MasterCard bolsters development
abilities…
Paystone calls it quits…
Go deeper with GlobalData
Barclays’ debit cards go contactless…
First Data honoured by McDonald’s…
MERGERS AND ACQUISITIONS
MasterCard bolsters development abilities
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By GlobalDataIn a move that will considerably enhance its innovative
capabilities, MasterCard is to acquire Irish payment cards systems
developer Orbiscom in a deal worth up to a maximum of $100
million.
Acquisition of Orbiscom builds on a close, existing relationship
between the two companies that includes Orbiscom’s development of
MasterCard inControl, a platform designed to enable card issuers to
provide transaction controls demanded by cardholders.
Established in 1999, Orbiscom’s solutions are based primarily on
its patented Controlled Payment Number technology. In essence, the
technology allows businesses and consumers to generate an
authenticated, individual controlled card number in real-time for
each merchant or payment instead of transmitting their actual
credit card number via the internet.
Users can also select the payment limit, expiration date and
specific merchant site for use.
In the technology’s application in MasterCard inControl
additional functionality includes intelligent routing capabilities
that enable a transaction to be routed to different funding sources
depending on the transaction characteristics, real-time
communication on transaction activities and traceability on every
purchase.
Orbiscom’s extensive client-base includes MasterCard rivals
Visa, JCB and Discover Network, online payments specialist PayPal
and US banks Wells Fargo and Citi.
ONLINE PAYMENTS
Belgium approves first e-money service
Belgium’s Banking and Finance Commission has given the go ahead
to French online advertising company Hi-Media Group (HMG) to become
Belgium’s first issuer of electronic money. The new service,
branded as Hipay, will be operated by HMG’s Hi-Media Porte Monnaie
Electronique unit which is also responsible for the operation of
HMG’s online billing and payments service, Allopass.
A multi-currency electronic wallet, Hipay will enable users to
among other things buy online and transfer money to other Hipay
account holders. Hipay will initially be offered in Belgium and
then in the other European Union countries.
“Hipay is going to perfectly complement our existing range of
electronic payment services within Allopass,” said HMG CEO Cyril
Zimmermann.
CONTACTLESS PAYMENTS
US merchants get the right tools for the
job
Success or otherwise of contact-less payments rests heavily on
the willingness of merchants to invest in the emerging
technology.
It is an obstacle industry body the Smart Card Alliance (SCA)
aims to overcome in the US with the aid of two new online services
designed to assist merchants in their decision making process.
The most significant of the new services is an interactive model
that enables merchants to calculate their return on investment
(ROI) in contactless technology.
The model asks merchants to enter data specific to their
business, such as revenue, store information, payment transaction
information (volume, type and cost of transactions), transaction
speed, expected changes in transaction volume and speed after
contactless payments are accepted and implementation costs.
With this information, the model then calculates an ROI based on
increase in revenue, savings from fewer chargebacks, reduced cash
handling and improved operational efficiency and incremental costs
of implementing contactless payments.
Companies that contributed to developing the ROI model are
Chase, First Data, Discover Financial Services, INSIDE Contactless,
Ubiq, USA Technologies, VeriFone and ViVO-tech.
The second of SCA’s new services is a merchant discussion forum
designed to enable merchants to discuss contactless payments with
other merchants and industry participants.
ALTERNATE PAYMENTS
Paystone calls it quits
Canadian alternate payments service provider Paystone all-but
ceased operations on 19 December 2008 with only one of its services
the e-Pera internet-based money remittance service between Canada
and the Philippines remaining operational.
“Recent legislative and regulatory changes in Canada adversely
impact Paystone’s on-line business model, rendering continued
operation impractical,” the service provider said in a
statement.
Paystone focused on three services:
• International money remittance and email money from North
America to any bank account in 15 countries;
• A payment gateway linking North American online merchants to
Chinese online buyers; and
• GroupPay, a mass payments system enabling payment of a large
group of people at one time internationally via email.
