been
operating in challenging market conditions” – reported a profit
before tax, goodwill amortisation, exceptional items and
share-based payments of £8.3 million ($17 million) in the year to
March 2007.
According to alphyra, it is Europe’s largest branded consumer
payments network in terms of retail points (230,000) and countries
served (20). alphyra processed 540 million transactions in the year
to July 2007, with a value of €9.8 billion ($13.89 billion), and
reports that the transaction volume is up by 20 percent compared
with 2006.
alphyra reported a loss before tax of €10.06 million in the year to
June 2006. The combined net assets of the two companies are
approximately €67 million.
SEPA
VocaLink’s new corporate platform
Corporate Access, a service enabling banks to provide a platform
for major business customers to originate and manage SEPA
transactions, has been introduced by VocaLink.
The service is the first of a number of new offerings that are
being developed for the customers of the recently launched VocaLink
Euro Clearing and Settlement Mechanism (CSM), said Marion King, CEO
of the UK payments processor.
The Corporate Access platform can be branded by individual banks
and utilises gateway software from software vendor Eiger Systems
that connects corporate back offices to the VocaLink Euro CSM
service over a choice of secure connections.
The identities of customers are authenticated in a system supplied
by IdenTrust, a US-based multi-bank-owned identity security
specialist company.
SEPA
Payments processors establish
interoperability
Five European payments processors that handled a volume of more
than 18 billion direct debit and credit transfer payments in 2006
have forged an agreement that will establish interoperability
between them for the exchange of SEPA payments. The payments
processors are Equens (Netherlands and Germany), Iberpay (Spain),
Seceti (Italy), STET (France) and VocaLink (UK).
The agreement will result in the first implementation of the
Technical Interoperability Framework (TIF) Version 3.0, which was
formalised as the European clearing industry standard by industry
body the European Automated Clearing House Association (EACHA) in
August 2007.
The TIF complements the SEPA standards created by the European
Payments Council and adheres to SEPA scheme rules. EACHA designed
the TIF to help establish interoperability between banks and
clearing and settlement mechanisms (CSM), as well as
interoperability between European CSMs for payments that will have
to be cleared and settled for banks participating in different
CSMs.
PAYMENTS PROCESSING
UBS goes live with Fundtech gateway
Swiss banking and asset management group UBS has begun processing
its dollar and Swiss franc payment transactions using IGTplus, a
financial messaging gateway developed by US payments solutions
provider Fundtech’s Swiss subsidiary, BBP AG.
IGTplus supports three real-time transaction flow functions: US
dollar clearing between UBS, the US Federal Reserve Bank and the US
Clearing House Interbank Payments System; Swiss franc payments
between UBS and the Swiss central bank via the Swiss Interbank
Clearing System; and euro payments via the Swiss Interbank Clearing
System.
At its peak, UBS processes more than 300,000 transactions every
hour.
“The duration from evaluation to going live was a short time
frame,” said a UBS executive director, Charles Brenneisen. “The
system has been running absolutely stable and meets our performance
expectations.”
MOBILE PAYMENTS
LogicaCMG pilots mobile payments in the
Netherlands
Europe is on the verge of a revolution over the way people use
their mobile phones, believes Gerben Mak, innovation director of IT
at business services group LogicaCMG.
He was commenting on the launch by LogicaCMG of a pilot project in
which 100 customers have been supplied with mobile phones equipped
with near field communications (NFC) payment capability that
enables them to make contactless payments in a supermarket near
Rotterdam.
The pilot project, which will run for six months, is being
conducted in conjunction with Dutch bank Rabobank, Dutch
telecommunications company Koninklijke KPN, software developer NXP
Semiconductors and RFID Platform Nederland, an industry body
focused on promoting NFC.
MOBILE PAYMENTS
Atos scoops prestigious award
French software developer and payments processing outsourcing
services company Atos Worldline’s Pay2me mobile payments solution
has earned top place in the New Uses category at the French
technology industry’s annual Innovation Awards.