Established in 2001 and operational since May 2003 Paystone has
operations in Canada, the US and the Philippines and cash-out
capabilities in 13 other countries including China, Germany, Mexico
and the UK.
CONTACTLESS PAYMENTS
ViVOtech stars in multi-city trial
Contactless payments specialist ViVOtech, payments processor
Wright Express and retailer Sheetz have teamed up to launch what
the US companies claim is a ground-breaking, multi-city trial that
will enable fleet-vehicle drivers to make fuel purchases using
contactless payments-enabled mobile phones.
“The goal of this field test is to enable us to better
understand NFC mobile payment technology and position Wright
Express to rapidly achieve leadership in this exciting new market
as it develops,” explained Wright Express manager of emerging
technologies Russ Lamer.
For the trial, ViVOtech will supply technology that will enable
drivers to download a fleet card over the air into near-field
communication-equipped mobile phones.
These will facilitate contactless payments at ViVOtech POS
terminals at 350 Sheetz refuelling and convenience store locations
in Pennsylvania, Virginia, Maryland, West Virginia, Ohio and North
Carolina.
A vehicle fleet payments specialist, Wright Express charge cards
are used by to purchase fuel and maintenance services for some 4.5
million vehicles.
PREPAID CARDS
Solving UK employers’ costly burden
Though the majority of wage and salary payments in the UK are
direct credit-based, cash and cheque payments to foreign seasonal
workers, new employees migrating to the UK and permanent residents
without bank accounts still pose a costly problem to employers.
UK prepaid card specialist Altair Financial Services
International; NorthgateArinso, one of the world’s top-five human
resources services providers; and the Newcastle Building Society
have come up with a solution, the Essential Prepaid MasterCard.
“The Essential Prepaid Card provides a quick fund distribution
method to help streamline the payroll administration processes,
reduce the associated costs and time-consuming paperwork,” said
Altair CEO Lee Britton.
To implement the solution, employer and employees undergo
background checks, facilitated by NorthgateArinso’s PeopleChecking
service. This ensures that employees have the right visas to work
and employers are complying with employee screening guidelines.
NorthgateArinso, which provides administration services covering
20 million employees in 31 countries, is a unit of Northgate Group
which is in turn wholly-owned by US private equity firm Kohlberg
Kravis Roberts.
CONTACTLESS PAYMENTS
Barclays’ debit cards go contactless
In a UK first, virtually all Visa debit cards issued or reissued
by Barclays Bank’s Barclaycard unit from March onwards will be
equipped with contactless payments technology.
The bank’s target is, by year-end, to have issued more than 3
million debit cards enabling payments of up to £10 ($15) at some
8,000 retailers already equipped with Visa payWave contactless POS
readers.
In addition to contactless payments, users will be able to use
the chip and PIN cards for conventional POS and ATM
transactions.
When used for contactless payments the card will periodically
prompt for the PIN to be entered to verify the customer’s
identity.
Barclaycard was the first to introduce contactless technology on
credit cards in the UK in September 2007 with the launch of
Barclaycard OnePulse, the three-in-one London public transport
Oyster, credit and contactless card.
MERGERS AND ACQUISITIONS
Gemalto gains a solid African base
Dutch electronic payments technology vendor Gemalto has secured
a manufacturing capability in Africa with the acquisition of the
South African operations of NamITech from its parent company, South
African diversified technology group Allied Technologies (Altech)
for an undisclosed sum.
“Africa is a region on the rise for us” said Gemalto CEO Olivier
Piou. “This project will enable us to grow our service offering to
Southern Africa customers, and contribute to the development of the
industry in the area.”
NamITech manufactures mobile phone SIM cards as well as a wide
range of payments products including conventional magnetic stripe
and smart EMV-compliant cards. In addition, the company
manufactures plastic and paper scratch cards which are used
extensively in Africa for applications such as prepaid
electricity.
According to Altech, its NamITech generates annual revenue of
some ZAR200 million ($21 million). Altech’s NamITech West African
unit based in Nigeria does not form part of the deal with
Gemalto.
ONLINE PAYMENTS
Visa opts for SMS two-factor security
The ubiquitous mobile phone is coming increasingly into its own
as an out-of-band authentication device with a growing number of
solutions using short message service (SMS) communication appearing
on the market.
Among the most recent of these, SMS-based solutions has been
launched by Visa in conjunction with Chinatrust Commercial Bank in
Taiwan and China Everbright Bank in China.
Visa’s service utilises the Verified by Visa online
authentication tool in combination with a one-time password which
is sent to a cardholder’s designated mobile number via a text
message. The cardholder uses this one-time password when making
payment instead of using a fixed password to verify his or her
identity.
The new service has a massive potential internet user-base which
in China alone stood at 253 million at the end of June 2008,
according to the China Internet Network Information Center. Taiwan
has some 15.5 million internet users, according to the Taiwan
Network Information Center.
Further underscoring the potential of the new service, Rahul
Khosla, COO for Visa in the Asia Pacific region, revealed a recent
Visa survey concluded that almost 80 percent of internet users in
the Asia-Pacific region conducted an online transaction and spent
an average of $3,000 each in the past 12 months.
PAYMENTS PROCESSING
First Data honoured by McDonald’s
Payments processor First Data has been honoured by McDonald’s as
its US Technology Supplier of the Year at an annual gathering of
the fast food restaurant company’s key technology suppliers in
early January.
The award is given to the technology product supplier that makes
the most significant impact on and contribution to McDonald’s USA.
The award recognises criteria including impact on the McDonald’s
system, innovation, quality, partnership, customer satisfaction and
value.
“First Data has proven integral to the McDonald’s system since
our relationship began six years ago,” said David Grooms,
vice-president and CIO of McDonald’s North America.
“They are a key supplier, supporting McDonald’s IT strategy to
improve efficiencies at the register, making it possible for our
customers to enjoy greater speed and service when they order.”
There are 14,000 McDonald’s restaurants in the US of which than
80 percent are independently owned and operated by local
franchisees.
PAYMENT CARDS
China UnionPay expands in Africa
An agreement between China UnionPay (CUP), China’s only card
organisation, and South African bank First National Bank (FNB) has
opened the door for the use of CUP cards in South Africa. The
agreement follows a pilot programme initiated by FNB and CUP in
April 2008 and will facilitate ATM withdrawals and payments at some
35,000 merchants.
In recent years, inbound tourism from China into South Africa
has grown rapidly with 33,177 arrivals recorded between January and
October 2008 according to the South African Tourism Board.
South Africa becomes the second country in Africa after Egypt
where CUP cards are accepted. CUP’s first move into Egypt came in
June 2008 in cooperation with the National Bank of Egypt.
In addition to the two African countries, CUP cards are accepted
in the US, 12 Asian Pacific countries including Japan, Australia,
Malaysia and Singapore, and 10 European countries including France,
Germany, Spain, the Netherlands, Italy and Switzerland.
MOBILE BANKING
UK first for NatWest
In a UK first, Royal Bank of Scotland subsidiary National
Westminster Bank (NatWest) has inaugurated a commission-free
service enabling its Polish Welcome Account customers to use mobile
phones to remit money to their accounts at PKO Bank Polski in
Poland.
Commenting on the significance of the new service, NatWest’s
group director responsible for mobile services, Roy Vella, noted
that research conducted by NatWest revealed that the Polish
community in the UK sends home £1 billion ($1.5 billion) each
year.
He added that while the service will initially only be available
to NatWest Polish Welcome Account customers, NatWest will be
looking to develop the mobile phone payment service for other
customers in due course.
The NatWest service operates on the Monilink platform developed
by mobile banking technology specialist Monitise. Monilink is a
joint venture between Monitise and UK payments processor
VocaLink.