The awards are organised by Syntec Informatique, the association of
French software and computing services companies, and Orange
Business Services, a unit of the French telecommunications company
France Télécom. The awards ceremony will be held in Paris.
Pay2me is based on Atos Worldline’s m-banxafe technology and was
developed in collaboration with Belgian mobile phone operators
Base, Mobistar and Proximus. It enables payments via GSM
technology-based mobile phones. Such phones, according to industry
body the GSM Association, account for 82 percent of all mobile
phones in use.
Pay2me, which was launched in Belgium in March, requires a mobile
phone’s SIM card to be m-banxafe enabled. Transactions are executed
via short message service and users authorise payment by means of a
PIN.
Pay2me is linked to users’ and merchants’ bank accounts. Users pay
€0.25 ($0.35) per transaction and merchants €0.49.
JOINT VENTURES
Etisalat and Dubai government team up
eGovernment, the Dubai government’s electronic payments initiative,
has been boosted by the establishment of a joint venture (JV) with
Etisalat, the United Arab Emirates’ (UAE) telecommunications
service provider. Under the terms of the agreement, the partners
will work together to deliver a range of electronic payments
solutions to governments in the UAE and across the Middle East
region.
Etisalat’s eZeePay bill-pay service will form part of the JV.
eZeePay, which can be accessed via the internet, call centres and
ATMs, will be extended to allow the public to transact with the
government via banks.
Services to be added include mobile payments, a market that
Etisalat recently entered with the launch of mobile banking service
123 Mobile Banking in a JV with UAE-based bank Abu Dhabi Islamic
Bank.
CONTACTLESS PAYMENTS
payWave extends its reach in Taiwan
Taiwan’s largest telecommunications group, Chunghwa Telecom, mobile
phone manufacturer Nokia, Taiwanese bank Chinatrust Commercial Bank
(CBC) and Visa have launched a public trial of mobile handsets
equipped with Visa’s payWave NFC contact-less payments
technology.
In the trial, which will run for six months, 500 CBC card-holders
will be able to make payments at 3,000 stores that accept Visa
payWave contactless cards in Taiwan.
In addition to the NFC payments, trial participants will be able to
obtain merchant offers by pre-registering their preferences to
receive certain types of coupons or by holding their phone up to
special posters located in shopping areas, thereby triggering
on-demand download of specific merchant offers.
The trial was a natural progression for contactless payments in
Taiwan, the leading Visa payWave contactless market in the
Asia-Pacific region, said Gordon Cooper, Visa International’s
Asia-Pacific regional head of mobile payments. According to Visa,
1.4 million Visa contactless cards are in use in Taiwan.
PAYMENTS PROCESSING
First Data tightens security in China
US payments processor First Data International’s (FDI) VisionPlus
card processing system in China has deployed software vendor Austin
Logistics’s new predictive analytic EarlyDetection System, which
enables First Data to assist its customers in managing high-risk
credit card accounts and closing fraudulent accounts.
“Having been in the market for the past seven years, we’ve found
that managing risk has become a priority for most of the card
issuers in Asia,” said Nigel Lee, president of FDI in Asia
The VisionPlus card processing unit, based in Shanghai, provides
card processing services to FDI’s outsourcing clients in China and
is increasingly being used to deliver processing services to all
developing markets in Asia.
SECURITY
Canada rolls out chip and PIN cards
The first transactions in Canada to use chip and pin cards will
begin this month in Ontario. The initial trial marks the start of a
roll-out of chip and PIN cards that will lead to magnetic stripe
cards no longer being accepted at ATMs after the end of 2012 and at
POS after year-end 2015.
According to Interac, which is responsible for linking proprietary
payments platforms in Canada, in 2006 Canadian banks and other
financial institutions reimbursed debit card customers C$95 million
($97.5 million), stolen from their accounts. This was up from C$70
million in 2005 and C$44 million in 2003. Credit card fraud
amounted to C$290 million in 2006.
